Energy

The energy sector has moved from evolution to revolution in the last two years. The most capital-intensive and geo-political of all industries is facing its highest level of uncertainty for more than fifteen years, and wrestling with how to deliver affordable, clean and secure energy to billions of people. The global balance of demand and supply, the competitiveness of renewable energy, the changing patterns of energy consumption and the disruptive powers of new technologies make for heady and high-stakes strategic moves in traditionally conservative management teams.

At Marakon, we help energy firms understand the fundamental issues better and faster, so they can make major strategic and portfolio decisions more confidently and more quickly than rivals. We work with companies to ensure they are efficient and focused operators of their chosen assets and businesses. We support the realization and implementation of strategy across countries and business lines.

Our clients include large energy firms engaged on upstream, midstream and/or downstream activities, governments, utilities, service companies, technology providers, new entrants and investment companies.

Related Articles

Ukraine War and Five Lasting Changes for the Energy Sector

The war in Ukraine is creating geopolitical, social, and economic disruption in the energy sector and beyond, just as the world is beginning to recover from the worst of the Covid-19 pandemic. In the energy sector, it is compounding the trilemma of security, affordability, and sustainability. Increasing sanctions on Russia’s energy exports and moves to reduce dependence, notably by the EU, are limiting access to a previously reliable and low-cost global energy source, and the ripple effects could be felt in the form of higher costs of living and of doing business. There will also be implications for the energy transition. In this Marakon Commentary, Rod Davies and Quan Li outline five potentially lasting changes the energy sector could encounter and that companies and investors should account for.

Hydrogen Market Primer

Hydrogen has the potential to play a critical role in the energy transition, but the space remains nascent and is highly complex, with a dynamic value chain of supply and demand possibilities. CEOs and business leaders looking to invest into hydrogen need to work through significant strategic, organizational, and operational questions. Why hydrogen, when to invest, and where in the value chain? Whether and who to partner with, and with what commercial construct? What are the economics and drivers? As a starting point, some basic level setting on the market fundamentals will support decision makers contemplating these types of questions. To that end, Marakon and CRA are pleased to provide this hydrogen primer as a point of reference.

Responding to a Rapidly Changing ESG Policy Landscape

The Biden administration has signaled a strong desire to make environmental, social, and governance (ESG) considerations more central themes in government policy, corporate disclosure, and investor and corporate behavior. Policies directed at addressing climate change get the most attention, but we expect significant policy shifts across all areas of ESG. These shifts will not only change disclosure requirements, but may fundamentally affect the economics of certain value chains, capital-labor relationships, and the legal risks of corporates. As a result, US corporates need to step up their ESG orientation. One place to start is a simple set of questions management teams can ask themselves to better understand how prepared they are for the expected policy shift.

Beyond ESG: Building more confidence and assurance in corporate sustainability practices

Sustainability and ESG are the buzzwords of the day, and indeed much progress has been made to bring transparency and focus onto these issues in the business world. As capability and sophistication in this space evolve, many companies and investors are understanding the need to move beyond using relatively simple, sometimes self-reported ESG scores to build more confidence and assurance in corporate sustainability strategies and policies. Charles River Associates, via Marakon and its Investigations practice provides an effective supporting capability that enables corporates and investors to do just that.

Utilities Are Not Immune This Time

In this white paper, Marakon and CRA colleagues Quan Li, Neal Kissel, and Jim McMahon analyze the intense pressure on affordability, uncertainty in utility rate base growth, the heightened scrutiny on investments, and pressure on regulated ROEs in the current environment. Most of these issues were at play to some degree before the current economic downturn. The COVID-19 crisis has brought them to the fore at an accelerated pace. Consequently, there are deep strategic implications that all utility CEOs need to consider to better weather the storm in the current crisis, be better prepared for the next crisis, and increase the odds of creating long-term business resilience.

Strategic Resource Management - The Hidden Secret to Outperformance

Solid operational performance matters; if your team can’t reliably execute you’re finished. However, our comprehensive study of 1,200 companies revealed that the path to superior performance is determined by management’s decisions about where to focus the firm’s strategic resources (time, people and capital). At least 60–75% of the difference in performance can be attributed to high-level portfolio choices. The implications for senior management are stark and the report outlines the common challenges they face and six actions they can take to help ensure outperformance is within their grasp.

Making Better Technology Investments in Oil Sands

Ramping up your investment in innovation and technology is a logical response to increasingly complex and marginal – but potentially huge - oil and gas projects. And the numbers confirm it: despite the recession, overall R&D spending by oil and companies has jumped by several billion dollars in the last 5 years as national oil companies and independents have piled in. Yet chief executives cite “making technology work” as one of the hardest challenges of the industry. In this article, we highlight what oil sands operators – as owners of the largest volumes of marginal barrels and growing investors in technology – are doing to improve their odds of success.

HBR: Managing the Right Tension

There are three fundamental tensions with which most companies and executives struggle: profitability versus growth, short term versus long term, and the whole of a company versus its parts. Few companies manage these competing objectives successfully at the same time. But there is a way to do so. The key is finding the common bond that enables reconciliation of these seemingly irreconcilable objectives. For any company one tension is always more critical to unlocking better performance than the rest—that is the one to manage.

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