OE 2015: North Sea Industry Warned Not to Over-Engineer Assets

OE 2015: Oil, Gas Project Costs: Learning from Other Industries is Key
Proserv CEO David Lamont warns the industry not to over-engineer assets in the North Sea if the basin is to have a future.

The CEO of a UK offshore engineering services firm has warned the industry not to over-engineer assets and infrastructure in the North Sea if the basin is to have a future.

At the Offshore Europe show in Aberdeen, Proserv CEO David Lamont said the industry needs to make significant changes to the way it behaves in order to bring about more collaboration and efficient business practices.

"Despite talk in recent years of the urgent need to act and collaborate, even before the oil price crash, the industry as a whole still has a long way to go. Everyone knows what needs to be done but the inertia in the industry is of great concern. The time is now to put a stop to this and make dynamic changes to the way we act and behave. Changing our approach to how we think and do business will see the industry thrive, rather than simply survive," Lamont said

Lamont wants to see the industry challenge conventional approaches to achieving lower expenses, such as the practice of simply challenging the supply chain to reduce costs.

"As a start, we must stop over-engineering if we are to reset the cost base. Realising the value of the huge number of marginal fields in the UKCS [UK Continental Shelf] will only be possible if we as an industry collaborate and cooperate to make the most of the existing infrastructure, enhanced only by the most appropriate and efficient technology and engineering know how. Applying the same old engineering practice and business model is simply not an option.

"While we are seeing real efforts and actions to collaborate, it is still the exception rather than the rule. Too many people in the industry are still holding their breath for a return to the 'good old days of $100 oil' which simply won't happen."

Lamont also challenged the industry to change its new-for-old culture when it comes to offshore equipment.

"The challenges and opportunities that the industry faces with brownfield subsea developments are varied but all too often, the industry’s initial response to them is not. The typical reaction to a problem is to undertake a complete system change when sometimes a more flexible and simpler approach may be appropriate, especially in a low commodity price environment. After all, you wouldn’t replace your car if the windscreen wiper wasn’t working."

Speaking about Proserv's recent takeover of subsea communications specialist Nautronix, Lamont said that for about two years "he liked the cut of their jib". Proserve finally took over Nautronix on Monday after more than a year of work to bring the two companies together.

Employing 120 people, Nautronix is also headquartered in Aberdeen – where its main research, development and manufacturing facilities are located. The firm specializes in the supply of subsea digital acoustic communication products and positioning systems for the oil and gas industry.

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