New Ways of Thinking Needed for Oil, Gas Projects

New Ways of Thinking Needed for Oil, Gas Projects
Oil and gas companies need to take a new approach to addressing project cost overruns and delays.

New Ways of Working

Given the current commodity price environment, operators and contractors in the oil and gas industry are now willing to consider new ways of working, Chris Pateman-Jones, senior manager in EY’s Global Oil & Gas team, told Rigzone in an email statement.

Chris Pateman-Jones
Chris Pateman-Jones, Senior Manager, Global Oil & Gas, EY
Senior Manager,
Global Oil & Gas, EY

“We have seen significant improvements by using Lean and possess systems thinking on projects,” Pateman-Jones told Rigzone in an interview. “Similarly, the use of new technology and standardization of components offers significant opportunity, with some benefits already realized.”

Pateman-Jones also sees huge opportunity for the industry to standardize equipment and procedures, though for this to be truly successful the incentive mechanism suppliers have needs to be reconsidered.

The oil and gas industry’s long-term approaches to business are largely due to human nature, Pateman-Jones stated.

“Unfortunately, the behaviors you see during the downturns, such as dramatic cost cutting and headcount reduction, tend to then exacerbate the problems the industry faces in the upturn – resource challenges and high cost of personnel, amongst others,” said Pateman-Jones.

The challenge now is for industry to recognize the longer-term challenges it faces, from new and disruptive technology and alternative energy sources, and to adapt to resolve the project development challenges it has faced for some time, Pateman-Jones commented.

E&Y is seeing its clients target improvements in oversight, capability and efficiency. The effort to improve oversight include oversight of project delivery, the selection of the right projects, target setting and then transparency over project performance in operated and non-operated assets.

The firm’s clients also are working to ensure sufficient cost effective delivery capability. This includes having the right people at the right time and the right cost, both internally and within the supply chain.

‘This will be extremely important when a recovery happens as many of the existing resource pool has been made abundant,” Pateman-Jones said.

Finally, ensuring projects have access to the best technology, best practice systems and relationships is necessary to efficiency in delivery, Pateman-Jones concluded.


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