During black swan events like the current Coronavirus situation, and the Russia/Saudi price war, it is absolutely critical for oil and gas companies
Oil and Gas companies around the world are grappling with the appropriate response to the Coronavirus (Covid-19) for their employees, customers and their business, as well as the fallout from the Saudi/Russia price war. This unique situation of an overstocked oil market and a massive fall in demand has created a once-in-a-generation test of resilience planning and organisation flexibility. For many organisations the current crisis is an opportunity to not just survive but thrive.
Rapid decision making
Oil and Gas leaders should think through the medium term implications of decisions as they finalize a course of action – this is where an organization’s data strategies will separate the winners and the losers. Having the ability to quickly access and analyse data that allows you to assess things like credit exposure and payables is a tremendous tool for rapid decision making. The ability to distinguish between what is keep the lights on (KTLO) spend, important programs and discretionary spend is key to navigating this difficult time, many organisations are still reeling from the “freeze all spends” stance in the 2014-2015 crash.
Identifying and optimising value streams
For organisations that are on the path to being more agile and have value streams defined, the Covid-19 situation is a great litmus test – they should be able to look at value streams which are still yielding (or are expected to) yield high value and focus on those while curtailing the other ones. For B2B firms, these may or may not end up being customer facing ones, a good example is that a refiner may look for value streams that are optimization oriented vs. customer oriented. In nutshell this is a golden opportunity for small medium equipment and service providers that could never make it to the vendor approval and meet qualification requirements. EPC as well as end user downstream manufacturing plants will once again open vendor registrations in a big way in an effort to source at lower costs. Click here to download validated datalists of Purchase & Contracts at global EPC, Oil and Gas companies.
Business models for long term resilience
During black swan events like the current Coronavirus situation, and the Russia/Saudi price war, it is absolutely critical for oil and gas companies to have a better understanding of their B2B and B2C customers and a more flexible business model to build long term resilience.
On the B2C side, again, having an exemplary customer data strategy can give you an alternative business model, by truly understanding your customer’s behaviour, preferences and intent you have a ‘plan b’ strategy of relevant products from your own organisation or partner organisations (for example EV charging stations) that can offer an alternative revenue stream, when oil demand has decreased.
In a B2B context it is equally important to know which customers to focus on first, and again having access to this data is key, in such situations, keeping close to customers who have long term contracts, are worried about supply chain disruption or are looking for supplier flexibility in light of dwindling demand (say an airline which has a long term contract with an oil major).
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