“Short-term agility, long-term resilience” will characterise the oil and gas industry as companies seek to rebalance their business portfolios and re-organise to secure sustainable growth, according to DNV GL’s annual benchmark study on the industry outlook.
Study highlights include:
Oil and gas industry reorganising for a new era
Diversification, consolidation and ongoing cost efficiency measures will be hallmarks of 2017, with the research revealing signs of deep, strategic changes for sustainable growth beyond cyclical patterns. Almost half (49%) of senior industry professionals expect their businesses to diversify into, or invest more in, opportunities outside of oil and gas.
“The number of companies we now see pursuing opportunities beyond oil and gas signals a step change in the reshaping of the sector and demonstrates its ability to adapt and build a more robust, diverse and sustainable energy future,” says Elisabeth Tørstad, CEO, DNV GL – Oil & Gas.
Deeper cost-efficiency efforts are expected
85% have cost management as a top or high priority for 2017 and a majority (63%) see their current cost-efficiency measures as marking a permanent shift towards a leaner way of working. Organisational restructuring (37%), reducing operating expenditure (35%), and improving efficiency from existing assets (29%) are the top three priorities for cost control in 2017.
Two-thirds (66%) say that the cost pressures are driving more industry collaboration, a positive effect of recent market challenges. Standardisation efforts are also increasing as it helps remove remaining complexities. 66% of respondents say their organisation will seek greater standardisation of tools and processes in 2017, up from 59% last year.
Digitalisation on the rise
Digitalisation is also increasingly seen as a means to enhance operational and cost efficiencies. 39% expect their organisation’s spend in this area to increase in 2017. Half (49%) of respondents also said their organisation will embrace digitalization to increase profitability.
By: DNV GL