Abstract
Summary
GlobalData' s “Impact of the Financial Crisis on Oil & Gas Exploration
and Production Investment” focuses on the key challenges and issues
faced by the exploration and production companies. The unraveling of the
global financial crisis has had severe implications on the growth of the world
economies. IMF has revised the 2009 global GDP growth downwards to 2.2% from
3.7% in 2008 and 5% in 2007. Global financial and economic crises is eroding
oil and gas demand. The financial crises that has created world wide credit
crunch may stem the flow of capital expenditure by exploration and production
(E&P) companies. With commodities prices now having fallen 63% for oil and 50%
for natural gas off recent highs in July 2008, E&P companies are cutting back
their capital budget and drilling plans for the remainder of 2008 and 2009.
Scope
- The plunge in oil prices to around $50 a barrel and natural gas to $7 per
mcf will curtail E&P companies' spending on new projects, limit production
growth. E&P companies are cutting back their capital budget and drilling plans
for the remainder of 2008 and 2009.
- In 2008, production growth is expected to be around 14%, the highest
growth rate since 2003. However, E&P companies are expected to cut their
initial production guidance for 2009 if the commodity prices continue to trade
around the current level.
- Crude oil prices fell by more than a third in value from their record
levels of above $147 in July. Crude oil prices are expected to continue their
bearish trend with week global economic outlook, financial market turmoil, and
strengthening US dollar.
- As crude oil falls on back of current economic and financial climate and
fear of recession, most E&P companies are now trading near their 52-week lows.
- Global financial and economic crises have led to the falling stock markets
and oil prices. The combination of falling stock markets and oil prices could
be enough to trigger strategic acquisitions and partnerships by the oil and
gas companies.
Reasons to buy
- Identify potential challenges faced by E&P sector due to the current
financial crises.
- Analyze the impact of financial crises on the future investment strategies
of the E&P companies.
- Identify future Merger and Acquisition (M&A) trends in the E&P sector
arising out of current financial and business environment.
- Evaluate the impact of current financial crises on the valuation of the
E&P companies.
Methodology
GlobalData' s dedicated Research and Analysis Teams consists of experienced
professionals with a pedigree in marketing, market research, consulting
background in the energy industry and advanced statistical expertise.
All GlobalData databases are continuously updated and revised.
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