- Global upstream oil and gas investment increased by 39% in 2022 to $499 billion, the highest level since 2014, driven by higher costs and some recovery in activity.
- Annual upstream investment will need to increase to $640 billion by 2030 to ensure adequate supplies, an 18% increase from previous estimates due to rising costs.
- The primary constraint on investment has shifted from capital availability to willingness to invest, as oil and gas companies have record profits but must decide where to allocate funds between reinvestment, shareholder returns, and other priorities.
- Russian oil production is a major wildcard, as its trajectory over the coming decade will significantly impact future global investment needs depending on the extent of sanctions
Proposal - Mittal Janardhanadass Men Chung and Putchakayala.pdfAarthee Janar
This document discusses opportunities for technology disruption in the commercial real estate property management sector. It notes that the sector is currently inefficient, with many "mom and pop" operators using basic tools like Excel. The document argues that artificial intelligence and machine learning can be used to automate processes, optimize business practices, and create new revenue streams from data analytics services. This would make the sector more profitable and efficient while requiring less time than developing new investment algorithms. The document evaluates the market size and growth potential for property management technology.
An albergo diffuso is three things at a time.
It is a unique hospitality concept, different from the popular ones, like hotels or Resorts; it was born to develop tourism in hamlets and old town centres without changing their characteristics.
Secondly, it is a hotel that is not built, created with a network of preexisting houses close to each other in an old hamlet centre. The scattered hotel is also a model of touristic development for the territory
Customer Success in Practice presented by Procore at Totango TourTotango
Customer Success in Practice presented by Procore by Gabe Miller-Smith, Director of Customer Success at Procore Technologies, Inc. at Totango Tour in Los Angeles, CA.
The Project Management Centre of Excellence (PMCOE) provides project management services, training, and resources to government agencies in British Columbia. The PMCOE team consists of 16 project managers who aim to increase project success rates and internal project management capacity across government. Key services include project support, assigning project managers, a community of practice for knowledge sharing, and training programs on project management methodology and certification. The overall goal is continuous improvement in project outcomes and maturity for the province.
Specifics of Managing Large, Complex ProjectsJeremie Averous
This presentation shows in a compelling way why it is not possible just to scale up from managing simple projects to leading large, complex projects.
A must see for organizations that want to tackle large, complex projects!
The document summarizes the key changes between the 6th and 7th editions of the PMBOK Guide. The 7th edition focuses more on delivering value and outcomes rather than just project deliverables. It emphasizes 12 principles like stakeholder engagement, quality, and change management. The guide also includes new sections on value management and tailoring approaches to specific project contexts. It outlines performance domains to focus on like teams, planning, and navigating uncertainty. The body of knowledge section covers common project management processes, methods, and artifacts.
Proposal - Mittal Janardhanadass Men Chung and Putchakayala.pdfAarthee Janar
This document discusses opportunities for technology disruption in the commercial real estate property management sector. It notes that the sector is currently inefficient, with many "mom and pop" operators using basic tools like Excel. The document argues that artificial intelligence and machine learning can be used to automate processes, optimize business practices, and create new revenue streams from data analytics services. This would make the sector more profitable and efficient while requiring less time than developing new investment algorithms. The document evaluates the market size and growth potential for property management technology.
An albergo diffuso is three things at a time.
It is a unique hospitality concept, different from the popular ones, like hotels or Resorts; it was born to develop tourism in hamlets and old town centres without changing their characteristics.
Secondly, it is a hotel that is not built, created with a network of preexisting houses close to each other in an old hamlet centre. The scattered hotel is also a model of touristic development for the territory
Customer Success in Practice presented by Procore at Totango TourTotango
Customer Success in Practice presented by Procore by Gabe Miller-Smith, Director of Customer Success at Procore Technologies, Inc. at Totango Tour in Los Angeles, CA.
The Project Management Centre of Excellence (PMCOE) provides project management services, training, and resources to government agencies in British Columbia. The PMCOE team consists of 16 project managers who aim to increase project success rates and internal project management capacity across government. Key services include project support, assigning project managers, a community of practice for knowledge sharing, and training programs on project management methodology and certification. The overall goal is continuous improvement in project outcomes and maturity for the province.
Specifics of Managing Large, Complex ProjectsJeremie Averous
This presentation shows in a compelling way why it is not possible just to scale up from managing simple projects to leading large, complex projects.
A must see for organizations that want to tackle large, complex projects!
The document summarizes the key changes between the 6th and 7th editions of the PMBOK Guide. The 7th edition focuses more on delivering value and outcomes rather than just project deliverables. It emphasizes 12 principles like stakeholder engagement, quality, and change management. The guide also includes new sections on value management and tailoring approaches to specific project contexts. It outlines performance domains to focus on like teams, planning, and navigating uncertainty. The body of knowledge section covers common project management processes, methods, and artifacts.
Project Management Case Study .EC Harris International Ltd. (Al Wahda Mast...Malik Liaqat Ali
The Al Wahda Master Development project in Abu Dhabi involved the construction of a large shopping mall, hotel, office, and residential buildings between 2005 and 2012. EC Harris provided project management and cost consulting for the entire development. They established detailed procedures and plans to coordinate the diverse international team of over 30 nationalities. A major challenge was the 2008 financial crisis, which increased costs, but EC Harris' planning helped ensure supplies continued and the project was successfully completed, delivering key assets to the city.
This document provides an overview of CI Research, an independent market research company in Vietnam. It discusses the company's profile, research methods, field team structure, project quality control processes, and research team. CI Research has extensive experience conducting various quantitative and qualitative research methods across diverse industries in Vietnam. The company aims to provide reliable results and recommendations to clients in a timely manner through a team of experienced researchers.
The document provides examples of the standard formats used to present balance sheets and profit and loss accounts in case studies and exam questions. The balance sheet format shows fixed assets, current assets of stock, debtors, and cash, current liabilities of creditors and short-term borrowing, net assets, and capital employed including share capital, loan capital, and retained profit. The profit and loss account format shows sales revenue, cost of goods sold, gross profit, expenses, net profit before interest and tax, interest, tax, net profit after interest and tax, dividends, and retained profit.
Bjarte Bogsnes about Beyond Budgeting at ALE2011Olaf Lewitz
This document summarizes Statoil's transition from a traditional annual budgeting process to a new management model called "Beyond Budgeting". The key points are:
1) Statoil implemented the Beyond Budgeting principles which focus on continuous improvement, autonomy, transparency, and relative goals rather than fixed targets and budgets.
2) A new process called "Ambition to Action" was introduced which involves setting strategic objectives, key performance indicators, and concrete actions without rigid annual budgeting.
3) This new approach aims to make the planning process more dynamic, inclusive, and forward-looking to better adapt to changing business conditions. Performance is evaluated holistically based on relative success rather than meeting fixed targets.
The 5 Critical Elements to Creating a Project Management Center of ExcellenceFlevy.com Best Practices
Original article from the Flevy business blog can be found here:
http://flevy.com/blog/the-5-critical-elements-to-creating-a-project-management-centre-of-excellence/
Creating a Project Management Centre of Excellence is the driving force that takes an organization forward to realize their project management mandate. It encompasses the process of creating a strategy for project management, re-shaping the culture to be more focused on the consistency in the management of projects and implementing a project management process.
Creating a Project Management Centre of Excellence
project_management_COEA Centre of Excellence is a business unit that has organization-wide authority. The key elements of a successful Project Management Centre of Excellence include:
Vision and Strategies
A clear vision of what it represents and the strategies to identify how it will reach this vision in the short and long term.
Competencies
The selection of resources based on project competency requirements compared to actual project resource competencies. The identification of coaching, training and other developmental activities to close any competency gap.
Culture
How to re-shape the organizational culture to be more supportive of the consistency in the management of projects.
Processes
The right processes, tools and templates that are helpful and meaningful to project managers and their teams.
Quality
The quality criteria for the project management framework, processes and documents.
1. Create the Vision and Strategies
One approach to creating a vision for the Centre of Excellence is to brainstorm ideas that focus on what the future will look like. Start by creating scenarios that describe what the Centre will be doing 5 years into the future. What are some of the things that they will be doing that reflect a successful Centre of Excellence? What will employees and customers be saying about them? How did they get there?
The outcome of this process is the creation of a vision statement for the Project Management Centre of Excellence. Determine how this vision aligns and supports the organization’s strategic direction.
The alignment of the Centre of Excellence to the goals of the organization is key to driving strategy implementation. Strategies translate this vision into reality. They close the gap between the present and the “ideal” future described in the vision scenarios. These strategies must be described clearly so that the organization understands and accepts them.
The business model canvas of Airbnb a San Francisco Startups that helps people rent places.
You can see more details in my blog: http://startupbizmodel.com
(in portugueses)
Whitepaper - Connected Project Portfolio Management in the Oil & Gas IndustryAshwin Menon
One vital question often asked by executives dealing with an ever-changing market landscape is, “How should my company most effectively invest in in order to grow our revenue, capture market share, and increase profitability?"
To sustain long-term growth, companies must manage a number of projects at different stages of maturity. Many organizations struggle with capturing the voice of the customer, and translating that input into executable projects staffed with the right resources, while also ensuring adequate due diligence to make certain that projects align to corporate strategy and meet market expectations. Companies that more effectively manage this process position themselves for greater revenue realization, market share, and/or profitability.
