What does 2013 hold for oil and gas.
With project activity around the globe set to ramp up and all indicators pointing to a sustained healthy oil price, 2013 looks set to be a promising year for oil and gas.
Colin Welsh, chief executive officer of Simmons & Co, corporate finance advisers to the energy industry, said: “Crude prices were resilient in 2012 despite the extensive volatility that marked the broader markets as a variety of European and US debt crises played out and economists fretted over the sustainability of growth in China.”
“Whilst we continue to adjust to the new norm of low to no economic growth in the UK and Europe, the US economy may surprise us in a positive way and growth in the developing economies increase. This, combined with continued OPEC discipline, will ensure crude prices remain in a healthy range.”
Mr Welsh believes that the international markets will be good to the oil and gas sectors in 2013 as project activity in all the key international offshore markets continues to gather pace.
“The wild cards are Brazil, Australia and the Falklands,” he says. “How long will they remain “mañana” markets in terms of delivering on their potential. On the drilling side, international activity is looking good with over 100 wells planned. The areas to watch include Ireland, Gambia, Gabon, Nicaragua, Kenya, Namibia, Peru, Morocco, New Zealand and Vietnam.”
Closer to home Simmons & Co are confident that things are looking promising for the UK sector with offshore spending at levels not seen since the 1970s.
“Just drive round the industrial estates, particularly Kingswells and Westhill, to gain an insight into the extent to which Aberdeen will reap the benefits of the continued increase in activity. I hope that this will be the year when our city fathers waken up to the reality that the infrastructure and amenities on offer have fallen woefully behind what’s needed of a world energy city and what is required to attract people to fill those offices. A dose of imagination, investment and a “can do” attitude would give the city a fighting chance of becoming a place that can compete for talent alongside Perth (Australia), Houston, Singapore, Stavanger etc.”
There are high hopes for the UK’s shale sector now that the potential for it to help lower gas prices and boost economic growth has been recognised and the Government has decided the process is safe.
Mr Welsh added: “There is unlikely to be a UK shale gas revolution in 2013 but we can expect to see significant capital committed to the sector in terms of investment in acreage and in the rigs, pumping equipment and other hardware that make up a fracking spread.
Nobody can tell today how big the prize from shale in the UK will be, but we know it’s really big and potentially offers 100 years of cheap natural gas. One day the UK will have an energy policy that reflects that economic windfall, but my most confident prediction is that we will not see that in 2013.”
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