Oil and Gas
Today, leading market players are struggling to retain their global market shares in the face of increased oil production by the USA and the Organization of Petroleum Exporting Countries (OPEC). Technological advances in hydraulic fracturing, deep-water drilling and lateral drilling have led to surplus oil production within the US. This rise in output coupled with declining oil consumption has resulted in lower prices and shrinking profits. The falling prices of oil per barrel pose significant challenges for the industry. While some producers are equipped with diverse and mature assets to handle these challenges, upstream players are under pressure to increase operational efficiencies and reduce costs to preserve margins and maintain the reinvestment rates necessary for future growth.
The oil and gas industry has been progressive in adopting new technologies such as Big Data, analytics, cloud and automation. However, in the current global situation, it is important for producers to evaluate their portfolios and ensure that each operation aligns with the company’s core strengths. Declining profits are constraining working capital for many players, making the oil and gas industry ripe for mergers and acquisitions.
The global shift in demand from the West to the East is creating new challenges for companies in midstream and downstream sectors. With unconventional gas from North America as the main driver, natural gas is steadily gaining greater share within the energy market. To take advantage of the increasing demand within the emerging markets of Asia and the Middle East, companies need to optimize their energy supply chain by investing in pipelines, storage and processing facilities.
Most enterprises in this industry struggle to attract and retain professional talent. With a skilled workforce that is shrinking, the industry needs to invest in talent management and learning to create a resource pool of professionals. Further, health, safety and environment (HSE) compliance continues to be a top priority owing to increasingly stringent regulations and harsher operating environments.