PwC warns oil companies to adapt

LONDON, February 12, 2015 – In a new report, PwC says UK oil and gas companies need “fresh strategies” to stay competitive in a changing industry.

On the heels of a prolonged drop in the price of oil, the business advisory network says UK oil companies must adjust their operations to remain viable with oil averaging $50 per barrel.

The report warns against “knee-jerk reactions” to the price drop, urging operators to instead plan for the long term and take a sustainable approach to reducing costs.

More specifically, PwC recommends that businesses divest their non-core operations and look for strategic acquisitions.

Large-scale downsizing, which can lead to problems with retaining skilled employees, is cited as a poor option. “Aggressive price negotiation” is also warned against, as this can damage a collaborative business environment.

Brian Campbell, author of the report, emphasised that UK companies would have been better positioned to weather the crisis had they heeded warnings to cut costs and restructure made more than a year ago.

With economists predicting low oil prices throughout 2015, he said, operators should avoid assuming the storm will lift in the near future.