Capital project portfolio management is all about making decisions about investment mix, matching investments to objectives and aligning them to strategy, allocating the right resources to the right projects, and balancing risk against performance.
This document offers our point of view on how capital project portfolio management must be implemented, how SAP can help, and some of the leading practices we have seen.
With asset management a known laggard in the realms of ‘digital’, we are now seeing a tectonic shift in the race to catch up with other industries. Eight in every ten firms are now prioritising their digital transformation and pushing to avoid being disrupted by leaner and more agile competitors.
[Whitepaper] Aberdeen Research Report: AP Invoice Management in a Networked E...Anybill
The Aberdeen Group just released their newest research report, "AP Invoice Management in a Networked Economy." The report discovered how Best-in-Class companies are leading the way toward improving both the internal and external facets of their financial operations.
1. The hotel industry in Milan intends to serve business travelers (41% of customers) and those attending trade fairs (31% total), as well as individual leisure travelers (15%) and groups (5%). Tourism in Milan is increasing, especially on weekends.
2. The Milan hotel industry has over 975 hotels employing over 16,000 workers. Occupancy rates were 61.4% in 2013 with an average daily room rate of 130.99 euros. Revenue per available room was 80.45 euros.
3. There are three main business models for hotels in Milan - local independent hotels focused on efficiency, hotel collections allowing different target markets, and large hotel chains providing standardized products under well-known brand
This document provides information on asset allocation and diversification. It discusses how diversification across asset classes can help reduce risk from any single asset performing poorly. While diversification does not guarantee profits, allocating capital across different asset classes and risks can help lower the volatility of investment returns. The document also notes that past performance is not indicative of future results.
This document discusses project execution and control. It explains that project execution utilizes prior plans and preparations to deal with unanticipated events while minimizing impacts. The purpose of execution is to construct the facility as commissioned while applying most resources. Execution concludes when the product is fully built, tested, accepted and transitioned to the client. At the end, all deliverables documented in the plan have been produced and the facility is handed over.
The document discusses lessons for project managers in their role. It identifies project management as an "accidental profession" for two reasons: 1) project managers are often not formally selected and trained, and 2) many individuals pursue project management without defining a clear career path. It then provides 12 guidelines for project managers to address common problems, such as understanding stakeholder expectations, using flexible leadership styles, and maintaining appropriate planning. The guidelines range from understanding the project context to effective time management.
Digital Cash Transfers and Financial Inclusion in IndiaCGAP
Digital Cash Transfers and Financial Inclusion in India outlines key elements for implementing digital cash transfers in India to achieve greater financial inclusion. It recommends establishing a one stop shop model where individuals can access government payments, financial services, and other functions in one location through digital infrastructure and interoperable backend systems. This would provide efficiencies for the government and more convenient access to services for users. The document also stresses the importance of coordination, developing sustainable business models for agents, and addressing issues like connectivity in rural areas.
This presentation discusses the core competencies of Larsen and Toubro (L&T), an Indian engineering, construction, and manufacturing company. It begins by defining core competency as a specific set of skills or techniques that deliver value to customers. The presentation then provides an introduction to L&T, describing its business areas and size. L&T's core competencies are then outlined, including process technology, engineering services, modular fabrication, procurement, project management, and construction capabilities. The presentation also describes L&T's competency cells that focus on upgrading skills and methods. It concludes by listing some of L&T's global certification benchmarks.
This document summarizes a presentation about implementing a Lean management system with an emphasis on the role of the CFO. It discusses designing the Lean system by understanding economics of Lean and measuring flow. It also covers building the system by measuring operational performance instead of profits, managing spending instead of costs, and valuing capacity measurement. Additionally, it addresses moving the system forward by focusing on decision making and a box score tool. Finally, it outlines tearing down the existing system by simplifying then eliminating standard costing and taming the ERP system.
Investment Thesis: Construction TechnologyJeffrey Bantam
This document discusses opportunities for construction technology investment. It notes that the construction sector spends $10 trillion annually but has low rates of technology adoption and productivity growth. Common issues include aging workforces, skilled labor shortages, underinvestment in technology, and industry fragmentation. The document argues that construction technology can help automate processes through offerings like off-site construction and supply chain management tools. It can also augment workers through improved communication, data integration, and use of IoT/AI. Increased adoption of such technologies may help boost productivity and address challenges facing the industry.
The document outlines key success factors for managing a software business, including having strong software architecture and engineering, tools, and roadmaps. It also emphasizes the importance of supporting customers, developing employee and community engagement, and generating new revenue through innovation and value-added services like consulting and training.
This document provides an overview of project management processes including initiation, planning, implementation, monitoring and review, and finalization. It discusses defining the project purpose and scope, developing a project proposal and budget, scheduling activities, assigning roles and responsibilities, managing risks, developing a communication plan, implementing the project, monitoring progress, and finalizing and evaluating the project. An example of organizing a food and wine cultural festival is provided to demonstrate applying these project management steps.
The purpose of this presentation is to present the major industry and consumer trends affecting the hotel industry, specifically with respect to the digital evolution and online booking.
Permian reported strong 2Q earnings growth from increased production and higher prices. While commodity prices remain volatile, ExxonMobil's sustained investments have driven leading US tight oil growth and increased US refining capacity to meet recovering demand. ExxonMobil continues to advance large-scale carbon capture and storage projects to provide energy and reduce emissions.
bp reported its third quarter 2020 financial results. Brent oil prices were 45% higher compared to the second quarter, while bp's refining marker margin was 5% higher. bp's underlying replacement cost profit was $0.1 billion for the third quarter, compared to a loss of $6.7 billion in the previous quarter, driven by higher oil prices and improved refining margins. Net debt fell to $40.4 billion due to a cash inflow of $0.6 billion. bp expects 2020 upstream production excluding Rosneft to be lower than 2019 and organic capital expenditure to be around $12 billion.
Project Management Case Study .EC Harris International Ltd. (Al Wahda Mast...Malik Liaqat Ali
The Al Wahda Master Development project in Abu Dhabi involved the construction of a large shopping mall, hotel, office, and residential buildings between 2005 and 2012. EC Harris provided project management and cost consulting for the entire development. They established detailed procedures and plans to coordinate the diverse international team of over 30 nationalities. A major challenge was the 2008 financial crisis, which increased costs, but EC Harris' planning helped ensure supplies continued and the project was successfully completed, delivering key assets to the city.
This document provides an overview of CI Research, an independent market research company in Vietnam. It discusses the company's profile, research methods, field team structure, project quality control processes, and research team. CI Research has extensive experience conducting various quantitative and qualitative research methods across diverse industries in Vietnam. The company aims to provide reliable results and recommendations to clients in a timely manner through a team of experienced researchers.
The document provides examples of the standard formats used to present balance sheets and profit and loss accounts in case studies and exam questions. The balance sheet format shows fixed assets, current assets of stock, debtors, and cash, current liabilities of creditors and short-term borrowing, net assets, and capital employed including share capital, loan capital, and retained profit. The profit and loss account format shows sales revenue, cost of goods sold, gross profit, expenses, net profit before interest and tax, interest, tax, net profit after interest and tax, dividends, and retained profit.
Bjarte Bogsnes about Beyond Budgeting at ALE2011Olaf Lewitz
This document summarizes Statoil's transition from a traditional annual budgeting process to a new management model called "Beyond Budgeting". The key points are:
1) Statoil implemented the Beyond Budgeting principles which focus on continuous improvement, autonomy, transparency, and relative goals rather than fixed targets and budgets.
2) A new process called "Ambition to Action" was introduced which involves setting strategic objectives, key performance indicators, and concrete actions without rigid annual budgeting.
3) This new approach aims to make the planning process more dynamic, inclusive, and forward-looking to better adapt to changing business conditions. Performance is evaluated holistically based on relative success rather than meeting fixed targets.
The 5 Critical Elements to Creating a Project Management Center of ExcellenceFlevy.com Best Practices
Original article from the Flevy business blog can be found here:
http://flevy.com/blog/the-5-critical-elements-to-creating-a-project-management-centre-of-excellence/
Creating a Project Management Centre of Excellence is the driving force that takes an organization forward to realize their project management mandate. It encompasses the process of creating a strategy for project management, re-shaping the culture to be more focused on the consistency in the management of projects and implementing a project management process.
Creating a Project Management Centre of Excellence
project_management_COEA Centre of Excellence is a business unit that has organization-wide authority. The key elements of a successful Project Management Centre of Excellence include:
Vision and Strategies
A clear vision of what it represents and the strategies to identify how it will reach this vision in the short and long term.
Competencies
The selection of resources based on project competency requirements compared to actual project resource competencies. The identification of coaching, training and other developmental activities to close any competency gap.
Culture
How to re-shape the organizational culture to be more supportive of the consistency in the management of projects.
Processes
The right processes, tools and templates that are helpful and meaningful to project managers and their teams.
Quality
The quality criteria for the project management framework, processes and documents.
