Editorial comment
‘Globalisation of energy demand’ is one of those buzz phrases that you can’t seem to avoid at the moment. The world’s energy balance is certainly changing as surging demand in emerging markets, such as China and India, capture an ever greater share of the world’s oil and gas consumption. Nowhere is this more apparent than in China where annual car sales have increased from a meagre 2 million in 2001 to 18.06 million units in 2010. China’s Ministry of Industry and Information Technology predicts that by 2020 this figure will increase to 40 million units per annum with a total of 200 million registered vehicles on China’s roads by this date. In contrast, US annual sales have reduced from 17 million in 2001 to 11 million in 2010. For many of the world’s auto manufacturers China will soon become far and away their largest market. Mercedes Benz saw sales increase 115% in 2010 to 147 700 vehicles whilst Audi sold 227 900 vehicles, up 43%.
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Clearly the challenge for the oil and gas industry will be to meet the escalating demand that will surely accompany such rapid expansion and which is by no means unique to China but is evidenced to a greater or lesser extent across all of Asia’s emerging economies. Whilst there are signs that saturation of car ownership, an ageing population and increasingly fuel efficient vehicles in the developed world are leading to a decline in energy consumption, the overall global picture is of a tightening in the supply and demand balance that will inevitably lead to rising worldwide energy prices.
The Asia-Pacific region undoubtedly represents a significant opportunity for the energy sector that will only multiply as the ‘globalisation of energy demand’ gains an ever tighter grip on supply. This trend is identified in a recent report commissioned by the Economist Intelligence Unit and prepared by GL Noble Denton entitled, ‘Deep Water Ahead? The outlook for the oil and gas industry in 2011’. The findings of the report are discussed in this month’s regional overview beginning on page 10 of the issue. The article provides an insight into the challenges and opportunities facing the industry in this region and documents the increasing prominence of mega projects, often in geographically harsh locations, being pursued by a new breed of dynamic Asian internationalising NOCs, or INOCs, such as Malaysia’s Petronas or PetroChina. It certainly makes for interesting reading, as does our keynote article by Matt Underhill of Hays Oil & Gas, Australia, which begins on page 16 and provides a perspective on the thorny topic of recruitment; arguably an even greater challenge to the future of the oil and gas industry.
We will be attending the ATCE Conference & Exhibition in Denver, USA, later this month and look forward to seeing some of our readers there.
