COVID-19: Global Oil and Gas Production Decline and Recovery until 2025 - Essay Sample

Introduction

The oil industries are at the heart of the global energy market that produces and supply the majority of the energy used. Like other sectors, the energy sector has been adversely affected by the COVID-19 pandemic, recording the lowest number of drilled oil wells globally (George et al., 198). The decline in the number of drilled wells marks a 23% fall from 2019's and is anticipated not to recover its 2019 level until 2025 (Eyoh & Roy, 31). For the oil and gas production to regain its level soon, there is a need for the government to ease travel restrictions, boost oil demand and prices, improved innovations, and technological advancements. According to Offshore Technology, smart drilling, incorporation of blockchain, smart oilfield, and digital transformation, among others, are some of the technological advancements the oil companies should embrace for the future energy solutions in the United States (Eyoh & Roy, 38). This paper highlights and discusses the energy solutions to the oil and gas companies in the United States.

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Smart Drilling

The United States petroleum industry maintains a high level of drilling and spending a fortune on drilling-related goods and services (Mojarad et al., 26). This considerable level of activity will continue in the predictable future. Although the United States petroleum industry continues to maintain a significant degree in domestic drilling activity, recent estimates of the volume of recoverable resources require operators to improve their ability to and increase reserves per unit effort through enhanced technology.

Smart drilling, an improvement drilling technology, will increase the rate of success, lowers drilling costs, and harmonize the processes involve in the oil and gas production. It will also ensure that equipment selection, work implementation, designing, and analysis are matched and bolstered by the experts. Therefore, integrating smart drilling will directly benefit the United States in terms of improved economic competitiveness, stable energy costs, and higher energy reserves in the drilling and service industries.

Incorporation of Blockchain Technology

The energy industry is faced with complex capital and expenditures transactions, data insecurity, accelerating adoption of connected sensors, increasingly large sophisticated information, intermediaries, and complex processes. Consequently, data has become a burden rather than an asset for the oil and gas businesses (Mojarad et al., 24). Due to a rising urgent need for the companies to validate data and control information flow, the blockchain technology set would drastically transform the fuel sector.

Blockchain has the vast capability of reducing the risk of swindles, invalid transactions, erroneous recording, better and secure fiscal deals, aided interoperability, and facilitated regulatory reporting (Mojarad et al., 28). Similarly, it will enhance all processes involved ranging from upstream, midstream, and downstream. For instance, a single permanent record of transaction and documentation from equipment maintenance scheduling to managing acreage records can effortlessly be maintained by this technology. This digital system also generates transparent activities, such as demurrage, claims management, product exchange, and distribution delivery documentation. Also, regulatory compliance, contracting, joint ventures transformation, and risk management are some of the task simplified by blockchain technology (George et al., 201). The next sector for the blockchain progress platform is the energy sector because it has brought tremendous improvement to the financial industry. Therefore, these companies' real task is to quickly take advantage of the benefits accrued by embracing blockchain technology.

Distortion of The Line Between Renewable and Fossil Fuels

The International Energy Agency (IEA) outlined a moderately belligerent scenario for the United States to cut its oil consumption by 29 percent between 2007 and 2030 (Aalsalem et al., 92). This increasing social and environmental pressure on many oil and gas companies raises complex questions about the role of these fuels in a changing energy economy and the companies' position in the societies in which they operate. Even though renewables sources are increasing, liquid fuels are still hard to be completely replaced (Mojarad et al., 20).

With the invasion of better technological know-how, renewable energy sources will gradually replace petroleum products as a flammable fuel. Moreover, other energy sources like petroleum will continually produce more erudite carbon products, polymers, and hydrocarbons, making it both fuel and raw material. Since the oil from natural materials can be chemically synthesized, the differences between fossil and renewable fuels will be finally distorted. As a result, the demand for fossil fuels in different forms will readily exist in the global markets.

The Smart Oilfields

The numerous tasks imposed on all oil operators, such as monitoring their local and remote assets, refining their productivity, and focusing on the budget allocation, will lower the output. To solve all these problems, deployment of a smart oilfield technology becomes a crucial entity. This technology will provide all important data instantaneously without interruption, thus significantly improving the productivity. Therefore, the best solution will be a seamless connection of all hardware platforms and systems across the operation fields, drilling facilities, production facilities, and integrating exploration. As a result, it will ultimately deliver useful data to a central place, permitting a better and faster decision-making process by the operators.

