Innovate or Fail – Your Oil Industry Predictions

In January 2016 we asked for your predictions on the future of the oil and gas industry. In the first of two papers, we report on what you said about the oil price, the mood of the industry and its longer term future. A common theme throughout was the need for the industry to change – attitudes, working practices and business models. Innovation is essential – cost cutting is not enough.

Download the full report here.

As far as the oil price is concerned, you were broadly in line with the rest of the market, though a bit more pessimistic about a rise than many of the banks were (see report for comparison).

WBC Oil Price 2016 Survey

There was a clear view that external forces – geo-politics, OPEC decisions, macro-economics – would drive prices far more than any actions or innovations from the industry. And in the short term, the mood was overwhelmingly pessimistic, in particular compared to last year:WBC 2016 Survey_Optimism

Longer-term, though, confidence seemed to return. Indeed, a significant minority saw a return to high profits within 3 years; but the most widely held view was that oil and gas would remain a significant industry but with reduced profitability:WBC 2016 Survey_futureshape

Many of you put forward ideas on how best to manage for the future, with several observations that without real change, the industry is unlikely to thrive again – indeed, some talked of oil companies having their “Kodak” moment, unable to see that the world has changed.

What does this mean for careers in oil and gas and how people are managed? In the second part of our survey, published in March, we will look at what you said about skills and career development in the “new order”.  As always we welcome your thoughts.

Download the full report here

Comments

  1. Another interesting survey analysis from Angus. It again highlights for me that the oil vertical (gas is another matter) seems locked in a bit of a time warp. “The oil industry will remian a significant force in the world , but no longer generating huge profits for the next 20 years” response above only seems to highlight this. Again, not sure if it applies to gas industry which might go the other way, replacing oil in a number of applications. A question to us all (I suppose) in a world of changing transportation fuels in particular, is shouldn’t the oil industry be focussing more on the fact that oil leads to almost every item (forget fuel for now) we use and rely on in our “developed” economies (consider cell phones, tablets, even some clothes). Perhaps, we need a more major rethink, not just in terms of business model and management but lateral thinking (showing my age here) to develop new real strategies and focus for the uncertain future.

  2. Javier Lopez says:

    O&G will only survive if it can turn CO2 from a problem into a solution. The industry must find a way to deliver value without damaging the environment or else the duo of “distributed solar-electric mobilization” will wipe it out of the map in less time than we think it will.

    Plus, we must change our attitude. It is not just Kodak, think about retailers vs Amazon.com, taxi drivers vs Uber, utilities vs distributed solar and car dealers vs Tesla, just to name some examples.

  3. My predictions for the oil market is less fracking companies those fracking companies that survive will depend on technology.I think the long term prospects for the British Oil industry is very good if horserhill in surrey becomes another Wynch Hill farm and i think Hurricane Energy drillling in the North sea could be a very good investment.
    I do not see that the combustion will go away other night and i think it is highly likely that green tech will need time to establish itself I can see solar technology and use growing and i can see the technolgy of Australian Carnigie wave energy doing very well, but i do not see the death of the combustion engine in my life time I think Australia could become a major oil producer and that will be bad news for Saudi Arabia and Russia.Russia however is much more mineral rich than Saudi Arabia and its Uranium assetts could become become very important for Russia.I can see the shares of medium size oil producers going up and the shares of majors going down.

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