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ost (though not all) of the oil&gas dance”, with the discovery of numerous new ener-
industry has been caught by gy reserves and new sources, as well as – even
surprise by the oil price collapse, more importantly – with many technology inno-
which started in the summer vations and breakthroughs. The latter have made
of 2014. However, our industry economically exploitable new unconventional ener-
Mshould have known better, having gy sources, hitherto considered non-economical,
seen alternating “feast and famine” scenarios over such as offshore and deepwater fields, shale gas,
its 150 years of history, a typical cyclicality of com- tight oil, etc.
modity-based industries (Figure 1).
This time, after the rapid growth in energy demand We have now moved from “the age of
of the last 15 years stimulated by strong global energy scarcity” to “the age of energy
economic growth, we have now moved from “the
age of energy scarcity” to “the age of energy abun- abundance”

Figure 1 - “Feast-and-famine” scenarios have characterized the oil&gas industry throughout its history

The price war initiated in the summer of 2014 has
not produced the results desired by some: contra-
ry to expectations, several producers believed to
be “high cost”, have not gone bankrupt and have
not stopped producing but have made remarkable
operating improvements and lowered their breake-
ven production costs to hitherto unbelievably low
levels. This was true foremost for North American
operators of shale gas, tight oil and even oil sands,
who have managed to continue producing from
their existing plants, profitably, also when the oil
prices had sunk below 40 US $/bl. They almost
match the low production costs of traditional
Middle-Eastern or Russian oil fields onshore (Figu-
re 2). Hence, in this race the energy supply has
frequently outstripped demand.
This has brought havoc to the oil&gas industry,
particularly to the sectors concerned with new in-
vestments: according to industry analysts, an esti-
mated 2,000 Billion US $ of new investments were
and will be “lost” in the five years after the mid-
2014 price collapse, particularly in upstream. This
Figure 2 - Also the high-cost Canadian oil sands operators have reduced their operating is almost 50 % less than the original world upstre-
costs dramatically

Impiantistica Italiana - Gennaio-Febbraio 2017 21