A new reality for oil and gas procurement and supply chains

BCG | Unprecedented times call for unprecedented measures. Oil and gas operators are reeling from the effects of the pandemic as well as collapsing oil prices. In addition, worldwide lockdowns and border closures are hampering the ability of oilfield services and equipment (OFSE) suppliers to deliver on time and on budget.

Many OFSE companies are entering this crisis weaker than they’ve ever been. Despite this, oil and gas operators are demanding that suppliers cut prices and are reducing both operating and capital expenditures, as they did during the 2014 price decline. Such traditional measures could cause supply companies to go bust, decimating vital industry capabilities and hurting the ability of oil and gas operators to maintain production.

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