EVERYONE SHOULD LOVE LOW OIL PRICES

It is obvious why consumers like low oil prices. They can drive more, heat there homes for less and put more money in their pockets to buy more things or save more money.

Why is this a good thing for oil company’s? Because it forces positive change.

It drives lower cost structures, innovations in technologies, improved processes, better partnerships with service providers, new services, and it purges the industry of producers that are not competitive.

The companies that succeed and thrive generally are the companies that embrace the change and put all of their resources into finding ways that make them more competitive. They see the problem as an opportunity and they use their energies to make their organizations better.

The best example of this is the period 1983 through to 1999. This prolonged period of low prices allowed the energy industry in Canada to re invented itself. This low price period was followed by the longest sustained period of oil and gas growth in Canada. This also spurred the advent of outsourcing non core businesses as well as a whole new set of industries and technologies around the oil and gas industries.

This period created a 15 year period of growth for oil and gas in Canada.

• The energy industry consolidated

• Majors left Canada or shrank their businesses

• Oil Sands projects grew

• Oil pools continued to give with horizontal drilling and new fracing technology

• EFM and software technology companies flourished improving specific processes

• Conventional oil production grew

In the current low price environment companies should be driving lower cost structures, improving their balance sheets and focusing on improving the way they do the business. This is a period of change. It is time to embrace change and drive it. Dare to be different... We are.

Ask ICG how outsourcing of non value add (transactional) activities can help your company do more with less.