New survey shows N. Sea oil and gas firms are missing opportunities on collaboration

collaboration4A new survey of oil and gas operators and oilfield services companies has found that a lack of effective supply chain collaboration means companies are missing out on maximising the potential value from the North Sea.

While most (74%) respondents to the Deloitte survey said collaboration was an integral part of their day-to-day business – only 27% reported that the majority of their efforts resulted in successful outcomes.

Cost-reduction was found to be the main driver for collaboration today, with nearly a third (31%) of company respondents in agreement: 90% said that supply chain collaboration would also play a greater role in their company’s success.

Nick Clark, a director in Deloitte’s consulting team and contributor to the research, said:  “While it is encouraging that collaboration is seen by the industry as an important tool in helping companies succeed in maximising economic recovery from the North Sea in line with the Wood Report – there’s clearly work to be done, and quickly, given the current tough environment.

“The industry needs to address a number of practical, cultural and behavioural barriers that are standing in the way of realising this successful future. 

“These include fundamentals such as a lack of effective financial incentives, a lack of clear communication and misalignment of expectations between operators and service companies in execution.”

The most critical finding highlighted the discrepancy between what drives successful collaboration, and the actions of leadership and business processes to underpin it.

Whilst there was clear recognition of the value of collaboration and what’s needed to make it happen, trust and mutual benefits for example, less than 10% said that leadership regularly emphasised its importance or included it in their business strategy.

Despite this 20% of respondents still said they actively sought out opportunities to collaborate, which shows that the potential is there if the right leadership and incentives are in place.

Deloitte suggests that whilst industry must take the lead to make collaboration effective in the UKCS, it should look to the regulator, the Oil and Gas Authority (OGA), and Oil and Gas UK (OGUK), the industry trade body for support, pointing out that initiatives like OGUK’s Efficiency Task Force can be a real driver for positive change.

A spokesman for OGUK commented: “Collaboration is crucial if we’re to fulfil Wood’s vision to maximise economic recovery from the North Sea.

“I believe industry is now starting to readjust its way of working together. 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 the first Deloitte oil and gas collaboration survey in the UK and took place between 1-31 July 2015.

See also:

 WoodMac warns that squeezing supply-chain for cost savings won’t save N. Sea oil operators from jobs and spending cuts – http://goo.gl/4WymOR

 

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