Energy Perspectives

LATEST THINKING

The energy industry is experiencing its most severe downturn in decades and those involved face the difficult and painful prospect of having to quickly transform their business to remain relevant and prosperous. But that’s not all. We’ve also entered a period in which CO2 emissions’ effect on Earth’s climate is assuming greater prominence in the world’s economies, as punctuated by the COP21 agreement last December. This edition of Energy Perspectives provides the latest thinking from Accenture Strategy on what oil and gas companies must do to prosper in a volatile, “lower for longer” environment.

This edition of Energy Perspectives features eight articles and one interview that provide valuable insights on current developments within the industry, the implications for E&P companies and other related players, and actions to take now to weather the storm and devise sustainable long-term strategies. Topics include:

Changes in supply-demand dynamics and the two durable trends they are shaping
Implications of COP21 for the energy industry
Effect of the crisis on countries holding hydrocarbon resources
Strategic and operational issues operators face (including those specific to North American LTO operators)
Transformative potential of analytics (big data) and digital capabilities in the upstream oil and gas industry

Today’s trends require O&G companies to think much differently about their strategies and operations in the next several years. Specifically, they must move away from typical immediate but often short-sighted responses: Selling assets, cutting investments, slashing headcount, and squeezing suppliers. Instead, they should carefully review their underlying operating models, organization, and capabilities. That’s the first step toward enacting long-needed structural reforms across the industry. Such reforms are necessary to restore competitiveness in a lower-price, higher-volatility environment and to prepare companies to thrive through future cycles.

Authors

Arthur Hanna