Oil

Challenges for the industry

The upstream business is suffering from a dramatic decline in the price of crude oil. However, at the same time, oil exploration costs continue to rise. Attractive new exploration projects are frequently characterized by difficult political circumstances or unusual technical conditions such as high pressure or high temperature.

The industry is reacting to this situation with mergers and cooperative agreements that will change the rules of the game in this sector. Downstream, tight competition is causing margins to shrink. Environmental taxes will further encourage this trend. Upstream, downstream and integrated companies have to reposition themselves in this environment while maintaining the economic performance of past years.

Solutions through Consulting Services

The services we offer Upstream Businesses constitute a comprehensive strategic consulting program:

Project examples

Development of a vision:
• What role does our client want to play in the future market? A generalist in the E&P sector, or a specialist in particular technologies or regions?
  Definition of clear goals:
• How should the product profile be developed in the coming years? What are the target regions? Which markets does our client choose to service? Competency check:
• Can our client achieve its goals alone, or should it enter into a partnership agreement with other E&P companies? What are the pros and cons of each alternative?
  Partner search:
• Which companies are ideal partnership candidates? What can the client do to better its status as a potential partner?
• Development of a plan of action including internal requirements.

We also create detailed marketing strategies for downstream businesses:

Distribution policy:
• Which sales channels should our client use? To what extent does our client want to be involved in end-customer distribution? Should it operate its own points of sale? How can our client take advantage of new sales methods (e.g. e-commerce)?
  Product and Service policy:
• Does our client want to be strictly a commodities supplier or does it also want to offer finished specialty products? Can the product range be broadened at the point of sale? Which additional services could create customer loyalty? Pricing policy:
• What pricing strategies are there for non-commodities? For additional services? Can our client generate a greater willingness-to-pay by bundling products and services (e.g. pumping gas and maintenance)?
• Branding and Communication: How can our client build up its brand image and create awareness of its brand?

Project Examples

• Strategy for improving a production profile
• Due diligence for an expansion strategy
• Customer loyalty strategy through new services at the point of sale
• Opening up new profit potential through improved utilization of the distribution network

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