Risk factors Faced by the Oil and Gas Companies

The nature of the oil and gas business is that risk/reward is part of the fundamentals, and risks are relatively straightforward, relating to uncertainties around extraction, distribution, volatile commodity prices and the perplexing political landscape - not to mention the myriad factors that can impact operating costs and liquidity. Oil and Gas executives cited regulatory change and scrutiny as the top risk that their organization faces. Reining in Exploration and Production: As prices have continued to plummet, numerous upstream oil and gas companies have put the brakes on additional exploration and production activities. Oil and gas companies tend to prefer countries with stable political systems and a history of granting and enforcing long-term leases.Beyond the geological risk, the price of oil and gas is the primary factor in deciding whether a reserve is economically feasible. Basically, the higher the geological barriers to easy extraction, the more price risk a given project faces. Supply and demand shocks are a very real risk for oil and gas companies.

  • Track 1-1 Geological Risk
  • Track 2-2 Political Risk
  • Track 3-3 Volatile Oil and Gas Prices
  • Track 4-4 The Bottom Line
  • Track 5-5 Inability to Expand Reserves
  • Track 6-6 Operational Hazards
  • Track 7-7 Inaccurate Reserve Estimates
  • Track 8-8 Developed Countries vs. Emerging Markets

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