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Decommissioning in Oil & Gas

Upstream Oil & Gas

Upstream companies are facing a range of opportunities—as well as challenges—that make today the right time for CEOs to chart an optimized path.

In recent years, falling oil and gas prices have prompted many companies to launch strong cost-cutting measures—putting them in a position of relative financial strength. At the same time, upstream oil and gas players are contending with the challenges presented by the growing emphasis on decarbonization and renewable energy around the world, as well as changes in mobility patterns and end-user preferences. To seize the opportunities while navigating the challenges, companies must focus on four domains as they map out a path: ways of working, operations, the asset portfolio, and relationships with ecosystem partners. Within each domain, digital capabilities are key.

Digital Transformation in Upstream Oil & Gas

The upstream oil and gas sector has long embraced technological innovation as a means of increasing profitability, but the industry has been slow to adopt the global business trend of digital transformation. For long-term impact, digital can help companies capture a tremendous amount of value across the entire value chain, transforming all aspects of business operations.

In a context of abundant oil and gas supply and uncertainty about the development of demand, operators need to constantly push for greater cost competitiveness—and digital is the lever that can help make that happen. Producers must embrace digital technologies, including big data and analytics and artificial intelligence, as part of a multipronged endeavor that addresses operations, organizational effectiveness and efficiency, the business portfolio, and culture for long-term business improvement.

Digital modeling and simulation tools can connect reservoir data, field architecture, equipment design, and economics into a single framework that will help oil companies determine the most economically advantageous path forward—and do it faster than ever before.

Together, these developments have the potential to transform the upstream oil and gas industry’s fortunes by substantially improving capital efficiency, lowering production costs, and reducing time to first oil. For such a transformation to be successful, oil and gas companies need to fundamentally change their DNA and the way they work. A structured and pragmatic methodology that embraces an agile approach and addresses all aspects of the value chain will deliver maximum benefit.


Organization and Operating Models in Oil & Gas

Energy organizations are well structured and process driven, but they lag behind leading companies in other industries in optimizing ways of working to generate superior performance.

Historically, most companies have organized themselves by asset, but today larger players depend more often on a functional model as they pursue controls and consistency across operations and around the globe. Big functional models inherently require a more collaborative workplace—a cultural shift that can be hard to get right. And technological disruption is adding another layer to upstream organization and operating model effectiveness, as companies move toward new processes, governance, and decision-making logic.

There are several distinct areas on which upstream oil and gas companies can focus in order to lift themselves to the next organizational level.

Meet Some of BCG’s Experts in Upstream Oil & Gas

BCG has experience with more than 200 oil and gas upstream clients around the world over the past five years. Our experts are advisors to 19 of the world’s leading 25 oil companies on the 2018 Petroleum Intelligence Weekly ranking.

  • Cost reduction programs
  • Post-merger integration
  • Business unit/headquarters transformation
  • Decommissioning
  • Oil and gas upstream: strategy, performance, and operating models
  • Oil and gas decommissioning
  • Oilfield services and equipment suppliers
  • Leads BCG's West Coast system
  • Upstream oil and gas
  • National and international oil companies
  • Upstream transformations
  • Leads BCG's Center for Digital in Oil & Gas
  • Upstream oil and gas
  • Upstream value creation and strategy
  • Mergers and acquisitions
  • Leads BCG's Energy practice in North America
  • Leads BCG's global work in unconventional oil and gas
  • Exploration and production
  • Unconventionals—shale oil and gas
  • Digital in upstream oil and gas
  • Oil and gas development and operations
  • Digital strategy development
  • Big data and advanced analytics
  • Oil and gas
  • Manufacturing
  • Operations strategy and management
  • Performance improvement
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