Investment in exploration-production and refining 2012

2012 has been marked by uncertainty and contrasts. In Europe, the debt crisis has threatened the economic stability of the entire Euro-zone. This has had consequences for other countries in the European Union as well. World economic growth is increasingly sluggish. This is affecting industrialised countries first and foremost, as well as a number of emerging countries - albeit to a lesser degree. Political and social stability has not yet returned to those countries that were affected by the Arab spring, with the region covered by North Africa and the Middle East still very vulnerable. The wave of revolutions in this region has been followed by international tension over Iran's growing nuclear capability, and its regular threats to blockade the Strait of Hormuz - through which a significant percentage of the world's petroleum passes. Economic, financial and geopolitical uncertainty has a tendency to drive oil prices up or push them down, creating a highly fluctuating oil market. Prices remain high overall, because of all the geopolitical uncertainty. The exponential growth of shale gas initially, and then tight oil over the last few years in the US, are dramatically transforming the landscape and have significantly changed our way of thinking about the oil and gas sector in the medium term. The increasing use of shale gas is accentuating the contrast between the world's three main gas markets - North America, Europe and Asia - and is challenging received wisdom about how international gas flows are changing. The word 'contrast' also springs to mind when looking into how investment in hydrocarbons has changed, with an upstream sector that is flourishing and a downstream sector that is treading water. In spite of the uncertain economic context, investment in exploration-production is still increasing at a healthy rate, with activity reaching record levels in all areas. The decline in activity of 2009/2010 now seems a long way off. As far as refining is concerned, investment has only risen very modestly, despite a somewhat encouraging 2011. It has only been driven by Asia and the Middle East and - to a lesser extent - South America. (authors)