1. Create the Vision and Strategies
One approach to creating a vision for the Centre of Excellence is to brainstorm ideas that focus on what the future will look like. Start by creating scenarios that describe what the Centre will be doing 5 years into the future. What are some of the things that they will be doing that reflect a successful Centre of Excellence? What will employees and customers be saying about them? How did they get there?
The outcome of this process is the creation of a vision statement for the Project Management Centre of Excellence. Determine how this vision aligns and supports the organization’s strategic direction.
The alignment of the Centre of Excellence to the goals of the organization is key to driving strategy implementation. Strategies translate this vision into reality. They close the gap between the present and the “ideal” future described in the vision scenarios. These strategies must be described clearly so that the organization understands and accepts them.
The business model canvas of Airbnb a San Francisco Startups that helps people rent places.
You can see more details in my blog: http://startupbizmodel.com
(in portugueses)
Whitepaper - Connected Project Portfolio Management in the Oil & Gas IndustryAshwin Menon
One vital question often asked by executives dealing with an ever-changing market landscape is, “How should my company most effectively invest in in order to grow our revenue, capture market share, and increase profitability?"
To sustain long-term growth, companies must manage a number of projects at different stages of maturity. Many organizations struggle with capturing the voice of the customer, and translating that input into executable projects staffed with the right resources, while also ensuring adequate due diligence to make certain that projects align to corporate strategy and meet market expectations. Companies that more effectively manage this process position themselves for greater revenue realization, market share, and/or profitability.
Capital project portfolio management is all about making decisions about investment mix, matching investments to objectives and aligning them to strategy, allocating the right resources to the right projects, and balancing risk against performance.
This document offers our point of view on how capital project portfolio management must be implemented, how SAP can help, and some of the leading practices we have seen.
With asset management a known laggard in the realms of ‘digital’, we are now seeing a tectonic shift in the race to catch up with other industries. Eight in every ten firms are now prioritising their digital transformation and pushing to avoid being disrupted by leaner and more agile competitors.
[Whitepaper] Aberdeen Research Report: AP Invoice Management in a Networked E...Anybill
The Aberdeen Group just released their newest research report, "AP Invoice Management in a Networked Economy." The report discovered how Best-in-Class companies are leading the way toward improving both the internal and external facets of their financial operations.
1. The hotel industry in Milan intends to serve business travelers (41% of customers) and those attending trade fairs (31% total), as well as individual leisure travelers (15%) and groups (5%). Tourism in Milan is increasing, especially on weekends.
2. The Milan hotel industry has over 975 hotels employing over 16,000 workers. Occupancy rates were 61.4% in 2013 with an average daily room rate of 130.99 euros. Revenue per available room was 80.45 euros.
3. There are three main business models for hotels in Milan - local independent hotels focused on efficiency, hotel collections allowing different target markets, and large hotel chains providing standardized products under well-known brand
This document provides information on asset allocation and diversification. It discusses how diversification across asset classes can help reduce risk from any single asset performing poorly. While diversification does not guarantee profits, allocating capital across different asset classes and risks can help lower the volatility of investment returns. The document also notes that past performance is not indicative of future results.
This document discusses project execution and control. It explains that project execution utilizes prior plans and preparations to deal with unanticipated events while minimizing impacts. The purpose of execution is to construct the facility as commissioned while applying most resources. Execution concludes when the product is fully built, tested, accepted and transitioned to the client. At the end, all deliverables documented in the plan have been produced and the facility is handed over.
The document discusses lessons for project managers in their role. It identifies project management as an "accidental profession" for two reasons: 1) project managers are often not formally selected and trained, and 2) many individuals pursue project management without defining a clear career path. It then provides 12 guidelines for project managers to address common problems, such as understanding stakeholder expectations, using flexible leadership styles, and maintaining appropriate planning. The guidelines range from understanding the project context to effective time management.
Digital Cash Transfers and Financial Inclusion in IndiaCGAP
Digital Cash Transfers and Financial Inclusion in India outlines key elements for implementing digital cash transfers in India to achieve greater financial inclusion. It recommends establishing a one stop shop model where individuals can access government payments, financial services, and other functions in one location through digital infrastructure and interoperable backend systems. This would provide efficiencies for the government and more convenient access to services for users. The document also stresses the importance of coordination, developing sustainable business models for agents, and addressing issues like connectivity in rural areas.
This presentation discusses the core competencies of Larsen and Toubro (L&T), an Indian engineering, construction, and manufacturing company. It begins by defining core competency as a specific set of skills or techniques that deliver value to customers. The presentation then provides an introduction to L&T, describing its business areas and size. L&T's core competencies are then outlined, including process technology, engineering services, modular fabrication, procurement, project management, and construction capabilities. The presentation also describes L&T's competency cells that focus on upgrading skills and methods. It concludes by listing some of L&T's global certification benchmarks.
This document summarizes a presentation about implementing a Lean management system with an emphasis on the role of the CFO. It discusses designing the Lean system by understanding economics of Lean and measuring flow. It also covers building the system by measuring operational performance instead of profits, managing spending instead of costs, and valuing capacity measurement. Additionally, it addresses moving the system forward by focusing on decision making and a box score tool. Finally, it outlines tearing down the existing system by simplifying then eliminating standard costing and taming the ERP system.
Investment Thesis: Construction TechnologyJeffrey Bantam
This document discusses opportunities for construction technology investment. It notes that the construction sector spends $10 trillion annually but has low rates of technology adoption and productivity growth. Common issues include aging workforces, skilled labor shortages, underinvestment in technology, and industry fragmentation. The document argues that construction technology can help automate processes through offerings like off-site construction and supply chain management tools. It can also augment workers through improved communication, data integration, and use of IoT/AI. Increased adoption of such technologies may help boost productivity and address challenges facing the industry.
The document outlines key success factors for managing a software business, including having strong software architecture and engineering, tools, and roadmaps. It also emphasizes the importance of supporting customers, developing employee and community engagement, and generating new revenue through innovation and value-added services like consulting and training.
This document provides an overview of project management processes including initiation, planning, implementation, monitoring and review, and finalization. It discusses defining the project purpose and scope, developing a project proposal and budget, scheduling activities, assigning roles and responsibilities, managing risks, developing a communication plan, implementing the project, monitoring progress, and finalizing and evaluating the project. An example of organizing a food and wine cultural festival is provided to demonstrate applying these project management steps.
The purpose of this presentation is to present the major industry and consumer trends affecting the hotel industry, specifically with respect to the digital evolution and online booking.
Permian reported strong 2Q earnings growth from increased production and higher prices. While commodity prices remain volatile, ExxonMobil's sustained investments have driven leading US tight oil growth and increased US refining capacity to meet recovering demand. ExxonMobil continues to advance large-scale carbon capture and storage projects to provide energy and reduce emissions.
bp reported its third quarter 2020 financial results. Brent oil prices were 45% higher compared to the second quarter, while bp's refining marker margin was 5% higher. bp's underlying replacement cost profit was $0.1 billion for the third quarter, compared to a loss of $6.7 billion in the previous quarter, driven by higher oil prices and improved refining margins. Net debt fell to $40.4 billion due to a cash inflow of $0.6 billion. bp expects 2020 upstream production excluding Rosneft to be lower than 2019 and organic capital expenditure to be around $12 billion.
bp reported its fourth quarter and full year 2020 financial results. Key points include:
- Underlying replacement cost loss of $100 million for Q4 2020 and $5.7 billion for full year 2020.
- Net debt of $38.9 billion as of December 31, 2020, down from $51.4 billion a year earlier.
- Capital expenditure was reduced by around 40% in 2020 compared to 2019 and is expected to be around $13 billion in 2021.
- Cash costs were reduced by 12% in 2020 and further reductions are expected through 2023.
Bernard Looney, Chief Executive Officer of bp, provides a recap of bp's new strategy and financial frame that was introduced on August 4th. The strategy focuses on three areas: low carbon electricity and energy, convenience and mobility, and resilient and focused hydrocarbons. It is underpinned by partnering with others, integrating energy systems, and driving digital innovation. The financial frame aims to support the energy transition with capital allocation priorities, a resilient balance sheet, and disciplined investment process. The goals are to deleverage to $35 billion net debt, maintain a strong credit rating, and allocate over 20% of capital to the energy transition by 2025.
The document discusses the digital future of the oil and gas industry. It notes that the industry faces challenges from lower oil prices, aging infrastructure and workforces, and increased environmental scrutiny. However, the long term demand for energy is still expected to rise significantly due to global population and economic growth. The document argues that the industry can overcome these challenges through increased digitization and use of industrial internet/IoT solutions. These solutions can optimize asset performance, reduce downtime and costs, improve safety and efficiency, and capture institutional knowledge as workforces age. Overall, increased digitization is presented as a key way for the industry to navigate current challenges and meet rising long term energy demand.
Chesapeake Energy reported 3Q 2019 earnings. The presentation discusses the company's financial discipline and profitable growth strategy focused on capturing resources. Key highlights included establishing an oil production record in the Brazos Valley, improving well economics in the Powder River Basin, and the Marcellus asset generating an estimated $300 million in free cash flow. Chesapeake also summarized recent drilling results and operational improvements across its assets.
