Energy and utilities

Energy

Energy companies face an environment of accelerating change. Price and earnings volatility is increasing significantly as commodity markets deregulate and become more liquid and more global. At the same time, technology and scale economies are requiring ever-larger long-term investments in such projects as deep-water exploration, gas-to-liquids infrastructure, and next-generation combined-cycle gas turbines, to name a few.

Upstream resource access constraints, an increasingly competitive environment in all parts of the value chain, and the challenge of building capability and replacing an ageing workforce (‘the big crew change’) continues to drive the long-term trends in the sector. Further complications are created by the shifting landscape of deregulation, privatisation, consolidation, and environmental mandates.

In order to succeed, both state-owned and commercial energy companies are finding it necessary to rethink how they manage risk and make investment decisions, and how the pieces of their portfolios fit together to create stakeholder value. Capability building, operational excellence, technological innovation, and strategic cost leadership are rapidly becoming the ‘price of admission’ for the right to compete in the global arena. Doing one or two things well is no longer sufficient to generate acceptable returns - successful companies must develop expertise across the energy value chain in which they operate.

PwC's Strategy& has worked with an array of the world’s leading energy companies in every category of the business - upstream oil and gas; downstream refining petrochemicals, trading, distribution, and retail; and gas and power including electricity and gas distribution; and alternative energy. Among the firm’s clients are global oil companies, national oil companies (NOCs), local and regional utilities, petrochemical manufacturers, financial investors and policy makers in the Asia Pacific, Middle East, Europe, the United States and Latin America.

Strategy& delivers a comprehensive energy service offering that spans corporate and business unit strategy (including strategies to build capability), portfolio management, customer and channel strategy, post-merger integration, performance improvement, organisation design, trading, and risk management.


Our thought leadership

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As growth curves regress toward the industry mean, some utilities are considering a new way to deliver shareholder returns: growth through subtraction. Executives need to ask a critical strategic question of their businesses: In today’s market conditions, what fits, and what doesn’t?
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Utility mergers often take a year or longer to close. Based on our experience with utility integrations over the last 25 years, we have developed 10 best practices that can improve the likelihood of a successful merger outcome.
Rewriting the rule book
The energy industry’s performance has plateaued recently, but a new approach can help. Instead of limiting the accountability for safety and environmental factors to an isolated function, this model shifts the responsibility to front-line workers.