The Value of Operational Excellence for Oil & Gas Companies

Every day, tens of thousands of wells, hundreds of thousands of miles of pipelines and millions of items of processing equipment deliver energy safely to our homes, transport systems, businesses and communities. All that happens in an industry increasingly focused on improving its operations. For oil and gas executives, the need for operational excellence has never been greater. Exploration, development and production costs are rising, and refining margins are under pressure. A shortage of technical talent and capability has bid up the cost of employees and services even further.

The rise of unconventional resources like shale oil also contributes to a deeper focus on operational excellence —primarily in North America, but elsewhere, too. As integrated oil companies (IOCs) and national oil companies (NOCs) climb the learning curve on unconventional resources, successful operators are refining their approaches for these unique operating challenges.

At the same time, the oil and gas industry is under tremendous pressure to reduce risk, even as it takes on new challenges, such as drilling in ultra-deep-water or the Arctic, intensive onshore operations in populated areas (for example, shale gas in the northeastern US) and pioneering technologies like floating liquefied natural gas (FLNG) terminals. Industry executives are working to define and deliver best of breed operations at the frontiers, where few benchmarks exist.

 

Complicating these changes are the rising expectations of regulators, shareholders, and communities, all of which are demanding more from oil and gas companies. Regulations are becoming increasingly complex and regulators more proactive, requiring a greater level of attention to ensure compliance. These pressures combine to increase both the need for and the value of operational excellence.

Operational excellence allows oil and gas leaders to confidently say and prove that they are running their assets safely, reliably, sustainably and cost effectively. That requires success in key areas:

• World-class health, safety and environmental performance
• Top performanceand return on capital across all assets
• Best-in-class standards and systems standardized and adopted consistently across an entire business
• A high-performance culture that is always striving to improve
• A highly talented workforce
• A stellar reputation, based on efficient operations and sustainable business practices

Operational excellence requires a continual focus from senior management and constant communication with the front line to sustain the transformation journey over time. Changing corporate culture also requires leadership from the top to reinforce new behaviors. Leaders must continuously set the tone for the transformation, keeping expectations and enthusiasm high. The expectation that management will lead, be visible and be accountable is the most critical and fundamental factor for ensuring a successful transformation.

How can we help?

360factors, Inc. helps Oil and Gas companies improve business performance by reducing risk and ensuring compliance. Predict360, its flagship operational risk management software product, vertically integrates regulations and requirements, policies and procedures, risks and controls, audit management and inspections, and on-line training and qualifications, in a single cloud-based platform.

We also offers consulting services in the areas of air, water, and waste permitting and compliance, site investigation and remediation, environmental and dredge material sampling and evaluation, engineering and geology, expert testimony, health and safety, and operational risk management.  Its Managed Services incorporate outsourced risk and compliance services using Predict360.

 

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