The number of new projects announced this quarter (Q2: April – June 2011) across the global energy industry has remained relatively static, while the total potential investment value is down US$108 billion (28%) over the previous quarter, according to the EIC Monitor quarterly report from the EIC, the leading trade association for UK companies that supply goods and services to the energy industries worldwide. Only the power sector has shown a growth in new project announcements this quarter, up 13% in potential investment value. The renewable energy and upstream sectors have shown the largest drop in potential investment values, however this can be attributed to several large project announcements in the previous quarter.
EIC Monitor tracks over 8,800 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 (both active and proposed) projects recorded by the EIC each quarter.
Key highlights of Q2 2011 report (1 April – 30 June 2011):
• Overall this quarter, the total number of new project announcements has remained relatively static. However, the total potential investment value of these projects has fallen by 28%. In Q2 2011 there were 553 new projects across the global energy supply chain with an estimated total value of US$280 billion, compared to 548 in Q1 2011 totalling US$388 billion and 415 new projects in Q2 2010 worth US$321 billion.
• The upstream sector has seen a slight decrease in the number of new projects, down from 79 in Q1 2011 to 65 in Q2 2011 with a 66% decrease in potential investment value over the same period, due to several major project announcements in Q1 this year.
• The midstream sector has seen an 8% decrease in the number of projects, but a 16% increase in project value since Q1 2011, up from US$36.2 billion to US$42 billion in this quarter.
• In the downstream sector, the number of new quarterly projects in Q2 2011 has decreased by 8% since Q1 2011 with a 13% decrease in the total potential investment value to US$48.6 billion.
• In the renewable sector the number of new projects has decreased by 6% in Q2 2011, while the potential investment value has dropped by 49% from Q1 2011 – although this drop can be attributed to one large project reported last quarter, the US$80 billion Grand Inga Hydropower project in the Democratic Republic of Congo.
• In the power sector, the number of new projects announced has increased by 44% this quarter (144 compared to 100 in Q1 2011) with the potential total investment value of new projects also being up by 13% from US$79 billion in Q1 2011 to US$89 billion in Q2 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, Mike Major, CEO of the EIC said,“This quarter we have seen a mixed-bag of results, with the power sector showing positive signs of growth in new project announcements while new projects reported in the renewables and upstream sectors show disappointing numbers. However, excepting some very large project announcements last quarter, the picture shows that the industry as a whole is holding steady. ”