Higher oil prices, new investments in expansion of oil and gas production at existing fields and continuous emphasis on discoveries are some key factors driving the prime movers markets in Europe, Middle East and Africa (EMEA) as well as the Former Soviet Union (FSU). While the enterprises involved must safeguard against over-expansion during the bubble and speculative periods, the possibility of earning greater revenues cannot be overlooked.

Increasing oil prices have resulted in petrochemical companies investing heavily in exploration and production of oil and natural gas. This development, along with the economically fast growing China, is driving the demand for prime movers across EMEA and FSU.

In such circumstances, it becomes crucial for prime mover companies to continuously measure performance to gain a competitive advantage. Some companies are making technological improvements in their prime movers in order to bring down their emission levels to within the acceptable range and thereby, satisfy the increasingly stringent emission regulations. Certain enterprises are going a step further by implementing technologies that decrease emissions to levels that are well ahead of the legislations likely to be implemented in the next few years.

While the funding could lead to superior quality, the inherent cyclical nature of the oil and gas industry makes the prime mover markets in EMEA and the FSU a tough environment to survive and sell in. The resultant imbalance between supply and demand along with the supply chain approach is leading to excessive manufacturing capacity.

Segments such as gas to liquid (GTL) as well as floating, production, storage and offloading systems (FPSOs) for deep water and frontier development are some areas where businesses expect to flourish. These areas require high initial capital, thus making returns in the medium to long-term vital.

Both new as well as existing market participants are increasingly finding the oil and gas sector highly attractive, resulting in swelling competition, which, in turn, is adversely affecting revenues, and in many instances, escalating end users' price sensitivity. Particularly for entrants, establishing manufacturing facilities for prime movers involves huge investments. This restraint is mainly pertinent to small and medium-level equipment manufacturers that have limited resources and experience. As price becomes an increasingly important factor, it will be crucial to exercise cost control as well as opt for the right manufacturing processes and source inexpensive components from developing nations.

Apart from solving prices and manufacturing facility issues, prime mover companies also need to deal with social problems, political unrest and, in certain cases, threats from terrorist activities.

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