The Efficiency Task Force (ETF) – an Oil and Gas UK group set up to drive a pan-industry improvement in efficiency – has launched a pilot project in which five operators will share share 200,000 inventory items on an online trading platform.
The aim is that by allowing access to a greater ‘virtual’ pool of resources, companies can reduce individual stock holdings and cut lead times for access to vital equipment.
If successful, this will pose a significant threat to existing ‘bricks ‘n mortar’ dealers and 2nd-hand drilling and platform hardware stock.
Operating companies Apache North Sea, Centrica, EnQuest, Shell and Talisman Sinopec Energy have come together to trade their sizeable inventories in the hope of reducing the cost associated with the storage and maintenance of materials.
After a rigorous tender process, the ETF began work with Edinburgh-based Ampelius Trading on an online trading platform. Companies have been preparing details of their inventories since autumn 2015 for today’s launch.
Stephen Marcos Jones, Business Development Director, Oil & Gas UK, explained: “Improving efficiency through inventory management is potentially a real source of cost saving in the North Sea, as well as providing an opportunity to reduce the loss of offshore production that comes from required equipment not being immediately available when it’s needed.
“This is a great example of companies are working smarter – together – <aka ‘collaboration’> to ensure we make the most of our operations in the North Sea.
“In practice, if an operator doesn’t have a specific item in stock, they’ll be able to access exactly what they need from a company down the road with surplus – rather than ordering a new part to be manufactured. That seems like a more efficient way to operate.”
Andy Taylor, Managing Director, Ampelius Trading – a company set up less than two years ago – added: “It has been estimated that power companies could save 15–20% of their annual non-fuel procurement costs by adopting innovative procurement and inventory trading initiatives.
“We are confident that Ampelius is well placed to deliver similar efficiencies and cost savings for the offshore oil and gas industry.”
Scott Benzie, Head of Materials and Inventory, Talisman Sinopec Energy UK, said: “Industry has recognised the need to improve its efficiency and inventory management for some time – action in this area provides us with a real opportunity to positively influence costs and support our businesses to get in better competitive shape for the future.
“I’m pleased to be part of a trial project that could give us the opportunity to access items at short notice, potentially reduce purchasing costs, cut down the levels of redundant stock held by industry and monetise these identified surpluses.”
The next phase of the project will build upon the implementation of the trading platform. An assessment of the opportunity to pool specific high-value items across companies is now also underway