North America Maintains Large Upstream-Downstream Lead
BMI View: Canada retains the top position in our Developed States Oil & Gas Upstream Risk/Rewards Ratings (RRR) although infrastructure obstacles in Canada and the unconventional oil and gas boom in the US could see Canada lose this top position in our regional rankings to the US. Meanwhile, upstream scores for the UK and Norway in particular have been pulled down by high project costs stemming from labour and, specifically for Norway, fiscal policy. In the downstream, we expect the US to extend its lead in this category over the longer term as its refining sector is given second life by domestic upstream growth. The US' re-emergence, however, will further hit the competitiveness of Western Europe's and Canada's refining sectors further, contributing to our negative outlook for these downstream markets.
The key themes from BMI's North America & Western Europe Oil & Gas Risk/Reward Ratings (RRRs) are:
North America clearly remains at the top of our overall RRRs, far above Western Europe, with a strong upstream and downstream outlook.
US Catches Up As Canada Risks To The Downside US and Canada Upstream RRR