The End of Accounting and the Path Forward for Investors and Managers

Chapter 15Strategic Resources & Consequences Report: Case No. 4—Oil and Gas Companies

The oil and gas industry supplies the major source of energy to individuals and businesses–the lifeblood of all economies. The highly volatile and unpredictable environment within which oil and gas companies operate–wide price fluctuations and geopolitical upheavals–complicate the management of these companies, large and small, as well as investors’ valuation of oil and gas enterprises. Oil and gas resources are exposed to a higher level of threats and risk than the resources of most other companies. The operations of oil and gas companies consist mainly of exploration, production and sale of oil and gas products, and–for the integrated enterprises–also oil refining and various other chemical activities. These operations are capital- and labor-intensive, so that cost containment and operating efficiencies are of the essence. The Resources & Consequences Report for the sector focuses on strategic assets and the efficiency of their deployment.

The oil and gas industry doesn't need a lengthy introduction; it is constantly in the news and often shapes national and international policies. The industry supplies the major source of energy to individuals and businesses—the lifeblood of all economies. But the general familiarity with the oil and gas industry is deceiving. The industry is exceedingly complex, and only few are familiar with the inner workings of oil and gas companies. While Exxon ...