1. The energy sector has seen plenty of turbulence in recent years. Where does it stand right now?
Among our oil and gas clients, we are seeing a considerably more optimistic outlook. Demand is rising and the recovery in the oil price is driving an increase in upstream activity, with final investment decisions on a number of major projects made in recent months. At the same time, the renewables sector is continuing its strong growth.
2. Does that mean the sector is returning to the same ways of working it used to before the oil price fell?
Absolutely not. The whole industry has achieved significant efficiency improvements and cost reductions, and nobody wants to let those slip away. We are seeing a continued focus on cost and productivity across the sector, whether that means companies are doing fewer big, high-risk projects, or just ensuring that cost-saving approaches are now embedded in the way they work. Moreover, as the integrated players switch investment to upstream projects, there is now even more pressure for efficiency improvements on the downstream side.
3. IS THE INDUSTRY REACHING THE LIMITS OF WHAT IT CAN DO TO IMPROVE EFFICIENCY AND REDUCE THE COST OF PRODUCTION?
Not by a long way. Our clients are just beginning to explore the possibilities of digitalization, for example, using artificial intelligence technologies and smarter data to improve the way they plan, monitor and execute their operations. Ultimately, I expect those technologies to deliver greater reliability, availability and productivity, along with less risk. We’ll also see companies finding ways to improve the utilization of their assets – including logistics assets which can be shared or where asset utilization can be outsourced. This change in approach will unlock significant additional -cost-saving opportunities.
Published: September 2018