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Oil and gas are vital to the country’s economy. Over the last year, Americans have been finding this to be true. Americans are paying more at the pump and there’s more demand for it.
The oil and gas industry is working hard to meet the country’s demand for these commodities. This country consumes an average of 7.22 billion barrels of petroleum each year.
The industry does its best to stay on track, but it faces certain challenges. There are regulatory and compliance factors to consider. Read on to learn five of the concerns this industry has to address.
1. Importance of Regulatory Compliance
You might be asking, “why does a big and powerful industry have to follow regulations?” Companies in this industry need to follow regulations set at the federal and state levels.
Pretty much all activities these businesses wish to take part in must be done with a permit. The businesses are subjected to a public review period. These are often contentious, so delays are common.
2. Reducing Costs To Remain Competitive
A major issue on the minds of most Americans is high gas prices. Different factors determine the price of gas. One of them is the time and money it takes to produce a barrel of oil.
The industry seeks to produce crude oil at a lower cost. The trouble is that doing so may affect the ability to remain competitive in the market.
To do this, the industry will need to optimize its production systems. Doing this improves production efficiency. In turn, it helps to lower the costs of extraction and refining.
3. Adhering to Regulatory Compliance To Begin Oil Exploration
Extending the life of current operating sites is a must. It helps to sustain their supply of crude oil or gas. At a certain point, companies need to find new sources of oil or gas.
Once they find it, it isn’t easy to begin exploration. The business will need to get several permits like a drilling permit. They can’t go on without the permits or else they face stiff penalties.
4. Environmental Regulations
There are environmental regulations to consider. This industry consumes a lot of water and energy resources so it must meet certain standards. These often serve as constraints that change the way businesses will need to drill for oil.
5. Upgrading Oil and Gas ERP
Another of the oil and gas industry challenges to consider concerns technology. Companies that face ERP issues need to improve their technology.
Oil and gas ERP Software can help companies deal with supply chain disruptions. This software promotes positive decision-making. With it, companies can become more efficient.
Factoring Regulatory and Compliance Matters
Compliance in the oil and gas industry is a must. Companies need to consider the regulations that affect their operations. Failing to consider these five regulatory and compliance matters can lead to issues.
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