This informal CPD article 'Oil, Gas and Chemicals Industries - Drilling Down into Challenges and Opportunities' was provided by Cambashi, a global market research, industry analysis, consulting & training firm focused on engineering and industrial software markets.
How are oil and gas and chemicals companies dealing with complex energy transition and other challenges? And what role does up-to-date market intelligence and expertise play in helping them maximize opportunities?
There’s no doubt that oil and gas and chemicals companies are facing multiple challenges to their businesses. Before the COVID-19 crisis, there were several challenges they were responding to, some of which have accelerated post-pandemic, including fluctuating oil prices, increasing production costs, and a skilled worker shortage.
With this massive energy transition happening, it’s perhaps no surprise that people involved in business communications with oil and gas and chemical companies, from CEOs to sales and marketing managers, are finding it hard to keep up with trends and challenges impacting the sector. For that reason, access to the latest tactical industry intelligence, linked to the latest trends in these industries, is seen as fundamental to meeting these challenges – and maximizing opportunities.
Clean energy transition
So, what is the current position of the oil and gas market and the industries it serves? Energy prices soared towards the end of 2021, fueled by the rising prices of oil and natural gas. The problem was compounded a few months later with Russia’s invasion of Ukraine, casting doubt over energy security across Europe. To further fuel the rise, OPEC announced it would cut production by 2mbd, despite energy prices being at record highs for recent years.
There’s no doubt that 2022 was a challenging year. High energy prices have reduced consumer confidence and demand, and labour shortages are impacting the workforce. But, despite these challenges, the oil and gas sector has become synonymous with one word – profit.
The seven largest drilling companies were expected to generate over $170bn in profit in the first nine months of 2022, over $100bn more than the same period 12 months previously. Annual reports would suggest the implementation of digital initiatives, cost streamlining, and successful investments made during the pandemic were the key contributors to such impressive returns. However, the surge in the price of oil and gas has been a significantly larger contributor than any efficiency gains that may have been realized over the first nine months of 2022.