In the three years since the oil price drop, the industry has made significant progress on the cost agenda and there is clear evidence of continued momentum.
Our survey highlights concerns regarding cost sustainability and whether companies plan to make these reduction measures part of their permanent strategies.
Overall, the industry has achieved material cost reductions in the region of 30% since the oil price crash. However, we’re seeing sizable variations in the level of cuts achieved, suggesting there is still room for improvement moving forward.
A shifting approach to cost reduction?
Cancelling projects and squeezing suppliers were common tactics used to bring down costs in the last 12 months, but the view is becoming more optimistic.
When asked to consider a range of short-term, tactical approaches and long-term strategic approaches to cost reduction in the next year, respondents placed greater emphasis on pursuing the latter.