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THE OIL & GAS INDUSTRY IN 2021
THE 2021 OIL & GAS OUTLOOK
The downturn caused by COVID-19 has been unlike any other so far in the history of the oil & gas industry. With the survival of many companies at risk, coupled with a longer-term decline in petroleum demand, the future could look very different for the industry.
The global economy and capital markets have, however, rebounded faster than expected in the third quarter of 2020. However, the pace of recovery in the coming months remains highly uncertain as mounting COVID-19 cases amid winter conditions, especially in Europe and the United States, may trigger another round of shutdowns and restrictions. Any further normalization of economic activity largely depends on how the pandemic evolves during the winter and, most importantly, when COVID-19 vaccines reach the general public. Even when the virus is controlled, economies are expected to continue dealing with the adverse impact of deteriorated fiscal balances and the effect of muted business investment on the labor market and consumer spending in 2021.
Global oil demand fell by 25% in April, but it has rebounded sharply since then, cutting its losses to just 8%. Looking ahead, 2021 oil demand is expected to recover strongly but remain lower than it was at pre–COVID-19 levels—about 4% lower in the base case, and about 7% lower in Rystad Energy’s second-wave scenario. Similarly, oil prices and energy stocks have underperformed base metals and the broader S&P 500 index by about 10% and 25% and 6% and 10%, respectively, since July 2020. Mass layoffs and heightened cyclicality in employment continue to challenge the industry’s reputation as a reliable employer. US O&G companies laid off about 14% of permanent employees in 2020, and our research shows that 70% of jobs lost during the pandemic may not come back by the end of 2021.
Although the oil and gas sector is used to the highs and lows of economic and price cycles, this downturn seems unlike any other. In fact, it’s the “great compression” of the O&G industry. With the survival of many companies at risk, and the longer-term decline in petroleum demand, the next decade could look very different for the entire O&G value chain. 2021 will either be a leapfrog year or a test of endurance for many. We see five oil and gas trends that may challenge traditional methods of oil and gas production in 2021, determine the direction of the industry, and begin separating the pioneers from the followers.
The oil and gas industry was facing market headwinds even before the pandemic started. However, the pandemic has turned into a “fast-forward” scenario for the industry, where what might have taken years to happen has instead unfolded in a matter of months. Pivoting to the new energy future could be tough and may require companies to make bold choices—and not everyone is likely to succeed. The following signposts could help O&G companies in deciding their strategy and direction in 2021:
· The stance and commitment of a new administration on clean energy.
· Changes in end-use demand patterns and supply composition.
· The rise of environmental, socially responsible, and impact-focused investing.
· An adoption of new talent strategies to succeed in the future of work.
· Consolidation in a low-priced environment.
The choices O&G companies make in the coming months, and the trends they prioritize, will decide the path forward and reverberate through their decision-making in the coming decade.
In the coming months or years, some challenges will be lessened or even gone. Nevertheless, the oil & gas (O&G) industry is at a tipping point, and to keep companies afloat and become resilient to any future emergencies, management teams need to optimize their portfolios and unleash new methods to add value. In this context, it’s hardly surprising that talking to current customers and business leads, the most frequently asked questions we get are “what are the main oil and gas trends?” and “what oil and gas emerging technologies do guarantee the maximum return-on-investment (ROI)?”
To stay competitive despite any headwinds, O&G companies need to demonstrate agility and techsavvyness while adjusting to the next normal. For instance, in the coming three years, market leaders mostly plan to invest in the following oil and gas industry and technology trends:
· Advanced analytics
· Artificial intelligence and/or machine learning
· Сloud computing
· Mobile platforms/apps
· Virtual and/or augmented reality
· Remote monitoring
· Operational technology (remote sensors and others)
· Robotic process automation (RPA)
· Internet of Things (IoT)
· Blockchain
Amid the COVID-19 pandemic, the need to close offices and shift to remote work immediately was one of the biggest blows for many fields, and O&G was no exception. Being highly dependent on manual processes and in-person activities, most enterprises were forced to go all out on the development or modernization of cloud infrastructures, security protocols, and workflows. However, this situation has only paved the way for the full-scale adoption of digital technology in the oil and gas industry. And while we’re still not sure about the duration of the epidemic impact on the field, drawing up a plan to digitize and adjust is essential.
