Traditionally unequally distributed energy resources worldwide as well as oil market crisis in 2008-2009 had strong impact on financial indicators and investment programs of international companies – majors. The following ecological catastrophe that occurred (2010) on Macondo field in the Gulf of Mexico compelled practically all oil companies to reconsider their approach to technologies used in preventing such accidents in future. It certainly caused additional risks for upstream sector. However, crises come and go. For instance, 2012 marked the tough debt crisis of the eurozone and the following growth of industrial production of leading economies of EU, bloody “Arabic spring”, and new economic sanctions introduced against Iran. All this somehow caused stabilization of prices (over $100 per barrel) in the oil market. It was the limit of ambitions of western oil-gas companies that enabled them to rapidly increase the dividend payout to their shareholders in 2012 as well as look to the future quite confidently. State oil companies aimed at development of hard-to-recover reserves in the Arctic zone, shelves of the Barents and Norwegian seas, purchase of assets in Canada and the USA by attracting technology, experience and investments of their western counterparts to this issue. Traditional rivalry of state companies possessing resources and flexible international oil-gas companies is turning more into cooperation.
Everything would seem to be good if it had not been a trend opposite to prospering globalization of resources and pipelines, which emerged during the last two years. This is the trend of geographical isolation and self-sufficiency of energy markets based on new technologies of production, energy saving and the network parity of prices for energy of photo-electric elements reached for the first time in the south of Italy as compared to energy generated at usual energy plants.
In particular, at the traditional European Autumn Gas Conference Stefan Judisch, Chief Executive Officer of RWE Supply & Trading GMBH, told Europe no more needs expanding of gas infrastructure. He illustrated the current decline of gas demand by citing the 15% price drop on Nov. 13 in the shares of E.On Ruhrgas; it became the largest drop during the period of the company’s operation.
Germany in particular, Judisch believes, reflects the future, with its deep subsidies for solar photovoltaic panels. The country is home to “40% of the world’s photovoltaic panels,” he said, and there is no reason not to introduce the technology in global regions with plenty of days of sunshine, such as Saharan Africa.
As for Chris Finlayson, Executive Director and Managing Director of BG Advance, European subsidies for renewables have undermined what was once a healthy trend toward European gas market liberalization.
In total, according to the researches by Ernst & Young in IIQ, the volume of global capital investments in development of renewable energy projects increased by 24% up to $59.6bn. in comparison with the IQ.
The majority of invested funds fell to the share of solar energy. Investments into this sector reached $33.9bn., and it is 19% up vs. IQ. Solar energy is maximum attractive for investments and has been showing a stable positive dynamics for several years.
Capital investments in wind energy in IIQ comprised $21.6bn and $4.1bn to other sectors.
Three years ago the United States, the largest importer of hydrocarbons, is preparing for full self-sufficiency of its energy sector. Thanks to the sharp growth of production of nonconventional hydrocarbons of the USA, according to forecasts of the Information Administration of the US Department of Energy for 2013, the USA is to become a net exporter of LNG in 2016 and natural gas as a whole in 2020. The experts of the administration expect the internal oil production in the country to grow up to 7.5 million barrels a day by 2019 from less than 6 million in 2011, and US’s net import of all energy sources by 2040 will fall down to 9% from former 19% on the results of the last year.
Besides, experts forecast a decrease of gasoline consumption in connection with the developing renewables sector and fuel saving standards.
According to the outlook of the International Energy Agency published in November, by 2020 the USA can reach world’s leading positions on oil production volumes and the boom in the field of exploration and production of shale make a significant contribution to this process. Earlier IEA experts believed that Saudi Arabia and Russia would become leaders in the long-term outlook.
However, the practice of the latest technological maneuvers has shown none of these forecasts can come true as increasing investments into renewable sources and high prices of oil, no matter how paradoxical it sounds, reduce the cost of new technological developments of energy saving and diversification of sources. Therefore, all market players, both state-run oil and gas companies and the multinational western companies, have to be ready for new challenges, including pricing-related ones. So far the rating prepared by Caspian Energy shows one old trend of growing reserves of state-controlled oil and gas companies. In 2012 it also included companies of the three Caspian countries – Azerbaijan, Kazakhstan and Turkmenistan. Azerbaijan has considerably increased its proved gas reserves through discovery of new fields (developed earlier, in the 90s, by foreign consortiums) in the Caspian Sea sector. And, if to summarize aggregate reserves of oil equivalent of the three Caspian producers, they will be equal to the reserves of Saudi Arabia. This rating is prepared on the basis of the published data of the companies, the polling of their official representatives, information of Bloomberg, BBC.