Volatile energy prices was the single potential risk that worried oil & gas companies most.
Frederiction, New Brunswick (PRWEB) July 12, 2012
Remsoft, a leading provider of asset optimization and supply chain analytics solutions, recently announced the findings of a survey of executives that manage upstream oil and gas analysis and planning operations for their organizations.
The most interesting finding of the research was that volatile energy prices was the single potential risk that worried oil & gas companies most. With the ability to affect almost every aspect of an oil & gas company’s business—from exploration to drilling to shipping—it is no surprise that 67% of respondents cited energy prices as their biggest potential risk.
In addition to energy prices, respondents cited regulatory compliance and environmental issues as the next potential risks that worried them the most. Some 54% of respondents felt that regulatory compliance problems could drive their business off-track, while 51% worried that environmental risks would hurt their company. Political upheaval and safety rounded out the top five.
Just over half of the respondents (54%) are using technology, such as predictive analytics or advanced planning and modeling software, to help them analyze and manage these risks for their businesses. By doing this, they are able to be better prepared to navigate the business through a troubling issue if/when one arises. Not surprisingly, there is an almost exact match between what respondents are most worried about risk-wise—and what they are actually measuring and analyzing in their everyday lives.
Environmental risks are what respondents analyze most often, with 77% modeling these. That was closely followed by 76% of respondents looking at potential outcomes of rising energy prices and 72% planning for potential problems with regulatory compliance.
“Risk management has become an integral part of running a modern business. With budgets planned out exactly and resources stretched as far as they can go, companies need to verify they have factored in all possible situations, outcomes and consequences when making critical business decisions,” said Andrea Feunekes, co-CEO of Remsoft. “The fact that volatile and regularly changing risk factors such as energy prices or the environment are at the top of the oil & gas industry’s most worried about risks is not surprising.”
Of those oil & gas companies still considering whether or not to use a technology solution to analyze risks, 53% are worried about volatile energy prices and the same (53%) are worried about regulatory compliance issues. Those evaluating technology solutions are also concerned about the potential for technology failure (46%)—and are more concerned about that than environmental risks or safety issues, both at 33%.
In addition to which risks respondents were most worried about and were already analyzing, the survey looked at several other issues of importance to those in the oil & gas industry. Some of those responses included:
Managing Risk is of Growing Importance to Industry Executives
- Respondents felt strongly that the number and nature of the risks/constraints on their businesses is of increasing concern (71%).
- Security of supply is very important to oil & gas companies. In fact, 81% of respondents feel that securing energy will increase in importance over the next decade.
Energy Sources Impact Decisions Across the Oil & Gas Industry
- 64% of oil & gas companies feel that oil & gas will remain North America’s primary energy source for the next 50 years or more.
- 66% of these executives also feel that alternative or renewable energy sources will make up 10% or less of North America’s energy in the next decade. It should be noted that even 10% of the continent’s energy coming from alternative fuels is still a major increase over how much has previously been the result of alternative fuels.
- Oil & gas companies are fully behind Tar Sands oil recovery projects. When asked about the environmental risks of the process, 54% of respondents felt the risks were significant, but that they could be managed—while another 26% felt that the risks were only minimal.
- Respondents were even more hopeful of Shale Gas recovery’s prospects. Some 40% felt the risks associated with the process were significant but manageable; while another 26% felt that the risks were only minimal.
The Oil & Gas Industry Expects Future Growth
- Respondents (45%) also feel that the price of oil will continue to rise and will hit $150 a barrel or more in the next decade.
- Oil & gas executives were also very hopeful that the economy would continue to recover and that their companies would be increasing their employment levels in the next 3-5 years. 78% expected employment levels to increase—with almost 30% of that group feeling that employment would increase “significantly.”
As a provider of advanced analytics, modeling and spatial planning solutions, Remsoft helps companies in industries such as forestry, oil & gas and transportation analyze and plan for the potential risks that could befall their companies. By using Remsoft’s optimization technology to review all potential decisions and “what if” situations, customers can make the most of their assets and ensure that there are fewer surprises, no matter the situation.
In the first quarter of 2012, executives were queried about their risk management practices, how (or if) they analyzed potentially detrimental situations and about general industry issues. A majority of respondents had mining and drilling operations located in the United States (79%) and Canada (20%).
For an overview of the SURVEY RESULTS or email info(at)remsoft(dot)com.
Remsoft provides asset optimization and supply chain analytics solutions that empower executives to maximize the performance and value of land-based and infrastructure assets. Through advanced analytics, modeling and spatial planning technology, Remsoft simplifies complex, high-variable decisions to fuel long-term sustainability. Hundreds of organizations worldwide utilize Remsoft software to make the most of their resources and assets. For more information, please visit http://www.remsoft.com.
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