The mood in the O&G industry is undoubtedly pessimistic. In a recent survey of 6,000 industry professionals*, nearly 50% of respondents declared themselves to be ‘not very optimistic about the industry’, at least in the near term, although the same percentage believe that it will remain a significant force in the world for at least the next 20 years, albeit with reduced profitability.
One thing that everyone, not just participants in this survey, agrees on: it is time to ‘look outside the box’ and get innovative. After the price collapse of 1986 induced the industry to cut costs dramatically, many advanced technologies in seismic acquisition and drilling were developed, aided by the explosion in computing power and driven by the need to achieve more with less. It is time again for companies to seek out innovative technological solutions, and to invest in ones that have been identified but not yet developed.
Original thinking is also needed with regard to effective use of the human resource. It has been estimated that over a quarter of a million people have lost their jobs in the sector since the beginning of 2015, and more are announced daily. While cuts are inevitable at such a time, alternative ways of reducing costs, such as voluntary part-time options which do not impact on career prospects and incentivising personnel to develop economies in their own working environments, should be encouraged.
While being bound to promote hydrocarbons, do we in this industry, which is, after all, about energy, give sufficient consideration to alternative sources when they are appropriate and cost efficient? A number of companies are already involved in the alternative energy market: oil giant Total, for example, is affiliated to Sunpower, which has developed the most efficient solar panel in the world; while Statoil has a multimillion dollar venture capital fund dedicated to investing in ambitious growth companies in renewable energy and has recently invested in the world’s first floating wind farm, in the North Sea not far from Aberdeen.
Maybe one way around the permanent cycle of boom and bust in the oil and gas industry is not just to think outside the box - but to step outside the box and embrace the energy industry in all its manifestations.
Editor in Chief
*Warren Business Consulting