With oil and gas companies facing several barriers to growth in 2013, forward thinking is needed to overcome momentary economic setbacks and map future successes in challenging new operating environments.

In the face of continuing uncertainty about the global economy, oil and gas professionals still maintain confidence about the industry’s overall long-term prospects, according to GL Noble Denton’s 2013 industry outlook, ‘Seismic Shifts’. Of those surveyed for the report, 89% said they were confident about the industry’s prospects in 2013 compared with 82% in 2012.

The path to increased productivity in 2013 comes with its problem areas, though. “[The report’s] findings indicate that companies will have to think smarter to achieve the levels of safety, integrity, and performance that will be required to breed success in 2013,” Pekka Paasivaara, GL Noble Denton executive board member, said in the report.

To grow, companies will look more to organic methods that often involve moving into challenging new areas. Of those surveyed, 41% expect to achieve growth organically versus 35% who said M&A initiatives will fuel growth.

“As far as the industry is concerned, the overall investment climate is well oriented for 2013,” Thierry Pilenko, Chairman and CEO of Technip, said in the report. “The industry is progressively moving to new frontiers such as deeper water, pre-salt fields, floating LNG, harsher environments like the Arctic, and new areas like East Africa, as firms seek to renew their reserves and reach their production targets.”

Increased operating costs for these increasingly complex – but necessary – new projects may prove challenging for companies to overcome this year. Of respondents, 38% said rising operating costs were the No. 1 barrier to growth facing the industry in 2013.

“The mounting cost of operations is largely down to an increase in the complexity of oil and gas projects, a surge in insurance premiums, and the acute lack of suitably qualified professionals across the region,” Richard Bailey, executive vice president for the Asia-Pacific region at GL Noble Denton, said in the report.

In the aftermath of the Macondo oil spill, increased regulations in the upstream industry also are posing a major barrier to growth. Almost 50% of respondents said their companies will spend more on compliance in 2013, and 40% of respondents expected their companies to spend more on health and safety this year.

While only 9% of respondents said their companies’ main source of growth would be innovation, technology will continue to play a role in shaping success.

“The industry used to be accused of being technology-averse and always staying with how things are,” Colin Johnston, vice president of commercial engineering at Helix ESG, said in the report. “Although officially nothing has changed, I think technology development is more ‘across the board’ in terms of the equipment that’s used. It’s become more of a drip-feed type of development.”

A shortage of skilled engineers, scientists, and other personnel will continue to prove problematic to the industry in 2013, with 55% of those surveyed saying lack of skilled labour would be the No. 1 barrier to growth in 2013. Digital oilfield technology may allow companies to mitigate these shortages and better allocate existing resources. “You can have one senior experienced drilling engineer overseeing, say, 12 to 15 drilling programs at any one time rather than having to spend a week flying out to one rig, spend 24 hours there, and not see anything interesting while he is there,” Justin Lowe, an oil and gas specialist at PA Consulting, said in the report.

“That also gives an opportunity for training up the next generation because they can actually fast-track some of that knowledge gain,” Lowe added.

As the industry comes to rely more on technology in 2013, geopolitical relationships may shift as national oil companies lacking the technical know-how turn to international oil companies to help them meet their goals. An example of such collaboration can be seen in the relationship between Russian state oil company Rosneft and ExxonMobil, which are developing three fields in the Russian Arctic. “The only reason they are dealing with ExxonMobil is because they don’t have the technology to develop the Arctic fringe, and Rosneft has no offshore platform experience, particularly not in Arctic conditions,” Bruce Misamore, former CFO at Russia’s Yukos Oil Co., said in the report.

Oil prices are expected to remain around $100/bbl in 2013, according to the report. An increase in demand from emerging markets and a “long-term stress” on supply will help to offset any weakening effects in the economy.

“The time that it takes to find and develop deepwater resources and build the rigs and the equipment is in the 5-10 year time horizon,” Greg Mather, a deepwater consultant with Mather Consultants, said in the report. “And within that span of time, I don’t see anything but continued growth.”

By Mary Hogan, Hart Energy