Energy Snapshot: Industry themes - June 2019

Upstream project sanctions have had a slow start to 2019, with only 4 billion boe receiving FID to the end of May. However exploration volumes discovered have had a good start with large gas discoveries in the Kara Sea (Russia). Throughout the downturn the majors have been rebuilding their exploration acreage and have performed well in terms of discovered resources in 2018 and 2019. But with Energy Transition, exploration faces the big question of how much is required? After the Anadarko takeover, the big question in the US Lower 48, is who is next? We highlight recent analysis from the corporate team looking at potential targets. We also look at Chevron’s disposal programme. European gas price is weak and is expected to remain so through 2020, with weak LNG demand pull from Asia. Gas prices are also weak in the Permian due to takeaway constraints. Wood Mackenzie’s long term oil price outlook has been updated. Slightly lower in the medium term, but unchanged longer term.