Executive Chairman of Stockton-based OES Oilfield Services, Richard Upshall, believes the oil and gas industry should prepare for further improved market conditions and predicts that the price of oil will rebound to up to $70 per barrel before the end of the year.
Maintaining a view he has held since late 2015, Mr Upshall believes that despite the recent rise from low $30 to around $40 a barrel, the situation is still severe for the oil and gas industry, but is convinced it presents an opportunity for supply chain companies to deliver innovative technology-led solutions to meet the global need for efficiency gains.
He said: “Operators and contractors have tightened purse strings and are scrutinising every penny they spend; on the face of it, this is a wholly negative situation, but it has actually created a significant opportunity for companies capable of helping realise efficiency gains.
“By resisting the need to scale back investment, OES is now in a position to deploy an improved service provision, which saves customers time, money and increases safety and performance – something that will be of great interest to cost conscious companies.”
The Dubai-based entrepreneur expects the price of oil per barrel to reach $50 – $60 during the summer months, before reaching equilibrium of around $70 toward the end of the year. He puts this increase down to a sharp reduction in production, which will allow the industry to achieve a price that will see activity in the industry improve significantly, as more projects become commercially viable.
He added: “$70 a barrel will be high enough for OPEC producers and deep water operators to increase output, but will also, be low enough to compete with the influx of cheap shale from the US, which will provide us with a sustainable price that improves certainty in the industry.”
Listen to Richard Upshall’s views on the future of the oil and gas industry a recent Video Blog:https://youtu.be/eQT5U_dRDts