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Activity in global energy sector slowing

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Hydrocarbon Engineering,


Global energy project activity has slowed during the last quarter (Q4: Oct-Dec 2013), dropping to 412 projects, a significant 21% decrease compared to Q3 2013, but a small 2% increase on Q4 2012, while the total potential investment value of US$ 222.3 billion has almost halved on the last quarter, decreasing by 48%, according to the EIC Monitor quarterly report from the Energy Industries Council (EIC).

EIC Monitor tracks nearly 10 000 projects proposed or under development in the global energy industry and provides a barometer, broken down into oil and gas (downstream, midstream, upstream), nuclear and conventional power, and the renewables sectors. Data is analysed by the number and value of new (both active and proposed) projects recorded by the EIC each quarter. 

 

Key highlights of Q4 2013 report (1 Oct-31 Dec 2013):

Overall this quarter, there were 412 new projects announced across the global energy supply chain with an estimated total value of US$ 222.3 billion, compared to 524 in Q3 2013 totalling US$ 424.5 billion and 405 new projects in Q4 2012 worth US$ 292.8 billion.

The upstream sector has seen a decrease of 25% in the total number of new projects proposed this quarter, falling to 50 projects from 67 projects last quarter, with a 36% decrease in the total potential investment value of new project announcements since Q3 2013.

In the midstream sector there has been a 31% decrease in the total potential investment value of new projects in Q4 2013, dropping to US$ 42 billion from US$ 60 billion in Q3 2013 with a small 2% decrease in the number of new projects announced.

In the downstream sector, the number of new projects has decreased by 30% since Q3 2013, and the total potential investment value has decreased 34% from US$ 132.7 billion in Q3 2013 to US$ 87 billion in Q4 2013.

The renewables sector has seen a 20% decrease in the total number of new projects this quarter, falling to 122 projects from 153 projects last quarter, with a 55% decrease in the total potential investment value of new project announcements since Q3 2013.

In the power sector, the number of new projects has decreased by 23% in the last quarter, and there has been a decrease of 67% in the total potential investment value of new projects in Q4 2013, dropping to US$ 44 billion from US$ 134 billion in Q4 2013.

In nearly all cases newly proposed projects must first undergo various planning and consent approvals, which may take several years. Also, early stage proposals do not necessarily have financing agreed and in place. Thus there will always be a proportion of projects that do not gain consent and/or finance.

 

Commenting on EIC Monitor, Claire Miller, CEO, said:

“Overall, figures this quarter indicate that project activity in the energy industry has contracted with a 21% decrease in the number of new projects compared to the third quarter of 2013, along with a significant reduction in investment. Despite lower investment, taken in the broader context of the last six months, project numbers have returned to similar levels found in Q2 2013 following a sharp rise in activity in Q3 2013.”

 

Summary of Q4 new projects by number and value

The graphs below shows the total number and value of new projects across the global energy supply chain for Q4 2013 and the previous four quarters.

 

Analysis by sector

 

Upstream:

  • There have been 50 new projects in the upstream sector totalling US$ 17.3 billion in Q4 2013.

In comparison, there were:

  • 67 new projects totalling US$ 26.9 billion in Q3 2013.
  • 71 new projects totalling US$ 45.7 billion in Q4 2012.

The hotspots of activity this quarter were Canada, China and Argentina, together accounting for almost half of the total potential investment value in this sector. In Canada, there were five oil sands related projects worth a total potential investment of US$ 5.8 billion, while activity in Argentina and China was dominated by onshore unconventional oil and gas projects.

 

Midstream:

  • There have been 64 new projects in the midstream sector totalling US$ 41.6 billion in Q4 2013.

In comparison, there were:

  • 65 new projects totalling US$ 60 billion in Q3 2013.
  • 69 new projects totalling US$ 56.6 billion in Q4 2012.

The USA, Canada and Mexico are hotspots of activity in the midstream sector, with a combined total of 34 projects worth a potential investment value of US$ 17 billion. The largest project this quarter is the planned US$ 10 billion 15 million tpy Vassilikos LNG Export Plant in Cyprus, proposed by Noble Energy for completion in 2020.

 

Downstream:

  • There have been 91 new projects in the downstream sector totalling US$87.2 billion in Q4 2013.

In comparison, there were:

  • 129 new projects totalling US$ 132.7 billion in Q3 2013.
  • 36 new projects totalling US$ 44.6 billion in Q4 2012.

The hotspots of activity this quarter were the USA, China and Iraq, together accounting for more than a third of the total potential investment value in this sector. The highest value project this quarter is the proposed US$ 17 billion Baku Refinery & Petrochemical project in Baku, Azerbaijan, where SOCAR plans to build a 10 million tpy refinery and a 1.7 million tpy petrochemical complex, along with other smaller plant.

 

Renewables:

  • There have been 122 new projects in the renewables sector totalling US$32 billion in Q4 2013.

In comparison there were:

  • 153 new projects totalling US$ 70.8 billion in Q3 2013.
  • 135 new projects totalling US$ 87.4 billion in Q4 2012.

The USA, UK and Ethiopia were hotspots of activity this quarter, with a combined total of 52 projects worth a potential investment value of US$ 12.2 billion. The largest project this quarter is the proposed US$ 4 billion Corbetti Geothermal Power Plant, with a capacity of 1GW, planned for the Corbetti Caldera in the Rift Valley, Ethiopia.

 

Power:

  • There have been 85 new projects in the power sector totalling US$ 44 billion in Q4 2013.

In comparison there were:

  • 110 new projects totalling US$ 134 billion in Q3 2013.
  • 93 new projects totalling US$ 58.4 billion in Q4 2012.

The hotspots of activity this quarter were the UK, Brazil and the USA, where a total of 23 projects were announced with a combined total potential investment value of US$ 16 billion. There was however a broad geographical spread of activity in this quarter and high capital projects were announced in Qatar, Kenya, Iran, Germany and Chile.

 

EIC Monitor is published on a quarterly basis. The next report will be available in April 2014. For further information about the EIC and its membership of more than 710 UK companies operating across the energy supply chain, visit www.the-eic.com.

Adapted from a press release by David Bizley

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/28012014/activity_in_global_energy_sector_slowing/


 

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