OIL & GAS
OIL & GAS
You participated in the Black Sea Oil & Gas conference in 2018 with a presentation on global trends affecting the upstream industry. Now, in 2019, are there any new trends that upstream companies should be aware of?
We would see three trends – not completely new but in their intensity worth watching.
The visible climate change agenda is becoming a new global trend. Greta Thunberg's speech at the UN conference in September is a litmus test that there is a critical mass of public opinion, including the investors, starting to act not just talk about climate change, such as a group of banks with $47 Trillion assets here. This is currently and will be going forward impact the oil and gas industry massively.
The portfolio divestment of global mature assets by the supermajors is probably not new but getting even more pronounced for example in the North Sea and Gulf of Mexico. New owners and operators will have to prove that they can operate more agile and efficient.
VULNERABILITY OF SUPPLY
The drone attack in Saudi Arabia was a reminder about the vulnerability of supply in the Middle East even if in the concrete case the effects on supply and price were not significant and long term.
Here we see mixed signals. The reaction of the market and players is always a good indicator of the direction on various policy changes over the last years.
The far biggest offshore project in the Black Sea is still awaiting FID and rumors on players exiting are painting a clear picture.Johann Raunig, Partner, McKinsey & Company
On the other hand Black Sea Oil & Gas, backed by Carlyle, has taken FID on its Midia Gas development project. We are currently at a pivotal moment for the future of the O&G industry in Romania which is relying long term on the Black Sea developments. All involved parties have realized this over the last months.
Global trends based on energy transition bring a lot of opportunities to the Black Sea region due to the increased importance of gas.Johann Raunig, Partner, McKinsey & Company
Combined with a stable and secure location and the geopolitical attractiveness of domestic European gas there are a lot of opportunities in the long term.
Local trends and connected opportunities or risks will emerge and need to be assessed based on local energy policies.