Indeed, estimating the damages is crucial for going ahead, but we can already define forward-looking areas and activities that O&G leaders can focus on. After all, it’s not only the pandemic that drives the changes. These days there is much tension around the issue of social consciousness and climate change. And even if firms survive the epidemic, there will be another pressure coming from society and investors.
wholesale oil & gas TRADING platform procedure
ELIGIBILITY & COMPLIANCE FOR OIL & GAS TRADING
Traders transacting through this platform have undergone our rigorous and extensive vetting and background checks and are certified to be capable of transacting successfully. The platform directly engages in every aspect of the transaction process to ensure the smoothest experience in implementation of the sale and delivery of fuel.
BUYER ELIGIBILITY:
- A proven multi-year track record in oil & commodity trading.
- A proven ability to receive and transport the product upon delivery.
- Sufficient available capital, or credit line, to purchase the product.
- Banking at a reputable bank.
- Storage and Shipping Arrangement must be in place
- Holding import or trading licenses to receive or transport the product in/through/to any country or territory where this might be required.
- Not selling the product to any party residing in, liaised with, or transporting to a location in, a country or territory under trade embargo by the United States of America, European Union, Hong Kong S.A.R. or the United Nations.
SELLER ELIGIBILITY:
- Seller must be the Title Holder and must unconditionally provide proof of title holding/allocation
- Seller must submit their Corporate and Tax registration details
- Seller must submit his Transaction Terms beforehand.
- Seller must submit verified Technical Specification of the product(s) it intends to sell. Verification agency must be a neutral inspection agency of International repute
- Seller must have an official website detailing Corporate information and activities. Email addresses with public domain servers are not accepted.
- Seller must provide sufficient proof of successful past transaction(s) in the oil & gas sector
Trader Due Diligence:
In order to become a Qualified Oil & Gas Trader, the applicant needs to undergo a due diligence carried out by our internal compliance team on the buyer or seller and his company The financials of the companies, trading track records and current ability to purchase, store, and transport fuel are thoroughly scrutinized.
The procedure to become a Registered Trader:
- The potential Oil & Gas Trader fills the Buyer KYC Template / Seller KYC Template and submits online to Global Oil & Gas Trading (Subcontracts India).
- Our compliance team will review the information submitted and might request for further information relating to the Buyer's / Seller's company details, financial status, trading history and product requirements.
- Upon a positive review of the application, one of our sourcing managers will contact the Buyer/ Seller directly to discuss purchase requirements, product availability and transaction procedures.
- Once all parameters are satisfactorily met, the company will be registered as a Qualified Buyer / Seller and will receive our regular product offers via email.
The below points are important:
- Only experienced Traders can apply to become a Qualified Traders on this platform. We do not accept applications from Brokers or Intermediaries.
- Only authorized directors or senior officers of the buying/ selling company can submit an application for registration. We do not accept applications by unauthorized persons.
- Every Oil & Gas Trader will have to meet our Prescribed Standard prior being able to trade on this platform.
Global Oil & Gas Trading Also Actively Assists Several Other Types of Oil and Gas Investments
Broadly speaking, we facilitate four main types of oil and gas investments:
1. Exploration
These companies or projects buy or lease land and invest money in drilling. If they strike oil, the investment can pay off 10 times over – sometimes much more if the company uses borrowed money (leverage) to finance operations. If not, they may lose nearly everything they invested in that particular project. Pure exploration companies are best suited for those with very high tolerance for investment risk. These plays are highly speculative.
2. Developing
These projects drill near proven reserves, hoping to unlock further value. These are somewhat less speculative, but there are never any guarantees that their efforts on any one plot of land will bear fruit.
3. Income
These projects involve the acquisition of plots of land, either through lease or purchase, over proven oil and gas reserves, and seek to create a steady stream of income over and above expenses. This is generally the safest way to get involved specifically in the drilling and extraction operations, and is more of an income play than a speculative play. The risk is that the oil or natural gas will run out faster than expected.
