Upstream Oil and Gas Sector – Resilient Enough to Rise Again

Insights

Low oil prices made companies in the upstream oil and gas sector refocus their strategies and strengths on improving operational efficiencies using innovative & cost effective techniques & technologies which ultimately helped them reduce the breakeven costs by almost 40% including US Shale as well as on major deepwater conventional projects. Cost compression has made oil players in the upstream oil sector accelerate the development of their slow-moving offshore projects as steep decline in the upstream investments during the last three years are likely to lead to a tighter oil market in the next three to five years.

Key Takeaways

• Innovative and cost effective measures helped oil companies reduce breakeven costs.
• High upstream investment cuts in the last three years resulted in delay in project investments and hence decline in rate of production from already producing mature fields.
• North Americas will lead the oil production growth for the next 2-3 years.
• The OPEC ‘super group’, including Russia plans to extend the production cut limits even in year 2019 in-case the oil trade below USD50/bbl.
• Oil prices to trade in the price range of USD55-75/bbl for the next two years.

Author

Atul Prasad Gupta

A key member of Acuity's Consulting and Corporates vertical and is responsible for client and project oversight for Energy, Chemicals & Materials, Industrial sectors as well as ESG, Circular Economy, Cleantech growth themes.

He holds experience in executing and managing projects involving corporate strategies, market & opportunity assessments, go-to-market assessment, growth strategy, ESG assessments/programs, sustainability reports, decarbonization roadmap, sector advocacy, business plans & models, M&A deals, commercial due-diligence, investment case building, fundraising & investor presentations, etc.

Prior to Acuity, he worked with the energy consulting team at ICF Consulting where he led clients and engagements from energy & power sectors. Prior to that he worked with the corporate advisory team at Deloitte where he supported global energy and natural resources companies on corporate strategy and M&A deal engagements involving strategic, financial, and advisory requirements. Before that he worked with the business development team at Cameron (a Schlumberger company) where..Show More

Upstream Oil and Gas Sector – Resilient Enough to Rise Again