Oil and Gas

As things stand, the oldest, most expensive refineries may be the first to close. By optimising costs early as competitors ebb away, opportunities can arise to build a leaner operation with a greater market share.

The world will need energy for decades to come, yet the overall demand will decline. In a highly competitive landscape, the highest‑cost producers face an immediate and urgent need to identify and deliver operating efficiency.

Some will close marginal profit refineries to become leaner and more aggressive in the face of fierce competition for market share. Others may pivot toward investment in renewables – an option for industry players who decide to become a ‘fuel for transportation’ provider.

The way forward

We find this challenge less daunting once there is a clear picture of where the organisation is currently positioned.

We begin by understanding how much improvement is possible, where it lies in your organisation and what it is worth. From there you can begin to develop the roadmap around which parts of the operations represent the biggest opportunity and align a work plan on how to capture that value effectively and efficiently.

For many organisations, both their future and short‑term plans are now vulnerable to the plateau in demand for oil and gas. What is the right path to begin reducing costs and optimise existing assets?

The days of $200 per barrel are a thing of the past. For organisations that had not started acting on that, a potential downturn would become the new reality. There is an immediate need to change their labour model in a way that is future‑proofed to provide a long‑term edge over their competitors.

A tighter focus on capital investment and cost reductions can be difficult to navigate in a corporate culture where it is foreign, yet this is not a journey that any organisation should feel they must take alone.

Creating consensus

Our approach is designed to create consensus and alignment, identify net cash benefits and prioritise opportunities.

In practice, we reduce costs for organisations by restructuring departments, promoting greater accountability across roles and implementing new key performance indicators.

Organisational restructures are typically regarded as a last resort due to necessity – essentially a defensive move. Instead, they should be viewed as an opportunity for continuous improvement.

Restructure is often feared by companies and seen as an overt acknowledgement that the status quo is no longer 'fit for purpose'. In fact, it is an opportunity to embed continuous improvement principles across an organisation, so it becomes self‑perpetuating and a constant focus.

Any such change can only begin from a place of curiosity and understanding. What are the best practices? How are existing processes and systems perceived by employees? How are performances measured and managed?

The way forward

Your people represent your biggest opportunity, and often also the biggest challenge. Gaining a ‘frontline’ view of your core operations around what is and is not working, not only helps you to identify improvement opportunities, but it creates buy‑in around operational and organisational changes.