Oil field services, engineering, and equipment companies must respond decisively to the cyclical downturn.
Oleg Mikhailov on Disruption in the Oil Field Services Industry
Industry analysts anticipate that low oil prices will cause energy companies to cut investments for new projects by at least 25%. Overcapacity has emerged in most heavy asset markets, while volumes have collapsed for many well services firms, particularly in North America.
How do these companies respond? In a world of razor-thin margins, successful oil field services companies are establishing cost-competitive operations and rationalizing their asset bases. They’re making targeted technology investments that deliver near-term advantages. They’re finding new ways for contractors and clients to collaborate more effectively and discovering mutual efficiencies that eliminate unintended costs and complexities. And they’re examining acquisition opportunities and exploring innovative business models that challenge the historic boundaries of the sector.
Operators and suppliers face new challenges as the subsea oil and gas industry matures. To continue to prosper, they must take action in these areas: