2014 oil & gas industry forecast - ey - united · pdf filepreface dear reader, 2014 | oil...

2014 Oil & GasIndustry Forecast

4 | 2014 | Oil & Gas Industry Forecast

“THESE ARE INTERESTING TIMES, WITH MANY CHANGES AND CHALLENGES STILL AHEAD OF US”

Jeff Sluijter

PrefaceDear reader,

52014 | Oil & Gas Industry Forecast |

At the time of writing, we can look back on another successful edition of our annual Oil and Gas forecasting event. This event, which we organized together with IRO, attracted well over 250 attendants this year. We started with a very interesting presentation of our keynote speaker Christof Rühl, Group Chief Economist and Vice President of BP plc, who gave us BP’s outlook on the worldwide developments in Oil and Gas. After Christof, Coby van der Linde presented her views on what these developments entail for us, The Netherlands and Europe. The event was concluded with Q&As from the audience. Christof Rühl’s and Coby van der Linde’s presentations are included in this booklet for future reference purposes.

We normally also present the results of our annual survey of Oil and Gas service providers during our forecasting event. Having done so successfully for a number of years, we decided to change our survey from a questionnaire to a more detailed and quantified review based on the financial statements of Oil and Gas Service companies. Such a review is already conducted by our colleagues of EY UK and EY Norway; by including the Netherlands, we will not only be able to comment on the developments from the perspective of those individual countries, but also compare the different countries. The survey will be available after the summer. In the meantime, you can find the 2013 UK and Norway reports on our website (www.ey.com/oilandgas).

Over the past years, these surveys have set out the main developments in our industry. Things which come to mind are an Oil & Gas industry whose underlying fundamentals remained strong and was less affected by the financial crisis as a result. Opportunities which arise are, however, mostly cross

border, often involving new players (NOCs rather than IOCs) and larger and more complex projects, with our home market increasingly showing the signs of a mature market. This creates new challenges and makes it even more important for oil and gas service companies to have proper risk management procedures in place, as margins for this part of the industry remain tight and “being in control and on top” makes the difference between a profitable and an onerous project. Looking at the bigger picture, some of the changes which are taking place are quite fundamental. It was already evident that worldwide flows have significantly changed over the past few years, with the US currently being an exporter rather than an importer and an ongoing increased demand from countries such as India and China, to name just a few changes. A range of analyses show that the position of Europe in these worldwide developments is becoming less and less important. Our response to date has been marked by an “us about us” way of thinking, but the political instability of the past few months has prompted new items to be put on the agenda.

These are interesting times, with many changes and challenges still ahead of us. Should you have any questions, or if we can assist you in achieving your ambitions and challenges in any other way, please do not hesitate to contact us.

Jeff SluijterEY BeNe leader Energy & Natural Resources

Table of contents

Preface 5

1 Impression of the Oil & Gas Industry Forecast Event, 8 11 March 2014

2 Word from the Managing Director of IRO 10

3 Presentation Christof Rühl, BP’s World Energy 12 and Global Energy Outlook

4 Presentation Coby van der Linde, Outlier Europe; 36 short and medium term challenges in oil and gas

5 Contacts 45



1 | Impression of the Oil & Gas Industry Forecast Event, 11 March 2014

“ENERGY POLICIES SHOULD BE VIEWED IN A GLOBAL PERSPECTIVE, AS SUPPLY AND DEMAND AS WELL AS POLLUTION AND PRICE HAVE A MUTUAL EFFECT ON A GLOBAL SCALE.”

Sander Vergroesen



The 2014 edition of the annual EY & IRO Oil & Gas Industry Forecast was a proper mix of international and national focus on developments in the Oil & Gas industry.Christof Rühl, Group Chief Economist and Vice President of BP plc., highlighted the fast-growing global demand for energy and available resources to cover such demand for the next 20 years.

Total global energy consumption will increase by 50%, particularly outside the OECD region. Consumption is currently roughly 50% in OECD countries, 25% in India + China and 25% in other regions. In 2035, it will be 33% in OECD countries (with hardly any growth), 33% in India + China and 33% in other countries. By that time the global consumption of fossil fuels will be 28% for coal, oil and gas alike, that of nuclear energy 4% and hydro and renewable energy sources 6% each.

