Wherever you are in the world and whatever industry you work in, you never have to go far to find someone with a strong opinion about the state of the Oil & Gas market. Some will predict that the industry will be gone in 10 years thanks to wind turbines and others will argue that, without increasing production, the turbines themselves can’t be produced.
As such, it’s incredibly tricky to make any realistic predictions about what will happen in this tumultuous market but, after speaking with people around the world in the sector every single day, I’ve had a go at providing my forecast.
Here’s what I think 2019 has in store for the Oilfield Services market.
1. Oil prices continue to rise, topping $70/bbl and stock will bounce back
If 2017 saw the market stabilise and 2018 started to see optimism, 2019 looks set to be the year that oil and gas starts to take off again.
I’m not predicting that we’ll be hitting the dizzy heights of the $100/bbl pre-crash mayhem, in fact that may be a little too steep an increase. We’re seeing an increase in the number of offshore projects being approved but the increase in oil price likely won’t just be attributed to brand new projects being started.
Instead, operators are looking to get the most out of their existing assets, trying to maximise the lifespan of rigs in locations like the North Sea. This desire for longevity has also seen companies invest more heavily in the latest technological solutions.
2. The Popularity of Unconventional Completions Continues to Rise
This one follows on from my previous point well. In fact, the ability of companies to utilise technology to maximise the return from non-standard well sites is a direct contributor to the optimism surrounding the industry and the oil price at the moment.
We have recently seen the release of new, exciting technologies which aim to optimise fracture stimulation, such as Tendeka’s FloFuse and DynaEnergetics’ DS Trinity perforating system, yet already I see a slightly different trend for 2019.
The growing popularity of Dissolvable Frac Plugs has become apparent; the likes of Halliburton, Innovex Downhole Solutions and Packers Plus are leading the way when it comes to developing such unconventional completions technology, and the sophistication of the technology involved in this development is allowing operators to have more control over, and learn more from, wells that even 20 years ago might have been inaccessible. Even as I was writing this BHGE introduced their newly developed lightweight frac plug!
We’ve long seen the shale boom in the USA lauded, but 2019 may be the year unconventional completions truly goes global, led by innovative companies at the forefront of the industry developing these exciting new solutions.
3. Well Interventions will Rejuvenate the North Sea Market
If the shale plays in the USA represent the latest era of oil and gas exploration, then the offshore North Sea market represents times gone by. Whilst new sites are still being discovered, the North Sea is seen as mature oil field and is an area that decommissioning companies are beginning to focus their efforts on as resources start to look as though they may be dwindling.
However the end may not be as near as some say, as the latest well intervention technology provided by businesses like Canada-based Blue Spark Energy as well as Altus Interventionand Paradigm from the UK are helping to reinvigorate mature wells.
It’s predicted that 20% of existing wells in the North Sea have more to give, and if that’s the case then operators will be leaning heavily on well intervention companies to maximise their investments.
4. Artificial Intelligence (AI) and Digital Technology Reach the Oilfield
It’s being discussed in relation to every single other industry, but 2019 is the year that AI will really start to impact the oilfield. Discussions of a new, digital, oilfield have been taking place for a number of years but it seems that the technology may finally be ready for widespread implementation this year.
Just as in other industries, the implications of AI could be far-reaching, but just one use for the technology could be in the surveying and exploration phase – where AI enabled tech has the ability to interpret and analyse vast amounts of data, allowing operators to make faster and better-informed decisions about where they want to drill.
With the O&G AI market expected to reach a value of $3B by 2022, it seems as though the companies, operators and oilfields that adopt the technology sooner rather than later are the ones that will reap the benefits.
Those are my 4 outlooks for this year, based on the conversations I’m having with companies, clients and candidates from around the world in the OFS space. Broadly speaking, I think technology is going to have a more and more significant part to play in production (as well as in ensuring safety), but the signs are positive that 2019 will be a great year for the industry.
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