The analysts say that available assets require large investments as industry’s costs are rising on labor and equipment, as well as increased taxes. Upstream growth options for International Oil Companies (IOCs) are becoming limited. Thus, analysts believe that there are major exporting nations who found they have more influence with consuming countries than they did previously, and therefore they are tightening their grip on upstream production.
“Energy security has emerged as a global foreign policy concern. Energy security is no longer just about the availability of supplies at affordable prices, but now includes other issues such as the disruption of supplies, security of demand, supply diversification, buffers against supply shocks, globalization of the entire energy chain, and increased interdependence in the world.” (NetAdvantage)
What is recommended? The IOCs need to adapt to this new competitive vibrant, as the limited resource environment will work against them, such as the drilling available for purchase today may be much harder to find in 20 years. One way to adapt to this new model is to exploit their core skills in size and technology.
If peak oil were a fixed point, analysts’ believe it’s more like a moving target. “As technology improves the pool of recoverable oil increases and therefore the reserve base is continually changing, driven by economics and technology.” (NetAdvantage)
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