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What are the key issues in oil and gas industry? What are the most demanding types of risk in oil and gas industry? What opportunities lie before your oil and gas business? Rapid global change presents both a threat and an opportunity to grow faster. At almost the flip of a coin, you can see oil and gas consumption spiking or falling off a cliff. Are you prepared for the uncertainties and business risks facing you :
- Rapid oil and gas price fluctuations
- Geopolitical and economic risk factors
- Operational hazards including safety and environmental risks
- Natural disasters and extreme weather events
- Competition within types of oil and gas production as well as external market competition from other types of energy production
- Inadequate assets or assets in wrong place
- Regulatory compliance
- Manipulation of oil and gas marketplace
- Increased costs of oil and gas exploration
- Health of global economy – expansion or contraction in demand for oil and gas
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Oil and Gas Industry Risk Management
The oil price recover at the back end of 2016 will continue and get stronger in 2017 as the cut back in investment feeds into higher prices. Longer-term is always wrapped in uncertainty and risk for the oil industry. The worlds population continues to grow and this brings with it an amount of certainty that sooner or later oil and gas prices will rise, as demand will eventually catch up with supply. Which means that the oil and industry grow for many decades yet and then morph into other forms of energy production.
Oil and Gas Industry Risk Factors Overview Live News Headlines Business Opinions Risk Analysis
Read more about the current live issues in oil and gas industry. What are the energy related threats and opportunities live online.
3rd January 2019 OPEC Biggest Cut In Oil Production In Almost 2 Years
OPEC oil output figures for December 2018 show that OPEC have finally put their oil output where their mouths are. It has pledged significant cuts in oil production from January 2019. According to Bloomberg actual oil production is falling in line with promises of cuts in oil production.
Although recent oil production by OPEC has been slashed oil prices have fallen. Current oil price falls may be more due to fears of a slowing global economy. The markets think demand could fall faster than oil production cuts.
USA shale oil production helps to make America the biggest oil producer in the world and America does not want to cut production. The oil production cuts being achieved by OPEC will need to be sustained for a significant period of time before the oil markets reward OPEC for its strategy to push up oil prices.
2nd January 2019 Oil Prices In 2019 Not Set To Increase On 2018 Peaks
Oil prices continue to fall under rising fears of slowing global economy continued oversupply and high political risks.
Russia produced a record high level of oil in 2018 indicating that once again Russia talks about production cuts but wants others to reduce oil production not Russia.
USA is also producing record levels of oil in 2018. USA is the worlds biggest oil producer helped with shale output.
Oil prices fell in 2018 for the first year since 2015
OPEC are supposed to be cutting oil supply to support oil price but Saudi Arabia continues to be in the top three oil producers in the world.
There is insufficient evidence that oil producers want to cut oil supply in 2019 so oil prices will not rise above peaks seen in 2018. Low oil prices might be the biggest positive to protect global economic growth in 2019 which is under pressure.
16th December 2018 Qatar Petroleum To Invest At Least 20 Billion Dollars In USA According ToReuters News Agency
The new investment in USA will focus on gas and oil conventional and non conventional.
Qatar Petroleum is majority owner of the Golden Pass terminal in Texas with Exxon and ConocoPhillips holding smaller stakes.
Qatar Petroleum also announced that it was partnering with Italian oil major Eni on three oil fields in Mexico taking a 35 percent stake in deposits that will begin production in mid 2019 and ramp up to about 90,000 barrels per day by 2021.
3rd December 2018 Qatar Leaving OPEC After 57 Years As Member
Qatar is to leave OPEC in January 2019 to focus resources on maintaining and expanding liquefied natural gas lead exporter status.
14th November 2018 Oversupply Of Oil In 2019 Forecast
Global oil supply will exceed demand throughout 2019 according to the International Energy Agency IEA. The slowing global economy and lack of control on supply will keep lid on oil prices in 2019.
29th October 2018 Concerns Over Contracting Global Economy
- Oil prices set for biggest monthly fall since July 2016.
Oil prices have fallen relatively dramatically this month.
Global share prices have been hit by a mini bear market. Trade wars particularly the USA with China have pushed oil prices down.
The oil marketplace thinks there will be reduced demand for oil in coming months and the supply is likely to be maintained by Russia and Saudi Arabia. Iran may suffer price fall by selling privately rather than open market due to sanctions but this means the oil marketplace is unlikely to experience supply fall.
