Shareholder returns in global oil sector to rise in 2018
Baku, Azerbaijan, Dec.8
By Leman Zeynalova – Trend:
Shareholder returns in the global oil sector are expected to increase in 2018, according to the report released by BMI Research, (a Fitch Group company).
“Many of the trends unfolding in the global oil sector over 2017 will remain in play over 2018. However, improving market conditions will support a gradual shift in capital use, with a particular focus on increased shareholder returns,” said the report.
In 2018, BMI Research analysts expect the global oil and gas sector to shift from downcycle to upcycle.
“Oil prices reached their nadir in 2016 and have averaged around 20 percent higher on
an annual average bas is in 2017. However, the recovery in price has yet to be fully reflected in the market,” said the report.
The analysts expect the number of final investment decisions (FIDs) taken in 2018 to increase, but this will not necessarily translate into substantially higher capital requirements.
Further, the analysts point out that some producers have begun to flag the risk of a supply deficit, given the collapse in capex since 2014.
“These concerns are likely to come increasingly to the fore in 2018, as the market rebalances. In 2018, we believe companies in the sector will look to increase shareholder returns. A number of the majors and larger independents have indicated that they will look to restart share buybacks, end scrip dividends and restore or increase payouts in the coming quarters,” said the report.
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