This investment is for those seeking a passive income stream, but who can take on more risk than those investing in other traditional income generators, like investment grade bonds and annuities.
4. Services and Support
These companies provide a nearly unlimited menu of supporting services to the oil and gas industry. Examples include transportation, shipping and logistics companies, pipeline companies, construction and rigging companies, drilling and refining hardware and equipment manufacturers, refiners, and many others.
Investing in these companies is similar to investing in any other company involved in B2B services, logistics, technology, and the like. Some of these investments don’t rely on increasing fuel prices to be profitable. For example, pipelines make money by charging a fee per barrel transported. They’ll make roughly the same amount regardless of whether fuel prices rise or fall, as long as demand remains consistent.
OUR SERVICES ENSURE SMOOTH TRANSACTION
Oil and Gas buyers constantly endeavor to explore and expand their supply base. They look for the most competitive price, superior product quality and an extremely efficient and flawless delivery service. Global Oil and Gas Trading provides its clients (both buyers as well as sellers) a fair, trustworthy, efficient and professional platform. Be it alacrity, transparency, uprightness, competitiveness, or ease of doing business, there is no need to look any further. We are exemplary in what we do and our clients rarely find any reason to complain.
Based on the initial information the client provides to us through our online submission forms, one of our highly proficient staff will quickly determine the best move forward considering the client's specific requirements, contact the client personally, and will assist in getting started with the best suited counterpart. We service qualified buyers and/or sellers who are serious about expanding their international trade transactions.
For best long term results, we encourage clients to establish mutually beneficial mandate relationship with us.
Clients can take great advantage of our expertise in sourcing commodities, products and services and get rid of the never ending stress of finding genuine buyers or sellers and let our professional team work for them. We make sure that all offers made through this platform are genuine and the products are of the highest world standard.
We welcome you to take the opportunity to put our resources and expertise to work for you. Please feel free to contact us, should you have any questions.
STANDARD TRANSACTION PROCEDURES
Oil and Gas Transaction Procedures vary from client to client and it is always extremely difficult to get both buyer as well as seller agree to any one set of Transaction Procedures.
This Platform does not participate directly in any of the sale or purchase transactions between traders. However, as a facilitator of any deal transacted through this Platform, the management tries hard to put in place a mutually acceptable transaction procedure between clients on a case to case basis.
Whereas it is mandatory for all clients (buyers as well as sellers) to submit their own set of transaction procedure while submitting their specific buy or sell offers, The Platform management intervenes to make certain clients drop clauses which inevitably leads to any kind of upfront payment. We are listing a few examples below:
- Splitting "Shipping Charges" and asking the buyer to pay half of those charges to the shipping company prior actual shipment or handover of shipment.
- Asking for Banking Instrument prior verification of PPOP documents by the buyer.
- Asking the buyer for Tank Storage Receipt prior providing Proof Of Product, Location, and valid Inspection Report.
- Asking for any kind of payment on the pretext of any government charges.
- Providing Banking details that do not relate directly to either the buyer or the seller.
Please read our ideal transaction procedures for FOB, CIF, and Spot (Dip & Pay) transactions.
JET FUEL/ atf (Jet A-1/ TS-1)
JET FUEL/ atf (Jet A-1/ TS-1)
JET FUEL/ atf (Jet A-1/ TS-1)
Jet fuel, Aviation Turbine Fuel (ATF), or Avtur is a type of fuel designed for use in aircraft powered by gas-turbine engines. It is clear to straw-coloured in appearance. The most commonly used fuels for commercial aviation are Jet A and Jet A-1 which are produced to a standardized international specification. During the refining process only 8% of the crude oil is made up of Jet fuel.
D2 DIESEL GAS OIL
JET FUEL/ atf (Jet A-1/ TS-1)
JET FUEL/ atf (Jet A-1/ TS-1)
D2 is a refinery abbreviation for Gasoil. It is the second distillate from the crude oil, and can be used without reformers and additives. The principal difference between GASOIL and D2 is the content of sulphur. ISO has a standard for D2 that most of oil companies use as their reference.
