scholarly journals After the Crash - Oil Price Recovery and LNG Project Viability

2019 ◽  
Author(s):  
Uyiosa Omoregie
Keyword(s):  
Energy Demand ◽  
Oil And Gas ◽  
Paris Agreement ◽  
Oil Price ◽  
Expansion Phase ◽  
Oil Companies ◽  
Demand Growth ◽  
Crude Oil Prices ◽  
Additional Demand ◽  
Gas Market

Crude oil prices fell below the 2009-2014 five-year average in early September 2014. The drastic fall in price was from a monthly peak of $112 per barrel (bbl) in June 2014, falling to $62/bbl in December. Since 2016 the oil and gas market has gone through a period of rebalancing, resulting in modest recovery in prices. Oil price recovery reached a peak of $85/bbl in October 2018. Gas prices have also achieved similar modest price recovery. The industry has now entered an expansion phase: the five largest international oil companies exceeded expectations for 2018. The outlook for gas is encouraging. It is projected that gas will supply the largest share of energy demand growth, supplying over 40% of additional demand by 2035. Also, the United Nations 2015 Paris Agreement on climate change has led to a re-emphasis on gas as a ‘transition’ ‘cleaner’ fuel. A window of opportunity exists for new LNG projects to commence production in anticipation of an undersupplied market (2025-2035). LNG projects provide long and stable dividends for shareholder companies, certain risks found in tight oil and upstream projects are absent.

Mexico's shale ambitions will have to wait

2016 ◽  
Keyword(s):  
Economic Development ◽  
High Risk ◽  
Oil And Gas ◽  
Oil Industry ◽  
Oil Price ◽  
Tight Oil ◽  
Shale Oil ◽  
Content Type ◽  
Oil Companies ◽  
Growing Crop

Subject Mexico's massive untapped shale oil and gas reserves. Significance Mexico has enough 'tight oil' and gas reserves to make the country energy independent again, according to some estimates. However, finding and developing those reserves will be a long, costly and high-risk endeavour. Unfortunately for Mexico's energy policymakers, the oil price crash has sapped the industry's appetite and ability to take on the challenge. It will be years before Mexico's shale industry regains the momentum that had started to build before the oil industry downturn. Impacts Mexico will grow increasingly reliant on US natural gas imports, providing opportunities for pipeline and other infrastructure builders. Shale development could bring economic development to some of Mexico's poorest regions. A growing crop of domestic oil companies stands to gain from tight oil production.

U.S. oil company stock returns and currency fluctuations

2015 ◽  
Vol 41 (9) ◽  
pp. 974-994 ◽  
Author(s):  
Andre Mollick ◽  
Khoa H Nguyen
Keyword(s):  
Financial Crisis ◽  
Stock Returns ◽  
Structural Breaks ◽  
Oil And Gas ◽  
Global Financial Crisis ◽  
Oil Price ◽  
Content Type ◽  
Oil Companies ◽  
Daily Data ◽  
Oil And Gas Sector

Purpose – The purpose of this is paper is to pay a closer look at the 2008-2009 financial crisis (and its aftermath) and analyzes stock returns of nine major US oil companies as well as the oil and gas sector under daily data from January 1992 to April 2012. Design/methodology/approach – The authors adopt the arbitrage pricing theory model to examine the relationship between stock returns and their influences including oil price return, yield spreads, and US dollar index return. The authors also provide a test for structural changes in each regression model of return series to capture for multiple breaks. To examine the asymmetric effect of oil price returns on stock returns, the authors separate oil price returns series into two series: positive changes in oil price and negative changes in oil price. Findings – The authors find stock returns of oil companies as well as the oil and gas sector are positively affected by oil prices and have stronger effects in the downward direction. Interestingly, The authors find the effects of oil price movements on stock returns increase over time. The authors examine the possibility that investors wishing to hedge against a weakening USD invest in US oil companies and find that more than half of these companies benefit from a weaker USD against the JPY, while all strongly benefit from a weaker USD against major currencies. Originality/value – The authors employ daily data for two-decade period including the last global financial crisis. Due to the long-term period covered in this study, sequential Bai-Perron tests are used to detect structural breaks of stock return series. In addition, the data-dependent procedures result in good specifications throughout with white-noise processes in almost all cases.

