An Attractive Investment: The Ingredients Required By The Industry To Attract Capital

Panel discussed the ability of the industry to attract investment capital and the factors that influence private and public investors’ willingness to fund oil and gas projects—the right management team, right kind of assets to create value and return cash to investors, right scale and mix of infrastructure, and the right technology/data assurance.

This panel explored how significant a concern the availability of finance is for the industry globally, and what new approaches are being taken to ensure projects are fully funded.

Parasnis: Capital markets remain very challenging for the oil and gas industry. Having the right management team in place is critical. Investors have to feel comfortable with the leadership. Also have to have the right kind of infrastructure in place to generate cash flow as well as long-term asset value. Having scale is also important—public investors want to be able to get in and out quickly if necessary.

Welsh: Capacity is a major consideration. Oil and gas projects are often very large. Local banks don’t necessarily have the commercial or governance ability to take them on. We take risks others won’t take, for example, reserve risk, because flexibility is built into the project.

Decio: Improved technology will provoke a huge impact on the industry and on financing. Projects will be competing for financing. The ones that provide security to investors are more likely to be financed.