Market Analysis
We develop studies of reserves and resources and gas & oil. We carry out studies and analyses of the demanding markets for gas, oil, and energy.
We analyze the wholesale, primary, secondary, and retail markets for liquid fuels, LPG, natural gas, electricity, and Hydrogen market.
We develop studies on the energy transition and the hydrogen economy.
Market Analysis and Energy Regulation
- Global oil and gas markets
The global oil and regional gas markets have high volatility, with sudden rises and falls in prices, caused by supply cuts or excess supply due to lower demand due to economic recession or pandemic phenomena that reduce demand.
The falls or rises in prices can take place long before the variations in supply or demand have an effect on the market.
Prices rise due to a perception, fearing future shortages, and this effect is magnified by speculation in the oil and gas futures markets.
In April 2021, the prices of WTI crude oil fell to -37 USD/Bbl, due to excessive speculation, the holders of futures certificates (traders without storage capacity), were forced to sell before the expiration date, after this date they are obliged to physically acquire the underlying asset and assume the cost of storage, those who had storage capacity were the winners of this game.
Unlike crude oil, the volatility of gas is regional, not yet global, and therefore gas prices in the different markets will have great differences, a Henhy Hub of 3 USD/MBTU in America compared to a TTF of 20 USD/MBTU in Amsterdam by Feb 2023. The reason is high gas transportation costs and a still underdeveloped global SPOT market for LNG.
- Local gas markets
Local retail markets, on the other hand, have a particular behavior in each country, whose dynamics will depend on the level of competition existing in the market, or the level of regulation and subsidies existing in the different stages of the value chain until reaching the final user.
For this reason, the final prices of gas, LPG, and liquids vary significantly in the different markets of the region.
- Regulated Activities
On the other hand, the activities of Transportation and distribution through pipelines, in most countries are considered monopolistic activities and their prices or service rates are regulated by a Local Regulatory Entity. These processes include extensive regulatory studies, depending on the local regulatory framework. Typically, a Price Cap is established, defined as the average cost of the service to the projected demand of the market.
- Supply Analysis – Reserves and Resourced studies.
We develop estimates of Reserves and Resources, according to the guidelines of the PRMS (Petroleum Resources Management System). The PRMS or Petroleum Resource Management System is a system whose guidelines are established and approved by a committee made up of SPE/WPC/AAPG/SPEE.1
Reserves
They are those quantities of hydrocarbons that are estimated to be commercially recoverable, through development projects in known accumulations, from a certain date onward and meet the following conditions: They are discovered, recoverable, commercial, and remain as remnants in the reservoir at the evaluation date.
They are classified according to the level of certainty of the calculation estimates, which depend on the maturity, level of development and production of the project.
- Nivel de certeza alto
- Nivel de certeza medio
- Nivel de certeza bajo
Resources
They are hydrocarbons that do not yet have a commercial declaration and are classified as Contingent and Prospective Resources.
Contingent Resources are those estimated quantities of hydrocarbons, as of a given date, to be potentially recoverable from known accumulations, through the application of development projects that are currently not considered commercial, due to one or more contingencies, such as:
- Volúmenes acumulados estimados son insuficientes para lograr comercialidad.
- Falta de facilidades de producción o de transporte para asegurar la comercialidad de los hidrocarburos.
- Contingencias legales o sociales, entre otros.
Gráfico Recursos Contingentes
Source: NTC Energy Group
- Energy transition
We develop various analyzes of the energy transition, the technical, economic and social aspects that promote or retract its progress.
It is important to analyze the economic impact of reaching a Net Zero economy in the short or medium term, due to the availability and volume of the necessary resources and, on the other hand, to evaluate the capacity and efficiency of the new sources to outperform the “market” fossil resources, which by 2023 still have a predominance of 80% of the world energy market.
An analysis of the subsistence of fossil fuels that will depend on their efficiency and competitiveness in the market, beyond the incentives or subsidies of the governments for a greater or lesser local use.
We analyze the role of natural gas in the energy transition, the least polluting fossil. The ability of gas to be the bridge fuel between today’s predominantly fossil economy and an economy with zero CO2 emissions.
- The Hydrogen economy
Analysis of the hydrogen market as the fuel of the future and the current prices and estimated future of green hydrogen in cost per barrel of oil equivalent.
The analysis of the economic viability of green hydrogen or green ammonia projects, the analysis of the risks for investors due to the scale of the projects, the lack of clear market prices, the current levels of regulation and their financing feasibility. .
- Regulatory Impact Analysis
The energy regulatory framework must have clear objectives, which must be oriented towards the development of the market, its competitiveness, dynamics and sustainability, in order to have access to continuous, quality energy at adequate prices. The standards issued must follow these objectives and the RIA measures the efficiency of these standards and their regulatory framework.
1
SPE: Sociedad de Ingenieros de Petróleo
WPC: Consejo Mundial del Petróleo
AAPG: Asociación Estadounidense de Geólogos del Petróleo
SPEE: Sociedad de Ingenieros de Evaluación de Petróleo