WHAT THE INDUSTRY EXPECTS IN 2008

What the industry expects in 2008

The year 2007 has been extremely good for E&P companies, but talent shortages, increasing numbers of NOCs and deep sea ownership issues concern analysts.

Edited by Katrina Boughal, Technical Editor

One of our E&P analysts expresses the current industry situation best “I think to myself, what a wonderful world.” Oil prices have risen from around $60/bbl in November 2006 to a peak of $98.62/bbl in early November 2007, with crude prices expected to average at $86.93/bbl for the efourth quarter of 2007. Oil futures predict prices to remain in the 90s and high 80s well into the next year. With those numbers running through our heads, it’s hard to say anything negative about the industry.

However, concerns about talent shortages, uncertainty about the rapidly changing future and fear of being left behind in the continental shelf ownership are worrying some analysts. Increasing numbers of NOCs are changing the market, leading IOCs and service companies to change their strategies. Enhanced global oil recovery will involve the cooperation of all members of the industry, and our analysts agree that companies must be flexible, innovative and ready to work in difficult environments to continue increasing profits.