THE GLOBAL OIL & GAS INDUSTRY: PROSPECTS & CHALLENGES IN THE NEXT DECADE

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THE GLOBAL OIL & GAS INDUSTRY: PROSPECTS & CHALLENGES IN THE NEXT DECADE

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THE GLOBAL OIL & GAS INDUSTRY: PROSPECTS & CHALLENGES IN THE NEXT DECADE

  1. 1. THE GLOBAL OIL & GAS INDUSTRY: PROSPECTS & CHALLENGES IN THE NEXT DECADE Presented By: Theophilus Acheampong Aberdeen July 12, 2011
  2. 2. PRESENTATION OVERVIEW  The Global Oil & Gas Value Chain  Major Changes within the Oil and Gas Industry  Company Strategy Framework  Barriers to Change Within the Business  Overcoming the Barriers to Change  Summary and Conclusions  Appendix2
  3. 3. The Global Oil & Gas Value Chain Upstream Oil & Gas Mid Stream─ Exploration─ Field Development─ Production Operations Downstream ─ Transportation ─ Processing ─ Storage & Distribution ─ Manufacturing ─ Refining & Petro-Chemicals ─ Wholesale & Marketing3
  4. 4. Major Changes within the Oil and Gas Industry Challenges  Volatile energy markets on the macro-economic front  Increased operational and logistical challenges from tougher environments  Increased regulatory pressure on the industry & Fiscal regime instability  Skills and labour supply deficit in the industry Opportunities  Growing market in the low-carbon sector of the economy  Closer collaborations between contractors, operators, and the supply chain  Opportunities in frontier markets with newer assets and technologies4
  5. 5. Company Strategy Framework DIVERSIFCATION OF REVENUE STREAMS EFFECTIVE COST CONTROLS & CUSTOMER SERVICE FOCUS SAFETY & HUMAN CAPITAL INVESTMENT5
  6. 6. Company Response Strategy DIVERSIFCATION OF EFFECTIVE COST REVENUE STREAMS SAFETY & HUMAN CONTROLS & CAPITAL INVESTMENT CUSTOMER SERVICE • Offer a broad service range (e.g. Logistics • Continuous Capital • Investment in Employee supply in Renewables Expenditure and Health & Safety such as Offshore wind & Technology investments Turbine Installations) to improve economies of • Initiatives to ensure scale & efficiency continuous supply of • Consolidate & leverage talent pool (e.g. existing business in the • Reduce operational cost Training, Leadership & UKCS (e.g. base utilizing innovative Personal Development Decommissioning approaches (e.g. Cut Programmes) Projects) down on wastages, hedge fuel price risks ) • Adequate succession • Emerging markets planning for senior opportunities such as • Understand customer management Africa & Asia (e.g. J.V. requirements, ensure Partnerships and project deadlines and Acquisitions) service delivery are timely6
  7. 7. Barriers to Change • Macro-economic factors (e.g. Oil Prices & Fiscal regime instability) POLITICAL & • Non-standard legal & environmental regulatory ECONOMICAL frameworks • Financial and other resource constraints • Non existence of expertise in new service offerings SOCIAL & and emerging technologies TECHNOLOGICAL • Non-integrated operations at the organizational level7
  8. 8. Overcoming the Barriers to Change Utilize integrated logistics policies to cut down project timelines. Bespoke risk & asset management strategies to address capital allocation decisions. Membership of industry bodies such as Oil & Gas UK to advocate on behalf of industry. Effective communication strategies to understand employee & customer needs. Training and human capital development.8
  9. 9. Summary & Conclusions Price Risks, Capital Investments and Sustainable development will be industry drivers in the coming decade. Company strategy should focus on: ― Diversification of Revenue Streams ― Effective Cost Controls &Customer Service Excellence ― Safety & Human Capital Investment Benchmarks on supply chain focus, operational excellence, & regulatory compliance. UKCS will be pivotal in building on core competencies. Future growth in the industry will come from investments in new assets, technology & people.9
  10. 10. Thank You:Questions?
  11. 11. Resources & Other Useful links Source: DECC, 2011
  12. 12. Resources & Other Useful links Source: BP Statistical Review of World Energy 2011
  13. 13. Resources & Other Useful links Source: BP Statistical Review of World Energy 2011
  14. 14. Resources & Other Useful links1. http://www.oilandgasuk.co.uk/knowledgecentre/supplychain.cfm2. http://www.spe.org/jpt/print/archives/2011/04/16TalentTechnology.pdf3. http://www.pwc.com/en_GX/gx/transportation-logistics/pdf/hoisting-the-sails_final.pdf4. http://ax4energy.com/LinkClick.aspx?fileticket=vbON1Pl4Kj4%3D&tabid=675. http://www.kpmg.no/arch/_img/9448852.pdf6. http://www.deloitte.com/assets/Dcom- Australia/Local%20Assets/Documents/Services/Risk%20services/220909_Deloitte_Oil_and_gas_reality_check. pdf7. http://www.ey.com/Publication/vwLUAssets/Top_10_risks_affecting_oil_and_gas_in_2010/$File/The%20top% 2010%20risks%20for%20oil%20and%20gas.pdf8. http://www.energyinst.org/information-centre9. http://www.economist.com/node/448965910. http://www.abdn.ac.uk/~pec144/acreef/publications.html11. http://www.bp.com/liveassets/bp_internet/globalbp/globalbp_uk_english/reports_and_publications/statistica l_energy_review_2011/STAGING/local_assets/pdf/2030_energy_outlook_booklet.pdf12. https://www.og.decc.gov.uk/

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