Oil & Gas: Impact of Covid-19 & Recovery Prospects - Paper Example

Introduction

The oil and gas 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 (Lu, et al., 6). 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, 31). For the oil and gas production to regain its level soon, there is 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, 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. 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. Besides, it will ensure that equipment selection, work implementation, designing, and analysis are all aligned and bolstered by operational expertise. Therefore, integrating smart drilling with intelligence through specialist providers 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 control and authenticate information, which is essential for the success of the energy sector, the blockchain technology set would drastically transform the fuel sector.

Blockchain has the vast capability of reducing the risk of swindles, error, and invalid transactions in energy trading, better and secure fiscal deals, enable interoperability, and facilitated regulatory reporting requirements (Mojarad, et al., 28). Blockchain would enhance both the upstream and downstream processes. For instance, it offers a single permanent record of transaction and documentation from equipment maintenance scheduling to managing acreage records. Distributed ledgers also generate transparent downstream activities, such as demurrage, claims management, product exchange, and distribution delivery documentation. Similarly, regulatory compliance, contracting, joint ventures transformation, and risk management are some of the task simplified by blockchain technology (Lu, et al.,13). 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 drastically 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 combustible fuel. Moreover, other energy sources such as petroleum will continually produce more erudite carbon products, polymers, and hydrocarbons, making it both fuel and raw material. Finally, the ability of oil and gas from natural materials to be chemically synthesized will distort the differences between renewable and fossil fuels.

The Smart Oilfields

The numerous tasks imposed on all oil and gas operators, such as monitoring their local and remote assets, refining their productivity, and focusing on the budget allocation, among others, will lower the output. To solve all these problems, deployment of a smart oilfield technology becomes a crucial entity. Smart oilfield technology will be able to provide all critical data in real-time without interruption, thus significantly improving the productivity. Therefore, the ideal solution would be a seamless connection of all hardware platforms and systems across the fields of operation, drilling facilities, integrating exploration, and production facilities. As a result, it will ultimately deliver useful data and video streams to a central place, permitting the operators to make better and quicker decisions.

The major challenge facing the energy industry is global geographical relocation from the oilfield to another by contractors and assets daily. Environmental conditions such as 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 uninterrupted services without the attention of the on-site technicians even after moving a drilling platform, employs Smart oilfields technology (Aalsalem et al, 87).

The increasing demand for smarter sensors in the field and the desire for managers to stay continuously connected with their valuable assets would accelerate the further adoption of wireless technologies.

Digital transformation offshore

The legacy systems have defined the oil and gas industry for its functionality (Aalsalem et al, 87). As digitalization continues to transform the energy sector, organizations are looking for common technologies that can balance requirements for safety, uptime, and security with the need to utilize the power of digital innovation. Certainly, organizations should view this as an opportunity to improve their facility's functional capabilities and move to a new software environment, extending the life of the traditional legacy systems. Since digital complexity and operational efficiency is every company's dream, many companies are expected to embrace this transformation.

In the future, the energy sector will be working cordially with their peers to make open systems that enhance the digital revolution (Mojarad, et al., 20). A safe path to digital for these firms will expose substantial cost savings and efficiency for the industrial automation processes.

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 (Lu, et al.,7). 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 (Khan, et al, 68). Internationally, emerging countries will want to exploit their oil reserves to experience sectorial growth. The billions of pounds spent on building platforms and exploration in new energy fields will be distribute amongst manifold industry supporters (Khan, et al, 68). 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 future of oil and gas is an automated platform, with workers changing from offshore to onshore office-based roles. Generalist manager roles will die out as the demand for short-term, niche skill sets to implement IT systems and bring oil fields' online' grow (Khan, et al, 30).

Conclusion

As recognized in the text, the solutions of the United States oil and gas 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. 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/S1084804518301309

Eyoh, 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/51218353

Khan, Wazir Zada, et al. "Oil and Gas monitoring using Wireless Sensor Networks: Requirements, issues and challenges." 2016 International Conference on Radar, Antenna, Microwave, Electronics, and Telecommunications (ICRAMET). IEEE, 2016. https://ieeexplore.ieee.org/abstract/document/7849577/

Lu, Hongfang, et al. "Oil and Gas 4.0 era: A systematic review and outlook." Computers in Industry 111 (2019): 68-90. https://www.sciencedirect.com/science/article/abs/pii/S0166361519302064

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