Re(de)fining resilience
October 28, 2021
October 28, 2021
Oil and gas refiners—regardless of whether they are pureplay operators or downstream segments of integrated oil companies—are facing pressure from all sides. They’ve been struggling for years, with business and operating models that haven’t changed in generations. As the global energy system expands and the energy transition accelerates, so do the challenges they face.
Overcoming the obstacles in their path requires a new operating approach aimed at building resilience—and maintaining relevance—in the energy transition.
Strengthening, connecting and optimizing operations can deliver margin improvements of $0.5-1.5/bbl, which could translate into yearly profitability gains of $60-180 million for the average refiner.
Refiners’ operating environments will likely be characterized by increasing pressures on margins, operational performance and safety, and diminishing talent pools as existing workforces are pushed to their limits. Winners will stand out by activating four levers of resilience:
Resilience = Adaptability + Responsiveness: A resilient refiner adapts to new conditions and seizes new opportunities to grow in the energy future.
We have seen resilient refiners achieve up to:
10%
improvement in production yields
20%
improvement in working capital
20%
reduction in maintenance costs
20%
reduction in asset lifecycle costs
We believe connecting and optimizing operations is the prerequisite for the resilience that’s now required to successfully navigate the energy transition. Piecemeal solutions are no longer enough. Unlocking competitive advantage—and the full value potential of the organization—calls for an end-to-end approach. There are three primary components that underpin a fully connected and optimized refiner.
We believe refiners looking to build resilience should take the following six steps:
Once refiners have addressed these issues, they can move forward to develop an execution blueprint, with projected milestones and metrics. Communications, governance and change management programs will be critical to managing the change—and generating value—over the long term.