Coming regulations will create opportunities for companies, such as those who focus on vapor recovery, or those who can help oil and gas companies meet new standards.
Chicago, IL (PRWEB) May 20, 2015
L.E.K. Consulting’s second annual study of the oil and gas sector revealed broad-based concerns over inefficient water management and increasing emissions regulations amid the current slowdown. As companies reposition themselves to deal with an increasingly challenging energy environment, the study finds that these twin concerns also offer opportunities for providers of services and equipment that can help oil and gas companies manage regulations and water resource management.
“The steep drop in oil prices has squeezed weaker companies and is forcing stronger ones to rethink investment strategies,” said Chris Kenney, managing director and head of L.E.K.’s Americas Industrials practice. “This new pricing reality has raised a whole host of issues within these companies, but regulatory pressures and water management issues remain towards the top of the list of E&P oriented companies.”
This year’s survey also confirmed an acceleration of trends to control costs and drive efficiencies in response to lower energy prices, continued supplier consolidation and declining drilling activity in North America. Over the past 12 months, 168 oilfield equipment and services deals were announced or completed.
Key Water Management and Emissions Regulation Challenges:
- Few companies have cracked the code for efficient water disposal; winning companies will provide an integrated water management solution (delivery, treatment and disposal)
- Though changes in hydraulic fracking regulations are not likely to have negative effects on drilling, some new restrictions on contamination controls and increasing pressure on flaring are arising
Expectations for New Regulations:
- The majority of customers and suppliers—69% and 70% respectively—expect increased regulation on freshwater recycling and wastewater management in the next three years
- Federal and state regulations on flaring as well as measurement of methane leaks has increased, with some states having stricter regulations than the EPA
“Coming regulations will create opportunities for companies, such as those who focus on vapor recovery, or those who can help oil and gas companies meet new standards,” said L.E.K. Managing Director Chris Rule. “It’s more important for companies to develop a long-term strategy in this tougher energy environment than ever before.”
Additional insights and results can be found in “Beyond Low Oil Prices: Issues and Opportunities in Water Treatment and Emissions Control” by Chris Kenney and Chris Rule, managing directors, and Marc Chernoff, a principal, in L.E.K.’s Industrials practice.
About L.E.K. Consulting
L.E.K. Consulting is a global management consulting firm that uses deep industry expertise and analytical rigor to help clients solve their most critical business problems. Founded more than 30 years ago, L.E.K. employs more than 1,000 professionals in 21 offices across the Americas, Asia-Pacific and Europe. L.E.K. advises and supports global companies that are leaders in their industries – including the largest private and public sector organizations, private equity firms and emerging entrepreneurial businesses. L.E.K. helps business leaders consistently make better decisions, deliver improved business performance and create greater shareholder returns. For more information, go to http://www.lek.com.