Oil and Gas Leaders Are Taking a Holistic Approach to Reinvention by Balancing Energy Security and Sustainability, Accenture Report Says
The reinvention “reset” is seen as key to achieving a more resilient, agile, sustainable, innovative and profitable future
NEW YORK; December 8, 2022 – As recent events, including threats to energy supply in Europe and uncertainty over commodity prices, have led the majority of oil and gas companies to focus more on energy security, the most progressive companies are accelerating their reinvention plans with a holistic approach to balancing energy supply with the adoption of low-carbon initiatives, according to a new report from Accenture (NYSE:ACN).
The report, titled “The Reinvention Reset – From Bold Plans to Pragmatic Actions,” is based on proprietary industry research and a global survey of more than 200 oil and gas executives. An update to the inaugural Accenture report released last year, the report focuses on identifying executives’ plans to reinvent their businesses along a “5C” model encompassing competitiveness, connectivity, carbon, customer and culture.
Participant responses were aggregated to arrive at a reinvention index score for each company. The 10% of companies with the highest scores – those taking decisive and holistic action to build capabilities across the value chain, showing signs of total business reinvention – were ranked as “ Leaders”, with the bottom 25% labeled as “Laggards”.
“Faced with a myriad of disruptions – from longstanding underinvestment in production to the effects of the pandemic and war in Ukraine – oil and gas companies need to step up their reinvention efforts now,” said Muqsit Ashraf, director Accenture’s senior general who leads Accenture. Company energy strategy and practice. “An enterprise-level approach is crucial. Companies might be tempted to pay less attention to non-hydrocarbon investments because short-term energy security depends on maintaining oil and gas production, but the balance between short-term energy security and sustainability longer term energy will be key to their ability to be competitive and deliver 360oh Assess.”
Reinvention dominates the industry agenda, with nine out of 10 respondents (92%) in this year’s survey saying they anticipate some form of reinvention, whether radical, significant or encompassing fundamental change. In fact, 70% of Leaders and 50% of Laggards view enterprise-wide transformation as critical to ensuring their competitiveness.
While embarking on such broad and holistic transformations, the report suggests that oil and gas companies should aim for balanced energy portfolios to underpin the future energy system. Indeed, all companies indicate that they place more emphasis on security and sustainability, but the leaders take a more balanced approach, with the laggards focusing more on energy security.
- Leaders are more than twice as likely as Laggards – 43% vs. 18% – to say their portfolio priority is investing more in natural gas and more than half (59%) of Leaders plan to invest 5-10% of their capital expenditure in low-carbon companies over the next five years, compared to just 45% of laggards.
- Reducing emissions has become a key priority for Leaders, with nine in 10 Leaders (92%) setting net-zero goals, compared to 30% of Laggards.
Closing capacity gaps in digital connectivity will also be essential as oil and gas companies seek to reinvent themselves – the report identified a significant gap between leaders and laggards in this area. For example, 94% of Leaders said their remote operations are already highly connected and monitored in real time, compared to only 52% of Laggards.
“While some companies are making progress in their connectivity efforts, more can be done to scale capabilities in this area,” Ashraf said. “To improve digital connectivity, they can combine technologies such as 5G, edge computing and AI; invest in new areas like the metaverse to drive the future evolution of connected operations; and investing in people’s skills to unlock their potential.
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About Research
In early 2021, Accenture conducted its first Oil & Gas Reinvention Index research to understand the actions companies are taking to address energy transition challenges, their progress towards reinvention and the results they are achieving. are waiting to achieve. This initiative, including industry surveys and research, was updated in 2022 to track the progress of industry reinvention over time. The 2022 edition of the research included a survey of 201 senior executives from 201 companies globally. The responses from each of these participants were aggregated to arrive at a Reinvention Index (RI) score for each company. The top 10% of companies on this score were designated as “leaders” and the poorest 25% as “laggards”.
About Accenture
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