Short and long-term solutions to the gas crunch


Years of weak upstream investment in the oil (and more so in the gas) sector are building up to a global supply crunch. While the latest OPEC decision to up oil production by 400kbbl p/d (and OPEC holding back more than 7m bbls p/d from production) will alleviate some fears of an oil supply crunch, the gas situation is different.

When it comes to gas, new supply is only expected towards the middle of this decade.

The EIA estimates that there has been around a 33% decrease in investment in oil and gas due to the Covid-19 pandemic and this led to a lack of supply. A vivid example is the Permian basin and the US shale industry. This has been in decline due to lack of investment. The good news is that with the developments of more efficient technology and a focus on short-cycle project, the output of gas can be increased relatively quickly. If this was to happen, there would need to be a sharp increase in production to allow sufficient surplus to be exported outside of the US. As one can appreciate, this scenario has too many ‘ifs’ to be comfortable in the current state of the European gas markets.

... to continue reading you must be subscribed

Subscribe Today

Paywall Asset Header Graphic

To access hundreds of features, subscribe today! At a time when the world is forced to go digital more than ever before just to stay connected, discover the in-depth content our subscribers receive every month by subscribing to gasworld.

Please wait...