Even though oil prices are slipping many companies are still cautiously investing in new as well as existing technologies to obtain oil and gas from unconventional sources. Unconventional oil and gas is therefore expected to play a big part in the global fuel mix with technological advancement across the entire value chain shaping the profitability of the industry over the long term. Despite the increasing affinity towards alternative energy sources, oil and gas will still be the primary energy source across the globe for many years. The Global Oil and Gas Outlook 2014 from Frost & Sullivan has found that the LNG market will remain highly attractive and the study provides detailed analysis on the key trends affecting the global oil and gas market over the course of the next 10 years and beyond.
Gas is expected to be one of the major fuels for power generation in 2030, despite economic uncertainty following unrest in Africa and the Middle East. Also, the recent sanctions on Russia following the Ukraine conflict, will negatively impact Russian oil and gas trade volumes. In the long term, it is quite likely that the production of unconventional gas across North America, Latin America and China will offset any shortfalls in gas supply and demand.
Pritil Gunjan, Energy and Environmental Analyst at Frost & Sullivan said, “investments in new technologies and resilience of the oil and gas sector have given rise to innovative exploration and production systems such as deepwater and ultra deepwater drilling, and arctic explorations at depths of more than 12 000 ft. Technological advancements and investor optimism have also spurred the output of unconventional tight oil and shale gas.”
Frost & Sullivan have also highlighted the following additional challenges to affect the oil and gas industry:
- Geographical and climate hazards in difficult to access locations.
- Oil and gas security risk in high consuming regions, especially China, India and South East Asia.
- Low operational safety, high risk of spills, and environmental disasters.
- Future projects classified as highly challenging in terms of technology and operational efficiency.
- Uncertainty related to growth of alternative oil and gas markets.
- Switch from oil based technologies to substitutions such as biofuels and electric power.
- Strict policies related to carbon emissions.
The proper assessment of reserves and recovery rates will be crucial over the next two years. Focus on increasing production and reducing costs will also be a priority in the short term. To that end, investments in advanced technologies such as horizontal drilling, hydraulic fracturing, downspacing and deepwater drilling will rise.
Gunjan said, “while there still remain uncertainties with respect to reserves, technologically superior extraction and production methods can exponentially improve recovery rates. Widening pipelines and terminals to connect production areas with refineries will hence be a key opportunity area for firms in the global oil and gas space.”
Edited from press release by Claira Lloyd
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/17122014/altering-global-fuel-mix/