Business environment review 2020
Simon MolyneuxMolyneux Advisors Pty Ltd, Nedlands, Australia. Email: simon.molyneux@molyneuxadvisors.com
The APPEA Journal 61(2) 347-356 https://doi.org/10.1071/AJ21008
Accepted: 15 April 2021 Published: 2 July 2021
Abstract
The petroleum (oil, gas and LNG) business environment in 2020 was adverse. Two factors disrupted the foundations of the global oil and gas industry. First, the COVID-19 global pandemic caused an unprecedented reduction of demand that combined with high levels of production resulted in oversupply of oil, gas and LNG. This gap between supply and demand resulted in a collapse in commodity prices, reduced revenues and cancelling or deferral of investment. Second, societal awareness of the impact of climate change on planet Earth increased. Pressure to reduce carbon emissions and a concomitant societal-shift against carbon-emissions intensive petroleum-based forms of energy generation intensified. Many major players in the petroleum industry re-framed their strategies to focus on energy supply in general and in some cases plan to cease their exploration, development and production activities in the coming decades. In Australia, in part global factors manifested in the deferral of investment decisions on three LNG investments. The Australian Government signalled that gas developments would be a critical part of Australia’s post-COVID recovery and that management of abandonment and decommissioning liabilities would be a factor in the approval of transactions leading to a change in ownership. This paper will describe each of the factors faced by the industry in 2020 and frame the issues facing the petroleum industry in 2021 and beyond.
Keywords: Australia, climate change, COVID, CO2, demand, development, environment, energy, gas, greenhouse, government, LNG, OPEC, oil, price, petroleum, regulation, society, supply.
Simon Molyneux is a Geoscientist with more than 20 years of leadership and technical experience in the upstream energy industry. He founded Molyneux Advisors in 2018 to provide upstream advice to the oil and gas industry. Molyneux Advisors serves a range of clients across the globe. Simon is driven by a belief that each field, prospect, basin or business opportunity requires an integrated approach to maximise resource value. Before starting Molyneux Advisors Simon was Santos’s Exploration Manager for offshore Australia and exploration and subsurface lead for Talisman Energy’s assets in Malaysia. Simon has a Masters degree in Earth Sciences from Cambridge University, a PhD in Structural Geology from Durham University and a Graduate Certificate in Strategic Decision and Risk Management from Stanford University. |
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