Positioning Canadian oil and gas companies for success from the inside out
Oil and gas companies are now more global, and some are becoming more processed-based. Cross-functional stakeholders are increasingly demanding results that are more difficult to achieve given the ongoing economic uncertainty and challenging market conditions.
Low natural gas prices, oil price uncertainty, WTI-Brent differential and heavy oil differentials are forcing upstream companies to focus on improving efficiency and reducing costs. The capital and operating costs for deepwater wells offshore, unconventional resources such as oil sands and horizontal drilling techniques are also compounding the industry’s cost challenge. That’s where performance improvement comes in.
Performance improvement is an operational philosophy of management that can benefit customers, shareholders, employees and suppliers alike. Companies facing capital and operational cost constraints within the oil and gas sector are employing performance improvement programs and tools to help drive down costs and improve their bottom line. These programs can address ongoing problems and inefficiencies within a company that enable teams to refocus on innovation and strategic initiatives.
They can stimulate a culture of improvement among all levels of the workforce. And, perhaps most importantly, uniting employees under a common goal that sheds light on how each of their individual actions impact the company’s value chain. In the oil and gas space, these programs can do even more. Performance improvement programs can reduce drilling and completion costs by evaluating the movement on pad sites and rigs, downtime, maintenance and reliability of the operations, as well as effective operations mobilization throughout the sites. They can also reduce cycle times of approvals, planning and construction by reducing non-value-add time as well as rework that commonly occurs in project planning and development stages of well, pad and oil sands sites.
Many companies in the energy sector grapple with how to remain low-cost, efficient and effective while pursuing growth. Concern revolves around whether short-term cuts will impair long-term growth. This is especially challenging for companies that have undertaken significant improvement efforts during previous oil and gas cycles. What’s important to recognize is that there’s always performance improvement work to be done, and it must not be forgotten when gas and oil prices rise and less focus is on the bottom line.