Oil and gas capital confidence barometer

Growth

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Growth is now a global imperative. Almost two-thirds of oil and gas executives plan to accelerate their growth strategies over the next 12 months.

Companies have weathered a prolonged period of uncertainty. During this time, they have strengthened their balance sheets and largely optimized their capital structures. Companies are now ready to capitalize on the improving global economy and credit markets to implement their growth agendas.

Growth strategies will initially focus on the optimization of organic platforms (existing products and core channels and markets).

EY chart showing organization focus, 2013

This is driven by their enhanced focus on governance and fiscal discipline. The natural progression will then be to M&A. Coupled with positive leading indicators, the greater focus on growth points to a return of increased M&A activity and larger deals, globally.

A cautious approach to growth: shifting to a lower-risk growth path

EY chart what is the primary focus of your company’s organic growth

Those companies focused on growth tend to prioritize lower-risk organic strategies that are within their comfort zone. Rather than pursuing ambitious, transformational deals, they are hoping to deliver growth through better execution in existing markets and identifying new sales channels. Companies are, however, also pursuing some riskier strategies, primarily developing new products and markets through the exploitation of technology, and changing the current mix of products and services.

Other trends we observe include:

  • Growth focus returns
  • A cautious approach to growth: keeping shareholders happy
  • Regulatory environment creating the biggest obstacles

Q. What best describes your organization’s focus over the next 12 months?

EY chart showing organization focus, 2013

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Q. What is the primary focus of your company’s organic growth?

EY chart what is the primary focus of your company’s organic growth

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