Deloitte Study Says High Energy Prices Provide Opening for New Oil and Gas Challengers

Unrelenting high energy prices continue to pressure consumers and businesses who seek new, less expensive energy options. Innovative companies have appeared and are changing the traditional oil and gas market’s competitive landscape. This may result in a significant disruption, leaving today’s dominant firms at risk, according to a new study conducted by Deloitte Research, Regime Change in the Oil and Gas Industry: How disruption and value migration could undermine the dominance of today’s leading firms. The report finds three areas of risk which could result in shifts in relative profitability of today’s leading oil and gas firms.

Retail, refining and exploration, and production — each of the three segments of the oil and gas value chain — are facing disruptive forces that historically have signaled the end of large, incumbent organizations. Major oil and gas companies are advised to be alert to challenges from unexpected sources and familiar rivals.

For many years, the oil majors have outsourced E&P to oilfield service companies. Now the established companies could find themselves in vigorous competition and forced to collaborate with the services companies for access to these new technologies.

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Source: Deloitte & Touche USA LLP