Accelerating the three dimensions of E&P clockspeed – A novel strategy for optimizing utility in the Oil & Gas industry

As the global Oil & Gas Industry enters its third, late lifecycle stage (outlined in the introduction of this study), new strategies and conceptual tools are needed to postpone – or reverse – the decline of the E&P industry. The problem is this: the late lifecycle is principally heralded by limited supply due to finite hydrocarbon reserves, while energy demand soars as world population and the global economy continue to grow. This study therefore proposes a framework through which an E&P company can critically assess its capability in accelerating lag-time between exploration and production. In the first part of this paper (Sections 1–3), the need for a phase-shift toward faster clockspeeds for the Oil & Gas industry is argued to be an important step to close the energy supply gap. In the second part of this paper (Sections 4–6), the strategy concept of clockspeed acceleration is further elaborated and optimization methods for the three principal dimensions of E&P clockspeed acceleration are discussed. The three Clockspeed Accelerators™ are: workflow speed, improvement rate of Uncertainty Mitigation and accrual speed of portfolio value. The third part of this paper (Sections 7–11) presents the empirical analysis of E&P clockspeed performance for two peer groups (IOC supermajors and public private partnership NOCs) comprising six companies each. The acceleration of E&P clockspeed can help to optimize production levels of conventional and unconventional oil, and includes diversification strategies that replace non-renewables with renewables. In summary, E&P Clockspeed Accelerators provide the gearshift instruments that enable the energy industry to better meet the required demand/supply ratios. The results of this study translate into the following deliverables for practical use by Oil & Gas professionals:–insight into the concept of clockspeed in E&P industry setting,–use of Clockspeed Accelerators™ as gearshift lever tools for monitoring and directing E&P clockspeed,–a template for benchmarking and scaling the cardinal axes of E&P Clockspeed Accelerators™ for companies in time-series analysis and cross-sectional analysis,–insight in the critical drivers of E&P clockspeed acceleration based on the companies studied,–a set of recommendations to support and speed up the optimization of the individual Clockspeed Accelerators™ for Oil & Gas companies.