Research consultant Wood Mackenzie (WoodMac) has dispelled talk that oil and gas is a “sunset industry”.
In a report released yesterday, WoodMac highlights strong prospective value growth in the upstream industry, with a 23% increase on its 2010 forecast.
It says that the sector is valued at about £1.9trillion, not including exploration acreage or assets owned by national oil companies and governments.
Iain Brown, WoodMac’s regional upstream manager, said: “Most oil and gas companies expect higher oil prices to be maintained in the medium term. This is reflected by the number of acquisitions in the second half of 2010, and a strong flow of new development plans and approvals.
“It has become increasingly difficult for international oil companies’ to access conventional, shallow-water and onshore projects and, where this is possible, prospects for value generation are often modest.
“There is therefore strong motivation to seek alternative opportunities and promote technological innovation. We have seen a shift in international companies’ portfolios over the past decade, towards four key themes: deepwater, LNG (liquefied natural gas), unconventional gas and unconventional oil.
“These now make up between 30% and 70% of future upstream value for the international majors.”
Mr Brown said it was also notable that value prospects were still high in the traditional producing regions of North America, Europe and Australia, which accounted for more than half of future upstream value for international companies.
