According to the Deloitte 2014 Oil & Gas Survey, most industry professionals are supportive of broadening into new markets.
When queried about broadening the North American Energy Renaissance to include new markets and new regions for exploration and production, industry professionals were overwhelmingly supportive.
- 72% of respondents support some form of crude oil exports from the US with over a third responding that exports are important for the long term viability of unconventional oil and gas production in the US.
- Without a significant spread between the two major benchmark crudes, exports are unlikely to have a significant impact on price.
- Given the narrowing spread between WTI, which is used to price domestic crude, and Brent, which is used to price crude internationally, only 8% believe exports would increase prices significantly, while 40% believe exports would have no significant impact on prices.
Opening the Atlantic Coast
Almost all (89%) feel that opening the Atlantic Coast to offshore exploration and production is at least somewhat important to sustaining the oil and natural gas revolution in the US.
- While the potential for offshore drilling along the US Atlantic Outer Continental Shelf remains a remote possibility over the near to medium term, more than half of respondents (55%) believe that opening the Atlantic Coast to offshore exploration and production activity is very or extremely important to sustaining the oil and gas revolution in the US.
- The US government announced in August that it would begin to allow testing for oil and gas reserves off the Atlantic Coast.
- Estimates from the American Petroleum Institute (API) indicated that there could be as much as 114 million bbl or one tenth of the amount of oil as the Gulf of Mexico in the region.
Liberalisation of Mexican oil and gas industry
Two thirds of respondents believe that the liberalisation of Mexico’s oil and gas industry is at least somewhat critical to help North America achieve energy self sufficiency.
- Over the past decade, Pemex has suffered from insufficient operational capabilities, a lack of capital, and maturation of its major oil fields.
- As a result, the Mexico’s output has fallen from 3.85 million bpd of crude and liquids in 2004 to 2.9 million bpd in 2013.
- Opening Mexico’s oil and gas sector to foreign firms creates opportunities for exploration and production, supply chain management, infrastructure development as well as equity investment.
- 39% believe opening Mexico will strengthen US competitiveness, while only 14% believe it will weaken it.
- Most respondents (56%) believe Mexico’s liberalised E&P environment will be a benefit to supermajors or large independents.
- Pemex’s Round One, in which over 150 blocks will be tendered to private companies and Pemex, is scheduled for mid-2015.
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