Business resilience: weathering the next storm
Canadian oil and gas market study
What are the resilience components of successful oil and gas organizations?
In the first quarter of 2018, EY, in association with the University of Calgary’s Haskayne School of Business, conducted a survey of 70 executives from organizations in Canada’s oil and gas industry to gain insight into how those organizations achieved resilience during the past three years of continued low commodity prices.
Since 2014, Canada’s energy sector has been faced with many challenges, including barriers to accessing national and international markets, an evolving regulatory environment that favors clean energy, job loss amid recession, and two major natural disasters that shook Alberta. As prices begin to recover, the time is right to look at how organizations have responded to those challenges.
With the boom and bust cycles of Canada’s oil and gas patch, organizations and leaders consistently faced increasingly complex environments that are more dynamic, interconnected and less predictable. To achieve resilience, a company’s strategies must ensure that each element works in concert with other elements to help it adapt better to disruptive risks.
Our survey respondents, whose organizations represent a wide range of sizes and sectors within the oil and gas industry, ranked their organization’s ability to survive and thrive across six key resilience dimensions: portfolio, financial, operational, market, stakeholder and talent management. In terms of survival outcomes, the split was even among respondents ranking themselves as thriving, adapting or managing during the recent downturn.
Regardless of survival level, organizations rated their highest priority as reallocating capital to optimize returns. Perhaps unsurprising given downward pricing pressures and other market indicators, this tells us that organizations were focused on cash flow above all else. When asked if they were well positioned for the next upturn, most organizations said they were, or would be by the end of Q4 2018. Whether oil prices continue to recover or downward pressure on oil prices prevails, the lessons learned can help form a foundation for any future changes organizations will have to make.
We’re excited to build upon our previous work with the Haskayne School of Business in the innovation and reorganization spaces, leveraging the advanced insights our collaboration can provide. In this report, we’ve summarized the findings from our survey responses and identified trends by breaking responses down by company size, type and industry sector, based on comprehensive self-assessment across 6 dimensions and 25 subdimensions.
We believe the findings provide insights into how companies achieved resilience during the past downturn and how they aim to position themselves in the next upturn.
- Industry current state
- What is business resilience?
- Summary of survey results
- Dimension details
- How EY can help