IT in the New Reality for Oil & Gas
2020 has been a tumultuous year for the oil and gas industry with (17 percent) in ‘hard reset’ mode –double that of the overall average (8 percent). Commodity prices, already significantly depressed, were exacerbated by disagreements between Saudi Arabia and Russia over production levels. And then COVID-19 struck. The pandemic dramatically reduced demand as commercial and consumer transport modes effectively went into hibernation and manufacturing output dropped. The effects were so drastic that on April 20, 2020, crude oil contracts went negative for the first time in history. Since then, OPEC+ compliance and the slow reopening of many countries around the world have propped up Brent crude prices, with prices recovering to pre-COVID levels late in the year. But in light ofthe volatility, the drastic downturn caused many oil and gas companies to reduce development programs, scale back production or shut down wells in order to reduce both capex and opex. Oil and gas executives have focused on cash preservation, concentrating on core operations. It's likely that we'll continue to see a number ofimpairments, bankruptcies and restructurings in the sector, and a longer-lasting impact beyond the immediate COVID-19 hits to cash and liquidity -effects that may permanently change the sector as we know it.