We help oil and gas companies develop strategies to pursue growth and create value in an uncertain and volatile environment.
To prevail in current markets, successful businesses treat strategy development as a dynamic process. Commodity price fundamentals are challenging in the short term, requiring executive teams to constantly reevaluate mid- to long-term expectations. As a result, industry players are confronting significant strategic challenges and complex decisions on a daily basis.
To help our clients manage this complexity, we bring distinctive propositions to our advisory work, ranging from tools that target short-term cash and performance enhancement to levers for enabling operating-model evolution to proprietary market models that provide granular, rigorous supply and demand scenarios to support strategy planning and development.
What we do
As a preeminent global strategy consultancy and leading adviser to the oil and gas industry, McKinsey is uniquely placed to help companies with today's challenges. In the past 5 years, we have undertaken some 1,000 projects involving oil and gas strategy across all major regions and industry sectors, helping clients in developing, planning, and executing the strategies required to sustain and grow.
Our clients have access to a pool of more than 400 consultants with extensive experience in oil and gas strategy topics, a global network of industry experts and external advisers, and broad cross-sector expertise from our Strategy & Corporate Finance Practice.
Examples of our work
We have built an outstanding track record of high-impact client work in five core strategy areas: exploration, corporate growth, new energy segments, gas, and regulatory. By investing in developing market perspectives and understanding trends and outlooks, we ensure our strategy work is built on a robust fact base. Our recent projects include the following:
- Exploration: Advising a midsize independent on optimizing its exploration portfolio for production volumes, risk, and returns in the short and long term, using our proprietary exploration-portfolio tool. The project resulted in a doubling of P50 volumes in the next 2-year plan.
- Corporate growth: Helping a new upstream CEO tackle falling production, a poor reserve-replacement ratio, and a collapse in total shareholder return by focusing the portfolio, finding new areas of growth, and identifying opportunities for cost reduction. After completing the project, the client saw production grow by more than 5 percent and made a major find in one of the new identified growth areas.
- New energy segments: Supporting an integrated oil company with mapping future global energy systems in 20 different segments, analyzing investments in the various segments using different future energy scenarios, and helping identify which segments to play in and how to win in them.
- Gas: Working with a Middle Eastern government to develop a gas master plan to meet 2030 demand—including an overview of supply sources and marginal costs at various supply levels—and to establish the implicit cost of meeting a given market demand. The project determined optimal pathways for gas-to-power industrial and commercial supply chains to maximize economic impact.
- Regulatory: Supporting a regional consortium of operators facing regulatory uncertainty by providing a fact-based perspective on global fiscal and nonfiscal regulation, modeling industry data to create a common view of the impact of regulatory change, and creating materials to communicate with regulators, partners, and the wider society.
To equip our oil and gas clients with the best data and capabilities to support strategic decisions, we invest heavily in building sector- and region-specific knowledge and tools:
- Numerous proprietary market models, including our Global Gas Model, Global Downstream Model, and Offshore Drilling Model, all of which provide clients with highly granular fundamentals data, customizable scenario-development capabilities, and deeply integrated supply and demand perspectives.
- Our Global Energy Perspective, which leverages our Energy Insights analytics platform as well as the deep expertise of McKinsey's global sector practices for an integrated, bottom-up perspective on global energy-demand outlooks. The model covers 181 countries, 25 sectors, and 36 fuels, and it allows clients to analyze granular energy-demand drivers as well as to build and run customizable scenarios within minutes.
- Our Corporate Performance Diagnostic tool, which helps leaders measure, interpret, and manage the real sources of value in their company. Diagnostics include industry-tailored breakdowns of a company's current stock-market valuation and its relationship to business performance and growth.
- Energy Insights, which combines our analytical models, benchmarking capabilities, and proprietary insights for critical decisions on strategy, investment, and performance.