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Oil and gas companies can reduce operating costs without sacrificing production by targeting avoidable or non-strategic spending while protecting safety, reliability and well productivity. The practical approach is to understand how costs interact, improve the way assets and work are managed, and judge every proposed saving against its effect on output and operating risk. The best options depend on the asset, its infrastructure and market conditions; there is no universal cost-cutting ranking.
What does “without sacrificing production” require?
Cost reduction is not the only measure of operating performance. Deloitte’s Operational Excellence in Oil and Gas treats safety, reliability, well productivity, operating efficiency and cost optimization as connected dimensions that need to be managed together. A cut that lowers spending but increases downtime, undermines well performance or creates a safety or asset-integrity risk may be a poor operating decision.
Use those dimensions as constraints when assessing a cost proposal. Compare expected savings with its likely effect on production, reliability, maintenance work and safety. The available guidance supports this integrated approach but does not establish universal KPI thresholds; operators need to use measures suited to their own assets and operating requirements.
Why the biggest operating costs depend on the asset
There is no single cost category or measure that ranks first for every oil and gas company. Costs and their interactions differ by asset and operating context, so a measure that is attractive in one field may not transfer directly to another. Deloitte recommends understanding individual cost components and how they interact rather than treating cost optimization as a uniform exercise.
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Start by making costs visible across operating practices, equipment and service procurement, supply-chain activity and contract terms. Then distinguish spending that supports safe, reliable production from avoidable or non-strategic spending. The evidence does not support a universal list of the “biggest” costs or a ranked catalogue of savings for all geographies and asset types.
Which operating levers can reduce costs?
Deloitte identifies smart well design, real-time reservoir management and analytics, lean operations, supply-chain strategy and flexible contracts as contributors to sustainable cost management. Methane measures and digital tools can also offer opportunities, but their value depends on the field, implementation and commercial setting.
| Lever | What it can address | Production-aware consideration |
|---|---|---|
| Well design and reservoir management | How a well is designed and how reservoir information informs operating decisions. | Evaluate the design or operating change against well productivity and reliability, not cost alone. |
| Lean operations and analytics | Workflows, operating practices and the information used to make decisions. | Remove waste without removing work or capability needed for safe, reliable production. |
| Supply-chain strategy and contracts | Equipment and service procurement, supply-chain activity and contract flexibility. | Assess the full operating effect of a change, including service availability and implementation needs. |
| Methane detection and gas recovery | Leaks, methane-emitting equipment, vapor losses and associated gas that could be put to use. | Check captured volumes, operating costs, infrastructure and the value of recovered gas. |
| Digital monitoring and automation | Production and maintenance decisions, data processing, inspection and some operating workflows. | Adopt tools where they improve a specific decision or task; potential gains are not guaranteed field results. |
Find structural and avoidable costs
Review operating practices, procurement, supply-chain analytics and contract terms together. Look for unproductive or non-strategic cost, but do not treat a lower budget as proof that an operating change is sound. Deloitte’s guidance is to realign costs while maintaining performance across the other operational-excellence dimensions.
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Protect well productivity and reliability
For each proposed reduction, identify the work, equipment or service it changes and assess how that change could affect downtime, maintenance backlog, asset integrity, safety and production. These are decision checks, not universal pass/fail thresholds: the cited guidance does not set standard values for them.
Use methane measures where the gas can be captured or put to work
The International Energy Agency’s 2025 methane analysis identifies leak detection and repair, replacing methane-emitting equipment with electric devices, vapor recovery units and productive use of associated gas as cost-effective measures. The commercial case for an individual site depends on the cost of the measure, the gas captured and the value of that gas.
In its 2026 analysis, the IEA estimates that nearly 30 Mt of upstream oil and gas emissions could be abated at no net cost under average energy prices in 2025, because the cost of abatement can be lower than the value of gas captured and sold or used. This is a global modeled estimate—not a forecast of any company’s savings or a claim about total operating-cost reductions.
The IEA’s 2025 analysis separately estimated that around 25 Mt of upstream methane emissions—40% of worldwide upstream oil and gas methane emissions—could have been avoided at no net cost in 2024. It also estimated that measures with internal rates of return above 25% could have avoided more than 15 Mt. These figures describe that analysis and period; they are not an individual operator’s expected return.
Apply digital tools to a defined operating problem
Sensors, analytics and automation can support production or maintenance decisions, while robotics and drones can assist inspection of subsea equipment, pipelines, tanks and remote facilities. Their usefulness depends on whether a tool improves a particular decision or workflow in the operating context where it is deployed.
The IEA said in 2017 that widespread digital technologies could decrease production costs by 10% to 20%, citing applications such as seismic-data processing, sensors and reservoir modeling. That is an estimate of potential published in 2017, not a measured result for every company or a current guarantee of savings.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How should operators compare cost-saving proposals?
Because there is no source-established ranking that applies to every asset, compare candidate measures on the same decision criteria. A proposal should show both its expected economics and how it fits the operating conditions where it would be used.
- Cost and net savings: Estimate the cost per unit of production and expected net savings, including implementation needs.
- Production and reliability: Assess potential production effects, downtime and reliability implications.
- Safety and maintenance: Consider safety, asset integrity and maintenance consequences.
- Capital and operating requirements: Account for capital, ongoing operating costs and the effort needed to implement the change.
- Commercial assumptions: For gas recovery, state the captured-volume and commodity-price assumptions behind the business case.
- Asset fit: Check infrastructure, operating conditions and the relevant regulatory setting.
This comparison framework follows Deloitte’s cost-visibility and integrated-performance guidance and the IEA’s qualification that gas-recovery economics depend on captured-gas value. It is a decision aid, not a published quantitative ranking of measures.
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Much of the detailed cost-management guidance here—well design, reservoir management, well productivity and upstream methane estimates—is upstream-oriented. The IEA’s methane measures cover oil and gas operations more broadly, but the emissions figures cited above specifically concern upstream emissions. The available material does not establish one set of cost-reduction measures or expected savings for every upstream, midstream and downstream operation, country or company.
Results also depend on factors such as asset mix, implementation, measurement methods, infrastructure and energy prices. Treat global estimates and broad digital potential as context for evaluating a local proposal, not as a substitute for an asset-specific operating and financial case.
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