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The Transformation of the Oil and Gas Industry: Extend Beyond the Barrel!

For many years now, we have been observing oil and gas (O&G) companies transforming into energy companies. This can be observed with changes in company names like Statoil to Equinor, or in news announcements such as, “Total is now the second largest solar provider in the world”. Those are some of the obvious indicators that the industry is changing.

 

There is more to it than the O&G industry just transforming to energy companies; they are looking to “extend beyond the barrel”. An example of an upstream company extending beyond the barrel might be where they have been able to refine their management of their oil field production to such a level that they are able to take oil fields being run by other companies and make them profitable. This means they are no longer focused exclusively with producing oil but now they are focused on how to efficiently manage Merger and Acquisition (M&A) activities. Downstream companies are looking at how to generate new revenue opportunities. For example, companies like Shell have more retail outlets than any other retailer.   Shell, for example, also sells more coffee than Starbucks.

 

If you step back and look at the 25 industries on which SAP focuses (see figure 1), you can see where the traditional O&G company is now an energy company and that they are looking to expand their revenue opportunities into other industries.   I already touched on how they are moving into the traditional utility space and retail, but as you can see, they are expanding their revenue opportunities into several other industries as well.

Figure 1

 

So, what does this mean?   As energy companies look to expand their revenue portfolio, they will need a platform that supports those industries. SAP provides solutions for all 25 industries, and the Intelligent Enterprise on SAP S/4HANA is the platform for all industries.

To learn more, download the “The Intelligent Enterprise for the Oil and Gas Industry” white paper here.

 

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