1. Speaking with you today
Stanley Porter
Deloitte Consulting LLP
Shemin V. Proctor Andrews Kurth
Pamela Tsang
Morgan Lewis
Andrea Wang Lucan K&L Gates
Grace C. Yeh Exxon Mobil Corporation

2. Oil and Gas Current Trends and Implications
Supply Changes
Demand Drivers
Regulation
Restructuring
Operations
Technology
Major Trends
Crude Oil
Natural Gas
OPEC still influences prices through its capability for large production volumes
World continues to be awash in natural gas
Shale wells boosted US production but current low prices are causing significant drops in the rig count
Major demand growth worldwide is expected to come from the Non-OECD nations despite growth slowdowns
Natural gas demand will grow driving need for pipeline transportation
Countries continue to diversify Oil & Gas supplies as a way to mitigate supply risk
Environmental restrictions and drilling oversight continue to grow following the 2010 Gulf of Mexico spill
Stricter regulations governing fracking and other unconventional extraction techniques are expected to continue in the U.S
Regulatory approvals and local opposition could create a lag that can thwart midstream market development for natural gas
Companies are reassessing their portfolio strategies and refocusing on core businesses
Potential for movement away from the MLP structure
Continued M&A activity in the market as companies in all subsectors seek to protect longer term viability
Oil companies continue to cut costs via labor reductions to realize greater operating efficiencies
Midstream processors continue to benefit from throughput of liquids-rich shale in the US
Low oil prices are forcing O&G companies to reconsider investment plans
Technological advancements have supported production of unconventional resources
Companies must adopt a range of strategies to address poor project performance, including integrated project delivery, advanced analytics, and a shift toward the digital oilfield

3. Power and Utilities Current Trends and Implications
Challenges
Commodity Market Disruption
Inexpensive natural gas supplies and legislative base load retirement (coal)
Increase in Variable Renewables
Wind and Solar add variability to the network and change the order of generation dispatch
Shift Toward Distributed Generation
Disruptive technologies are challenging the paradigm of centralized electricity generation
Rise in Reliability Expectations
Consumers and regulators expect more reliable and cost effective service
Increasing Capital Demands
Significant capital expenditures for generation and T&D infrastructure are required
Explosion of Data
Unprecedented data volumes will need to be managed due to ‘smart’ technologies
Major Trends
Generation
Transmission
Distribution
Consumer
Insufficient forecasting accuracy
Systems not designed for distributed generation
Capacity constraints from new power flows
Less capability with which to balance system
Two-way power
Voltage stability
Lack of visibility and control
Managing net load in context of price variation
Unpredictable net load (solar, EV)
Incorporation of storage ability
Aging network / infrastructure
Mitigating potential cost of outages
Retiring work force
Risk of achieving adequate returns
Siting permission for new lines
Small players lack funding
Capital project demand exceeds funding
Data management and analytics
Increased customer engagement
Security threats