Report: Oil, Gas IT Spending Cuts 'Lower Than Expected'
The oil and gas industry has responded to the decline in global oil prices by cutting back on spending, including IT spending, but these cuts are lower than expected, according to a recent report by IDC Energy Insights.
A recent survey of chief information officers at 20 non-OPEC oil and gas companies found that these companies had cut IT spending by less than 10 percent, a lower than expected rate, and that cuts will be more selective rather than across the board.
The survey – mostly U.S.-based upstream, midstream and downstream companies with revenues of at least $500 million and at least a third with over $1 billion in revenue – found that:
- 85 percent of survey respondents will either maintain, slightly increase or reduce by less than 5 percent their spending on IT
- 60 percent of respondents anticipate that their 2015 IT budgets will decline, but three-quarters of those that will cut budgets will reduce spending by less than 5 percent
- 15 percent of respondents expect to reduce their IT budgets between 5 and 10 percent; none of the CIOs surveyed said they expected to cut spending by more than 10 percent
IT internal staff focused on exploration and drilling workers are likely to be the most affected by IT spending cuts. Workers who support production, including IT staff, are likely better positioned, but the decline in oil prices should have everyone concerned.
“Also, bear in mind that some companies are better at production than others, and some are better at finding oil, and some are better at drilling, so each company will have their own strategy for what needs to be cut or reduced. In general terms, those staff members involved in production are probably in the best position, but that is not decisive.”
The largest IT budget cuts will occur with internal staff and in line-of-business areas due to a reduction in exploration and drilling activities. IT spending will actually increase in 2015 at production and midstream operations, the survey found. Despite the slowdown in drilling, some companies will continue to drill to take advantage of lower drilling costs, and to meet lease agreement requirements.
IT workers most in demand in oil and gas are data architects who can design and develop the platforms oil and gas companies need to manage and analyze Big Data, said Niven.
1234567
View Full Article
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Gunvor CEO Sees Russian Refining Capacity Taking Hit from Drone Strikes
- These Factors Helped Brent Oil Price Break Above $85
- Sinopec Engineering Posts Higher Annual Petrochemicals Revenue
- Imperial Pipeline in Winnipeg Goes Offline for Three Months
- Gaz System to Acquire Gas Storage Poland
- Subsea7 Secures Contract to Service Woodside's Trion
- Adnoc Inks Supply Deal for Ruwais LNG Project with Germany's SEFE
- EIA Boosts USA Crude Oil Production Forecasts
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Rystad Looks at the Buzz Around White Hydrogen
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension