CFOs critical role in the economic survival of oil and gas industry


With oil prices slowly recovering from the dramatic fall last summer which forced global organisations to put multi-million dollar projects on ice, ACCA (the Association of Chartered Certified Accountants) has detailed the key areas in which chief financial officers (CFOs) working in the sector can galvanise the finance function in the fight to future-proof their business in an ever more volatile market.

Speaking on the report, titled Oil and gas – priorities and challenges for the CFO enterprise, Jamie Lyon, the author and ACCA’s head of corporate sector says:

“We have all seen the impact of volatility in the market hitting the cost base and impacting capital expenditures over the last year or so. The big question now is how low and how long the oil price will remain at present levels.”

The report also highlights how volatility is bringing pressure on forecasting and decision support capabilities, and more scrutiny from investors on the performance of businesses in the sector.

“Corporate reporting challenges are also a key test for CFOs, particularly in relation to asset impairment and stranded assets” Lyon says.


One of the biggest issues facing CFOs in the sector is predicting the future business landscape. Lyon adds: “Effective forecasting and planning is vital right now. Preparation for the potential risks of the future and most importantly, how to overcome them, needs constant review so that plans do not become irrelevant which can happen all too quickly in a fast-moving and volatile sector like oil and gas.”


The report also highlights the challenges facing CFOs in terms of the cost base. “Resource allocation needs to be prioritised, and ruthlessly so. What really needs the funding? All spending will be analysed so CFOs need to tread a fine line between cutting cost but also protecting essential investment for the future. It’s a really tricky balance to get right”.


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