Welcome back to the rollercoaster!
I have worked in this industry for nearly forty years and in that time, like so many of you, I have seen it ride the peaks and troughs of waves extreme enough to rival those facing me in the North Sea all those years ago. And here we are again, back in the doldrums, with a downturn fueled by a global oversupply coupled with weakening demand. The oil price, having rallied in February, is heading down again, the US rig count, which many consider an accurate harbinger of the state of the industry, has dropped more than a third since the end of 2014, and the inevitable closures and mergers of oil and service companies have begun.
Is this the same as all those other waves in the industry cycle? Some observers feel that it is different this time, and we might be in for a long haul back up. There have been thousands of job losses and companies appear to be cutting back faster and deeper than in previous downturns. Production is leveling out and is expected to decrease in the US, which was not the case in the 2008–09 recession. The world security situation does not inspire confidence, either.
In some ways, however, downturns can be beneficial; a pared-down industry is leaner and more productive. Many believe that those who manage to ride out the storm will be tougher and more efficient, making better use of the high-end technology, such as ‘intelligent oilfields’, available to them. Choices will have to be made, and it is to be hoped that somehow the industry will continue to invest, particularly in technology and also expertise. We need to learn from previous crises, and remember that knowledge – and the people with it – is our greatest asset. Lose that, or fail to pass it on, and this downturn will be much harder to climb out of.
The pundits are finding this particular cycle hard to predict. Enjoy the ride!
Jane Whaley
Editor in Chief
