A government report said that the evolving political situation in Libya, the increased stability in Iraq and the global push for shale gas will have a great impact on the oil and gas markets in 2012.
The third annual Oil & Gas reality check report from Deloitte Touche Tohmatsu, recently released at the World Petroleum Congress in Doha, examines how the oil and gas sector could evolve in the coming year considering the potential impact of trends that emerged in 2011.
According to the report, the governmental changes in Libya will have a deep impact on how its oil industry functions, as well as the extent of its participation in the global market. In Iraq, the increase in stability and decrease in violence could help the government ramp up its oil production capacity, but the country's infrastructure may not be equipped to support an increase in production. Additionally, security concerns in both countries remain paramount.
Mr Carl Hughes, DTTL global head of energy & resources, said that "It is expected that an increase of output by non OPEC nations will make up for rising demand in 2012 and while Iraq and Libya will undoubtedly play a major role in the global oil industry, both countries have obstacles to overcome that will likely have a major impact on the market in the year ahead."
The report said that Brazil's entry into the global oil production market, after an estimated 50 to 120 billion barrels' worth of high quality light sweet crude oil reserves were discovered offshore, has left its federal government, states, the majority state owned oil company Petrobras, and international oil companies all wanting a share. As the Brazilian government tries to determine how to maximize profit from these fields, the primary challenge that has emerged is how it can avoid jeopardizing the billions of dollars in investment needed to develop the fields, as raising taxes and royalties on the oil reserves could deter foreign investment.
According to the report, the production of shale gas has already transformed the energy industry in the US, and now a global push for the production of this resource has taken place, with Europe, Asia, and South America leading the pack. But there is still inconclusive evidence of the potential effects that hydraulic fracturing, the process used to extract the gas from the tight rock formations, has on groundwater resources.
Mr Ken McKellar, regional leader, energy & resources, Deloitte Middle East, said that "The more emerging markets find shale gas, the more it will have an effect on the global gas industry. Energy demand in the emerging markets is on the rise, making energy security a critical priority. Therefore, these countries are less likely to be concerned with the environmental consequences of hydraulic fracturing."
(Sourced from www.albawaba.com)
