Deloitte: UK Oil, Gas Firms Not Maximizing UKCS Value

Deloitte: UK Oil, Gas Firms Not Maximizing UKCS Value
UK oil and gas firms are not maximizing the potential value from the UK Continental Shelf due to a lack of effective supply chain collaboration, according to a survey from Deloitte LLP.

UK oil and gas firms are not maximizing the potential value from the UK Continental Shelf due to a lack of effective supply chain collaboration, according to a survey from Deloitte LLP.

The survey, which was supported by industry body Oil & Gas UK, found that 74 percent of respondents believed collaboration was an integral part of their day-to-day business, even though just 20 percent of participants said they actively sought out opportunities to collaborate. Only 27 percent reported that the majority of their efforts resulted in a successful outcome and less than 10 percent of respondents said that leadership regularly emphasized the importance of collaboration, or included it in their business strategy.

Nick Clark, a director in Deloitte’s consulting team and a contributor to the research, commented in a Deloitte statement: 

“While it’s encouraging that collaboration is seen by the industry as an important tool in helping companies succeed in maximizing economic recovery of the UKCS…there’s clearly work to be done, and fast given the current tough environment.

“The industry needs to address a number of practical, cultural and behavioral barriers that are standing in the way of realizing 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.”

Oil & Gas UK’s business development director, Stephen Marcos Jones, commented in an organization statement: 

“Collaboration is crucial if we're to fulfil Sir Ian Wood's vision to maximize economic recovery from the UK Continental Shelf. 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. That is why Oil & Gas UK has put in place an Efficiency Task Force, championed by leaders from across the industry. We hope this group will challenge existing behaviors and be a catalyst for pan-industry improvement, in addition to the extensive work being undertaken by companies individually.”

Oil & Gas UK announced the launch of a new North Sea task force, which aims to improve the efficiency and competitiveness of the UK’s oil and gas industry, on September 2. The Efficiency Task Force will be responsible for “driving improvement, making the sector more competitive and supporting the drive to maximize economic recovery from the UK continental shelf”, according to Oil & Gas UK. In order to try and achieve its goals, the ETF will aim to deliver behavioral change, standardization initiatives and company collaboration. Earlier this year, Oil & Gas UK’s chief executive Deirdre Michie told Rigzone that the industry’s most urgent priority is “to tackle the issues that are driving cost inefficiency on the UKCS”.

Deloitte’s survey, which was the first Deloitte oil and gas collaboration survey in the UK, included 61 participants from a range of oil and gas operator and oilfield services companies.

A graduate in journalism from Cardiff University, Andreas has eight years of experience as a business journalist. Email Andreas at andreas.exarheas@rigzone.com

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