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Speaker Q&A - Jarand Rystad

Jarand will be speaking at the upcoming 3rd Annual OGFAmsterdam on 23rd & 24th March 2017 - to hear more from him and our line-up of industry leading speakers you can secure your place here.

Rystad Energy aims to provide transparency in the oil and gas business. How do you go about doing this?

Rystad Energy continuously collects and combines data from thousands of available sources and uses these to build up, adjust, and calibrate own perspective on the industry. We put this data together into our field-by-field databases, which allow in-depth analysis of the entire global upstream E&P and oilfield service market. E&P companies, governments, suppliers, service providers and investors value Rystad Energy’s products for the ability to see the holistic market view.

You have spoken at the OGFAmsterdam event over the past couple of years – what has changed in the year since the last event?

In 2016, we have witnessed a continued market downturn with oil prices trending below 50 $/bbl, ongoing investment cuts, resulting in production decline in many regions of the world. Offshore exploration activity continued to drop and reached historical minimum. On the bright side, demand growth last year has been higher than supply, which is anticipated to continue into 2017 as well, driving recovery in the market.

To what extent is there light at the end of the tunnel in terms of oversupply and oil price? As a result of the OPEC agreement, etc.

There is absolutely a light at the end of the tunnel. It could even be better than first expected when we look towards 2020, as capacity is built down and demand for oil service will come back in a big way. However, in the short term this will vary between the different oil service segments.

How quickly do you expect increased global demand for oil to turn into increased activity in the offshore space? Will there be an immediate impact in offshore activity?

Rystad Energy expects offshore exploration activity to slowly pick up from 2018, allowing for more discoveries towards the end of this decade and beyond. At the same time, some of the recent license awards could open new prospective exploration regions.

Can you predict a hurdle rate at which FIDs regarding new field development will be taken again?

Many offshore projects will have breakeven below 45 soon, and we will see a lot of FID’s in 2018.

Which geographies are you expecting to be the most active in the offshore sector when the recovery comes?

Norwegian Continental Shelf (NCS), Gulf of Mexico and Brazil had big discoveries over the past years and we expect these regions to remain the most active in the offshore sector.

How was last year for Rystad Energy and what are your future plans?

As of changes for us as a company – Rystad Energy continued expansion into global oil & gas market with new offices opened in Singapore and Dubai. On the solutions side we have successfully launched some new products, including mobile app and a modelling tool for evaluating upstream oil & gas assets, companies and portfolios across the world. 2017 as well will be very exciting in terms of new products and enhancing our core solutions.

Finally: Will the oil and gas industry change permanently as a result of the oil price slump over the past couple of years?

A key question is whether the cost cuts we have seen in the industry over the past couple of years will be conserved. When it comes to offshore we believe that as much as 50% of the cost cuts could be structural and thus stay, whereas the remaining costs cuts are cyclic and will start to increase once the activities pick up again.

About the Author

Jarand Rystad has extensive experience in oil and gas strategy advisory work from McKinsey and Rystad Energy and he has led a number of strategy projects for international oil and gas companies and oilfield service companies. He has also worked with governments and international organizations on topics related to the global energy agenda. His areas of expertise include E&P strategy, asset and company transactions, macro analysis and oil service industry analysis. Mr Rystad has also worked for Kvaerner Engineering and as a research scientist within Industrial Economics, gaining wide expertise in statistics and programming. He holds a M.Sc. degree in Physics from the Norwegian University of Science and Technology, where he majored with a thesis on astroseismology.

This content is provided by Euromoney Seminars for informational purposes only, and it reflects the market and industry conditions and presenter’s opinions and affiliations available at the time of the presentation.