Oil and Gas Industry

Goals

To determine insights and trends from the Oil and Gas industry, specifically for the last two quarters.
  • Trends.
  • The latest high-value insights.
  • Include data from Bloomberg, Deloitte, Ibis, etc., that leaders in the industry will find valuable.

Early Findings

Data Availability

  • The initial round of research indicates that data availability is adequate on this topic.

Insights

  • PwC reports the oil and gas Industry posted 100 deals with a total deal value of $141 billion in the last twelve months to May 15, 2021, with deal counts up 70% in the last two quarters of the period.
  • McKinsey's report on how oil and gas companies will navigate energy transitions suggests the pandemic has resulted in a material near-term drop in global energy demand- a 30% reduction.
  • According to an IBIS report, the market size, measured by revenue, of the U.S. Oil Drilling and Gas Extraction industry reached $327.7 billion as of May 2021. The market size, measured by revenue, of the Global Oil & Gas Exploration & Production industry, is $2.1 trillion in February 2021.
  • Bloomberg mentions Brookfield Infrastructure Partners LP’s decision to raise its offer for Canada’s Inter Pipeline Ltd. by 2.6% to $8.6 billion (originally $6.9 billion) came as shares in the fought-over midstream company surged.
  • Preliminary data from 1Q21 based on assumptions of continued economic recovery, consumption of global petroleum and other liquid fuels is forecast to grow by 5.3 million b/d in 2021- growth in global oil consumption is expected to reach 3.7 million b/d in 2022 bringing global oil consumption to 101.4 million b/d.

Trends

  • Global oil demand fell by 25% by end of April 2021 and has rebounded to cut its losses to 8%. Demand from the industry's major markets is expected to fluctuate due to Covid-19 and will remain lower at about 4% in the base case, and 7% lower in Rystad Energy’s second-wave scenario.
  • While the oil and gas industry has been viewed as lagging inaction towards climate change, the world’s leading oil and gas companies are rapidly mobilizing to prepare for a lower-carbon economy. Consequently, the Sustainable Development Scenario (SDS) maintains global liquids demand at 66.7 million barrels per day (mm BPD) by 2040.
  • Accenture's report on the oil and gas industry highlights growing pressure to challenge establish paradigms and reinvent business models as key to success moving past 2030. Larger conglomerates are broadening their focus on hydrocarbons and electrons by emphasizing on end customer uses and needs.
  • The top trends forming the broadest oil and gas industry, with most of the trends utilizing IoT and AI to improve oil and gas processes, include innovations in the internet of things (22%) and artificial intelligence (19%), 3D Modeling and Visualization (9%), Big Data and Analytics (13%), Cloud Computing (7%), AR/VR (5%), Predictive Maintenance (4%), Manufacturing Execution Systems (5%), and Blockchain (5%).
  • Large oil and gas companies have built full-scale mergers and acquisition departments, while mid-market and smaller companies cannot do so. M&A deals in the sector Oil and gas in 1Q2021 rebounded as majors players like Exxon Mobil Corporation, Royal Dutch Shell PLC, and Equinor ASA divested assets and corporate consolidations continued- the industry announced 28 more whole-company and minority-stake deals in 1Q2021 than in the 1Q2020 (117 deals compared to 89- the combined value of deals soared from $3.86 billion).

Summary

  • Within the first hour, we were able to provide high-value insights and trends in the oil and gas industry over the past six months.
  • We have presented a brief list of three major players that have thrived over the past 12 months. We suggest further research to determine how these major players are addressing current trends affecting the industry.
  • We were not provided a geographic focus for this research so we assumed both a global and U.S. view.
  • Please select one or more of the proposed next steps listed below.

Research proposal:

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