Challenges and opportunities in oil and gas
Eyevis’s Max Winck outlines trends in the oil and gas market and what challenges and opportunities are on the horizon for suppliers to the industry due to unstable oil prices. Tim Kridel reports.
TK: What are some new/emerging AV technology trends in the oil/gas market? For example, are they using 4K widely? What are they using that companies in other verticals aren’t yet using widely or at all?
MW: From an eyevis perspective, the oil and gas market means primarily control rooms for generation or dispatching. Here we see the trends common for the control room industry, which means a growing number of IP-based signals that need to be integrated and requests for collaboration between different sites. In terms of resolutions, 4K becomes automatically an issue when you add more than four displays in a video wall. So it’s nothing particularly new there.
What distinguishes the oil and gas industry from other verticals to a certain extent is that they are still willing (and able) to pay the higher prices for really professional equipment. The simple reason is that the sites where the AV equipment is installed are located not next to the nearest AV shop, but in the middle of a desert on an oil platform, or other places where service may take some time just to travel there. So they need a highly reliable product which minimises the risk of expensive downtimes. So for example, we have installed video walls in Colombia at places that could only be reached via helicopter or on oil platforms in the North Sea.
TK: Oil prices remain depressed, with no sign of a major rebound anytime soon. Many producers have cut capital spending sharply as a result. Are you seeing any cuts to AV spending? Or is AV spending actually increasing because a lot of the technology is used for identifying reserves that can be tapped once prices rebound? In other words, do they see AV as one of the investments that they need to keep up so they’re poised to succeed when prices rebound?
MW: From our experience, the depressed oil price has two sides. On the one hand, there are investments in AV technology by the oil/gas industry itself to become more efficient. But on the other hand, all other industries and public spending in the oil/gas producing countries suffer also from the low prices. So we see a lot of projects, especially in the Middle East region, that are delayed, reduced or even cancelled. Especially some public projects are set on hold, as public authorities and many other industries that indirectly depend on the oil price hesitate to invest these days.
TK: Governments in some oil-dependent countries are late paying contractors and vendors in other trades (e.g., construction) because of the downturn. Are you hearing/seeing anything similar when it comes to AV integrators, consultants and vendors? If so, is it a ripple effect, where a government’s late payment to a general contractor means that contractor is then late paying its AV subs?
MW: In these states, we usually have to accept the long payment terms. So it always takes a long time to get the return for the investment we have when we start our production. But that’s normal in project-based business. So due dates for payments are long, but in the end they always pay. Of course, the more companies are in between us (the manufacturer) and the final customer, the longer it takes.
Max Wink contributes to a wider discussion on the oil and gas market that you can read here.