Although the oil & gas industry has always been volatile, there used to be a comfortable predictability to the boom & bust pendulum. These days appear at an end for now. This is one of the findings from the 'Oil and Gas trends 2019', published by PwC as part of the 22th global CEO Survey.
A combination of erratic and inscrutable commodity price fluctuations, ambiguity on the future of fossil fuels and contentious global trade negotiations are upending traditional supply & demand fundamentals. This is generating a host of new challenges with no clear answers, leaving oil & and gas execs to set a growth course for their companies based on constantly shifting sands. “Oil and gas companies, both large and small, seem to have arrived at a turning point where also a decision has to be made about the desired role and intended identity in a changed energy landscape”, says Chris Winkelman of PwC. “This requires the right strategic decisions, in which the choices for the path to be followed seem to be clearly different for large and smaller players.”
"Oil & gas companies are facing a turning point, one which requires strong decisions about their strategies for surviving and thriving in uncertain times."
Oil & gas companies must make strategic decisions about their role and identity within this evolving energy landscape, with three choices as to which pathway to take:
Firms are not on an equal footing when it comes to this choice. Large, cash-rich companies have a distinct advantage as they can pivot quickly as industry conditions morph. Smaller, independent oil & gas concerns have less room for error, however, so can best focus on traditional strengths while prudently managing the cost curve.
Whichever path you choose, regardless of the size of your company, your role as an oil & gas executive during this period of transformation means paying close attention to four key strategic and tactical facets.
Launched at the World Economic Forum in Davos, PwC’s 22nd Global CEO Survey includes CEO expectations for economic growth in 2019. Some 1,378 CEOs from 35 industries in more than 90 territories contributed to the report. The insights from these CEO interviews are combined with expert analysis from the oil & gas sector to explore crucial trends and strategic options.