Upstream Oil and Gas operators in the Permian Basin and Gulf of Mexico are implementing working-capital discipline programs in response to continued price uncertainty. MRO inventory rationalization has emerged as a priority target because it represents trapped capital with no production dependency — reducing duplicate inventory does not affect production rates or operational continuity.
Industry benchmarks suggest that large upstream operators carry between $50M and $200M in total MRO inventory, with 8 to 18 percent estimated to be duplicate or near-duplicate stock across the item master.
CFOs and treasury functions are applying the same working-capital discipline to MRO inventory that they apply to accounts receivable and payable — and finding that the diagnostic evidence required to make the case was previously unavailable.
