Facilitating Collaboration in a High-Tech, High-Risk Environment
- Tom Benwell (Critical Path Strategies)
- Document ID
- Society of Petroleum Engineers
- Journal of Petroleum Technology
- Publication Date
- August 2008
- Document Type
- Journal Paper
- 42 - 47
- 2008. Copyright is retained by the author. This document is distributed by SPE with the permission of the author. Contact the author for permission to use material from this document.
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When most people imagine a high-tech business, they picture San Jose or Seattle, not Tulsa or Lafayette or Houston. Those who walk the hallways of the energy business know better. Oil and gas exploration and development has become a world of high technology. While drill bits, pipe, and supplies for the toolpushers are still at the core of the oil and gas business, executives increasingly must manage complex networks of new-technology providers, and of traditional oilfield services that have leapt into a new technological age.
Onshore exploration and development continues to push deeper, applying new science every step of the way. Offshore, rigs push from deep water into ultradeep prospects, demanding technological innovation. As the energy-finding climate changes and risks grow, the most successful operators and suppliers develop collaborative relationships to deploy new technologies, maintain supply chains, and gain access to technical resources. The pressure to maximize efficiency and get results is intense, even with prices at historic levels. Operators and suppliers are stretching their technical resources, forcing companies to selectively allocate their hardware, software, and personnel. When a supplier bundles services and equipment for a competitor’s key project, it may contractually commit specific technical talent, making them unavailable to others for some period of time.
Resources continue to be consolidated into larger, more complex organizations through mergers and acquisitions. New corporate combinations often lose focus on the customer, becoming internally focused for a while after the consolidation. Operators are reducing the number of suppliers they do business with to reduce the expense of managing so many relationships. Some companies have adopted a policy to deal with no more than three vendors in each procurement category. Smaller suppliers and service companies weeded out in that process find it necessary to work as a subcontractor to a larger supplier in order to maintain their access to the business.
Even in its most traditional moments, the energy sector has understood the need for joint ventures and strategic partnerships, as well as the value of collaborative relationships. But as the industry evolves, so must its approach to collaboration. In a time of rapid change, companies cannot afford to have technology acquisition and application struggle through traditional internal layers of approvers, such as conventionally structured procurement groups and established operations leadership. It has never been more important for operators and sup-pliers to understand each others business, needs, processes, and potential, and find the most productive common ground. There are good reasons to begin facilitated discussions about new ways of working together.
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