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TEXT III

How energy companies can adjust their business models to a period of recovery

The character of Chuck Noland, played by Tom Hanks, says near the end of the film Cast Away, “...because tomorrow the sun will rise. Who knows what the tide could bring?” He makes this observation after having survived on a desert island for four years before being rescued and returned to civilization. If you’re a top executive in an oil and gas company, more than likely you’re feeling the same way right about now — optimistic but extremely cautious.

Much of the oil and gas industry has survived an especially tough few years with weak demand and low prices. It has been difficult to make strategic decisions and plan for the future. Only now is the sector beginning to emerge from its upheaval. If there is hope on the horizon, we must, like Noland in Cast Away, remain mindful of the risk. […]

So if you are an oil and gas executive peering out over 2017 and beyond, you will face structural and cultural issues internally; many companies do not have the talent, organizational framework, systems, processes, or attitudes to be sufficiently flexible and innovative in an evolving and uncertain marketplace. You should be prepared to pursue new drilling and extraction technologies and to increase your research into sustainability and clean energy. To start planning for the future, oil and gas leaders in all segments might consider some fundamental questions: Do I have the right business models in place? How can my company develop new capabilities and in what areas? How should asset portfolios evolve? What type of technology plays should I invest in?

As companies address these challenges, we see a number of business models and strategic responses emerging between now and 2020.

(From https://www.strategyand.pwc.com/trend/2017-oil-and-gas-trends. Accessed July 19th, 2017)