Close

Search

Whitepapers

What do oil and gas companies do now? Mitigating the risks in an uncertain market

Looking at the market, the challenges and opportunities presented by market conditions, as well as delving into more detail as to how to address some of those challenges and opportunities.

Download full whitepaper

Whitepaper summary

Written by: Stephen George, Kevin Smith

If you read the press you know that there is no shortage of theories pertaining to the price of oil and the associated impacts to the overall market. For all those whose crystal ball is working and are confident in the prediction of the future of the oil price, we wish you the best in your lucrative and early retirement. For everyone else, it’s not a matter of certainty but a focus on playing the odds. In order to safely risk your money in this market, it's important to understand the various scenarios that can play out in the oil market and look for improvement strategies that play the odds on addressing the most likely ones.

The obvious first question is what are the “likely scenarios”? For oil price, there are theories that place us below $10/bbl and a few that put us back well above $100/bbl, but the prevailing thinking is “lower for longer” but not rock bottom for longer. The consensus view seems to be that the price will bounce back from today’s price of around $30/bbl, but not back to anywhere near $100/bbl for those who might be holding out hope. While not the forecast that most of us in industry are hoping for, it does provide a platform from which many in the industry can still be profitable if they manage the operations well. For product pricing, the near future most likely sustains continued healthy gasoline pricing but weaker pricing for other products, meaning that for many refiners their margins are not optimal but they are still making money with the potential to make more if they are able to optimize refining yields.

In order to have a view on what actions to take in response these scenarios, it is important to first look at the key market drivers behind them, and based on those drivers start making business decisions that play the odds. This paper and the KBC paper series that will follow over the coming weeks and months will stay on top of the market and the challenges and opportunities presented by market conditions, as well as delving into more detail as to how to address some of those challenges and opportunities.

Share this

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.