American Multinational Energy Corporation Gains Effective Portfolio Management with Planview Advisor

An environmental business unit within a Fortune 10 oil and gas company tasked with fulfilling the organization's goals directed towards ecological stewardship and carbon footprint reduction was undergoing a reorganization brought on by economic factors. The company soon recognized a need to transition from project management to portfolio management, where decisions were made at the portfolio level instead of site-by-site. Effective execution of this transformation requires a solution that would integrate economic modeling and scenario planning to help consistently conduct in-depth, long-term financial valuations, site assessments, and analysis across a highly complex portfolio of assets.

As the company took a more comprehensive portfolio approach to how they informed remediation decisions for 650 sites across the United States, they uncovered three strategic objectives to mitigate risk: be responsible stewards of the environment, be efficient and effective in resource utilization, and work with internal and external partners very intentionally. Since multiple spreadsheets to manage hundreds of entities across various decentralized departments were not conducive to this new direction, the organization turned to Planview Advisor as a go-to solution for analyzing its portfolio of assets.

The environmental management branch of this multinational oil and gas corporation was established in 1998 to provide a wide range of services, including the remediation of legacy operating sites and asset retirement obligations for over 650 sites across the United States while protecting the environment and public health in the communities in which they operate.

In response to market conditions brought on by an economic downturn, evolving regulatory standards, and increased competition, the environmental business unit transitioned from a project management approach to a systematic portfolio management approach in 2020. Until that point, the company leveraged multiple spreadsheets with hundreds of entities across many decentralized departments to analyze a complex portfolio of assets that included upstream production sites (oil fields), downstream sites (refineries), and future energies (sustainable fuels and renewables). The spreadsheets were becoming difficult to scale, unmanageable, and error-prone.

Moreover, the specialized division depended on subject matter experts to maintain the spreadsheets, yet SMEs often transitioned teams every two or three years due to the corporate culture. This made it challenging to hand off essential business and ensure continuity. Lastly, the level of utility modeling required by the company to achieve its goals had outgrown its current status.

“After the oil prices crashed in 2018, we had to adjust how we did business. The unit had gone through a reorganization and moved from a traditional project management viewpoint to more of a strategic steward of the corporate portfolio,” said the Strategic Portfolio and Planning Lead. “We were trying to improve the cycle time in how we manage risks as we remediate our sites with a reduced spend and an external expectation to be good stewards to the environment.”

The environmental management unit’s cashflow modeling extends 50 years, and they need economic models sensitive to price assumptions and fluctuations. As the company began to connect its strategy planning to execution more effectively, it conceded its spreadsheets had limitations. Planview Advisor was brought in to help quantify strategic thinking through logic and interpret insights and tradeoffs to find the strategic direction they care about.

“Planview Advisor enables us to scale up to possibilities that are difficult to see in Excel, and it simplifies a complex level of permutations. This is critical for us as the tool helps us organize logic, mathematical equations, tangible and intangible data and how we profile risk in various dimensions and produce a visual representation of outputs in a dashboard,” said the Strategic Portfolio and Planning Lead.

With Planview Advisor playing a pivotal role in the unit’s portfolio management, the company can increase the complexity of its real-time price modeling and scenario planning and get to a much more granular level than before. The modeling is done more efficiently, helping them strategize based on macroeconomic outcomes, which it was unable to do before.

The environmental management unit consistently meets its strategic objectives with the data and insights it gathers through Planview Advisor. They have reduced the cycle time and shortened how long it takes for the portfolio to meet the end state of remediation with better costs associated with each remediated site. About 90% of its 650 sites will be remediated in 15-20 years rather than 40-50 years. And because they have a much better understanding of how to mitigate and preempt risk, they also have the opportunity to reduce risk exposure by 30%-50% within five to seven years, potentially improving their enterprise net present value by about 15%.

The environmental management branch of this oil and gas company has come a long way in a short period and today has a better understanding of liabilities and risks within the asset lifecycle. Planview Advisor is a critical component the company uses to accurately forecast economic outcomes for their portfolio. The continuous improvement in asset remediation and retirement has led to an enhanced brand perception of the oil and gas corporation as an excellent environmental steward responsive to customers, partners, stakeholders, and employees.