What
are
the
largest
volume
products?
The largest volumes of products of the oil and gas
industry are fuel oil and
gasoline (petrol). Petroleum is the primary material for a multitude of
chemical products, including pharmaceuticals, fertilisers,
solvents and
plastics. Petroleum is therefore integral to many industries and is of critical
importance to many nations as the foundation of their industries.
Oil and gas industry outlook: 2019
In consideration of industry low's, such as the price collapse in 2013 and
major environmental disasters such as the Deepwater Horizon Gulf Of
Mexico Oil Spill in 2014, the oil & gas sector has now recovered.
The world's dependence on oil and gas is increasing as global economies and
infrastructure continue to rely heavily on petroleum-based products.
Discussions of when world oil and gas production will peak seem to be on
the periphery, even amid a weakened global
economy and the shrinking
availability of oil. The oil and gas industry continues to wield incredible
influence in international economics and politics - especially in consideration
of employment levels in the sector, with the U.S.
oil and gas industry
supporting at least 10 million jobs.
The recovery occurred for several reasons, but
the chief among them is the
success of the production restraint agreement between OPEC and non-OPEC
nations. In addition, developing nations such as China, Brazil and Russia are
increasing exploration and production efforts. However, geopolitical
considerations such as the ongoing troubles in Venezuela, Iran, and Qatar's
exit from OPEC will influence oil and gas supply.
The trend towards renewable and alternative energy is another threat to
traditional oil and gas companies. Coupled with the rise in pro-eco legislation
and governmental pressure has meant the industry is under more scrutiny
than ever.
Generating electricity from solar power systems
and offshore wind is
becoming increasingly cheaper and cost-effective. According to IRENA, over
80 percent of newly commissioned renewable energy will be cheaper than
new oil & natural gas sources.
More recently, there has been a resurgence of confidence in the industry as it
enters its third year of recovery. Growth is increasing at a remarkable rate, as
increased upstream production continues to have a positive knock-on effect
for midstream businesses. The price of crude has also stabilised - steadying at
around $50 per barrel. In addition, 100,000 jobs are expected to be created in
2019 and the number of active drilling rigs in the U.S. has increased to 780+
compared
to
591
from
a
year
ago.
The UK continental shelf also appears to be back, with the potential to unlock
dozens of undeveloped discoveries with drilling prospects on the horizon.
Additionally, we can expect an improved outlook for UK upstream
production. The UK offshore sector is expected
to improve after historical
lows in the past few years as there are 16 planned greenfield projects with
identified development plans and 29 announced greenfield projects forecast
to
start
production
between
2019
and
2025.
It is estimated that 30 billion barrels are consumed globally each year,
primarily by developed nations. Oil also accounts for a significant percentage
of energy consumption regionally from 32% for Europe and Asia, 40% for
North America, 41% for Africa, 44% for South and 53% for the Middle East.
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