Mergers, Acquisitions, and Divestments (MAD)

They say one man’s trash is another man’s treasure. This is particularly the world of oil and gas where mergers, acquisitions, divestments and joint ventures take place every day as operators diversify into new markets or focus on core ones. But why might a small regional operator consider it can make money from an outdated refinery where an oil major has given up and is selling on? There are many reasons why this might be the case, whether it is getting hold of a channel to market that is key to their success, or reckoning that their greater agility is the difference between success and failure.

Whatever their reasons, these deals remain common because both sides consider they can make money through the venture. A very small line item on these projected figures will probably read “IT rationalisation” or similar. It might be a fraction of a percent of the overall deal value and it has probably been arrived at without asking the IT manager due to the secretive nature of these deals, but it could spell the difference between success and failure. Consider the impact of email not working on cutover day precisely when stakeholders most want to get in touch. Or acquiring, along with other assets, an ERP system that is fine for an oil major but far from adequate for a regional operator. These considerations can all have major impacts on the ability to realise the benefits envisaged.

Here at Logica we help oil and gas companies - whether large or small, acquiring or divesting, upstream or downstream - make sure that IT is aligned to deliver the benefits you’re expecting from the deal. We do this by bridging the gap between business and IT, and based on deep understanding of how the industry works. We understand the nuances of whether the venture takes place in the asset intensive upstream where drilling downtime might be a key consideration, or in the downstream where customer access will be a top concern.

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