Free Essay: Challenges Facing Oil and Gas Industry
The oil and gas industry play a great role in our daily lives as well as the economy. Without oil and gas, maybe we could still be living in the ancient times since almost all of the advancements that we enjoy today in terms of technology, infrastructure among others are as a result of gas and oil. However, we should also not forget that they too have their demerits that include global warming and various forms of environmental degradation.
Even as the demand for oil and gas increases across the globe, there are several challenges that are facing the industry. One of them is limited access to significant quantities of oil and gas resources that are economically recoverable. Despite the fact that there are enough oil and gas resources required to meet future demands, more than 80% of the resources are owned by National Oil Company and host governments. These resources are not available to International Oil Companies. Currently, National Oil Companies account for almost 60% of the largest oil producers in the world.
Another greater challenge that is faced by the gas and oil industry is the higher cost of services. The cost of drilling, facilities, engineering, procurement and construction has tremendously increased, hampering the performance of the industry. Besides, the higher prices of oil and gas have also pushed the operations of the industry to a higher level such that its ability to respond has been significantly affected. One of the areas that have experienced higher activity is in the drilling of rigs. It is expected that new rigs will be available in the coming years; however, it comes with another challenge. It will require experts to manage the new machinery who are not also very easy to find. All these requirements have to be met in financial terms that are becoming a great burden for the players in the industry to bear.
For the oil and gas industry to be efficient in its operations, more skilled and experienced personnel are needed. On the other hand, the industry will also need to adapt to new technologies and machinery that is yet to be introduced. For such machines to be operated, highly skilled and compensated individuals are needed. The machinery and technology may be available but the greatest challenge is how and where to find an adequate number of professionals with the qualifications for their operators.
Currently, there is an on-going need for breakthrough technologies that can help in location, development and production of more oil and gas so that the industry can be positively impacted. Technology has been a main driver in the ability of the oil and gas industry to ensure safe and efficient production. With this, environmental impacts can be properly controlled. However, concerns have been raised that enough effort is not being devoted by relevant parties towards creating innovative technologies for the oil and gas industry. In fact, there is still more that needs to be done in order to have make the oil and gas industry sustainable in the future.
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