When oil prices first started plummeting, oil and gas organizations swiftly entered survival mode, cutting costs wherever necessary to ride out the downturn. For those companies with strong balance sheets, the strategy proved successful—allowing many to remain afloat three years later. But as the O&G sector emerges from the worst of the downturn, one thing is clear; the industry is forever changed. Oil prices are expected to remain much lower, for much longer—and they’ll likely not return to previous levels anytime soon.
To achieve sustainable growth in a lower-for-longer environment, organizations must embrace change and shift longstanding mindsets governing how, which whom and where they conduct business—a concept supported in a roundtable discussion hosted by Grant Thornton. Throughout the discussion, executives from a range of Canadian service and supply organizations—representing multiple sub-sectors including manufacturing, distribution, instrumentation and controls, maintenance and repair, and transportation—all agreed that the O&G sector of the past forty years is gone. To succeed in this new environment, companies must learn to innovate, collaborate and diversify—or face the consequences.
However, despite how critical collaboration, innovation and diversification efforts are for the future of the industry, efforts are not taking hold. Roundtable participants agreed that a mindset shift needs to happen before the O&G industry can move forward and grow sustainably, and explored reasons why this isn’t happening.