When we look back over the last year in the oil and gas sector, it is difficult to decide what the biggest story might be. There have been many recent developments within the industry as well as a lot of growth and innovation. Those involved with the industry have been keeping up with the trends and have watched these stories unfold with fascination. What do these developments tell us about the industry? Can we look back over the past developments and learn something about the future of oil and gas?
Let’s take a look back over the last year and see what some of the major events have been in the world of oil and gas. Here are a few of the biggest stories around the world in the oil and gas industry recently and what they might mean for the future of the sector:
Increase in U.S. Oil Production
One of the most important recent stories that have emerged is the large jump in U.S. oil production. It was estimated to reach more than 6.4 million barrels per day by the end of 2012 and seems to be continuously climbing.
The increase is due to hydraulic fracturing (known as fracking) and oil-rich shale formations. By the year 2017, the International Energy Agency expects the USA to compete with Saudi Arabia as the biggest oil producer in the world. It is even predicted that by 2022 the USA will surpass Saudi Arabia in oil production. This could have a huge impact on the price that Americans pay at the pump.
Oil Discovered in Angola, Barents Sea and Mozambique
Another important development in the oil and gas sector that occurred last year was when Danish company Maersk discovered oil offshore of Angola in January 2012. At around the same time, oil and gas company Woodside set a world record for drilling the world’s deepest well, offshore of Western Australia. Serica Energy also announced within the same month that it had confirmed the new discovery of oil in the Havis prospect in the Barents Sea. These new oil discoveries all occurred within the same month and since then have brought a large demand for oil and gas drilling.
UK Government Offers Tax Breaks for North Sea Oil Exploration
An important recent news story within the last year was when the UK Government announced in July that there would be a £500 million tax relief intended to support large investments in the shallow-water gas field along the UK Continental Shelf. It was also announced at this time that offshore drilling increased by 64% during the second quarter of the year on the UK Continental Shelf. This is compared to the same period in 2011.
BP Reaches Settlement Over Deepwater Horizon Disaster
The UK oil giant British Petroleum reached a settlement in March of 2012 over the Deepwater Horizon disaster in the Gulf of Mexico. The $7.8 billion settlement will resolve the economic loss and medical claims that are related to the spill, including the 11 deaths of oil workers that resulted from the accident. The payment also covered loss claims that were related to the Gulf seafood industry. This is a record breaking settlement for a record breaking environmental accident.
What can we expect for the oil and gas industry in 2013? The fiscal cliffs, rising production costs and slow economic growth will all conspire together to make energy production a very risky business over the next year. There will be a trade off to confront, between lower prices for consumers and a better and faster growing economy. In terms of the future, what do you think that we can expect from the oil and gas industry?