This paper describes the work and experience gained by a team of senior managers using a systems thinking approach, to develop their own set of future scenarios, to support a realignment of strategy and the redesign of a worldwide exploration group of a major integrated oil company. The opportunity for this experience arose from a need to assess the diminishing returns produced during several years of overseas exploration activity. According to a recent article in the Wall Street Journal, the entire petroleum industry has increased its search for reserves overseas. “...between 1988 and 1992, the world’s 234 largest publicly traded oil companies spent $157 billion on exploration and development overseas, 49% more than in the U.S.”, but diminishing results. In 1990, the industry discovered 148 barrels of oil outside the US for every 100 barrels it sold abroad; last year it added just 100 barrels of foreign reserves for ever 100 barrels sold, while the average cost of replacing crude surged 55% to $6.56 a barrel. Against this backdrop, the senior manager used a systems thinking approach to brainstorm the factors influencing the dynamics of the world oil and gas industry. From this process the group was able to develop a set of five distinctly different plausible futures that might develop. To test their group mental model for consistency, they develop a causal model of the industry and discovered that their five different futures all could be explained by a common model.

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Date created

• 1994

Type

• Document

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• Processing documentation available at: https://wiki.albany.edu/display/SCA/Processing+Ingested+Digital+Files

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• Creative Commons BY-NC-ND Attribution-NonCommercial-NoDerivs 4.0 International

  
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fe35db792b573af835d96e6eba4759cd

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c060552994c1527f70693734935660f1

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Collection

System Dynamic Society Records

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Collecting area

• This collection is part of the University Archives