Companies Must Develop Resilient Strategies to Deal with Sector Volatility

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+ADw-p+AD4-by +AKA-Rigzone Staff+ADw-/p+AD4
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Wednesday, June 13, 2018+ADw-/div+AD4
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+ADw-div class+AD0AIg-article+AF8-img+AF8-container+ACIAPgA8-img class+AD0AIg-stretch+ACI alt+AD0AIg-Companies Must Develop Resilient Strategies to Deal with Sector Volatility+ACI src+AD0AIg-https://images.rigzone.com/images/news/articles/155917+AF8-582×327.png+ACI /+AD4APA-/div+AD4
+ADw-p+AD4-A new report by PwC identifies challenges the industry will face if there’s a supply crunch and offers ways for companies to develop future plans.+ADw-/p+AD4
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+ADw-p+AD4-Despite a ramp-up of U.S. oil production and rising sector optimism, the oil and gas industry could be headed into a supply crunch, according to +ADw-a href+AD0AIg-https://www.strategyand.pwc.com/media/file/2018-Oil-Gas-Industry-Trends.pdf+ACI target+AD0AIgBf-blank+ACIAPgA8-strong+AD4-a new report by PwC+ADw-/strong+AD4APA-/a+AD4.+ADw-/p+AD4
+ADw-p+AD4gHA-With oil demand growing and investment in many major projects having been deferred during the downturn, there is less potential supply available,+IB0 the report states, adding that CEOs of Total, Eni and Saudi Aramco have warned of a supply crunch by the end of the decade.+ADw-/p+AD4
+ADw-p+AD4-Sector volatility remains+ADs therefore, oil and gas companies need to develop resilient strategies to forge ahead.+ADw-/p+AD4
+ADw-p+AD4-PwC identified the following supply-related challenges in its report:+ADw-/p+AD4
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+ADw-li+AD4-Ongoing decline in new discoveries+ADw-/li+AD4
+ADw-li+AD4-A slowdown of the rise in exploration spending+ADw-/li+AD4
+ADw-li+AD4-Supply disruption+ADw-/li+AD4
+ADw-li+AD4-Deferred maintenance+ADw-/li+AD4
+ADw-li+AD4-Gap between expanded capabilities companies need and the diminished capabilities they have+ADw-/li+AD4
+ADw-li+AD4-Overall momentum to build a lower-carbon world+ADw-/li+AD4
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+ADw-h2+AD4-Developing a Resilient Strategy+ADw-/h2+AD4
+ADw-p+AD4-In order to be prepared for the fluctuations of the market, energy companies need a +IBw-future-proof+IB0 plan of action. In its report, PwC offers the following principles:+ADw-/p+AD4
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+ADw-li+AD4APA-strong+AD4-Continue to manage the overall portfolio with a much lower breakeven price, despite where actual oil prices are.+ADw-/strong+AD4 In order to maintain this type of portfolio, companies must undertake regular portfolio reviews to weed out assets that don+IBk-t comply.+ADw-/li+AD4
+ADw-li+AD4APA-strong+AD4-Hold on to the mantra of capital discipline.+ADw-/strong+AD4 All spending needs to reflect the focus of a company+IBk-s core and differentiated capabilities.+ADw-/li+AD4
+ADw-li+AD4APA-strong+AD4-Refocus investment and efforts on asset maintenance.+ADw-/strong+AD4 Given the age of many assets, oil and gas companies need to ensure adequate funds are available to keep supply infrastructure in good repair.+ADw-/li+AD4
+ADw-li+AD4APA-strong+AD4-Replace the +IBw-owner-operator+IB0 model with an +IBw-owner-only+IB0 approach in which returns are the priority.+ADw-/strong+AD4 Many oil exploration and production companies believe they need to build capabilities across the entire value chain, when in reality shareholders and the providers of capital simply want a return on their investment.+ADw-/li+AD4
+ADw-li+AD4APA-strong+AD4-Double down on digitization.+ADw-/strong+AD4 Now is the time to transform operations by leveraging advanced digital technology to drive efficiencies and open up new opportunities.+ADw-/li+AD4
+ADw-li+AD4APA-strong+AD4-Develop talent for a new era of technology.+ADw-/strong+AD4 Traditional disciplines such as subsurface and surface engineering are still important, but they must be balanced against new demand for expertise in digital operations.+ADw-/li+AD4
+ADw-li+AD4APA-strong+AD4-Consider how the overall business should evolve.+ADw-/strong+AD4 In the longer term, given the mega trends shaping the sector, companies must focus on finding and executing the best strategy for their own unique capabilities.+ADw-/li+AD4
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+ADw-h2+AD4-WHAT DO YOU THINK?+ADw-/h2+AD4
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+ADw-p+AD4-Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.+ADw-/p+AD4-

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