Global energy industry remains buoyant

EIC quarterly report tracking new projects in the global energy industry shows a mixed bag of results with power and renewables leading the way although some slow down in the oil & gas sectors.

London, 27 July 2010: The global energy industry remains focused with encouraging levels of new projects emerging according to EIC Monitor, a quarterly report from the EIC, the leading trade association for UK companies that supply capital goods and services to the energy industries worldwide. EIC monitor reports newly announced projects across the global energy supply chain.

The Q2 (April – June 2010) report reveals that the number of new projects remains healthy although the total potential investment value has fallen. The power and renewables sectors account for over half of all new projects and investment potential in Q2 2010. The upstream and downstream sectors have seen decreases in both new project numbers and values since the previous quarter.

EIC Monitor tracks over 7,900 active and future projects in the global energy industry and provides an industry barometer, broken down into oil and gas (downstream, midstream, upstream), nuclear and conventional power and the renewables sectors. Data is analysed by the number and value of new, active and proposed projects recorded by the EIC each quarter.

Key highlights of Q2 2010 report (1 April – 30 June 2010):

· Overall this quarter, the total number of new projects has dropped slightly on the previous quarter but is still significantly higher on the same quarter in 2009. Potential investment value has fallen by around 6% since the same quarter last year. In Q2 2010 there were 409 new projects across the global energy supply chain with an estimated total value of US$287 billion, compared to 426 in Q1 2010 totalling US$509 billion and 336 new projects in Q2 2009 worth US$306 billion.

· In the renewable sector the number of new projects is much the same as the previous quarter although the value of these has dropped. The previous quarter, Q1 2010, was dominated by the US$150 billion Round 3 UK offshore wind programme.

· In the power sector, there has been a slight increase in the number of projects although the potential total investment value is down by 14.5%, possibly reflecting a slight move towards smaller decentralised power generation in some regions.

· The upstream sector has seen a 30% drop in both the number of new projects and project value since the previous quarter.

· The midstream sector has seen a slight growth in the number of projects although with a 26% decrease in project value since Q1 2010.

· In the downstream sector, the number of new quarterly projects remains similar although the total investment value has dropped by a third since Q1 2010.

In nearly all cases newly proposed projects must first undergo various planning and consent approvals which may take several years. Also, early stage proposals do not necessarily have financing agreed and in place. Thus there will always be a proportion of projects that do not gain consent and/or finance.

Commenting on the EIC Monitor, Mike Major, CEO of the EIC said:

“While the potential investment value across all sectors has dropped slightly this quarter, it is encouraging to see that the number of new projects being proposed is holding steady and the global energy industry remains buoyant. Power and renewables continue to be the primary sources of new project proposals but there are still plenty of opportunities for energy supply chain companies across all sectors.”

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Global energy industry remains buoyant