Due to a dramatic drop in commodity prices, oil and gas companies have seen their revenues cut significantly. Therefore they are keenly focused on cash flow and cutting costs. They are deferring investment decisions and looking for ways to reduce recurring costs. They also know that the market will eventually come back, creating the need to ramp up operations and production quickly.
The recent fall in commodity prices has hit upstream oil and gas companies the hardest, impacting their cash flow and their ability to continue investing in high-risk projects. There is a pronounced shift from volume to value as operators focus on making existing wells more efficient instead of drilling new wells.
It is difficult for refiners and marketers to stay competitive given today’s market conditions. Not only must they meet or exceed all regulatory standards of operational performance, they also have to keep cost performance a top priority and focus on generating healthy cash flow. Massive shifts in global demographics, wealth, and consumer engagement, fueled by technology adoption, will create new growth markets and reward agile companies that turn rising market complexity and variability into an opportunity for growth.