The dynamics across the segments of the oil and gas sector (upstream, midstream and downstream) and related sectors (petrochemicals, transportation and power) are changing. Certainly, the future will not be the same as the current situation. From the perspective of Stratas Advisors, the change is being driven by the following four major themes:
- A changing energy mix stems from the advent of shale-related production, but also from shifts in non-shale production and the growing importance of natural gas, coupled with an increased focus on clean sources of energy and alternative fuels within the transportation and non-transportation segments.
- Shifting energy flows associated with differing rates of economic growth and energy intensity, shifting the economic center from the Atlantic Basin to the Pacific Basin, the expanding role of the US as an energy supplier, along with geopolitics (OPEC, Russia, Middle East and China/US relationships) together create the potential for bottlenecks, dislocations and investment needs in new areas
- An evolving transportation sector pertains to all modes of transportation – road (light-duty, medium-duty, heavy-duty), marine, rail and air – and all modes are being affected by the shared affinity for electrification, digitization, autonomy, efficiency and green.
- An intensifying regulatory environment encompasses upstream-related standards, GHG regulations, tightening fuel specifications and an array of subsidies and mandates. While the intensity will ebb and flow, the regulatory environment will continue to have a major impact on future market conditions and the competitive landscape.
During the next several months, Stratas Advisors will be releasing analyses and insights related to these four themes. For more information, call 713-260-6426 or contact us.