The catastrophic decay of oil prices over the year and the years-long weakness in gas prices have resulted in a new structural anomaly for the oil and gas industry. The “price correction” that was cited as a reason for deteriorating prices in 2014 has seen pricing adjustments well beyond what was expected. A new world order of depressed prices for oil and gas has become the basis for describing the financial and strategic imperatives in the coming 12 to 18 months.

The global oil industry is adapting to the latest pricing trough in its ongoing business cycle. Independent US oil companies are particularly vulnerable in the current situation as they struggle to stay competitive in an oil market dominated by OPEC and traditional assets. Jamal Khawaja of Wipro’s Engineering, Natural Resources, Utilities, Engineering and Construction Strategic Business Unit, considers the challenges faced by these companies as well as strategies that can help “turn the ship” to ensure successful operations in a price-distressedenvironment.  

Much of the oil and gas industry is struggling right now. American producers in particular are sweating bullets as falling crudes prices threaten the financial viability of shale production, given the capital-intensive nature of hydraulic fracturing. However, the smart money isn’t fleeing oil stocks at the moment; there is now a singular opportunity for investors and oil/gas/energy companies to take advantage of the economic climate. They will be an acquisition spree in the next 18 months for distressed entities, assets, and market share. Those that survive the current downturn could emerge stronger than ever.