Mid-sized E&P companies can achieve better business performance through improved technology practices and stronger technology management processes, according to Arthur D. Little’s latest viewpoint “Technology Applications in Mid-Sized Oil and Gas Companies.” The assessment reviews a group of mid-sized E&P companies and finds that those with a more proactive approach to the adoption of technology deliver a better business performance.
Stephen Rogers, Leader of Arthur D. Little’s Global Energy Practice says, “Becoming a highly performing technology organization can not only reduce project and operating costs, but can also accelerate projects and enable companies to monetize assets in ways that may not otherwise have been possible.”
Mid-sized upstream oil and gas companies have traditionally been less involved in R&D efforts than the large international oil companies. Some of these mid-sized players run the risk of becoming overly dependent on the support provided by service and equipment companies whose capabilities and priorities are not always attuned to the asset needs of their particular business. Arthur D. Little’s research found that those E&P companies having more proactive approaches to the adoption and absorption of technology, particularly when such a stance is matched with relatively focused business and asset strategies and with moderate or strongly developed technology management processes, can be seen to yield better business performances. This suggests that improving technology strategies and strengthening technology management processes can bring substantial benefits to the business performance of mid-sized E&Ps.
Analysis reveals a link between performance and technology application when considered in light of a company’s corporate strategy and asset portfolio. Being a passive implementer of proven technologies, within the context of weak technology processes and a business strategy involving a diverse spread of assets, appears to be a predictor of mediocre business performance. By contrast, being a first adopter or intelligent adapter of technologies, when combined with strong technology management processes seems to drive business success in the sector, particularly when applied across a focused asset base.
“For underperforming mid-sized E&P companies, one route to improvement seems to be to move towards an ‘intelligent adapter’ or ‘first adopter’ technical strategy,” says Ben Thuriaux-Alemάn, Principal in Arthur D. Little’s Energy Practice. “However, strengthening the internal culture and technology processes is necessary in order to make this approach work.”
The full report can be downloaded at www.adlittle.com/tamsogc
About Arthur D. Little
Founded in 1886 as the world’s first consulting firm, Arthur D. Little has continually transformed business thinking and practice by applying its expertise in the areas of strategy, technology and innovation. Today, Arthur D. Little helps companies to create growth, overcome strategic challenges, improve innovation capabilities, and increase efficiency and competitiveness in a globalised marketplace. Arthur D. Little has a global footprint in 20 countries with a network of over 1,000 people.
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