Cost reduction across Oil & Gas value chain

Hi there,

Funny you ask this as I worked on an Oil & Gas value chain alignment project not too long ago! I even created a case losely based off of this project: https://www.preplounge.com/en/management-consulting-cases/interviewer-led-mckinsey-style/advanced/mckinsey-digital-bcg-platinion-oil-gas-upstream-technology-196

Feel free to shoot me a message and we can talk much more in-depth about this industry and the cost/value drivers.

You're got it about right overall. The costs are massive with any of these capex projects. Fundamentally, the largest cost by far is the actual project to setup the sit to dig your resource out of the ground. This is essentially the materials, supplies, contracting/procurement work, etc.

From there, the operational costs are much lower, but consist of labor, IT, maintaining assets/infrastructure, etc.

(editiert)

Hello!

I like your initial approach of breaking it down into the different steps of the process, as a overal guideline, and then spot the cost reduction opportunities under each of them.

I would advise you to read some literature on the topic, mostly industry reports, since this would give you a better understanding of the sub-parts and how to cut costs on them

Hope it helps!

Cheers,

Clara

In all honesty - a very nichy question - in my opinion, get specialized O&G reports from especially the Big4, they will answer this and all possible other questions. Make sure to understand the current trends and implication in O&G.