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Oil and gas companies must be prepared to explore new forms of partnership - not only between national oil companies and private companies, but also between technology companies and service companies. Industry stakeholders must share their strengths if they hope to thrive in the future. When oil prices reached a record high of almost $150 per barrel in July 2008, industry stakeholders recognized that prices would ultimately slip. No one, however, predicted the speed or severity of the fall. By January 2009, prices dropped to $40 per barrel. Upstream companies that had committed themselves to higher cost projects found themselves saddled with unsustainable production costs. As approvals for new projects ground to a halt, downstream companies also began experiencing the ill-effects of the global financial crisis. Natural decline rates in existing fields average roughly 7% globally, which reduces annual supply capacity by approximately six million barrels per day. Post recession resumption in the massive growth rates in countries like India and China promises to quickly reverse the recent drop in global consumer demand. The costs of regulatory compliance remain set to rise, especially in the United States, as it steps up plans to reduce greenhouse gas emissions aggressively. Retirement rates in the oil and gas industry continue unabated, heightening the risk of talent shortages. And rising public support for alternative energies mandates a strategic response.
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