Energies Consumption Running Back to Normal
As every quarter, we propose you a review of the energies market. But at that period of the year, our review covers a recapitulation of 2021 and perspectives for 2022. By energies market, we refer to the Oil & Gas, Petrochemical and Energy Transition sectors.
For these areas, our interactive projects database www.projectsmartexplorer.com provide us with very thin granularity data. But, before jumping into these details, lets have an overview of these markets.
Firstly, in the year 2021, the oil consumption came back close to 100 million barrels per day (b/d). By comparison, in 2019 it ended up at 103 million b/d. As a consequence, this high level consumption tests the maximum production capacities in the world. It also propels the oil prices toward the $100 per barrel.
Secondly, we previously noticed that Covid had no impact on the gas consumption fueling the prices to new skies. In addition, the rising political tensions do not help to relax the prices.
One of the reasons for this stretched situation relies on the Petrochemical demand, the main source of supply of the manufacturing industries currently running full steam and suffering from shortages.
Thirdly, the energy transition projects start to materialize, thus offering quantity of new opportunities.
In this context, 2022 energies markets look to exceed 2021 significantly if they continue on the same trends.
More than ever projects awarded in 2021, more to come in 2022
In consequence of the energies market dynamism, we measure more projects than ever have been awarded in 2021 as illustrated below.
This barre graph shows the capital expenditure of the projects awarded year per year from 2015 to 2021. It also gives a perspective for the coming years.
The step between 2021 and 2022 just reflects operators ambition at this early period of the year. But, we know by experience that approximately 30% of this forecast will be postponed or delayed for multiple reasons.
Anyway, the trend is there. The Oil & Gas and Petrochemical projects stand robust while Energy Transition projects get now visible.
In addition, all the regions in the world benefited in 2021 from this positive trend as per below.
But behind this nice picture, we observe major changes in the market structure.
National Oil Companies and Independents Lead Energy Projects
Three categories of operators play in energy projects.
First historical ones are the international oil companies (IOCs), about 10 majors such as BP, Chevron, Conoco, ExxonMobil, Shell, TotalEnergies
Second category we saw emerging these last years, the national oil companies (NOCs).
Third category groups all the others from upstream, midstream and downstream or energy transition described as Independent companies (ICs)
In the picture below, the IOCs appear in blue, the NOCs in red and the ICs in green. It also compares the structure of the market between 2019 and 2021.
As we can see, the market was pretty well balanced between the three categories in 2019. But, during 2020 and even more 2021, it turned to the domination of the NOCs and ICs taking 89% market share from the awarded contracts for engineering, procurement and construction (EPC).
Regarding 2022, our forecast stands very much in line with 2021. The NOCs and ICs should continue to dominate the awarded EPC contracts by more than 85%.
Last point, the trends described above apply to energy transition projects in the same way as Oil & Gas and Petrochemical projects.
For more information, you can also have a look into our webinar below.
