Energy, chemicals and utilities

When a joint venture refinery started experiencing significant financial losses, management called on Strategy& to help determine the cause, and advise on a margin improvement plan.

The Strategy& team first created a baseline of the refinery’s units, processes, product flows, and production. In parallel, they reviewed historical financial statements and worked closely with management and the refinery’s optimization unit to diagnose the decision making process related to feedstock sourcing, refinery utilization, products’ mix, and constraints put in place. They then designed a customized margin-tracking tool, and ran it on historical data to identify the sources of margin leakages. Accordingly, the team has put forward a margin improvement plan that is centered on a revised market optimization algorithm, a dynamic decision making process, and more capable decision support team.

Strategy& was able to pinpoint the areas responsible for margin leakage and assist management in taking the operational decisions to turn around the situation.

A large GCC petrochemical company was struggling to identify and pursue growth opportunities, both close to home and further afield in the MENA region. Strategy& was asked to design a strategy and a governance model for the client’s M&A processes, and to find attractive greenfield and M&A candidates suitable to the client’s aspirations.

To develop the growth strategy, M&A approach, and governance model, the Strategy& team first defined and helped establish the requisite capabilities: process, governance, tools, systems, and talent. The team then generated a list of M&A targets and greenfield opportunities that aligned with the growth strategy and evaluated the most promising, ascertaining the synergies. The client approved the top 10 “build” and “buy” targets and gave the team the green light to design deal structures, engage in discussions and negotiations with each selected partner, and conduct due diligence on the targets.

A GCC country’s ministry of energy set the ambitious goal of deploying diverse renewable technologies over the next decade. Strategy& was drafted to help in auctioning the ambitions and to support in realizing them. The team began with articulating the program’s vision, defining the optimal renewable technology mix and capacity deployment plan, setting up the tendering policy framework, and establishing a centralized capacity procurement entity.

For the launch of the program itself, the team took care of obtaining approvals, supported the efforts to socialize it, and within nine months instigated an initial tendering round to procure renewable capacity. The result was that bids were among the lowest internationally for renewables projects. Strategy& also designed and implemented a series of programs to ensure that the renewables strategy built local content and capabilities across the value chain in a manner that is competitive with comparable foreign suppliers.

Strategy& was retained by one of the world’s largest national oil companies to help identify performance improvement opportunities across the spectrum of upstream operations.

The Strategy& team conducted an in-depth review of exploration, well delivery, reservoir management, major projects, procurement, and human resource processes, with reference to industry-leading practices, and identified the root causes for performance shortfalls. The team developed charters and improvement plans for individual functions, and introduced major cross-cutting initiatives to strengthen the culture of collaboration in the company. Leadership alignment sessions led by the team brought unity of vision on the areas to be improved and consensus on the road map.

Strategy& was retained by a leading international downstream subsidiary of a major Middle East national oil company to validate the existing long-term strategic plan, with key strategic directions cascaded to the different operating units, supported by concrete road maps for the operating units to pursue.

The Strategy& team conducted a rapid validation of the countries and plays identified in the long-term plan on agreed macro and market dimensions. The team identified business opportunity "themes" (countries/regions), and created a list of potential opportunities across the validated countries/plays. They then prioritized the opportunities and defined entry options (JVs, M&A, or organic), which included not only key implications for the company’s operating model, capabilities, and resources, but also the risks. Finally, the team facilitated leadership alignment and approval on the implementation road map to ensure key stakeholders in the client organization have clarity and a unified vision on the way forward.