Introduction

Considered as the major contributor to energy generation, oil & gas sector has been impacted significantly by economic crisis, technical advancement, and new discoveries during past few years. Price volatility has also been a challenge for firms in this sector. During these challenging times, firms have relooked at their global sourcing approach and are adopting it as per the specific needs. Service providers, on the other hand, are developing distinctive capabilities as per the need of the buyer and industry

Scope

In this research, we have analyzed the outsourcing and offshoring trends in the oil & gas sector. The research covers:  

• Evolution and current level of adoption of global sourcing
• Sourcing strategies across leading players of oil & gas industry
  • Function mix
  • Locations leveraged
  • Sourcing models used
• Landscape of Information Technology Outsourcing (ITO) and Business Process Outsourcing (BPO) service providers in the industry
  • Capability development
  • Mergers and Acquisitions (M&A) and industry dynamics among service providers
• Perspectives on potential themes and opportunities that are likely to influence outsourcing and offshoring in the future

Key findings

• Oil & gas firms leverage both global sourcing models – GICs and third-party service providers. The share of GICs is much higher than service providers with a large number of FTEs based in offshore GICs
• IT services have traditionally led the outsourcing transaction signings in the oil & gas sector, whereas GICs have been primarily leveraged for business processes
• Asia-Pacific is the leading location for sourcing global services within the oil & gas sector, followed by Central and Eastern Europe (CEE)
• Several large outsourcing deals are nearing their end-of-term during H2 2013-2016 in the oil & gas space
• Service providers are making focused investments in this sector through both organic and inorganic route