BP reported its second quarter 2020 financial results and strategy presentation. The presentation contained forward-looking statements about BP's financial condition, operations, plans and objectives that are subject to risks and uncertainties. BP provided a cautionary statement to accompany any forward-looking statements. The presentation outlined BP's strategic plans to strengthen its balance sheet, invest in its energy transition strategy, focus on resilient hydrocarbons, and transform its convenience and mobility offerings over the next 5 years.
The document outlines BP's new strategy presented at its 2020 Capital Markets Day, including reducing oil and gas production 40% by 2030, developing 50GW of renewable capacity by 2030, and allocating over 20% of capital to energy transition by 2025. BP also introduces a new financial framework to support the energy transition with commitments around debt reduction, shareholder distributions, returns, and earnings growth through 2025. A question and answer section addresses investor questions about various aspects of BP's new strategy and ambitions.
bp reported strong third quarter 2021 results with underlying replacement cost profit of $5.9 billion, up from $4.7 billion in the previous quarter. Operating cash flow was $6 billion including a $1.8 billion working capital build. bp executed a $1.25 billion share buyback from first half surplus cash flow and announced an additional buyback. The results were driven by higher oil and gas prices and strong performances across all segments.
Chesapeake Energy reported earnings for the fourth quarter of 2019. The presentation includes forward-looking statements and discusses key risks and uncertainties. It outlines Chesapeake's business strategy of financial discipline, profitable growth, and exploration. Key 2019 accomplishments included reducing capex by 30% year-over-year, reducing costs, growing oil production by 30%, and increasing adjusted EBITDAX. Priorities for 2020 include further reducing costs and targeting free cash flow. The presentation provides details on Chesapeake's asset portfolio and 2020 plans across its core regions.
The document provides an August 2018 update on Chesapeake Energy Corporation's business strategies and operations. It discusses plans to use proceeds from an asset sale to reduce debt, goals of achieving a net debt to EBITDA ratio of 2x and free cash flow neutrality. Production from the Powder River Basin is growing rapidly and is expected to increase 90% in 2018 and 100% in 2019, driven largely by oil growth from the Turner area where 18 wells are currently producing. Drilling and completion costs in the Turner area have improved. The company has a diverse portfolio across five basins with an inventory of potential locations.
bp reported strong financial results for 1Q 2021, achieving its $35 billion net debt target and commencing share buybacks. Key highlights included exceptional gas marketing performance, significantly higher oil prices, and higher refining margins compared to 4Q 2020. bp also made disciplined strategic progress across its businesses, including major project delivery and partnerships to advance its EV charging and renewable strategies.
August 2022 Chevron Investor Presentation.pdfPatsyBaader
- Chevron presented its investor presentation, outlining its strategy and financial priorities.
- It aims to lower its carbon intensity and grow its lower carbon businesses while maintaining capital and cost discipline across its upstream and downstream businesses.
- Chevron expects to grow production over 3% annually through 2026 while decreasing unit operating costs and increasing returns on capital employed.
The document provides an update on Chesapeake Energy's business strategies and operations for September 2018. It discusses restoring the company's balance sheet through applying $1.9 billion in proceeds from an asset sale to debt reduction. It highlights the company's diverse portfolio across five basins and focuses on growth in the Powder River Basin, where production is ramping ahead of schedule led by the Turner opportunity. The company is improving drilling efficiencies to enhance returns in the Powder River Basin.
- Chesapeake Energy reported 2Q 2019 earnings and provided an operational and financial update.
- The company is executing on its strategy of financial discipline, profitable growth from captured resources, and exploration through focused investment in highest margin opportunities.
- Chesapeake has significantly improved its debt maturity outlook through refinancing activities and aims to achieve a net debt to EBITDAX ratio of 2x.
- The company is committed to safety, environmental stewardship, and reducing its environmental footprint through initiatives like its enhanced leak detection and repair program.
Mercer Capital's Value Focus: Energy Industry | Q2 2022 | Segment: PermianMercer Capital
Mercer Capital's Energy Industry newsletter provides perspective on valuation issues. Each newsletter also typically includes macroeconomic trends, industry trends, and guideline public company metrics.
bp reported its third quarter 2022 financial results. Some key highlights include:
- Underlying replacement cost profit of $8.2 billion, lower than previous quarter due to lower refining margins and oil trading performance.
- Operating cash flow of $8.3 billion including a $6.2 billion working capital build.
- Net debt of $22.0 billion, lower than previous quarter.
- A $2.5 billion share buyback was announced.
2016 Strategic Direction Report Natural GasPramod Singh "
The natural gas industry continues to adapt to low prices by finding efficiencies and new opportunities for growth. Economic growth in emerging markets is driving increased global demand for natural gas and presenting opportunities for suppliers. Countries in Asia seeking alternatives to oil are expected to rely heavily on imports from the US and Australia to meet rising needs. While safety remains the top concern, international market access is also a significant issue according to respondents outside North America. Managing aging infrastructure and ensuring reliability further challenge producers in this market.
bp reported its second quarter 2022 financial results. Key highlights include:
- Underlying replacement cost profit of $8.5 billion, up from $6.2 billion in the previous quarter.
- Operating cash flow of $10.9 billion and surplus cash flow of $6.6 billion.
- Net debt reduced to $22.8 billion.
- The company maintained its financial frame and discipline.
- Global energy investment is set to fall by 20% or nearly $400 billion in 2020 due to the Covid-19 pandemic, representing the largest decline on record. This is a reversal from pre-crisis expectations of modest growth.
- Investment activity has been disrupted by lockdowns and project delays, but the oil and gas sector in particular has seen cuts to spending of around one-third due to much lower oil prices and demand.
- While no sector has avoided impacts, utility-scale renewable power projects have proved more resilient than oil and gas supply or efficiency improvements, which rely more on demand growth. The effects of the crisis on energy investment vary significantly between countries.
Similar to IEF Global Upstream Oil and Gas Investment Report 2023 (20)
The Big Oil Reality Check report finds that the climate pledges and plans of 8 international oil and gas companies fail to align with international agreements to phase out fossil fuels and to limit global temperature rise to 1.5ºC.
Publication May 2021
IEA publication, May 2024
Critical minerals, which are essential for a range of clean energy technologies, have risen up the policy agenda in recent years due to increasing demand, volatile price movements, supply chain bottlenecks and geopolitical concerns. The dynamic nature of the market necessitates greater transparency and reliable information to facilitate informed decision-making, as underscored by the request from Group of Seven (G7) ministers for the IEA to produce medium- and long-term outlooks for critical minerals.
The Global Critical Minerals Outlook 2024 follows the IEA’s inaugural review of the market last year. It provides a snapshot of industry developments in 2023 and early 2024 and offers medium- and long-term outlooks for the demand and supply of key energy transition minerals based on the latest technology and policy trends.
The report also assesses key risks to the reliability, sustainability and diversity of critical mineral supply chains and analyses the consequences for policy and industry stakeholders. It will be accompanied by an updated version of the Critical Minerals Data Explorer, an interactive online tool that allows users to explore the latest IEA projections.
Science Publication
Global projections of macroeconomic climate-change damages typically consider
impacts from average annual and national temperatures over long time horizons1–6
.
Here we use recent empirical fndings from more than 1,600 regions worldwide over
the past 40 years to project sub-national damages from temperature and precipitation,
including daily variability and extremes7,8
. Using an empirical approach that provides
a robust lower bound on the persistence of impacts on economic growth, we fnd that
the world economy is committed to an income reduction of 19% within the next
26 years independent of future emission choices (relative to a baseline without
climate impacts, likely range of 11–29% accounting for physical climate and empirical
uncertainty). These damages already outweigh the mitigation costs required to limit
global warming to 2 °C by sixfold over this near-term time frame and thereafter diverge
strongly dependent on emission choices. Committed damages arise predominantly
through changes in average temperature, but accounting for further climatic
components raises estimates by approximately 50% and leads to stronger regional
heterogeneity. Committed losses are projected for all regions except those at very
high latitudes, at which reductions in temperature variability bring benefts. The
largest losses are committed at lower latitudes in regions with lower cumulative
historical emissions and lower present-day income.
Science Publication: The atlas of unburnable oil for supply-side climate poli...Energy for One World
Nature Communication, Publication 2024
To limit the increase in global mean temperature to 1.5 °C, CO2 emissions must
be drastically reduced. Accordingly, approximately 97%, 81%, and 71% of
existing coal and conventional gas and oil resources, respectively, need to
remain unburned. This article develops an integrated spatial assessment
model based on estimates and locations of conventional oil resources and
socio-environmental criteria to construct a global atlas of unburnable oil. The
results show that biodiversity hotspots, richness centres of endemic species,
natural protected areas, urban areas, and the territories of Indigenous Peoples
in voluntary isolation coincide with 609 gigabarrels (Gbbl) of conventional oil
resources. Since 1524 Gbbl of conventional oil resources are required to be left
untapped in order to keep global warming under 1.5 °C, all of the above-
mentioned socio-environmentally sensitive areas can be kept entirely off-
limits to oil extraction. The model provides spatial guidelines to select
unburnable fossil fuels resources while enhancing collateral socio-
environmental benefits.
