Reinventing oil and gas for a new energy era
January 21, 2020
January 21, 2020
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.
With flatter hydrocarbon use in many mature markets, economic growth is becoming disconnected from hydrocarbon demand.
Investments in energy efficiency are helping to contain energy demand and are fundamental to decarbonizing energy systems.
From eco-awareness to new ways of working, consumers want more seamless, connected and personalized experiences from energy providers.
Digital is reinventing every aspect of the energy value chain, with new digital players, platforms and plays disrupting the competitive landscape.
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.
Accenture reveals how disruption is reshaping the oil and gas industry.
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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:
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.
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.
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.
Leverage predictive, real-time data-driven insights to compete smarter, optimizing the most advantageous positions in the value chain.
Decide whether to be pure play, invest selectively in other value chains or be fully integrated, enabled by rich, new data exchanges.
As well as investing in physical assets, invest in digital assets to ensure rapid, data-led adaptability and optimize the consumer experience.
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:
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.
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?