Let’s be honest from the start, the first rule of investment is that there are no rules. As the last couple of months have proved, the markets can and sometimes do move in a variety of different directions and anyone that tells you that they have developed a structure that guarantees returns should, politely, be treated with a really high level of scepticism.
That said, one of the most fundamental rules we’ve learned from investment professionals at any level is that it’s not wise to keep your eggs in one basket, because if the basket should fall, all your eggs will be broken. To put it another way: spread your risk.
There are many opportunities to do this if you are an institutional investor, because the potential size of investment that you can make means that companies and sectors are always likely to be very accommodating.
If your means are more modest however, your support is less likely to have been welcomed in…
As we move into the 2020s, the long-term future of the oil and gas sector seems less assured than it was a decade ago. There’s competitive pressure from increasingly credible renewable alternatives, challenges from regulators and significantly less warmth from investors. If oil and gas is going to maintain its central role in the global economy then it needs to evolve. One of the most efficient ways of achieving this would be through embracing technology.
Enhancements in technology have the potential to help the oil and gas sector ensure its future, making the process of discovering, refining, transporting and delivering natural resources significantly more efficient and transparent.
The PermianChain platform has been designed to deliver these enhancements without the need for significant investment on the part of oil and gas firms. Using modern, blockchain technology, PermianChain can be integrated with existing systems and working practices to deliver efficiency and transparency that will bring down costs, satisfy regulators and attract the attention of investors of all sizes.
The oil and gas sector is in an unusual position. It has a preeminent role in the global energy mix, and has a broadly effective supply chain that has evolved with the sector’s requirements over the last century. At the same time however, its position is being challenged by increasingly viable alternatives and the underlying inefficiency of its supply chain is drawing attention from regulators, investors and even consumers. If it is going to maintain its central role within the global economy, the oil and gas sector needs to change.
The positive news is that there are technologies emerging that offer a superb opportunity to augment efficiency and transparency right across the oil and gas sector supply chain, and go some way answering the concerns of regulators, investors and consumers.
Over the last 50 years a complex system has evolved to support the delivery of oil and gas. The problem is that complexity increases cost, and we have reached a point where the sector is under pressure from investors, regulators and even consumers. Technology may well offer an elegant, simple and cost-effective solution.
There were several fascinating discussions at the third annual Methane Emissions Reduction Forum (MERF), a Canada-based virtual conference hosted by Petroleum Technology Alliance Canada (PTAC). One of the main points of discussion was the rapid improvement in emission detection technology, which is likely to have significant implications for oil and gas firms and how they operate over the next decade, not just in Canada but all over the world.
The long and the short of it is that using drone-based cameras coupled with sensitive sets of sensors, it is going to become increasingly easy to spot where natural gas is being wasted as a result of leaks, flares or venting.
Canada has a highly regulated oil and gas sector which has a keen focus on staying competitive with emerging alternative energy sources, and also takes its environmental responsibilities seriously. …
The energy sector is in a fascinating position: it needs to keep providing uninterrupted power to industries, governments, institutions and individuals, but it is also under increasing pressure to quickly, efficiently and (here’s the rub) cost-effectively transform itself and become carbon neutral. In short, there’s where we are today, there’s where many people think we need to be in the future and there’s a question about how get from one to the other.
Several global organisations including Facebook and Google have stated their ambition to become carbon neutral within the next decade. Many governments around the world are also committed to decarbonising their economies, including UK Prime Minister Boris Johnson who recently promised that windfarms will power every home in the country by 2030.
While there continues to be debate in certain quarters about the reality of global warming, there is increasing evidence that renewable energy is moving towards achieving the scale it needs to become an important and economically viable part of the global energy mix. …
There’s fascinating article in Decrypt entitled There Will Be Bitcoin: Oil, Gas and a Cash Cow Under Our Feet. Focused particularly on the needs of the natural resources industry in Texas and North Dakota, it examines the potential for closer links between oil and gas and the crypto sector, pointing out that one has too much energy and the other has a massive and growing demand for power.
Irrespective of where you stand on the environmental debate, there are few that would argue that the economics of the oil and gas sector are currently a little off kilter. On the one hand you have a sector that is struggling to find funding for viable oil fields, and on the other, when oil is being extracted, it is often accompanied by gas which is simply flared off. …
Historically the oil and gas sector has had a very close relationship with institutional investment. The reason for this was relatively simple: the size and complexity of oil and gas projects meant that leadership teams preferred to work with professional investment organisations that could fulfil financial requirements quickly and with the minimum of fuss. In short: most money, least effort. The world is changing however, and the oil and gas sector needs to spread its net a wider.
As we have discussed on several occasions, the complexity of oil and gas projects coupled with the timescales involved has meant that it is easier to focus fund-raising efforts on major investors that have the depth of pocket to fulfil financial requirements with very little effort.
There has been a well-trodden path between oil and gas and institutional investment organisations with relationships that sometimes stretch back decades.
The end of a special relationship?
In recent years however, some oil and gas organisations have started to find it more difficult to drum up funding from traditional sources. Some in the investment industry have been raising an eyebrow…
The emergence of Covid-19 appears to have accelerated demand for cryptocurrencies. This should be a fantastic news for innovators around the world, but the sector lacks a credible, environmentally acceptable infrastructure to support what is fast becoming an important part of the world’s economy. If the issue isn’t addressed, there is a good chance that it will hold back innovation and development.
The economic challenges of the last few months have led to a lot of organisations and regulators taking a fresh look at their positions on cryptocurrencies, with several announcing accelerated adoption strategies. The latest of these is MicroStrategy, a US-based independent business intelligence company, which has announced a plan to purchase more than 20,000 bitcoins as part of a new capital allocation strategy (which you can read here).
The interest in bitcoin is being driven by several factors, not least of which is that it appears to be a hedging strategy against traditional, fiat currency fluctuations as the ramifications of…
Deutsche Bank’s announcement that it is pulling back from financing oilsands projects adds to momentum that has been building around the natural resources sector for some time. The announcement was covered in the Calgary Herald in an article that discussed much of the positive work that the oil and gas sector has undertaken in recent years to improve efficiency and transparency and reduce costs and waste.
Deutsche Bank’s move away from supporting oilsands projects is another milestone in the world’s journey towards a more energy efficient future but it doesn’t come out of the blue. As we discussed in one of our recent articles, according to The Economist, energy’s weighting on the S&P 500 dipped below 5% in June 2019, less than a third of its 2008 level. Meanwhile, the European Investment Bank has decided to stop supporting oil, gas and coal projects by the end of 2021.
As the Calgary Herald’s article points out, the decision to reduce investment in the oil and gas sector…
PermianChain Technologies
PermianChain harnesses blockchain technology to digitize, tokenize and monetize proven natural resources, starting with oil and gas.
