Apache Competition
Now Viewing Apache's competition in: Oil and Gas Exploration and Production (primary)
Recent Developments
Oil, Gas Consumption Possibly Low until 2010 - Oil and natural gas consumption, which fell over 6 percent in 2008, is expected to drop 2 percent in 2009. Liquid fuel consumption, which has been driven down by the recession, is not expected to rebound until 2010, when the economy should be stronger. Oil and natural gas consumption are expected to increase slightly, just over 1 percent, in 2010, according to the Energy Information Administration.
Future Growth of Oil Supply Uncertain - The sharp decline in oil prices could lead to reduced oil production capacity over the next five years, according to a study from Cambridge Energy Research Associates (CERA). While oil prices have fallen, operational costs for oil exploration companies remain high. Low oil prices, high costs, and tightened credit markets have made some companies reluctant to invest in future exploration projects. Slower growth in oil production could lead to higher oil prices in the future, a ripple effect from the economic turmoil of 2008.
Smaller Oil Producers Protest Eliminating Tax Breaks - The Obama Administration's proposed 2010 budget could eliminate tax breaks for oil and natural gas companies, which could put smaller producers out of business, according to the Oklahoma Independent Petroleum Association. Smaller, independent energy companies, which provide about 60 percent of domestic oil, are squeezed by low commodity prices and the tightened credit market. Without tax breaks, independent companies may be hard pressed to attract investors. Until commodity prices rise, eliminating tax breaks may threaten the survival of smaller oil and gas producers.
Competitive Landscape
Demand is driven by economic activity, population growth, and energy efficiency for residential, industrial, and transportational uses of oil and gas. Profitability of individual companies is driven by the success rate of new wells drilled and the ability to increase production from existing wells. Large companies are advantaged by access to capital, including the ability to buy or merge smaller companies. Small companies compete by focusing on, and developing expertise in, a few geographic areas. The industry is capital intensive: average annual revenue per employee is about $5 million.
Full Industry Overview For Oil and Gas Exploration and Production
Oil and Gas Exploration and Production Industry Forecast
from Hoover's/D&B subsidiary First Research
The output of US natural gas extraction and crude petroleum production is forecast to decline at an annual compounded rate of 4 percent between 2008 and 2013. Data Sourced: December 2008
Oil & Gas Production Growth Volatile
First Research forecasts are based on INFORUM forecasts that are licensed from the Interindustry Economic Research Fund, Inc. (IERF) in College Park, MD. INFORUM's "interindustry-macro" approach to modeling the economy captures the links between industries and the aggregate economy.
First Research Industry Growth Rating
The First Research Industry Growth Rating reflects the expected industry growth relative to other industries, based on INFORUM's forecasted average annual growth for the combined years of 2009 and 2010.
- Demand: High oil prices drive demand
- Need strong technical expertise
- Risk: Slow global economy cuts demand
Industries Where Apache Competes
- Energy & Utilities
- Oil & Gas Exploration & Production (primary)