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LATEST THINKING


Energy company
of the future

Identifying where to play and how to win in the emerging energy landscape

OVERVIEW

A perfect storm of factors is upending the traditional oil and gas industry’s economics. In the face of this roiling change, oil and gas companies can no longer proceed with business as usual. Their survival hinges on a bold rethinking of their business and operating models. Oil and gas companies will not only need to transform the role they play in the broader energy industry, but also how they operate, work with their supply ecosystem, and interact with end consumers. Digital will be the foundation of this transformation, helping the industry unlock trillions of dollars in new value globally. North America’s unconventional resources will lead the charge.

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Energy company of the future

KEY FINDINGS

Massive changes are under way on the demand and supply sides of the oil and gas value chain:

On the demand side, hydrocarbons’ share of the energy mix is expected to fall from 80 percent today to as low as 50 percent by 2060. And, according to Accenture Strategy’s analysis conducted as part of the World Energy Council Energy Scenarios study, demand for two hydrocarbon supply sources—oil and coal—will peak around 2030.

On the supply side, assets such as shale haven’t just become economical; they’ve added a wide swath of ever-decreasing cost capacity to the supply curve driving US production upward since 2007. At the same time, non-hydrocarbon sources like solar and wind have approached—or in some cases, have actually achieved—cost parity with oil.

To succeed in North America, the industry will need to adjust to a new paradigm, becoming both agile and adaptable, and connected and collaborative.

HEAR FROM THE EXPERT

DOWNLOAD VIDEO TRANSCRIPT (PDF)

Accenture Strategy's, Vivek Chidambaram, discusses how oil and gas companies are facing an existential crisis. In many ways, both the demand and supply sides of the equation are in flux. The industry is becoming more consumer-centric, so understanding US consumer energy preferences will be critical.

RECOMMENDATIONS

North American oil and gas companies must use digitial to help them think boldly along two critical dimensions – reimagining unconventional field operations, processes and interactions with oil field services providers:

Where to play

Companies will need to rethink the essence of their business, their role in the value chain and the value they create. They will have to carefully select assets to maximize the returns for the risk incurred.

How to win

Companies will have to develop an operating model that includes processes for using information to drive simultaneous execution; technology required to support collaboration and adaptability; an organization that shares information; and the ability to interact with their ecosystem in real time.

Energy company of the future: The digitization of onshore

2017 WORLD ECONOMIC FORUM INSIGHTS

Global Energy Architecture Performance Index Report 2017

World Economic Forum's 5th Annual Energy Architecture Performance Index Report

The Energy Architecture Performance Index Report (EAPI), developed by the World Economic Forum in collaboration with Accenture Strategy, looks at trends and the real performance of countries' energy systems. Since its launch five years ago, the EAPI has contributed to the global benchmarking of energy systems, highlighting topical energy issues and providing guidance on making energy transitions more effective. The 2017 report includes the findings from benchmarking 127 countries on 18 indicators covering contribution to economic growth and development, environmental sustainability, and energy access and security.

Learn more about key global trends in the energy transition moving towards more sustainable, affordable and secure energy systems around the world, as well as the challenges countries continue to face, individually and as cohorts.

Explore the full report, infographics and more here.

Visit the Accenture Energy blog to read: The Energy Transition – what's at stake for oil and gas companies.

READ THE REPORT [PDF]

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