With reports increasingly suggesting the current offshore downturn will turn out to be worse than the carnage of the mid-1980s, questions are being raised over the sector’s ability to learn from past mistakes.
A majority of senior oil and gas professionals – 56% – believe that the industry is repeating the mistakes of previous downturns and have concerns over the loss of jobs and experience and lack of efficiency, according to a new report published today by class society DNV GL.
A new phase of cost management is needed, as nearly three quarters (73%) of senior oil and gas professionals globally are preparing their company for a sustained period of low oil prices.
According to A New Reality: the outlook for the oil and gas industry in 2016, a DNV GL report based on a global survey of 921 senior sector players, cost management is the top priority for 41% of respondents in 2016.
Elisabeth Tørstad, CEO of DNV GL – Oil & Gas, commented: “With the low oil price, the industry has taken painful short-term cost-cutting measures by reducing the capex and headcount and squeezing the supply chain. Although 74% say they achieved their cost-efficiency targets last year and 65% believe the industry will be successful in cutting costs in 2016, not all parts of the sector have been able to achieve lasting lower cost levels during downturns. To prevent repeating past mistakes, real change is needed now – cutting complexity, increasing collaboration and driving standardisation. These measures will enable the industry to adjust to the new reality and put it on a sustainable growth path for the long-term.”