Search for Oil Yields a New Business Model – Through Mercer Framework
- Kosmos Energy Ltd. Is a very unique firm that focuses on being the forefront pathfinder in oil and gas exploration.
- Areas of exploration are abnormal compared to competitors
- Have discovered some large oil fields in areas that were considered “deadzones.”
- They are successful even when the larger companies are slashing budgets for oil exploration for off-shore drilling.

Under the Mercer Model
- Currently operating in the North East quadrant
- Components of Business Design
- Customer Selection – Large oil companies and countries
- Value Proposition - Find new and emerging petroleum systems in frontier settings and develop them quickly and profitably.
- Value Capture – Extracting and producing the cheapest barrels of oil.
- Strategic Control – From a geography standpoint the frontier in itself. Because of the vast areas in the ocean, there are fewer and fewer discoveries. From a debt prospective, operate on shoe-string budget or at the $50 barrel rate. Where many companies carry large amount of debt and cannot afford to operate at the breakeven rate of $50 barrel rate. Quick turn around of production of oil, most take 6 years and Kosmos takes 3 years. They drill less wells with 100% success rate, industry average is 31%, operationally they are cheaper.
- Scope - They can partner with local entrepreneurs, local governments, etc.

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Oliver Wyman, a global management consultancy on ‘strategy, operations, risk management, organizational transformation, and leadership development,’ has proposed business design audit to companies for evaluation of their existing business model/s. The proposed design audit focuses on strategy and execution. Specifically, the consultancy firm reminds companies to audit their business against the following: customer selection, value proposition, value capture, strategic control, and scope.
Kosmos Energy is a midsize firm that conducts exploration activities to find new...