The energy industry was already in flux prior to the spread of COVID-19. At the beginning of 2020, weakening economic growth, political risk and intensifying trade tensions were predicted as the biggest challenges that the industry would face. As well as the operational and financial impact to the sector itself, lockdowns across the globe have caused the demand for oil to plummet, a surge in unemployment and a massive decrease in consumer spending.
As a result, there has been an increase in the cost of production within the UKCS and a decrease in the number of projects approved, tightening budgets further.
Last week, energy companies from across the world logged on to the Topsides UK 2020 virtual conference. With key stakeholders from operators, supply chain, SMEs and consultants in attendance, there was one main question on everyone’s lips: how do we survive and thrive today whilst preparing for our future?
In this blog post Add Energy’s Sales Manager, Andy Gardiner talks about his key takeaways from the event, highlighting future themes and discusses the steps companies can take to safeguard the future.
If you’re not fast, you’re last
“In today’s fast paced world, it’s important that we continue to research the latest technological advances and assess whether they are relevant to our company in order to remain competitive and survive.
“With the use of 3D printers becoming increasingly popular, some operators are purchasing in-house kit to print materials instead of purchasing from suppliers, creating their own “digital warehouse”. This approach will save time and money for operators, whilst providing the opportunity to supply consumables, as well as safety critical equipment quickly at a lesser cost using materials less harmful to the environment.
“This latest trend is a double edged sword for the industry - although this will save money for the operator, it will cause a decrease in sales for their suppliers. As suppliers, we must take an agile approach to a solution, deliver a quality service and be as cost effective as possible by looking at alternative commercial models.”
You’ve got to spend money to save money
“When times are tough and budgets are tight, companies are more inclined to put a stop to all spending within the company. Although in some cases this can often be a necessary evil, in most it is a precautionary measure that is costing their company money.
“Investing in innovative approaches can often a short term cost that delivers a long term saving. For example, the use of data driven RBI can allow for reduced exposure during a turnaround as well as optimized maintenance and inspection costs by reducing the time taken to carry out a turnaround. By investing into this approach, operators are able to save money, reduce downtime and improve safety in the long run.
“The continued focus on cost control has created a tough environment for suppliers so it remains crucial for companies to think differently, looking for opportunities to de-risk their solutions, to establish a proof of concept that cannot be refused.”
Collaboration is key
“In order to achieve all of the above, we must work together. We’re at the point of establishing a new normal, both in regards to commodity price and the way that we operate.
“As these challenges and pressures are becoming increasingly prevalent, it’s important that we continue to talk to each other, bounce new initiatives off of each other and share best practice. And forums like Topsides 2020 is key to this type of communication, knowledge sharing and learning.
“Following what could be argued as one of the industry’s toughest years, we need to discuss new technology and learnings, be honest about lessons learnt and support each other as we continue to tackle these unprecedented times.”
To learn more about how Add Energy can help operators leverage new technology and best practice, click here.