Back in July, the coronavirus was dominating headlines. For folks in oil and gas, discussions were still focused on the OPEC fallout and the headaches of navigating mandatory offsite work. But the start of Q2 is also when we typically start seeing early projections for the year ahead. OPEC, for example, projected next year’s oil demand to exceed pre-COVID levels by 25%. That was back in July. Around the same time, IEA also predicted that global demand would rebound in 2021. IEA pegged the industry’s annual growth at 1.5% per year through 2025—a slight drop from the pre-COVID estimate of 1.8% YOY, but still moving in the right direction.

Why are we talking about July when it’s already October? Because as our oil and gas customers dive into 2021 planning, we’re seeing these market projections reflected in their strategies. The prevailing mood can be summed up with the word “measured.” Although we’re seeing a restrained approach to 2021 capex—we don’t envision new builds making a full rebound just yet—we’re gearing up for rebuilds and refurbs that put the cold stack back in “warm.” Just like the team here at the Grizzly workshop, our customers are both cost-conscious and optimistic about the year ahead.

The 2021 Outlook for the Permian

From where we’re sitting in Houston, a ripple in Permian Basin activity feels more like an earthquake. In the first few months of the coronavirus pandemic, our customers were hit hard by the slowdown in Permian production. (If you’re reading this blog, we don’t need to tell you that COVID-19 killed Permian drilling activity.) But the hardest-working basin in the nation is expected to experience a solid rebound in 2021.

According to one industry analyst, the Permian’s gas output is projected to return to record levels by late 2021. Like many other forecasts we’ve seen, the rebound although sizable, will probably be a little lower than projected. According to Rystad Energy, the Permian is better positioned than most basins to gain market share from 2020-2021. Still, it might be 2022 before it hits Q1 2020 production numbers again.

What does this mean for our customers and our work at Grizzly? Heading into 2021, planning should focus on putting the cold stack back in “warm” so that equipment is prepped for action in the most economical way possible. A big part of this involves fixing any issues that occurred when your equipment was out of commission and, as a result, not getting routine maintenance. This can do a number on performance, but with the right partner, you can get your cold stack primed for peak performance again. We’re also expecting rebuilds that help operators make the most out of their existing assets.

(Want to read more about the ins and outs of reactivation? Check out this article from the Grizzly blog.)

The Power of the Right Equipment Services Partner

Those of us who lived through the oil price crash in 2014 learned important lessons about spending, efficiency and maintaining flexibility. Although 2020 was a different situation, there are also some similarities. In both cases, we’re facing a market dynamic where operators need to find every possible efficiency. As you optimize your 2021 strategy, don’t overlook the importance of the right equipment services partner.

With the right approach, getting your equipment ready for action can be completed quickly, economically and with your unique operational dynamics in mind. Whether you need a refurb, a rebuild or another oilfield equipment service, choose a partner with an approach that equips you for a dynamic 2021.

  • Efficiency: Peak productivity is important at the wellsite, and it’s also critical when you’re working from home. But it’s also important in an equipment services partner. The right partner won’t just get their job done efficiently; they’ll also spot areas to optimize the productivity of your existing assets. When your partner is efficient, your bottom line and your operations will both benefit.
  • Experience: From frac pumps to blenders, data vans, hydration equipment and beyond, our industry has no shortage of specialized equipment. By choosing a partner with proven expertise—not just in equipment services, but in oil and gas equipment—you can have the confidence that your assets are ready to get the job done.
  • Flexibility: Sure, there are best practices for refurbishing or rebuilding particular types of equipment. And they’re called “best” practices for a reason. But when you’re looking for a partner to help you weather the dynamics of a tough market situation, you need both expertise and flexibility. Make sure your partner is equipped to identify your unique needs and use best practices to fulfill them. Then, explore a customized approach that reflects your equipment’s requirements now and as demand fluctuates.
  • Humility: When you’re navigating the path forward, a strong working relationship is key. A big component of a successful workflow? A healthy dose of humility. By choosing a partner who’s down to Earth, takes ownership of its work and is committed to continuous improvement, you’ll know that your equipment services are in trusted hands—no matter the market situation.

At Grizzly, we’re driven to help our oil and gas customers succeed: in terms of budget, productivity, flexibility and true partnership. As you’re planning for 2021, let us help you find the best path forward so that you can go from cold stack to back in action.