Where else can oil companies derive greater efficiencies?
“Petroleum companies need to focus further on the things that they do best. First, they can shift their asset portfolios to increase exploration and production activities in locations where exploration costs per barrel are realistic vis-à-vis oil prices. However, increased competition for limited new fields has meant that governments are becoming more adept in taking a larger share of the profits from the oil companies. In future, operational excellence, in terms of better recovery rates, decreased downtime and reducing the cost per barrel will become major drivers of profit. Some believe that the best operations can deliver a 30% increase in profitability while a glace at BP’s woes in the Gulf of Mexico reveals a clear picture of what companies can expect when operations fail. Alternatively, oil companies can choose to look for upstream long-term investment opportunities to strengthen their resource positions. This may mean learning to squeeze more product out of existing marginal wel
