Despite significant actions taken on the cost and efficiency agenda over the last 24 months, cost and performance improvement will continue to be a priority for operators, governments and service companies.
With expectations for the oil price to remain subdued through to 2019, continued action on cost and efficiency will be required to drive financial performance. Despite the actions already taken, opex and capex per barrel remain significantly above 2004 levels. Many operators have successfully reduced their cashflow breakeven, but the weight of action has fallen on dividend distributions and investment. The service companies have taken significant action to reduce cost and capacity, feeding the risk of cost inflation as activity levels recover.
The challenge across the energy and natural sector is to build performance management and performance improvement into the core of the organisation. The industry's traditional approach to financial pressures has been to focus on cutting costs, through deferring projects, scaling back activity plans, cutting headcount and squeezing supplier rates. These approaches can deliver short term results, but very often create longer term performance issues and amplify the boom and bust cycle along the supply chain.
We believe that performance improvement needs to be central to the ways that companies in the energy and natural resources sectors work. There is clear evidence from the downstream sector that concerted focus on operational efficiency and capital discipline delivers results across the economic cycle.
Focusing on sustainable improvements to strengthen your bottom line
Our Performance Improvement team works with leaders in the energy and natural resources sector to deliver sustainable improvements in financial performance. We bring together deep practical experience in driving bottom line results with Wood Mackenzie's market leading industry knowledge. We work closely with leadership teams to:
- Increase production and improve reliability
- Improve efficiency
- Reduce cost
We can help you focus on material opportunities by working across the P&L and balance sheet, and exploiting our extensive hands-on experience across the energy and natural resources sectors.
Why Wood Mackenzie?
- Our Performance Improvement team has a proven track record, delivering multiple billions of dollars for clients across the energy and natural resources sectors
- Wood Mackenzie is the global leader in commercial intelligence for the energy and natural resources sector. We draw on our network of dedicated analysts and subject matter experts to give you the complete commercial picture
- Practical advice based on deep industry experience and relationships
- Leverage commercially-driven results coupled with deep industry content
We focus on material financial opportunities and ensure that our business cases are underpinned by deal-level financial and analytical rigour. The plans and financials that we develop provide a solid base to drive accountability for delivery.
Together with our position as a global leader in commercial intelligence for the upstream sector, we are able to draw upon our worldwide network of dedicated analysts and subject matter experts to give you the complete commercial picture.
How can we help you?
To discuss how our team can help you strengthen your bottom line, please contact us directly:
Head of Performance Improvement
T +44 20 3060 8766
Vice-President, Performance Improvement
T +44 20 3060 8762
Managing Consultant, Performance Improvement
T +44 20 3060 8758
Alternatively, register your interest below and we will contact you:
More from Wood Mackenzie on Performance Improvement:
Download our latest report on downstream's structural changes and the lessons for upstream, in What can upstream learn from downstream?
Read our blog on the turning point in the price cycle: Costs – early warning signals
Read about sustainability risks in our recent blog: Progress on opex – but will it stick?
Read about operating costs in our recent blog: Operating cost: has the oil industry really moved the needle?
Read our blog on upstream cost management: Breaking the cycle? Cost efficiency in upstream oil and gas
Read about competitive pressures and exposure to risk: On the margin: North America refineries
Watch the first video to find out more about Performance Improvement and to meet the team: What is Performance Improvement?
Watch the second video to find out more about how low oil prices are impacting operating costs: The Low Price Environment
Download the full 2016 report on cost management in upstream oil and gas: Has Upstream kicked its cost problem?
Download the full 2015 report on cost management in upstream oil and gas: Crash diet or lifestyle change?