Close

Search

Whitepapers

US oil and gas downstream pivots to digitalization to sustain excellence

The timely combination of US tax reforms and changes to the global bunker fuel specifications in 2020 are poised to turn US oil and gas downstream into a cash generating machine. Our Chief Economists believe the net result will be US refiners flush with cash and looking for more investments to improve their bottom line.

Download full whitepaper

Whitepaper summary

Written by: Stephen George, Mark Routt and Bradley Ford.

The timely combination of US tax reforms and changes to the global bunker fuel specifications in 2020 are poised to turn US oil and gas downstream into a cash generating machine - full conversion refining margins are set to soar and refiners will keep even more of their earnings. The net result will be US refiners flush with cash and looking for more investments to improve their bottom line.

The reduction of the federal corporate tax rate from 35% to 21% brings US total corporate taxation more in line with other large economies and addresses a key concern about American competitiveness in the global economy. Coupled with generous allowances and accelerated depreciation, the lower rate of tax will boost investment returns on capital projects, and expand the universe of projects able to meet corporate hurdle rates. It leaves companies with the cash needed to fund their projects, to implement smartly and to deliver a quick payback. We believe the US tax reforms will act as a springboard to launch IIoT (Industrial Internet of Things) and Industry 4.0 technology investments that will position US hydrocarbon companies at the forefront of the next industrial revolution; the digitalization of manufacturing.

In the near term, generous capital allowances create a window of opportunity for US companies to plow their profits back into their assets. Our Chief Economists think the smart money will be spent on getting better, not necessarily bigger.

Find out more by downloading the whitepaper now.

Share this

Download full whitepaper

Get in touch with us

Do you have a project which you are interest in working with us on?

You may also be interested in

WHITEPAPER

Data readiness: The fundamental building block

May 29, 2020

The whitepaper outlines the key data considerations and decisions that you can make to help you sustain profitable operations.

Read full article
WHITEPAPER

Driving flow assurance through effective KPI setting, analytics and digital twin technology

Aug 15, 2019

In the past, when oil prices were higher, upstream producers were very focused on managing their assets for maximum production volume. However, in the current and forecast business environment, there is a much greater need to manage for value. Maximum value is not always maximum flow; this can sometimes lead to value destruction. So what does managing for value mean for an upstream producer?

Read full article
WHITEPAPER

Key steps for delivering autonomous operations

Feb 4, 2020

Achieving autonomous operations is all about empowering the plant to run, learn, adapt and thrive in tomorrow’s environment. Dynamic real-time optimization gives a fast automated response based on the actual changes in raw material properties, product demand, and operating conditions.

Read full article

Get the latest updates from KBC

Sign up to our newsletter to receive our latest innovations, viewpoints and be informed about any upcoming events.