Insights from Energy Industry Leader Steve Blackwell: What to Expect in the First Half of 2023
According to Steve Blackwell, CEO and Managing Partner of Invito Energy Partners, the energy industry faced several challenges in 2022 including labor shortages, increased costs due to supply chain issues, a changing regulatory climate, declining refining capacity, and declining commodity prices in the second half of the year. Blackwell notes that these issues are primarily a result of the COVID-19 pandemic with the associated shutdowns and supply chain disruptions and uncertainty brought by ongoing international conflicts and domestic fed policy with interest rates.
The energy industry has been impacted by political tensions between Russia and Ukraine, with Russia using energy as a tool to erode support for Ukraine. Russian energy companies have limited the flow of natural gas to Europe, causing prices to rise and prompting countries to search for alternatives. This has led to increased oil and gas revenues for Russia as countries are willing to pay a premium for more Russian energy.
However, Russia’s reliance on the globalized energy market to support its economy has begun to have negative consequences. The Ukraine war and the West’s aversion to Russian energy imports could lead to the end of the international oil market, with a more regionalized version defined by politics taking its place. In response, the European Union and the Group of Seven nations have begun phasing out Russian oil imports and have approved an oil price cap for Russian imports, which could significantly impact Russia’s energy revenues.
Looking ahead to the first half of 2023, Blackwell expects commodity prices to remain range bound and relatively stable, but with the potential for higher prices as we approach the end of the second quarter as demand concerns subside and the market returns to a focus on supply. He also expects OPEC to continue its prioritization of higher oil prices over market share. He also sees the costs for drilling of wells to stabilize and decrease as we move through 2023.
“The biggest challenges facing the industry recently have been labor shortages, increased costs due primarily to supply chain issues, an ever-changing regulatory climate, refining capacity declines, and recent declines in commodity prices from the highs during the second and third quarters of 2022,” Blackwell explains.
Despite these increasing hurdles, Steve Blackwell remains optimistic about the future of the energy industry. He believes that with the right strategies in place, the industry can meet the challenges of the present and build a more sustainable and prosperous future.
Overall, the energy industry is facing a range of challenges, but there are also opportunities for growth and innovation as the industry adapts to changing market conditions. As Blackwell notes, the key will be to stay informed and stay nimble in order to navigate the shifting landscape and emerge stronger on the other side.
About Steve Blackwell
Steve Blackwell is the CEO and Managing Partner of Invito Energy Partners. With over 14 years of experience in the energy industry and more than 20 years of executive-level experience, Blackwell brings a wealth of knowledge and expertise to his role.
During his tenure as President of Petromax Operating, Blackwell oversaw the deployment of over $100 million in investor capital into three operated fields, where the company leased over 86,000 acres of mineral land and drilled 39 horizontal wells. He also oversaw the divestment of these assets for nearly $900 million, with an average rate of return of 370%.
As Chief Operating Officer of U.S. Energy Development Corporation, Blackwell oversaw the deployment of over $100 million in investor capital, resulting in the drilling of 29 wells in the company’s Eagle Ford shale asset. Under his leadership, the company was able to decrease costs per well by 25%, increase average EURs by 5%, and increase the return on investment. Blackwell holds a B.S. in Business Administration, Finance, and Accounting from Central Michigan University.
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