With the covid-19 pandemic at the beginning of 2020, the oil and gas industries suffered impacts on their production and are now looking for its recovery.
The pandemic changed our routine, our lives, and forced us to quickly adapt to a new work model. The need for social isolation was also one of the measures taken to safeguard the health of people around the world.
As the disease spread across the world, economic structures began to encounter new behaviors. For the American oil and gas sector, this change was responsible for one of the biggest drops in oil consumption in its history.
Already under pressure for some years, the oil and gas sector has been adapting to a new production model based on the reduction of pollutant emissions and compliance with ESG strategies. A not easily change that takes time and effort to achieve
In the midst of this change, the sector is faced with the covid-19 crisis and sees dozens of plants being closed and stocks being burned so that the price of a barrel of oil does not fall drastically, accentuating an unprecedented crisis.
The sector was growing in 2019, producing at least 11.3 million barrels per day. After the health crisis, the number dropped to 935,000 barrels per day.
The fall is understood as a reflection of the restrictions adopted during the pandemic. Business blockades, travel restrictions and social isolation reduced the consumption of oil and its derivatives in the first quarter of 2020. On the other hand, the sector felt obliged to close wells to contain the crisis.
The resumption of oil and gas production
With the development of the vaccine, the trend is that restrictions are gradually relaxed and the market warms up again. In the latest weekly oil status report, the EIA (Energy Information Administration) indicated for the first time an increase in US crude oil production, however, the numbers are still far below those of the pre-pandemic.
Cuts and restrictions imposed by OPEC (Association of Oil Exporting Countries), also tend to be reduced, favoring positively the resumption of production.
However, experts say it is unrealistic to think that production will exceed pre-pandemic levels. According to CEO Vicki Hollub, the pandemic period is causing a change of view that was previously based on productivity growth, and which now shifts to the value generated.
The tendency is for companies to seek, through technology, the optimization of their operations already in operation rather than escalating through mass production.
What we can say in advance is that the recovery is happening, faster than expected, and that you now have the tools you need to shape your future.