Driving operational performance in oil and gas

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Current state of industry: usage and benefits EY researched 30 oil and gas companies, including oil majors, NOCs and independent players, to identify if the sample companies had an operational excellence program. For companies that did have an operational excellence program, we looked at the reasons for i n t ro d u ci n g t he p ro g ram , t he m ai n are as o f f o cu s an d t he s t ru ct u re o f t he p ro g ram . Our findings are as follows: 7 7 % currently have an OE program or have previously ru n an O E program 5 3 % of these companies applied O E across the organization 8 6 % 5 0 % of I O C scurrently have an OE program or have run one in the past of the N O C in s ou r sample have never implemented an O E program The oil majors have long-established OE programs that are embedded across the organization. OE programs have long remained an asset to the organizations by providing a quantitive decrease in drilling and completion costs, volu me of petroleu m spills and, increasing refinery energy efficiency, uptime and earnings. However, even the most successful OE programs have room for improvement. Now is the time to harness the momentum by leveraging new tools and technologies and capitalize on the multitude of opportunities for success OE has to offer. 1 2
1 2 3 We identified three main reasons why companies first introduced an operational excellence program: To improve HSE performance, typically following an HSE incident. Companies that had not experienced an HSE incident introdu ced an operational excellence program in response to high-profile HSE incidents in the industry. To improve financial and operating performance, with a focu s on redu cing costs and closing the performance gap relative to peers. As part of a wider corporate transformation program or a shift in strategic direction. Six most common operational excellence focus areas 8 0 % 8 0 % 7 3 % 6 0 % 2 0 % 1 3 % E x p an s i v e as s e t re l i ab i l i t y E x p an s i v e p ro d u ct i o n efficiency Man ag e m e n t of HSE risk O p e rat i n g co s t re d u ct i o n F o cu s o n cu l t u re E m p l o y e e re t e n t i o n F ou r main ou tcomes of companies u sing O E programs $ Improved HSE metrics 4 3 % C o m p an i e s re p o rt e d d e cl i n e s i n b o t h t he t o t al re co rd ab l e i n j u ry / i n ci d e n t rat e an d d ay s - away-from-work incidents for e m p l o y e e s an d co n t ract o rs . T w o co m p an i e s achi e v e d t he i r b e s t - e v e r re s u l t s o n s p i l l an d p e rs o n al s af e t y m e as u re s . C ost savings 4 3 % C o s t s av i n g s i n cl u d e d achi e v i n g re d u ct i o n s i n t o t al o p e rat i n g co s t s as w e l l as i n are as s u ch as w e l l d ri l l i n g co s t s . T he m aj o ri t y re p o rt e d t hat t he y d e l i v e re d o n co s t re d u ct i o n t arg e t s ahe ad o f s che d u l e . I mproved asset u ptime/ availability 2 9 % O i l an d g as co m p an i e s w i t h O E p ro g ram s re p o rt e d i m p ro v e d as s e t u p t i m e o r av ai l ab i l i t y . T w o co m p an i e s had t arg e t e d top-quartile performance in as s e t av ai l ab i l i t y . I ncreased oil/ gas produ ction 2 9 % T he i n cre as e d as s e t u p t i m e m ay be linked to the increased oil and g as p ro d u ct i o n achi e v e d i n 29 % o f O E p ro g ram s . Driving operational performance in oil and gas | 1 3
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Page 3 and 4: 1 E x e cu t i v e s u m m ary T he
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Page 7 and 8: Low oil prices highlight the effect
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Driving operational performance in oil and gas

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