Growing the top line always takes time. But do you have time in this business environment? At current and forecast prices, many oil companies are obliged to cut CAPEX and OPEX budgets significantly. Focusing on lowering costs, reduced maintenance, shut-ins and optimizing existing assets at lower flow rates, the upstream industry must undergo large-scale portfolio and operating model adjustment to improve economics of marginal assets.
New, more radical approaches are needed to drive out cost and capture revenue opportunities, at scale in order to remain competitive in the energy mix. Value chain optimization requires a “systems thinking” approach that focuses on the way that a system’s constituent parts interrelate, how they work over time and within the context of larger systems. Industry has been relatively successful in achieving productivity improvements from point solution technology applications that drive efficiency and effectiveness. However, many assets have reached the ‘point of diminishing returns’ in the pursuit of optimization benefits using conventional business models.
To reach the next horizon of value, these assets must undergo digital process re-engineering, digital re-organization and digital business transformation. Many have started small or in an ad hoc manner, they haven’t scaled fast and as a result their initiatives are only ‘scratching the surface’, have died or are hanging on by a thread.
Read our whitepaper on how survival hinges on three priorities for change, and how sustainability through portfolio management requires thinking big, starting small, scaling fast and driving adoption.