Strategy

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, companies in the oil and gas industry are confronting significant strategic challenges and complex decisions, daily.

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 enhancements, 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. Our clients have access to more than 400 consultants with extensive experience in oil and gas strategy, 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 impactful track record of 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:

Employing our Exploration Portfolio Tool

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.

Supporting Production Growth

Helping a new upstream CEO improve production, a poor reserve-replacement ratio, and 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.

Identifying 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 those segments.

Developing a Gas Master Plan

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.

Providing Perspectives on Regulatory Change

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.

Featured capabilities

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

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 139 countries, 22 sectors, and 55 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