Cost management a top priority for oil and gas companies

According to DNV GL, a majority of senior oil and gas professionals (56%) believe that the industry is repeating the mistakes of previous downturns and have concerns over the loss of jobs and experience and lack of efficiency, according to a new report published today by DNV GL, the leading technical advisor to the oil and gas industry. A new phase of cost management is needed, as nearly three quarters (73%) of senior oil and gas professionals globally are preparing their company for a sustained period of low oil prices.

According to A New Reality: the outlook for the oil and gas industry in 2016, a DNV GL report based on a global survey of 921 senior sector players¹, cost management is the top priority for 41% of respondents in 2016. The top three measures prioritised to impose stricter cost controls are:

Tougher decisions on capex, down from 44% in 2015 to 31% in 2016, suggesting that opportunities for further capex reductions are limited.

Prioritising headcount reductions, up from 25% last year to 31% in 2016, signalling further job losses; and

Increasing pressure on the supply chain, down from 31% in 2015 to 27% in 2016, indicating that suppliers have been squeezed as much as possible.

Adapted from a press release by Louise Mulhall