NEWS RELEASE                                                                                                    AUGUST 2015

Maximizing Flow Control and Treatment Revenues in the Oil and Gas Industries

Flow control and treatment companies such as Flowserve who relied on the oil and gas industry for more than one-third of its revenues are recalibrating their market strategies to deal with capital reduction expenditures by their clients which approach 50 percent.  A webinar on August 25 will invite discussion as McIlvaine proposes routes to both maximizing future oil and gas revenues and protecting against future swings in the market.

The right strategy will be a combination of five right to win strategies.

In general, there will be continued growth but with major fluctuations as oil and gas companies over compensate in both up and down markets.  So the execution strategy includes a game plan for the down cycles.  Liquid fuel usage in 2015 was under 200 quadrillion Btu.  By 2040 world usage will be close to 250 quadrillion Btu or a 25 percent growth rate for the 25 years.  Gas consumption will grow from 130 quads to 210 quads for a growth of over 60 percent during the period.

Part of the adaptation strategy is to focus on the high growth areas both by geography and process. Non OECD Asia is expected to account for 55 percent of the world’s energy increase in the period to 2040.  The production of natural gas plant liquids is expected to increase by 10 million barrels per day compared to gains of less than 3 million barrels per day for refined oil. U.S. production of non-conventional gas including shale gas, tight gas and coal bed methane will increase by 10 trillion cubic feet.  So this will be a major opportunity for flow control and treatment companies.

The expense of maintaining a valve used on an offshore oil rig is considerably higher for the same service as a valve used in a land based application. Adaptation strategies take advantage of this fact by creating valves with higher prices and margins which can be justified based on total lowest cost of ownership

The world’s relevant information is doubling every few years while the individual using conventional decision making tools has a fixed ability to absorb information. This leads to two opportunities for flow control and treatment suppliers. One is in adaptation and one is in creation.  The adaptation strategy dictates expanding the product line to provide total solutions and operational support.  The creation strategy involves supporting companies such as McIlvaine who are providing free Decision Guides to oil and gas companies to help them make decisions based on total cost of ownership.   This includes more than just the evaluation of existing products but the ability to accurately evaluate the advantages of new products.

The August 25 webinar is free of charge.  Click here to Register for the Webinars