BDO Publishes 2020 oil and gas predictions

12 December 2017

BDO has today published its 2020 OIL AND GAS PREDICTIONS report (download here). The report spotlights four major trends to impact energy sources and infrastructure, forcing legacy national and corporate energy strategies to be entirely revisited. BDO also warns against the next stage in cyber attacks, ‘phlashing’, a cyber crime that turns smart grids against themselves to take hostage a nations’ entire energy infrastructure.

 

  • By 2020, the U.K. could go virtually ‘off grid’, becoming energy self-sufficient through its shale gas reserves. The UK government recognises this potential and has offered favourable tax breaks to shale-gas producers and initiated fast track planning procedures to kickstart production. In addition to this, the UK government has announced that it will create a Shale Wealth Fund to ensure that communities which host shale sites can share the benefits of shale development. The fund will initially consist of up to 10% of tax revenues arising from shale gas production and could provide up to £1 billion of funding in total, a proportion of which could be paid out to host communities over 25 years.

 

  • By 2020, liquefied natural gas (LNG) imports and solar power will bring electricity to 4 in 5 African people – Inadequate energy infrastructure has stood in Africa’s way and African nations are combining LNG and solar power to break grid dependency. Africa presents an opportunity for LNG producers to find new sources of demand and LNG import facilities in Ghana and South Africa are under construction. Foreign solar companies have taken to installing solar microgrids and home-based solar systems across sub-Saharan Africa.

 

  • By 2020, all oil will be nano-marked, proof-of-origin tested to avoid contravening international sanctions. Emphasis on ethical sourcing  along with sanctions such as those in place on North Korea and Qatar, will lead to ‘proof of origin’ testing. A secure, complex method of identifying oil will be the key enabler, with nano technologies such as graphene quantum dots already being used to trace shipments. A specific spectrum can assign the nano markers to a particular well or producer. BDO predicts that tracing results will be part of the audit of production sharing contracts.

 

  • By 2020, at least five countries will see their national energy grid be taken offline by Permanent Denial of Service attacks (PDoS) a new type of cyber attack. Known as “phlashing” PDoS attacks differ from DDoS attacks in that they target an embedded system instead of using a botnet, which makes it particularly worrisome considering the present establishment of smart grids. New data indicates that while the number of DDoS attacks decreased 18% in 2017, the average number of attacks per target increased by 19%. Cybercriminals are raising their game and are eager to leverage the advent of two-way smart grids to achieve a domino effect of black-outs in the nation-critical areas of healthcare, transportation, security and financial services.

BDO’s OIL AND GAS PREDICTIONS report closes its global prognosis to then dive into regional predictions for Australia, Canada, the United States, Saudi Arabia and the United Kingdom.

In Canada, by 2020, new accounting rules will be required to respond to new challenges for financial planning, forecasts, and asset management, as oil & gas companies increasingly leverage cloud computing. The US will overtake Australia and Qatar by 2020 to become the number one LNG exporter, discussions about constructing a natural gas pipeline to central America through Mexico standing central in the 2020 presidential elections. In the Middle East, Saudi Aramco will step up the use of local goods, services, and labour, reaching 70 percent localization by the end of 2020, and substitute oil and gas with solar power. By 2020, the UK will be the world’s fracking capital, having developed the most robust planning, licensing, and operating regime for fracking in the world.