Arthur D. LittleArthur D. Little

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Alternative paths for large IOCs

Alternative paths for large IOCs

Low oil prices may drive pervasive structural changes in upstream oil and gas

In the same way that the low oil prices of the 1990's triggered a major structural overhaul of the oil and gas sector, it is important now to ask what impact the current phase of low oil prices might also have on future structural trends in the industry, in particular on the large International Oil Companies.

It is clear that with the postponement of many capital projects the IOCs have an increasing reserves replacement and dividends/free-cash flow challenge. The increasing strength of many National Oil Companies also presents them a growing strategic dilemma to these IOCs. What are potential future winning strategies for the IOCs? What directions are plausible and how can they either pursue growth or maintain earnings? Might some or all of them need to rethink their business models? What types of future partnership or collaboration might be appropriate? This paper aims to identify and evaluate a set of alternative scenarios for the IOCs, describing the strategic responses that IOCs may have to make.

Released: December 2015

Download File ADL_Alternative_paths_01.pdf (.PDF, 754 Kb)

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