The oil and gas industry is more efficient than ever

Looking ahead, industry remains cautiously optimistic as prices start to rise and the Industrial Internet of Things (IIoT) slowly makes its way into the industry.

By Kevin Parker February 8, 2017

If you like silver linings, know that engineers responding to a recent survey believe oil and gas industry operational efficiency did improve amidst the last two years’ cost cuts.

The study, executed by Oil & Gas Engineering and sponsored by Trelleborg, also found that the biggest stumbling block to new technology and other type projects are installation, implementation and commissioning costs. The notion that software implementations cost too much has helped lead to many interesting developments, from intuitive user interfaces to the cloud.

Nearly half the respondents said their workplace facilities were highly automated, with only 12% of respondents saying their facility was not automated.

The nearly 300 survey respondents were drawn from a sample selected from Oil & Gas Engineering readers, with an additional sample provided by Trelleborg. The margin of error for the survey results is +/-5.7% at a 95% confidence level. 

Money and technology

The downturn in oil prices came as a surprise to many, the survey reports. Respondents were witness to hiring freezes and layoffs. They are looking ahead, though, to a year 2017 in which oil price, they believe, will rise to about $60 a barrel. These expectations are very much in line with the estimates discussed in the 2017 Industry Outlook feature in this edition of Oil & Gas Engineering.

Asked about their familiarity with the Industrial Internet of Things (IIoT), readers said they were familiar, either a little or a lot, but either needed or wanted to learn more. About 7% said they were already engaged in pilot projects.

About 65% of the respondents said they were involved in the upstream sector of the industry, while another 36% identified themselves as employed by engineering, procurement, or construction contractors (EPCs). 

Suppliers pay heed

Related as well to the recent industry downturn is the fact that three in 10 respondents said they have observed improvement over the past two years in their suppliers’ negotiations on cost, technology and product availability, responsiveness and ability to provide alternative solutions.

Respondents also said they want a broader selection of alternative solutions and more technical support, which certainly rings true given shortages in technical skills in many facilities. Suppliers can step into the breach by offering services, and they have been. 

A majority of respondents said that they are part of organizations that prefer to work with a single vendor and that they would rather spend money up-front on a good product and not assume they will be able to upgrade later.

The challenges respondents see to resurrecting "shelved" projects and recharging innovation are installation and commissioning costs (56% of respondents), the extended lives of current facilities (43%), and drilling and well construction costs (38%).

We hope you enjoy this edition of Oil & Gas Engineering.

Kevin Parker is a senior contributing editor to Oil & Gas Engineering magazine.

Original content can be found at Oil and Gas Engineering.

Author Bio: Senior contributing editor, CFE Media