Oil and gas companies face unprecedented uncertainties over next 10 years
Europe and the United States can no longer rely on Middle East oil exports as global balances of demand and investment shift towards Asia, says a new report.
The oil and gas industry is set to undergo a decisive transition over the next 10 years as global balances of demand and investment shift towards Asia and away from Europe and North America. These are sectors where geography matters and such a transition will have major geopolitical implications and a profound effect on industrial strategy. Oil and gas companies and their governments also face unprecedented uncertainties over a growing range of issues, including the development of low carbon policies, shale gas, questions about Iraqi oil production, and surging demand in China.
鈥楳ore for Asia: Rebalancing 91天堂原創 Oil and Gas鈥�, argues that Europe and the US will compete with Asian importers for supplies from West Africa, Northern Iraq and Central Asia, which are 鈥榩ivotal鈥� between eastern and western markets, while Russia will be a default supplier of oil to Europe.
The report also foresees a similar disconnection between Asian and Atlantic gas markets, with North America self sufficient due to shale gas, and Europe supplied by liquefied natural gas (LNG) from the Atlantic basin to compete with Russian and Central Asian gas.
The report鈥檚 author, John Mitchell, said, 鈥楥ompanies and governments need to recalibrate their strategies and policies to recognise the impact of Asia鈥檚 larger share of the world鈥檚 oil and gas in the future.鈥�
In both commodities, the new weight of Asia implies a shift to markets dominated by state controlled corporations, some if which will have considerable market power 鈥� Saudi Arabia for oil and Qatar for gas. The report calls for a reconsideration of the energy security risks that this may imply when political conflicts disrupt the normal functioning of international trade.
The full report can be downloaded here:
Read the article online at: /business-news/13122010/oil_and_gas_companies_face_unprecedented_uncertainties_over_next_10_years/
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