Frost & Sullivan is a Growth Partnership Company working to allow their clients to leverage innovation that could address global growth related opportunities that can make or break the participants in today’s market.
The company’s Environment has carried out research in to the demand and supply imbalance within the oil & gas industry. This imbalance has had wide spread economic and geopolitical implications on the global market over recent years. There has been a strong production of oil & gas in the North American and Russian markets which led to an oversupply, causing a price crash and leading to some economic instability within the Eurozone. Challenges have also been faced with the geopolitical tensions in the Middle East and Africa as well as the low demand in Asia-Pacific. On top of this, the low revenue inflow has led to oil & gas major players to reduce their capital expenditure as well as their oilfield services.
Frost & Sullivan’s Outlook of the Global Oil and Gas Industry is a part of the Growth Partnership Subscription. The Outlook projects the possible industry opportunities and challenges from 2015 all the way to 2020. The study is normally divided in to three different sections: upstream; midstream and downstream. The Environment team at Frost & Sullivan have found that companies that are vertically integrated are in a better position to make the most of any growth opportunities in an industry that is being quite volatile.
The number of oil rigs in the US has almost doubled, which has led to a surge in productionf4rom tight oil. Because of this some of the members of the Organisation of Petroleum Exporting Countries had to decrease their production in order to restore the balance in global production. However, these countries may not be able to reduce their oil production for extended periods, because they have to produce enough to make sure that they break even. In this situation the environment team have found that oil companies that are vertically integrated will be in the best position for getting the most out of the market.
