A fit-for-purpose solu­tion enabled an oil and gas com­pa­ny to reduce well down­time by up to 65%

Back­ground

The oil and gas indus­try is in a tran­si­tion. Oil com­pa­nies are look­ing for new ways to sus­tain a com­pet­i­tive advan­tage in an uncer­tain mar­ket­place, as they adapt to a world of resource abun­dance which is lead­ing to sus­tained low­er oil prices and a focus on cost, effi­cien­cy, and speed.

Our client is one of the largest hydro­car­bons explo­ration and pro­duc­tion com­pa­nies in South Asia, oper­at­ing one of the biggest gas reser­voirs in the region. They are pri­mar­i­ly engaged in explo­ration, devel­op­ment and pro­duc­tion of nat­ur­al gas, crude oil, con­den­sate, and nat­ur­al gas liq­uids. The gas reser­voir accounts for more than 90% of the client’s revenues.

The clien­t’s busi­ness mod­el was chang­ing from ‘cost-plus’ to an open mar­ket one. One of the biggest impacts of the change was the need for the client to fund all explo­ration and devel­op­ment activ­i­ties. Doing this effi­cient­ly and sus­tain­ably required improved mar­gins, and that meant more effi­cient and effec­tive ways of working.

Analy­sis

We were brought in to analyse the clien­t’s busi­ness process­es and man­age­ment sys­tems in the fol­low­ing areas:

1. New well man­age­ment process
2. Seis­mic sur­vey acqui­si­tion and processing
3. Oper­a­tion and main­te­nance of pro­duc­tion fields
4. Sup­ply chain and busi­ness planning

Our two-week analy­sis unearthed for improv­ing oper­a­tional plan­ning and exe­cu­tion process­es, lead­ing to more effi­cient and effec­tive deliv­ery of the clien­t’s prod­ucts and services.

We also revealed under­ly­ing weak­ness­es that had an adverse effect on progress, both in field oper­a­tions and at the head office. This result­ed in cost over-runs and/or delayed rev­enues. These issues could be sig­nif­i­cant­ly alle­vi­at­ed by:

1. Bet­ter man­age­ment con­trol prac­tices
   - Improv­ing the util­i­sa­tion of KPIs and imple­ment­ing per­for­mance review mech­a­nisms.
   - Intro­duc­ing for­mal man­age­ment tools that flag off-schedule con­di­tions and plan attain­ment, along with process­es to assess root caus­es and mit­i­ga­tion plans on a short inter­val basis.
   - Enhanc­ing util­i­sa­tion of active man­age­ment prac­tices at every man­age­ment lev­el through train­ing, prac­ti­cal appli­ca­tion, and con­tin­u­ous coaching.
2. Process­es
   - Intro­duc­ing account­abil­i­ty for oper­a­tional process­es effec­tive­ness through empha­sis and increas­ing vis­i­bil­i­ty of plan achieve­ment at key process steps.
   - Intro­duc­ing mea­sures and con­trols along the key process steps, along with cor­rec­tive action process.
3. Struc­ture
   - Adding struc­ture and for­mal­is­ing com­mu­ni­ca­tion and pri­or­i­ty set­ting.
   - Clar­i­fy­ing roles, respon­si­bil­i­ties, and accountabilities.

Project Approach

Based off the results of our analy­sis, we devel­oped, designed, and deployed the fol­low­ing solu­tions with­in a 30-week period:

1. A fit-for-purpose man­age­ment con­trol sys­tem (MCS) that would allow the client to gain pre­dictabil­i­ty and con­sis­ten­cy in man­ag­ing new wells, seis­mic, reser­voir, oper­a­tions, main­te­nance, sup­ply chain and busi­ness planning.
2. New well project man­age­ment to reduce drilling cycle times.
3. Improved pro­duc­tion man­age­ment process­es and increased sup­ply chain man­age­ment efficiency.
4. Improved strat­e­gy and busi­ness plan­ning processes.
   

   “The MCS installed by Renoir has giv­en me greater vis­i­bil­i­ty of both our over­all per­for­mance, as well as the depart­ments with­in my area.”

   Gen­er­al Man­ag­er, Human Resources

5. A cul­ture of con­tin­u­ous improve­ment through train­ing and coach­ing of project team mem­bers and key people.

Project Imple­men­ta­tion

A joint project team was assem­bled con­sist­ing of client-side experts and our own con­sul­tants. This team worked to iden­ti­fy issues and root caus­es, assess impact, and imple­ment our solu­tions. Exten­sive man­age­ment and super­vi­so­ry train­ing, along with ongo­ing follow-up, coach­ing, and pos­i­tive rein­force­ment con­tin­ued through­out the dura­tion of the engagement. 

The joint project team iden­ti­fied that many of the root caus­es for low pro­duc­tiv­i­ty arose from gaps in man­age­ment con­trols, cou­pled with a lack of oper­a­tional plan­ning and quan­ti­ta­tive, real-time progress measures.

A dai­ly mea­sure­ment sys­tem of work was imple­ment­ed which, when com­plet­ed by each super­vi­sor, enabled a base­line to be set, tracked for progress, and objec­tive­ly assessed for results and issue resolution.

Sig­nif­i­cant time was invest­ed in train­ing man­age­ment and super­vi­so­ry lev­els, to ensure under­stand­ing of new and enhanced man­age­ment con­trols and tech­niques. All ele­ments were installed with detailed follow-up to assess imme­di­ate results and pre­pared­ness for sus­tain­abil­i­ty of the full con­struc­tion project cycle.

Results