Client is O&G company looking to integrate across the value chain

MBB Structure
New answer on Nov 21, 2020
3 Answers
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Anonymous A asked on Nov 20, 2020

Hi

How would others structure/ tackle this type of question that focuses on value chain.

Thanks

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Ian
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replied on Nov 21, 2020
MBB | 100% personal interview success rate (8/8) and 95% candidate success rate | Personalized interview prep

Hi there,

I'm happy to help as I literally worked on an O&G value-chain intergration project in APAC a couple of years back.

The main problem is that multiple business units (upstream, midstream, and downstream) all individually optimize their own operations to the potential detriment of the business as a whole.

The objective og value chain integration in O&A is align incentives/KPIs etc. so that each part of the body is operating effectively together. I.e., upstream may make a decision that's slightly less beneficial for them (lose 1$ per unit) that is great for the business (make $10 per unit).

Very very tough to accomplish and requires an in-depth understanding of the mechanics of O&G and the dozens of important metrics that O&G firms need to worry about to make profits!

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Adi
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replied on Nov 21, 2020
Accenture, Deloitte | Precision Case Prep | Experienced Interviewer & Career Coach | 15 years professional experience

Hey, would be better if you post more details here for better advice. My intial thoughts are these:

  1. Value chain for a company basically is how the raw material becomes the final product and gets delivered to the customer. So in case of O&G a simplified chain could be: Drilling->Production->Processing->Refining-> Product Storage->Distrbution. There will be slight difference depending on Oil or Gas value chain and the end products will be different too.
  2. Integration is all about driving efficiencies, breaking silos and establishing collaboration in process, tools/technology and people in the value chain. The whole thing hangs together by measuring & reporting right KPIs across the value chain.

Not sure if that helps?! Feel free to send me personal message and we can discuss further.

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Vlad
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replied on Nov 20, 2020
McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School

Hi,

Looking to integrate what? I think you are missing something here

Best

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Ian gave the best answer

Ian

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