Improving Oilfield Services for Higher Revenue

Since the fall in oil prices in 2014, oil companies have been recovering at different rates. While some have rapidly improved, others are still lagging.

The oil boom that occurred from 2017 – 2018 was another missed opportunity for many oil companies. However, integrated and North American, also Oilfield Service companies saw their revenue increase.

So, what made North American Companies different?

Companies in North America succeeded because they adopted a financial structure that enables them to record unusual growth in profit and revenue.

Deloitte Canter for Energy Solutions reported a study conducted among 70 companies in the oil and gas industry between 2014 and 2019. The result of that survey showed that average margins declined from 15% to figures less than 5%

Also, the revenue recovery observed in the North American companies was attributed to geographically dispersed offshore operations that were based on long term contracts and their technological abilities.

The factors that contributed to their success were summarized into three key points as a structure that other oil and gas companies should adopt. They are:

1. Prioritizing services
The services offered by companies in the industry must be prioritized based on the cost implications. Services with lower cost should be given top priority as was observed among the companies in North America.

2. Develop new products for existing markets
The market for oil may be diminishing but it is quite different for natural gas. The potentials are changing and oil companies must follow the trend to improve their revenue.

3. Internal cost and Business Processes
Improving and redesigning the business processes through technology is important for companies in the industry. Technology can also help minimize the cost of operations and limit cost.

Mapping out a revenue recovery strategy is important because many Oilfield Service companies are still facing the effect of poor revenue despite occasional opportunities for revenue growth.

As the companies in North America, they must also work to have more efficient internal and operational processes by using technology in Oilfield Service companies. Also, other guidelines as observed in the companies which defied the odds to grow their revenue will be helpful.

Contact Mesa Acres, Inc., for Energy consultancy services.

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How Digital Transformation Reduces The Risk In Oil & Gas Exploration

The effect of digital transformation in the oil and gas exploration industry is unprecedented.

Key Points

A whopping $4 billion was announced as losses by Shell Petroleum in 2015 after an oil and gas exploration went wrong in the Artic. Billions of dollars are lost in like manner by many oil and gas exploration companies. More.

Also, between 2013 and 2017, a total of 489 oil and gas workers were killed on the job.

This occupational health hazard also indicates that there is a need for improvement in the way that oil and gas exploration is practiced.

The implication of these human and economic problem is that the oil and gas industry has become a very risky venture.

But thanks to digital transformation that is fast changing the situation for good. Technologies such as Machine Learning and Artificial Intelligence has helped to reduce risks associated with drilling for oil and gas.

The main contributions of technology is in the aspect of decision-making, and more improved operations and processes that can make the entire oil drilling process more precise and safer.

Artificial Intelligence and Machine Learning can be applied in the following oil and gas drilling operations;

• Predicting operational outcomes
• Predictive Maintenance
• Locating where to drill using machine learning
• Replacing manual workers
• Accurate modeling
• Optimizing drilling operations

It can be applied in many other areas too. However, in the face of vast technological development in that sector, many multinational companies are yet to benefit from the potentials that technology has brought through digital transformation.

Digital transformation is the use of technology to improve business operations and services. It is a measure of how far technology has been utilized and the reality in the oil and gas industry proves that it has been poorly utilized.

The increasing awareness and market for green energy have negatively affected the oil market.

Low oil prices have been the bane of the industry in recent times. Companies in the sector are searching for a way to maximize profit and make oil and gas exploration more profitable. All these aspirations cannot come to reality if technology is not adopted.

Companies in the oil and gas drilling industry cannot afford to keep spending $150 million per oil-well drilling with just a 20% chance of success.

They need to maximize profit and limit costs now than ever before due to dwindling oil prices.

Technology will increase the chances of success and reduce the associated risks thereby restoring the lost glory of the oil and gas industry.

Contact Mesa Acres, Inc., for Energy consultancy services.

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