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

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Reporting challenges

With ongoing pricing challenges impacting the sector, the investor community remains cautious, and is becoming more challenging. For enterprises that are heavily invested in carbon, the issue of “stranded assets” and potential impairments is also dominating the agenda, with Lyon commenting: “I think we can expect to see a reduction in the value of assets on the balance sheet, that’s just a reality of the market at the moment.”

Longer term outlook

From the CFO’s perspective, the report also points to the longer term demands. “Obviously investment in renewables is a key issue. Fossil fuels by their very nature are a finite resource, and one that global warming targets may leave out of reach, so investment in alternative energy sources must be increasingly on the priority list.”

Lyon adds “Another equally important issue for CFOs longer term is the talent pipeline. Securing the right balance of operational and strategic skills in the finance function is a huge challenge across the industry, and ensuring its endurance in the longer term must be a key consideration. The big question is where the next generation of finance talent across the industry will come from.”

Summary

CFOs, and the approach they use to transform their businesses to make them fit for the future, are a vital part of ensuring the oil and gas industry runs ‘business as usual’ as it works through turbulent times and continues to transform in an ever-changing world. The typical finance organisation is going to be at the forefront of driving the transformation needed in the sector.

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