Following a year of slow economic recovery, unstable price fluctuations and damaging incidents in the Gulf of Mexico and China, the oil and gas industry is predicting a healthy investment in new exploration and market opportunities in the Middle East over the next 12 months, a new report on the future of the sector reveals.
Deep water ahead? The outlook for the oil and gas industry in 2011 has been published by the Economist Intelligence Unit and is sponsored by GL Noble Denton, an independent technical adviser to the industry with considerable insight into many of the issues faced.
Despite concerns over tougher industry regulation and increased operating costs, the 194 board-level executives and policymakers from some of the industry’s leading international companies surveyed for the report are optimistic that 2011 will be a key turning point for industry growth, thanks to a period of relative price stability, particularly in the fast-growth economies in Asia.
John Wishart, President of GL Noble Denton, said: “This report helps to bring clarity to a sector that has faced significant challenges in recent years. While it forecasts an upturn in growth with guarded confidence, the industry must concentrate on overcoming significant technical challenges if the market is to pick up dramatically.
“The demand for energy is taking the exploration, production and distribution of oil and gas to even tougher extremes of geography and climate, and pushing the boundaries of the industry’s technical knowledge to its very limits. Against this backdrop, key players in the industry will need to find more innovative solutions to mitigate risk, while operating more efficiently and sustainably. Their success will define their position and reputation in the market this year.”
Tony McAuley, Managing Director, Energy, at the Economist Intelligence Unit said: "The inaugural oil and gas barometer takes the pulse of senior executives at a challenging time for the industry. New risks are emerging, and 'black swan' events like the Gulf disaster have shown that the operating environment and the perception of risk can change seemingly overnight.
"But our survey shows that there is room for optimism too. Companies are prepared to invest for the future, and meet new safety and environmental standards. There is an appreciation that the industry must do its bit to reform, yet there is equally a clear message that policymakers must not allow knee-jerk reactions to influence regulations."
