HEAVY IRON NEWS
Technology Can Turn Oil Around
Design Team • January 12, 2016
Though oil and gas companies are still maintaining their production, the market as a whole remains in disarray. Per barrel crude oil prices have plummeted to an 11 year low, well below $40 a barrel. Changes within both domestic and international oil markets have increased the supply for oil while demand has remained relatively static, and the only way this can be countered is through the use of technology.
THE CURRENT STATE OF DOMESTIC OIL
The domestic oil market is strong but struggling. Following the shale oil boom, the market was flooded with an excess of oil. Rather than pulling back on their supply, oil producing countries flooded the market with cheap oil. Today, oil is trading at an extremely low per barrel price, which has pressured many domestic oil and gas companies to slow down their operations. Rather than shutting down, many oil and gas companies have instead focused on improving and optimizing their operations.
REGAINING CONTROL OVER THE DOMESTIC OIL MARKET
It's impossible for domestic oil and gas companies to regain control over market prices. Instead, oil and gas companies must focus on utilizing technology to the fullest extent, thereby capturing more revenue despite the low per barrel prices. Oil and gas companies will need to optimize their logistics and supply chain management through the use of big data , and apply big data analysis to maintenance and safety issues for better predictability. Oil and gas companies will also need thorough analysis of real-time market data and predictive analysis of the future status of the market, so that they can better plan ahead. A significant component of near industry collapse occurred due to overly optimistic forecasts.
Technology can be further used to monitor and maintain oil sites, reducing administrative overhead, and to perform calibration and other necessary tests. Better detection technology could lead to better well sites, and better oil recovery procedures could increase the ability to recover oil from previously depleted sites. Altogether, technology can be used to improve upon every level of the oil and gas extraction process.
POTENTIAL ROADBLOCKS AHEAD FOR OIL AND GAS
Even with technology, there are some potential issues that could cause significant setbacks for the oil and gas industry. In particular, increasing regulations, safety requirements, and environmental protection protocols are making it more costly for domestic oil companies to operate. If oil companies are to compete with foreign nations, they will need to be able to control and secure their own operations. Technology will also aid in improving upon safety and avoiding issues such as spills and environmental damage.
An emphasis on technology is undoubtedly the best chance for the oil and gas industry to recover. Moreover, an emphasis on technology could greatly benefit the oil and gas industry once prices have rebounded once again; the profit margins will be far greater, as the entire system will have been streamlined and optimized. For more information about how technology is helping (and will help) the oil and gas industry recover, contact Heavy Iron Oilfield Services LP today.
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