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Barclays CEO Energy-Power Conference
Paal Kibsgaard
I would now like to turn to our business outlook for the rest of 2013.
The oil market has shown little change since the end of the second quarter, although IEA
estimates for demand growth in 2014 have been upgraded, in line with improving trends
in several of the main economies. Overall, the market continues to support Brent prices
over $100 per barrel, with possible upward pricing pressure based on supply outages in
Libya and Iraq and as we await further developments in Syria.
For natural gas there has also been little change in recent months, with the US market
remaining fragile as production seems steady and demand from the power sector has
decreased. In the international gas markets, prices remain firm in both Europe and Asia.
In terms of E&P spend, third-party surveys released in the second quarter showed upward
revisions in upstream capex estimates for 2013, driven by the international and offshore
markets—an outlook generally confirmed by ongoing customer activity.
Looking at our operations, we see continued strong activity in the Middle East and Asia,
driven by Saudi Arabia, Iraq, China and Australia. In Latin America, we continue to
face challenges in Mexico and Brazil, but this is largely offset by strong performance
throughout the rest of the region.
In ECA, our business in Russia remains very strong, while we have some delays in parts of
Europe and Africa this quarter, driven by summer shut-downs in the North Sea, ongoing
security challenges in North Africa, and operational delays in sub-Saharan Africa.
Finally, in North America there are no major changes from our comments at the end of the
second quarter. US land activity remains solid, while pricing continues to see a slowing
downward trend, offset partly by growing uptake of our new technology. In Canada,
stronger activity in the liquids basins now indicates that H2 activity will be in line with
that of H2 2012, while activity in the Gulf of Mexico is at record levels and has so far seen
minimal effect from the hurricane season.
Overall, we maintain a positive outlook for our business and we continue to focus on what
we control—namely the quality and efficiency of our execution.
