regulations, staffing keep energy executives on their toes
DESCRIPTION
The American energy sector is booming like never before. Record domestic oil and natural gas production have ranked the U.S. output above that of Russia and Saudi Arabia. Such explosive growth, however, is challenged by regulations and a competitive M&A landscape, according to respondents to a Grant Thornton LLP and Hart Energy 2014 survey of the energy industry. This infographic outlines the key pain points for executives. Get more survey findings at http://gt-us.co/1wvd0gJ.TRANSCRIPT
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About the 2014 Grant Thornton LLP survey of upstream U.S. oil and gas companiesThe survey is based on answers from 564 respondents collected in July 2014. Respondents were C-suite and senior executives from U.S. independent producers, midstream operators, oilfield service companies and financial companies. Participant titles included CEO, COO, CFO, CIO, senior vice president, board member, general counsel, and tax and finance professional.
1 Institute for Energy Research, “U.S. Overtakes Saudi Arabia and Russia as Largest Oil Producer,” July 10, 2014, http://instituteforenergyresearch.org/analysis/u-s-overtakes-saudi-arabia-russia-worlds-biggest-oil-producer
Regulations, staffing keep energy executives on their toes2014 survey of U.S. oil and gas companiesThe American energy sector is booming like never before. Record domestic oil and natural gas production have ranked the U.S. output above that of Russia and Saudi Arabia1. Such explosive growth, however, is challenged by regulations and a competitive M&A landscape, according to respondents to a Grant Thornton LLP and Hart Energy 2014 survey of the energy industry. Here are some of the key pain points for executives.
OBSTACLES TO GROWTHTop 3 operational barriers to sustained growth
How regulatory uncertainty affects the
energy industry
Staffing is a priority amid shortage of workforce
Federal, state and local regulations
1 in 2 say finding and retaining the right people is the biggest operational infrastructure challenge
3 in 5 project that they’ll need to hire more in 2015
Safety, acquisitions are top risks
Henry Hub natural gas price projections(per 1,000 cubic feet)
Capital spending increase in 2015Domestic Foreign
More than 20% 30% 5%
Up to 20% 37% 11%
Decrease 5% 2%
No change 18% 17%
A hot M&A market means more challenges
West Texas Intermediate crude oil price projections (per barrel)
Safety and environmental
2015 2016 2017$4.50 $4.81 $5.12
2015 2016 2017$97.99 $98.28 $98.66
LOOKING FORWARD: PRICES AND CAPITAL SPENDING
Capital
Competition for assets/ targets for acquisition
see policy support and public perception as barriers
6%
are worried about fraud and corruption
Acquisitions and transactions
Ineffective internal controls
38%
22%
16%
33%
31%
20%
2%
26%It’s difficult to plan effectively
Regulation volume and complexity make compliance challenging
Can’t forecast economic consequences of changing regulations
29%
20%
High costs due to competition
Quality of assets on the market
Access to capital
31% 17% 12%
For more survey findings, please visit grantthornton.com/2014energysurvey