Oil, Gas & Chemical Industry Outlook
As we, once again, move from one year to the next, how do we assess the oil and gas and chemical
sectors’ performance in 2019 and its prospects for 2020? As always, there are headwinds and tailwinds,
risks and opportunities, uncertainties and foreseeable trends, but in this report we aim to take stock of
the main factors to watch for in 2020 across the diverse oil, gas, and chemical industry. Over the past
decade, we have seen the heights of bullish optimism and seemingly limitless investment during the
years of the $100 per barrel world, from 2011 to mid-2014, and the lows of the price crash and extended
oil downturn, from mid-2014 to 2017. Neither extreme seems in the cards for an imminent return as the
industry has learned valuable lessons from both episodes, but uncertainties are clearly still a challenge
to performance and investment.
As we evaluate the most prominent trends and issues for the oil and gas and chemical sectors in this
outlook, executives in these businesses seem keenly aware of wider macroeconomic and business
environmental risks, which seem to be gaining strength. Among these are:
• Weakening economic growth, not only in the United States but also in Europe and China;
• Ongoing, perhaps intensifying, trade tensions, which can create uncertainty, dampen growth,
and lead to modifications in long-established supply chains; and
• The many political risks, of course, including the US election cycle, the outcome of the Brexit
process in Europe, and tensions in the Middle East between multiple states and non-state
actors with different objectives.
And, while walking the tightrope across these shifting sands in 2020, fundamental changes in the longterm
business environment could become more salient. So, attention to the coming disruptive forces
associated with this century’s energy transition and sustainability imperatives is increasingly crucial
alongside day-to-day positioning.
Support your Black Workforce, Now
Racism in America today
Today, racism against the Black community manifests throughout systems
from childhood onward.
• Black women are 243 percent more likely to die in childbirth than White
women, due to lack of access to sufficient health care
• Black babies are twice as likely as White babies to die before their first
• Black people (22 percent) in America are twice as likely to experience
poverty than White people (11 percent) or Asian people (10 percent)
• Black students are suspended three times as often as their White peers,
for similar behavior
• Black workers are twice as likely to be unemployed as White workers
(6.4 percent vs. 3.1 percent in 2019), equalizing for work experience and
education. Even Black workers with a college degree are more likely to be
unemployed than similarly educated White workers
• In terms of median hourly earnings, Black men with a college degree earn
78 percent of what White men with a college degree earn for the same
work. Black women earn 92 percent of the wages of similarly educated
• Black individuals in America are 20 percent more likely to be pulled over
while driving than White individuals
• On average, Black men in the United States receive sentences that are
Returning to Work during Covid-19
LITTLE DID WE know how powerful the
foreshadowing was when we wrote in the
prologue of this year’s Global human capital
trends report: “Much in the same way that we
started the decade in uncertainty, we appear to be
headed back into a period of uncertainty.” With the
rest of the world, we watched in disbelief as the
COVID-19 pandemic took hold at the beginning of
2020 and changed life as we knew it. In March,
more than a third of humanity was in lockdown.1
By the end of April, 1.6 billion workers stood in
immediate danger of having their
And yet amid the tragedy and uncertainty ran a
strong undercurrent of hope. Individuals and
communities responded with empathy and
strength. Organizations, despite many staring
down the barrel of layoffs, furloughs, and
shutdowns, took fast action to protect their
workers’ health and safety, establish essential
services, and deploy workforce strategies to
support workers in real time. And ecosystems
banded together to leverage their collective and
complementary capabilities to effect meaningful
change. The social enterprise went to work.
Mini-Grids in Africa
For many years, energy developers have believed that mini-grids offer a cost-effective solution for providing communities
and businesses in sub-Saharan Africa with low-cost, reliable, and clean power—particularly in places out of reach of existing power grids.
Many developers say that the sector hasn’t grown quicker because more public sector reforms and donor support is needed before
private investors will start putting together deals. Now, they believe, even as countries grapple with the COVID-19 response,
is the time to get those conditions in place for the longer-term rebuilding.
“We go where favorable regulation and funding exists for mini-grid projects,” said Sam Slaughter, CEO of PowerGen,
a company that has built solar mini-grids in Kenya, Nigeria, Sierra Leone, and Tanzania. “We’re building utilities,
which are highly regulated and scrutinized by governments. A lot of regulatory and political pieces need to be in place
for us to be confident about going into a country.”
Despite those potential roadblocks, some developers are more hopeful now for an expansion of private investment into mini-grids,
especially in Africa. This is due in part to renewed attention from international institutions, including a recent IFC-led session
that explored near-term possibilities in three African countries.
Africa poised for economic success
The recently ratified African Continental Free Trade Agreement encompasses 50 countries and is the largest free trade area in the world.
2019 will likely be remembered as the year that trade turned the global economy sour. Ongoing trade tension between the US and China has
already scrambled and remapped existing trade routes, trade alliances and trade networks. And there is more to come because the issues
at stake between the US and China include much more than balance of trade and current account deficit.
No one should expect a quick resolution to the ongoing tension. It will be years before we can definitively tally the full economic impact
as well the winners and losers of this trade dispute. However, many companies, economists and other close observers of international trade
already recognize some of the winners are emerging from unexpected places.