Exploring 2019 Oil and Gas Industry Trends through the Cost Analysis Template

As we transition into 2019, it is imperative to assess key trends in the oil and gas industry. What should companies in this sector be attentive to? How is the recovery in the energy market impacting the industry, and what emerging supply chain risks should be considered?

Despite the recent overall economic picture, the current state of the oil and gas market appears robust, with stable prices and substantial increases in business investments. These positive fundamentals, coupled with external stimuli from recent tax cuts, may continue to support growth in the near term. However, considerations arise if the impact of these stimuli begins to diminish over the next couple of months.

Our experts can guide you in understanding the oil and gas landscape through the top three trends:

1. The Sustainability Imperative

The rise in consumer awareness and societal expectations is compelling oil and gas companies to embrace sustainability as a core part of their business strategy. Companies are making significant investments in technologies that bring renewable, low-carbon energy to consumers and reduce their carbon footprints.

2. Natural Gas

Natural gas remains a major source of lower-carbon power generation globally. The wave of new investments in oil and gas facilities is made possible by the growing supply of natural gas and natural gas liquids (NGL) in the United States.

3. Digital Technologies Intertwined with the Oil and Gas Value Chain

The oil and gas industry is known for its focus on technology and innovation. New opportunities include a suite of digital technologies that could impact all aspects of the supply chain.

Digital Maturity Index

The Digital Maturity Index quantitatively evaluates the degree of technological and digital transformation within a company. It considers factors such as technical infrastructure, digital skill sets, data usage, and openness to innovation. A higher score on the index represents a higher level of digital maturity.

Case Study: Client in the US Oil and Gas Industry

Client’s Challenge

A well-known player in the US oil and gas industry wanted to identify key cost elements and analyze the market scenario. The company collaborated with SpendEdge to develop a cost analysis template, leveraging our expertise to gauge the impact of each cost factor on overall business growth.

Engagement Overview

The US oil and gas industry faces various challenges, including diminishing oil reserves and complexities in supply chains. These challenges necessitate a focus on cost analysis to boost productivity and aid in resource discovery.

Key Findings

The cost analysis engagement aimed at standardizing procurement costs and creating a template that harmonizes efforts, eliminates redundancy, and synchronizes deliverables. Key areas of focus included:

• Determining and gauging current costs and major cost components.
• Identifying key cost factors and their impact.
• Reviewing historical cost trends and the evolution of key cost drivers.
• Analyzing data to determine future cost trends.

Technological Trends Impacting the Industry

Digitalization and Data Analytics: The industry is increasingly adopting digital technologies to optimize operations, enhance efficiency, and reduce costs. Advanced data analytics, machine learning, and artificial intelligence are used to analyze large volumes of data for better decision-making and predicting maintenance needs.

Advanced Seismic Imaging: Enhanced seismic imaging technologies provide more accurate and detailed images of subsurface formations, improving reservoir characterization and well placement decisions.

Robotics and Automation: Robotics and automation, including drones, remotely operated vehicles, and autonomous drilling rigs, are explored to improve efficiency and safety in tasks such as inspection, maintenance, and drilling operations.

 

Source: SpendEdge

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