N. Sea operators achieve MER collaboration – but could do better still

Nexen's Golden Eagle field, 40 miles east of AberdeenAs its jobs crisis deepens, companies in the N. Sea oil and gas sector are increasingly working in collaboration to improve efficiency and reduce costs, while smaller firms are more enthusiastic about collaboration than larger operators.

According to a survey carried out by Deloitte on behalf of Oil and Gas UK, the Operator Collaboration Index (OCI) score has increased from 5.9 to 6.7 out of a possible 10, based on almost 400 pieces of feedback on all major North Sea operators.

In total, 392 individual pieces of feedback were received, which provides more than 20 pieces of feedback from the supply chain for each of the major operators in the North Sea.

Detailed analysis suggests that operators are becoming more open and are engaging the supply chain earlier in projects and are more likely to be proactive in seeking out new ideas and solutions from suppliers. 

The new insight also reveals that smaller companies (those employing fewer than 2,500 people) appear to be more positive about collaborating with operators than those from larger companies –  ie those employing more than 10,000 people.

Geoff Gibbons, a partner at Deloitte who lead the research, said: “The first phase of the Operator Collaboration Index has yielded a very robust initial dataset and early insight into the quality of supply chain collaboration in the UKCS.

“Our confidential benchmark analysis helps companies understand how they perform compared with their peers, what they do well and what they can do better.

“Future phases of the project will not only show trends emerge and develop over time, they will also highlight the impact of individual company efforts to improve collaboration and help companies identify areas for further improvement.”

Stephen Jones, Oil & Gas UK’s director of business excellence, commented: “Our members are telling us that it’s vital the offshore industry pulls together to face what is a challenging time the sector. That’s why our Efficiency Taskforce, will continue to focus its efforts on being a catalyst for positive change.

“We’ve seen examples of how increased collaboration has been successful in the aerospace and automotive industries, so we’re pleased to see green shoots of success from the offshore oil and gas industry.

“It’s essential now we work to nurture greater cooperation so will be asking those operators who scored particularly highly to work with us on sharing examples of good practice.”

However, incentivising collaboration by financial means and through contractual terms is still the lowest-scoring area on the index. Consequently, the next phase of the ETF will look specifically at efficiency in procurement.

Catch up on what you missed at DELIVERING MER and the Collaboration Code: The Issues:

Speaker’s presentations at the unique and ground-breaking conference held on 14 April 2016 by Aberdeen University’s Institute of Energy (in collaboration with Scottish Energy News) are now available for downloading.

Kathryn Fowler, Deputy Executive Director, Institute of Energy at the University of Aberdeen, said: “Attendees can now access and download copies of the speaker’s presentations as they were delivered on the day at:


“The only exception to this is the Plenary presentation by Paul Goodfellow from Shell UK, which is restricted to delegates-only.

“We hope that  everyone who attended thoroughly enjoyed this event and that the day stimulated thinking and discussion around this critical issue.

Pixie Energy

Pixie logo Pixie Energy is an incubator and a facilitator of strategic research and project work, focusing on energy regulation, policy and markets at the local and national level. Find out more about Pixie Energy here.

Local Energy Matters: Scotland

Local Energy Matters: Scotland is a free-to-download brochure with a focus on energy tariffs in the two Scottish electricity distribution regions, as well news on local energy and low-carbon schemes.

Previous editions can be download here.

Scottish energy market overview

You can read an overview of the Scottish energy market here.

Scottish Government energy feed