Guest Editorial: A Balancing Act

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The inherent volatility in the oil and gas industry came into full force in 2014, with the culmination of increasing complexity, rising operating costs, and a rapid fall in oil prices. Getting through this latest downturn will require a balancing act between short-term measures to reduce costs while maintaining a long-term perspective on growth.

While the cyclical rise and fall of the oil price hardly comes as a surprise, there is an obvious correlation between confidence in the industry and the price of a barrel of oil. In tandem with identifying the priorities and strategies for the year ahead, this was very much demonstrated in the findings of our fifth annual industry benchmark study, A Balancing Act: The Outlook for the Oil and Gas Industry in 2015.*

Unlike in previous years, we felt the need to carry out the survey on industry confidence twice, three months apart, as we believed that the rapid drop in oil price at the end of 2014 may have skewed the results. We did indeed see a sharp drop in confidence between October 2014 and January 2015, from 62% being confident to hit their revenue targets down to 32%. The sharpest drop in confidence was seen in Asia, which dropped from 72% to 33%. The research not only compared results across a quarter of the year, but also from DNV GL’s 2014 industry outlook report, providing a snapshot of sentiment and a look ahead.

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Guest Editorial: A Balancing Act

Elisabeth Tørstad, CEO, DNV GL Oil & Gas

01 April 2015

Volume: 67 | Issue: 4

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