Choose your location to get a site experience tailored for you.

Remember my region and language settings

Supplier Distress Analysis

BCG’s exclusive market analysis scans for risks and opportunities for oil and gas suppliers.

In the wake of volatile oil and gas prices, many suppliers are facing financial stress or even extinction. Highly leveraged producers—particularly US independents, small-capitalization businesses, and private-equity-backed new entrants with heavy debt financing—are expected to suffer liquidity and financing crises.

The challenging market also offers opportunities for nimble suppliers that can respond quickly and effectively to rapidly changing conditions. BCG’s proprietary Supplier Distress Analysis can help companies see what’s working—and what’s not. BCG maintains a watch list of 100 top companies—including equipment manufacturers, onshore and offshore drillers, shipyards, seismic services, and engineering, procurement, and construction firms—and tracks their performance each quarter.

Among the key performance indicators tracked quarterly by BCG’s Supplier Distress Analysis are:

  • Total revenue
  • Share price
  • EBIT margin
  • Net debt
  • Free cash flow
  • Staff additions or reductions
  • Restructuring initiatives
  • Growth and profitability matrix

As a defensive measure, producers should monitor the health and risk of failure of key suppliers—and determine the potential impact of supplier distress on the company’s ongoing projects with regard to quality, safety, and asset availability. This is particularly vital for relationships with suppliers that provide large, hard-to-replace assets, such as installation vessels, without which major projects can suffer critical bottlenecks. 

Energy & Environment
Previous Page