The oil and gas industry is experiencing a significant shift

The oil and gas industry is a very long-standing domain and critical to any country's economic growth. The industry has undergone unprecedented digitization, managing technical challenges, great political and operational risks, and exploring approaches to talent deficiency across the world. With a period of plummeting crude prices, frequent budget and schedule overruns, and greater demands of climate change accountability, the oil and gas industry has always faced several challenges.

Industry 4.0 technologies, especially the Internet of Things (IoT) and artificial intelligence, are expediting the pace of digital adoption in oil and gas. Since the year 2020 has been a roller coaster ride for the industry majorly affected by COVID-19, 2021 is anticipated to be a productive year.

Here’s a look at the top trends shaping the oil and gas industry.

Sustainability

Sustainability typically refers to carefully balancing social, economic and environmental capital in a continuously changing world. In the oil and gas industry, sustainable development should meet the needs of the global society for oil and gas cost-effectively, safely and with minimal impact on the environment using appropriate alternative energy sources. Ever since the first conference held on sustainable development in Stockholm in 1972, it has become a prevalent phenomenon across the industry.

Digitalization

Digitalization will play a key role in effective energy transition strategies in 2021 and beyond. Already, digital technologies are redefining almost every industry, and the oil and gas industry is not an exception. Advancements in technology, the falling cost of digital implementation and the proliferation of smart devices provide a real competitive edge opportunity for oil and gas companies. Digitalization has also a significant role in setting near-term emissions targets, using standardized and credible reporting and tracking accountability across the hierarchy.

Additive Manufacturing

3D printing, also known as additive manufacturing, is paving its path into the oil and gas industry. The technology has a cross-industry appeal, giving companies opportunities to expand their operations. 3D printing in the oil and gas industry helps reduce the time companies take to produce complex prototypes. As oil and gas organizations use complex machinery that must meet robust performance and environmental standards, additive manufacturing allows for innovative shapes and complex geometries lessening the number of parts, thereby lowering assembly time, reducing emission and improving performance.

Labor Costs Factors

With the increasing aging workforce, labor costs tend to vary with time. The corresponding tariffs have to be adjusted to take into account the variation in productivity levels. The issue gets complicated by the likelihood that labor costs will occur in different parts of the world depending upon where the equipment such as topsides are getting fabricated. It is in this scenario that benchmarks become invaluable in order to justify the assumptions used in estimating.

Growth in Natural Gas

According to a report, global demand for natural gas in 2019 soared by 1.5 percent compared to 2018. At the OECD level, natural gas demand was boosted by 1.9 percent in the same year, 34.5 Bcm more than in 2018. Another report from McKinsey revealed that the liquefied natural gas (LNG) market set to witness growing demand in 2020 and 2021 as new projects continue to grow capacity well beyond steady demand growth.