Where do you see the biggest opportunities for growth within the industry in the next 5 years, does APAC’s outlook differ at all?
Following years of declines, E&P capex is on the rise and will likely continue to grow over the next five years. There are currently over 25 planned or ongoing licencing rounds, providing plenty of opportunities at a time when confidence – and free cash flows – have returned to the industry.
The Asia-Pacific is no exception, and the next several years promise to be incredibly dynamic. In addition to this year’s licensing rounds in India, Indonesia and the Philippines – to name just three – 2019 brings a number of new opportunities. This includes licensing rounds in Australia (Queensland – onshore) and, for the first time in six years, Myanmar (offshore and onshore).
How is Verisk Maplecroft positioned to support this?
We’ve been helping companies identify and manage above-ground risks since the early 2000s, and we like to say that O&G is in our DNA. The risk landscape today is more unpredictable than ever, and this support is more valuable than at any point in the last decade.
We provide clients with comprehensive country- and industry-specific analysis, covering political, regulatory, economic, security, social and environmental risks. Our analysts monitor ongoing and emerging threats, such as government instability, terrorism, corruption, civil unrest, sudden regulatory changes and natural hazards. While these risks are particularly acute for upstream E&P, they impact every single phase of a project’s lifecycle, from exploration to decommissioning.
My team’s task is to help identify links between seemingly disparate events before they emerge, allowing clients to mitigate them. Having this foresight is crucial considering the multi-decade lifecycle of a typical O&G project. To achieve this, we combine in-depth analysis of the above-ground risks impacting key oil and gas markets with a portfolio of risk analytics covering over 150 issues. This enables companies to build a comprehensive picture of their risk exposure and anticipate and manage emerging risks at the country and asset levels.
Most recently, we’ve integrated our indices with oil and gas data on over 10,000 assets from our sister company Wood Mackenzie. Clients can now see the risk exposure of their entire portfolio and benchmark it against that of other players. We’re confident in saying that this is an industry-leading solution that’s miles ahead of anything provided by our competitors. And best of all, it’s accessible 24/7 through an interactive dashboard.
What do you see as the greatest challenge specific to the APAC region?
The single greatest challenge is geopolitical uncertainty, which seems to be heightening by the day. Although it affects the entire globe, the APAC region is particularly exposed. The US-China trade war and the overlapping territorial claims in the South China Sea are just two examples with direct implications for O&G. My team keeps a close eye on geopolitical hotspots throughout the region and provides the industry with regular updates and forecasts.
Beyond geopolitics, O&G companies in APAC face the same challenges that will affect their counterparts across the globe in 2019 and beyond: Rising populism, resource nationalism and soaring protectionism to name just three. When combined with the impacts of an accelerating energy transition, the recent retreat in oil prices, and a forecast slowdown in oil demand growth, these factors will ensure that the risk landscape for O&G will remain difficult to navigate well into the 2020s.
About Miha Hribernik:
Miha Hribernik heads Verisk Maplecroft’s Asia Research, and leads the company’s analysis on the Korean Peninsula. He has substantial experience with analysing political, regulatory, economic and security risks for clients, particularly in the oil and gas and mining sectors. Miha has been based in Singapore since September 2018, and had previously worked at Verisk Maplecroft’s offices in Bath, London and Beijing.
In addition to his role at Verisk Maplecroft, Miha holds a non-resident research fellowship at Pacific Forum, a US-based think tank. He has a master’s degree in International Security from the University of Bristol and a bachelor’s degree in International Relations from the University of Ljubljana.