Just two years ago, Bain research on the oil supply curve predicted that by 2030, we could see a clearing price of around $100 per barrel, according to one scenario. Since then, changing market demands and reductions in supply costs have ushered in an era of unprecedented competition that will threaten some legacy assets. In our most recent research into the economics of energy markets, our reference case scenario forecasts a considerably flatter supply curve in 2030. This is setting up intense intrafuel competition with profound implications for upstream portfolios. Avoiding stranded assets will be a strategic as well as operational imperative.
Jorge Leis is a partner with Bain & Company’s Oil & Gas practice, which he formerly led in the Americas. He is based in Houston.
A new era of hypercompetitiveness will redefine business boundaries as it threatens to strand legacy assets.