Business Strategy: The Impact of Lower Oil Prices on Oil and Gas IT Budgets Is Not as Much as Expected

Business Strategy: The Impact of Lower Oil Prices on Oil and Gas IT Budgets Is Not as Much as Expected

This IDC Energy Insights report examines the impact of low crude prices on oil and gas companies' IT budgets. The report is based on an IDC Energy Insights flash poll from February 2015 of CIOs from 20 non-OPEC oil and gas companies — Oil & Gas CIO Survey. The report serves as a guide to understanding: what oil and gas sector's IT investments are most impacted and what technology investments companies are making to mitigate lower oil prices. Essential guidance is provided on planning within the context of uncertainty.

According to Chris Niven, research director, IDC Energy Insights, "The impact of lower oil prices on oil and gas IT budgets is not as much as expected, and cuts are not across the board as oil and gas companies are more strategic and disciplined about reductions. The challenge for CIOs is to understand the company's plans going forward and present the role of IT to help successfully implement these plans. Focus on immediate goals and objectives and identify what resources and tools are necessary, and be prepared to cut, reduce, and postpone investments to accomplish these goals in the short term. Identify which IT areas are core to the business and identify which can be outsourced and which can be dropped."

Please Note: Extended description available upon request.

IDC Energy Insights Opinion
In This Study
Situation Overview
The Approach
2015 Budget Cuts for Some, But a Majority Will Be Less Than 5%
While There May Be Cuts, There Will Also Be an Increase in Line Items
Internal Staffing Will See the Largest Budget Cuts
Production Is a Key Area for Investment
In Line with Reductions in Capital Investments, IT for Exploration Will See Reductions
Investment in Drilling-Related IT Is Mixed
Investments in Midstream IT Will Continue
Traditionally Low-Margin Business of Refining and Retail See Increases
Future Outlook
Oil and Gas Companies Will Make Strategic IT Investments to Mitigate Low Oil Prices
Essential Guidance
Actions to Consider
Things for the CIO to Think About as the Pressure Intensifies
Learn More
Related Research
Figure: Impact of Lower Oil Prices on 2015 and 2016 IT Budgets
Figure: Technology Increases/Decreases in 2015 IT Budget
Figure: Line of Business Increases/Decreases in 2015 IT Budget
Figure: Actions to Mitigate Lower Price of Oil
Figure: CIO's Perception of CEO's View of IT

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