The energy industry (including oil and gas drafting) is both engineering-intensive and labor-intensive in nature, making cost reduction a part of the business mandate. Since the last few years, oil and gas companies have endured tumultuous times. While upstream energy companies are coping up with the increasing commodity prices and competition for oil reserves, downstream energy firms are finding it difficult to contend with declining margins and refining capacity problems. Decline in production, increasing exploration costs and demand-supply volatility have only added to the troubles. Energy companies are looking to decrease costs across the board, in a move to consolidate company-wide spending.
Another key area that energy companies are looking to overcome is talent shortage. Due to cost pressures, they are forced to innovate and adopt newer technologies. This investment is not only for the engineering function of an energy firm, but for other low priority areas as well. Outsourcing non-core areas of mechanical engineering is seen as a key driver in cost control and also a potent tool for expanding into core business functions.