McKinsey Oil & Gas Practice - Organizational Work

We help oil and gas companies engineer their organization for success through our unique combination of deep industry knowledge, field-tested approaches, and proven tools and benchmarks.

Turbulence in the oil and gas industry is posing pressing questions for company leaders. How do they improve engineering productivity, manage accelerating change, determine the right size and structure for their organization, and build capabilities for success? Drawing on decades of deep industry knowledge and organizational expertise, we help clients address critical challenges like these. While working to boost their business performance, we also help them build the health of their organization to sustain long-term excellence.

How we work

To bring clients the best and most innovative thinking, we develop distinctive perspectives on hot topics, such as:

  • shaping tomorrow’s oil and gas company, including agile design, digitization, decentralization, and redefining the core
  • understanding trends such as benchmarking across capital-project organizations, nonoperated governance, and board and shareholder governance
  • executing mergers to maximize the value from integration management
  • deploying organizational approaches to remove cost, including above-asset cost
  • closing the technical-talent gap through strategic workforce planning, building local talent pools, expert career paths, and capability development

Examples of our work

McKinsey Oil & Gas Practice - Organizational Work

Over the past five years, we have served two-thirds of the world’s top 20 oil and gas companies in more than 280 projects spanning organizational analytics and design, performance transformation, human capital and talent, and merger management.

Supporting an Agile Transformation

Working with a supermajor seeking to modernize its global organization to compete in increasingly volatile energy markets, we helped design a comprehensive transformation, embedding new agile processes that have cut average time to plan a well by more than 30 percent.

Delivering Competitive Advantage

We helped a fast-growing Asian independent oil company to turn project delivery into a sustainable competitive advantage by building a cross-functional organization and culture and capabilities while continuing to execute projects worth $3 billion. All projects were delivered on time and on budget, with $500 million in accrued savings.

Driving a Performance Transformation

For a national oil company suffering from massive under investment after 30 years as a monopoly, we helped retool the organization for success in a deregulated market, leading to a 24 percent rise in upstream oil production, a 4 percent gain in refining yield, a 10 percent uplift in fuel-station sales, and a 10 percent drop in distribution costs.

Featured capabilities

We invest heavily in developing proprietary tools, databases, and methods, including:

  • Our Capability Building program provides training and coaching to help clients apply best practices for themselves. For senior executives, we offer focused learning and personal development through our Change Leaders Forum, national oil company executive program, Organizational Agility Forum, and Executive Transitions Master Class.
  • Our International Upstream Production Performance Benchmark includes data from 200 assets globally and provides objective comparisons of a company’s performance across multiple metrics, including production efficiency at an asset level.
  • Our Upstream Workforce Benchmark helps companies compare their technical and operational headcount against that of peers to inform transformation planning.
  • Our Overhead Benchmarking Initiative is based on data from more than 1,000 companies and enables clients to draw comparisons across general and administrative functions.
  • Our Oil and Gas Merger Management Tool Kit captures our insights from supporting the industry’s largest mergers over the past 20 years and covers integration boot camps, day-one checklists, draft integration plans, and value-capture opportunities.

Featured solutions

Organizational Health Index

The Organizational Health Index maps the DNA of your organization, providing insights into how your team is operating and recommended improvements based on proven recipes for success.

OrgLab

Organizational redesign is inevitable. In a dynamic and increasingly complex business environment, organizations must evolve. Done well, redesign can have transformational impact. Yet only 23% of redesigns successfully meet objectives and improve performance.

Related Insights

Article

What it takes to be successful: Three hallmarks of a healthy oil and gas organization

– As oil and gas companies navigate a ‘new normal,’ embedding three hallmarks of organizational health will be key to success.
Article

A business leader’s guide to agile

– Agile promises rapidly evolving software and substantial business benefits, but it requires new habits from everyone: from IT... and from business partners.
Article - McKinsey Quarterly

Rethinking the oil and gas organization

– Organizational choices made during a time of resource scarcity need reexamination when the cycle turns.