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Oil and Gas World Brief Overview


Oil and Gas Market Introduction

The Upstream Oil and gas sector is an international market, with investment and operational decisions increasingly determined against world norms, heavily influenced by both the current world oil and gas price and anticipated price for its impact on new offshore and inshore field developments.

The volatility of the oil price has led to changes in the structure of the oil and gas sector, encompassing both the oil companies and their various suppliers and contractors. In particular there has been consolidation both horizontally and vertically in the traditional contracting oil and gas supply chain.

Every day the world consumes over 75 million barrels of oil and 6 billion cubic metres of gas. This rate of consumption further depletes the planet's finite quantity of fossil fuel.

Demand for Oil and Gas

Continued world economic growth, particularly assuming there are no major downturns in world regions (as in Russia and SE Asia in 1998 / 1999), that will lead to increased demand for Oil and gas.

With limitations on the spare production capacity available world-wide at present, increased world demand will certainly require increased development activity in both OPEC and non-OPEC countries. Thus it is expected that world investment in exploration and production facilities will rise.

The level of activity in any one country is influenced generally by the expectation on oil price, and local conditions reflecting the country's competitive position with respect to others.

Local conditions generally, the attractiveness of the oil province geologically (indicated perhaps by recent discovery rates and size of discovered fields), legislation affecting conditions and taxation on developments, and the confidence in political system and proximity to markets are all factors to be taken into account.

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