Why oil companies must look beyond oil

Oil prices are likely to remain below $50/b for at least a year or so; unless all stake holders, including OPEC and major non-OPEC producers cooperate on a production freeze/cut. Electricity 101 video This is a difficult task and even harder to implement. 3 gases The reason being that all oil producers/exporters are in a catch-22 situation. Electricity generation by source by country Almost all oil producing/exporting countries are facing a dilemma of a budget deficit due to deteriorating oil revenues. Static electricity in the body effects Each producer is trying to produce/export more by offering discounts to grab the market and trying to lift oil revenues to narrow-down their budget deficit. Electricity tower vector For example the headline: Saudi oil output sets record despite global glut signals that is, there is a silent war going on among oil producers/exporters to produce and sell more in an effort to sustain/revive their sluggish economies. Electricity sound effect mp3 free download Their individual actions continue to push up the already overflowing inventories and further exerts downward pressure on oil prices.

On the global oil demand front the international agencies’ forecast is always associated with strong oil demand in Asia and more particularly linked with China and India. Electricity office For example, BP and IEA respectively predicted that non-OECD Asian oil demand is likely to increase by 15 and 11 million bpd during 2015/2035.

It is quite possible that these forecast may not materialize as predicted due to so many on-going initiatives in both the countries. Static electricity human body Such optimistic forecast may lead to overinvestment in the upstream sector, further dis-balancing the oil market equilibrium in the medium to long-term.

In an effort to curb pollution, a number of ongoing regulatory and legislative initiatives in China and India are taking place. Gasco abu dhabi salary For example, total vehicle sales in China grew by 4.7 percent in 2015 to 24.6 million, down from 6.9 percent sales growth seen in 2014. Electricity production in north korea This is partly contributable to weaker GDP growth, but mostly due to certain initiatives such as quotas imposed by the Chinese government in cities such as Beijing and Shanghai where aspiring car owners must enter a ballot to get a license plate. Gas variables pogil answers extension questions Other measures include alternative day driving restrictions and progressively improving average fuel consumption standards.

Rapid penetration of electric vehicles in China is yet another factor that could dent the projected oil demand growth. V gas station India’s oil demand is expected to grow as the ownership of vehicles is still expected to increase significantly. 101 gas station However, an Indian court handed down rulings in an effort to control air pollution in urban areas in particular. Electricity quotes by benjamin franklin Examples of this are a ruling by India’s Supreme Court in 2015 which results in banning the sale of luxury diesel cars in New Delhi and the National Green Tribunal, a special environmental court, which directed the government last month to ban all diesel vehicles in the capital that are more than 10 years old.

The higher oil prices and environmental challenges in the past have motivated the auto-industry to revolutionize and move away from over a century old Internal Combustion Engine (ICE) dominance with Electric Vehicles (EVs) and Fuel Cells Vehicle (FCV). Gas meter reading What does it mean to oil companies? Do oil companies need a new long-term strategy to remain successfully in the business? Or live with a status quo strategy? If they ignore such a threat and do nothing it may undermine their long-term objectives. Gas 69 One should not ignore the fact that more than 72 percent of oil demand is mainly associated with transport sector and out of this over 80 percent has been linked with road transport. Gaston y la agrupacion santa fe Speedy penetration of EVs will certainly displace sizeable oil demand in decades to come and could be detrimental for the oil industry.

Until recently, the oil industry perhaps is not giving any attention as what is happening around the auto-industry. Gas in dogs stomach However, a recent announcement of almost all the ICEs car manufacturers’ plans of moving away from ICE to EVs while some companies are planning to completely stop manufacturing of ICEs beyond 2050 should be alarming and eye opening for oil industry.

Volkswagen and Audi are aiming for EVs to make up 25 percent or more of sales by 2025, while Mercedes is about to unveil an entire fleet of electric vehicles, other automakers Hyundai, BMW, GM, Chevrolet Bolt, Tesla, and others also unveiled big plans.

In addition, the introduction of semi and fully autonomous cars and drones to replace domestic delivery will surely have a substantial impact on global oil demand. Gas welder job description What this paradigm shift means for oil companies? Surely rapid penetration of EVs will displace sizable oil demand in road transport which accounts for major chunk of oil consumed. R gas constant Author and Andreas de Vries in their recently published the article “Wake up call for oil companies: electric vehicles will deflate oil demand” predicted that under the reference case the penetration of EVs will displace 13.8 million bpd by 2040 and under the high case it could reach 39.5 million bpd.

To defend the oil industry from complete disintegration, is the current lower $50/b oil price regime part of oil and gas companies’ strategy to discourage the speedy development of EVs industry? Or rather is it due to technological innovation or due to self destructive policies for individual survival (grabbing market share) rather than protecting the industry? Some smart companies already expanded their old philosophy of being purely oil and gas business towards energy business including development of renewables. Electricity recruitment 2015 I think sooner or later most oil companies will need to develop a new strategy before it is too late. Gas stoichiometry Those sticking with the philosophy of “old is gold” could find themselves losing out.