May 2000

Natural gas has staked its claim as the 21st century’s fuel of choice. Few doubt its impressive potential for growth, but some limiting factors must be overcome before potential can be realised. The limits span marketing/pricing, and legislative and technical aspects.

The opening-up to competition of the gas markets of EU countries, legislated to start this August, is set to exceed the EU’s targets. But legislated opening does not guarantee the creation of lively, competitive markets.

The EU gas market must open to competition in three months’ time, but the situation in France remains a puzzle to industry and to other member countries.

There is speculation that Gazprom could face some sort of restructuring after the recent presidential election. However, the company has often proved its inability to resist external pressure to change and it is unlikely that its dominance will be radically altered in the future.

Natural gas prices and supplies are seemingly on a collision course that could radically reshape the North American industry, from explorers to consumers.

Although the US market has been opening up since the 1970s, it still has some way to go to be fully open.

Unprecedented demand for natural gas in the US, mainly from the power generation sector, has intensified interest in the gas-rich Gulf of Mexico.

Gas production and consumption is expected to increase significantly in the coming years. More gas-fuelled power plants, more vehicles that run on compressed natural gas and growing populations will feed the region’s natural gas appetite.

Potential supply of liquefied natural gas (LNG) will continue to exceed demand in both the Asia-Pacific and the Atlantic Basin markets for the next 10 years.

Capturing, storing, organising and manipulating market data are key activities for energy companies worldwide and, as markets evolve, data sources increase and technology advances, good data management will continue to improve a company’s performance, writes Sarah Pedley, marketing director of the Saladin unit of FAME

Until recently, the upstream oil and gas industry paid little attention to the commercial upheavals taking place under the banner of e-business. After all, what relevance does a revolution in customer management have to an asset-intensive commodity industry? This viewpoint is now changing, as the industry realises that the opportunities and threats are just as real, and the implications just as profound, as for the consumer industries, writes Nick Lowes, manager, Arthur D Little’s energy practice, London

To remain competitive in the age of the internet technology revolution, refining companies will have to change the way that they run their businesses. The future of e-business in the refining and parallel industries is coming into focus, and refiners are asking more questions about internet and e-business opportunities, according to Aspen Technology, a leading supplier of e-business systems for the process industries

In the first quarter of 1985, Robert Mabro appeared as an expert witness before the government select committee hearings into the heavy losses incurred by the British National Oil Corporation, the UK state oil company.

With three recent offshore exploration deals, and a new licensing round planned for later this year, Morocco looks set to take its first serious plunge into its extensive and untested deepwater acreage. The state-owned oil company, Office National de Recherches et d’Exploitation Pétrolières (Onarep), hopes that favourable offshore geology will lead to new finds and production that can help to lessen the country’s dependence on oil imports, reports Paul F Hueper from Rabat.

Since the start of electricity deregulation in the US, mergers and acquisitions have gathered speed and frequency as companies jostle to position themselves in a new industry dynamic.

Iraq’s plans to significantly increase crude output over the next few months must be taken with a pinch of salt if the latest UN report on the state of the country’s oil industry is anything to go by.

Opec’s attempt in March to restore world oil prices to more comfortable levels for consumers appears to have worked, for now, as prices establish themselves in the range the organisation said was its target. But, despite claims of a new era of co-operation and stability, the Vienna meeting was prey to political in-fighting. At the same time, concerns over demand and extra output mean the market appears set for more price volatility.

The stakes were raised in the bidding war for Spain’s Hidroeléctrica del Cantabrico as the country’s third biggest energy company, Unión Fenosa, chipped in with a $2.55 billion offer. Just as Fenosa’s bid looked likely to succeed, Cantabrico shareholders failed to agree to remove a “poison pill” company statute that would have cleared the way for the deal. TXU, which owns a 10 per cent share of the company, blocked the move, vowing to revive its takeover offer if that of Fenosa failed by the mid-May deadline.

Convergence of gas, oil and electricity is arguably an inevitable consequence of industry deregulation and new-found market liquidity. But does the prospect of carrying vertical integration to its ultimate conclusion, with the creation of the Total Energy Company, spell good news for the power sector?

Raising the estimated $150 billion that southern Africa needs to spend on its power system will be no easy task. How can it encourage such investment?

Phase 3 of the Azito power project is currently on hold, but the financial package of earlier phases could provide a blueprint for future private investment in Africa