Delivering Operational Excellence in Mature Oil & Gas Assets

Mature upstream oil & gas businesses are facing challenges to performance across multiple fronts. Upstream assets in late life, in regions with complex subsurface conditions, or in difficult operating environments can face a perfect storm of production decline, rising unit costs, fiscal pressures, and trade-offs around value. The most common response across the industry has been to seek opex and capex cuts through supplier cost renegotiations, headcount reductions, and by limiting spending on exploration, projects, and even asset integrity. These efforts usually deliver savings in the short term, but the outcomes are often not sustainable, and the opportunity cost of foregoing attractive investments can be high. This paper describes a better way, avoiding complex, short-term cost reductions and instead mobilizing resources to deliver more impactful and lasting improvements in overall performance and value. This approach is more motivating and exciting for executives and teams who are exhausted by repeated cost cutting efforts, and delivers much greater value over a longer period. The approach is very much different from continuous improvement, as it still requires the mobilization of organizations and capabilities to deliver, and needs effective change management. But the prize for getting this right is substantial.