This document is a report from the Inter-agency Task Force on Financing for Development summarizing the current state of financing for sustainable development. It finds financing gaps have increased to $4 trillion annually for developing countries. Progress on reducing poverty and hunger has stalled or reversed in some cases. Many developing economies face high debt burdens, exacerbating financing challenges. The report calls for $500 billion in additional annual investments in sustainable development and climate action through measures like development bank reforms, debt relief for vulnerable countries, and international financial system reforms to better support developing countries in achieving the SDGs. It will help inform discussions at the upcoming Fourth International Conference on Financing for Development.
This report analyzes global trends in corporate sustainability policies and practices. It finds that nearly 10,000 listed companies representing $85 trillion in market capitalization disclosed sustainability information in 2022. Most large companies report greenhouse gas emissions and set reduction targets, though target baselines are often missing. The report also examines board oversight of sustainability issues, executive compensation linked to ESG metrics, corporate lobbying activities, and stakeholder engagement practices. It concludes by recommending flexibility in disclosure standards and increased assurance of sustainability reports.
European Court of Human Rights: Judgment Verein KlimaSeniorinnen Schweiz and ...Energy for One World
The European Court of Human Rights found Switzerland in violation of its obligations under the European Convention on Human Rights to protect citizens from climate change. The Court ruled that Article 8, the right to respect for private and family life, includes protection from serious adverse effects of climate change. However, it found the individual applicants did not have standing, while the applicant association representing over 2,000 older women did have standing. The Court also found Switzerland violated Article 6 by failing to properly consider the association's complaints in domestic courts. Overall, Switzerland failed to implement sufficient legislation and measures to meet its climate change targets in line with its international commitments.
Donate to charity during this holiday seasonSERUDS INDIA
For people who have money and are philanthropic, there are infinite opportunities to gift a needy person or child a Merry Christmas. Even if you are living on a shoestring budget, you will be surprised at how much you can do.
Donate Us
https://serudsindia.org/how-to-donate-to-charity-during-this-holiday-season/
#charityforchildren, #donateforchildren, #donateclothesforchildren, #donatebooksforchildren, #donatetoysforchildren, #sponsorforchildren, #sponsorclothesforchildren, #sponsorbooksforchildren, #sponsortoysforchildren, #seruds, #kurnool
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Preliminary findings from OECD field visits for the project: Enhancing EU Mining Regional Ecosystems to Support the Green Transition and Secure Mineral Raw Materials Supply.
RFP for Reno's Community Assistance CenterThis Is Reno
Property appraisals completed in May for downtown Reno’s Community Assistance and Triage Centers (CAC) reveal that repairing the buildings to bring them back into service would cost an estimated $10.1 million—nearly four times the amount previously reported by city staff.
UN WOD 2024 will take us on a journey of discovery through the ocean's vastness, tapping into the wisdom and expertise of global policy-makers, scientists, managers, thought leaders, and artists to awaken new depths of understanding, compassion, collaboration and commitment for the ocean and all it sustains. The program will expand our perspectives and appreciation for our blue planet, build new foundations for our relationship to the ocean, and ignite a wave of action toward necessary change.
Food safety, prepare for the unexpected - So what can be done in order to be ready to address food safety, food Consumers, food producers and manufacturers, food transporters, food businesses, food retailers can ...
Jennifer Schaus and Associates hosts a complimentary webinar series on The FAR in 2024. Join the webinars on Wednesdays and Fridays at noon, eastern.
Recordings are on YouTube and the company website.
https://www.youtube.com/@jenniferschaus/videos
United Nations World Oceans Day 2024; June 8th " Awaken new dephts".Christina Parmionova
The program will expand our perspectives and appreciation for our blue planet, build new foundations for our relationship to the ocean, and ignite a wave of action toward necessary change.
2. _____________________________________________________________________________
A report by the International Energy Forum and SP Global
Commodity Insights
February 2023
____________________________________________________________________________
Written and produced by:
Mason Hamilton mason.hamilton@ief.org
Allyson Cutright allyson.cutright@ief.org
Roger Diwan roger.diwan@ihsmarkit.com
Karim Fawaz karim.fawaz@ihsmarkit.com
____________________________________________________________________________
About the International Energy Forum
The International Energy Forum (IEF) is the world’s largest international organization of
energy ministers from 72 countries and includes both producing and consuming nations. The
IEF has a broad mandate to examine all energy issues including oil and gas, clean and
renewable energy, sustainability, energy transitions and new technologies, data
transparency, and energy access. Through the Forum and its associated events, officials,
industry executives, and other experts engage in a dialogue of increasing importance to
global energy security and sustainability.
____________________________________________________________________________
About SP Global Commodity Insights
SP Global Commodity Insights is a division of SP Global. For more than 100 years, SP
Global has been a trusted connector that brings together thought leaders, market
participants, governments, and regulators to co-create solutions that lead to progress. Vital
to navigating Energy Transition, SP Global Commodity Insights coverage includes oil and
gas, power, chemicals, metals, agriculture, and shipping.
3. _____________________________________________________________________________
3
Table of Contents
Executive Summary ................................................................................................. 4
Introduction: What a Difference a Year Makes ...................................................... 5
Investment in 2022 and Beyond.............................................................................. 6
Global upstream investment rebounded in 2022................................................................ 6
Primary hurdle for investment has shifted from capital availability to willingness to invest . 7
Upstream investment will need to increase to $640 billion annually by 2030 to meet future
demand and offset declining production ............................................................................8
Russia Upends Oil Markets..................................................................................... 9
Wildcard: Investment needs will depend on Russia ........................................................... 9
Russian production remained stable in 2022, but that will change in 2023 ...................... 10
Russian production risk skewed lower for longer, but uncertainty abounds ..................... 10
Slowing Economy and Monetary Tightening Add to Investment Challenges but
Also Provides Opportunities................................................................................. 11
The global economic outlook has deteriorated significantly in the past year .................... 11
Higher costs caused by inflation and supply chain issues................................................ 12
Central banks are tightening monetary policies to combat inflation.................................. 12
Lessons from the past recessions ................................................................................... 13
Demand slowdown and high prices provide an opportunity for investment to catch up.... 14
Tighter Markets are Here to Stay Without Increased Investment ...................... 16
Global spare production capacity will remain limited in the near-term.............................. 16
Capital discipline will keep U.S. shale growth at a moderate pace, but SPR buyback may
provide some temporary protection for investors and operators ...................................... 16
Latin America could thrive in the new environment.......................................................... 17
Lifting sanctions could bring quick relief........................................................................... 17
Energy Security and Energy Transitions ............................................................. 18
Energy security needs to be accepted as a long-term issue ............................................ 18
Long-term demand uncertainty remains a key constraint on investment.......................... 18
Carbon intensity of crude becomes an increasingly important metric and hurdle............. 19
In current situation, nobody wins: The current energy price volatility is not good for
consumers, investors, businesses, or governments......................................................... 19
Ways Forward: Increased Cooperation Supportive Policies .......................... 20
Conclusion.............................................................................................................. 20
4. _____________________________________________________________________________
4
Executive Summary
• Oil and gas upstream capital expenditures increased by 39% in 2022 to $499 billion,
the highest level since 2014 and the largest year-on-year gain in history. Higher costs
primarily drive the increase in investment, but activity has also started to recover. The
global rig count is up 22% from a year ago but remains 10% below 2019 levels.
• Annual upstream investment will need to increase from $499 billion in 2022 to $640
billion in 2030 to ensure adequate supplies. This estimate for 2030 is 18% higher than
we assessed a year ago primarily because of rising costs. A cumulative $4.9 trillion will be
needed between 2023 and 2030 to meet market needs and prevent a supply shortfall, even
if demand growth slows toward a plateau.
• The major constraint on near-term investment levels has shifted from capital
availability to capital allocation. Oil and gas EPs are experiencing record profits. While
companies prioritize returns to shareholders, share buybacks, and debt repayment, they
still have ample free cash flow that could jump-start upstream investment. The question is
now, will companies re-invest, and if so, where?
• Near-term economic headwinds weigh heavily on markets and investors. If the world
enters a recession in 2023, depending on the duration and depth, it is possible that oil
demand growth could remain below trend in the next couple of years, potentially extending
the post-pandemic demand stall to five years. Once economic activity recovers, it will likely
be less oil demand-intensive than it would have been due to fuel switching, EV penetration,
efficiency improvements, and accelerated climate policies. The near-term uncertainty of
demand and the potential medium-to-long-term consequences add to investment hurdles
and deterrents. However, it also provides a valuable opportunity for upstream investments
to catch supply up with demand.
• Energy security has re-emerged as a politically strategic imperative. This has led to
increased government interventionism and an important shift away from an energy
abundance mindset. Governments and investors can use this as both a warning and an
opportunity. The cascading energy crises serve as a warning to the economic turmoil
caused by high, volatile energy prices and it is an opportunity to ensure and secure
adequate investment for the future.
• Russian production is a big wildcard for the medium-term. There is enormous
uncertainty concerning the extent of Russian production losses. Russian production levels
depend not only on what sanctions allow and what is technically feasible but also on
Russian policy. This decade’s need for investment and new upstream projects will depend
on how much Russia produces and invests. This report assumes Russian production will
decline by 1.1 million barrels per day in 2023 to 9.4 million barrels per day and then plateau
at this level through the rest of the decade.
