What industry leaders expect in 2010

As the oil and gas industry moves shakily toward recovery from the recent downturn, World Oil’s editorial advisors offer their predictions and advice for the year ahead.   

Edited by David Michael Cohen, Managing Editor

More than a year after oil prices fell from their epic highs of over $140/bbl, the E&P industry has had time to reflect on how well it collectively lived up to that perennial promise: “Please Lord, just give us one more oil boom, and this time we won’t screw it up.” According to our industry leaders, we haven’t done too badly. Most importantly, they note that oil and service companies, generally, made judicious cuts in spending and personnel to keep their businesses strong in the downturn, rather than slashing to the bone as in previous slumps. This means these companies remain in a strong position to make the most of the rebounding price of oil and, hopefully soon, natural gas.

There is still great uncertainty about many factors that will influence the speed of the industry’s recovery. Politically, the passage of cap-and-trade legislation in the US and an international agreement on climate change at Copenhagen could greatly increase the cost of developing hydrocarbon resources. A year after the end of moratoria on development of the US Outer Continental Shelf, miles of red tape still prevent companies from exploring on the shelf. The recovery of natural gas demand remains difficult to predict, as does the role that shale gas will play in filling that demand.

In these pages, our industry experts lay out their visions of how these and other factors will play out, and offer their advice for seizing the opportunities to come in the year ahead.