Major energy company restored discipline to its investment portfolio decision-making

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Oil and Gas Case Study

Jumping from the Burning Platform:

A major multinational energy company needed to quickly return to profitability and restore discipline to its investment portfolio decision-making.
A two-tiered approach to Project Prioritization and Portfolio Optimization with more inclusive decision-making provided better cultural fit and overcame organizational resistance to change.

The Oil & Gas industry is in transition. Gone are the boom days, where investments could be approved without significant rigor and attention to ROI. Pricing pressures, increased operational complexity, rising costs and higher risks have forced major players in the sector to seriously reevaluate how CAPEX and OPEX are allocated.
UMT’s client – one of the world’s largest multinational energy companies, with oil, gas, and renewables operations in more than 180 countries – was no exception. Recent major investments had tied up large amounts of capital with few returns. Operating costs were skyrocketing to the point of significantly impacting the bottom line and risking the company’s competitive advantage – essentially a “burning platform” that required immediate action.
To uphold Shareholder confidence, Management knew that, short-term, the company needed to quickly improve the P&L. Longer term, it needed to reduce its exposure to macroeconomic factors and change the culture to learn how to say “no” more often to imprudent investments.