In less than 4 minutes learn what the top business issues will be in 2014 for the oil and gas industry. Be ready for next year!
Transcript of Session –
Hey, folks. Let’s learn some more about the oil and gas industry.
Okay. On today’s show we’re going to hit the top ten business drivers for 2014 for oil and gas. We’re going to go quick and we’re going to try to do it less than four minutes, so hang on. Ready?
Number one. Low interest rates. Low interest rates are going to drive a different type of behavior in the industry in 2014. Think of ready access to capital. A lot of the small guys and the big guys or the pick-up projects that they put off for the last couple of years ‘cause now the cost of that capital is much cheaper.
Number two. New political risk. So there’s always been political risk in the oil and gas industry predominantly in the Middle East, but now things have changed dramatically, we have new leadership at Australia and Mexico, we have changing dynamics in the Arctic with the Russians, so political risk is a factor in a different way.
Number three. Talent. There is a war for talent in the oil and gas industry and it’s only getting worse. There’s a shortage of both skilled and unskilled labor and this can be a big business driver for next year.
Number four. Inflation. Think of the success in the upstream side of the house in North America like hydraulic fracking. Well, that success is driving an increase in price in both service and equipment by 10% or 15% and that’s going to change people’s business models in order to be profitable.
Number six. Long term project planning. So oil and gas industry has always thought of projects in the 3 to 7-year life cycle. Now, they have to think of projects in the 15 to 30-year life cycle. Think of the things like Arctic drilling, ultra deep water drilling, and the all the pipeline growth in North America and those project plan cycles will have to be much longer. Once again, a business driver in 2014.
Number seven. Exploration. So the E&P guys will have to really hustle in order keep up with the demand they’re going to have to uncover 30 to 45 million new barrels under reserve globally, so they’re going to be hitting the ground hard and that’s going to be a driver in 2014.
Number eight. Gas. What else can I say? Gas is all over the place. What used to be low margin very stable product has now prices are going up, supply is going up. The Asia Pacific has a huge appetite, North America is trying to figure out how to get there, so gas is a major driver in 2014.
Number nine. Major product startups. Because of these large CAPEX multi-year projects are getting ready to hit the ground running, they have to hit their start dates and they have to hit their delivery dates. That these major startups start slipping, it’s going to lose – they’re not going to be profitable and the people are going to pull the plug on it. So once again, that’s going to be a big driver.
And then, number ten. Realistic operational delivery. What does that mean? Almost all the fields in the world are performing under their theoretical maximum in order to be able to meet the world’s demands, think of China, Brazil, and India and the US would have to maximize production in the oil fields and that’s going to be a big driver in 2014.
So there we go, we hit ten thing really quick. We have a deep detailed synopsis of this information on our website if you want to download it. It’s completely free. So if you’re watching this on YouTube, just go to the website www.modalpoint.wpengine.com and you can download it.
I hope this helps. Have a great day.