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Time to execute: Innovation is imperative to the success of the oil and gas industry in Canada, Monitor Deloitte report finds

An integrated approach to innovation is necessary for oil and gas companies to survive

Toronto, February 25, 2016 – Pressures are greater than ever for the Canadian oil and gas industry as it’s faced with simultaneous pressures to reduce production costs, achieve greater environmental targets and satisfy a complex stakeholder environment. Embracing innovation is the industry’s only option. According to a new study Innovation in Oil & Gas: Canada 2016, conducted by Monitor Deloitte, the need for oil and gas companies to pursue innovation broadly and systematically is greater than ever, or their long-term survival may be in jeopardy.

The study found that surveyed companies hold a narrow view of innovation as a way to increase operational efficiency through R&D. 86 per cent of innovation within the oil and gas industry is implemented with the aim of optimizing discreet aspects of current production approaches, with 44 per cent of companies specifically focused on technical solutions. However, focusing innovation narrowly toward technical solutions does not address the critical juncture the industry is faced with. For innovation to thrive, companies need to look beyond R&D. Focusing on a broader spectrum of innovation types from profit models and networks, to branding and stakeholder engagement will more effectively and consistently deliver higher results across the triple bottom line.

“The key challenge for oil and gas companies is to drive innovation beyond the technical and R&D groups and into the wider organization, said Andrew Swart, Partner, Monitor Deloitte. “The findings underscore the importance of going beyond acknowledging the critical need to innovate, and beginning to act upon this imperative in a focused, coordinated way.”

The report looked at ten oil and gas companies, representing 67 per cent of the production in Canada in 2015. Through a series of interviews and cross-company surveys, the study examined current perspectives on innovation in an age of rising costs, multiplying risks, increasing environmental concerns, escalating activism and shrinking margins.

The study found that most companies see innovation as the key to survival, both as a way to become globally competitive in terms of costs and as a means of shifting the public perception of the industry, and particularly of the oil sands, into a safe, sustainable, and economically feasible option. Yet despite this urgency, most respondents revealed they have begun to innovate only in select areas and have yet to make innovation a strategic priority or to act upon it in a consistent or integrated way. Combined with industry’s risk-averse culture and intense focus on operational efficiency, the capacity for companies to innovate broadly and systematically contracts even further.

“Taking an integrated approach to innovation and collaborating with stakeholders within and outside the industry may be the only way to bring about a shift to the industry’s down cycle,” said Swart. “Considering the magnitude of environmental, social and economic pressures facing oil and gas companies, a unified strategic approach to innovation will be necessary to thrive. A disconnected approach rarely works.”

Through strategic innovation, leading organizations have an opportunity to build a new brand for themselves as well as to redefine the perception of the industry. This new image will need to encompass not only economic benefits but also environmental protection, stakeholder engagement, safety and the social license to operate.

The Innovation in Oil & Gas: Canada 2016 report is available at:

About Deloitte

Deloitte, one of Canada's leading professional services firms, provides audit, tax, consulting, and financial advisory services. Deloitte LLP, an Ontario limited liability partnership, is the Canadian member firm of Deloitte Touche Tohmatsu Limited.

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.


Emily Richardson
Manager, Media Relations
416-202-2872 / 416-294-5633

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