Towards the back-end of last year, countless industry predictions surfaced online (as they do every year) from prominent industry analysts as to the various directions in which the oil and gas industry may be headed, moving forward. It’s fair to say, however, that a crippling global pandemic didn’t feature within any of these predictions. What the virus has done, is force the industry (both oil investment companies and operators) to, in some ways, re-evaluate and reset.
That’s why here at TriStone Holdings Ltd, we think it’s important to examine the industry as it stands now, not where it may have been heading six months ago. Lots has changed already, and there’ll undoubtedly be more change to come yet, but there are certain areas we foresee materialising into more concrete trends in months to come, and that’s what we want to talk about today.
The Need For Agility
It’s a new era for oil companies, one in which only the fittest and most competent will survive the myriad pitfalls that invariably lie ahead. Agility is a trait that’s going to prove absolutely crucial for oil operators in the months (and years) to come.
Foundations Have Already Been Laid
A shift towards more agile practices had already been on the cards prior to the COVID-19 pandemic. Last year, for instance, BP announced that they had managed to shave $60 million from their logistics costs in Azerbaijan. They did this by implementing an agile work-system known as the scrum technique. A discipline that, at its essence, boils down to simply putting the right people in the room together, and leaving them to come up with a solution to a problem! The attraction of agility is in its fundamental simplicity.
Now, however, the need for that shift has clearly been significantly accelerated. Flexibility, from an operational perspective, is going to be imperative in coping with the turbulent shifts in demand that we’ll likely see in the coming months (if the past few months are anything to go by).
Clean Up, Wherever Possible
We’ve talked in previous posts, here at TriStone Holdings Ltd, about the drive from oil companies, across the globe, to clean up their practices, from an environmental perspective, wherever possible. Ours is an industry geared around a fossil fuel, there’s no way of getting around that fact. However, that’s not to say that the entire oil industry cannot still be made much cleaner.
Whilst some major international players within the industry are looking towards biofuels and diversifying their portfolios, in that regard, others are trying to make what they do already greener and cleaner. Using drones to better detect methane leakages, is something that many more oil companies are starting to do. You can find out more about how drones are changing the oil industry in our previous blog post here! Even tightening margins by relatively small amounts can make a large difference in uncertain times such as these.
Oil operators should look to expand into the natural gas market, if they’re able. According to BP’s Energy Outlook (2019 Edition), natural gas is the fastest-growing fossil fuel, with an estimated annual growth of 1.7% between 2017 and 2040. LNG (Liquefied Natural Gas) volumes are also set to continue their increase, and so pursuing a more diversified asset portfolio – one in which your interests are more safely spread – will look to prove a shrewd move in what is an immensely volatile period of time. Whilst natural gas, like crude oil, has taken a hit as a result of the pandemic, it’s also likely to see a return to form in the coming year.
TriStone Holding Ltd’s initial goal is to pursue high-value crude oil assets in the Cherokee Valley, in the USA. However, this isn’t to say that subsequent diversification is not an option. The area we’re focused on features not only existing wells, but an already well-established natural gas pipeline network as well. One of the reasons we’re pursuing such a prospect, in the first place, as an oil investment company, is to secure an asset which is not only high-value, but very versatile as well.
If this year has taught us all anything, it’s the importance of being able to think on your feet and change tack, where necessary. You can be as well-prepared as is conceivably possible, as a company, and still fall victim to an event entirely out of your hands – a global pandemic, for instance. Whilst you can’t have contingency in place for such unforeseen events (although, it’s likely that some of the most well-funded companies will, from now on, attempt to do exactly that), you can be smart in the way that you have your company set up. Oil companies need to structure themselves in such a way that allows for agility and that allows for diversification places you in a far better position to weather any inclement industry weather thrown your way.
So, if you’d like to find out more about our oil investment opportunity, then get in touch! Contact TriStone Holdings Ltd today on 0800 055 7079 or by emailing us at [email protected] We’d love to hear from you! Why not check out our Facebook and Instagram pages, whilst you’re at it?