OilVoice - Deloitte Energy Launches Energy Predictions 2010 Report

Deloitte Energy Launches Energy Predictions 2010 Report

Wednesday, November 04, 2009

- M&A activity will begin to rebound in mid 2010
- Middle East and North Africa new centre for renewable energy

Deloitte, the business advisory firm, today launches Energy Predictions 2010, the first of an annual series by Deloitte on the state of the energy industry.

Derek Henderson, senior energy partner for Deloitte said: “2010 will be a challenging year for the energy industry and it is likely M&A activity will begin to rebound in mid 2010.

“Companies across sectors will need to think about how to ensure they make the most of future M&A opportunities. As global competition increases so will M&A’s role as a vital strategic tool for gaining much needed access to resources and opportunities.

Highlights from the report include:

• Oil & gas companies - both international oil companies (IOCs) and national oil companies (NOCs) – are expected to face a particularly difficult set of issues in the year ahead. Merger and acquisition (M&A) activity is likely to begin to rebound in mid 2010 and attain pre-recession levels by 2011.

• Power and utilities companies will be likely to face their own set of issues. The most important of these is the continued rise of the Smart Grid which has the potential to revolutionise the power sector by reducing energy consumption by up to 30% and decreasing the need to construct new power plants.

• Renewable energy production is likely to heat up in two places synonymous with fossil fuels: the Middle East and North Africa. The geographic and demographic conditions are just right for a new type of renewable energy leadership.

• Pressure to resolve the coal conundrum intensifies, coal will account for 29% of global energy requirements by 2030. Carbon capture storage may be the answer, yet this technology is costly and yet to be proved on a global scale. Many nations, particularly emerging ones, will forge ahead with building new fleets of coal-fired plants in the coming years - regardless of the emissions consequences.