• The current energy price volatility harms consumers, investors, businesses, and
governments. Adequate investment is needed for stable markets now and in the future.
If investment falls short, high-prices and high-volatility could become the new standard.
Underinvestment threatens to undermine energy security in the short and medium-term
and it can also stall progress on climate goals by increasing reliance on more carbon-
5. _____________________________________________________________________________
5
intensive options in the short-term. The vicious cycle of volatility and investment remains
a key risk in the coming decade, with high price volatility deterring investment and lagging
investment potentially fueling volatility.
• The energy sector and policymakers can prepare and help mitigate negative impacts
by (1) increasing producer-consumer dialogue; (2) bolstering inventories; (3) providing
regulatory and policy certainty; (4) supporting long-term contracts; (5) de-risking
investments; (6) basing policies on realistic energy demand scenarios; and (7) increasing
market transparency.
Introduction: What a Difference a Year Makes
The state of the global economy and the energy sector has been transformed since our last
upstream investment report (Investment Crisis Threatens Energy Security, December 5, 2021).
The economic outlook for the near-term has deteriorated significantly while the geopolitical risks,
and price volatility, across the energy sector have surged following Russia’s invasion of Ukraine.
For the time being, long-term demand uncertainty has been overshadowed by turmoil impacting
near-term supply and demand. On the supply-side, there are many outstanding questions about
the depth and duration of a reduction in Russian production. On the demand side, there are many
outstanding questions about the depth and duration of a global economic slowdown and how much
China’s lifting of COVID-zero policies will offset sluggish demand elsewhere.
For policymakers, security of supply has re-emerged as a top priority. However, there is lingering
uncertainty as to whether increased interventionism by governments in energy markets are a
symptom of extraordinary circumstances in 2022 or a strategic shift that will transform into long-
term policies, market structures and price formation.
Market upheaval has led to higher and more volatile energy prices, resulting in record profits for
oil and gas producers. After decades of lackluster stock performance and free cash flow, oil and
gas companies are now outperforming every other major industry. Prices for long-dated futures
(the back-end of the forward curve) appear to have decisively broken above $70 per barrel for the
first time since the 2014 collapse. This has shifted the primary constraint on investment from
capital availability to producers’ willingness to invest. As long as crude prices remain above $70
per barrel, there are enough profitable oil and gas reserves and projects to meet demand over the
next decade, but the primary uncertainty is whether companies will commit sufficient investment
to develop them.
The failure to increase and sustain investment in oil and gas upstream could lead to recurrent price
shocks across commodities caused by the disparity between the slower-moving demand transition
and the rapidly thinning supply buffer resulting from insufficient investment and geopolitical
developments. This will result in increased price volatility across the energy complex and adverse
economic consequences. Further, the combination of short-term price volatility and long-term
demand uncertainty could further deter investment and further exacerbate volatility, with resulting
energy insecurity inviting further government interventions.
New challenges and hurdles have emerged in the past year that are no less difficult than the
obstacles we highlighted in December 2021. While oil prices ended 2022 at nearly the same level
as the end of 2021 – the world is a different place. There is a lot more capital available for the
upstream industry, but also acute short-term uncertainty. More than anything else, 2022 may have
6. _____________________________________________________________________________
6
marked the end of the era of perceived energy abundance and the restoration of energy security.
In this new energy world, investment has a critical role to play.
Investment in 2022 and Beyond
Global upstream investment rebounded in 2022
Oil and gas upstream capital expenditures rebounded by 39% ($141 billion) in 2022 to $499 billion
– the highest level since 2014 and 13% above 2019’s pre-COVID level. Upstream capital
expenditures in North America increased the most, rising by a robust 53% ($61.7 billion) year-on-
year.
Increased spending reflects both increased costs and increased activity. Cost inflation was up 15-
20% year-on-year in 2022, with more expected in 2023. While the global rig count is up ~22%
year-on-year, it is still ~10% below 2019 levels. The industry has achieved significant
improvements in capital efficiency over the past decade, but a high-cost environment means the
sector will need even more investment than previously expected to ensure adequate supplies.
7. _____________________________________________________________________________
7
Our previous upstream investment report highlighted how 2022-2023 would be crucial years for
financing projects. In 2022, nearly 2.2 million barrels per day of new capacity was approved or
sanctioned – falling short of 2019’s high. In line with pre-pandemic trends, companies are still
favoring small, modular, or phased projects over megaprojects (a single large-scale project with
peak production of 500 thousand barrels per day with new infrastructure).
Notably, there are still no new greenfield megaprojects planned in the next five years despite of
higher prices. In contrast, almost 250 small- to medium-scale projects are expected to begin by
2030, assuming companies move forward with investment. These projects require less capital,
have shorter payback periods, and are more insulated from long-term risks.
If upstream capex fails to accelerate, the risk of markets facing a period of substantive supply
shortfalls in the medium-term rises significantly. Recent market events and trends have dealt
producers a sudden cash injection but also eroded many of the oil market’s supply buffers
(commercial and strategic inventories and OPEC+ spare production capacity). Without traditional
supply buffers, demand in the medium-term will need to be primarily met through increased
investment in existing and new production.
Primary hurdle for investment has shifted from capital availability to willingness to invest
This year’s record profits mean companies can afford to invest from operating cash flow, shifting
the major constraint to companies’ willingness to invest. This is a significant change from recent
years when the primary constraint on investment was capital availability due to weak cash flow,
reliance on external capital, and waning investor appetite.
Whereas the challenge through most of the 2015-2021 was mainly prioritizing limited capital in a
low commodity price environment, the challenge for investment in 2022 and beyond consists of
how to allocate excess capital in a high(er) commodity price environment.
Seven of the largest global IOC’s reported free cash flow deficits every year except one between
2013 and 2020. The aggregate net free cash flow for the same group of IOCs between 2000 and
2020 equaled a deficit of $104 billion, but those deficits have been erased by record profits in the
past two years. Major IOCs saw a record $97 billion surplus in 2021 that grew to an estimated
8. _____________________________________________________________________________
8
$173 billion surplus in 2022. The surplus in 2022 is more than three times greater than the largest
annual surplus experienced in a 20-year period between 2000 and 2020.
After prioritizing returns to shareholders, share buybacks, and debt repayment, companies still
have record levels of free cash flow. The question is, will companies re-invest? If so, where? and
if not, why? This entails company-level decisions to re-invest proceeds into upstream operations
(existing or new developments) or divert windfalls to other ends, be they returns to shareholders
and stakeholders or low-carbon/alternative investments. These decisions will be complex and
depend on a number of factors including shareholder and stakeholder priorities, regulatory
environment, existing operations, geography, in-house expertise, etc.
Many oil and gas companies face investor pressure to use cashflow from fossil fuels to invest in
lower carbon options such as renewables and hydrogen. However, the sector also understands
the cyclical nature of the business and that profits today do not guarantee profits tomorrow. In
addition, some NOC’s may have governments that want to use the windfalls to boost their domestic
economy. Other companies will not want to overcommit or base project economics on today’s
environment knowing that while short-term energy security concerns have clearly increased and
improved the near-term profitability, the long-term trajectory of hydrocarbon demand remains
dictated by ambitious energy transition objectives. With most green-lit projects likely to produce
well into the 2030s, the lack of long-term demand certainty remains a potent deterrent for
investment, particularly for longer-term prospects such as exploration.
Willingness to invest remains the key variable only as long as profits remain high. If profits fall due
to lower prices or policies (such as windfall taxes) – then capital availability becomes a key
constraint again. There is still negative investor sentiment and other hurdles to obtaining external
capital.
Upstream investment will need to increase to $640 billion annually by 2030 to meet future
demand and offset declining production
While upstream investment in 2022 returned to an eight-year high and posted the largest year-on-
year increase in history, it will need to rise even further to stave off a global supply shortfall this
decade. Annual upstream investment will need to increase from $499 billion in 2022 to $640 billion
9. _____________________________________________________________________________
9
in 2030 and a cumulative $4.9 trillion between 2023 and 2030 to meet market needs, even if
demand growth slows toward a plateau. This is a significant ask from investors and companies,
but one that has become critical in light of the 2020-2021 downturn and erosion of supply buffers
in the market.
Continued upstream investment is needed just as much, if not more, to offset expected production
declines than to meet future demand growth. Without additional drilling, we estimate that non-
OPEC production would decline by 9 million barrels per day by 2026 and 17 million barrels per day
(or 31%) by 2030.
Russia Upends Oil Markets
Wildcard: Investment needs will depend on Russia
There is a new added layer of uncertainty that will impact future investment needs – the trajectory
of Russian production. Russian production levels depend not only on what sanctions allow and
10. _____________________________________________________________________________
10
what is technically feasible but also on Russian policy. The depth and duration of Russian
production losses will significantly influence investment needed going forward.
Russian production remained stable in 2022, but that will change in 2023
Russian oil production exceeded expectations in 2022 as Moscow successfully rerouted a large
portion of exports to China, India, and other willing buyers. Initial analysis in early-2022 suggested
Russian production was going to fall by more than 1.5 million barrels per day. However, Russia
was able to keep production virtually flat by diverting flows from Europe to Asia.
