2017 has been an interesting year for the oil and gas industry. The Keystone XL Pipeline was approved (but is still on hold), oil prices are climbing back from previous lows, and recently the Trump administration announced the country’s largest oil and gas lease sale ever.
In looking at predictions for next year, we’ve seen some analysts who say oil prices will rise, some who say prices will drop, and some who say prices will stay about the same. Regardless of what happens in the market, here are four things we think are ahead for oil and gas in 2018.
1. Increased focus on preventive and predictive maintenance
The industry has been steadily moving toward more proactive models of maintenance because they decrease losses due to unplanned downtime. Technologies like control valve diagnostic tool ValScope-PRO and valve management software ValvKeep aid in these initiatives by providing performance data that helps technicians plan efficient maintenance schedules.
Especially if oil prices remain near current levels, we expect oil and gas companies to put increased focus on proper maintenance that will help them get the longest life out of their equipment.
2. Preparations for natural disasters
Hurricane Harvey did a number on the oil and gas industry, shutting down as much as one-third of the nation’s refining capacity. Fortunately, thanks to preparations made following the 2008 hurricane season, the industry was able to recover faster than expected.
To ensure they’re ready to weather any storm that comes along, oil and gas companies will continue to boost their preparedness efforts.
3. New jobs — a lot of them!
Not long ago, oil and gas workers faced major layoffs. Now, the industry is suffering from a talent shortage. Particularly if oil remains above $50 a barrel, new jobs will be added.
This is already happening. Online job board Monster.com notes an uptick in positions available for derrick operators, rotary drill operators, petroleum engineers, and several other specialties. Based on job postings and BLS data, it’s quite possible that Goldman Sachs’ prediction of 100,000 more industry jobs before the end of 2018 may come true.
4. More digital solutions
Finally, every industry is becoming more digital. For oil and gas, the payoff can be huge, which is all the more important if oil prices stay where they are. According to McKinsey, “the effective use of digital technologies in the oil and gas sector could reduce capital expenditures by up to 20 percent; it could cut operating costs in upstream by 3 to 5 percent and by about half that in downstream.”
What does digital transformation in the oil and gas industry look like? Here are a few examples:
- Using the Internet of Things to connect subsea oil wells, monitor remote oil fields, and facilitate timely repairs
- Modeling projects using digital twin technology to plan installation, maintenance, and decommissioning
- Using 4-D seismic imaging to measure and predict fluid changes in reservoirs
- Going paperless to provide better access to information and meet regulatory requirements
Has your company started down any of these paths? What do you think will be coming down the pike for O&G in 2018?
If you’d like to learn more about #1, we can help! Contact us to learn more about developing a preventive maintenance program for your valves.