Benefits of Investing in a New Tools & Equipment in the Oil and Gas Industry
No matter how often it was written off as obsolete, the oil and gas industry is still a behemoth and, with its estimated revenue of as much as $5 trillion, by far, one of the largest sectors in terms of sheer dollar value. The high scores are present in other areas as well. For instance, over the last ten years, the wages in the sectors rose by a whole 34% which is more than a commendable number.
However, in order for these results to be truly sustainable in the long-term, the O&G companies can’t sit on the laurels for too long but rather take active steps in building sustainable infrastructure and invest in newer and more efficient equipment.
Let’s see how this strategy can bring some very real and tangible benefits.
Higher level of efficiency
The goal of any company and any industry, for that matter, should be to reach the highest possible level of efficiency and the optimal production output. Even if we, at the moment, get satisfying results we need to take into consideration that the rest of the business world is moving forward and that the direct competitors are not being as complacent. Keeping that in mind, investing in newer, more efficient, and more contemporary equipment does an excellent job of keeping industrial production at the optimal level while cutting the waste to the bare minimum and keeping the company competitive.
Improved worksite security
Workplace safety was always considered to be one of the weakest spots of the entire O&G sector. Putting aside the property and equipment damage that is often measured in millions of dollars, the true price of these disasters and accidents is paid with human lives. At the moment, the petroleum sector scores a pretty poor number of 1.4 job-related injuries per 100 workers. Investing in newer equipment does not provide an instant solution to this problem but it certainly does make an incredibly important building block in addressing this issue and making the O&G industry much safer for everyone involved.
Lower production costs
This topic heavily leans toward both issues we have covered above. So, despite the enormous profit, the petroleum sector can’t really be called sustainable and as time goes by the industry will start lagging behind newer, cleaner, more up-to-date, and renewable energy sources. Investing in new and more contemporary pieces like, for instance, efficient fluid equipment parts can go a long way in lowering the production costs and making the industry more maintainable in the long run. Investing in simpler pieces also does a great job in preventing the major accidents that require far more resources to address.
Opening the doors for digital transformation
The entire business world is making big steps in the digital direction undergoing a process of digital transformation where analog assets and practices are being replaced by their digital counterparts. We need to keep in mind, though, that digitalization is never a goal by itself but rather the tool we use to reach a higher level of operational efficiency, simpler workflow management, and, ultimately, lower production costs. All these things are in sharp contrast to the waste and unreliability produced by older equipment which makes updating the obsolete infrastructure an incredibly critical step in this journey.
Beneficial warranty coverage
Pushing the older equipment pieces to the point of attrition puts the expenses of eventual repairs and replacement entirely on the shoulders of the business owner. In some cases, these costs may even prevent timely interventions and lead to the major breakdowns and accidents we have mentioned in the previous sections. New equipment, on the other hand, offers a tremendous benefit in the form of lengthy warranty coverage that allows the companies to cut the problems at the very root without causing any additional expenses. These tools are also much easier to insure than the obsolete pieces.
Joining the sustainability movement
Last but not least, we would like to point out that, keeping in mind the contemporary green tendencies and efforts made toward building a more sustainable society, the overall reputation of the O&G sector finds itself in a very unfavorable position simply due to the industry’s inherent reliance on fossil fuels that still make the backbone of the global economy. With things as they are, any opportunity to paint this sector in greener colors should be taken advantage of. Using the equipment that allows businesses to reach a higher level of operational efficiency definitely pushes this behemoth in the right direction.
We hope these few examples gave you a general idea about why investing in newer, more efficient, and more contemporary oilfield equipment isn’t only beneficial but should make one of the petroleum industry’s highest priorities. Granted, the OL&G sector finds itself in a very good place right now. But, in order to make this race with competing sectors into a marathon, the O&G industry will need to start working on some serious legs. Investing in new equipment does seem like an excellent place to start.