Oil and Gas Rig

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Case Study Prompt

Your client is an oil and gas company. They own the rights to explore an offshore oil reserve in Venezuela. This reserve is expected to produce oil for 20 years.

The production from a single well slowly increases until it reaches its peak, and then begins to decline. In order to keep a stable production level, the client should expect to drill multiple wells at different times.

Each well requires a rig to drill into the well to get the oil and is one of the bigger costs in an offshore oil reserve. The client currently spends $200M per year on rigs that are built in the United States. They are considering finding a local manufacturer of rigs. They have hired you to see if they should pursue buying their rigs from Venezuela or keep with their current suppliers in the United States. What would you consider?

Case Study Overview

The best case studies are the ones that challenge you to think creatively – this case will certainly present an opportunity for that. The case involves an oil and gas company that has an opportunity to explore offshore oil reserves in a foreign country. The company would need to purchase expensive drilling rigs from the USA, where labor costs are higher than the country that has the oil reserves. The client is considering finding a local manufacture of rigs. Is this a good idea or not?

You can use the Profitability Framework to help form your structure for the case, but don’t limit yourself to the basic framework. Get creative with the structure. Build something that will give you the best change of successfully completing the case and getting to a viable solution.

This case is one of many in the Case Library that will prep you for a final round case interview. The case does have several simple charts that you’ll need to interpret and analyze.

McKinsey Interview Tips

McKinsey looks for casers with an efficient problem-solving process and ability to communicate with clarity. This extends far beyond just a case interview. The company wants to be able to see how you would respond in a high-pressure situation with a client. Do you have what it takes to ace the case and land an offer?

Make the most of your time with this case by doing to the following:

1. Focus on your presentation skills – are you clear and concise?
2. Time yourself as you go through the case (recommended times listed on the Guidance pages)

Looking for a little extra help in your preparation process? Schedule time with an ex-MBB coach today. For more of our best case studies, click back to the Case Library to browse through our large repository of case studies.