2016 has been a year of flux for the international oil and gas industry. With the industry enduring a second straight year of low oil prices, and with no prospects for a significant increase in sight, participants in the industry have been forced to adapt. Capital projects have been delayed or abandoned, staffing levels have been reduced, and oil companies have been seeking to sell off parts of their portfolios to focus on their best prospects and raise capital.
Oil producing countries have been in a similar pinch. Having become accustomed to triple digit oil prices, the ‘new normal’ of US$50 oil has produced a grim budgetary reality. Although some producers with a relatively large ratio of reserves to population such as Kuwait, Qatar and the UAE have been able to get by without making drastic changes, others, such as Venezuela, have been brought to the brink of national bankruptcy as years of economic mismanagement enabled by high oil prices have finally taken their toll.
The international oil and gas industry has always been cyclical. Although the last two years have been eventful, it is by no means the first downturn the industry has faced nor the last. I have no doubt that the years ahead will continue to present challenges and opportunities for practitioners in this most dynamic of industries.
Chris Strong is a partner with Vinson & Elkins’ London office, and has previously been resident in its Middle East, Texas and Asia offices. Chris counsels clients in a wide variety of transactions in the energy, infrastructure and natural resources industries, with a particular focus on project development and finance and mergers and acquisitions. His experience includes transactions relating to upstream oil and gas, power plants, petrochemical facilities, refineries, pipelines, liquefied natural gas, and mining and metals.
The publisher acknowledges and thanks the following for their learned assistance throughout the preparation of this book: