Strategies to Survive the Global Recession and a Lower Oil Price analyzes the market risks facing the industry and the strategies that the companies can adopt to survive and grow in the current business environment. The report provides an overview and an in-depth analysis of the factors that led to the financial crisis and the global economic slowdown, the risks and challenges for the companies in the oil and gas industry and an analysis of the various strategies that different categories of companies (National oil companies, International oil companies and Independent oil & gas companies) can adopt to counter the key industry challenges.

Oil Price Volatility and the Credit Crunch Are the Major Short Term Risks That the Oil & Gas Companies Need To Counter Effectively

Price volatility and the limited availability of credit are the key risks that the oil & gas companies need to manage in the short term. Price of oil and gas and the easy availability of credit play an important role in influencing the future growth decisions of the companies. Low oil and gas prices and a grim outlook on global economic growth and future prices are affecting the development of new projects. Many projects that were planned when the prices were at record levels are now getting postponed as they are no longer economical at current prices. According to GlobalDatas Energy eTrack, over 60 oil and gas projects across the value chain have been delayed, postponed or cancelled. The credit crunch and the eventual financial crisis have also squeezed the availability of funds for new oil and gas projects. The tightening of credit markets, collapse of equity markets and a sharp decline in the oil prices has had a combined effect in creating an uncertain environment in the oil and gas industry.

Inadequate Reserves, Depletion of Easily Extractable Oil & Gas and Competition from NOCs Are the Key Long Term Risks Facing the Oil & Gas Companies

Threat of inadequate reserves, depletion of easily extractable oil and increasing competition for reserves from national oil companies (NOCs) are the major long term risks that the integrated oil companies (IOCs) need to effectively manage to ensure that they are able to sustain their growth in the long term. Oil and gas reserves have been depleting rapidly and as a result the oil and gas companies are now forced to expand their operations to areas where the costs of extraction are high (like deep offshore) and are now also exploiting unconventional resources (like oil & gas shales, coal seam gas, heavy oil etc) to ensure that they are able to sustain their growth in the long term. International oil companies are also facing increasing competition from National oil companies which have started to expand beyond their domestic boundaries and have started competing aggressively to acquire assets internationally. National oil companies also benefit from the political support from their domestic government which at times proves to be an important factor in securing deals.