Time for Change

Oil Company Asset Management

Structural changes taking place in the oil supply outlook are making it very complex for international oil companies (IOCs) to pursue their key twin targets: reserves replacement at sustainable cost, and operational efficiency to sustain the levels of profitability that investors and markets expect of them.

Traditional models of asset management - focused on individual asset performance and short term results - are already limiting what IOCs can accomplish today. And additional challenges are emerging for the future: e.g. asset operations will need to be capable of quicker response to the accommodate market changes, and greater awareness will be needed of the full spectrum of opportunities and threats to which assets are exposed.

IOCs where asset and field managers merely perform tasks, rather than attempting to run a business as part of an overall enterprise, will not be able to deliver their full potential. They, and their colleagues in the corporate strategy rooms, need to radically rethink their vision of asset management.

To address these challenges, both present and future, we propose here a holistic approach to asset management - one that supports consistent and integrated decision-making at each level of the asset portfolio. This approach provides a route to improving current practises, accelerating response to market changes, delivering better resource allocation and utilization, and ensuring optimum cross-asset use of best practice and innovation.

Released: December 2009

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