The traditional model of asset management within international oil companies (IOCs) may not be sufficient to see them secure profits in the long term.
IOCs need to rethink traditional models of asset management and consider moving towards a more integrated and cross-asset view in order to ensure long-term success in a changing marketplace, a new report Time for Change Oil Company Asset Management by Arthur D. Little finds.
The report identifies that most published IOC growth strategies rely on an outlook of sustained growth in oil demand and rising prices.
Fat profits in the past have masked a number of structural changes such as the rise of national oil companies and the end of easy oil, Paolo R. Dutto associate director of Arthur D. Little's Global Energy Practice says. However, the oil price collapse at the end of 2008 showed that the industry cost structure had not come down to the same extent as prices.
The report urges CEOs to rethink what asset management means to their future business models and introduces Arthur D. Littles innovative Asset Performance Dashboard, which bridges the gap between portfolio and asset perspectives with a holistic approach.
