Strategy in Oil and Gas

In: Business and Management

Submitted By Investor
Words 360
Pages 2
Strategies for oil and gas companies

There are a variety of challenges facing the energy industry, from decreased access to sovereign reserves, to declining fields, innovation challenges, increased regulation and new energy policies. These challenges pose a threat to the basic industry structure. Oil & gas companies espouse four common industry-wide strategies of Portfolio Management, Operational Efficiency, Financial Management and Sustainability-of which the first three are core operating strategies of oil & gas companies. The companies have derived their profitability, growth, and shareholder returns based on the superior execution of these strategies. Though talk about Sustainability is a business imperative, it is no longer a differentiating factor and is not integrated with the core strategies. The current challenges facing the energy industry, however, necessitate that the companies integrate sustainability, innovation and management of technology strategies with their core strategies of portfolio management, operational efficiency and financial management. In this thesis, we propose two distinct strategic options: Total Life Cycle Management and Management of Technology. Environmental management and organizational efficiency are an integral component of both the strategic options. Through Total Life Cycle Management, the companies address challenges of continued access to easier to develop and produce reserves and legacy fields, efficiencies, costs and hosts expectations. The key components of Total Life Cycle Management constitute Portfolio Management with enhanced relational strategies with the hosts, Operational Efficiency with continuous business process innovations, Sustainability with focus on longterm energy needs of the hosts and Financial Management with focused capital allocation to build scale and synergies in a region. Management of Technology…...

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