Business response Our research reveals that most companies (78%) are taking a cautious or reactive response to market changes. However, 22% are either prepared to, or are in a position to, adopt an aggressive or opportunistic stance. Restructuring of businesses or assets is considered key for industry players in light of current conditions – almost a third (32%) of respondents highlighted this as the one strategy they would drive as a priority. Streamlining operations, focussing on core business and dealing with unprofitable areas look vital. That said, market participants are set to pursue a multitude of other tactics, from focussing on smaller, less capital intensive projects, to entering new growth markets and
generating a more efficient supply chain. Tellingly, investing in shale energy did not feature on our respondents’ radar at all – a sharp reminder of the change in unconventional hydrocarbons’ fortunes. Given current market conditions, entry into new markets may be out of reach for many companies where budgets are tight and capex decisions are on hold. However, for a small minority of better-resourced, agile IOCs or NOCs, (as evidenced by 15% of our survey respondents) taking a pro-active approach to increasing penetration of growth markets now makes sense, to take advantage of cheaper assets or to fill gaps left by others as they retreat.
What one strategy would you drive as a priority in light of the current market conditions?
21% Focus on smaller and/or more flexible capital-light projects
15% Entry into new growth markets
10% Generating a more innovative and efficient supply chain
5% Investment in renewable energy
5% Enhancement or development of downstream capabilities
5% Enhancement or development
1% Focus on fewer but larger projects with heavy capital
32% Restructuring of the business or assets
5% Other
of upstream capabilities
5
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