Industry Trends

Downstream Oil & Gas

The continuing low crude oil price drives high refinery utilisation levels, simpler marginal configuration and higher refinery margins. A significant number of new refining facilities have come online and increasing capacity now tends to reduce utilization and decrease margin. Operational excellence projects and introduction of best practice technology lower the operational costs and energy use. Increasing regulatory pressure and social responsibility are drivers for more sustainable operations.

Upstream Oil & Gas

The survival mentality in the upstream oil and gas industry seems to have resulted in a mindshift toward shorter-cycle projects. Many are deferred or canceled as a result of the downturn, and appetite for long-term and complex projects has waned. The focus is on extending useful life of existing assets to continue reliable and safe operations. Life-time extension projects and safe removal of retired assets shifts attention to asset life-cycle management centered aspects of operations.

Chemicals

Eurozone chemical output is likely to fall futher given the weakening new orders and confidence data. Increasing demand volatility and vulnerable economies are affecting the demand. Low feedstock prices help to maintain a healthy margin in naphta based chemicals markets. The chemicals industry has significantly altered and has become a highly competitive global playground. In order to gain a competitive edge, chemicals companies are restructuring cost levels and introducing innovative technology to increase plant performance.

Metals Processing

Demand conditions have deteriorated further and stock levels have risen. Overcapacity issues even with softening of iron ore prices (utilisation rates of 80% for steelmakers). Recovery gradually gathers pace. After shake-out of the industry, the strongest and economically fittest survive. Slowly, production levels are increased again and focus shifts toward more reliable and predictable operation.

Mining

Weak metal prices drive production capacity down partly by closing mines and partly by delaying investments in new mine developments. The conservative mining industry is making a giant leap into modern times by introducing the digital mine concept with new technology and best practice work processes. The end-to-end value chain of a mine from exploration to development and all the way to customer products is becoming more integrated. This will drive operations performance and not in the last place worker safety.

Power Generation

The Europe area power generation, transmission and distribution declined to its lowest level in thriteen years. Environmental policies drive investments to heavily subsidized renewables production in (offshore) wind, solar and alternative energy sources. Lowering production costs of existing generation facilities is required to gain a better position in the merit order. Asset Life Cycle Management provides an excellent approach to balance investments and risks over the life cycle of the production and distribution network assets.

Water Utilities

The key challenge in the water utilties sector is to overcome funding and cost concerns, the cost of addressing outdated systems at a time when traditional income streams are drying up. Most state owned utilities have been privatised in recent years, leading to a discontinuity in funding from public to private funds. This resulted in renewed prioritization of asset investments and the need for better risk management. Publicly funded utilities were required to show transparancy in how they spend public money by complying with PAS-55 and ISO-55000 standards. Better use of data and advanced analytics combine improved risk control and increased asset utilization.

High Tech Manufacturing

Steady demand for mobile devices and increasing chip capacity forces producers to maintain production capacity. Integration of supply chain for chip manufacturers guarantees long-term client-supplier relationship. Service demand is high to sustain reliable and predictable production levels. The innovative nature of the industry catalyzes introduction of new technology and analytics in production and maintenance operations.