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Energy company of the future: Rethinking everything

Identifying where to play and how to win in the emerging energy landscape

OVERVIEW

A perfect storm of factors is upending the traditional oil and gas industry’s economics. In the face of this roiling change, oil and gas companies can no longer proceed with business as usual. Their survival hinges on a bold rethinking of their business and operating models. Oil and gas companies will not only need to transform the role they play in the broader energy industry, but also how they operate, work with their supply ecosystem and interact with end consumers. Digital will be the foundation of this transformation, helping the industry unlock trillions of dollars in new value.

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Energy company of the future

KEY FINDINGS

Massive changes are under way on both the demand and supply sides of the oil and gas value chain:

On the demand side, hydrocarbon's share of the energy mix is expected to fall from 80 percent today to as low as 50 percent by 2060. And, according to Accenture Strategy's analysis conducted as part of the World Energy Council Energy Scenarios study, demand for two hydrocarbon supply sources—oil and coal—will peak around 2030 (for oil as late as 2040).

On the supply side, assets such as shale haven’t just become economical; they’ve added a wide swath of ever-decreasing cost capacity to the supply curve. At the same time, non-hydrocarbon sources like solar and wind have approached—or in some cases, have actually achieved—cost parity with oil.

To succeed in this new world, the oil and gas industry will need to adjust to a new paradigm, becoming both agile and adaptable, and connected and collaborative.

RECOMMENDATIONS

Oil and gas companies must use digital to help them think boldly along two critical dimensions:

Where to play

Companies will need to rethink the essence of their business, their role in the value chain and the value they create. They will have to carefully select assets to maximize the returns for the risk incurred.

How to win

Companies will have to develop an operating model that includes processes for using information to drive simultaneous execution; technology required to support collaboration and adaptability; an organization that shares information; and the ability to interact with their ecosystem in real time.

Energy company of the future: The digitization of onshore

2017 WORLD ECONOMIC FORUM INSIGHTS

Global Energy Architecture Performance Index Report 2017

World Economic Forum's 5th Annual Energy Architecture Performance Index Report

The Energy Architecture Performance Index Report (EAPI), developed by the World Economic Forum in collaboration with Accenture Strategy, looks at trends and the real performance of countries' energy systems. Since its launch five years ago, the EAPI has contributed to the global benchmarking of energy systems, highlighting topical energy issues and providing guidance on making energy transitions more effective. The 2017 report includes the findings from benchmarking 127 countries on 18 indicators covering contribution to economic growth and development, environmental sustainability, and energy access and security.

Learn more about key global trends in the energy transition moving towards more sustainable, affordable and secure energy systems around the world, as well as the challenges countries continue to face, individually and as cohorts.

Explore the full report, infographics and more here.

Visit the Accenture Energy blog to read: The Energy Transition – what's at stake for oil and gas companies.

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