2019 is likely to see continued growth in oil demand despite the fluctuation of prices and energy demands withstood by the industry throughout 2014-16. These fluctuations occurred due to a variety of reasons – a large one being the widening differentials between supply and demand. But with energy consumption rapidly increasing in fast-growing and populated countries such as China and India, BP Power predicts that almost 70% of the increase in primary energy will go towards the power sector along with an increase in demand for oil and natural gas.
There is financial abundance in the future of this market as dry natural gas production is forecasted to average 90.2 billion cubic feet per day (Bcf/d) in 2019, which is an increase of 6.9 Bcf/d from 2018 and will continue to rise at a steady pace in the coming years. With production on the rise, an increase in energy investment by firms and government funding and growing global demand, we predict great prospects for those working within oil and gas. But what trends and potential challenges can oil and gas industry leaders expect to face in 2019?
Navigating oil supply and demand
The Organisation of Petroleum Exporting Countries (OPEC) is an organisation of 14 nations including three of the top ten exporters of oil: Saudi Arabia, Iraq and Iran. As of 2017, OPEC is estimated to produce 48% of global oil production and own 82% of oil reserves globally giving them major influence oversupply and oil prices within the industry. In some countries, the supply disruption is directly related to geopolitical issues and should be accounted for – an example includes the US’s sanctions on top exporters, Iran and Venezuela. If countries within OPEC were to suffer economic collapse, then the oil supply could also suffer. In order to combat this, it’s wise to keep a reserve in the case of shortage.
To further combat the natural unpredictability within this sector, key leaders should address the issue of a potential over or undersupplied market and consider alternative sources of energy, allowing for pre-planned solutions to mitigate future risks through data analysis. The future of oil prices seems positive, however as prices will average to be $60-70 per barrel until 2020 should the demand stay consistent.
Increase in production of natural gas
The increase in demand for natural gas is supported by the expansion of liquefied natural gas (LNG) which is more environmentally friendly than other fossil fuels — because of this, natural gas is forecast to surpass coal within ten years to become the second-largest source of fuel worldwide. This is further supported by the demand for LNG in the major world and energy influencer that is China which will see the global trade in LNG double by 2040. This will undoubtedly shape future trade flows, business models and global prices.
The consequences of this can be seen in EIA’s February Short-Term Energy Outlook report which suggests that significant growth in natural gas production will put downward pressure on gas prices in 2019. They also predict natural gas production will be equal to 90.7 billion cubic feet per day (Bcf/d) in 2019, which is an increase of 7.4 Bcf/d from 2018 and is predicted to rise to 92.0 Bcf/d in 2020.
The rise of digital technologies
Digital technology is rapidly increasing and integrating with many areas of life — one of these being the oil and gas industry which relies on ingenious innovation to shape the future of energy production.
Technologies such as AI, analytics, robotics and blockchain can speed up and revolutionise the supply chain as well. Accepting change and embracing the positives of technology will see oil and gas companies grow and flourish in 2019.
If oil and gas industry leaders leverage advanced digital technology, it can open new opportunities to streamline industry processes. Examples of this include predictive maintenance, the use of drones to inspect offshore platforms to improve upon health and safety and data analytics to optimise production and calculate necessary reserves. Digital solutions and reports can also more accurately predict and report on trends and changes within the industry, allowing for efficient digital solutions which are likely to sustain lower oil prices overall.
It’s important for industry leaders to cultivate technological talent within their staff as the industry is, aside from traditional disciplines of subsurface and surface engineering, also becoming populated with software engineers and data scientists. However, those in all levels and roles of work within oil and gas can benefit from progressing their technical knowledge and integrating technology into their workplace practises.
Oil and gas jobs with TRS Staffing Solutions
There is an ever-increasing demand for, and various growth opportunities within, the oil and gas industry so there’s never been a better time to work in oil and gas than in 2019. At TRS Staffing Solutions, we’re on the lookout for driven and talented candidates to work in oil, gas and chemical engineering roles globally. Interested in jobs which make an impact on the world and have brilliant prospects? Then apply for your next role with us today.
Alternatively, if you’re looking for top candidates with proven talent to fill your next vacancy in oil and gas, confidently recruit with TRS Staffing Solutions. Contact us to see how we can help you today.
15 October 2019
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