Top Oil and Gas Trends — 2019
The oil and gas industry is a hot button right now, and they have caught a lot of heat from environmental activists. The name of the game now is to adapt to the changing times, find ways to grow and to implement modern technology to the industry. Below are the top five trends of 2019 and their impacts on the industry.
The commodity prices and cash flow revival has proven to be invaluable to the oil and gas sector. The question now is how will that translate into sustainability for profits and returns? The dip in prices saw a lot of improvements in cost containment, operational efficiency, and high grading. We also learned that we should focus on adopting a disciplined approach to investment decisions and the use of digital technology to increase productivity. It’s essential that these painstakingly acquired lessons be maintained and nurtured. There will be some unavoidable cost increases due to the repair of service sector margins and the rising cost of materials. Only time will tell if acceptable returns will be created through the commodity price cycle.
The infrastructure really matters in this industry. It is vital to expand or build pipelines, processing and storage facilities, liquefied natural gas plants, and import/export terminals. We’ve seen crude oil price discounts surpassed $20 in the Permian Basin and even $50 in Western Canada due to a lack of pipeline construction. The process to plan, get permits, and to construct the infrastructure is getting more difficult and lengthier and is often litigated by a group opposing the expansion. Delay to expansion is costly, however, expansion is a necessary evil for the survival of the industry.
Natural gas is the forgotten partner in the oil and gas sector; however, it continues to grow and enable long-term change in the worldwide energy market. Natural gas is a source of lower-carbon energy creation, and a new wave of investment in petrochemical facilities would be impossible without the growing US natural gas supply. The United States is now a key player in the liquefied natural gas market, and it has two operational facilities with four more planned openings in 2019. The natural gas expansion will be set to shape prices, trade flows, and models.
Energy and chemical companies have been reporting on and discussing environmental footprints, impact relief, and sustainability for years. The ever-increasing number of consumers becoming aware of environmental and climate issues are forcing more and more companies to make sustainability a key part of their business strategies. These companies, to accommodate consumer concerns, are willing to make enormous investments in technologies that will bring renewable energy to their consumers, and to reduce their own carbon footprints and environmental impact.
Digital technologies are crucial in the further development of the oil and gas industry. Various types of technology from robotics and artificial intelligence to blockchain can help increase productivity, efficiency, consistency, and dependability. Implementing technological changes at scale can be complex in such a capital-intensive industry where the questions of legacy equipment and a large number of suppliers should be addressed. The process of refining has been in the automation process for years, and if that succeeds it could equip the industry to thrive and be receptive to a customer and societal concerns.
