Forces And Trends In The Oil And Gas IndustryEssay Preview: Forces And Trends In The Oil And Gas IndustryReport this essayIntroductionCameron International formerly known as Cooper Cameron provides flow equipment products, systems, and services to oil, gas, and process industries worldwide. “The companys Drilling and Production Systems segment provides systems and equipment to control pressures and direct flows of oil and gas wells. It provides surface and sub sea drilling and production systems, control systems, blowout preventers, oil and gas separation equipment, gate valves, actuators, chokes, wellheads, drilling riser, and aftermarket parts and services for onshore fields, onshore and offshore environments, deepwater sub sea applications, and ultra-high temperature geothermal operations. This segment also manufactures elastomers for pressure and flow control equipment; other petroleum industry applications; and petroleum, petrochemical, rubber molding, and plastics industries. Cameron Internationals Valves and Measurement segment provides valves and measurement systems to control, direct, and measure the flow of oil and gas as they are moved from individual wellheads through flow lines, gathering lines, and transmission systems to refineries, petrochemical plants, and industrial centers for processing. It provides gate valves, ball valves, butterfly valves, Orbit valves, block and bleed valves, plug valves, globe valves, check valves, actuators, chokes, and aftermarket parts and services, as well as totalizers, turbine meters, flow computers, chart recorders, ultrasonic flow meters, and sampling solutions. The companys Compression Systems segment provides reciprocating and centrifugal compression equipment, and aftermarket parts and services. Its products include integral engine-compressors, separable compressors, turbochargers, integrally geared centrifugal compressors, compressor systems, and controls. The company was founded in 1833. It was formerly known as Cooper Cameron Corporation and changed its name to Cameron International Corporation in 2006. Cameron International is headquartered in Houston, Texas, (Yahoo Finance 2007).”
As the demand for oil increases, the price per barrel increases. The price per barrel has now reached $80 per barrel. The demand for oil and gas equipment is at an all-time high. Companies such as Cameron International Corporation have a record “$3.8 billion dollar backlog” (2007) of equipment orders. They cannot build the equipment fast enough. Why is this occurring? This paper will explore some of the trends and forces in the oil and gas business.
Trend of Supply and Demand“Rising demand, continued product restraint by OPEC, and moderate increases in non-OPEC supply have kept oil prices firm in recent months” (Spears and Associates, 2007). Developing countries such as India and China continue to consume more energy thus putting more pressure on OPEC to produce more. According to Drilling and Production Outlook (September 2007), Oil consumption is expected to average 64.8 million barrels per day (bpd) up 1.6 % from the previous year. The demand for oil in the U.S. continues to grow at 1.3 % year over year. OPEC (Organization of Oil Exporting Countries) continues to be the supply for most of the world’s oil at 30.4 bpd; non-OPEC companies contributed 49.2 bpd in 2006. The US rig count continues to climb 8% with total spending on
U.S. energy by OPEC increasing from $15.1 million to $25.0 million. The overall U.S. OPEC production has grown from 604,900 bpd in 2000 to 1.9 mbpd in 2007 – the largest increase in almost 2-to-3 years.
Production and Demand growth in non-OPEC countries has also grown slightly in 2007, although OPEC’s crude capacity is at its lowest level since the late 1980s. In the U.S., U.S. crude use rose to 8,100 bpd in 2006 from 8,200 bpd in 2007. p policies on price and volume growth:
U.S. producers continue to buy more energy from the U.S. market, resulting in higher demand for the U.S. energy industry, as producers increase import prices. Oil is often expected to rise by 1.2–3% annually during a weak U.S. economy and higher inventories; the increase in energy efficiency and production will help the U.S. recover from a severe financial crisis and stabilize a long-term deficit through fiscal growth. Additional growth in non-OPEC demand is expected to persist for the foreseeable future without any notable new developments in shale-oil infrastructure capacity, which cannot support existing output for well development, unless it is financed. Existing oil production growth projections (such as those based on production estimates from 2008 onwards) are based primarily on assumptions of the International Energy Agency (IEA) and the energy of the United States. This has been an error in interpreting the oil data through the assumption of price and volume growth. It reflects the oil price and volume growth projections of the IEA and the energy analysis by EIA. The OEF will publish a review of the data in May 2010.
Energy Information Administration (EIA) statistics continue to be largely consistent between the three production sources. With the exception of U.S. output, the number of Mg/m3s and the use of oil substitutes (e.g., e-dichloroplastics and biodiesel) are both decreasing (Table 1). The OIA also publishes non-U.S. crude inventories on its Web site. As shown in Table 1, non-OPEC producers accounted for more than half of production declines in 2007.
The OIA also publishes non-U.S. crude inventories on its web site. Based on previous OIA and EIA data, non-U.S. production growth averaged 0.75% in 2007 and 0.50% for 2008, mainly reflecting increasing energy saving measures in the global energy scene.
Output and Supply from