Deloitte’s new report, Phoenix rising: The oilfield services sector transforms again, examines the impact the downturn has had on the oilfield services sector. It explores the actions and attributes of the companies who survived and prospered during this time, as well as those that did not. With industry recovery taking shape, the paper also discusses the strategies that oilfield services companies are beginning to adopt to improve their performance and resiliency moving forward.


To understand the best strategies for moving forward, it is essential to look back. It this case, Deloitte analysed a group of 56 oilfield services companies to understand why and how they survived the industry downturn. Deloitte looked at the common qualities they shared and how could those qualities be used to their advantage - and replicated by other companies - to capitalize on the emerging industry recovery.
The oilfield services companies that were the most resilient during the downturn had more geographically dispersed operations. They also had a greater presence in service segments like offshore operations that benefited from longer-term contracts. Larger services companies - with broader and deeper technological capabilities applicable to diverse operating conditions - were more likely to have these characteristics, although some smaller companies also outperformed the group of examined companies.


As the oil and gas market begins to recover, the oilfield services sector must undergo yet another transformation, developing new strategies to prosper in the upturn and stay strong through future price cycles. Deloitte analysed the strategic positioning statements from a majority of the 56 oilfield services companies in a sample to identify how they are planning to secure market share and drive revenue growth in 2017 and beyond.
Deloitte identified seven key strategies across three transformation categories.

CATEGORY 1: Prioritize services that achieve ongoing cost reductions for upstream operators - in particular, those related to achieving business process and integration efficiencies.
Strategy 1 - Advanced technology to lower customer costs.
Strategy 2 - Innovate business process efficiencies to lower customer costs.
Strategy 3 - Integrate value chain offering or bundle offerings to lower customer costs.

CATEGORY 2: Reorganize and redesign business processes to reduce internal costs within the services company.
Strategy 4 - Increase internal business process efficiencies to support balance sheet improvements or lower prices for customers.

CATEGORY 3: Develop new products and services in existing or adjacent markets.
Strategy 5 - Expand or add new market offerings.
Strategy 6 - Pursue long-term contracts.
Strategy 7 - Add or expand market offerings to non-energy sectors.

The unifying theme across these strategic categories is the recognition by oilfield services companies that sustainable success will likely depend on meeting and anticipating customer needs.
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