Oil and Gas Industry

In the oil and gas industry, global oil production touched 77 million barrels per day in 2003, up 3.8 percent, while gas production upstream and downstream segments amounted to 2,618 billion cubic meters, up 3.4 percent.

OPEC countries continue to account for a major proportion of the supply of oil to the oil and gas industry. According to oil statistics, their share of world oil production currently stands at 40 percent while the Organization for Economic Cooperation and Development (OECD) countries dominate the natural gas supply, accounting for a production share of 42 percent.

During 1999–2003, the Europe and Eurasia region fared better than the Middle East in terms production for the oil industry. Europe’s supply rose at a CAGR of 4.02 percent while the Middle East has been growing at 0.82 percent. In the case of gas, South and Central America and the Middle East grew at a CAGR of more than 7 percent.

The world’s oil reserves (1.15 trillion barrels) are situated in the Middle East (63%) and in Europe and Eurasia (9.5%). World gas reserves stand at over 175.78 trillion cubic meters. Gas reserves are concentrated in the Middle East (40.5%) and Europe and Eurasia (35.5%).

Five US giants wield considerable influence over the global oil and gas industry. These five companies have become bigger over the years, through mergers and acquisitions. Liberalization and deregulation, technological breakthroughs and international energy prices will drive mergers and acquisitions in the next few years.

The five leading oil and gas companies in the industry are ExxonMobil (Revenue-USD246.7 billion), BP (USD232.5 billion), ChevronTexaco (USD121.7 billion) ConocoPhillips (USD billion 104.2) and Royal Dutch\Shell Group.
New technologies such as 3D-seismic technology, directional drilling and the dynamic positioning system have enabled the industry to augment proven reserves at lower incremental cost. Gas-to-liquid technology (GTL) is a new technology that converts gas into diesel oil. It will help in bridging the growing gap between demand and supply in the oil market.

Business metrics such as reserve life, reserve replacement ratio and degree of integration continue to be the critical factors for success in the oil and gas sector. Recently, however, performance on the environmental issues has started receiving the attention it deserves.

According to EIA, consumption of natural gas is expected to double to 4,300 million tons of oil equivalent in 2030 while the demand for oil is expected to touch 118 million barrels per day in 2030.

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