Shortly prior to the outbreak of the COVID-19 crisis, a sense of confidence appeared to be returning to the Oil & Gas sector. Surveys by Wood Mackenzie and other reputable research firms confirmed that a majority of leading oil major senior executives intended to either increase or, at the very least, maintain capital expenditure throughout 2020.
But repercussions from the pandemic have been swift and brutal. Demand destruction - on a scale barely imaginable, coupled with supply disruption resulting from a breakdown of the OPEC+ arrangement, have sent oil markets reeling. While a historic deal to slash production by 10% has subsequently been agreed, oil prices have continued to plummet, with Brent Crude approaching $25 per barrel at the time of writing. And, as storage facilities reach capacity, a widespread suspension of production appears inevitable.
In the circumstances, it is evident that - for now, at least - any hopes for a genuine recovery from the post-2014 downturn have been well and truly extinguished. For the majority of stakeholders, the priority is simply survival.
Against this backdrop, we expect the immediate focus to be on managing liquidity, cost-cutting across the entire value-chain, contract renegotiation and other such measures designed to mitigate the unprecedented impact on inflows. A wave of mergers and acquisitions are likely to follow as the industry enters into a period of consolidation. When it eventually emerges, it will unquestionably be to a very different landscape.
But, as dire as the situation appears to be at this juncture, there could yet be a silver-lining. As the crisis has unfolded, the industry has responded. At the heart of this response has been cross-sector collaboration, with leading Oil & Gas sector players stepping up to meet the challenge. From making supercomputing power available to scientific and medical research centres; to repurposing underwater breathing equipment as components for medical ventilators and respirators; to redesigning and manufacturing reusable personal protection equipment for health care workers and more, oil and gas industry stakeholders have provided the first hint that they might finally be ready to break free of the silo-mentality that has limited their scope of work. If the industry can build on these small steps and truly reinvent itself as an integral component of the knowledge economy, it will undoubtedly end up stronger in the post-COVID-19 future.
Precision helps Oil and Gas sector clients develop appropriate strategies by identifying needs, scoping aims, unlocking resources and developing comprehensive implementation strategies. From government agencies and regulators seeking to support their industries, to asset owners, operators and other key stakeholders, we can help identify opportunities, access the relevant value chains and maximise profits.
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Abu Dhabi National Oil Company (ADNOC)
Instituto Brasileiro de Petróleo (IBP)
Maersk Oil & Gas
OIL & GAS FACULTY
Precision’s Oil & Gas faculty comprises world-renowned consultants, researchers, analysts, communications experts and other leading professionals.
Drawing upon the unparalleled expertise inherent in this assiduously assembled faculty, we provide a comprehensive suite of services to public and private sector clients alike.
SELECTED VIDEOS FROM OUR CHANNEL PLAYLIST
From consultancy and training support, to workshop planning and a great deal more, our work is underpinned by expert research and insight, designed to deliver tangible, measurable results.
We invite you to review the small selection of case studies below and welcome the opportunity to discuss how we might be able to help your organisation achieve similar outcomes.
Africa's Gas to Power Revolution
Developing a solution to sub-Saharan Africa’s lack of cheap, reliable electricity.
North Sea Decommissioning
Turning challenges into opportunities:
A commercial approach to the UK’s decommissioning challenge.
Decommissioning Indonesia's Oil & Gas Assets
Preparing an overarching decommissioning strategy and new
guidelines to meet key national and economic priorities.
In addition to the in-house programmes prepared and delivered for our oil and gas industry clients, Precision promotes a range of results-driven B2B events under its flagship brand, Accelerate. Details and links to forthcoming events appear below: