How Will the Oil and Gas Industry Fare in 2014?

The New Year is coming, and the crystal balls are rolling out to make predictions about the oilfield services trends for 2014.

Overall, it could prove tight for those in the supply end of the sector, but prospects remain positive for healthy growth.

Pricing and Production

The industry is enjoying steady pricing and growing production, which bodes well for generating revenue.

Because of this continued opportunity to generate cash, those in the oilfield services sector will enjoy lower costs but may find themselves fending off more competition for such services.

Bitumen Prices

Unfortunately, the prediction for the price of bitumen isn’t quite as good. Even with no pricing changes – or, in fact, with reduced pricing – investments in this sector may see declines.

“On Hand” Assets versus “Greenfield Investments”

Ultimately, operators like Suncor Energy will look to get the most out of their current assets; they won’t be making any “Greenfield investments” (that is, building new facilities).

Any building projects that do get a green light will mostly likely be subject to very in-depth cost control.

Thinner Margins

Those in the ultra-deep drilling sector, generally classified as 6,000 meters or deeper, will continue to see growth.

Other types of drilling sectors, however, will find themselves in a much more competitive pricing environment.

To remain profitable, then, it will be up to the oilfield service managers to cut costs where they can within their own organizations in order to continue profiting from their businesses.

New Opportunities

Innovation and new services will drive the oilfield service industry.

For example, those who can bring new terminals for the oil-by-rail businesses, more efficient fluid storage, and better transportation systems for the hydraulic extraction businesses will profit in 2014.

Production from long, low pressure horizontal wellbores must be maintained – or better yet, increased – and anyone who devises cost-effective solutions will be rewarded.

To learn more, check out Alberta Oil’s website’s “Fearless Forecasts.”

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