-
Subscribe to Blog:
SEARCH THE BLOG
CATEGORIES
- Aerospace
- Asset Maintenance
- Automotive
- Blog
- Building Products
- Case Studies
- Chemical Processing
- Consulting
- Food & Beverage
- Forestry Products
- Hospitals & Healthcare
- Knowledge Transfer
- Lean Manufacturing
- Life Sciences
- Logistics
- Manufacturing
- Material Utilization
- Metals
- Mining
- News
- Office Politics
- Oil & Gas
- Plastics
- Private Equity
- Process Improvement
- Project Management
- Spend Management
- Supply Chain
- Uncategorized
- Utilities
- Whitepapers
BLOG ARCHIVES
- September 2024 (1)
- August 2024 (5)
- July 2024 (6)
- June 2024 (3)
- May 2024 (3)
- April 2024 (4)
- March 2024 (3)
- February 2024 (4)
- January 2024 (5)
- December 2023 (2)
- November 2023 (1)
- October 2023 (6)
- September 2023 (3)
- August 2023 (4)
- July 2023 (2)
- June 2023 (3)
- May 2023 (7)
- April 2023 (3)
- March 2023 (3)
- February 2023 (5)
- January 2023 (6)
- December 2022 (2)
- November 2022 (5)
- October 2022 (5)
- September 2022 (5)
- August 2022 (6)
- July 2022 (3)
- June 2022 (4)
- May 2022 (5)
- April 2022 (3)
- March 2022 (5)
- February 2022 (4)
- January 2022 (7)
- December 2021 (3)
- November 2021 (5)
- October 2021 (3)
- September 2021 (2)
- August 2021 (6)
- July 2021 (2)
- June 2021 (10)
- May 2021 (4)
- April 2021 (5)
- March 2021 (5)
- February 2021 (3)
- January 2021 (4)
- December 2020 (3)
- November 2020 (3)
- October 2020 (3)
- September 2020 (3)
- August 2020 (4)
- July 2020 (3)
- June 2020 (5)
- May 2020 (3)
- April 2020 (3)
- March 2020 (4)
- February 2020 (4)
- January 2020 (4)
- December 2019 (3)
- November 2019 (2)
- October 2019 (4)
- September 2019 (2)
- August 2019 (4)
- July 2019 (3)
- June 2019 (4)
- May 2019 (2)
- April 2019 (4)
- March 2019 (4)
- February 2019 (5)
- January 2019 (5)
- December 2018 (2)
- November 2018 (2)
- October 2018 (5)
- September 2018 (4)
- August 2018 (3)
- July 2018 (2)
- June 2018 (4)
- May 2018 (3)
- April 2018 (3)
- March 2018 (2)
- February 2018 (2)
- January 2018 (1)
- December 2017 (1)
- November 2017 (2)
- October 2017 (2)
- September 2017 (1)
- August 2017 (2)
- July 2017 (2)
- June 2017 (1)
- April 2017 (3)
- March 2017 (3)
- February 2017 (2)
- January 2017 (2)
- December 2016 (2)
- November 2016 (4)
- October 2016 (4)
- September 2016 (3)
- August 2016 (6)
- July 2016 (4)
- June 2016 (4)
- May 2016 (1)
- April 2016 (3)
- March 2016 (4)
- February 2016 (2)
- January 2016 (4)
- December 2015 (3)
- November 2015 (3)
- October 2015 (1)
- September 2015 (1)
- August 2015 (4)
- July 2015 (6)
- June 2015 (4)
- May 2015 (7)
- April 2015 (6)
- March 2015 (6)
- February 2015 (4)
- January 2015 (3)
CONNECT WITH US
Tag Archives: Oil & Gas Industry
From supply chain disruptions to fluctuating demand, the past few years have caused a ripple-like wave of challenges throughout businesses across the globe, including the oil and gas industry.
Fortunately, with oil prices bouncing back, the oil and gas industry has nearly recovered from the issues to pre-COVID operations. That being said, there are a considerable number of concerns on the forefront of the industry that will shape the course of operations for years to come.
So, what’s the state of the oil and gas industry today? Let’s look at some of the issues and opportunities they’re facing.
Production capacity concerns
For months, we’ve been seeing news reports about the Russia and Ukraine conflict. Many of us have been seeking updates on the conflict itself, but those in the oil and gas industry have no doubt kept a keen eye on how it is affecting the global oil and gas market.
The sanctions placed on Russian oil have caused strain on a U.S. refinery system that, like so many manufacturing industries, was already overwhelmed and under-staffed following the COVID pandemic and the Great Resignation that followed. Demand for gas plummeted during a time when the majority of the country stayed in their homes for months on end, which left a large number of refineries with no other choice but to close their doors.
Refinery numbers still have not yet rebounded, which has resulted in a refining shortage of roughly one million barrels of oil a day compared to pre-COVID numbers. Add in sanctioning one of the world’s biggest oil producers, and the increased demand coupled with reduced refining capabilities combines into the perfect storm for shortages and increased prices.
Mergers & acquisitions opportunities
Despite the recently tabled climate bill, this country (and the world at large) is moving toward a renewable energy future. Even if it’s at a snail’s pace.
This has caused leaders in the oil and gas industry to evaluate operations and find ways to meet renewable and decarbonization efforts in the next few decades. One option is partnering with or purchasing renewable energy companies.
Companies like BP, Equinor, Respol, and PKN Orlen are leading the charge in renewable energy investment opportunities, and are reaping the financial and ecological rewards of doing so. Expect many major players in the oil and gas industry to continue to expand their portfolios and increase their outreach with strategic mergers and acquisitions into renewable energy.
Appeasement of investors
Despite incredible year-over-year growth, the oil and gas industry as a whole has been plagued with cash flow issues that have caused investors to reconsider their financial plans.
There are a host of reasons why investors have turned their focus toward other industries in recent years: Some have been leaving due to increased concerns over carbon-mitigation and ecological issues, some have left due to oil and gas’s tendency to overspend cash flows in the name of company growth and continued investment, while others have been scared away due to plain uncertainty.
Whatever the case may be, oil and gas companies are seeking to attract investors again, while investors want to see predictability and consistent returns to shareholders. The aforementioned increase in renewable mergers and acquisitions opportunities is a step in the right direction for the oil and gas industry, and that coupled with an inevitable stabilization will no doubt cause investors to flock back to the industry.
Outdated infrastructure & opportunity for innovation
Across the board, oil and gas infrastructure is aging.
In the off-shore sector, oil platforms are becoming old, deteriorated and increasingly at-risk for operational failures and natural disasters. This, of course, poses a problem not only for oil and gas companies meeting the ever-growing demand of the marketplace, but also risks ecological disaster in the form of oil spills and other malfunctions. Equipment and structural deterioration is no doubt due to saltwater and other environmental factors that come with operating in the ocean, and improvements to such facilities come at great expense, leaving some executives to employ a “we’ll-fix-it-when-it’s-broken” approach.
On land, plants and refineries across the country are aging, too, with many having outdated control loops, absences of updating engineering controls, and lack of complete computerization. This, of course, doesn’t even touch on the efficiency potential that technological aspects like robotic automation, artificial intelligence and IoT advances could bring to these facilities.
We can help
No matter the challenges, issues or opportunities facing the oil and gas industry, one solution is getting the job done more efficiently. That means looking at supply issues in new ways, casting an eye toward structural improvements and ensuring your day-to-day efficiency in the refineries and out in the field. We can help with that. At USC Consulting, we’ve been working with companies in a wide range of industries to up their efficiency game for more than 50 years.
Contact us today if you’d like to talk about how we can help your business.