Link, share, join, listen ...
Link, share, join, listen ...
BG Group is well positioned in developing markets. They have significant presence in Asia and Brazil, and these large emerging economies are continuing to witness strong growth in comparison to the more mature traditional nation states.
These emerging nations’ population dynamics are also outstripping the west. According to figures from the most recent UN Census report, between now and 2035 the world’s population will rise 1.7bn from 6.9bn to 8.6bn. Importantly, 110m of this figure will be within OECD counties and 1.6bn from developing counties. OPEC is also suggesting an increase in energy demand of 51% by 2035.
Therefore BG is well positioned to capitalise on this increased demand!
So, investment in BG Group’s stock should provide sustainable earnings and is a long term capital appreciation play?
I look forward to your thoughts.
Jonathan Mooney is the Energy & Utilities Senior Consultant at Interim Partners.
Click here to read other blogs on the Energy sector
Iran appears committed to its hegemonic aspirations within the gulf, flexing its muscles regionally on an almost daily basis (most recently with the large scale naval exercises around the Straits of Hormuz) and continuing its policy of developing itself into a credible nuclear player.
As the price of crude (over the long term) continues to rise on the basis of several factors – the eradication of reserves, continued global security threats and the political instability of some of the world’s largest exporters (GCC, Nigeria and North Africa for example) – we can add to this equation that the new major oil importers, notably China and India, are expanding their demand and the oil market will simply have to expand its production capacity.
Put simply, 66% of the world’s oil reserves reside in the Arabian region, and ultimately oil remains the world’s dominant source of energy and will continue to be for some time to come.
This indubitably promises to increase the world’s dependence on the Persian Gulf members of the Opec, especially Saudi Arabia and maintain upward pressure on price, in conjunction with the continued sabre-rattling emanating from Iran.
On this basis, what alternative strategies if any, should we be exploring to reduce our dependency on our future, free access to the region?
Jonathan Mooney is the Senior Energy & Utilities Consultant at Interim Partners.
Click here to read other blogs on the Energy sector
