A framework for strategic decision-making in junior and intermediate oil and gas operating companies

Understanding the rationale behind the spate of strategic decisions being undertaken by oil and gas operating company (OGOC) executives in Alberta, Canada, as a consequence of the petroleum industry’s challenges associated with low commodity prices, presented a unique research opportunity. A framework for strategic decision-making and the competencies or skills required for making such decisions are critically important.

Empirical data was gathered from case study and industry survey as well as follow-up interviews. Some of the key findings were: 1) it is imperative to continually check to confirm that the strategic decision issues remain valid throughout the process and especially during the strategic decision issue framing and implementation phases; 2) periodic benchmarking of the OGOC’s key performance indicators against peers is necessary for sustainability; 3) capturing lessons learnt (knowledge management) and reapplying those lessons learnt throughout the strategic decision-making and implementation stages are very important for an effective strategy and strategic integrity; 4) the strategic decision priorities for the specific strategic decision issue or problem should be central in the strategic decision-making process; 5) Junior and Intermediate OGOCs should continually take cognizance of the cyclic nature of the oil and gas industry and examine several scenarios while maintaining capital discipline for sustainable growth, whether in a down- or up-cycle; and 6) sustainability of the organisation is paramount irrespective of the life cycle time frame consideration of the business or organisation’s principals. Ultimately, a framework, implementation guide, and skills required for strategic decision-making in Junior and Intermediate OGOCs were proffered and validated.