Making joint ventures work

2013 ◽  
Vol 53 (2) ◽  
pp. 464
Author(s):  
David Ibels ◽  
Marc Van Grondelle ◽  
Jonathon Peacock ◽  
Jonathan Smith
Keyword(s):  
Joint Ventures ◽  
Joint Venture ◽  
Oil And Gas ◽  
Warning Signs ◽  
Global Perspective ◽  
First Year ◽  
Cost Overruns ◽  
Oil Companies ◽  
Scant Attention ◽  
Gas Market

No LNG capital project in Australia can survive without excelling in joint ventures; yet, the practicalities of them are often overlooked. The Australian oil and gas market has some of the most complex joint-venture arrangements in the world, and there is much we can learn from a global perspective about how to make them work. Too often, joint ventures are forced marriages between two or more parties who misunderstand each other and have widely differing aims. Organisations often rely too much on the joint-venture agreement, devote too few resources to the venture itself, and pay scant attention to any warning signs of trouble. The authors see that international oil companies typically have about 30–40% of their portfolios tied up in joint ventures. This is set to grow to about 70–80% during the next 5–8 years as they enter new territories in the hope of securing new resources. Although joint ventures are familiar ground for oil and gas companies, such operators often struggle to make them work. Cost overruns, schedule delays, compliance issues, renegotiations, and erosions of value are common. There are, however, ways to make joint ventures work more effectively, including: knowing what is expected of all parties and monitoring these expectations; improving transparency of information between joint-venture parties; ensuring expectations are realistic and continuing to validate them; paying particular attention in the first year of a joint venture; proactively strengthening existing joint ventures; and, staffing and resourcing joint ventures with care.

OPPORTUNITIES FOR IMPLEMENTING LARGE STATE OIL PROJECTS UNDER VARIOUS SCENARIOS OF OIL PRICE CHANGES

2020 ◽  
Vol 13 (4) ◽  
pp. 207-215
Author(s):  
T.M. Mazurchuk ◽  
Keyword(s):  
Russian Federation ◽  
Oil And Gas ◽  
Oil Industry ◽  
Scientific Work ◽  
Scientific Basis ◽  
Oil Price ◽  
Oil Companies ◽  
Development Scenarios ◽  
The Russian Federation ◽  
State Projects

The scientific work studies the influence of the dynamics of prices for hydrocarbons on the possibilities of implementing state projects in the oil industry of Russia. Also, the economic efficiency of oil projects in the Russian Federation is assessed under various cost scenarios, both in the short and long term. The aim of the study, the authors set out to build an objective model for the implementation of Russian state projects in the oil industry, based on 3 scenarios of changes in hydrocarbon prices until 2023 according to: basic, optimistic and pessimistic forecasts. The paper studies the experience of creating large oil projects in modern Russia and in other countries; the authors pay special attention to oil projects during periods of turbulence in oil price quotations, during the economic recessions of 2008, 2014–2016 and 2020. The prospects for the completion of current projects in Russia are also being assessed in the face of oversupply on hydrocarbon markets and turbulent prices for well-known oil brands. The scientific basis of the work is Russian and foreign sources, assessments of experts from the oil and gas complex of Russia and countries-exporters of hydrocarbons, analytics and reports of oil companies, state programs for the development of the oil industry of the Russian Federation and statistical bases of state statistics services. To construct objective development scenarios, forecasts were used from sources such as: the Ministry of Energy of the Russian Federation, the Ministry of Economic Development, the Central Bank, the BP Statistical Database and the World Bank data, forecasts of large oil companies in Russia.

