August 2015 – RusselSmith |

The Oil and Gas Industry: Versatile vs Volatile

The global oil and gas industry has experienced a steady decline in the last three years primarily driven by the African and Middle East region, but the current instability in the industry does not deter a positive outlook as operators are positive that the industry will continue to grow over the next three years. It is expected that the industry will continue to be profitable based on an average benchmark oil price of $85-$90 per barrel.

Operators are implementing cost reduction strategies and focusing on operational excellence and innovation as a way of increasing their profitability despite declining revenue.

Local content has become a significant issue for the oil & gas industry, especially across Africa. Given the drive by governments to enable locals play more significant roles within the energy sector, we would expect increased pressure on operators to justify the utilisation of ‘non’ local resources. Nigeria has recorded some measure of success in this light.

Taking Innovation Beneath The Surface

Organisations require innovative technologies to ensure their assets remain in top functional condition and their life span extended in a cost-effective manner.

Those who continually strive to provide these innovative solutions to maintain quality service with utmost regard for safety are highly sought for within the oil and gas industry.

One area where we see the highest potential for growth and innovation is Subsea operations. It is estimated that by the end of 2015, the international oil Companies operating in Nigeria will have sold at least 250,000 barrels per day worth of equity in onshore and shallow water producing assets in the oil producing Niger Delta region (Source: ‘Review of the Nigeria Oil and Gas Industry 2014’ by PWC). This represents the single highest opportunity for indigenous companies to participate in the upstream sector.