A Strategic Approach for Asset Management in the Oil and Gas Industry

by | Jun 13, 2018 | NEWS

A Strategic Approach for Asset Management in the Oil and Gas Industry

In the oil and gas industry, the most significant strategy is to produce at the lowest possible cost and get the highest profits. In order to be competitive, a working site must develop the best products at the opportune times which ultimately needs a high level of professional asset management plan and asset availability.

With the global oil markets facing a structural shift accompanied with a rapid decline in prices, major oil-producing countries have opted to protect their market share with the hopes of eliminating expensive supply from the entire market.

The process of managing large projects such as the discovery of new hydrocarbon resources, most oil and gas companies use a rigorous stage-gate process. The idea of ‘front-end loading ‘ is the appropriate way to maximize the creation of value by ensuring quality decision-making during the early stages of the project.

Most oil and gas companies benefit from acquiring and delivering large projects using traditional sources, but some challenges threaten this kind of business model and include:1. The uncertainty of the long-term value of the asset

It is a fact that assets values are linked to commodity prices and it is not certain when oil and gas companies should focus on purchasing assets, selling them or opting for a wait-and-see approach.

2. The unavailability of large project opportunities 

Newly discovered resources tend to be small in size and more geologically sophisticated to be developed. Besides, it is hard to because of geopolitical tension and nationalization of these resources by most national oil companies.

3. The development of unconventional and mature assets 

Sophisticated operations need strategic decisions to be made during the process o execution and operation stages of the projects such as the management of large drilling companies, learning and cost reduction.