Seize the opportunity!

Published:  25 June, 2015

The fall in the oil price has resulted in widespread budgets cuts, which have seen many operators put a firm hold on recruitment activity and contracting work out to support companies. Despite this, the future looks bright for companies willing to seize new opportunities by developing technological advancements. ODEE spoke to Alexander MacLeod, project services manager at independent project services consultancy, Cambla, to discuss how the company has adapted its service offering with the development of state-of-the-art software to meet the changing needs of the industry.

The current downturn has effected companies of all sizes operating within the energy industry, from small start-ups to the world’s largest operators. The need for stringent cost control measures has never been more important, and recognising this, many companies have pulled back on capital expenditures since the price of oil dropped by more than 50%. Many have had no other choice but to review their cost structures and take drastic measures to reduce their overheads.

There is the concern that if the budget cuts are too severe, they could lead to a lack of resources on operational projects, affecting the quality of the end result. Effective project support solutions play an integral part in the success of any project, from the initial planning stage right through to execution, and this has never been more crucial.

The fluctuating oil price has driven major oil operators to undertake larger more complex projects with the aim of boosting production to replace aging fields. These companies can no longer afford to risk any project oversights or delays, which might once have been mitigated by the revenues made in the completion stage. Any additional costs that are unaccounted for can have a significant impact on the project success and the company’s revenue.

This rise in more complicated oilfield projects has increased the requirement for specialist project services, but with a widespread recruitment freeze sweeping the sector, internal project management teams are under extreme pressure to perform with minimal support.

To ensure project teams have the resources required to achieve high quality end results, it is important that they outsource expert project planning and schedule management support when required. This can support the project team when compiling accurate data, analysing it and help them determine what controls should be applied to mitigate the risk of projects becoming delayed and spiralling over budget.

Ensuring the latest cost and schedule management procedures and software are in place at the initial stage of the project can give companies a competitive advantage in today’s market. Using the correct tools and technology will allow the team to effectively track a project’s progress and predict outcomes ahead of time can mitigate the risk of any oversights.

Meeting the needs of the industry

Alexander MacLeod, project services manager at independent project services consultancy, Cambla, told ODEE, how his company faced its share of challenges operating in a declining market. But he explained his business has adapted its service offering to meet the changing needs of the industry. As a small company supplying a service to the oil and gas sector, Cambla like many others, has experienced substantial pressures to deliver cost reductions. MacLeod says the business has been able to counteract this by offering a flexible and cost effective service which can be tailored to suit each client’s requirements.

To provide its clients with the level of support they require and save the final cost, the team work collectively on projects and ramp up and down the resources available according to demand. This is opposed to seconding a full-time projects services consultant to work in-house, when they are not necessary/ required for that length of time. By offering this flexible work method and agreeing costs before the project commences, the company has delivered consistent cost-savings for its clients without impacting on their head count.

MacLeod told ODEE that ever since the fall in the oil price, there has been a widely-documented call for the government to support the industry by cutting tax rates and investing in North Sea oil. This is of course important, he explained, but companies operating within the energy industry can also take action and guarantee the future of their business by adapting their business strategies to suit this ever-changing market. He added that Investing in the development of innovative new technology can play a key part in sustaining the energy sector for years to come.

Recent reports have shown that despite the subsea industry facing considerable challenges now, the fundamentals remain relatively strong and the development of new technology could see significant improvements for the sector from 2017 onwards. Recognising this, MacLeod highlights that Cambla developed state-of-the-art software to improve the accuracy and efficiency of planning subsea and marine operations.

The declining production in mature, shallow water basins has led to an increase in deepwater operations and resulted in operators deploying more and more vessels to support deeper, more complicated field developments. This has resulted in a significant rise in the number of vessels operating offshore at any one time, increasing the risk of multiple vessels arriving at the same location at the same time.

If only one vessel can operate the other would be forced to wait to commence work or leave the field and return to port. There is a high cost to operate each vessel which can range from £100,000 to £300,000 per day, any time disruption or delay to the planned schedule can cause a huge loss in production and result in a significant cost for the operator.

To overcome this issue, Cambla developed the Schedule Animation Tool (S.A.T.), a multi-user application that provides an accurate visual representation of a vessel’s location and planned activities, making it easier for operators to identifying times when vessels are required to be in close proximity to other vessels or installations and generates a list of relevant SIMOPs or Close Approach Risk Assessments required to be carried out in advance.

Despite the negativity surrounding today’s climate, the oil and gas industry has proven to be resilient, having overcome a number of challenges over the last four decades. MacLeod says his team at Cambla are optimistic for the sector’s future and believe that technological innovation is the key to addressing the current issues.

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