Exploring 2019 Oil and Gas Industry Trends through the Cost Analysis Template
As we move into 2019 its essential to assess the key trends in store- What should oil and gas companies watch out for? Does the recovery in the energy market make a huge impact, or are the emerging supply chain risks coming into play? However, with respect to the recent overall economic picture, the oil and gas market at present appears healthy- prices are stable and business investments have picked up tremendously. Such positive fundamentals coupled with the external stimulus from recent tax cuts may possibly continue to support growth in the near term. But what if the impact of the stimulus begins to wane over the next couple of months? Our experts help you understand the oil and gas landscape, through the top 3 trends:
The sustainability imperative
The rise in consumer awareness and societal expectations are driving oil and gas companies to embrace sustainability as a core part of their business strategy. This is one of the reasons for oil and gas companies to make sizable investments in technologies that bring renewable, low-carbon energy to consumers and to reduce they’re own carbon footprints.
Natural gas continues to be a major source of lower-carbon power generation globally. The wave of new investments in oil and gas facilities wouldn’t be possible without the growing US natural gas and NGL supply.
Digital technologies intertwined with the oil and gas value chain
The industry is well-known for technology and innovation. The new opportunities in the store include a whole suite of digital technologies that could touch all aspects of the supply chain.
Digital maturity Index
The Digital Maturity Index is a quantitative evaluation that gauges the degree of technological and digital transformation within a company. It evaluates how well digital technologies are embraced, put to use, and integrated into corporate strategies. This index takes into account things like technical infrastructure, digital skill sets, data usage, and openness to innovation. An organization’s capacity to prosper in the digital age is demonstrated by a higher score on the index, which represents a higher level of digital maturity.
About the Client
The client – an oil and gas industry player in the US.
The client- a well-known player in the oil and gas industry wanted to identify the key cost elements and analyze the market scenario in the US. To do so, the company collaborated with SpendEdge to leverage its cost analysis expertise and develop a cost analysis template to gauge the impact of each cost factor on the overall business growth.
The industry in the US is witnessing several challenges. The diminishing oil reserves have forced oil and gas companies to operate in hostile environments. As a result of this, the complexities of supply chains have skyrocketed creating trouble in delivering projects within the budget. Such complex challenges have prompted every upstream oil and gas company to focus a significant amount of their efforts on cost analysis to boost productivity and aid in resource discovery.
To devise a robust cost analysis template, the procurement experts at SpendEdge carried out extensive research comprising interviews and discussions with prominent stakeholders in the oil and gas industry in the US. Additionally, the cost analysis experts also collected information from reliable sources including primary and secondary research data and paid industry database.
The aim of the cost analysis engagement revolved around standardizing procurement costs and the creation of a cost analysis template for delivery that harmonizes the efforts and eliminates redundancy to synchronizes deliverables.
Consequently, the study focused on crucial areas, and the results included the following:
- Determining and gauging current costs and major cost components
- Identifying key cost factors and their impact
- Reviewing historical cost trends and the evolution of the key cost drivers
- Analyzing relevant data to determine future cost trends
New technologies that will impact in the future
Digitalization and Data Analytics:
The oil and gas industry was increasingly adopting digital technologies to optimize operations, enhance efficiency, and reduce costs. Advanced data analytics, machine learning, and artificial intelligence were being used to analyze large volumes of data from sensors, equipment, and drilling operations to improve decision-making and predict maintenance needs.
Advanced Seismic Imaging:
Enhanced seismic imaging technologies were expected to provide more accurate and detailed images of subsurface formations, enabling better reservoir characterization and improved well placement decisions. This technology could increase exploration success rates and reduce drilling risks.
Robotics and Automation:
Robotics and automation were being applied to various tasks in the industry, including inspection, maintenance, and drilling operations. Unmanned aerial vehicles (drones), remotely operated vehicles (ROVs), and autonomous drilling rigs were among the technologies being explored to improve efficiency and safety.
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