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Digital Powers Value Creation in Oil and Gas
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Digital Powers Value Creation in Oil and Gas

Mauro Castilhos, Marie-Hélène Ben Samoun, Håvard Holmås, Sylvain Santamarta and Sverre Lindseth
Boston Consulting Group, 2020
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If you’re employed in the upstream oil and gas industry, no one needs to tell you that your industry has got a value-creation problem. Shareholder returns have declined for the past 10 years, so, no one can blame the problem on the COVID-19 crisis, either. So what will save your industry? Boston Consulting Group has a solution, and if you’ve been paying the least bit attention, it probably won’t surprise you: Digitization. In this special report, the BCG go over the Digital Acceleration Index survey results, which suggest that the push for digitization is more urgent than ever before.  

Summary

Upstream oil and gas (O&G) companies are falling behind in the push for “digital maturity,” and it’s hindering value creation.

The Boston Consulting Group’s Digital Acceleration Index (DAI) study evaluated the TSR (total shareholder return) data of 10 industries between the years 2010 and 2018. The O&G industry came in as the lowest performer at 2% annualized returns. 

Things grew worse between January 2019 and February 2020, when TSR dropped by a whopping 9%. 

Assessment of the O&G industry’s digital maturity suggests digitization is the key to value creation. 

The DAI study’s interviews and online surveys placed companies on a spectrum of digital maturity, comprised of four groups: Digital starters, digital literates, digital performers and digital leaders. BCG then compared the O&G companies to companies in other industries.

Digital starters are companies that have made only nascent attempts at digitization. In other industries, about 9% of ...

About the Authors

Mauro Castilhos is a Senior Knowledge Analyst in BCG's Madrid office. Marie-Hélène is a Managing Director & Partner in the Houston office. Håvard Holmås is a Partner and Associate Director and Sverre Lindseth is a Principal in the Oslo office, and Sylvain Santamarta is a Managing Director & Senior Partner in Amsterdam.​

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