Overview
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:
- Energy transition is advancing: The development of renewable energy and electric vehicle adoption are accelerating the timeline to peak oil demand.
- 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.
- 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.
- 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.
- 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.
Coming Out Ahead in the Energy Transition
The energy market is undergoing a transition from hydrocarbon-based energy to low-carbon solutions. In this environment, how can businesses manage the tension between creating value and building for scale? See how L.E.K.’s Energy practice can work with you to develop a fresh perspective on achieving success in the near term while positioning for growth in the future.
Opportunities in Energy Decarbonization
Decarbonization is gaining momentum, with opportunities opening up for investors who know where to look. Our report reveals the five key drivers behind this shift and examines what decarbonization means for energy companies and investors alike.
Before Jumping Into the Hydrogen Economy, Know the Pitfalls
For investors, the hydrogen economy offers a range of opportunities — from extraction to distribution to end use in multiple industries and applications. But each of those points in the value chain is complex, and there are many pitfalls.
Landfill Renewable Natural Gas: L.E.K. Industry Perspectives
Renewable natural gas (RNG) is a growing market driven entirely by government incentives for renewable and cleaner fuels. In this report, we explain the basics of RNG — highlighting opportunities and a list of critical questions investors should ask.
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
