Association Webinars: Our Complex Worlds Scramble Oil Investments



  

 

Our Complex Worlds Scramble Oil Investments -- Oil vs Oil.

Speakers: John Ballantine and Mohammed AlMehdar

Our energy worlds have experienced more uncertainty since the1973 OPEC embargo, the Iraq Wars, or 2015 Paris Climate agreements. Oil & gas remains the dominant source of energy as demand shifts and suppliers make huge investments in our evolving energy system. How do today’s players make their investment decisions and prosper in the long run?

The oil industry has faced a whirlwind of exogenous surprises over past decade: financial crises, changing climate agendas, regional conflicts, and the pandemic. However today much of the turbulence is generated within the oil industry: divergent producers operating with different investment parameters. Shale oil in the Midwest with shorter paybacks and lower development costs, compared to the Middle East and OPEC producers, or the North-Sea operators with huge investments, low break evens, and decade long returns. Today's oil & gas sector is characterized by players with dissimilar capabilities operating in a less well-organized market where they are the source of cyclicality and price volatility. 

In this webinar, we discuss how an agent-based model brings more realism to the production and investment behavior than macro scenario models.

  • we focus on the heterogeneity of producers and why this results in different investment behavior
  • we show what this means for oil market imbalances due to lagged producer responses to demand changes and technology innovations

Oil Investment in the Time of Corona

Speakers: Colin Ward

“Unprecedented” may be the word for energy markets in 2020 with the sharpest demand fall, the largest OPEC cut, the lowest oil price (negative!), and several other firsts. Now that some stability is slowly returning to the market, producers are looking to the future of energy and deciding on the best allocation of their capital budgets.

While profit maximization is at the heart of any investment decision, the portfolio of risks (real and perceived) and options available can lead to quite different investment choices. These risks are not purely economic and are difficult to quantify with traditional modelling techniques as the utility / expectation for each participant is quite unique. Understanding the context for the various oil producers can explain the divergence in investment / production commitments, and what we can expect in the years to come.

In this part of the webinar, we discuss the short-term oil market as provided by the KAPSARC Oil Market Outlook (KOMO), long-term trends, and the impacts on the medium-term investment decisions of players in an uncertain energy landscape.

Key points to be covered:

  • The continued need for investment, no matter the outlook
  • The legacy of COVID-19 beyond 2020
  • The influence of stakeholders and financing
  • Changing behavior of market participants
  • A variety of strategies brings stability

Seats are limited, sign up to ensure a spot!

Speakers:

John W. Ballantine, Jr. is a senior lecturer at Brandeis International Business School. For the past twenty years he has taught courses in global economics, investments, and energy/climate to undergraduates and graduate students. He has a PhD in economics from the NYU Stern School and a masters degree in public policy from the University of Chicago. He has worked as a consultant with Arthur D. Little, a banker with Chase Bank, and an analyst with Ashland Oil. Ballantine has been a research visitor with KAPSARC in Saudi Arabia. His current research involves the challenges of energy DSGE scenario models and agent based partial equilibrium models.

Mohammed AlMehdar is an economics PhD candidate at Brandeis University building agent-based energy models and writing his dissertation on complexity theory / computational economics. His research focuses on applying artificial intelligence techniques to modeling the behavior of economic agents. AlMehdar has also been a research visitor with KAPSARC.

Colin Ward was the interim director of the Markets and Industrial Development program and currently serves as a Visiting Researcher for KAPSARC. He has worked in the energy industry for 15 years in various capacities including seismic field work, refinery design and consulting for major international and national oil companies worldwide. Colin plays a major role in several projects including the KAPSARC Oil Market Outlook (KOMO) and environmental issues for the energy industry.


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Event Date: February 10, 2021

Event Time: 12 Noon - 1:00 PM Eastern Time

Topic: Our Complex Worlds Scramble Oil Investments

Price: FREE

Speakers: John W. Ballantine, Jr., Mohammed AlMehdar, and Colin Ward


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