Alignment and Integration

In an Oil and Gas Industry that is blessed with so many talented staff with a wide range of skills reaching alignment can be a challenge. In fact, on some occasions it may not be obvious that there is a lack of alignment - which means that during any Asset or Project’s lifecycle as a minimum the best return is not being received from the investment and at worst there are significant cost overruns or operating issues. Looking at the skill sets there are 2 very different work streams that are worked, the sub-surface and the facilities. These can be very different in their design and points at which they touch each other. To be fully integrated there must be good communication between the teams and a dialogue that ensures that the risks and opportunities are fully understood. No one group should have the dominant voice at this time and the focus should be on meeting the business goal.

Much has been discussed regarding the Leadership needs and Integration necessity, but despite this I had occasion to consult recently where the above was not taking place.

The scenario is a company that has taken over some mature offshore assets and whose short-term needs is to increase production. Given the collapse of commodity prices more production is needed to increase venue. Fortunately, capital was available for new wells. There are a number of actions I would recommend they undertake but the most glaring opportunity was with the available spare well slots and a significant pipeline capacity.

The wells drilled were those in new areas that were closer to exploration areas and if successful required new facilities. A strategy that was not meeting the company’s basic needs and in most cases reserves replacement is an important metric, but it was not in this case. The results were none of the wells were commercial.

Now a field wide hydraulic model has been constructed and is being used in conjunction with the Sub-surface team to determine where spare slots match with reservoir areas that can be quickly drilled and produced with low risk. So the teams are now aligned around a common business purpose and are working in an integrated team to deliver a solution.

This appears to be an aspect of our industry that needs constant attention – why?