The oil and gas industry has gone through a turbulent few years. A combination of economic uncertainty, supply disruptions, and geopolitical risk have bolstered volatility in oil and gas prices.
Competition for reserves has heightened, compelling upstream companies to conduct drilling operations in highly difficult, remote and inhospitable areas. Regulatory pressures have increased and upstream operators and service companies are facing intense scrutiny in the wake of major mishaps like 2010’s Deepwater Horizon Oil Spill in the Gulf of Mexico on the BP-operated Macondo Prospect.
Meanwhile, the drilling industry faces ongoing changes related to technology, operations, and the environment.
Technological Trends in O&G
Technology is also playing an increasingly larger role in reinventing the oil and gas industry and on companies focused on the extraction of natural gas and petroleum. O&G is absorbing and adopting to new technologies, and investor funding is going into innovative businesses that can aid in adopting a smarter work process when it comes to extraction.
The Internet has sparked a migration away from conventional research and data analysis. Traditionally, thick applications were installed on mainframe computers, large amounts of data was accessed or stored, and data analysis took a team of company men. This process was expensive, complicated, and challenging to standardize, manage, and control.
There has been a slow and steady movement toward thin-client solutions, which are focused, lightweight, and easy to use and support. For example, mobile technology takes pieces of the system that historically sat at corporate headquarters and puts them on iPads. Today’s O&G research applications offer strong technical solutions to more people for a reduced overall price. They are also extending the stretch of geographically based decision making from a few analysts to entire departments.
Operational Responsibilities in O&G
The role of the chief operations officer usually defies a one-size-fits-all definition, specifically in the oil and gas industry. It is, essentially, a job whose duties are defined closely with the goals of the chief executive officer.
Still, there are common concerns and themes that cut across everyone in this position. What we find is a breed of executive who merges deep engineering and operational knowledge with broad commercial and strategic insight and has what it takes to identify priorities and use resources accordingly – modern oilfield workshops are re-shifting their focus on core skillsets and delegating secondary tasks to outsourced workers. Successful COOs are expected to constantly adapt to a fast-changing economic, risky, and regulatory environment.
Global Emissions Policy Push
Many major oil-consuming nations are now nominally committed to decreasing carbon emissions, although not enough to stabilize global emissions. The combination of business, national and international drives will reduce fossil fuel use and greenhouse gas emissions; how fast and how far are difficult to determine because of the numerous uncertainties about future technologies, cost, and government policies.
Reduction of Oil in Transport
The transport sector is the largest market for liquid fuels. In 15 years, oil dependence of the transport market may explode depending on the scenarios for climate change policies. Petroleum dominates the transport market because of a century during which it was relatively cheap, available, and easy to store and handle due to its high density and "clean” properties. Today’s aircraft, ship, and land vehicle industries have developed as siblings of petroleum. Now, they are turning their technology and business models toward avoiding its use. These changes are mostly felt in the OECD markets where the demand for oil will reduce from its previous trend.
As the trend of decreasing oil prices continues, every company in the oil and gas industry will be challenged in a different way. They will, therefore, have to rise to the occasion and reposition themselves based on their strengths and the opportunities that present themselves.