Industry Looks Towards the FutureBy Peter Appleby | Thu, 07/09/2020 - 17:27
With chinks of light appearing in some global regions following the COVID-19 pandemic, industry stakeholders have turned to face the future. Among the topics discussed in the past week are the need for more upstream spending to meet global energy demand, a positive outlook on oil prices from a major US investment bank and positive news for PEMEX as it has increased its proven reserves. On top of this, SENER has ruled that Zama must be unitized.
All this and more in the week in oil and gas!
A Wood Mackenzie report has said that despite the current market difficulties and low prices, upstream spending will be essential to meet the future needs of the globe’s growing population. The consultancy said that “companies that are showing signs of fatigue with exploration are questioning their long-term commitment to upstream petroleum” but that a “supply gap” of 460 billion boe is forecast if companies do not commit to meet that need. While renewable energies have shown huge promise in the last several years, they are not quite yet ready to meet a truly global demand.
US investment bank Gold Sachs believes that oil prices will return to their pre-pandemic levels in 2022 once economies settle into a rhythm and mobility returns to normal. Though demand destruction has delivered a terrible blow to the industry, Goldman Sachs sees demand recouping 6 percent in 2021 of the 8 percent it will lose in 2020. Though crude will see a strong comeback, aviation fuels will take a little longer to recover as the aviation industry lags behind.
In line with promises made at the beginning of the López Obrador administration, PEMEX has reversed its declining rate of proven reserves and, in 2019, increased its overall volumes by 2.4 percent. The new 7.182 billion boe will help with credit agencies that have recently downgraded the company.
In addition, SENER has ruled that PEMEX and Talos Energy must unitize the Zama reservoir that stretches into both companies’ blocks. According to SENER regulations, the companies have just 120 days to agree on how to advance with the development of one of Mexico’s most important discoveries of the last two decades.