10th October 2018 Oil Prices In 2019 in 65 to 100 Dollars a Barrel Range
The biggest oil trading houses forecasting oil prices not falling below 65 dollars per barrel and possibly breaking above 100 next year.
- USA trading sanctions on Iran to reduce crude exports from Iran impacting on global oil prices
Iranian oil sanctions should come into effect on 4th November. The significant oil suppliers loss of marketplace options will push up oil supply prices elsewhere. The flip side risk is that global trade will reduce and demand for oil may fall in 2019. The relations between USA and China will most clearly define demand for oil around the world.
The pressure in 2019 is more likely to be on the reduced supply side meaning that it is more likely that we will see oil prices rise from mid 80 dollars a barrel. Demand for oil is more likely to increase than supply to be unfulfilled. The global economy pessimists will be proven wrong in 2019. Demand for oil in 2019 will be the same or greater than 2018.
3rd June 2018 Kenya To Export Oil Via Mombassa
Kenya will export oil via Mombasa. Kenya will pump oil from its reserves in its Lokichar oil reserves 500 miles via a pipeline.
Oil output from this source will reach full capacity by 2022. Initially oil will be transported by road. The pipeline will cost more than 1 billion dollars to build.
Lokichar has around 600 million barrels of oil to the benefit of all of Kenya.
31st May 2018 Shell and Gulf of Mexico
Royal Dutch Shell has started oil production at the Kaikias oil field in the Gulf Of Mexico one year ahead of schedule. Oil output is expected to reach 40000 barrels per day.
18th April 2018 Iran Switches To Euro and Bins USA Dollar
Irans official reporting currency will be the euro in future. Iranian government institutions will start reporting foreign currency amounts in euros rather than USA dollars. This is to reduce Irans reliance on American currency.
9th March 2018 Royal Dutch Shell To Focus On USA Shale Oil Production
Developing revenue from natural gas and oil exploration will become the poorer relative in Shell’s corporate strategy. Instead Shell is increasing investment in USA shale oil production.
— Risk Management (@HolisticRiskMgt) March 8, 2018
6th March 2018 Exxon Mobile and Algeria
According to head of Algerian state-owned firm Sonatrach, Exxon Mobile have shown an interest in working in Algeria.
— Risk Manager (@ERMuk) February 20, 2018
— Risk Management (@HolisticRiskMgt) February 20, 2018
— Risk Management (@HolisticRiskMgt) February 16, 2018
9th February 2018 – USA Continues To Disrupt Oil Gas Marketplace
America’s self-imposed ban on oil gas exports was changed in 2016. Since then USA oil and gas producers have been stealing market share from OPEC and Russia largely based on lower pricing of oil gas products.
Despite apparent political conflict neither China nor USA have been letting their pride get in the way of a good deal. China is getting cheaper oil and gas. USA is making billions of dollars out of a new oil and gas market that this China.
USA is forecast to export 11 billion barrels of oil per day to China. The main reason America can’t export more than this, is because American ports can’t accommodate the biggest oil delivery ships though this is changing in the Gulf of Mexico. When upgrades are complete, America will export even more oil to China and the rest of the world, taking over number one oil producer status.
To go from zero exports to China from USA in the such a short space of time should be good for political relations too. It helps to rebalance trading between the two countries. America is making billions more from China and China is saving a packet by buying oil and gas from America instead of OPEC or Russia.
31st January 2018 – Shell Makes Deepwater Oil Discovery Gulf Of Mexico
Royal Dutch Shell said it has made one of its biggest oil discoveries in the last decade in the Whale deepwater well in the USA Gulf of Mexico. Whale is co-owned with Chevron Corp.
22nd January 2018 – Oil Prices Rise Again
Oil prices continued their upward trend after comments from Saudi Arabia that cooperation between oil producers to restrict oil supply will continue beyond 2018. Saudi Arabia exports more oil than any other country and is the driver of oil pricing from OPEC countries and Russia.
In addition, there are strong signs that strong global growth will develop in 2018.
18th January 2018 – Iraq To Boost Oil Production From Kirkuk With BP
According to reports from Reuters Iraq has plans to sign a deal with BP to boost oil production capacity from Kirkuk oil fields. BP will work in partnership with Iraq’s North Oil Company which operates the oil fields.
The oil deal is aimed at producing twice as much oil to 700,000 barrels per day.
Iraq plans to truck crude oil from the northern oil fields to Iran at the end of January.
Kirkuk is one of the biggest oilfields in the Middle East, estimated to have 9 billion barrels of recoverable oil according to BP.
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