Oil and Gas industry: Surviving the Slack

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The world has not ended up yet, but the natural resources are bound to diminish soon. As per the reports, the oil and gas industry is experiencing the downfall and rate cuts which have slowed down the economic growth around the globe.

As per, Sheikh Ahmed Zaki Yamani, former Saudi Arabian oil minister, when he was interviewed in 2000, had exclaimed with a deep sigh that oil and gas industry business dealers will definitely face a downfall soon and it will redefine the business strategy.

Sheikh Ahmed’s Comment in an interview in 2000;

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Due to such a drastic downfall, the smart and strategic decision will be required on the O&G front runners. The expense and cost concerns must be resolved by them in order to save this downfall’s impact on the future growth.

The oil prices have been lowered by 60% in the later 2015- beneath US$40, all due to an uncontrolled supply and poor worldwide demand. As Saudi Arabia being the 2nd largest producer of oil and gas reserves, it continued to secure market share without any support to diminishing oil rates. They were more interested in hopping out the negligible producers in united states.

Due to such a drastic downfall, the smart and strategic decision will be required on the O&G front runners. The expense and cost concerns must be resolved by them in order to save this downfall’s impact on the future growth.

The oil prices have been lowered by 60% in the later 2015- beneath US$40, all due to an uncontrolled supply and poor worldwide demand. As Saudi Arabia being the 2nd largest producer of oil and gas reserves, it continued to secure market share without any support to diminishing oil rates. They were more interested in hopping out the negligible producers in United States.

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The crude price has not been budgeted yet in spite of the anxiousness between Russia and Turkey in late 2015. We can definitely expect lower oil prices in the future too.

To secure this from happening, O&G companies must execute the below plan;

  • Resynchronize your business strategy and think of your competitors. Concentrate on those areas which can yield profit and will help you to grow.
  • Secondly, avoid cutting costs randomly in order to sustain your company’s growth in near future. Apart from this O&G companies must tie up their funding programs to carbon-forced operating atmosphere. In short, oil production must be done with full competition by reducing its carbon footnote as much as possible
  • Apart from this, O&G companies must research new science helpful in an innovation to reduce funds and must integrate to gain an environment which should have low harmful emissions. The call for clone oil-field apps will grow as the oil prices will dive quickly.

As the technology is picking up the pace which the world can’t describe, search for an inevitable technology which will help in flourishing and producing renewable energy. Few O&G companies like Neste, Eni are searching for the refining process to use more fuel obtained from palm and animal fats to be used in aircraft.

Following the upcoming year which again will face reduced oil and gas prices, the industry will experience many challenges soon. You will have to search for opportunities which will lead you in an ongoing positive direction. Management of your business plan will be required. The scenario of oil and gas industry will definitely be different after 10 years from now. Some part of the plan will surprise you with growth and that will be a part of proof for others.