By Athanasios Pitatzis
The low oil price environment forces a lot of oil and gas companies to make strategic decisions for their future. According to EY Report which refer to the top 10 oil and gas risks and opportunities we will them examine one by one taking consideration and low oil price environment.
According to the Ernst and Young report:
The top 10 risks for oil and gas companies
1. Access to reserves: political constraints and competition for proven reserves
Our global multi-sector survey found that oil and gas respondents were more likely than those in any other sector to report difficulties in managing the risks associated with the expansion of government’s role. 
Comment: It is true that in our days it is very difficult for International Oil Companies to access to reserves due to the fact that National Oil Companies possess at least 75% of global oil and gas reserves. This is a fact if we observe the below graph from the Economist:
2.Uncertain energy policy
Energy policy is in a continued state of flux in many key geographies. Meanwhile, the consequences of last year’s oil spill in the Gulf of Mexico continue to be felt in the debate over deep-water regulations. 
Comment: The last years we have observed a lot of implemented new energy policies regarding oil and gas industry on global scale, such as:
- Mexico Energy Reform of 2014
- Greece New Exploration and Production Law for Hydrocarbon which implemented since 2011
- Recent UK and Egypt Oil and Gas Reforms
At present, rising costs are being driven both by cyclical factors and the end of “easy oil.”.
Comment: It is a fact that the era of “easy oil” is finished, so the last years we have a production boom from unconventional oil and gas resources such as shale gas and oil sands. The cost of extraction is very high so these oil and gas assets are unattractive on a low – price environment.
Probably in the future we will observe a lot of oil and gas companies to sell this kind of assets from their business portfolio.
4.Worsening fiscal terms
“The use by governments of tax claims, real or not, as a pressure point to coerce oil companies appears to be increasing,” said one panelist.
5.Health, safety and environmental risks
Health, safety and environmental issues have risen on the oil and gas industry’s agenda, reflecting both increased public pressure and more complex operational challenges.
Comment: Due to the rapid climate change in the future this factor will increase its pressure on oil and gas companies geometrically.
6.Human capital deficit
Twenty-two percent of oil and gas respondents indicated a lack of qualified personnel was impacting their operations. 
Comment: A solution on this issue maybe is the creation of corporate universities, a combination of academic and company’s experts. This solution is already implemented by Eni in Italy as far I am concerned.
7.New operational challenges, including unfamiliar environments
Three years ago, this was a “below the radar” risk in our report. The threat has now moved onto the radar, and is still rising. 
Comment: I think Artic environment is very good example for this factor.
8.Climate change concerns
Though the Copenhagen summit of 2009 failed to achieve a breakthrough, pressure on companies can arise from other stakeholders. Risks related to climate concerns cannot be fully managed solely as a regulatory compliance issue 
Comment: NGO global environmental concerns regarding oil and gas exploration is a very often example
The unrest in the Middle East and North Africa region in the first half of 2011 resulted in an oil price surge. Of course, given the increase in exploration and production costs, volatility on the downside poses an equal or greater challenge. 
Comment: This exactly the factor which oil and gas companies faces this period with low – oil prices
10.Competition from new technologies
In addition to new technologies for exploration and production, the sector is impacted by broader technological advancements, such as alternative power generation and the electrification of energy delivery. 
Comment: A new technology maybe is a commercial extraction process for the Methane Hydrates or Coal Methane Hydrates Reserves
Personal Prediction: The recent decline of oil prices and the recent events on Ukraine probably are the warning signs of a major currency war between dollar, euro and China and Russian Currencies with prize the global deposits currency market. In this war significant role play also India, Japan and Brazil. This mean that oil and gas companies may face very unstable situations starting from the second semester of 2015.
The top 10 opportunities for oil and gas companies
- Frontier acreage
The pushing out of operational boundaries is clearly an opportunity for those companies that have the requisite competencies. “Frontier acreage was not an opportunity that existed 30 years ago with the technology as it was,” said one panelist. 
Comment: With low oil prices is probably a risky investment for oil and gas companies
- Unconventional sources
Growing energy demand alongside a tightening of access to conventional supply, and advances in technology, are making unconventional sources commercially viable. This has broad implications — as one panelist put it, “Unconventionals rewrite the rules.”
Comment: If the oil prices remain low for the next 6 – 12 months then the development of unconventional sources will decline rapidly, these sources are shale gas, oil sands etc..