It was, again, very clear that the opportunities for IRO members are plenty. In addition to requirements under Dutch and European policies guiding further growth in renewable energy, such as offshore wind farm installation, there will be substantial need for special equipment and know-how to develop deep water and/or arctic fields outside Europe.

Coby van der Linde, director of Clingendael International Energy Programme and Professor of Geopolitics and Energy Management at the University of Groningen, presented her views on the situation in the Netherlands and Europe in relation to global developments presented by Christof Rühl.

In short, Dutch and other European politicians have adopted an isolated

approach to issues such as CO2 emissions, renewable energy and climate change, while ignoring opportunities for Dutch suppliers abroad and their potential economic impact in the Netherlands.

“Energy” policies should be viewed in a global perspective, as supply and demand as well as pollution and price have a mutual effect on a global scale.

IRO members can, and do, play an important role in providing innovative solutions for large, complex projects all around the world. Close cooperation between member companies and research institutes, combined with the experience and entrepreneurial spirit of the companies’ management, enable Dutch suppliers in the upstream Oil & Gas industry to stay ahead of competition and be among the global majors in this field.

It is time for our own politicians to realize this and dare to talk about economic opportunities in Oil & Gas projects for innovative Dutch companies, a group they can be proud of!

Sander VergroesenManaging Director IRO

2 | Word from the Managing Director IRO

Christof Rühl

Christof Rühl, Group Chief Economist and

Vice President of BP plc, presented BP’s

World Energy and Global Energy Outlook.


3 | Presentation Christof Rühl, BP’s World Energy and Global Energy Outlook

Coby van der Linde

Coby van der Linde, Director of Clingendael

International Energy Programme and

professor of Geopolitics and Energy

Management at the University of Groningen,

presented the challenges in oil and gas on

short and medium term. Her presentation

was based on the report ‘A new European

energy policy? Assessment and proposals’,

published by Synopia.


4 | Presentation Coby van der Linde, Outlier Europe; short and medium term challenges in oil and gas

45 | 2014 | Oil & Gas Industry Forecast 452014 | Oil & Gas Industry Forecast |

EY’s Global Oil & Gas Center

The oil and gas sector is constantly changing. Increasingly

uncertain energy policies, geopolitical complexities, cost

management and climate change all present significant

challenges. EY’s Global Oil & Gas Center supports a global

network of more than 9,600 oil and gas professionals with

extensive experience in providing assurance, tax, transaction

and advisory services across the upstream, midstream,

downstream and oilfield service sub-sectors. The Center works

to anticipate market trends, execute the mobility of our global

resources and articulate points of view on relevant key sector

issues. With our deep sector focus, we can help your

organization drive down costs and compete more effectively.

For more information please contact:

Jeff Sluijter

EY BeNe leader Energy & Natural Resources

+31 88 407 87 10

[email protected]

IRO

Since its foundation in 1971 IRO promotes the interests of the

Dutch supply and service companies in the upstream oil and gas

industry. Members cover all activities involved in the supply

industry, such as engineering, field development, pipeline

installation, maintenance, manufacturing and material &

equipment supply, onshore as well as offshore.

IRO represents the interests of its 430 member companies

towards the government and prospective customers, facilitates

export promotion and subsidies for innovative technology. IRO

offers member companies a vast national and international

network. More recently Employment & Education has become a

focal point of the association.

For more information please contact:

Sander Vergroesen

Managing Director IRO

+31 79 341 19 81

[email protected]

5 | Contacts


EY | Assurance | Tax | Transactions | Advisory

About EYEY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.

© 2014 Ernst & Young Nederland LLP.All Rights Reserved.

140040ED 0615

This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Neither EYGM Limited nor any other member of the global Ernst & Young organization can accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication. On any specific matter, reference should

be made to the appropriate advisor.

www.ey.com/nl

2014 oil & gas industry forecast - ey - united · pdf filepreface dear reader, 2014 | oil...

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