Before we look ahead, first a look back at some of the key Events which shaped the Oil & Gas Industry After all, the industry does run on History Matching Models!
1859: Drake’s well – considered the start of the modern Oil & Gas industry
1911: Winston Churchill, then First Lord of Admiralty, ordered the entire British naval fleet to be converted from being coal powered to oil powered. A seemingly unwise decision at the time, as coal was mined within the British Isles while oil was imported. The decision was vindicated in the World Wars and amongst its side results led to the creation of bp and also drew up the maps of the modern Middle East.
1933: Standard Oil of California managed to outbid the Anglo-Persian Oil Company of Britain for an entry into Saudi Arabia. An event with huge geopolitical ramifications. Later the company would become Aramco.
1959: A meeting between the Saudi Oil Minister, Abdullah Tariki and Venezuela’s Minister of Mines & Hydrocarbons, Juan Pablo Perez Alfonso on the sidelines of the Arab Oil Congress in Cairo, which eventually led to the creation of OPEC.
1983: The New York Mercantile Exchange introduced the Futures Trading in crude oil. A decision which broke up the hegemony of the likes of OPEC and major companies in determining the price of crude oil. A few years down the line it also resulted in quirks like crude oil trading in the negative!
1997: Nick Steinsberger, successfully applied the fracking technology to extract oil & gas from shale – the technological development needed for the US Shale boom considerably reducing its dependence on external crude supply.
2015: COP21 and Net Zero targets - countries agree in principle to reducing their emissions to stop the average global temperatures rising beyond 1.5 C.
2020: Covid-19 pandemic brings the world to temporary halt, drastically reducing demand. Certain analysts even conclude that “peak oil demand” has been reached (how wrong were they!)
1997: Nick Steinsberger, successfully applied the fracking technology to extract oil & gas from shale – the technological development needed for the US Shale boom considerably reducing its dependence on external crude supply.
2015: COP21 and Net Zero targets - countries agree in principle to reducing their emissions to stop the average global temperatures rising beyond 1.5 C.
2020: Covid-19 pandemic brings the world to temporary halt, drastically reducing demand. Certain analysts even conclude that “peak oil demand” has been reached (how wrong were they!)
So what next?
On one hand, Climate change concerns and net zero ambitions – there could be a sudden decision to switch the transport fuel from crude oil based to electric and/or hydrogen based and for power generation to renewables/nuclear etc. On the other. increasingly strained global supply chains may lead to increased exploration within currently oil deficient countries.
And I get a feeling that both paths will go hand-in-hand for the coming few years. Not sure when the divergence for one or the other will take place.
Certainly, interesting times ahead for the industry!
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