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Energy Perspectives: Ushering in collaboration and integration

Returning the oil and gas industry to the era of superior returns


Even by its own standards, the oil and gas industry would regard the past 10 years as an eventful period.

Most of this was good news for the industry. However, operators’ financial metrics—be it operating margin, return on capital, or free cash flow—actually deteriorated. The industry has not been making the most of the resources with which it has been endowed—and it must now turn a corner—and quickly.


Key Findings

The upstream model needs to transform along three paths:

  1. Improved efficiency through joint operator-supplier cooperation. A joint efficiency team can execute a holistic assessment, put in place the required enablers, use a structured combination of lean methodologies, adopt best practices, and implement a mechanism to synchronize operator-service company interaction and decision making.

  1. Technology collaboration and integrated design. More innovation is coming from service companies. Operators are focusing more on coordinating, buying, and applying technology, so they are upgrading their procurement organizations to access technologies no longer being developed in-house. The challenge is making sure they use strategies that maximize value.

  1. Performance alignment. As the industry braces itself for continued cyclicality, exacerbated by greater complexity and service intensity of hydrocarbon developments, the relationship between operators and suppliers is becoming the single biggest barrier to performance improvement. A partnership model based on an aligned set of objectives is needed.


The type of change needed is logical: establish common goals around efficiency and technology, and reward them with incentives that enable such outcomes. However, implementing the change is far from easy. It represents a fundamental shift in mind-set from one that has been entrenched for decades, requiring a recalibration of the operator-supplier relationship from a zero-sum game to a symbiotic one, and a change in operating methods to provide greater information flows and produce more effective joint developments. However, if achieved properly it could put the industry on course to achieve the returns once prevalent in its glory days.

Mugsit Ashraf

Muqsit Ashraf
Managing Director
Accenture Strategy, Energy, North America Lead

Muqsit focuses on helping Oil and Gas companies in transforming their strategies and operating models to elevate their performance and be better prepared to face the multifaceted energy challenges of the 21st century. He specializes in the end-to-end lifecycle of unconventionals, in developing new business models for operators and service companies, and in large-scale business transformation programs. He publishes frequently on these topics. He is based in Houston, TX.

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David Rabley

David Rabley
Managing Director
Accenture Strategy, Energy

David focuses on helping Upstream Oil and Gas operators and services companies drive superior performance with a focus on operations, organization and strategy. He specializes in business transformation delivered through strategic and operational planning and has developed innovative collaboration models capable of doubling performance the supply chain. David is based in Houston, Texas.

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