Companies should target efficiency while oil prices are low

Hugh Ebbutt, Richard Forrest, Vance Scott and Jim Pearce, of A T Kearney, highlight the opportunity offered by lower prices to reset portfolios and get costs down - and to come out leaner and stronger

The collapse in oil prices since last summer has triggered spending and staff cuts. More uncertainty may be on the way. The key question for companies is what further action to take in this low and more volatile price environment. Immediate responses have differed. Most have already announced big spending cuts for 2015 - smaller and mid-sized independents by 35-40%, with exploration and high cost developments, not yet started, taking the biggest hits. Niche explorers, unable to raise more funds for drilling, may very soon become 'zombie' companies - at least for a while. The more integrated majors, with strong balance sheets and big ongoing projects, can afford to take a longer term view. Th