For investors looking to take the top financial risks of the decade and make a real difference, there’s only one company that can give them everything they need: Saudi Arabia. The world’s most expensive country has become a global leader in natural gas production, shipping gasvedasically, and investing in renewables has expanded its energy diversity. This week, Saudi Arabia announced it would create its own national energy regulator-the National Energy Regulatory Commission-to eliminate the double standard that exists in oil and gas investment. Earrings worth tens of billions are on display at the event held this week in Riyadh. From Middle East to European Union, investments by major oil and gas companies will be discussed at the forum as part of their strategy to become more efficient consumers of energy. Here’s what you need to know about this week’s event:
The Middle East is a leader in natural gas
Many oil and gas companies have been following in the footsteps of ExxonMobil, Halliburton, and Chevron. In a matter of months, these companies managed to increase their production by more than 30 percent. This growth has been driven largely by the demand for natural gas in the Middle East and North Africa. While most oil companies have focused on developing new fields in the Middle East, some of the industry’s top names have also been investing in gas facilities in the Middle Eastern part of the world. Emirates National Oil Company (Enerco) and Oil & Gasdrill have both set up operations in the region, while Halliburton’s operations in the U.S. are focused on serving the needs of oil and natural gas companies in the region. The increase in demand for natural gas in the Middle East has also led to an increase in production from oil and fields in that region. In fact, oil production hit a record high in January, according to the International Energy Agency. This increase is likely due in part to the region’s increasing demand for natural gas, coupled with a decline in oil production.
Oil and gas companies are seeing great sales potential
Investors need to take note of a few things before diving into the oil and gas sector. First, oil and gas production has been increasing in the Middle East for the last few years. According to the International Energy Agency, oil production will increase more than double its average rate over the next decade. Additionally, demand for natural gas will increase more than oil demand combined. And, while oil and gas companies have ramped up spending to modernize and increase production in the last decade, they have also been investing in emerging technologies that will help the industry become more efficient, more agile, and more sustainable. In particular, oil and gas companies are investing in natural gas scrubbers tocolo me more efficiently and maintain pressure while reducing production. And, while oil and gas companies have been investing heavily in electric vehicles and wind turbines, they are also backing up their plans with carbon emissions reductions.
There is an abundance of natural gas
While oil and gas companies have been investing heavily in carbon emissions, natural gas, which is produced without the use of fossil fuels, has been the most consistent source of energy for the last few decades. It accounts for about one-third of global energy production, and it has also been used as a heating and cooling fuel for thousands of years. Natural gas is also one of the cleanest energy sources on the market, accounting for less than one-fifth of the carbon emissions generated by global electricity grids.
The Kingdom is looking to renewables for flow
Similar to oil and gas companies, renewables have also seen an increase in demand this week. Additionally, there is increased interest among oil and gas companies in purchasing solar panels and wind turbines, along with other clean energy technologies. In fact, electric vehicle sales are up in the U.S., while demand for clean energy is strong in the UK, Germany, and France.
More action on energy standards
Climate change is having an impact on energy resources around the world. It has been called the “new buzzword” in the energy industry, and it has received a lot of publicity this week. The Paris Climate Agreement was signed this week, and while other countries are taking action to reduce emissions, the U.S. is leading the way in demonstrating leadership by building the world’s largest solar array, the largest windmill array, and building a sustainable energy storage system.
Investors need to keep in mind that the oil and gas sector is still relatively young, and there are still a lot of questions and concerns about the industry. The most important thing they can do is take a hard look at the company and ask themselves these questions: Where is this company going? How will this company succeed? What can I do to help? What are the risks I need to avoid? And, finally, what can I do to be successful? The oil and gas sector is a highly lucrative market for both companies and individuals. As with any industry, you need to be careful about taking too much money without knowing what the risks are. Once you’ve put some money into the market, it’s easy to miss the true costs of your investments due to all the positive publicity and easy profit potential that is available in this industry. If you want the best possible chance of making a significant impact, play for cover and stay out of the oil and gas industry.