With its wide open plains and existing infrastructure, services and workforce, North American oil and gas development is attracting admiration around the globe and prompting other countries to scratch beneath the surface in search of their own shale revolution.
Peter Dupont, oil and gas analyst at Edison Investment Research in London, tells The Energy Report why the U.S. and Canada have retained their lure and discusses vast untapped potential in a number of developing international plays.
The Energy Report: You work for a London-based research organization, and I imagine that you have a somewhat broader outlook on the oil and gas investment arena than most firms do in North America. Tell us a little about what you see ahead for energy markets.
Peter Dupont: Actually, some of the most interesting developments over the past year or two have taken place in North America. North America experienced a production increase of about one million barrels per day (1MMb/d) last year, whereas output dropped about .5MMb/d in other parts of the world. The North Sea was a major contributor to that. I see North America driving the global increase in output in 2013-2015.
I see the global supply/demand picture as pretty comfortable, barring natural, political or technical disasters. Those are always the wild cards. The demand side of the picture looks about the same as 2012, with a fairly subdued increase of perhaps 1MMb/d or a bit less. Demand growth is clearly constrained by recessionary or quasi-recessionary conditions in Europe and sluggish economic activity elsewhere in the OECD countries, including North America. China should see similar increases to recent years, maybe 3-4%. Overall, I don’t think we’re looking at particularly large increases in demand, which is just a function of the global economic situation.