After CAGR 11% in 2015 since 2010, production began to decline after June 2015. The upstream deal value had seen a 14% downfall in 2016 when compared to 2015. The deal value of was of 130 billion USD in 2016 and it is expected to improve in 2017. A decline in the price of Crude oil and Natural gas was observed in from 2013 to 2016 but in early 2017 a deliberate increase in price was observed. The highest price of crude oil was 111.44 USD per barrel in 2013 after which it declined to 29.01 USD per barrel in 2016. A similar trend was observed for natural gas which was rated as 3.55 USD per barrel in 2013 and declined to 1.77 USD per barrel in 2016. Looking ahead of 2017, the oil and gas market in expected to be stronger than the previous year. In early months of 2017 crude oil and natural gas has increased to 53.44 USD per barrel and 2.92 USD per barrel respectively. The overall market for Oil and Gas is expected to increase with CAGR of 28.4% from 2015 to 2020.
Key Product Categories & Technologies
The key products produced after refining crude oil are liquefied petroleum gas, gasoline, naphtha, kerosene, diesel fuel, fuel oils, lubricating oils, paraffin wax, asphalt, tar and petroleum coke. The natural gas primary constituent is methane. Natural gas is classified in two categories, associated gas, and non-associated gas. Natural gas is a clean and versatile resource of energy which is used to generate electric power, as a vehicle fuel and for domestic purposes. Natural gas is also used in industries as a raw material, and as an energy resource. Natural gas is classified as conventional and unconventional gas.
Oil and gas wells are drilled to extract hydrocarbon. Along with crude oil, gas, water, and solids are also extracted which are furthers separated and processed. Crude oil is processed in a refinery to produced liquefied petroleum gas, gasoline, naphtha, kerosene, diesel fuel, fuel oils, lubricating oils, paraffin wax, asphalt, tar and petroleum coke. Natural gas is processed in the field or at the natural gas plant. Traditionally, oil wells were drilled vertically but the development of advanced technologies have reduced cost, improved efficiency, and reduced surface disturbance. These new advancements are horizontal drilling, multilateral drilling, extended reach drilling and complex path drilling. Unconventional gasses, like tight gas, shale gas, hydrate and coal bed methane are produced by advanced methods other than traditional oil wells.
Top Players & Company Share
In the USA, the top oil and gas producer companies are ConocoPhillips, EOG Resources Inc., Pioneer Natural Gas Resouces Co, ExxonMobil, Chevron. In 2016, Pioneer Natural Resources, Devon Energy, and Hess Corporation are reported to have negative free cash flow. ConocoPhillips was the only company showing a loss for the year while EOG Resources Inc. had shown a profit in 2016.
Growth Drivers & Restraints, Major Trends and Issues
Growing economies and population drive will increase the demand and consumption. Considering Import and export of crude oil, import has decreased from 2011 to 2015 while in 2016 and early months of 2017 import has increased. While export of crude has continued to increased from on an average of 34.71 thousand barrels per week in 2011 to an average of 629.2 thousand barrels per week in 2017.
Net import of oil and gas will decline in further years as USA oil and gas production coupled with growing and falling demands.
Shale gas will dominate the US natural Gas production growth. Shale gas and tight oil gas production are expected to increase from around 27 trillion cubic feet to around 43 trillion cubic feet by 2040. The overall consumption natural will increase from 27 trillion cubic feet to around 34 trillion cubic feet in 2040. The major consumers will industries followed by electric power generation companies.
Competitive Dynamics & End market mix
Oil and gas companies have outperformed from 2005 to 2015. These companies had a boost in drilling, midstream and downstream projects due to high natural gas and oil prices. But in 2015, revenue decreased by 10 to 20% and continued to decline in 2016. Companies are aggressively adjusting their business models and have lowered break-even cost.
Further, companies are expected to cut capital expenditure by 30% to 50%, divest assets to a high portfolio of underperforming operations positions, renegotiating contracts to reach low break-even points and also going large scale layoffs.
Although in past, there was a fall in prices of crude oil and natural gas, but consumption of both will continue to increase due to rapid growing industries and population drive. Shale gas will continue to dominate over other natural gasses. Natural Gas consumption is expected to increase to 75 Bcf per day in 2017. The production levels will vary with prices and companies will continue to evaluate their growth plans in uncertain global price environment. Oil price upside will be dependent on availability and responsiveness of US shale development. The oil price could range between 45 USD to 65 USD per barrel for the coming years. Export of crude oil will increase by 29% and import will also increase by 8% in 2017.
Companies are expected to reform their business strategies and lower breakeven point.
This report provides comprehensive analysis of
- Market growth drivers
- Top players
- Global regional insights
- Technology outlook
- Oil and Gas
- Refinery, Shale Gas
- Downstream and Upstream production