“Sustainable development in the context of volatility" ("Neft Rossii" magazine, issue 3-4, March-April 2019)

Sustainable development in a context of volatility

Read about operational excellence measures in the oil & gas companies.

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Anton Oussov

Partner, Global Oil and Gas Leader; Head of Audit

KPMG in the CIS

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Over the past few years the oil & gas market has become increasingly volatile and competitive, while oil field development has gotten ever-more challenging. For Russian companies, a potential solution lies in intensifying efforts towards operational excellence and enhancing investment activity. According to global best practice, operational excellence measures can include cutting service costs, improving equipment utilisation efficiency, and implementing innovative technologies; the overall optimisation effect might reach up to 8–15%. A decrease of capital costs can be achieved through creating a service market for subcontractors, enhancing the return on investment throughout an asset's entire life cycle, and, most importantly, optimising the assessment and selection of the investment process. To succeed in the latter, companies should move away from a pattern whereby each business unit independently analyses and adjusts a potential investment project, and implement a system which is based on flexibility and end-to-end integration, which allows investment projects to be aligned with the company's strategic goals.

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