Industry Transformation Takes Many Forms

Topics: Petroleum economics/production forecasting
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Many column inches are filled with discussion of how companies need to operate in the lower-for-longer market that the upstream oil and gas industry continues to face. Much of what we read is focused around headline words such as “innovation” and “disruption.” I feel these are used too often and inappropriately such that we lose focus around their meaning. However, if asked for one word that I believe encapsulates what the oil and gas industry needs, it would be “transformation.”

The oil and gas industry has a history of delivering incredible engineering feats that are impressive in their innovation by any measure in terms of sheer physical or budgetary scale. Whether we look back to the early Gulf of Mexico and North Sea facilities designed to withstand extreme marine environments, the ultra-deepwater subsea developments offshore Africa and Brazil, or the megaprojects around floating LNG, the industry has a history of innovation. The rise of independent oil companies, redefining markets in certain regions, has been a good example of disruptive practices.

What we need to focus on now is how we transform the industry. This word can resonate with all of us working in the industry at every level within an organization; all of us can offer ideas for how we could transform what we do, whether at a company or personal level and with a long-term outlook or on a daily basis.

One of the key transformations occurring now is organizations coming together—through mergers, acquisitions, and alliances—to combine products and services from subsurface through subsea and pipelines to topside processing. The move is clearly toward integration of products and services, with companies trying to reduce the costs of interfaces of different aspects of field development and production and reducing the overhead of business operations. While the impact of the downturn cannot be ignored, it is my hope that these changes will offer the opportunity for transformation from an industry that has been heavily project-focused to one that is geared more to delivering standardized products designed to be flexible enough to be modified to cope with the range of projects and operating conditions in which they will deployed. This is a move toward a more efficient engineering industry in the long term.

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Industry Transformation Takes Many Forms

Alex Read, Global Director, Business Development, Industries Group, Siemens PLM Software

12 December 2016

Volume: 69 | Issue: 1