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Structural crisis in the oil and gas industry

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  • Mitchell, John V.
  • Mitchell, Beth

Abstract

The structure of the oil and gas industry is being disrupted by technical developments which increase supply and reduce demand, the reversal of growth in demand in transport in OECD countries and less dependence of the US and Europe on Middle East oil supplies. Upstream, expectations of scarcity are changing to expectations that, at current prices, national oil companies face increasing competition from public listed companies which use diverse advanced technologies to develop reserves in areas outside NOC control. The public listed companies also have the opportunity to bring specialized technology to match NOC needs. Downstream oil markets are dividing into the OECD markets where growth has been reversed and a non-OECD markets where it continues. This is a challenge for the major public listed companies whose downstream operations are concentrated in the OECD. They may respond by focusing on local advantages or by separating the downstream from their upstream businesses. The natural gas industry is being transformed by new discoveries, particularly in the US, but regional markets remain separated by transport costs and pricing systems. The challenge will be to find prices which will grow both the supply and demand in each region.

Suggested Citation

  • Mitchell, John V. & Mitchell, Beth, 2014. "Structural crisis in the oil and gas industry," Energy Policy, Elsevier, vol. 64(C), pages 36-42.
    • Handle: RePEc:eee:enepol:v:64:y:2014:i:c:p:36-42
    DOI: 10.1016/j.enpol.2013.07.094
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    Cited by:

    1. Weijermars, R. & Sun, Z., 2018. "Regression analysis of historic oil prices: A basis for future mean reversion price scenarios," Global Finance Journal, Elsevier, vol. 35(C), pages 177-201.
    2. Hana Halini Hamzah & Maran Marimuthu, 2019. "An Overview: Oil and Gas Capital Structure," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 9(4), pages 330-334, October.
    3. Sharma, Sunil & Sud, Mukesh, 2019. "Impact of regulatory framework on bidding behavior of firms: Policy implications for the oil & gas sector," Energy Policy, Elsevier, vol. 131(C), pages 33-42.
    4. Wajahat Ullah Khan Tareen & Zuha Anjum & Nabila Yasin & Leenah Siddiqui & Ifzana Farhat & Suheel Abdullah Malik & Saad Mekhilef & Mehdi Seyedmahmoudian & Ben Horan & Mohamed Darwish & Muhammad Aamir &, 2018. "The Prospective Non-Conventional Alternate and Renewable Energy Sources in Pakistan—A Focus on Biomass Energy for Power Generation, Transportation, and Industrial Fuel," Energies, MDPI, vol. 11(9), pages 1-49, September.
    5. Duch-Brown, Néstor & Costa-Campi, María Teresa, 2015. "The diffusion of patented oil and gas technology with environmental uses: A forward patent citation analysis," Energy Policy, Elsevier, vol. 83(C), pages 267-276.
    6. Scott R Stephenson & John A Agnew, 2016. "The work of networks: Embedding firms, transport, and the state in the Russian Arctic oil and gas sector," Environment and Planning A, , vol. 48(3), pages 558-576, March.
    7. Franco Ruzzenenti, 2015. "Changes in the relationship between the financial and real sector and the present economic financial crisis: study of energy sector and market," Working papers wpaper105, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    8. Pan, Lingying & Liu, Pei & Li, Zheng, 2017. "A system dynamic analysis of China’s oil supply chain: Over-capacity and energy security issues," Applied Energy, Elsevier, vol. 188(C), pages 508-520.
    9. Bebbington, Jan & Schneider, Thomas & Stevenson, Lorna & Fox, Alison, 2020. "Fossil fuel reserves and resources reporting and unburnable carbon: Investigating conflicting accounts," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 66(C).
    10. Justin Ritchie & Hadi Dowlatabadi, 2015. "Divest from the Carbon Bubble? Reviewing the Implications and Limitations of Fossil Fuel Divestment for Institutional Investors," Review of Economics & Finance, Better Advances Press, Canada, vol. 5, pages 59-80, May.

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    Keywords

    Oil; Gas; Industry;
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