Deloitte - Oil Gas Industry Outlook 2023

The Deloitte survey conducted among 100 US executives and senior leaders in the oil and gas industry provides valuable insights and an outlook for the industry in 2023. The survey covers five specific industry segments: exploration and production, oilfield services, midstream, petroleum refining and marketing, and integrated O&G and new energy companies. In terms of trends to watch, the report highlights several key areas. Firstly, in the upstream sector, the industry has focused on capital discipline and cash flow generation, with a modest increase of 4.5% in O&G production in 2022 compared to the previous year. However, there is now a growing focus on whether upstream companies will prioritize shareholder payouts or increase their hydrocarbon reinvestment rate to meet the urgent need for affordable energy worldwide. Secondly, the report emphasizes the acceleration of the clean energy transition. High commodity prices and concerns over energy security are driving the need for diversification of energy supply. New policies are expected to play a significant role in expediting this transition. Additionally, the role of natural gas in the clean energy transition is highlighted. Natural gas is seen as playing a new and important role in the industry's shift towards cleaner energy sources. The downstream sector, specifically refiners, are responding to shifting energy demand. The report suggests that refiners are adapting their strategies to align with changing market dynamics. Mergers and acquisitions are also a significant aspect of the industry, reflecting wider trends in the market. The report indicates that deal-making activity is influenced by various factors and can have a significant impact on the industry landscape. Overall, the report suggests that the oil and gas industry is proving resilient amid uncertainty. Economic uncertainty and volatile energy prices are driving the industry's focus on capital discipline. Despite oil prices nearing 2013-2014 levels, upstream capital expenditure is expected to be significantly lower in 2022 compared to previous years. In conclusion, the Deloitte survey provides valuable insights into the outlook and perspectives of the oil and gas industry. It highlights key trends to watch, including capital discipline, the clean energy transition, the role of natural gas, downstream adaptation, and mergers and acquisitions. The industry's resilience in the face of uncertainty is also emphasized.