Insights - Energy Dais
Collaboration in Oil&Gas

Collaboration in Oil & Gas: From aspiration to reality

The global oil and gas community finds itself in a state of flux. The oil prices and the uncertainty that envelopes this phenomenon, the effect of US Sanctions, the US-China trade war, increasing climate change concerns, the rise of alternate energy sources continue to pose some serious questions – How to tackle continuous layoffs in the industry? How to cope up with energy transition? How to enhance industry reputation? There can be no immediate solution and the oil and gas industry must seek long-term, sustainable answers.

At the same time, this fundamental shift in the energy landscape witnessed the welcome effect of closer partnerships among the industry stakeholders.

Collaboration: A new wave of opportunities

The landmark Wood Review identified collaboration as a fundamental approach for a secure future of the UK Continental Shelf (UKCS). It highlighted the existing collaborative approach in the industry and the need for extending this behavior across all activities- rig sharing, production efficiency, more effective deployment of recent technology and so on.

Here are the key findings of the report:

  • The Collaboration Index score has increased to 7.1 in 2017 from 6.6 in 2016 (out of 10)
  • 95% of operators and suppliers say collaboration is an integral part of their day-to-day business (86% in 2016 and 74% in 2015)
  • 43% of survey participants considered their collaborative engagements successful in 2017 compared to 27% in 2015

Embracing Collaboration as the New Normal

“Through collaboration companies are able to reduce costs, share knowledge and maximize the economic recovery from the basin. We can speak with tentative confidence that these behaviours are the new normal.”

– Dr Mariesha Jaffray, Continuous Improvement Manager, Oil & Gas UK

Collaboration holds immense value for the oil and gas industry and there are clear indications for recognition of this approach. According to the 2017 UKCS Upstream Supply Chain Collaboration Survey, the Collaboration Index score has significantly risen to 7.1, the highest to date. Further, the results of the 2018 UKCS Survey reflect that “the behavioral and cultural improvements in 2017 have been sustained at an industry level even as activity in the basin picked up significantly in 2018”.

What is Collaboration Index?

The Collaboration Index measures the effectiveness of companies as partners in collaboration. The aggregated Index scores give an indication of how effectively operators and suppliers collaborate.

Source: Deloitte Analysis

This is the third successive improvement to the collaboration index score despite tough conditions experienced by many oil and gas companies. The offshore industry has been facing a prolonged period of irregularity owing to the low oil prices for an extended period of time.

As pointed out by Jaffray, there is a renewed confidence among the companies regarding the possibilities offered by collaboration.

Attitudes to Collaboration

A continuous improvement in the attitude towards collaboration across the industry has been observed over the years. The survey outcomes suggest a near-universal acknowledgment by respondents that collaboration is critical for shaping their company’s future success.

In a marked development from 2015, 95 percent of the respondents in the year 2017 stated that collaboration was an integral part of their day-to-day business. A vast majority of these respondents confirmed that their organization has been initiating strategic moves for collaboration. The factor that associates collaboration with future success and the desire to be widely recognized as an effective collaborator remained high.

Attitudes to collaboration, % of Respondents. Source: Deloitte Analysis

Key Drivers of Collaboration

According to the UKCS Upstream Supply Chain Collaboration Survey (2017), the prime moving forces of collaboration are:

  • Cost Reduction- The previous two editions of the UK Collaboration Survey talked in detail about how cost reduction has been in focus for the global oil and gas sector. The latest edition puts across important questions aimed at building a better understanding of the relationship between supply chain collaboration and cost reduction to achieve ‘strategic cost reduction’.
  • Knowledge Sharing- The willingness to share knowledge and the learnings has assumed the second most important position in the list of the key drivers of collaboration.

The other primary reasons for collaboration in the UKCS have been presented below.

Source: Deloitte Analysis

However, the findings are only reflective of the opinion of a small proportion of the industry and should not be considered as the wider sector view. Despite this, they do indicate certain important trends that can be taken into consideration.

Welcome evidence of behavioral and cultural change

The data in the latest UKCS Report suggests that both the level and quality of collaboration
has considerably improved. The results not only reflect increased awareness about the benefits of collaboration, they also show more action.

43 % of survey participants considered their collaborative engagements successful in 2017 compared with 27 % in 2015.

Source: Deloitte Analysis
Source: Deloitte Analysis

This improvement indicates that a wider range of companies are trying to collaborate with their suppliers or clients differently and achieve enhanced outcomes. It has also been observed that some of the leading multinationals are employing collaboration to improve their performance.

“More than nine out of ten operators and suppliers say that they collaborate daily and their organisations are taking strategic steps to improve collaboration. Nearly all participants also agree that collaboration will be crucial for their company’s future success.”

Adding to it, the participants have confirmed that company strategy is playing a crucial role in strengthening the core of collaboration.

Energy Dais: The larger goal of collaboration

Energy Dais, a unique platform in the energy landscape, aims at creating a sustainable environment for the entire oil & gas industry to act as one and create efficiencies through collaborative cross-border linkages. In an emerging world of technological shifts and alternative resources, oil & gas will have to gear up for a new age business with the greatest competitive edge. Energy Dais is designed and intended to be a catalyst in that journey.

By collaborating we can do much more and redefine the way oil and gas business operates. Energy Dais aims to be the changemaker driving the power of collaboration!

Visit our insights section to learn more about the dynamic oil and gas industry!

mm

Garima Gayatri

Senior Content Writer & Editor

With a background in English Literature and a diverse experience in writing and editing, Garima now focuses her creative energy in the dynamic oil and gas industry. She believes that the world needs to be more aware of the myriad shades of the energy landscape, which has a domino effect on other contours shaping our society.

Add comment

mm

Garima Gayatri

Senior Content Writer & Editor

With a background in English Literature and a diverse experience in writing and editing, Garima now focuses her creative energy in the dynamic oil and gas industry. She believes that the world needs to be more aware of the myriad shades of the energy landscape, which has a domino effect on other contours shaping our society.

Let’s Stay In Touch





Get the latest insights of the oil and gas industry straight to your inbox.
Subscribe to our monthly newsletter today!

MENUMENU

Latest News

Let’s Stay In Touch