COVID-19 can certainly be described as the defining feature of 2020. It’s affected life in ways we didn’t realise were possible and every business and industry has had to adapt in some way. Here are our Covid updates.
As a supplier of pipes fittings and flanges to the oil and gas world, Special Piping Materials’ global offices have also been affected by Covid-19.
Our robust action plans have prioritised the safety of our employees, ensured that relevant government guidelines have been followed and we have been able to maintain a very high level of service for our clients.
Our warehouses around the world have been consistently well-stocked and their contents are invariably in high demand by our discerning clients. Further to this, we have remained in close contact with our network of mills and manufacturers across the globe to keep our supply chains intact and as efficient as possible.
So, what COVID updates have there been for the oil and gas industry?
Understandably, oil and gas prices around the world have seen a downturn over the past few months. However, rather than focusing on the doom and gloom, we have been looking for optimism in the market and where some potential opportunities may lie. Below is our round-up of the most optimistic COVID updates stories from around the globe.
Signs of recovery
In October it was announced that oil prices jumped the most since May 2020, fuelled by President Donald Trump’s improved health prognosis and further optimism over the possibility of an economic relief deal in Washington.
John Kilduff, a partner at Again Capital LLC commented that: “We need the economy to get boosted, and for that to translate to improved demand for refined fuels.”
Boost for petrochemicals
An interesting COVID update for the oil and gas industry is that the pandemic has certainly highlighted the global need for well-made plastic items, and this can only be a good thing for the petrochemical industry.
Plastics have been indispensable for things like personal protective equipment in hospitals and hygienic food distribution packaging.
Finding ways to ensure these types of items are recyclable and have a low carbon footprint will be key, but for now it is evident that plastics from petrochemical refinery are still very much in demand across the world.
Winter Gas demands
The IEA has reported that 2020 gas demand will not drop as much as previously feared. Analysts at Refinitiv have backed this claim by announcing that the northern hemisphere winter’s demand could be better than in 2019-20.
The team from Refinitiv said to the GECF’s monthly gas lecture in October that: “We expect LNG demand to increase by 4bn m³ this winter… led by growth in China, Japan, and South Asia. LNG supply is expected to grow by 3bn m³ led by the US. And when we put together [that] demand and supply forecast, we expect the LNG market to be slightly tighter than last winter by 1bn m³.”
They also predicted that: “while the economic recovery is still very slow in Japan, we do see the La Nina weather pattern emerging for this winter and that will mean colder temperatures than last winter, boosting demand for heating.”
Figures from China’s National Development and Reform Commission show that China actually posted a 4pc year-on-year demand gain, with emerging markets in Africa, Asia and the Middle East accounting for c.20pc of global gas consumption all also seeing growth.
Optimism for clean energy
The IEA Clean Energy Transitions Summit in July – the world’s largest energy and climate meeting of the year – was extremely positive and presented some much-need optimism into the sector.
40 Ministers from around the globe, representing 80% of global energy consumption and carbon emissions, shared their ambitions to make clean energy technologies a vital part of their economic recovery efforts.
The European Union has announced plan to bring the region’s net emissions to zero by 2050 and many other governments around the world are also getting ambitious with their clean energy strategies.
To boost this, several major oil companies have shared plans to turn themselves into lower-carbon energy businesses. Although many of them have a long way to go, their large budgets, project management capabilities and engineering expertise means they could bring significant inroads in advancing offshore wind, hydrogen and carbon capture technology.
It is bolstering to see that, despite the economic disruption caused by Covid-19, the potential of new frontier energy technologies is still being explored by governments and businesses alike. Hydrogen, battery technology, advanced nuclear reactors and electric aircraft are all things being looked into.
BP report profits
In a great show of optimism for the oil and gas sector, despite COVID, Energy giant BP announced in October that it had returned to profit for the third quarter of 2020.
The firm released information that it had benefitted from the ‘absence of the huge write-offs and impairments which dented its previous results in August’. It also noted “some early signs of global economic recovery” but that the recovery was still “uncertain” and would be influenced by the potential further spread of the pandemic.
The announcement went on to state that the gradual recovery in oil demand seen since spring looked set to continue, led in parts by a strengthening demand in Asia.
New innovation in Singapore
Nothing shows optimism in the oil and gas sector than when innovation is embraced, and glimmers of industry advancements can be seen.
Unsurprisingly, city-state Singapore has found itself on the forefront of modernisation again as it is gathering global energy firms together in order to boost innovation in the oil and gas sector.
Shell, Chevron, ExxonMobil, and ConocoPhillips have combined forces with Enterprise Singapore in order to invite start-up businesses to pitch and testbed digital solutions that could resolve challenges in their sector. These solutions are specifically around robotics, sustainability, workflow, and asset management and could be a real game changer for the industry at a time when some people would prefer to focus on the negatives.
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