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Foreword
Shell Global Solutions has become part of a new, group-wide business called Projects and Technology, which will manage the design of all major new projects, upstream and downstream, and which will consolidate technology R&D and technical services on a truly global scale.
We have entered a new set of world circumstances. It is clear that our immediate future lies in a downturn with low margins. Within the industry, this could mean that less capital is available to maintain investments in operating facilities and future supplies, which may lead to price volatility. Moreover, oil demand has fallen and prices are less than half of their historical peak in July 2008. Yet industry costs, though softening, remain nearly twice what they were in 2004.
Set against that context, this special supplements aims to provide insights into the industry’s short- and long-term outlooks, and practical strategies and operational tactics that could help your company to emerge from the downturn as a winner.
Chief Strategist Karl Rose, Shell International BV, suggests that oil and gas companies need to ask themselves not only how they are going to cope with the downturn, but also how they will accelerate growth when the markets pick up again. Companies often tend to react to crises by reducing investment levels and cutting costs until normality returns, but this assumes that the downturn will be short-lived. There are indications that today’s crisis may be different; there may be a slower return to the status quo.