Publications

Its obvious that the recent fall in oil and gas prices is having a major impact on the commerciality of hydrocarbon resources. Development activity is slowing down and, given the current worldwide looming recession, its unlikely that well such levels of activity for the foreseeable future. However, this slowdown does present an opportunity to allow time and space to optimise costs. With many companies having reaped the harvest in recent years, perhaps now is the time to invest these gains into improving internal efficiencies in order to become stronger and fitter for the future. The key will be to optimise cost to ensure that any short term gains do not compromise long term integrity of an asset. Although benchmarking is useful, every operation is different and the key is to develop an understanding of the opportunity for a particular asset and then implement changes which lead to cost optimisation - a holistic approach that facilitates understanding, fosters engagement and sustainability, changes behaviours and actually delivers optimal costs. The paper presents a set of experiences and an approach that allow companies to optimise their operational costs in a sustainable way i.e. develop a culture of performance management that allows them to weather the storms ahead. It cites examples - such as reducing maintenance costs by 18%, reducing fuel costs by 15%, reducing materials costs by 20%, reducing contractor costs by 25%. All this has been achieved without affecting HSE, production or long term technical integrity. It is based upon not only on our work in oil and gas but also from lessons we have learned from other sectors such as manufacturing - many of whom have not had the good fortune to enjoy record operating margins in recent years.