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OVERVIEW

The oil and gas industry is emerging from its worst downturn, but it’s far from smooth sailing ahead. The industry still faces significant challenges, with unit cost—and profitability—per barrel being the most acute and widespread. Left unchecked, unit cost could erode industry players’ competitiveness and possibly threaten their very existence. The biggest factor in the unit cost challenge is the supply chain, which is why oil and gas companies need a fundamentally new way of working with their suppliers—one that’s based on an ecosystem that shares, innovates and competes together.

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KEY FINDINGS

According to our research, the oil and gas industry continues to struggle with cost challenges:

RECOMMENDATIONS

To succeed in the next oil and gas cycle, operators and their counterparts need to develop a collaborative ecosystem—both operationally and commercially—that:


Shares together in key areas, including performance goals, accountabilities and outcomes, critical resources and infrastructure, and data-driven insights.

Innovates together to create new and leaner workflows, new and simpler designs and standards, enabling technologies, and contracts and incentives.

Competes together via fit-for-purpose alliances and new business models, such as “as-a-service,” equity partnerships or joint ventures.

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