Oil & Gas

Despite an energy sector that is in transition, oil and gas remains critical to the world’s energy and economic systems. While the extent of its future share in the global energy mix is uncertain, it’s apparent that these resources and their derivatives will undoubtedly continue to be essential for the global transport, power and petrochemical industries over the next several decades.

For exploration and production (E&P), oilfield services and equipment (OFSE), midstream pipeline, and downstream refining companies, successfully navigating the rapidly changing market environment — and efficiently allocating capital and ultimately creating an enduring competitive advantage — has never been so challenging.

Several trends, in particular, stand out:

Decarbonization goals are leading to innovation

As existing oil and gas operations strive to achieve decarbonization goals, a host of new technologies and operating philosophies are emerging to better manage emissions.

Natural gas is gaining resiliency over oil

Natural gas is a bridge fuel in the transition to renewables. This is driving a higher frequency and volume for global liquid natural gas (LNG) flows and ushering us into a world of gas and oil rather than oil and gas.

Rapidly evolving technology is impacting the value chain

New technologies, such as the Industrial Internet of Things (IIoT) and automation, are disrupting the oil and gas value chain, posing both opportunities and risks.

Environmental, social and governance (ESG) programs are growing in importance

For companies across the oil and gas sector, ESG in becoming integral to both operations and results.

The unconventional resource business model remains in question

E&P companies have experienced poor returns and challenges generating sustainable free cash flow. To support the business model, operators have relentlessly pursued aggressive field cost reductions and have adopted M&A strategies to drive consolidation and portfolio rationalization.

Energy transition is advancing

The development of renewable energy and electric vehicle adoption are accelerating the timeline to peak oil demand.

How we help

L.E.K. Consulting advises a diverse range of companies, including E&P companies, midstream pipeline operators, refiners, oilfield equipment manufacturers, oilfield service firms and private equity investors. Our experienced professionals have a deep understanding of key issues faced by oil and gas companies, including asset portfolio optimizations, evolving E&P supply chains, the changing purchasing priorities of oilfield service companies, ESG and decarbonization strategies, and the impact of potential new fracking regulations on unconventional drilling.

We help oil and gas businesses grow and invest successfully and improve operational performance. We are often called on by companies and investors to:

Assess where and how capital and investment resources should be deployed in the context of energy transition dynamics
Improve operational performance through developing and implementing sustainable cost-reduction plans, optimizing supply chain operations, benchmarking and more
Analyze the oil and gas market and the competitive landscape
Support asset portfolio management and efficient resource allocation

Provide M&A support services from deal thesis development to commercial due diligence, synergy assessment and post-merger integration
Develop an ESG and decarbonization strategy
Support commercialization of new technologies through customer value proposition development and assessment of the market opportunity

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