The oilfield supply chain: the future isn’t what it used to be

Although the entire upstream sector made dramatic changes in response to lingering low oil prices, the service sector has borne the brunt of cost savings and project cancellations. Between 2014 and 2017, operator development and exploration expenditure fell by US$310 billion, which forced the sector to make extraordinary adjustments in every part of their business. However, this is a cyclical business known for over-shooting on the highs and lows. There is a real sense that we have begun to cut too far, potentially damaging the integrity and fabric of the oilfield service sector. Operators are also beginning to understand that further cuts, while attractive in the short term, will undermine the long-term sustainability of the sector when the market returns to growth.