The Russian Economy in the Context of the World Energy Markets Development

2006 ◽  
pp. 119-136 ◽  
Author(s):  
V. Mironov ◽  
S. Pukhov
Keyword(s):  
Economic Growth ◽  
Energy Demand ◽  
Oil And Gas ◽  
Energy Markets ◽  
Key Factors ◽  
Demand Growth ◽  
Russian Economy ◽  
World Energy ◽  
The World ◽  
Oil Sector

The tendencies and prospects of the Russian economy development as an energy net-exporter country are considered in the context of perspective supply-demand dynamics in the world energy markets. Medium- and long-term prospects of oil and gas prices dynamics as one of the key factors of economic growth in Russia in the post-crisis period are analyzed. It is shown that due to predicted slowing of the world energy demand growth rates and strengthening in this connection of the competition in the traditional Russian markets the dual Russian economy character (it is not only a producer, but also a rather intensive consumer of energy) makes the problem of internal economy diversification very urgent. A conclusion is made that it is necessary to carry out preventive measures aimed at accelerated transformation of the Russian gas sector (or in addition to the oil sector) into a major factor of economic growth.

TRENDS IN THE DEVELOPMENT OF THE OIL AND GAS MARKET AND THE MAIN MEASURES OF STATE SUPPORT AIMED AT THE IMPLEMENTATION OF ARCTIC OIL AND GAS PROJECTS

2021 ◽  
Vol 5 (11) ◽  
pp. 31-38
Author(s):  
Igor V. Selin ◽  
◽  
Mikhail V. Ulchenko ◽  
Keyword(s):  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Gas Production ◽  
State Support ◽  
Gas Industry ◽  
Oil Companies ◽  
Oil Reserves ◽  
Exploration Drilling ◽  
Gas Market ◽  
High Level

This article is devoted to the study of the main trends in the development of the oil and gas market, as well as the transfer of state support aimed at the implementation of Arctic oil and gas projects. The analysis showed that 2020 turned out to be extremely difficult for the oil and gas industry as a whole. The volumes of oil and natural gas production and consumption decreased, and due to a reduction in revenue, large domestic companies began to save on exploration drilling. Given the high level of «depletion» of oil reserves in traditional fields, with an increase in demand, in the short term, domestic oil companies will not be able to quickly increase production volumes and take advantage of favorable market conditions.

Lower oil and gas prices and the changing LNG landscape

2016 ◽  
Vol 56 (2) ◽  
pp. 586
Author(s):  
Chris Graham ◽  
Andrew McManus
Keyword(s):  
Oil And Gas ◽  
Supply And Demand ◽  
Commodity Prices ◽  
Oil Prices ◽  
Extended Period ◽  
Oil Price ◽  
Spot Prices ◽  
Demand Growth ◽  
Oil Markets ◽  
To Come

The recent uptick in oil prices from multi-year lows reflects growing anticipation of a tightening of supply and demand fundamentals in global oil markets. Price recovery is expected to come through most notably in the second half of 2016, as the extended period of low oil prices takes its toll on global oil supply growth, and oil demand growth holds up as prices recover. Rising oil prices will eventually flow through to higher realised LNG revenues in Australasia's long-term oil-linked term contracts. This would provide welcome respite to project economics, many of which have been hit hard by cost escalation and schedule overruns throughout the build phase, and compounded by the collapse in oil price just as these were starting up. But even with a more favourable oil price environment, the outlook for LNG prices remains weak in the medium term. Lower Asian LNG demand growth and an impending wave of new LNG supply raises the potential for an over-supplied market. With spot prices low, Asian LNG contracts may come under pressure from over-contracted customers. Demands for volume rescheduling and price reductions could become more common. With demand growth less than anticipated, and faced by competition from new entrants, buyers could look to place excess LNG into the international market. They risk competing for market with sellers, trying to secure customers for their own LNG while cutting costs through optimisation. These changes are forcing all companies to consider the benefits of a portfolio approach to their business. These dynamics, in light of low commodity prices, and the implications for the industry are considered in this extended abstract.

