The energy transition is bringing forth both new challenges and opportunities for oil and gas companies. The evolving oil and gas industry apart, industries too are undergoing transformation based on their local mandates and requirements. To survive in the competitive environment, oil and gas companies need to innovate and continuously increase the value they create for their clients while also modernising their business models and operations. To succeed in this highly competitive environment, it is important that oil and gas companies go global and clearly define their internationalization strategies to create new pathways for growth.
Research shows that nearly half of the top 29 global hydrocarbon-producing companies have grown beyond their national borders and transformed themselves into international companies.
There are various factors that have triggered the need for oil and gas companies to go global.
In countries such as China, oil and gas players are going global, motivated by the need to secure their resources in order to meet the growing national demand for energy.
On the other end of the spectrum, net oil exporting companies are internationalizing to secure their markets, strengthen or build their core competencies, or access more hydrocarbon resources. Then again, some are prompted to explore new pastures due to the increasing competition in the domestic markets and the need to find new avenues to sustain growth for the long term.
With focus shifting to clean energy, the need for transition is also encouraging companies to pursue international markets. Added to this is the pressure to bring down the cost of production, implement digital and emerging technologies, and develop new reservoirs. All these factors are driving oil and gas companies to strengthen their asset portfolios and expand globally, either on their own or through strategic alliances with local partners.
Factors that support success in global expansion for oil and gas companies
The need to expand could be motivated by a host of factors, such as the need to capture new markets, ensure energy security, strengthen capabilities, improve technological competence, or develop strategic partnerships. Each oil and gas player is different from the other, and so each company must have a compelling value proposition that is well-aligned to their goal and stakeholders, to their risk profile, and to the time frame for expected returns.
To ensure maximum opportunity for success, the other important factor is to have a data-driven expansion strategy based on organisational goals, the market and regulatory environment of the target country, and the competition that may exist from global and domestic players.
Finally, while selecting international opportunities, keep various trade-offs in perspective, for instance, entry costs, which in some cases could be low but could involve greater geological risks. In another case, the identified opportunities could generate revenues but be more expensive in the long term.
In sum, going international opens up opportunities to access new markets, strengthen core competencies, diversify portfolios, and develop international partnerships to share know-how and technology. This being said, it is important for companies to develop an international expansion strategy based on big data; otherwise, international expansion can prove costly while also creating significant risks in the process. Further, companies that are keen to expand their operations internationally would also have to be prepared to face competition from other global players that may have been managing their asset portfolios for decades together.
Also, to expand internationally, there is a need to consider obstacles that may manifest in the form of dealing with bureaucratic processes, constraints on costs, and the inability to adapt to new working and regulatory environments.
In tune with the need to go global, GET, an emerging player in upstream oil and gas services, is following an aggressive international expansion strategy, backed by its more than a decade of experience, proven methodologies, strategic partnerships, technical know-how, strong connections with local players and networks in target countries, and most importantly, its highly trained multidisciplinary and skilled personnel.
GET enjoys a strong presence in Europe, America, and the MENA region. The company has deployed more than a thousand technical specialists across six countries in the Middle East and South Asia and is gradually expanding its footprints to other countries, such as Guyana and the USA. Guyana has a burgeoning oil and gas sector, which could further enhance economic growth in the country and accelerate growth in other sectors such as manufacturing and construction, forestry, agriculture, and services. GET is also set to expand footprints in the USA with the objective of creating value in terms of growth and profit while maintaining high operational standards in the geography.
