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manufacturing provinces (e.g. in Libya, Venezuela, “electric mobility” and “sharing economy”, and to
Iraq and some other areas of the Middle East etc.); higher than expected production levels, should the
to evident limits to US capabilities – or perhaps de- US tight oil producers gear up to act as “swing pro-
sires – to fill the gaps with higher tight oil production ducers”. Indeed, the Energy Information Agency of
– to name just a few key factors. the US Department of Energy had forecast the oil
Indeed, the analysts differ greatly in their expecta- price in 2019 between 25 and 90 US/bl – not a
tions about future oil prices. On one hand, it is esti- small range, highlighting the pervasive uncertainty!
mated that there is little or no “spare capacity” in In any case, over the last months, we have seen
the world-wide oil production system, so any signi- most analysts and industry operators changing
ficant additional difficulty might cause prices to sky- their forecasts from bearish to aggressive, namely
rocket. On the other, it is felt that the oil price might to expectations of further price increases, perhaps
come down even in the short term, as the OPEC to 80 $/bl as – due to growing demand - the mar-
agreement might not hold for too long a time, the kets will continue to rebalance from recent over-
oil demand might slow down at some point due to supply. But, the uncertainties continue to rule - the
increasing gains in energy savings, to novelties in prices never move in the straight line!
As we said before, the world of energy is under-
going great and highly transformative transitions,
and many future opportunities (as well as possible
pitfalls!) in the plant engineering and construction
industry for these markets will come from the mate-
rialization of such transitions. Let us just see a few
of them and particularly their impact on the capital
investments in our energy industry.

The renewables are becoming
a leading source of power

First of all, in figure 4 we see how the total pri-
mary energy demand is expected to continue to
Fig. 1 – World upstream oil&gas investments – Source: Elaboration based on grow at a broadly unchanged historical pace. Al-
data from IEA (2017) and Barclays (2017)
though many significant breakthroughs in energy
conservation keep reducing the amount of energy
required for each future unit of GDP, even in de-
veloping countries and certainly in China, the in-
crease in global population and growing affluence
will contribute to increasing the pro capita energy
consumption. Therefore, there will be a continuing
growth of primary energy demand, particularly for
electric power, as we can see in the accompanying
article by A. Clerici.
However, the energy mix will change greatly, with
significant impacts on needs for new plants. As
we can see in figure 5, the net increase in prima-
ry energy demand over the next 25 years, when
Fig. 2 – World investments in refining – Sources: IHS Global insight; Economist compared to the net increase during the previous
Intelligence Unit (2017) 25 years, shows significant changes in the mix: a
major, further increase in renewables production
and in gas demand accompanied by a relatively
smaller increase in the demand for oil and coal.
The demand for the latter two sources of energy,
indeed, could peak and level off at some point in
the future, but most likely beyond the horizon of
the next 25 years. In the case of oil (figure 6), in
this timeframe we expect the demand to grow, al-
beit more slowly, without reaching a peak, since the
unquestionable improvements in fuel consumption
in new engines and generally the improvements in
efficiency and energy conservation will be oversha-
dowed by higher demand for mobility worldwide,
Fig. 3 – Price of Oil (Brent) – Source: The New York Times (2018) including trucks, aviation and ships, as the world

18 Impiantistica Italiana - Gennaio- Febbraio 2018