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Navigating the Crude Cycle: 10 Strategic Actions for National Oil Companies

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

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Navigating the Crude Cycle: 10 Strategic Actions for National Oil Companies

  1. 1. Navigating the Crude Cycle 10 Strategic Actions for National Oil Companies Copyright © 2015 Accenture All rights reserved.
  2. 2. Copyright © 2015 Accenture All rights reserved. 2 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. Copyright © 2015 Accenture All rights reserved.
  3. 3. Copyright © 2015 Accenture All rights reserved. 3 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. Copyright © 2015 Accenture All rights reserved.
  4. 4. Copyright © 2015 Accenture All rights reserved. 4 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. Copyright © 2015 Accenture All rights reserved.
  5. 5. Copyright © 2015 Accenture All rights reserved. 5 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. Copyright © 2015 Accenture All rights reserved.
  6. 6. Copyright © 2015 Accenture All rights reserved. 6 4. Share logistics assets and resource capacity. Consolidate the demand and share logistics assets, infrastructure and resources across operators to achieve large savings. Copyright © 2015 Accenture All rights reserved.
  7. 7. Copyright © 2015 Accenture All rights reserved. 7 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. Copyright © 2015 Accenture All rights reserved.
  8. 8. Copyright © 2015 Accenture All rights reserved. 8 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. Copyright © 2015 Accenture All rights reserved.
  9. 9. Copyright © 2015 Accenture All rights reserved. 9 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. Copyright © 2015 Accenture All rights reserved.
  10. 10. Copyright © 2015 Accenture All rights reserved. 10 8. Get smarter about people management. Leverage innovative solutions to increase the efficiency of training while optimizing costs. Copyright © 2015 Accenture All rights reserved.
  11. 11. Copyright © 2015 Accenture All rights reserved. 11 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. Copyright © 2015 Accenture All rights reserved.
  12. 12. Copyright © 2015 Accenture All rights reserved. 12 10. Develop cost transparency capability across the asset portfolio. Practice cost transparency of assets to increase sharing of cost optimization ideas across assets. Copyright © 2015 Accenture All rights reserved.
  13. 13. Copyright © 2015 Accenture All rights reserved. 13 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. Copyright © 2015 Accenture All rights reserved.
  14. 14. Copyright © 2015 Accenture All rights reserved. 14 Get the full report: https://accenture.com/us-en/pages/insight-navigating-crude-cycle-national- oil-companies.aspx Follow us @AccentureEnergy Copyright © 2015 Accenture All rights reserved.

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