Global chessboard
The U.S. and Canada are in the O&G spotlight now, but fortunes can turn quickly, cautioned DB Schenker’s Edward Fish. Less than two years ago, the darling of the industry was Australia. In 2013, energy analysts were tossing around nicknames like “the next Saudi Arabia” for the estimated A$20 trillion worth of oil shale discoveries in South and Western Australia. These discoveries attracted liquefied natural gas (LNG) projects from Chevron and Conoco Phillips, but when oil prices fell, the cost of extraction cooled off Australian activity dramatically.
But even as Schenker finishes its work in support of the Chevron and Conoco Phillips projects in Australia, it is moving on to new projects in the Asia Pacific region with companies such as Bechtel, Fluor, Chevron and Shell.
Some of these projects may be shelved, he said, but others, particularly connected with natural gas extraction in Canada and the Gulf of Mexico, are being tendered and going out to bid. Natural gas is seen as the future, as exemplified by Shell’s recent purchase of British Gas. This is the largest takeover in the O&G sector since Exxon purchased Mobil in 1998, and the acquisition will boost Shell’s oil and gas reserves by 25 percent.
Fish said Angola, an OPEC member since 2007, has always been an area for major oil exploration, while Tanzania and Mozambique are the future in natural gas production. About 45 percent of Angola’s GDP comes from the oil industry, and petroleum products make up 95 percent of its exports. OPEC estimates that Angola, which is the second largest oil producer in Africa, has more than 9 billion barrels of crude oil in reserve, most of it offshore.
According to Faycal Boumerkhoufa, global projects director for Volga- Dnepr Unique Air Cargo, the main focus for Volga-Dnepr is still ongoing LNG development, specifically in the Africa/Middle East region. “LNG is continuing its growth and setting a stronger footprint in the global energy vertical,” he said. “Moving gas turbines, power plants and rotors, are just a few examples of special air transport the company masters well.”
Other emerging markets include Argentina, Brazil, Columbia and, if it becomes economically and politically stable, Venezuela. Venezuela has the world’s largest oil reserves, but when the government began nationalizing foreign-owned assets in 2008, drilling dropped by 80 percent. Furthermore, Petroleum Venezuela owes US$1.6 billion to Exxon Mobil. Market research and consulting service Douglas- Westwood believes onshore crude production in Venezuela will continue to decline at 1 percent per year from now until 2021.
Fish also said Iran could be a big player if sanctions are lifted, adding: “It’s a very, very political chessboard around the world.”