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ast year’s expectations in our very This renewed optimism is due to many factors, fo-
cyclic industry, namely that the ca- remost of which are the stabilization in 2017 of the
pital investments in the oil&gas mar- oil price at above 50 US $/bl (for Brent), with some
kets would start gradually recovering confidence that this might become a longer-term
in 2017 vs. the lowest point in 2016 trend, and the profound restructuring of the EPC,
L (when they fell by almost 50% below manufacturing and service industries, which have
the peak in 2013/4), were fundamentally correct: found ways of significantly cutting costs and incre-
for 2017 we estimate a modest investment growth asing the efficiency of their overall supply chains,
of 6% in the upstream, perhaps 7% in the down- which enables them to design and execute new
stream markets (vs. 2016), with an expectation of capital investments at significantly lower costs,
a broadly similar further increase in 2018 (figures thus providing acceptable returns to Owners even
1 and 2) and beyond (Rystad Energy). For the first in this “New Normal” situation.
time in several years, the operators can start lo-
oking at the future with some optimism, although
with a careful and tempered one. Many new, large
projects have recently obtained - or are considered What do we see in the
close to - a Final Investment Decision, or are ex- “crystal ball” for the future?
pected to go past this essential milestone in 2018,
in most market segments including offshore, whe- The energy markets are in the midst of many pro-
reas there were almost no important FIDs since late foundly transformative “transitions”: geopolitical,
2014, with the exception of the Coral FLNG project economic, environmental, climactic, technological,
in Mozambique. social, societal. It would, therefore, be highly misle-
ading to look only at the future evolution of oil pri-
ces as the only decisive factor, although in the short
There is renewed optimism in the oil&gas term it is a key indicator. We have seen a significant
industry, where capex investments in and steady oil-price recovery over the last two ye-
upstream and downstream are expected ars (figure 3), due to strong, perhaps larger than
expected oil and generally energy demand; to the
to grow by approx. 7% p.a. over the next OPEC production-limiting agreement which has
years held so far; to significant production shortfalls with
respect to their theoretical potential in several oil
Energy “transitions”

and resumption of investments

offer new opportunities

for the plant industry

Impiantistica Italiana - Gennaio- Febbraio 2018 17