Global Oil & Gas Industry
The global oil and gas market was worth just over $2,640 billion in 2010, representing almost a 74 billion barrel oil equivalent of consumption. The market is predicted to grow at a 7% compound annual growth rate, hitting almost $3,700 billion by the close of 2015, according to research from MarketLine.
The oil and gas industry is a major segment of the energy market and covers the locating, extracting (drilling), refining, delivering and marketing of oil and gas products. Oil meets much of the world’s demand for energy, around a third in the EU and Asia and over half in the Middle East. Demand for gas in the EU is forecast to show 1% annual growth in the long term, according to a 2010 statistical report from the European gas industry association Eurogas. This marks gas market recovery after consumption fell about 6% in the EU in 2009, driven down by the global financial crisis.
The world could come up against daily oil shortages of almost 10 million barrels by 2015 and daily shortages of 18 million barrels by 2030, according to a report by the US Joint Forces Command.
Leading Market Segments
Oil - In 2010 the world market for crude oil saw growth rise close to 32% to over $2,100 billion, reports MarketLine. It is estimated the market’s value will almost hit $2,683 billion in 2015, representing over 27% growth over a five-year period. If estimates are accurate, the volume of crude oil on the market in 2015 will be over 30 billion barrels, more than a 13% jump on 2010. The global market for crude oil is highly competitive due to falling resources. Americas represent more than 35% of the overall value of the global crude oil market.
Gas - The natural gas and liquefied natural gas storage (LNG) market is forecast to reach a value in excess of $18.5 billion by the close of 2011, reports Visiongain. Demand for gas has rebounded to match and exceed pre-recession levels. Gas prices in the US are about half of those in the EU and Asia. Gas demand fell 3% in 2009; the most dramatic fall in 30 years, according to the International Energy Agency.
Key Regional Market Share
Demand for gas is decreasing at different rates in various regions, with demand in OECD countries dropping nearly 3.5% in 2009 to 1,495 billion cubic meters (bcm) and demand in India and China climbing 10% to 20%. Gas meets about 20% of global demand for electricity.
The top 10 gas and oil companies dominating the global market are ExxonMobil Corp, BP, Gazprom Oao, Petrobras Brasileiro, Total SA, E.On AG, Petrochina Co, China Petroleum, Chevron Corp and Royal Dutch Shell.
Texas-based Exxon Mobil Corporation produces, transports and sells both crude oil and natural gas. The company reported 2010 revenues in excess of $275,560 million, and reached close to 16% return on invested capital (ROIC).
BP, based in the UK, is a fuel provider for various sectors including transportation, retail services and energy for heat and light. It is involved in exploration, production, refining and marketing. According to Standard & Poor’s, BP’s 2010 revenue was almost $240,000 million, with profit of more than $16,500 million. The company’s ROIC was 13%.
Other leaders in the market include LUKOIL, RWE AG, Reliance Industries, Rosneft Oil, Endesa SA, ENI SpA, and TNK-BP.
According to Datamonitor estimates, the global oil and gas market will be worth more than $3,192 billion in 2014, reaching a volume in excess of 30 billion BOE. Oil faces dual challenges of dwindling resources and weakening demand as environmental factors and the need for more reliable, cheaper sources of energy sees governmental policy favor renewable energies moving forward.
The EU region is increasingly reliant on imports of gas as its domestic production falls. The market is fragmented and national monopolies make it difficult for newcomers to gain access to the market. LNG share will continue to rise, coming largely from Africa, North Africa and the Caribbean.