What industry leaders expect for 2016

Not since 1986 has the global upstream industry seen such a 12-month period of oil price erosion, punctuated by rapid-fire reductions in operator, vendor and contractor activity.

Kurt Abraham / World Oil

Not since 1986 has the global upstream industry seen such a 12-month period of oil price erosion, punctuated by rapid-fire reductions in operator, vendor and contractor activity. On Dec. 4, 2014, the NYMEX WTI futures price sat at $66.81/bbl, having tumbled from a high of $106.91/bbl on June 13, 2014. As of Dec. 4, 2015, the NYMEX WTI price sat at $39.44/bbl. Accordingly, the U.S. rig count fell 62%, from 1,920 active units on Dec. 5, 2014, to just 737 on Dec. 4, 2015. The Canadian rig count fell 58%.

And yet, the industry is exuding remarkable resiliency and creativity. In their commentaries, 13 members of World Oil’s Editorial Advisory Board show how the industry is coping with low oil prices via a variety of measures, ranging from technological innovation and collaboration, to improving human and safety factors. There is enthusiasm that technology and business creativity will lead the industry back to profitability.

We want to recognize the dean of our board, Alex Kemp, as this issue marks his 25th anniversary as an advisor, and this is his 26th annual set of comments. In addition, Nathan Meehan—the current SPE president—is providing his 20th annual analysis, and is marking 19 years as an advisor. We thank them for their continued, devoted service.