AOG Insights with Accenture: Industry Collaboration – what is being done and what needs to be done?
In its highly regarded May 2015 report ‘Ready or Not? Creating a world-leading oil and gas industry in Australia’, professional services organisation Accenture highlighted the importance of “collaboration” if the Australian oil and gas industry is to take advantage of its world-class LNG sector and survive the current industry downturn.
In this first follow-up review of how the local industry has fared since the release of the Accenture report, co-author Bernadette Cullinane, Accenture’s Asia Pacific Energy Lead and a keynote speaker at the AOG 2016 Conference, provides some in-depth thoughts of how the industry is shaping up.
AOG: The Accenture report highlighted collaboration as a key component in making the transition from the major LNG construction period to the operational phase smoother, particularly in the current low oil price environment. Have you seen any signs that collaboration between operators and the service sector is taking place?
Bernadette Cullinane: Yes, while it is frequently lamented that the industry didn’t do enough sharing and collaboration during the construction phase, there is now increased recognition of the opportunities and importance of capturing synergies and cost savings. This multi-decade phase has the potential to create long running skills, services and capabilities that will set Australia apart in terms of expertise and can potentially be exported to other geographies.
AOG: What are some good examples of collaboration within the oil & gas sector?
Bernadette Cullinane: These are some of the examples of notable collaboration projects;
- The Stand Together for Safety (STFS) initiative – possibly the longest running example of industry collaboration. Established in 2009, this Australian oil and gas industry safety leadership initiative is dedicated to the prevention of major accident events through the collaboration of operators, contractors, industry groups, frontline personnel, technical experts and regulators.
- Project Symphony – a group of West Coast operators collaborating on a number of industry initiatives including identifying logistics synergies (both air and marine), turn around optimisation and other high priority areas.
- Energy Industry Collaboration Group (EICG), a group of service companies engaging in cross-industry discussion in areas of workforce capability development, supply chain integration and HSE technology, with plans to proactively collaborate with operators.
- Oil, Gas and Energy Resources Growth Centre (OGERGC) – this is a government and industry initiative across the oil, gas, coal and uranium sectors to improve competitiveness, collaboration and productivity.
- Subsea First Response Toolkit (SFRT), built in 2013 by Oceaneering in Stavanger, Norway and stored in Jandakot, WA. The SFRT is a complete subsea incident response package of well-capping equipment for use anywhere in the world. APPEA coordinated the program, and companies including Apache, BHP Billiton, BP, Chevron, ConocoPhillips, ENI, ExxonMobil, Hess, INPEX, PTTEP Au, Santos, Shell and Woodside financed it through the Australian Marine Oil Spill Centre (AMOSC). This capability has in turn expanded, increasing its investment in equipment and doubling the size of the trained oil spill response team.
- CORE: A Resources Innovation Hub –a technology and knowledge hub for entrepreneurs, corporate industry, service providers and researchers to collaborate on innovative solutions to critical problems faced by the mining, oil and gas, energy resources and mining equipment technology and services sector.
AOG: What other forms of collaboration would you like to see take place?
Bernadette Cullinane: A key area ripe for increased collaboration is the relationship between operators and service companies.
The traditional relationships and contracting structures result in a lack of alignment on outcomes. In the future, there must be increased focus on longer-term strategic partnerships which incentivise productivity and are structured to proactively reduce cost by eliminating waste and non-value adding activities such as extra layers of management and regulation.
Collaborative planning for major maintenance and turnarounds is one example where the industry could be more productive at a lower cost while improving safety and reducing downtime.
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