The resiliency of Russian crude oil production is expected to change in 2023 following the
implementation of a number of sanctions and punitive measures in late 2022 and early 2023: E.U.’s
embargo on crude and products, the EU-led ban on insuring cargos of Russian oil, and the
implementation of a price cap. While most of these measures came into effect in early-December
– at the time of writing, it is still too soon to discern the full impact of these measures. Nevertheless,
most consensus-leading forecasts expect Russian production to fall between 1.0-1.5 million
barrels per day in 2023.
Russian production risk skewed lower for longer, but uncertainty abounds
The base case investment scenario in this report assumes Russian production will decline by 1.1
million barrels per day in 2023 to 9.4 million barrels per day and then plateau at this level through
the rest of the decade as the combination of the exodus of western service companies and
constraints on investment and trade hinder growth. It also assumes Russian and Caspian region
investment will be sustained at around $38 billion. If Russian investment and production fall short,
investment from the rest of the world will need to exceed the previously mentioned levels.
Conversely, should geopolitical conditions shift, or Russia produces at a higher level despite
pressures on the domestic upstream sector, meaningful relief could be provided to global markets
and the investment burden, albeit only partially.
While Russian crude oil production exceeded expectations in 2022, the risk going forward is
skewed lower without a resolution to the war in Ukraine. Production could falter due to reduced
demand (domestically or from a recession in Asia), a lack of available ships or insurers to move
11. _____________________________________________________________________________
11
Russian flows, Russian policies to not trade with countries that adhere to the price cap, or reduced
access to technology and foreign capital.
The lack of visibility over the long-term trajectory of Russian production also adds a further
challenge to investment by clouding market conditions and price expectations.
Slowing Economy and Monetary Tightening Add to Investment
Challenges but Also Provides Opportunities
For an industry tasked with jump-starting upstream investment after stalling in 2020-2021, the
broad-based slowdown in the global economy in 2023 and compounding tightening in global
monetary conditions present clear challenges to both the demand outlook and access to capital.
However, unlike previous economic downturns, commodity prices are likely to remain elevated in
light of supply concerns and geopolitical pressures, shielding industry returns even amid slowing
demand. Additionally, as China unwinds COVID-zero policies, pent-up demand in China may
partially offset some of the weakness caused by slowing economies elsewhere.
This presents a critical opportunity for the sector. In our previous investment report, we highlighted
that the investment challenge was primarily a mismatch in velocity, with the recovery in upstream
investment post-pandemic lagging global demand recovery. The slowdown in global demand over
the latter part of 2022 and at least part of 2023 imposes some restraint on demand and affords
some time for supply to catch up. But that will require operators to look through complex short-
term economic risks.
The global economic outlook has deteriorated significantly in the past year
Global growth forecasts from banks, financial institutions, and inter-governmental groups have
deteriorated significantly in the past year. The IMF lowered its global growth estimate and forecast
for 2022 and 2023 by one percentage point or more in the last 12 months. In its latest update, the
IMF warned that nearly 33% of the world economy will enter a recession in the next year and the
lost output through 2026 will total $4 trillion USD.
12. _____________________________________________________________________________
12
Higher costs caused by inflation and supply chain issues
Consumers globally are struggling with a deepening cost-of-living crisis spurred by inflation that,
in many locations, shows few signs of easing. Inflation has significantly increased the costs of
materials and operating expenses in the oil and gas sector. The world economy’s weighted
inflation is near 10%, but costs in the energy sector are up as much as 15-20%. As a result, a
dollar invested in upstream today will yield less activity than before. However, it is worth noting
that the rise in oil and gas companies’ profits are outpacing the rise in costs.
Central banks are tightening monetary policies to combat inflation
Central banks are raising interest rates to dampen demand and contain inflation, which in many
countries has been at its highest levels since the 1980s.
Higher interest rates can have a direct impact on energy producers because of the significant
capital required up front to bring projects to fruition. Although many producers are making enough
13. _____________________________________________________________________________
13
cash from operations to fund capex, a survey of oil and gas producers conducted this past fall by
Haynes and Boone (a US-based law firm) found that more than 35% of respondents planned to
secure capital through debt in 2023 compared to 25% from cash. However, oil and gas investment
slowed even when interest rates were consistently near 0% for nearly a decade, therefore, higher
and variable interest rates now and in the future only add to investment decision complexity.
Lessons from the past recessions
Global growth is energy-intensive, and when global growth slows, oil demand can stall. Previous
global recessions, such as 2009, saw a year-on-year decline in both oil demand and upstream
capex.
If the world enters a recession in 2023, depending on the duration and depth, it is possible that oil
demand growth could remain below historical trends for several years, over the long-term, or
permanently. Once economic activity recovers, it will likely be less oil demand-intensive than it
would have been in 2019 due to fuel switching, EV penetration, efficiency improvements, and
accelerated climate policies.
The near-term uncertainty of demand and the potential medium-to-long-term consequences will
add to investment hurdles and deterrents. However, rather than be deterred, companies would
need to invest into and through the recession in order to provide supply security in the medium-
term.
14. _____________________________________________________________________________
14
China’s easing of COVID-zero policies will only partially offset negative economic fallout
China may be a small bright spot for demand, after China announced an unwinding of COVID-zero
policies which is expected to provide markets with a one-time demand boost as travel recovers to
pre-COVID levels. Jet fuel will see the largest gain as international flights return, adding ~500
thousand barrels per day of jet fuel demand. However, this release of pent-up demand is unlikely
to fully offset the impacts of economic slowdown in the rest of the world. Moreover, as China’s
transportation demand recovers, the country is also expected to face structural economic
headwinds caused by rising unemployment, slowing manufacturing output, a deepening real estate
crisis, and demographic shifts.
Demand slowdown and high prices provide an opportunity for investment to catch up
Despite growing economic concerns, the energy sector is faring much better than the rest of the
global economy at the moment. While the SP 500 index is up only 2% from the beginning of
2021, the SP Global Oil Index is up 60%. Notably, the SP Global Clean Energy index is
underperforming other sectors and is down 29% from January 2021. Energy supply/demand
balances are relatively tight and energy prices are high because of supply-side factors (primarily
the loss of Russian oil and gas). This is helping energy companies reap hefty profits.
The disconnect between the energy sector and the broader economy is uncommon and provides
an opportunity for upstream investment to catch up while demand remains more muted.
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The recent performance of the energy sector is even more striking when compared to the lackluster
performance over much of the past decade. Between 2013 and 2021, the SP Global Oil Index
fell by 10% compared to a 178% growth in the SP Global Clean Energy Index,169% growth in
the SP 500 index, and a 368% gain in the SP 500 I.T. Sector Index.
The recent strong performance by energy equities does not erase the decade of poor performance.
However, it highlights the energy business’s cyclical nature and how profits today may not equal
profits tomorrow. The current up-cycle provides a unique opportunity for the energy sector that is
not afforded to other sectors at this time, and it is an opportunity that the energy sector cannot
afford to waste.
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Tighter Markets are Here to Stay Without Increased Investment
Global spare production capacity will remain limited in the near-term
Traditionally, tight markets have found relief by drawing inventories, utilizing spare production
capacity, or ramping-up short-cycle production (U.S. shale). Over the past twelve months, markets
relied heavily on all four but have yet to find sustainable breathing room that would ease supply
concerns. Strategic and commercial inventories have been tapped extensively and are below the
5-year average in most regions, and U.S. producers are tempering growth despite higher prices.
All that remains is global spare production capacity.
Current global spare production capacity is at only ~2.0-2.5 million barrels per day; nearly all of it
is held by Saudi Arabia and UAE. Global spare capacity rarely falls below 2.0 million barrels per
day for any extended period. With a few notable exceptions, Gulf producers typically maintain a
buffer to increase production in unexpected supply outages and emergencies.
Saudi Arabia plans to increase capacity to 13.2 million barrels per day (from their current 12.2
million barrels per day) by 2027, and UAE plans to expand to 5 million barrels per day (from 4.2
million barrels per day) by 2027. However, actual production increases will depend on OPEC+
policy and their desire to maintain their traditional safeguard.
Capital discipline will keep U.S. shale growth at a moderate pace, but SPR buyback may
provide some temporary protection for investors and operators
The surge in U.S. production in the middle of the last decade provided the market with a perceived
supply safety net that was expected to endure well into the 2020s. Beyond the growth figures,
U.S. onshore production proved highly responsive to price signals, with any temporary
improvement in market conditions sufficient to move the U.S. shale engine back into high gear.
That elasticity of supply was a core tenet underpinning views of “lower for longer” and a frequent
counterpoint to shortage/supply fears. However, that vision of U.S. supply has changed. U.S.
growth has been, and will likely stay, well below the 1.5 million barrel per day growth seen in late
2010s due to the prioritization of capital discipline, consolidation in the sector, and headwinds from
inflation, rising interest rates, policy uncertainty, supply chain shortages, and labor shortages. The
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shale industry’s relatively muted production response to the 2021 and 2022 recovery reflects new
priorities of increasing shareholder returns and the commitment to “capital discipline.”
