With oil prices stuck at low levels for the foreseeable future, exploration and production (E&P) companies must increase their productivity. Some E&P companies have already shown they can do this, driving up their production even as their capital spending has declined. Others have had a harder time, a fact reflected in their falling production numbers.
As E&P companies adjust to the new price environment, they could benefit from strategic portfolio management. Strategic portfolio management is a framework in which analytical tools and a set of clearly defined ongoing meetings are used to identify which assets, programs, and wells E&P companies should invest in. It encourages companies to make all of their decisions using a capabilities lens. At a time of severe capital constraints, strategic portfolio management keeps E&P companies on track by doubling as a control mechanism and a significant booster of performance.
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