With the new year closing in, we are all interested in predicting the direction of travel for the oil and gas sector, and where best to inject our funds. As with all facets of oil and gas production, upstream priorities are fast-moving. Here are some potential areas that could interest investors in 2020.
Industry 4.0 continues
The expected spend on Industry 4.0 is expected to be $907 billion per year, and this is likely to continue into 2020. If you have yet to catch up with the developments in Industry 4.0, it is a term used to refer to the digitisation of processes and production. Innovations in product management and offshore technologies are thought to have the potential to increase efficiencies by as much as 50%. One example could be the use of drones to inspect platforms; another could be the use of AI to decrease the need for human resources.
While the oil and gas sector is dominated by large iconic names such as Exxon and BP, the future could be with smaller companies. The industry requires an agile and flexible approach, with a streamlined decision-making process that can allow rapid evolution of market strategy. The smaller companies can also become a specialist in a facet of production, offering specific production techniques. They can then use this specialism to move quickly into different landscapes, which often compensates for lack of ability to scale.
Relentless focus on efficiencies
Investment in technologies is going to be essential for companies looking to make the most of ongoing fields. The full potential of each opportunity needs to be unlocked to its full. Therefore, investment in such innovations could be a focus of 2020, along with means to address inefficiencies in the supply chain. This is not just about improving the profitability of existing projects but ensuring that new projects will offer sustainable rewards.
Invest in finding, developing and operating future reserves
UKCS identified an attractive opportunity that could stimulate activity and revenue for the supply chain and the extraction and production companies. They note that there is a need for approximately £200 billion in spending on the finding, developing and operating of future research.
However, the focus of this investment is going to be impacted by a commitment to a lower-carbon future. Therefore, there is also the potential for investment in innovation that aids this transition. Oil and gas currently provide 60% of UK energy needs, so it is essential to the future of the UK economy. However, the need for lower-carbon output cannot be ignored if this position is to be retained. Therefore, moves to maintain oil and gas as an asset to the UK economy could provide significant investment opportunities.
Exi Flow Measurement specialises in products for the gas and liquid measurement industry – manufacturing, researching and developing with a focus on continuous project development and enhancement. To speak to us about how we can help you, call +44 (0)1243 554920 or contact us here.