By Joyce Deuley
Falling gas prices in an increasingly saturated market has plagued the oil & gas industry since 2014. In November of last year, prices had reached $50 a barrel, and now, in some cases, the market has become even more volatile. For instance, US crude prices had fallen to $26 a barrel in January, the lowest since 2003, but had the largest recovery since April 2015 just a month later. In an effort to pull the industry out of the hole, there had been talks of creating a global supply freeze, with discussions scheduled for the 17th of this month. However, as the discussion date draws near, talks seemed to have stalled, with prices continuing to waver.
In a legacy industry like oil and gas, outdated infrastructure and the need for a surge in new, highly skilled workers as well as better access to vital data are proven pain points, but with such a turbulent global market, these issues have become amplified. That being said, all is not lost. I believe someone dead and famous once said that adversity brings forth innovation—and he or she is correct. While waiting for government regulators to figure out how to re-stabilize the market, oil & gas companies can look on this industry “lull” as an opportunity to improve and streamline processes throughout the entire value chain.
After the Best Practices in Oil & Gas Conference, SAP’s John Ward met up with ARC Advisory Group’s Peter Reynolds to find out more about how IoT's goal isn't to disrupt anything, but more about it’s mission to enhance the industry at large, resulting in complete business transformations. Reynolds understands that legacy companies can’t transform overnight—and that they don’t necessarily have the budget in this economic climate to overhaul their operations. However, the beauty of IoT is that they don’t have to. By simply adding real-time sensors and new connectivity layers to existing controls, companies can achieve the necessary remote monitoring and performance guarantees without heavy investment. The goal during these tough times is to find solutions that can be “self-funded”, bringing in valuable change at a sustainable cost.
Energy is one of the fastest growing markets for IoT growth, and especially in lieu of the oil & gas supply slump, improved systems and better data insights are critical for its success. In the spirit of this, let’s take advantage of this period to collaborate and maximize our opportunities by expanding our ecosystems to include innovative and reliable partners and vendors and their technologies.