EN590 DIESEL (10PPM) ULSD
JET FUEL/ atf (Jet A-1/ TS-1)
D6 VIRGIN FUEL OIL/bunker oil
EN590 (10PPM ULSD) had been introduced along with the European emission standards. With each of its revisions the EN 590 had been adapted to lower the sulphur content of diesel fuel - since 2007 this is called ultra low sulphur diesel as the former function of sulphur as a lubricant is absent
D6 VIRGIN FUEL OIL/bunker oil
D6 VIRGIN FUEL OIL/bunker oil
D6 VIRGIN FUEL OIL/bunker oil
D6 is also be known as Residual Fuel Oil and is of high-viscosity. This fuel oil requires preheating to 220 – 260 Degrees Fahrenheit. D6 is mostly used for generators. D6 is a type of residual fuel, mainly used in power plants and larger ships. The fuel requires to be preheated before it can be used.
LIQUEFIED PETROLEUM GAS /LPG
D6 VIRGIN FUEL OIL/bunker oil
LIQUEFIED PETROLEUM GAS /LPG
LPG (Liquefied Petroleum Gas) is predominantly propane and butanes, either segregated or in various ratios and mixtures of each product. LPG is a by-product of crude oil production (Associated Gas) and a by-product of natural gas production (Non Associated Gas).
LIQUEFIED NATURAL GAS /lng
D6 VIRGIN FUEL OIL/bunker oil
LIQUEFIED PETROLEUM GAS /LPG
Liquefied Natural Gas (LNG) is natural gas, cooled to minus 161°C until it becomes a liquid. It is stored under atmospheric pressure and reduced in volume by the ratio of 1:600. It is easier and less costly to transport, particularly where access to pipelines is not available.
MAZUT M100
MAZUT M100
MAZUT M100
Mazut M100 (Heating Oil) Fuel oil is supplied according to the Russian technical specification GOST 10585-99, section for fuel oil, mazut sort 100. This kind of oil is graded as the heavy furnace oil. The product is produced from the remains of raw oil processing.
NAPHTHA
MAZUT M100
MAZUT M100
Petroleum Naphtha is an intermediate hydrocarbon liquid stream derived from the refining of crude oil with CAS-no 64742-48-9. It is most usually desulfurized and then catalytically reformed, which rearranges or restructures the hydrocarbon molecules in the naphtha as well as breaking some of the molecules into smaller molecules to produce a high-octane component of gasoline (or petrol).
CRUDE OIL
MAZUT M100
CRUDE OIL
Crude oil is a naturally occurring, unrefined petroleum product composed of hydrocarbon deposits and other organic materials. A type of fossil fuel, crude oil can be refined to produce usable products such as gasoline, diesel and various forms of petrochemicals. It is a nonrenewable resource, which means that it can't be replaced naturally
PETCOKE
FUEL OIL/HFO/IFO/marine fuel
CRUDE OIL
Petcoke is the coke that, in particular, derives from a final cracking process—a thermo-based chemical engineering process that splits long chain hydrocarbons of petroleum into shorter chains—that takes place in units termed coker units.
BITUMEN /ASPHALT
FUEL OIL/HFO/IFO/marine fuel
FUEL OIL/HFO/IFO/marine fuel
Asphalt, also known as bitumen is a sticky, black, and highly viscous liquid or semi-solid form of petroleum. It may be found in natural deposits or may be a refined product, and is classed as a pitch.
FUEL OIL/HFO/IFO/marine fuel
FUEL OIL/HFO/IFO/marine fuel
FUEL OIL/HFO/IFO/marine fuel
IFO 380 - Intermediate fuel oil with a maximum viscosity of 380 centistokes (<3.5% sulphur)
IFO 180 - Intermediate fuel oil with a maximum viscosity of 180 centistokes (<3.5% sulphur)
LS 380 - Low-sulphur (<1.0%) intermediate fuel oil with a maximum viscosity of 380 centistokes
LS 180 - Low-sulphur (<1.0%) intermediate fuel oil with a maximum viscosity of 180 centistokes