How can national oil companies leverage the volatile oil price environment to emerge more competitive?

1. Navigating the
Crude Cycle
10 Strategic Actions for National
Oil Companies
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10 Strategies to Ride the
Oil Price Slide
Hard times have prompted national oil
companies to adopt quick fixes to tide
over the crisis—spending cuts, hiring
freezes and postponed maintenance.
But such across-the-board hasty
cutbacks can weaken them over time.
Accenture recommends national oil
companies leverage the low-oil-price
period to adopt 10 strategic actions to
drive costs down and efficiency higher.
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1. Reset partnerships with core suppliers.
Identify strategic suppliers in key work categories and renegotiate long-term contracts to
strategic partnerships for increased resilience during a crisis.
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2. Optimize industry-wide
cost structure.
Work more collaboratively with local
companies for better local content
development—such as through
efficient digital exchanges among the
supplier ecosystem—to structurally
reduce the cost base.
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3. Improve collaboration
for effective execution.
Don’t work as a pilot project—share
best practices and benchmark
vendor performance to avoid cost
and schedule overruns.
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4. Share logistics assets and resource capacity.
Consolidate the demand and share logistics assets, infrastructure and resources across
operators to achieve large savings.
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5. Balance
timing of asset
maintenance
with opportunity
loss.
Execute preventative
maintenance in low-
price periods for
increased availability of
low-cost equipment,
service providers and
contract labor.
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6. Adopt digital technology to boost productivity.
Invest in digital technology in the field that can transform the way people work and help
realize operational cost benefits earlier than competitors.
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7. Consolidate internal support functions to lower cost.
Consolidate functions to ride on IT investments and standardize IT infrastructure through
the software-as-a-service approach.
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8. Get smarter
about people
management.
Leverage innovative
solutions to increase
the efficiency of training
while optimizing costs.
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9. Reassess
portfolios to deliver
greater value.
Revisit the viability of all
expansions, especially those
into unconventional plays, and
identify and quantify operational
risks to determine
nonperforming assets and
review their future.
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10. Develop cost transparency capability across the
asset portfolio.
Practice cost transparency of assets to increase sharing of cost optimization ideas
across assets.
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Conclusion
While oil price may remain
unpredictable, national oil
companies that leverage
this time to engineer new
capabilities will emerge as
leaders. They could also
consider investing in training
people and implementing
digital solutions to improve
productivity and profitability.
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oil-companies.aspx
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