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Oil and gas investments to reach USD 15tn– experts

16th October 2012

Experts from Ernst & Young say investments in the oil and gas sector will reach USD 15tn in the next 20 years

Oil and gas investments to reach USD 15tn– experts
“It used to be a 1-in-8 chance of striking oil. Now with technology, it has become 1 in 2, and 1 in 3 chance,” says Andy Brogan

The oil and gas industry will reap expenditures of USD 15tn over the next two decades, experts say, as merger and acquisition activities by energy firms are spurred by additional exploration and production and more effective technologies.

New oil finds and technologies will boost investments in the oil and gas industry to USD 15tn over the next two decades, experts from Ernst & Young told reporters on Saturday. In particular, Ernst & Young claimed, technological developments and merger and acquisition activities will be key as “oilfield services companies must quickly and efficiently adapt to the evolving industry landscape,” marked by increased E&P activities.

“It used to be a 1-in-8 chance of striking oil. Now with technology, it has become 1 in 2, and 1 in 3 chance,” said Ernst & Young LLP partner, global oil & gas, transaction advisory services Andy Brogan. High-quality multi-client seismic data sets, multi-client geophysical programmes, and other new high-tech data-driven services are being developed for new offshore exploration, he added.

Acquisition activities will increase as service providers will strive to own both assets and services to be able to provide their E&P clients with the full width of services, the Ernst & Young partner claimed.

“In Brazil, [exploration] will mostly be deepwater while in the United States, it will be the development of shale oil and gas,” Brogan said, adding that other game changers also include shale oil potentially becoming very big in China and technology making striking oil increasingly efficient.

“The demand for oil… will be very strong,” Brogan added. “This will drive people to want to invest in the industry and enter new markets, for example in offshore Brazil, Australia, the Middle East and North America.”