Will oil and gas industry ever be the same again?
Or pick up?
9 replies (most recent on top)
Yes, it’ll return to normal after the election.
It will never be the same. If you’re young stay a few years as oil companies are only good for your resume and k–ling Mother Earth... if you’re old keep driving this puppy until the wheels fall off.
The amount of money the Fed Gov't spends on middle east defense to protect oil supply stability can be easily diverted to renewable energy. The real cost of a gallon of gas at the pump is an additional $2-3/gal more if you factor in the cost of military defense and the loss of life in the middle east. The younger generation is ready to make the shift to clean energy - not if, but when. . Drive a Tesla and you won't go back. Tesla will overcome the battery limitations thru their intense R&D efforts. Oil and gas will be used for jet fuel and making plastics - not much more. This is energy use evolution. If Marathon does not see this change coming and adjust business strategy - it will go extinct.
The BP and IEA reports can be ignored - they’re wrong as often as they’re right.
That said, the short to medium outlook is bleak. Young people should change careers now, before three exes and ten kids tie you to this sinking ship for good. The future is in something else, somewhere else.
The real problem is that we've spent the last decade chasing the siren's call of shale plays. Rather than focusing on making money, we were touting things like inventory and production growth. We've lost countless billions of investor dollars which is we're they are now running away from us. All the other stuff is just noise.
@OP The same as what or when?
Even before Covid-19, there were indications of a slowdown. Rig counts were in flux in January and early February. Volumes were down at process plants. Demand was stagnant. There were major downstream service outages and the higher maintenance costs to go with them. A tight job market was pushing up labor costs. I could go on.
The fact is that the “boom days” were already finished, and had been for some time. Covid-19 just accelerated industry trends that were already happening.
If you believe the BP economic forecast and the EIA forecast, then you can pretty well be rest assured we may not have hit peak supply, but peak demand. Companies who are not evolving and looking to support the clean wave of energy will suffer from not being attractive investments to several banks and equity funds. That's predominantly why the major international companies are shifting to "energy" companies. American companies will likely chase carbon capture as their mitigation. Heaven help them all if Biden wins the election. MRO is heavily exposed in the federal land holdings.
Oil is the new T-b-cco. Exxon, Chevron, the API being sued for "failure to warn" for selling and promoting a defective product is all you need to know.
IMO the oil industry has peaked. Cars will be fewer and going electric. Oil will be used mostly for industrial purposes through there will also be a move away from plastic whenever possible.