However, the U.S. government is exploring ways to incentivize companies to produce using the
country’s Strategic Petroleum Reserve (SPR). The U.S. sold 180 million barrels of crude oil from
its SPR in the wake of high prices and concerns of a supply shortfall following Russia’s invasion of
Ukraine. The SPR level is now at a 38-year low and the current U.S. administration has proposed
restocking if WTI falls below $70/bbl. A buyback may provide temporary certainty of demand and
price support, resulting in short-cycle investment and activity. However, the SPR rejected all bids
for an initial 3 million barrel buyback on price and quality grounds, after announcing plans to begin
repurchasing in mid-December 2022. While it remains to be seen whether the SPR refill
materializes, let alone at a scale and on a timeline that meaningfully supports producers, the tacit
recognition by the U.S. government that prices should be shielded on the downside to support
production marks a departure from the era of perceived energy abundance. The reassessment of
market conditions considering renewed energy security concerns clearly affects government
policies, investors, and other stakeholders.
Latin America could thrive in the new environment
Latin America is expected to be a driver of non-OPEC supply growth in the medium-term. There
has been an increase in attention and demand for Latin American crudes in recent years that has
intensified in the wake of Russia’s invasion of Ukraine. However, new production from offshore
Brazil and Guyana tends to be sweeter crudes and are not a perfect substitute for the more sour
Urals from Russia. Latin America capex spending was up 34% in 2022 while the rig count is up
24% year-on-year.
While Latin America could thrive in the new environment, it is worth noting that deepwater
production has a much longer lead time than U.S. shale or even most conventional onshore
projects. FPSO new builds can take 2-3 years. Investment in Latin America will not provide
immediate relief to markets but will help in the medium-term.
Lifting sanctions could bring quick relief
Momentum around a revival of a JCPOA deal has waxed and waned over the past year. The
return of Iran’s oil to the market remains highly uncertain. If a deal was reached, Iran may return
~1.3 million barrels per day to the market in fairly short order and drawdown and sell ~70-90 million
barrels from storage almost immediately.
In late 2022, Chevron received an exemption from the U.S. government to operate in Venezuela.
However, the upside to Venezuelan production will be limited to ~0.2-0.4 million barrels per day
due to severely decayed infrastructure after years of underinvestment and lack of maintenance.
If sanctions on Russia were lifted, its return would depend on the duration of sanctions and its
ability to find buyers. The longer sanctions are in place the higher the risk of a slower return due
to maintenance, investment, and fields’ natural declines.
Ultimately, with low Gulf spare capacity and limited engines of supply growth globally, a return of
Iranian oil to the market or a recovery from Russia (regardless of the conditions surrounding it) are
the primary pathways, if any, to restore some spare capacity in the market sustainably and let
some steam out of the pressure cooker. These are the types of step changes that can alter the
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supply function in market-altering ways, but remain somewhat challenging to envisage in the short-
term given geopolitical trends throughout 2022.
Energy Security and Energy Transitions
Energy security needs to be accepted as a long-term issue
Energy security is back at the forefront of policymakers’ minds, leading to a more accommodating
stance towards exploration and consumption in some countries but investors look longer-term and
need regulatory and policy certainty. If policies for energy security are viewed as temporary
measures, they will not spur the investment needed. The re-emergence of energy security helps
break the cycle of the energy abundance mindset and leads to a more accommodating
environment for investment.
Long-term demand uncertainty remains a key constraint on investment
Traditionally, decisions to invest in long-cycle upstream projects consisted of balancing economic
considerations such as full-cycle breakeven prices and above-ground risk affecting developments.
Now, investment decision-makers must also consider if demand will still be there over the lifetime
of a specific project and the impact of government policy changes.
While short-term demand and supply concerns have overshadowed long-term concerns recently,
long-term demand uncertainty remains a key constraint on investment.
Of the various long-term forecasts and their varying scenarios, the difference between oil demand
in the highest and lowest case for 2050 is 80 million barrels per day. The range in outlooks is
equal to ~80% of today’s market – a massive divergence.
Long-cycle projects that would come online in the mid-2020s are meant to produce well into the
2030s and often beyond into the 2040s. These projects now face a wide range of long-term price
scenarios and growing uncertainties. This means what may be profitable in today’s environment
may no longer be tomorrow.
Operators seek to mitigate this risk by accelerating the payback periods for new investments and
raising the return thresholds to account for additional risks. The current focus on smaller,
incremental, and more modular projects, with access to infrastructure and the ability to be brought
on faster, reflects this trend.
Long-term demand uncertainty, likely reinforced by short-term trends, remains a powerful
restraining force and by far the greatest source of investment risk.
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Carbon intensity of crude becomes an increasingly important metric and hurdle
As companies become increasingly concerned about long-term demand certainty and
decarbonization efforts, the carbon-intensity of potential projects will become a crucial metric
guiding strategic planning decisions. Oil producers have become increasingly focused on reducing
the carbon intensity of their upstream operations. Some oil majors have recently sold their stakes
in higher-carbon projects and prioritized new spending on lower-carbon supply options.
While the market has traditionally defined crude grades by their density and sulfur content, carbon
intensity will become a third metric scrutinized by producers and financers. Low carbon streams
will likely be traded at a premium to higher carbon streams and be more competitive from an
investment perspective, particularly when the global market begins to shrink.
Increasing investment and greenlighting new projects with a lower emissions intensity can also be
used to lower the overall environmental impact of the sector. If older, less efficient fields with a
higher emissions footprint are shut-in earlier than they might otherwise be, in an environment of
underinvestment-induced higher energy prices, the industry’s overall emissions could decline.
Specific, standardized, and transparent emissions data could be key to unlocking future and
continued investments in the oil and gas supplies the world will need during the energy transition.
In current situation, nobody wins: The current energy price volatility is not good for
consumers, investors, businesses, or governments
Adequate investment is needed for stable markets now and in the future. If investment falls short,
it increases the risk of high-prices and high-volatility becoming the new standard. Underinvestment
threatens to undermine energy security in the short and medium-term and it can also stall progress
on climate goals as demonstrated by the increased reliance on coal.
Prolonged cycles of energy price volatility are detrimental to economic growth. On the micro-level,
it can affect individuals’ and companies’ costs and revenue streams, making planning difficult. At
the macroeconomic level, volatile oil prices fan inflation, hinder investment, delay consumption of
durable goods, reduce total economic output, dent equity returns, and entrench energy poverty.
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The uncertainty surrounding future supply/demand can impact prices before the market is
under/oversupplied. Delayed investment decisions and the increased reliance on short-cycle
production, increases the uncertainty of where or if future production will be sourced. Concerns
about reduced FIDs and lower investment today can raise current prices even if the current market
is well-supplied.
Ways Forward: Increased Cooperation Supportive Policies
To move forward and enable stable markets through the medium term, there needs to be
intensified dialogue between, and supportive policies from, both producers and consumers. The
traditional framework of energy markets is evolving, and market players and governments need to
adapt. Energy trade is being reshaped by geopolitics, shifting demand hubs, historical
underinvestment in some traditional supply regions (e.g., West Africa), and new business models
by short-cycle producers.
Increased dialogue between suppliers and consumers, and data transparency are needed to
ensure security of supply and market stability through the current energy crisis and the energy
transition. History has shown that without market management, boom-bust price cycles prevail
and wreak havoc on economies, particularly in regions that are still developing.
In addition to active and continuous dialogue, governments can help by providing regulatory and
policy certainty, including those related to ESG. In many parts of the world, environmental policies
and regulatory frameworks related to the energy transition are in flux. As a result, companies must
consider the impact that future regulatory changes may have on the costs of compliance and
returns over time. Unforeseen or newly introduced regulations can lead to higher costs and
reduced revenues.
Consumer countries can support markets by sending clear signals about future demand, building
and maintaining sufficient inventories, supporting long-term offtake contracts, and preventing
prohibitive policies.
Meanwhile, producers can support markets by promoting investment. Operators need a certain
level of assurance and regulatory certainty to invest in capital-intensive, long-cycle projects. They
will be increasingly constrained in committing capital, or will require higher returns to do so, as
risks evolve. Future supply must clear an acceptable hurdle rate that accounts for policy
uncertainty, variable oil and gas prices, and, increasingly, carbon price assumptions.
Additionally, governments should base policies on realistic energy demand outlooks and to ensure
adequate and affordable energy supplies during the transition. The energy industry needs more
certainty from policymakers over penalties and incentives for future energy investments to ensure
sufficient capital for all technologies is mobilized to meet the climate challenge. This requires
government policies grounded in realistic assumptions about demand and disruption risks. In
particular, governments need to ensure assumptions do not underestimate energy demand growth
coming from the 80% of the global population in the developing world.
Conclusion
Today’s energy market is defined by uncertainty and volatility. It is hard to predict where markets
will stand in a year, nevertheless, in 8 years. But decisions made today will impact the availability
and affordability of future supplies. Increased dialogue with clear and decisive policies can help
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reduce the uncertainty inherent in a complex and integrated market. Low-cost resources and
capital are available – but the investment environment needs to be de-risked and producers need
incentives to re-invest. Adequate investment would help foster market stability, economic growth,
and enable a just and orderly transition for all. All it requires is a commitment of capital, market
transparency, and open dialogue between producers and consumers.