I was driving into the office and swerving to avoid potholes and large cracks on a popular highway here in California. “Why can’t they fix this road,” I thought, and this in fact led me to think about our own customers’ dilemma.
For as long as I can remember, oil companies and energy providers have been absorbed with large capital projects as they keep the world’s lights on and industries humming. How could they possibly stop to fix and improve archaic systems while running hydroelectric plants and LNG facilities? Just as our road transportation authorities can’t shut down a major thoroughfare during commuter hours to fix it, our customers can’t fully stop to build new plants while keeping existing ones running.
That said, with oil prices still low relative to historical highs, the pace of capital projects in the energy industry has slowed down enough for companies to take stock of their situation and make strategic moves. We discussed the possibility for these changes to happen when oil was less than $50 a barrel last July, and now the waters have parted, presenting an opportunity to act.
What we don’t know is how long the situation will last, and how quickly the window to do something impactful will remain open. If oil prices stay low another year, it will be a cumulative two years of this capital-light climate. That’s far too long for any (more…)