The falling price of oil – whilst positive for consumers and economies on one level – is seeing an industry response which some seem to describe as if in a state of shock. Whilst we simply should not dismiss the impact of effects, especially on people who may suffer as a result – it seems some memories simply aren’t long enough.
Once again 2015 sees a phase in the industry’s lifetime of recalibration – adjusting to life at less than $50 a barrel when living within our means has meant we had got used to industry operations being acceptable at much higher cost – well not now. Yet those of us who have longer memories will recall industry operating in a $10 a barrel environment. Clearly there are real effects – the economics of certain projects don’t add up, people lose their employment until they can be afforded once more and margins in every part of the supply chain are squeezed for more and more value. But the industry does recalibrate to adjust to the environment it must live within. The interesting part of that adjustment is whether it drives innovation.
At next week’s International Petroleum Week we will be discussing exactly that – strategies that drive investment and innovation in a changing landscape. If you are not already planning to be part of that conversation get involved now by visiting www.energyinst.org/ip-week #ipweek