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What’s the outlook for the oil and gas sector in 2018?

19 Dec
Posted by: Nathan Whitcombe

The oil and gas sector is one of the most prominent industries in the world. Since the Industrial Revolution, both oil and gas have played a huge part in bringing power to people all over the world, and shaping modern life as we know it. To date, the sector has paid more money into the UK’s Treasury than any other industrial sector, totalling £8.3bn, has provided jobs to hundreds of thousands of people, and also provides 76% of the UK’s power. As a resource that is essential almost everywhere in the world, the production and use of oil and gas remains vital as we move into the 21st century.

Despite this, the sector is also changing. The rise of renewable energy, new technologies, and new methods of extracting hydrocarbons from ever-more elusive sources have all impacted the way in which business is done, as has the fluctuating supply and demand in areas like Saudi Arabia and America. The market is opening up, rebounding from the price crash of 2015, and investment in areas like complex capacity is projected to increase over the years.

For anybody working within the sector, it pays to keep on top of the changing market to better understand how business - and job opportunities - will change in the future.

 

Oil

Over 2017, the sector recovered from the slump of previous years, with businesses working to decrease their cost bases with the aim of improving efficiency in a fluctuating and unstable market. Though the oil market remains unstable, the average Brent oil price was one third higher this year than in 2016, giving positive signs for the market in 2018. There is currently a higher supply than demand in the market- as Brazil has emerged onto the global scene as an oil producer, competing with America and Saudi Arabia and resulting in consistently low prices for oil over the past few years. However, investment is starting to pick up again, despite the uncertainty that will come with Brexit, and with an increasingly volatile political climate.

Investor confidence is returning to the industry, especially within the UK. In the first half of 2017, almost $6bn was invested in upcoming projects and in assets, and this trend is set to continue into 2018 as the demand for oil increases. However, the market is proceeding cautiously, and the future uncertainty means that there has been a surge of interest in shorter-cycle projects as opposed to longer-term ones; therefore, expect more short-term job opportunities to emerge in the market over the coming months. Indeed, $620bn worth of projects have been deferred until after 2020, with no indication as to whether the market will support investment in more complex, long-term projects in the coming years.

 

Gas

However, if oil is struggling slightly, gas is enjoying a profound upswing in popularity: an upswing that is almost certain to continue into 2018. With the boom of renewable energy has come an increased focus on low-carbon energy, and this has resulted in the rise of natural gas as a power generation fuel, overtaking coal as a source of energy for the first time: indeed, it’s currently growing more quickly than oil or coal, and as a result there will likely be increased demand for skilled engineers to innovate the ways in which it is extracted, refined and exported throughout the next few years.

 

The future

What about technology? The rise of renewables, new technologies and even electric cars are all set to have an important bearing on future demand for oil, as the world makes the switch to a more environmentally-friendly outlook, affecting the fuel mix as a result. Better software and technology, combined with more advanced mapping techniques, have made the oil and gas sector much more efficient. This has been enhanced by the introduction of drones and equipment monitors, as well as the use of advanced analytics for predictive maintenance - which can decrease maintenance costs by up to 13% and gives engineers the chance to repair equipment before it breaks down.

These same advancements have also paved the way for change in the sector, influencing everything from the way in which oil and gas is delivered to the market, to the use of analytics to gain a better understanding of consumer habits, which can then be exploited for digital marketing purposes. These trends are set to remain throughout 2018, with the rise in popularity of technology paving the way for the increased use of drones, sonar to map the seabed, and increase the efficiency of extraction, production and transportation in the sector; this rise in popularity will undoubtedly correspond with a surge in demand for software and technology-based roles in coming years.

 

The market is changing

Though the oil sector is currently struggling with surplus production, the market remains dynamic, with new markets opening up and a variety of short-cycle products being launched. The gas sector is growing- and predicted to grow more in the coming years, augmented by the switch to a more low-carbon energy source, whilst technology promises to revolutionise the way in which the industry operates.

One thing’s for sure: for people in the oil and gas sector, 2018 promises to be a year of changes.

At Primat, we take pride in keeping up to date with the changing market, so we can match the best talent to the best vacancies around the world. Find out more about what we do in Oil and Gas here, or have a look at our current jobs here.

 

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