McKinsey Oil & Gas Practice - Unconventionals Work

We help clients optimize their businesses to capture the potential of tight gas, shale gas, and light tight oil.

Recent developments in unconventional energy have delivered huge technical gains, yet industry economics remain challenging. In an environment where improving efficiency and reducing costs are imperative, we help operators eliminate waste and variability, optimize material and resource planning, share data and best practices, and identify and capture opportunities as they emerge.

How we work

We draw on our extensive industry knowledge, deep pool of experts, and decades of service to the energy sector to provide distinctive insights into topics such as:

  • achieving best-in-class performance in the speed, accuracy, and economics of drilling, completions, and field operations; optimizing equipment design for better subsurface access and reservoir production; and building lean, agile organizations to thrive in times of rapid change
  • understanding the strategic implications of supply, demand, and other macroeconomic factors; gaining insight into emerging market strategies; and developing portfolio strategies by stage of development
  • assessing midstream requirements, supply and flow shifts in differentials and netbacks, and producers’ decisions to optimize investment and ownership models throughout the life of lease
  • entering emerging basins and crafting novel operating models for new regions to take account of local economics, access requirements, and competitive landscapes
  • finding the pain points in technology and equipment that trigger cost, environmental, and social issues, and identifying solutions and innovations to take performance to the next level
  • optimizing supply chain and procurement through targeted programs to improve controls and reduce costs

Examples of our work

McKinsey Oil & Gas Practice - Unconventionals Work

Improving Costs and Safety

Working with an upstream producer seeking to improve performance in its water operations, we helped identify changes in procurement, pad and network operations, and organization structure to enhance safety and reduce costs by 15 percent.

Adopting a Design-to-Value Approach

We supported a North American onshore operator in applying a design-to-value approach to pad design that delivered safety improvements, a reduction in site-preparation time, and savings of $400 million in total cost of ownership across basins.

Optimizing the Supply Chain

In serving a large operator with strong performance that still faced cost pressures, we helped introduce best practices in procurement and contracting to deliver savings of $500 million per year in capital expenditure.

Identifying Growth Opportunities

For an engineering and construction firm seeking growth opportunities in the North American unconventional oil and gas value chain, we helped to identify three targets and develop strategies designed to boost annual revenues by up to $1 billion.

Driving Profitability

To help a national oil company grow tight-oil production and meet its drilling targets, we worked to eliminate unprofitable fields, debottleneck the supply chain, and upgrade contracting, enabling the client to ramp up drilling from five to 100 wells per year.

Featured capabilities

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

  • Our North American Supply Model covers 118 basins and incorporates all major sources of supply.
  • Our Offshore Rig Model forecasts the capability of rig activity per basin, based on local production dynamics, and global supply and demand balance.
  • Our Land Rig Model forecasts global land rig counts, along with country-level projections.
  • Our Global Wells Model provides historical data and forecasts for global well counts and well stocks, as well as projections for more than 25 countries.
  • Our North America Midstream Model simulates all regional refineries and transport infrastructure, determines crude flows, and highlights potential bottlenecks.
  • Our North America web tool, OFScope, delivers market spend to 2025 across 26 basins and a full range of service segments for the North American onshore market.

Featured Solution

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Energy Insights

Helps energy companies manage uncertainty and improve performance through analysis, insights, and benchmarking.

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