Can you tell us a little bit about AlixPartners’ history on the North American continent?
AlixPartners has served the Oil, Gas and Chemicals industry for years doing strategy, operations improvement, and restructurings for public, private-equity-sponsored companies up and down the hydrocarbon value stream. With experience in every basin, on-shore, off-shore, refineries, and both conventional and unconventional operations, our team brings decades of experience to our clients to create value for their shareholders.
What do you see as the key challenges facing the industry in the region over the coming 5-10 years and how is AlixPartners positioned to help their clients overcome these challenges?
The Upstream (E&P, OFSE) industry needs to find a balance where all companies involved in the value chain—from exploration to refined products—can be successful and grow profitably with stable cash flows and returns. There is a tremendous opportunity to transform the industry into a manufacturing type of environment, increase the use of automation, and capture data to help inform/improve operations. Until the industry achieves this, operations will continue to be sub-optimized, leaving truckloads of profits in the oil patch.
Similar to most US industries that employ large numbers of blue-collar workers, the talent drain is real. The industry needs to work together and identify a practical and sustainable solution to attract, retain, and grow workforces that will be needed to run operations. Additionally, they need to introduce automation into the processes to fill the resource requirements.
Where do you see the opportunities for growth within the industry in the next 5 years and how are you positioned to support this?
- Operating standards that are practical and measurable, which will then be converted to operating models driven by performance and statistical analysis
- Use of digital tools to enable operations improvements
- Consolidation of key services, e.g., well-servicing rigs, crude/water logistics, etc.
- Crude and water logistics
What game-changing discovery/ project/ technology is currently making waves in the industry?
Most companies are still trying to understand all of the data they own and how it can improve customer interaction and satisfaction. With a talent shortage in many parts of the business, companies are being forced to develop new ways to accomplish their tasks. In a couple of years, we will see innovations that were not contemplated.
Five years down the line what does the Oil and Gas industry look like?
Standard operating procedures, manufacturing concepts (e.g., LEAN, Six Sigma, etc.) will be standard in the industry. This will drive even better margins and spur a new growth period that will increase production.
The sustained extraction of a sweeter, lighter crude will cause US-based refineries to invest more in their capabilities and increase refinery complexity to consume the lowest cost and available alternative.
What insights are you most looking forward to debating and discussing at the 10th North America Assembly?
- How quickly will the Permian overcome the takeaway capacity issue?
- Will private equity investment return to oil and gas commodity-driven businesses?
- When will we reach “peak” oil demand and therefore maximum US oil production?
About Bob Sullivan
Bob Sullivan has three decades of experience in oil & gas exploration and production, upstream and downstream services, oil field equipment manufacturing, commodity and specialty chemicals, industrial manufacturing, and distribution. Bob’s clients benefit from his expertise in serving in both advisory and interim executive roles. Bob has worked extensively in North America, South America, Europe, Asia, and the Middle East. Prior to AlixPartners, Bob was a partner in A.T. Kearney’s operations practice. Bob has an MBA from the University of Texas at Austin.