To emerge from the economic crisis ahead of the competition, oil and gas companies are concentrating on transactions,
according to a survey conducted in June and released Aug. 17 by Ernst & Young LLP and the Economist Intelligence Unit.
When asked what actions they would take to emerge stronger than competitors, respondents from the oil and gas sector said their top four picks were acquisitions (55%), divestitures (36%) and strategic alliances (40%) -- all of which were higher percentages than from industry executives overall (34%, 29% and 33%, respectively). And more than two-thirds of respondents said restructuring had become more important at their companies, including mergers and acquisitions, divestitures, joint ventures and alliances.
The respondents primarily represented major international oil and gas firms, which were well capitalized before the downturn. That may explain why oil and gas executives are a more optimistic bunch. Indeed, 45% of oil and gas executives indicated that the economic downturn had impacted their business more than they expected, versus 56% for all respondents, and nearly half of the oil and gas industry executives believed their business had been less severely impacted by the economic downturn than other sectors and had actually even realized business improvements.
Marcela Donadio, Ernst & Young's Americas leader of oil and gas, said the results were consistent with what the firm was hearing from clients. "Compared to the last major collapse in the 1980s, today's oil and gas industry is leaner, more efficient and better-positioned to weather market turmoil and take advantage of opportunities in the recovery." Deal on. -
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