Page 43 - Impiantistica Italiana 5/2016
P. 43
Opportunities in the Current
Low Oil Price Environment
for the Italian Industrial
Plant Sector
The approach has to be an integrated approach, based on three
key pillars: growth, partnership, innovation
Roberto Nava, Antonio Linardi, Valeria Sterpos - Bain & Company
again, the short term outlook is still uncertain:
analysts are far from a reasonable consensus
with price estimates ranging from 60 to 85 $ /
barrel as maximum until 2019. In this context, oil
companies have reduced their oil price planning
range this year by approximately 30% (from an
average of 75 $ / barrel to an average of 50 $ /
barrel), meaning that they conservatively do not
believe in a resurgence of oil price to the levels of
2013-2014 in the next four years.
The oil companies have reduced their
oil price planning range this year by
approximately 30% (from an average
of 75 $ / barrel to an average of 50 $ /
barrel), meaning that they conservatively
do not believe in a resurgence of oil price
to the levels of 2013-2014 in the next
four years
After a sharp drop in the years 2014- Such a conservative approach is driven by the
2015, oil price has risen up to 50 extent to which Oil Companies have suffered
$ / barrel in the first half of 2016. from the price drop. In the third quarter 2015 alo-
However, the industry has not yet ne, Major listed oil companies wrote-down as-
reacted and the upstream activity sets for $38 billion, while their Depletion Depre-
of the major Oil Companies is at ciation and Amortization (DD&A) per barrel ratio
historical low levels: only 3 or 4 mega-project Fi- has increased since 2011 (for all Majors except
nal Investment Decisions (FID) are expected to Total and BP). Their aggregated net income has
be taken in 2016, out of 62 planned. Therefore, dramatically decreased by 97% in just one year
there will be a significant impact on the supply (from Q1 2015 to Q1 2016) and their market ca-
and demand balance in the short term, resul- pitalization reduced, burning 22% of the aggre-
ting in a supply gap by 2019 according to many gated value. In the same period, smaller and less
opinion leaders. Among them, Total Ceo Patrick diversified players have even failed to survive:
Pouyanne estimated a supply deficit of approxi- over 75 North American oil & gas producers have
mately 5 Mmbpd in 2019-2020, equivalent to the filed for bankruptcy since January 2015.
daily consumption of Italy, Germany and France In such a turmoil, Oil Companies have reacted
together. with an immediate focus on activity and cost
Although oil price has recently started to grow reduction. They reduced or postponed capex
spent on one hand and reduced operating costs
Impiantistica Italiana - Settembre-Ottobre 2016 41
