A culmination of disruptive forces and evolutionary change in the oil and gas industry have conspired together to make the case for a new, low‐cost operating model. The industry has experienced tremendous evolution in terms of our understanding of the underlying global resource base, the nature of its ownership and principal stakeholders, technologies and methods for resource development, and the economics and business models.
The industry was focused on cost and productivity even before the 2014 collapse in oil prices, but beyond incremental accommodations in response to change there has been little effort to redesign and transform internal enterprise operating models. Unlike other industries that have undertaken operating model transformations in response to disruptive industry forces, upstream companies rarely undertake operating model change on a systematic or enterprisewide basis.
A VITAL INDUSTRY
Notwithstanding tremendous advances in renewable energy, hybrids, and electric vehicles (EVs), and agreement among our world leaders to make great strides on behalf of climate change, oil and gas companies are, and will continue to be, an important contributor to the world's energy needs and to the world's economy. Most forecasts, even under aggressive growth trajectories for renewables, still call upon the upstream for one‐half or more of our energy in 20 years.1
In the United States, natural gas and petroleum have played an important role in our energy ...