(Ecofin Agency) - Several reports have shown that the global oil and gas exploration and production market will increase from the $4.12 trillion recorded in 2015, to $5.56 trillion by 2022, The Guardian reports.

This is as a result of the increasing population growth, usage of oil and gas in the transportation industry, high standards of living, energy competence for industries and housing as well as up-to-date technological developments of oil and gas exploration and production, according to Wise Guy Reports.The industry consultant added that the increased cost of crude oil was deterring the growth of the oil and gas exploration and production market.

“Moreover, Expansion of Gas to liquids (GTL) and increasing biofuels production growth rate are the challenging factors involved. North America dominated the global oil & gas exploration due to its strong production level in the US and separated export limitations could further support upstream companies to produce at strong levels in this region. Moreover, Asia pacific is anticipated to be the fastest growing market in terms of revenue during the forecast period driven by the growing demand for petroleum products in emerging countries such as China and India,” it added.

Recent reports by IBISWorld have also shown that the decline in the price of oil and gas in the global market have resulted in the reduction of the global oil and gas exploration and production industry in the past five years.Even though the price of crude oil dropped before 2015, the impact was not grievous as the decline being experienced now.“Though rapid industrialization of countries like China and India boosted demand for petroleum products, high levels of production continue to pressure prices for crude oil around the globe. Industry revenue is expected to trend higher over the next five years; however, it will continue to face downward pressure. Over the 10 years to 2021, industry value added, which measures the industry’s contribution to the economy, is projected to fall an annualized 0.9 per cent over the period, largely due to massive declines in 2015 and 2016. In comparison, world GDP is forecast to rise at an average rate of 2.7 per cent annually during the same period,” it said.

The research company added that the importance of the oil and gas industry to the global economy is reducing, meaning that the industry is on a downward trend. “However, stronger industry growth over the five-year period to 2021 is likely a better indicator of the industry’s overall importance. Overall, oil and gas exploration exhibits characteristics of a mature industry”, it explains.

Anita Fatunji