2016 Year in Review
2016 was a difficult year for the oil and gas industry. It saw prices plummet to a 12-year low of nearly $26 per barrel, with the average price hovering around $42 per barrel for the year. Major industry players reported quarterly financials far below expectations and cutbacks and layoffs were the norm, as low energy prices took their toll. These struggles were due to an overabundance of supply and the historically low price of crude oil, which lessened profits significantly.
Weathering the Storm
When thinking about the past year, the old proverb “desperate times call for desperate measures” comes to mind. In order to survive these turbulent times, industry professionals have made drastic cuts, including delaying or canceling new projects, slashing head count, and deferring important investments. Although costs have dropped, responsibilities have not – departments throughout the industry are still charged with the same high expectations in terms of safety, customer service, and productivity. Simply put, they’ve had to do more with less.
In order to meet these expectations, downstream oil and gas professionals are increasingly turning to automated solutions to perform routine tasks, saving time and resources. Things such as reporting, reconciliations, and customer communications that used to take up precious staff time are all increasingly being done digitally.
Solutions Making an Impact
Oil and gas industry professionals are making the move to automate many processes as a means to save time and energy and maximize the bottom line. These processes fall into three categories:
- Customer communication. A personal phone call is always nice, but when the seconds count, we believe automation is the only way to go. A great example of this was during the Colonial Pipeline disruption in 2016. Suppliers who were using a lifting control solution were able to instantly scale back on allocations, and distribute scarce inventory to meet commitments, rather than break them. They were then able to immediately communicate the change in positions to all impacted customers through allocation viewers in near real-time.
- Greater accuracy. Manual processes that are still being performed in the industry such as calculating prices by hand, keying in data from multiple sources and producing reports at regular intervals are all susceptible to keystroke or human errors, which can be costly to correct. Automating these manual processes can eliminate errors and save time, which will more than pay for the cost of the solution. On average, the cost to both find and fix just one transactional error is approximately $126.00.
- Improved efficiency. By automating daily tasks, industry professionals are able to complete tasks quicker and avoid the potential for human error; automating routine process can be like having extra employees in the office. Now customers set up price formulas to automatically generate information, which provides instant data they can use to make better business decisions.
The Future of Automation
The oil and gas industry is constantly striving to improve processes. Current automated solutions are greatly impacting the industry and give us a glimpse of what is to come.
Industry leaders are looking into current industry processes to see where they can automate further. The next logical step after the success of automated BOL processes would be to enhance the processes of financial settlement.
Big data is another trend in the industry that needs improvement. The oil and gas industry has a plethora of data points and identifying the right data can increase efficiencies and improve productivity. The key is in developing solutions which harness this wealth of information and putting it in a user-friendly format for oil and gas professionals to be able to quickly and easily analyze and, ultimately, make better business decisions.
Above all else, these new solutions need to be developed from a customer-centric approach. Hearing feedback from industry professionals is the only way to ensure the solutions address industry challenges and meet the needs of users. The key to our success has always been the close-knit relationships we have with our customers. We don’t develop new solutions based on what we ‘think’; we base them upon what our clients communicate to us.
Though 2016 was a rough year for the oil and gas industry, there is hope through use of automated solutions. 2017 will see even more automation as the industry continues to find ways to do more with less.