This document discusses how the global oil industry has shifted into an era of abundance marked by more capital than profitable investment opportunities. This has affected perceptions of value creation by prioritizing financial returns over growth. The price fall is severely straining oil producing countries and companies by creating budget shortfalls. Countries will prioritize securing revenue to finance budgets over securing investment. While opportunities may arise for international oil companies to help struggling national oil companies, companies will be more selective in investments given the global competition for capital. The document focuses on the implications for Latin America, including questions around how countries and companies are adjusting policies to cope with low prices and attract investment.

1. #OM2015
Era of Abundance: Shifts in Value Creation
• The global petroleum industry has
shifted into an era of abundance,
marked by more capital available
than profitable investment
opportunities.
• This shift has affected perceptions
of value creation, settling the
growth versus yield debate firmly
on the side of the latter.
Project Life Cycle
Perceptions of Value Through the
Project Life Cycle
Value
High
Low
Exploration Appraisal Development First
Production
SeismicIdentify
Resource
Scarcity,
2008-12
Resource
Abundance, 2015
Source: Energy Intelligence Research & Advisory

2. #OM2015
Era of Abundance: Country & Company Impact
• The price fall is placing severe strain on companies and oil-producing countries alike.
• The top priority of many countries will be to finance budget shortfalls without forestalling
broader economic growth.
• In almost all cases, securing revenue will take priority over securing investment.
• Opportunities could arise for IOCs to help NOCs struggling with gaps in revenue or
investment mandates. But as the industry’s priority shifts toward improved execution, IOCs
will be more selective in what is ultimately a global competition for capex dollars.
State
Mandate
Operational
& Financial
Demands
NOC
Capabilities
NOC Needs
NOC Partnership Framework
Source: Energy Intelligence Research & Advisory

3. #OM2015
Era of Abundance: Latin America Implications
• Latin America offers world-class resources in Venezuela’s Orinoco, Brazil’s pre-salt,
Argentina’s Vaca Muerta and Mexico’s deepwater.
• Even before the oil price downturn, the historic Mexican opening attracted great
attention—raising questions about companies’ regional investment priorities.
• Goal of this panel: illuminate the case of Latin America at this pivotal moment in
industry history.
• Three guiding questions:
– What is the impact of this era of abundance on the region?
– What types of adjustments and policy measures are Latin American countries and
companies taking to cope with low oil prices and to boost investment in their sectors?
– What are the implications for foreign investors?