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

Remember my region and language settings

Upstream Oil and Gas

The months and years ahead promise continued volatility in oil prices.

Companies must cope with price volatility and still gain value from the significant investments in exploration and production that they have and will have to make. Managing geopolitical and economic risk is increasingly difficult. In addition, transformational technology is shifting the competitive landscape as companies tap new energy reserves to capitalize on opportunities in these areas. 

Whether they specialize in conventional or unconventional energy markets, enterprises need new approaches to this rapidly changing sector. One critical challenge that companies face is how to improve their performance in large-project capital management. Companies must successfully apply lean principles to manage operating expenses and create clear strategies for renegotiating oil and gas contracts. Linked to that is a need to rethink cost and complexity of the entire value chain. Much of the E&P sector has seen prices rise above inflation, and along with it, increased complexity in how business is done.

Eight Critical Actions for Oil and Gas Companies

To succeed in today’s challenging energy market, upstream companies must make clear strategic decisions about how they will differentiate themselves. They must be prepared to make broad operating model changes to manage their increasingly complex portfolios. 

These eight critical actions can help oil and gas companies achieve sustainable improvements in unit operating costs within 12 to 24 months:

Technical Standardization and De-Averaging

Choosing appropriate standards and limiting choices

Organizational Right-Sizing

Optimizing head count and upgrading talent

Improved Workforce Efficiency

Reducing administrative costs and bureaucracy

Supply Chain Partnering and Renegotiation

Leveraging partnership opportunities and overhauling agreements

Maintenance Optimization

Rethinking schedules and policies

Organization of Aviation, Trucking, and Marine Logistics

Adjusting contracts and optimizing asset utilization

Greater Cooperation with Other Industry Players

Cooperating with peers to reduce infrastructure and asset costs

Streamlining Overhead, Real Estate, and Support Service Costs

Exercising greater discipline in—and thinking more strategically about—cost management

Sylvain Santamarta on How BCG Helps Upstream Companies Surmount Digital Ecosystem Challenges

Sylvain Santamarta on How BCG Helps Upstream Companies Surmount Digital Ecosystem Challenges

Philip Whittaker on Upstream Oil

Henning Streubel on Upstream Transformation

Featured Experts

Energy & Environment
Previous Page