The Indispensable Role of Oilfield Services and Equipment Suppliers
Therefore, operators need to adopt a radical dual approach and in short term, they must take steps to protect Oil Field Services and Equipment companies and enable industry supply chains to continue operating. OFSE enterprises today are facing a business environment which is relentless than in any previous downturn. As a consequence, numerous leading suppliers have filed for bankruptcy protection.
The oil and gas industry - one of the largest industries in the world, generating an estimated USD 3.3 trillion in revenue annually is classified into mainly three segments such as upstream, midstream, and downstream. Oil is pivotal to the global economic framework, particularly for its largest producers which include countries such as the US, Saudi Arabia, Russia, Canada, and China.
Upstream, Downstream and Midstream
Based on the classification, the upstream also known as exploration and production enterprises find reservoirs and drill oil and gas wells, the midstream enterprises transport oil and gas from the wells to the refineries and, lastly, the downstream organizations refine and handle the sale of the finished products. While the drilling enterprises contract their services to Exploration & Production companies in order to extract oil and gas, the well servicing enterprises on well sites conduct perform construction and maintenance activities.
Oil & Gas industry influencing decision making for other important sectors
In the Indian economy, the Oil and gas sector is not only one among the eight core industries but it also plays a significant role in influencing decision making for various other important sectors of the economy. Since our country’s economic growth is closely affiliated to its energy demand, the need for oil and gas is predicted to grow high, thereby making the sector more favorable for investment.
According to recent reports, the global oil field equipment market size is anticipated to reach USD 144.43 billion by 2027, growing at a CAGR of 2.8 percent. Major factors driving the growth of this market include the rise in exploration and drilling activities for oil across the globe and the redevelopment of mature oil wells.
The digitalization of oil and gas refineries, pipelines, exploration sites, and infrastructure are made possible with the help of many advanced technologies such as Artificial Intelligence, the Internet of Things, and analytics and this has enabled the oil & gas enterprises to collect all the respective data on a single platform. Furthermore, intending to increase productivity, reduce risks and costs, oil and gas companies are investing largely in emerging technologies.
Improving workforce safety and reducing environmental impact
For example, in the year 2019, Imperial and Alberta Machine Intelligence Institute (Amii) got together to build ML capabilities and AI for the oil and gas industry intending to improve the safety of its workforce and reduce environmental impacts. Likewise, in December 2019, Dataiku Technology and Schlumberger collaborated to develop and deploy AI solutions across oil and gas operations.
Understanding the importance of gas-based economy
Gradually moving towards a gas-based economy, Assam industry minister Chandra Mohan Patowary recently said, “We understand the importance of gas-based economy in welcoming the new wave of industrialization. Our relentless endeavour to connect Assam with the National Gas Grid Pipeline has yielded results. Baruni to Guhawati Gas Pipeline is under construction by GAIL and likely to be completed by November 2021. Expansion of Numaligarh Refinery 3 to 9 MMTPA (million metric tonnes per annum) with a 1400 Km Crude oil pipeline from Paradip Port to Numaligarh with a total project cost of Rs 22500 crores is another important milestone for Assam”.
“During the summit, 207 investment agreements were signed worth Rs 79000 crores many of which are in various stages of implementation. Post-Advantage Assam, the State has attracted public and private sector investments over Rs. 52000 crores. While the public sector investments are in tune with nearly Rs 44600 crores, we have also been able to attract over Rs. 7800 crores of private sector investments in the Industrial sector. While Petroleum and Natural Gas, Aviation, Logistics and infrastructure some of the sectors where public sectors invested, the private investments are majorly in sunrise sectors like Pharmaceutics and FMCG.”
Given the thrust towards emerging as a gas-based economy, India is taking giant strides in the direction through government policies and industrial reforms.