RESEARCH REPORT

In brief

In brief

  • With energy systems becoming decarbonized, digitalized and demand-driven, our latest report explores how disruption is changing oil and gas.
  • Discover how oil companies can respond by reinventing and redefining their purpose to drive the change that they and their stakeholders want to see.
  • Learn about the new technologies, strategies and models required to capitalize on emerging opportunities and thrive in the future energy landscape.


Facing up to an industry in flux

The oil and gas industry is dealing with massive disruption on multiple fronts. Increasing oil price volatility is adding complexity to a fast-changing energy sector where digital technologies, the drive for greener energy and demand for more consumer-centric services are putting national mandates and shareholder returns at risk, while creating a major re-evaluation of future commodity prices and energy value chains.

At Accenture, we see four major game-changers for the energy industry.

1. Decarbonized energy systems

With flatter hydrocarbon use in many mature markets, economic growth is becoming disconnected from hydrocarbon demand.

2. Energy efficiency

Investments in energy efficiency are helping to contain energy demand and are fundamental to decarbonizing energy systems.

3. The new energy consumer

From eco-awareness to new ways of working, consumers want more seamless, connected and personalized experiences from energy providers.

4. Digital reality

Digital is reinventing every aspect of the energy value chain, with new digital players, platforms and plays disrupting the competitive landscape.

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By better understanding the implications of disruption and these game-changing trends on future growth, oil companies can innovate at scale to redefine their purpose and compete more effectively in the emerging energy economy.

The case for change is clear

To stay relevant and retain their license to operate, oil companies must reinvent their purpose. As they strive to become more agile and adaptable, connected and collaborative, they will need to reinvent their business models fast, focusing on two key dimensions:

  1. Where to play? What is the essence of their business, role in the value chain and value they create?
  2. How to win? How will they rethink their operating models, embrace new technologies and adopt new workforce strategies?

With their purpose in mind, oil companies can tackle the global energy challenge with new strategies, firstly to “transform their current core business,” while releasing funds to simultaneously “grow and scale new businesses.” Some companies are already on this transition journey from “oil” to “energy,” redefining their purpose and focusing on new businesses. But with disruptors entering the competitive landscape and value increasingly shifting downstream, incumbents need to act fast.

With oil and gas industry disruption, wait and see isn’t an option. It’s time to reinvent for a decarbonized, digitalized, demand-driven future. Now.

Three key transformation imperatives

So how can oil and gas companies accelerate a transformational pivot to the new to take advantage of new game-changing opportunities? The report identifies three key priorities.

  1. Embrace next-generation digital technologies
    As the oil and gas industry moves to leverage ecosystems while making data-driven decisions at pace and scale, emerging technologies are key to unlocking potential. Critical among these are distributed ledger technology/blockchain; artificial intelligence (AI); extended reality (XR); and quantum computing—collectively known as DARQ technologies. While each is powerful individually, together they will change how the entire energy industry looks and works.
    • Combining DARQ technologies could help oil and gas companies boost their market capitalization by 44 percent.
    • Forty-two percent of upstream and 30 percent of downstream executives expect AI to have the greatest short-term impact on their business.
  2. Build the workforce of the future
    Heavily dependent on engineering skills, oil and gas is a mature industry where the average employee is more likely to be older. What’s more, sensitivity to environmental issues is a growing concern as recruiters seek to equip a modern workforce. Retooling the future oil company will require new data and digital capabilities to enhance labor proficiency and optimize productivity.
  3. Align to stakeholder and investor concerns
    Investor pressure for certainty of returns and cashflow is driving demand to maximize production from existing assets rather than open fresh frontiers. Changing their portfolios to include natural gas, electricity, biofuels and carbon capture projects will help oil companies to lower and offset emissions, while circular economy efficiencies will further help to reduce their carbon footprint.

Reinvent for hyper-relevance

As the energy world becomes more interconnected and non-linear, the report considers how oil companies can reconfigure their operating models for future agility and hyper-relevance, to better respond to market changes, adapt to rising consumer expectations, meet stakeholder demands and attract a new generation of talent, with strategies connected to a greater purpose. With this in mind, there are three key factors to consider.

Compete smarter as an asset specialist

Leverage predictive, real-time data-driven insights to compete smarter, optimizing the most advantageous positions in the value chain.

Optimize value through the energy life cycle

Decide whether to be pure play, invest selectively in other value chains or be fully integrated, enabled by rich, new data exchanges.

Focus on consumer intimacy and innovation

As well as investing in physical assets, invest in digital assets to ensure rapid, data-led adaptability and optimize the consumer experience.

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Next steps to fuel change

Just as every oil and gas company is unique, so is every transformation journey. Reshaping the oil industry requires companies to pivot their portfolios to the new in a timely way—growing new businesses while keeping the current portfolio profitable and agile. This can be achieved by balancing factors like:

  • Centralization and decentralization
  • Fixed assets and pay-as-you-go
  • Standard and bespoke
  • Operator and entrepreneur
  • Human and machine-based capabilities

To help reimagine the journey from traditional segments like upstream, refining, trading and fuels retail to the new energy landscape, Accenture has developed a suite of new industry archetypes and business models, which are addressed in depth in the report.

And, by drawing extensively on industry examples, it sheds light on how oil companies can transform via a digitally enabled, disciplined approach to unlock new sources of growth and value, and close the gap between potential and reality. Faster.

Accelerate your new energy future

In an era of rapid change, oil and gas companies will continue to face multiple challenges. But although disruption increases risks, it also creates opportunities to drive growth while boosting the reputational appeal of becoming greener to investors, consumers and employees. With a better understanding of the complex factors involved, and how they will impact your business, you’ll be better placed to succeed in the emerging energy landscape, whatever lies ahead.

The time to power into the New is now. Are you ready?

Andrew Smart

Senior Managing Director – Global Energy Industry Lead


Richard Holsman

Managing Director, Lead – Global Digital, Resources


Julie Adams

Lead – Energy Industry Research

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