The last time the Supermajors undertook a round of redundancies on the scale that has been outlined, and reduced investment by as much as is being suggested, it sparked a growth in independent oil & gas companies and sowed the seeds for the first oil supercycle.
In this context, the growth and maturation of the independent oil & gas sector in the UK has been a microcosm of the wider global trend.
The UK Government supported this transition by adapting licencing regulations and legislation, promoting participation from the newly formed more entrepreneurial new entrants.
The current environment is reminiscent of the late 90s: growing underinvestment in the global upstream sector, looming Supermajor redundancies and rising access to liquidity. However, only some of these ingredients are present, all of the required ingredients for a second supercycle are already present.
We are likely to be further along the path of the second supercycle than people believe.
The last remaining ingredient, investment, is still pending, but signs are positive.
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