Despite relatively robust oil and natural gas prices, the oil and gas industry continues to experience a difficult business environment. Some of the challenges include:
- Economic stagnation in many countries, including major consumers such as the U.S., Germany and Japan.
- Political and social instability in countries that produce and export oil, such as Venezuela, Indonesia, Nigeria and Iraq.
- Tougher emissions and product regulations, requiring heavy capital investment and higher operating costs.
- Faltering progress in natural gas and power deregulation in the aftermath of Enron, and other problems in countries undergoing deregulation.
- Poor access to capital at reasonable costs due to many energy companies' lowered credit ratings and fewer new securities issues.
- Increased safety, environmental and operating performance risks.
- Inability to reduce costs due to nearly 20 years of cost reduction initiatives.
- An unfavorable public perception of the industry that makes attracting and retaining the best people tough.
- Industry value comes from "wasting" natural resources, so sustaining value is difficult.
- Corporate credibility must be rebuilt with shareholders, capital markets and other stakeholders.
Deloitte helps companies address many of these challenges by providing a range of services to companies in all segments of the oil and gas industry. We have significantly strengthened our global oil and gas practice recently by adding hundreds of energy-focused professionals around the world and, together with the international practices of the firm, we provide ongoing services to 50 percent of the world's largest oil and gas companies. In addition, our commitment to the oil and gas industry includes research and analysis of industry issues and trends, participation in leading industry organizations and organizing conferences where CEOs of major energy companies and other industry leaders share their insights on industry trends and issues.