It is now widely accepted that the oil industry needs to collaborate, focus and innovate to reduce the $$’s to produce each barrel of oil and become more efficient in its processes, workflows and accelerate the take up of technologies which are successful in other industries.

Mind the ‘Strategy’ Gap:- In the current climate of $50 oil any business case (large or small) for investing in efficiency improvements for the longer term seems to be ‘parked’.  The price mantra and a paralysis of decision making only guarantees future losses.

When times are lean any investment in operational efficiency will deliver on-going cost reductions for the future and a more profitable and reliable asset base.  When times have been good the industry has not really focused on improving efficiency and has preferred not to change.

Sadly, leadership and management behaviours in the current slump have not changed or learned from previous upturns and downturns in the oil price.  Across the board cutting of jobs, budgets, service and contractor rates by 10%  or more may improve a ratio in some accounting performance metric but does nothing to enable or encourage continuous improvement and efficiency.

There no shortage of ideas and ways to make your organisations leaner, fitter and operationally more efficient for the future.  A lot of valuable time and resources are currently being wasted through inertia.  This focus on price, rather than ROI and business value, is manifested in endless meetings and discussions deferring decisions,  or delaying activities for cost reasons.   Many of these activities when delivered would immediately improve efficiency, availability of equipment or reliability of assets.

As a leader within your organisation you are probably asking yourself or being asked the questions:

How has all of the money poured into company initiatives, assets and information technology not resulted in increased production/revenue or reduced costs as promised?

Every one of the business cases looked so promising.

Why after all this investment of time, money and resources does any focus on the bottom line resemble trench warfare – with the same old arguments, opinions, processes and entrenched thinking and doing?

If we could achieve a future perfect, what would it be?

With guided analytics we can help build a concensus and understanding within the business of how to move from the ‘current state’ to ‘best practice’ and ultimately over time deliver lowest total cost of operations and lowest total cost of ownership.

Moving towards that ‘future perfect’.

$50 Oil: Cost Reduction vs Efficiency

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