- Conventional reserves in challenging areas
Our panelists made a distinction between countries, such as Iraq or Nigeria on the one hand, that present investors with significant political and security challenges, and the Arctic and other ecologically sensitive areas on the other, which pose a number of environmental challenges for operators. 
Comment: We can add in these areas for the future maybe and the South – East Mediterranean due to the unstable situation on Syria and Libya.
- Rising emerging market demand
Our global multi-sector survey found that 21% of oil and gas respondents had encountered challenges in their efforts to tap expanding emerging market demand. However, some 51% of oil and gas respondents reported making significant investments to achieve growth in emerging markets. 
Comment: Emerging markets like China, India, Turkey and recently Africa nations will play a vital role for the increasing demand for oil and gas.
- NOC-IOC partnerships
The industry is seeing international oil companies (IOCs) increasingly partnering with national oil companies (NOCs) from net-importing countries. Positive approaches were demonstrated recently by the partnership of BP and China National Petroleum Corporation (CNPC) concerning the development of Iraq’s Rumaila field. 
Comment: According to the (Xu & Investment n.d.) Competition between NOCs and IOCs will continue to increase in the future, but the two business sectors which can promote the cooperation of the NOCs and IOCs are:
- Cooperation in NOCs’ home countries, and
- Cooperation in many host countries against the harsh investment climate 
Future potential examples of cooperation between NOCs – IOCs will be:
- China Shale Gas Sector
- Mexico Oil and Gas Sector
- LNG Future Mega Projects
Source: Summary, Third International Energy Forum NOC-IOC Forum, www.ief.org
6.Investing in innovation and R&D
Only a minority, 41%, of oil and gas companies said that they had succeeded in embedding innovation as a core element of company strategy. 
Comment: The last years National oil Companies lead investments in innovation and R&D. This is obvious if we take in consideration the recent efforts from Japan to extract its methane hydrate reserves.
Source: Deloitte Report, 2013. Oil and Gas Reality Check 2013 A look at the top issues facing the oil and gas sector Contents.
7. Alternative fuels, including second generation biofuels
An organizational failure to prioritize this issue is the challenge most frequently reported by oil and gas respondents looking to take advantage of cleantech opportunities, including second and third generation biofuels. 
8. Cross-sector strategic partnerships
The commentators we interviewed gave a number of examples of cross-sector strategic partnerships. The most frequently quoted included working with auto or technology companies investing in renewables. 
9. Building regulatory confidence
In a highly regulated industry such as the oil and gas sector, regulatory confidence is about business survival. But green growth initiatives and government involvement in the energy sector are increasingly important to maintain license to operate. 
10. Acquisitions or alliances to gain new capabilities
In an increasingly competitive industry, entering into an alliance or an acquisition becomes a way for oil and gas companies to access new growth opportunities — be it expanding their supply base, accessing a new consumer market or gaining access to, and understanding of, new technologies. 
Comment: This last factor was implemented by Shell in the recent merger with BG Group.
It is obvious that for all of these factors we must be reconsider their importance if we take into consideration the low-oil prices environment. Finally we would like to give credits to Ernst & Young for this beneficial report, a useful strategic tool for oil and gas companies.
Athanasios Pitatzis is Member of the Greek Energy Forum. The opinions expressed in the article are personal and do not reflect the views of the entire forum or the company that employs the author. Follow Greek Energy Forum on Twitter at @GrEnergyForum and Athanasios at @thanospitatzis
 Oil and Gas – Top 10 risks, By Ernst & Young, http://www.ey.com/GL/en/Industries/Oil—Gas/Turn-risk-and-opportunities-into-results–oil-and-gas—The-top-10-risks
 Oil and Gas – Top 10 opportunities, By Ernst & Young,http://www.ey.com/GL/en/Industries/Oil—Gas/Turn-risk-and-opportunities-into-results–oil-and-gas—The-top-10-opportunities
 Xu, X. & Investment, O., Implications of the rising NOCs for the IOCs and the industry. , pp.2–5. (pdf file)
It was first published by Cyprus Gas News on 27th April 2015, http://www.cyprusgasnews.com/archives/8058/ernst-and-young-report-top-10-risk-and-opportunities-for-oil-and-gas-companies-a-useful-tool-for-strategic-decisions-for-oil-and-gas-managers/