DNV GL report: Oil industry will invest, but be tested in 2019

By Staff | January 24, 2019

DNV GL, a global oil and gas information and analysis company based in Norway, has issued its 2019 outlook for the world’s oil and gas industry. The main takeaway from the industry analysis shows that business leaders expect the industry to commit to greater investment to meet world hydrocarbon demand.

The main takeaways from the analysis shows:

-Confidence in the outlook for the oil and gas sector more than doubles in two years—up from 32 percent to 76 percent. 70 percent of senior industry professionals expect to increase or maintain capital expenditure in 2019

-A third (34 percent) expect to grow their workforce in 2019, compared to 20 percent last year and just 10 percent four years ago

-The industry’s grip on cost control is relaxing. 21 percent say cost efficiency will be a ‘top priority’ in 2019, a drop from 31 percent in 2018, and 41 percent in 2016

-41 percent have experienced a rise in cost inflation in 2018 after several years of frozen supply chain rates

-60 percent expect to increase spending on digitalization this year

-Half (51 percent) will focus on actively adapting to a less carbon-intensive energy mix in 2019, up from 44 percent last year.

“The global oil and gas industry is entering 2019 with renewed optimism and a greater sense of resilience. Despite greater oil price volatility in recent months, our research shows that the sector appears confident in its ability to better cope with market instability and long-term lower oil and gas prices. For the most part, industry leaders now appear to be positive that growth can be achieved after several difficult years,” said Liv Hovem, CEO, DNV GL—Oil & Gas.  

“While increasing optimism and expectations for higher spending are to be welcomed, there will also be new challenges for the sector this year. The industry’s resolve to maintain the efficiencies established during the recent market downturn will be tested as the sector relaxes its focus on cost control, and signs of supply chain inflation and skills shortages emerge,” Hovem added.  

To view the full report, click here.