While price fluctuations and demand variations have been a defining component of the oil and gas industry, the changes brought about by the coronavirus pandemic have been unprecedented. Many firms are still reeling from the effects of the first wave that resulted in heightened cyclicality and mass layoffs that jeopardize the industry’s reputation as a reliable employer.
Although the demand for oil and gas products has rebounded sharply in the third quarter of 2020, there is still uncertainty looming ahead. The mounting second wave of cases amid the winter season might cause another round of widespread shutdowns. Even if the virus is controlled and the vaccine is effectively delivered throughout the world, many economies will still face halted consumer spending and business investment.
Despite the uncertainty, there are certain trends we see emerging during this time. Let’s take a closer look.
1. Oil Prices
Oil prices are expected to recover in 2021 but will be lower compared to pre-COVID levels. In the base case scenario, prices will be 4% lower, but in the event of Rystad Energy’s second-wave scenario can decrease by 7%. Oil-producing countries are expected to diversify their investments to include more renewable energy projects in the mix.
2. Investment in Cybersecurity
Increasing cyber concerns will result in many manufacturers amping up their defenses. Foreign hackers are expected to attack national energy grids using Permanent Denial of Service (PDoS) attacks and relevant cybersecurity measures are essential to prevent these attacks.
3. Investment in Technology
Despite the uncertainty, companies are expected to invest heavily in digital transformation and process instrumentation that allows managers to reduce operating costs, maintain flexibility in their operations, and optimize capital allocation.
Also read: 3 Digital Transformation Myths Debunked
4. Global Energy Trade
The growth of LNG imports and solar power will drive growth in many emerging economies across Africa and Asia. Investment in renewable energy sources is expected to grow along with traditional fossil fuel energy.
Contact Instruments is a leading process instrumentation manufacturer that’s dedicated to providing flexible, long-term solutions that increases the viability of oil and gas operations. Our products are designed to bring down replacement costs, increase the safety of oil rig operations, and minimize unplanned downtime.
Our wide product range includes electronic gauges, clipper weight indicators, overmolded custom cables, and drilling mud pumps.