Oil and gas capital confidence barometer

Growth

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In a low-growth/flat oil and gas price environment amid rising shareholder activism, cost-cutting and operational efficiency is no longer just an operational issue, but rather has become a strategic imperative.

At the same time, oil and gas companies’ growth agendas have shifted to a new path, featuring more innovative (and somewhat higher-risk) organic growth.

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

EY chart showing organization focus, 2014

Organic growth shifting to a higher-risk growth path

In keeping with their more cautious and conservative outlook, the oil and gas respondents are shying away from ambitious, transformational deals and looking to deliver growth organically. Notably however, the organic growth agendas of the oil and gas respondents have shifted from lower-risk organic strategies to more innovative, but nonetheless higher-risk ones.

Oil and gas respondents are increasingly focused on developing new products and markets through the exploitation of technology, and changing the current mix of products and services. They are less focused than they were previously in growth through better execution in existing markets and identifying new sales channels. The oil and gas respondents are however, not particularly focused on new geographies and markets.

What is the primary focus of your company’s organic growth over the next 12 months?

EY chart showing the primary focus of organic growth

Other trends we observe include:

  • Keeping shareholders happy: focusing on returns
  • Acquisitions to deliver a relatively small proportion of growth