The major challenge facing the energy industry is global geographical relocation from the oilfield to another by contractors. Environmental conditions, frequent sandstorms, and extreme temperatures also pose additional challenges to the operators and expertise. Adopting high-capacity wireless platforms, InfiNet, which can mitigate these challenges by providing ceaseless services without the engineers' attention even after moving a drilling platform, employs Smart oilfields technology (Aalsalem et al., 87). The increasing quest for smarter sensors in the oilfields and the desire for executives to stay unceasingly connected with their treasured assets would accelerate the further adoption of wireless technologies.

Offshore Digital Transformation

The legacy systems have defined the oil industry for its functionality (Aalsalem et al., 87). As digitalization continues to transform the energy sector, organizations are searching for technologies that will balance safety, uptime, and security to utilize the power of digital innovation. Certainly, organizations will consider this to improve their facility's functional capabilities to an innovative software environment, thus extending the life of the outdated systems. Since digital complexity and operational efficiency is every company's dream, many companies are expected to embrace this transformation.

The energy sector will be working cordially to brand open and joint systems that will enhance the digital revolution (Mojarad et al., 20). With joint effort, this project initiation will be done with little disruption and a relatively low cost irrespective of its digital complexity. Exposure to substantial cost reduction and effectiveness in the industrial automation processes due to the joint effort will be a safer path for the firms.

Invasion of Gig Economy

The United States is currently establishing a gig economy, and estimates show that already a third of the working population has attained the gig capacity (George et al., 197). It is also anticipated that this working number is on the rise, as these positions facilitate autonomous contracting work. Many of those jobs do not require workers to report to the office to work.

Despite the challenging period of the market, it will not be easy for a 100 percent transition to eco-friendly energy use in the United States (Konschnik & Sarah, 1140). Internationally, emerging nations will want to exploit their fuel reserves to experience sectorial growth. The billions of dollars spent in building platforms and exploration in new energy fields will be distributed amongst manifold industry supporters (Konschnik & Sarah, 1140). As a joint organization, the oil and gas industry will become significantly more risk-hostile, with companies working on joint ventures to avoid deterioration.

The aversion to risk will filter into the organizational culture, with companies venturing into efficient operations. The industry will rely more on flexible workers to be brought in for specific projects. Technology will thus facilitate the renovation of organizations. The forthcoming automated platforms in oil industries of the United States where workers will be shifting to office-based functions will end the role of general managers because the demand for temporary and functional skill sets will take effect to device IT structures (Konschnik & Sarah, 1143).

Conclusion

As recognized in the text, the solutions of the United States oil companies in the future are majorly pegged on improved innovations and technological advancements. The current digitalization in the field of petroleum drilling and production include; smart drilling, blockchain technology, smart oilfield, and digital transformation. Besides, the invasion of the gig economy in the United States and offshore digital transformation are current trends that will greatly impact on the energy sector in the future. If well incorporated, these technology-based innovations would solve the current problems faced by the energy sector and future issues.

Works Cited

Aalsalem, Mohammed Y., et al. "Wireless sensor networks in oil and gas industry: recent advances, taxonomy, requirements, and open challenges." Journal of Network and Computer Applications 113 (2018): 87-97.

https://www.sciencedirect.com/science/article/pii/S1084804518301309Eyoh, Jeremiah, and Roy S. Kalawsky. "Evolution of maintenance strategies in oil and gas industries: the present achievements and future trends." (2018).

https://www.semanticscholar.org/author/Jeremiah-Eyoh/51218353George, Roshni A., et al. "Barriers to and enablers of sustainability integration in the performance management systems of an oil and gas company." Journal of cleaner production 136 (2016): 197-212.

https://www.sciencedirect.com/science/article/abs/pii/S0959652616001888

Konschnik, Kate, and Sarah Marie Jordaan. "Reducing fugitive methane emissions from the North American oil and gas sector: a proposed science-policy framework." Climate Policy 18.9 (2018): 1133-1151.

https://www.tandfonline.com/doi/abs/10.1080/14693062.2018.1427538

Mojarad, Ali Asghar Sadeghi, Vahid Atashbari, and Adrian Tantau. "Challenges for sustainable development strategies in oil and gas industries." Proceedings of the International Conference on Business Excellence. Vol. 12. No. 1. Sciendo, 2018.

https://content.sciendo.com/view/journals/picbe/12/1/article-p626.xml