All sectors across the global energy industry have seen a decrease in the number and the potential investment value of new projects announced this quarter (Q4: October – December 2011), according to the EIC Monitor. The EIC Monitor is a quarterly report from the EIC, the leading trade association for UK companies that supply goods and services to the energy industries worldwide.

The total potential investment value of new projects in Q4 2011 is US$260 billion – down 48% on last quarter, and down 9% on Q4 2010, while the number of new projects is down 21% compared to Q3 2011. Overall in 2011, both the number and potential investment value of new projects has slowed in growth with the renewables sector in seeing a steady drop in projects proposed for development through the year.

EIC Monitor tracks over 9,000 active and future projects in the global energy industry and provides a 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 (both active and proposed) projects recorded by the EIC each quarter.

Key highlights of Q4 2011 report (1 October – 31 December 2011):

• Overall this quarter, there were 408 new projects announced across the global energy supply chain with an estimated total value of US$260 billion, compared to 517 in Q3 2011 totalling US$500 billion and 419 new projects in Q4 2010 worth US$284 billion.

• The upstream sector has seen a slight decrease in the number of new projects down from 67 in Q3 2011 to 51 in Q4 2011 with a resulting 19% drop in potential investment value.

• The midstream sector has seen a 9% decrease in the number of projects and a 72% decrease in project value since Q3 2011, down from US$156 billion to US$44 billion this quarter. This decrease is due to the proposed US$100 billion Trans-Asian Oil and Gas pipeline that was announced in Q3 2011.

• In the downstream sector, the number of new quarterly projects has dropped by 42% since Q3 2011 with a 68% decrease in the total potential investment value from US$100 billion in Q3 2011 to US$32 billion in Q4 2011.

• In the renewables sector the number of new projects is down 12% in Q4 2011, while the potential investment value dropped 42% from US$110 billion in Q3 2011 to US$64 billion in Q4 2011.

• In the power sector, the number of new projects has decreased by 27% this quarter with the potential total investment value of new projects dropping 7% to US$85 billion in Q4 2011.

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, Ian Stokes, CEO of the EIC said, “The EIC Monitor figures for 2011 show that the global energy industry remains an attractive sector, in which to do business, despite a slowdown in new project proposals announced towards the end of 2011.”

“Looking ahead to the coming year, it is reassuring to see that opportunities exist across all sectors of the energy industry, with ambitious new projects being proposed. It will be interesting to view the results for Q1 2012 and to see if the number of projects proposed increases as they did in Q1 2011, following disappointing Q4 2010 figures, or whether we will continue to see a slowdown in proposals for new projects due in part to the current global economic conditions.”

Tags: EIC Monitor