The oil and gas industry is falling victim to the same mistakes, a new report has said.
The majority of senior oil and gas professionals (56%) feel the industry is repeating past transgressions in the current downturn and have concerns regarding the haemorrhage of skills and lack of efficiency, according to the latest DNV GL report.
The research, which surveyed 921 sector leaders, also found 73% of respondents were preparing their company for a sustained period of low oil prices.
DNV GL chief executive for oi and gas, Elisabeth Torstad, said: “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.”
A total of 61% of respondents were confident operators would push ahead with the standardisation agenda – up from 52% in 2014.
Nearly half (49%) said their company was taking a long-term approach to innovation and R&D. However, nearly one in five companies (18%) don’t have a strategy in place to maintain innovation.
Firms credited low oil price (63%), weak global economy (42%), uneconomic gas prices (21%) and growing regulatory burden (11%) as the main barriers to growth this year.
Torstad added: “Innovation and collaboration are even more important in this current price environment. It isn’t just about finding the breakthrough technologies – although that’s important too – it’s also about making things simpler and more efficient and ultimately helping the industry to safely cut costs.”
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