Introduction to this special section: India

2019 ◽  
Vol 38 (4) ◽  
pp. 252-253
Author(s):  
Soman Chacko ◽  
Satchidananda Rath ◽  
Pranab Sen ◽  
Subrata Kumar Das
Keyword(s):  
United States ◽  
Crude Oil ◽  
Energy Demand ◽  
Oil And Gas ◽  
Special Section ◽  
The United States ◽  
Petroleum Products ◽  
Demand Growth ◽  
The Third ◽  
The World

India is currently the third-largest global consumer of petroleum products after the United States and China. The country produces approximately 720,000 barrels of crude oil and 3.16 billion ft3 of gas per day and imports more than 80% of its oil and 50% of its gas needs. This large discrepancy between domestic supply and consumption has been rising rapidly of late. With an economy growing at 6%–8% per year, India's energy demand growth over the next couple of decades is forecast to be among the highest in the world. To mitigate the heavy dependence on imported energy, India has stepped up efforts in recent years to increase domestic production of oil and gas.

scholarly journals Impact of oil prices on profitability and investment activity of oil companies from central and eastern europe

2021 ◽  
Vol 266 ◽  
pp. 06003
Author(s):  
A. Ilic ◽  
T. Ponomarenko
Keyword(s):  
Eastern Europe ◽  
Central And Eastern Europe ◽  
Oil And Gas ◽  
Panel Data Analysis ◽  
Oil Prices ◽  
Descriptive Statistics ◽  
Oil Price ◽  
Investment Activity ◽  
Oil Companies ◽  
Oil And Gas Companies

In this text, we analyze the profitability and investments trends of oil companies from Central and Eastern Europe (CEE1)over the period 2008-2019. Based on descriptive statistics, comparative analysis, and panel data analysis, we show that: (1) CEE oil companies increased profitability in the period 2008-2019; (2) in the second sub-period (2015-2019), when the oil price was lower, ROACE of CEE oil companies exceeded ROACE of global major oil and gas companies; (3) in the second sub-period investment activity continued to be relatively high; and (4) oil price had less influenceon profitability and investment activities of CEE oil companies in comparison to oil majors. It is also showed that the upstream segment is less important for CEE oil companies than for major oil companies and the contribution of upstream segment to profitability of the companies was reduced during the period of lower oil prices.

scholarly journals A Probe into Impediments of Benefit Gain in Investment Contracts of Oil and Gas Industries

2016 ◽  
Vol 9 (5) ◽  
pp. 31
Author(s):  
Nader Mardani ◽  
Mohammad Mehdi Hooshmand
Keyword(s):  
Economic Policy ◽  
International Relations ◽  
Policy Making ◽  
Oil And Gas ◽  
Oil Price ◽  
Crucial Importance ◽  
Oil Companies ◽  
Factors Influencing ◽  
Oil Contracts ◽  
Selection Of

Generally, oil contracts comprise of a set of benefits in their own specific settings. Different technical, sometimes fundamental, factors may lead to imbalance in benefiting from the contract; this is considered as injustice in international relations and a violation to purpose of law. Therefore, seeking strategies to deploy justice in this field and offering strategies to find such strategies is of crucial importance. The present study is aimed at investigating impediments and factors that cause imbalance in equal gains of both parties in these contracts. Identification of these factors and the existing conditions significantly help realization of justice within a framework of rules and regulations. After carrying out deep analyses of oil contract and evaluation of the results, factors influencing this were identified; some of this factors such as contract parties and selection of the type of contract and currency system are related to the parties’ will sand some others are related to conditions such as risks of economic policy making and of economic structures, while there is another case of gas and oil price fluctuations which is separate from the existing conditions or parties’ wills. Therefore, it is of great importance to take these issues into account and to make attempts to follow them toward gaining benefit from oil contracts for oil companies, particularly those in countries where oil is the aim source of income.

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