PISTA BLOG#04 : REPORT-THE WORLD WILL ALWAYS NEED OIL & GAS!!

OIL'S RESOURCEFULNESS ISN'T GOING TO VANISH SOON.....

The Oil Industry is bouncing back after the pandemic, facing newer challenges

 In the past year, the impact of the COVID-19 Pandemic has been evidently felt in the Oil and Gas Industry. While some companies had to let go of Employees other had to close down operations. The travel restrictions meant that people had to stay home, restrict their activities, and in most cases had to avoid travel altogether.

Around this time last year, when most cities began shutting down, a barrel of oil was priced at $25. The price stooped even further during the early months of the pandemic. As of July 30, 2021, it is back up in the $65-70 range, and the industry experts believe that this range will be sustainable. Most companies believe that it’s a lot better now than last year, but fewer still know that the oil industry isn’t out of the danger yet.

COVID-19’S IMPACT

Several companies closed in the past year because of the pandemic. Other companies stayed in business but had to let many employees go. Representatives of many O&G companies say that it was indeed a tough time for them.

 “We were losing money and had to borrow money to stay in business, and that’s hard. We were trying to keep our debt down … We’ve all had salary reductions and benefit reductions, so it’s affected all of us, but we’re fortunate that we were able to keep people employed.”- says a spokesperson from a reputed American Oil and Gas Company.

As the global air traffic came to a halt, the fossil fuel industry took a very big hit. Consumption of petroleum products globally dropped to its lowest level in decades (in America, falling by 3.4 million barrels per day by April 2020, according to the U.S. Energy Information Administration.)Last April, the price of crude oil was down to around negative $35 in the U.S., according to EIA, and in 2020 oil production fell by 8% and natural gas by 1%.

ROLE OF GOVERNMENTS 

The Leadership in most countries has vowed to reduce the use of fossil fuels. Some countries have already started direct funding to accelerate INNOVATION, COMMERCIALIZATION, AND DEPLOYMENT of clean energy technologies and infrastructure.

This push to transform the use of natural gas and crude oil products would “essentially” put most oil companies out of business. However, a quick and hurried move towards alternative energy sources is still a daunting task and it is an accepted fact that the long-term growth of many countries is directly related to their access to reasonably priced energy consistently.

And in the oil and gas industry, it’s safe to say that  “nothing very drastic happens immediately” and we must be optimistic about the future of the oil and gas industry as it bounces back from the pandemic, though a lot of it does, depending on the effect of the 3rd wave, Governmental policies and many other factors.

Still, it is safe to say that the demand will continue to grow as people start going out again. Since the shutdown has been for a long time, we can be sure that many would want to get out and move around, many will start flying and driving again. We are going to see demand grow, and we could see some prices spike a little bit as well.

However, the general view remains: We’re still going to need to drive cars, trucks, buy fertilizer for the farms, use fuel for the tractors, and the transportation services that deliver agricultural products to markets — WE WILL ALWAYS NEED THAT!

THE WAY FORWARD:

The global offshore O&G Industry workforce consists of hard-working men and women who have the grit, determination, and know-how to continue to advance. There are so many products from petroleum and natural gas — thousands of products that we use every day, and that’s not going to be easy to replace.

 It’ll be interesting to see how the oil industry progresses in the next 10 years with new technology, as we know with certainty that THE WORLD WILL ALWAYS NEED OIL.