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Booz & Company

Oil & Gas

Downstream service offerings

The downstream sector covers a broad scope, ranging from crude supply, trading, and refining through to product distribution, marketing, and retail. It includes products such as gasoline, diesel, heating oil, jet fuel, bitumen, lubes, liquefied propane gas (LPG), and specialties. More recently, the downstream marketing segment has also included convenience retailing, biofuels, and end-user demand management.

Booz & Company’s oil and gas downstream team has deep industry expertise in refining, supply and trading, and fuels marketing. In addition, this team borrows heavily from practices in other relevant industries, such as retailing, aviation, shipping, other transportation, mining, and financial services (for payment processes and credit card strategies).

We regularly develop insightful perspectives on topical issues and trends. For example, in 2005 the downstream sector enjoyed a period of high profit margins, leading some commentators to describe this as the ‘golden age’ of refining. Increased global demand for petroleum products, in particular lighter products for road and air transport, outpaced increases in refining capacity. Unexpected natural disasters, such as Hurricanes Katrina and Rita, exacerbated capacity constraints, and served only to bolster refining margins.

Going forward, the industry will need to address capacity growth, with the International Energy Agency predicting capacity additions being concentrated in developing countries, such as those in the Middle East, China, and India.

The sector will also face a number of fundamental challenges: World crude oil production is becoming heavier and more sour, requiring additional processing and changes to the refining configuration of many players, and increasingly more stringent environmental legislation is tightening product specifications and obliging refiners either to use better-quality crude oil or to invest in new units to upgrade product streams.

Drawing on a deep understanding of industry dynamics, extensive cross-sector experience, and broad functional capabilities, Booz & Company delivers comprehensive support to the downstream oil and gas sector. Our global capabilities are equally effective in delivering lasting results in North America, Europe, the Middle East, Africa, Russia, and Asia. Working with our clients, we support strategy development and execution, operational readiness and effectiveness, technology management, and workforce planning.

Strategy development and execution: We help clients build sector-level, regional, and business unit strategies to tackle the full range of strategic and competitive challenges they face. Working with ambition and condition-driven methodologies, our teams help clients inform their strategic debate, envision the future, set clear expectations, and develop and implement an appropriate strategy.

  • Sector-level strategies 
  • Region and business unit strategies 
  • Growth and business renewal strategies
  • Distinctive strategies that break out and are competitive 
  • Strategies for changing industry position, challenging status quo.

Operations readiness and effectiveness: We assist clients in achieving maximum effectiveness in day-to-day business operations, tackling maturity onset or new project expansions and technology implementation.

  • Operating model review 
  • Organizational development 
  • Functional support improvement and excellence (Finance, Sarbanes-Oxley, human resources, technology, IT) 
  • Operations effectiveness, efficiency, and integrity.

Technology management: We help clients build competitive strategies for accessing, developing, and deploying new technology.

  • Technology strategy and portfolio management 
  • Due diligence 
  • Technology transfer and adoption 
  • Technology profile and competitive position.

Workforce planning: We work alongside clients to tackle tight labor markets, develop new skills, address discipline requirements, and build sustainable workforce strategies.

  • Learning and development strategy 
  • Resourcing, recruitment, and retention 
  • Workforce and capability planning 
  • Discipline and skill pool effectiveness.

 

Upstream service offerings

Upstream oil and gas exploration and production companies face continued pressure to perform—the private sector to secure renewal, grow, and deliver strong returns; the national oil companies to steward the resource base, deliver capacity expansions, further develop skills, and make the right partnership choices to create wealth.

At Booz & Company, we see five big themes impacting the agendas of our upstream exploration and production clients:

  • Rules and operating models: A revolution in the form and structure of concession terms and license operating models is under way. 
  • Vulnerability: In production and new project impact on the environment, safety, approvals, and the license to operate, companies face new weak spots. 
  • Margin squeeze: Increasing costs and effective tax rates may push investors to return even higher proportion of profits to shareholders. 
  • Players and supply chains: We see the continued rise of Russia, India, and China on the international E&P scene.
  • Technology deployment: The role and timing of new digital oil fields are a big challenge as is deployment of gas conversion technologies.

These themes will further separate the high performers from the more modest, produce major strategic challenges, and stretch oil company leaders and their government counterparts to the limit. They look to be the areas with the potential to further define the short- and medium-term industry landscape.

Booz & Company delivers comprehensive support to the upstream oil and gas sector. Our global capabilities are equally effective in delivering lasting results in North America, Europe, the Middle East, Africa, Russia, and Asia.

Strategy development and execution: We help clients build sector-level regional and business unit strategies to tackle the full range of strategic and competitive challenges they face. Working with ambition and condition-driven methodologies, our teams help clients inform their strategic debate, envision the future, set clear expectations, and select and realize an appropriate strategy.

  • Sector-level strategies 
  • Region and business unit strategies 
  • Growth and business renewal strategies 
  • Distinctive strategies that break out and are competitive 
  • Changing industry position, breakout, challenging the status quo.

Operations readiness and effectiveness: We assist clients in achieving maximum effectiveness in day-to-day business operations, tackling maturity onset or new project expansions.

  • Operating model review 
  • Organizational change 
  • Operations effectiveness, efficiency, and integrity.

Digital oil field design, development, and implementation: We help clients realize the full potential of digital surface and subsurface technology in new and mature project settings.

  • Business needs and technology development/selection 
  • Program design and implementation 
  • Change management.

Technology management: We help clients build competitive strategies for the access, development, and deployment of new technology.

  • Technology strategy and portfolio management 
  • Due diligence 
  • Technology transfer and adoption 
  • Technology profile and competitive position.

Workforce planning: We work alongside clients to tackle tight labor markets, new skills, and discipline requirements, and to build sustainable workforce strategies.

  • Learning and development strategy 
  • Resourcing, recruitment, and retention 
  • Workforce and capability planning 
  • Discipline and skill pool effectiveness.