By Velda Addison, Hart Energy
For the most part, the majority of both oil and gas operators and oilfield service companies agree that collaboration is a crucial part of their daily business.
But only about a quarter of them believe their efforts result in success.
The responses generated from a recently released Deloitte survey are concerning, given the benefits of working together especially when it comes to the common goals of lowering costs, heightening efficiency, improving safety and successfully tackling regulatory requirements.
Only 27% of the respondents to the U.K.-focused survey said their collaborative efforts resulted in a successful outcome, but 74% said collaboration was an integral part of their day-to-day business.
Results, according to a news release, also showed that reducing costs was the main driver for collaboration at 31%. But an overwhelmingly majority, 90%, believe that supply chain collaboration would play a greater role in their company’s success.
So how can companies make the most of their collaborative efforts?
Nick Clark, director of Deloitte’s consulting team, suggests companies identify specific practical, cultural and behavioral barriers and address them. This, he said, could include addressing financial incentives, improving communication and properly aligning expectations between operators and service companies.
“Thirty years ago health and safety was the major focus for the North Sea, and the industry made that a central tenet of its culture—for collaboration to succeed it has to be addressed with the same urgency and senior leadership,” Clark said. “Our research shows that the industry recognizes this, and the critical value that effective supply chain collaboration can deliver in securing the future of the UKCS.
“We need to act fast and I believe that every company involved in the North Sea will want to play its part in making it a safe, collaborative, efficient and profitable region for many years to come,” he said.
Not surprising, Deloitte said the “most critical finding” of the results concerned the varying drivers for successful collaboration and the actions of leadership and business processes. Most indicated that collaboration was even not part of their business strategy. This is not shocking given the competitive nature of the business.
But change is needed now more than ever given today’s dire market conditions, which don’t appear to be improving anytime soon. Good news is that at least 20% of the respondents actively seek out such opportunities. And many opportunities exist, including joint industry projects open to global participants.
The Oil and Gas Authority’s Efficiency Task Force is another one. Launched in September, the group will focus on cooperation, culture and behaviors; standardization; and business process. Its goal is to bring about significant cost savings.
“I believe industry is now starting to readjust its way of working together,” Stephen Marcos Jones, Oil & Gas UK’s business development director, said in the release. “It is vital we work together proactively—not just between operators, but crucially between operating companies and the wider supply chain—to deliver the transformational change we need to see.”
This is especially important for the U.K., where production from the mature North Sea has declined. But the goal of improved collaboration has merit in other parts of the world as well.
Velda Addison can be reached at vaddison@hartenergy.com.
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