[Editor's note: A version of this story appears in the January 2019 edition of Oil and Gas Investor. Subscribe to the magazine here.]
A continuing trend toward greater specialization in the oil and gas industry is enabling companies, particularly in North American shale plays, to achieve greater efficiencies, please investors and improve financial results.
But an IHS Markit analysis says this corporate strategy is putting many companies at significant risk to market volatility, fragility and vulnerability to unforeseen events.
Specialization is increasingly driving strategic focus for oil and gas operators because, for a time, it works, and the market prefers and rewards specialists. When focusing on one play type or asset, like an athlete who focuses on a single sport, one tends to get better at it and become faster and more efficient.