Production Challenges Highlight Need for Process Excellence in Oil and Gas Sector
New production challenges are emerging across the U.S. oil and gas sector, creating challenges that could put pressure on the global market. Organizations facing this mounting tension to balance production with revenue creation puts procedural excellence in the limelight. Of course, this struggle is a constant battle in the oil and gas industry. New conditions are adding impetus to squeeze every ounce of efficiency out of operations, and business process management tools can make that possible.
“The oil and gas industry is in a state of flux.”
U.S. oil and gas production is set to flatten during 2015, with lower prices forcing oil and gas companies to slow production, an IHS study found. The result is a growing need to improve operations to ensure organizations can maintain fiscal health while maximizing the benefits of the resources they do produce.
Production changes on the horizon
Recent history has been a period of revolution for the U.S. oil and gas industry. This has led to a situation in which the U.S. market has been the primary source of production growth in the global market. The study found that break-even prices became incredibly diverse in 2014 and a combination of economic challenges and reduced spending will create an environment in which fewer wells are dug in 2015 than were in 2014. The study also said that the production halt in 2015 will not happen right away, but it is coming.
Understanding the process challenges of production struggles
The need to limit production to maintain profits makes business processes extremely important in helping oil and gas companies stay afloat. Perhaps most importantly, IHS explained that future conditions are so variable that the industry is in a state of flux. Oil and gas companies facing this unpredictability need to find ways to improve operations so they can respond flexibly to different industry conditions. Business processes that are streamlined and optimized for a company’s specific requirements can help oil and gas businesses align operations between user groups and help ensure stability in a rapidly changing industry.