Looking Forward in the Oil & Gas Service Sector

At CERAWeek 2017, Emerson executive president, Mike Train joined a panel to discuss ways for energy service sector companies to effectively navigate a path forward after several difficult years. Here is the abstract of the session:

The extreme focus of IOCs and NOCs on reducing costs, simplifying designs, and improving operating efficiency has forced service sector companies to rethink their own business models. Many sectors face considerable overcapacity that must be rationalized; many are engaged in mergers and alliances; and others view the industry’s structural changes as an opportunity to increase their energy footprint. What are service companies doing to increase competitiveness? Which changes are sustainable? What will the competitive landscape look like in five years?

Mike opened noting that the downturn has caused everyone across the supply chain to think differently about how they conduct business. One of the key realizations was the need to reduce complexity–especially in projects to keep them on time and on budget.

Emerson's Mike Train presents at CERAWeek 2017
Although automation may be only 3-5% of a project’s total capital budget, its ability to impact the whole timeline of a project is much broader. Not only is the opportunity to use technology and changed work processes to improve project performance, operational performance can also be impacted to improve safety, reliability and efficiency.

The Industrial Internet of Things has opened up opportunities for outcome-based services in areas such as energy management, reliability and optimization. Experts, no where they are located, can use data and analytical tools to improve performance. With this enabling technology coupled with new acceptance to do things differently, the opportunity to improve projects and ongoing performance is more readily available.

During the question and answer portion of the panel, Mike was asked about the huge difference in performance between top and bottom quartile performers. He noted the ones who engage early with their partners and suppliers, identify the work processes and technologies, and streamline steps in the project will likely move toward top quartile performance. Often these early decisions also provide the basis for better operational performance. This is due to more pervasive sensing devices, earlier engagement of operations & maintenance staff and streamlining work processes.

Mike was asked what is holding back change. He said leaders need to give permission to drive change to the organization. While younger workers are ready to embrace all these great technologies, it’s important that all the lessons around safety and reliability are thought and well understood.

Posted Tuesday, March 7th, 2017 under Event, Oil & Gas.

Leave a Reply