The last decade has been a series of peaks and valleys, especially for members of the energy industry. Shifting regulatory priorities, as well as fluctuations in production and demand on an international scale, are partially responsible. Oil and gas companies are facing increasing pressure to comply with changing regulations and to modernize their processes and equipment—a trend that will likely grow stronger in the year ahead.
Not even experts and authorities can confidently predict the future with complete accuracy, especially in an industry with many volatile variables. However, the industry should remain mindful of forecasts regarding trends and developments in 2019. Understanding the forces that will shape the upcoming year, and likely those that follow, allows companies to take advantage of opportunities and take steps to protect themselves from potential challenges they may face in the near future.
Potential Increase in Crude Oil Demand
November 2018 saw partial re-institution of US sanctions against Iran, including restrictions regarding their oil exports. Several other major oil-importing countries have also recently expressed views or taken measures to cut back on oil imports from the region. This has lead some forecasters to predict a rise in demand from producers around other parts of the globe, as well as a stabilization in crude oil prices close to their current position near a four-year high.
Regional Challenges in the Texas Permian Basin
The Permian Basin area of Texas may have been a hot spot over the last decade, but current trends suggest that future growth may be stalled for some time. Logistical challenges regarding usage of limited pipelines have compelled some companies to limit their operations there, despite relatively high well productivity. Forecasts for regional production are subject to improvements in logistical infrastructure throughout the area.
Prospects for the US Natural Gas Industry
Many energy industry analysts believe there will be a significant shortage of liquefied natural gas (LNG) by 2025. However, these forecasts are partially contingent on the current trend of reservation regarding approval for new projects. An increase in green-lighted projects throughout the region could impact these projections and keep supply closer to demand levels. Global demand for natural gas is also generally expected to rise in 2019 and the decade beyond, which may yield growth opportunities for the industry in the United States.
Integrated Software and Digital Management Solutions
Both on and off-shore drilling operations rely on computers and digital technology on a daily basis, and this trend of digitization and device networking is expected to continue rising in the years ahead. Integrated software solutions are particularly useful on the management side of the operation, as they allow for varying levels of access to facilitate up-to-date coordination and communication throughout the organization. Our cargo and material software solutions are among the many reasons companies rely on EPS to handle their logistical concerns.
The Issue of Automation
Many aspects and components of energy industry operations already rely on automated systems, but it still presents serious issues for both employers and workers. As the technology to automate systems becomes more accessible, reliable and affordable, it is likely to become a valuable asset that increases overall profitability. This means that oil and gas personnel need to be proactive and prepare themselves to succeed in the future through additional training, education and development. As a forward-thinking and adaptive service provider, EPS encourages adoption of both innovative and conventional techniques in our oil and gas personnel to give our clients the best value possible.
Annual industry forecasts can provide valuable insight into the opportunities and challenges that may emerge in the near future. However, it’s also important for company leaders to keep their fingers on the pulse of the industry to stay ahead of new developments. As a provider of logistics and personnel services for oil and gas companies, EPS is poised to help our clients streamline their operations, improve efficiency and establish safer work environments in an evolving international marketplace. Contact us today to learn more.