Necessity is the mother of (re)invention
May 11, 2021
May 11, 2021
As oil and gas companies look ahead to 2030, they face a set of structural shifts that are poised to permanently change the environment in which they operate. Competition from new energy sources, environmental accountability, talent scarcity and investor apathy top the list. These challenges are all on the rise, with no signs of slowing. Most companies have realized they need to undertake big changes to achieve profitability and maintain their relevance during and after the energy transition.
But change—even big change—will not be enough. Radical reinvention is needed.
From transformation to reinvention, energy leaders are meeting the challenges of the energy transition.
View TranscriptAccenture believes reinvention in the oil and gas industry must be anchored in actions aligned to the "5Cs":
In 2021, we surveyed executives from 179 energy companies around the world to understand the actions they are taking in each area, their progress toward reinvention, and the outcomes they expect to achieve. We identified 18 companies as reinvention trailblazers. Their approach to transformation—and their expectations for success—stand in stark contrast to the "laggards," whose transformation agendas are less mature and less focused on a 5C change.
While more than 90 percent of all oil and gas companies in our study recognize the need to change, only 21 percent are moving beyond significant change to true reinvention.
Reinvention leaders have confidence that their actions in three areas—Competitiveness, Carbon and Connectivity—will pay off big. They expect to achieve:
2.3
Times more margin growth than laggards
1.8
Times more revenue growth than laggards
3.0
Times the environmental, social and governance (ESG) improvements than laggards
Our research revealed a number of things reinvention leaders are doing that other oil and gas companies should mimic—namely, zeroing in on a distinct set of actions within each of the 5Cs to drive future profitability and competitive advantage. They are, for example:
But our research also highlighted missed opportunities. For example, even leaders are not as focused as we believe they should be in the areas of ecosystem partnerships, cybersecurity, data management and innovation.
The bottom line is that industry players in all segments of the oil and gas value chain can learn from what the leaders are doing—and what they are not. That understanding will help them not only determine the right course of action in the areas of Competitiveness, Connectivity, Carbon, Customer and Culture, but also understand the gaps they need to avoid.
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