In today’s high-cost and low oil price environment, operating in a mature oil and gas province such as the United Kingdom’s North Sea is ever-more challenging. But at Chevron Upstream Europe (CUE), they’re focusing on “total cost of ownership” to ensure a sustainable business.
The approach is summed up by core supplier, Schlumberger: “We’re all looking to do more than just save money; we want to work more efficiently.”
On the Alder Project, enhanced collaboration with business partners is increasing efficiency and delivering real value-for-money improvements. CUE’s Supply Chain Management (SCM) team began looking beyond simple rate reductions and sought to drive more efficient partnerships with suppliers.
Last year, the business unit embarked on a program for building a sustainable future. Following an organizational review, the workforce has been applying business-focused cultural values into every task to achieve its vision of “creating our future by delivering today.”
With this foundation, it became clear that improvements were needed in how the Alder team interfaced with Drilling and Completions (D&C), SCM, and key service provider Schlumberger.
“We had too many teams working in silos, focused on their specific role, and this could have resulted in missed delivery deadlines. We needed to drive change,” said Marcin Kos, SCM contracts advisor.
A view shared by Graham Hetherington, Schlumberger’s executive account manager for CUE’s Alder Project: “We recognized the cost challenges but we also recognized that Chevron was looking to do more than just save money, they wanted to work more efficiently. Chevron saw the need for teams to work together with a broader view of the common goal.”
CUE and Schlumberger agreed that Hetherington would be available in Chevron’s Aberdeen office one day every week, bringing in product services line managers when required. Dedicated weekly meetings helped generate open and honest dialogue, and conversations were kept focused and constructive by ensuring all cross-functional meetings had the right people in the room.
“Some conversations were difficult, but the enhanced partnership brought a new sense of teamwork and trust,” said Mark Urquhart, senior completion engineer in CUE’s D&C team.
Rationalizing the Alder project’s total cost of ownership has helped resolve numerous technical, quality assurance, on-time delivery and commercial challenges. As a result, the team expect to save around $5.7 million for the project.
“In the current climate, suppliers have seen their rates slashed but often with little thought of the wider consequences. For Schlumberger, it was great to work with a client who saw the bigger picture and looked to save costs by working smarter,” said Hetherington.
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