Industry Trends & Challenges

Oil & gas companies face a number of opportunities and threats to their businesses. The companies best placed to deal with a challenge will consider it as an opportunity, whilst those poorly prepared will face the challenge as a threat.

Before the COVID-19 crisis, there were several trends that chemical companies were responding to. As the industry recovers from the pandemic some of those trends remain, and some new challenges have emerged. Those include:

• an ageing workforce
• competition from alternative sources of energy
• digitalisation of operations
• growing cybersecurity concerns
• meeting sustainability goals
• rising production costs
• securing future oil and gas supply

Fast growing technologies such as machine learning and predictive analytics are opening new possibilities for oil & gas. Companies that embrace these new technologies will become more efficient and sustainable.  Looking ahead, companies are investing in leading research in converting crude oil directly to chemicals or hydrogen as a possible energy source for the future.

What is the current position of the oil & gas industry?

The oil & gas industry’s outlook in 2023 is influenced by a mix of factors. On one hand, there has been a gradual recovery in demand as global economies rebound from the COVID-19 pandemic, leading to increased energy consumption. However, the energy transition and ongoing geopolitical tensions will continue to play a vital role in shaping the sector’s prospects in 2023.

Additionally, technological advancements and cost efficiencies are transforming the industry, prompting companies to adopt innovative approaches and diversify their portfolios. Furthermore, oil prices remain volatile, making strategic adaptation to the evolving energy landscape crucial for long-term sustainability and competitiveness in the sector.

Sustainability and decarbonization will remain a key concern in 2023. Many oil & gas companies are anticipated to boost their investment in R&D capabilities and exploit developments in decarbonization and recycling technology.

The aging workforce is a big issue in oil and gas because the sector is set to see around half of its existing workforce leaving over the course of the next ten years or so. Additionally, the pandemic and ensuing oil price crash resulted in thousands of job lay-offs in the industry.

Companies need to make sure they recruit, train, and most importantly, keep their young new recruits in the industry. However, hiring new recruits in the middle of an industry wide sustainability transition will not be easy, companies will need to battle the negative reputation the industry has as an employer, with fierce competition from other industries suffering from a labour shortage for the best recruits.

Technology