Shorter-cycle investments, shift to natural gas and adoption of new technologies to characterize oil and gas industry in 2020

摘要

As 2019 draws to a close, Anna Belova, Senior Oil and Gas Analyst at leading data and analytics company GlobalData, looks at the key trends that will shape the industry in 2020, ranging from greater focus on gas developments to a push for shorter-cycle investments. Oil and gas operators globally will continue to push for faster returns with shorter cycle investments, as the industry moves away from giant developments. Even with a large reserve base, smaller and phased developments are more likely in the future as compared to the 'maximizing peak capacity at all costs' projects of the past. Projects now go from final investment decision (FID) to first oil/gas in under 3-4 years, even for larger integrated developments with midstream components. Globally, this trend was observed with Zohr in Egypt recently and is expected for Liza in Guyana. Both are being developed with phased approach to building up capacity. Demand for natural gas will accelerate in 2020, as it will increasingly be used to replace coal and gas for power generation. Investments in liquefied natural gas (LNG) will continue to occur across different geographies, but the question will remain on how US LNG exports will impact the international trade via volume and price. Sustained excessive supply of natural gas combined with midstream constraints in the US has been depressing gas prices at the country's main hubs, thus making the US LNG exports potentially very competitive on the global markets.