Predicting the future of oil and gas (O&G) is a constant challenge. The industry has always been volatile, but there used to be a comfortable predictability to the boom-and-bust pendulum.
However, these days appear at an end for now. A combination of commodity price fluctuations, ambiguity on the future of fossil fuels, and contentious global trade negotiations are upending traditional supply and demand fundamentals. This is generating a host of new challenges with no clear answers.
NAVIGATING THE VOLATILE MARKETPLACE
here are several challenges facing the oil and gas industry today. One of them is to produce more energy at lower cost with less emissions. The global population is increasing, and energy demand post COVID-19 will not only recover but also increase. At the same time, the world is demanding cleaner energy so O&G companies must supply this energy with less emissions.
O&G companies are also spending big bucks to keep themselves relevant in the field. The industry is collectively investing approximately US$500 billion each year just to keep up with demand. What makes this particularly difficult is the strong headwind of rising capital costs.
Other challenges include:
- Technological advancement
Advances in technology, such as renewable energy sources, electric vehicles, and energy storage solutions, are increasing competition and reducing the demand for oil and gas. - Regulatory changes
Governments around the world are implementing stricter regulations on O&G production and consumption, which can increase costs for companies and limit their operations. - Environmental concerns
The industry is a major contributor to greenhouse gas emissions, and companies are under increasing pressure to reduce their environmental impact. - Geopolitical risks
The O&G supply chain is often subject to political instability, conflicts, and sanctions, which can disrupt production and supply chains. - Aging infrastructure
Many O&G facilities are decades old and require significant maintenance and upgrades to remain operational and safe.
IMPROVING EFFICIENCIES WHILE LOWERING COSTS
O&G companies can improve efficiencies by using management practices and digital technologies deployed by other industries to boost capital-project productivity. Project Production Management (PPM), digitizing processes, advanced analytics, and agile ways of working can all yield significant improvements.
Digital technologies
Digitising processes can significantly improve efficiencies and productivity for O&G companies. By collecting, analysing, communicating, and acting on data, digital transformation allows companies to automate high cost, dangerous, or error-prone tasks. This can help maximize asset and well integrity, increase field recovery, and improve oil throughput.
Advanced analytics
Advanced analytics can help O&G companies improve efficiency and lower costs by harnessing Big Data. Harnessing Big Data with analytics in could help companies improve production by 6% to 8%. Better data analytics can improve the ability to find the product, reduce the cost of development and production, and make energy more affordable and safer to extract.
Project Production Management (PPM)
PPM is a management practice that views a project as a collection of discrete production systems, each with its own set of processes. Managing each system separately makes it easier to optimize performance. PPM gives O&G companies control over the overall project-production process, allowing them to adjust capacity, inventory, and response time to mitigate unforeseen changes in supply or demand.
THE IMPORTANCE OF HAVING THE RIGHT IMPLEMENTATION PARTNER
For O&G companies to effectively transform its operations to improve efficiency while lowering costs, they need the right tools and professional support to get there. Renoir is able to achieve this, by providing services and solutions that work toward goals at every level of the organisation.
Undergoing a business transformation to develop more effective systems and processes can reduce production losses and ensure optimal cost-effectiveness. We can help you create a culture of discipline and structure that ensures targets are met and exceeded. We also provide a wide range of digital technology solutions that will enhance the impact of your operational and business processes.
You can talk to one of our consultants today to see how our solutions can help your organisation address the unique challenges efficiently and sustainably.
