In the first two articles of this series, we explored the challenges facing the oil and gas sector, and how Copperleaf helps organizations future proof their investment strategies. Today, we’ll explore tangible results our clients have realized since implementing advanced decision analytics across the capital planning process.
Making the Case for Change
Transforming a planning process that involves hundreds of internal stakeholders and billions of dollars of investment—under the watchful eye of governments, regulators, investors, and consumers—is no easy task. In early 2019, a multi-national oil and gas company began working with Copperleaf to bring increased consistency and transparency to its asset management strategy and capital planning process.
With the Copperleaf Value Framework, this client now has an enterprise-wide view of all the value measures that support its strategic goals and value models that calculate how individual investments or projects will contribute to those goals. Copperleaf’s AI-powered portfolio optimization provides the ability to re-optimize plans, positioning the organization to respond quickly and confidently to changing conditions while still meeting planned commitments.
By adopting Copperleaf’s solutions, our client has transformed its capital planning from a siloed exercise to a transparent, enterprise-wide process. And the results speak for themselves: since working with Copperleaf, the organization has realized 15% more value from its investment portfolios and secured a 30% increase in maintenance capital spend.
Moving from “What Now?” to “What If?”
The global pandemic caught many of us off-guard. Abrupt changes in consumer behavior due to lockdowns saw oil demand decrease by 30% and the rebound, when it came, outpaced supply and sent prices soaring. Russia’s invasion of Ukraine added another layer of supply insecurity to an already volatile market.
The ability to react to global events and adapt investment plans with speed and confidence is integral to the successful operation of oil and gas companies—and clients across the energy sector have used Copperleaf's solution to navigate the unprecedented challenges of the last two years.
But reacting to crises and challenges is not enough.
The ability to accurately plan and model for the next potential event and create realistic “what if” scenarios is what allows our clients to move from reactive to proactive, creating agile plans that are ready to meet the challenges of tomorrow.
Copperleaf clients can create and compare scenarios with multiple constraints and targets, moving the levers on resources, budgets, risk tolerance, ESG, and financial benefits to rapidly determine the best path forward in changing circumstances. These what-if scenarios allow stakeholders across the business to understand the trade-offs of different investment strategies and quickly come to agreement on the optimal plan. As a result, our clients have seen up to a 50% reduction in planning time.
Emergent events lead to uncertainty, which lead to people seeking to understand the impact on the networks, customers, and business. With Copperleaf’s products, we have been able to look at those financial strategies—something we wouldn’t have been able to dream of doing in the past. We’ve been able to quickly answer these questions and make decisions to move our business forward.
Finding and Funding the Balance
Capital discipline remains the name of the game across the sector as companies direct profit to shareholder returns over investment. A recent Bank of Canada business survey found that the country’s producers are earmarking 40% of estimated cash flow for capital expenditures—down from more than 100% pre-pandemic.
With reduced spending guidelines and aggressive ESG and financial targets, oil and gas companies must derive the most value for every dollar spent. Copperleaf is helping organizations across the energy sector do just that. Using our decision analytics solutions, clients can realize improved business outcomes while staying within budgetary and resource constraints, reporting, on average, 26% reduced cost in their discretionary investments to achieve the same value from their portfolio.
Learn More About Copperleaf
To learn more about some of our clients’ best practices for capital planning excellence, take a look at this video by the Institute of Asset Management (IAM) and ITN Productions Industry News, along with resources and webinars we created specifically for the oil and gas sector.
If our clients’ experiences resonate with you and you’d like to explore how advanced decision analytics could transform your organization’s investment planning and management process, please contact us to speak with a member of our team.
About the AuthorMore Content by Cicely Striolo