Abstract
The international gas industry will come of age in the 1990s. Gas demand is currently exhibiting an average rate of growth significantly greater than that of oil. Growing environmental concerns, the availability of significant volumes of undeveloped natural gas reserves discovered in the past decade, and the dramatic changes in the socioeconomic-political arena (leading to the global privatisation effort currently in progress) have set the stage for the natural gas industry into the next millennium. The future prospects for the international gas business are now sufficiently attractive to warrant serious consideration by all significantly-sized petroleum companies. The business opportunity spectrum for gas encompasses exploration, development, production, transmission, marketing, liquefied natural gas, electrical power generation, primary petrochemicals and automotive transportation. The development of appropriate strategies to capitalise on such opportunities depends mainly on the nature of the company pursuing the opportunity, the nature of the opportunity and/or the number of opportunities pursued. Also important are potential political, legislative and environmental developments.
Some of the more far-sighted companies are positioning themselves to participate actively in this rapidly growing sector, generally via a strategy of integration along the value-added chain. In this respect, the knowledge and expertise base required of such participants, if they are to establish profitable business activities, is much more extensive than that required of typical oil companies. The competitive advantage in this capital-intensive, long lead-time business sector lies with integrated companies with proven experience in all phases of gas operations. Companies without an effective, comprehensive strategy are unlikely to make any significant progress in the sector in the medium term unless they are prepared to pay large acquisition premiums. This paper reviews the anticipated evolution of the natural gas business, the major developments contemplated, and political, corporate and financial considerations.
