Even as the virulence of the COVID-19 pandemic subsides, its impact on the oil and gas sector is undeniable as the industry bounces back from unprecedented low per-barrel prices to retrieve losses and ensure future prosperity. The good news, according to energy sector leaders, is the U.S. economy is still fundamentally healthy, and changing work procedures have led to some unexpected benefits like increased communication among workers.
Reevaluating priorities
Bret Bement, director of supply chain petrochemicals -- North America for BASF, observed that any time a disruptive event similar to COVID-19's magnitude occurs -- like a hurricane decimating the Gulf Coast region -- questions about business economy and risk management demand more scrutiny and focus.
"We'll always have to reevaluate where we put our risk money, and I think that's going to be the biggest thing," he said. "And then we'll test processes and support those."
Bement also noted the disruption has made the workforce reexamine its priorities, but this will ultimately help everyone in their pursuit of happiness.
"This is going to make people who are working from home ⦠make some life decisions," he predicted in an online panel presentation called "Overcoming Key Challenges for Petrochemical Producer Supply Chains in 2020" recently offered by Petrochemical Update (Reuters Events). "Some people are going to realize they enjoy what they do, and some people are going to realize it's time to do something different. So I think we not only need to take care of our processes and equipment; we also have to take care of our people."
Co-panelist Paul Jepson, manager of logistics operations -- specialties for SABIC, said he believes the prevalence of people working from home is inspiring industry leaders to reevaluate team communication, which has led to "an increased level of communication."
"We're communicating more often and saying more than we would normally," he said. "The little thing that you were going to stop by somebody's office and mention now becomes a phone call, because you're not going to be in the office anytime soon. So you think, 'Well, I'd better say it now.'"
Economic health remains unshaken
"There's really nothing fundamentally wrong with our economy," added Economic Alliance Houston Port Region President and CEO Chad Burke, quoting his organization's chairman, Glenn Royal. "If you look at all of the forecasts and the numbers that were coming out of January, we were headed for a really good year for our industry."
Burke cited a survey conducted by Greater Houston Partnership in April that asked respondents if economic recovery would be "V-shaped," indicating immediate improvement, or "U-shaped," indicating a slower return to eventual prosperity.
"As far as the recovery goes, [the respondents] were split in half. Forty-seven percent felt it would be a V-shape and we would come back very quickly," Burke said. "And then 45 percent said, 'No, it's going to be U-shaped. It's going to be a prolonged bottom.'"
Burke said he believes the economic outcome is "completely dependent upon the 'work home/stay safe' orders [extended] across the entire country, and then what that reengagement process looks like as we phase back in. I think that will completely tell the story of ⦠how quickly we can reengage the economy and get back on track."
Burke added that he anticipates a gap in GDP and lost revenue, which he doubts will be recovered. "But we can get back on target as quickly as we can reengage the economy and reengage some of the demand that slipped off in everything from automotive to specialty chemicals and [industries] like that," he said.