The Final Frontier: E&p's Low-Cost Operating Model - Hardcover

by Justin Pettit (Author)

The energy industry's accelerated evolution requires visionary change

The Final Frontier parses the evolution of the oil and gas sector to map out a plan for going forward. The global energy industry is huge, and it is in disarray; between low oil and gas prices, climate change, rising development costs, and ever-mounting regulations, the need for change has been made crystal clear--but planning is much easier than implementation, and stasis is not progress. This book shows how redesigning internal operating models can bring about the necessary change in the implementation of upstream capabilities-driven strategies. From integrated, national, major, and independent oil companies, to the service companies in the upstream supply chain, there isn't an enterprise in the sector that cannot benefit from reduced costs and increased efficiency. Knowing that change is necessary is not enough--this book shows you what to change, and how to change it to get off the treadmill and start moving forward.

With expert guidance through each redesign element, this insightful guide provides more than simply ideas: it provides real, practical guidance on transforming operations to keep pace with the changes and create lasting advantage.

• Identify the most relevant organizational capabilities for your resource portfolio, as well as the changes that can translate into savings and efficiency
• Build a workable plan for real-world implementation
• Redesign the operating model most suited to the needs of your business on an organization-wide basis
• Learn what to do differently and how to do it differently

The energy industry has made great strides: our understanding of the global resource base, the nature of ownership and principal stakeholders, new technologies for resource development, and our economics and business models have all undergone a tremendous revolution, but now the more difficult--and more valuable--task begins. The Final Frontier helps you navigate the future and implement the changes necessary to avoid getting left behind.

Front Jacket

Sweeping evolutionary change and a range of powerful disruptive forces have left the energy industry in a state of disarray. No doubt the industry has attempted to address those challenges on several fronts, but always on a piecemeal basis. As a result, cash flows continue to fall short and the sense remains that the industry has not fully adapted.

In The Final Frontier, author Justin Pettit argues that although companies have been focused on cost and productivity since before the collapse in oil prices, beyond incremental accommodations to change, scant attention has been given to what should have been a critical concern: their internal enterprise operating models.

Pettit provides an overview of the ten key challenges facing the oil and gas industry, including weak oil and gas prices, the "ripple effect" of unconventional energy sources, and mounting social license and environmental costs. And he explains why the pressures they exert in the aggregate cry out for nothing less than a radical new approach to how business is conducted from the inside out.

He then explores the redesign elements of a new internal operating model for IOCs, majors and independents, NOCs, and services companies in the upstream supply chain. He offers examples of how they can be successfully internalized and leveraged with real-world case studies of both successes and failures. Operating model redesign offers a way to cut costs and grow stronger by investing in companies' most important capabilities and leveraging the capabilities of others. It is an opportunity to tap into the creativity and entrepreneurial spirit of the talent pool and to empower employees to drive enterprise improvement. In The Final Frontier, Justin Pettit doesn't merely make a compelling case for a radical redesign of outmoded internal operating models, he lays out a blueprint for how to make that change.

Author Biography

JUSTIN PETTIT is an advisor to the oil and gas industry. He entered the industry in 1992 as Senior Business Planner with Norcen Energy Resources and went on to a successful career on Wall Street, including Partner at Stern Stewart & Company, Group Head of Strategic Advisory for UBS Investment Bank, and Lead Partner in the energy and chemicals practice of Booz & Company. He also authored Strategic Corporate Finance: Applications in Valuation & Capital Structure (Wiley) and Merge Ahead: Mastering the Five Enduring Trends of Artful M&A. Mr. Pettit is a member of the Society of Petroleum Engineers.