BY ELIZABETH FABRI
OIL and gas companies must collaborate more effectively to solve the industry’s leading problems —from reducing costs, improving safety, to implementing new technologies— according to oil and gas heads at this year’s APPEA Conference and Exhibition.
The annual conference, held in Perth on 14-17 May, attracted more than 3000 delegates from 30 countries, with presentations from various officials including Federal Resources minister Matt Canavan and executives from national and global companies Woodside, Shell, BP, Senex, BHP, and ExxonMobil.
Speaking at day one, Deloitte national oil and gas leader Bernadette Cullinane said collaboration was a vehicle to achieving greater success, but a “lack of trust” and “misalignment of expectations” between oil and gas operators and service companies were the primary factors that created roadblocks.
Deloitte’s report Committed to change: Driving true industry collaboration, surveyed 96 individuals within the sector and found the buyer-supplier tension to be an issue that would need to be taken more seriously to increase the chances of effective partnerships.
“The majority of operators and service companies in Australia have limited history of working together on operational oil and gas assets and less of a track record in accumulating trustworthiness and institutionalising collaboration,” the report stated.
“A respondent from a major Australian operator explained the biggest challenge in overcoming these factors is ‘shifting the mindset of not wanting to share’.
“When asked whether respondents agreed or disagreed with the statement ‘Many business processes which are considered company confidential should be standardised to facilitate industry collaboration’, the majority of respondents from both operators and services companies agreed; this indicates that this mindset may already be starting to shift.”
Also touching on the topic at day three was Senex managing director Ian Davies, BP Developments Australia managing director Claire Fitzpatrick, and ExxonMobil Australia chairman Richard Owen.
“Partnering is key,” Mr Davies said.
“The magic ingredient as a general rule for businesses like us is partnering effectively, whether it is JVs, farm ins, farm outs or partnering with service industries where they have expertise that we don’t have, or don’t know how to apply effectively to review a problem.
“There are very few problems that probably haven’t been dealt with in the world somewhere and being able to tap into that global network and national network is extremely important.”
Ms Fitzpatrick said she didn’t view collaboration as a “them” versus “us” scenario, and there should be greater dialogue between partners.
“It’s about what the service companies see [what] we are doing that’s adding to our problem and driving cost up that we may be completely oblivious to, but [this] actually requires us to enter in that dialogue to understand and be willing to listen to that,” Ms Fitzpatrick said.
Mr Owen said it was an area where there needed to be more trust to “match problems and solutions”, however said competition was still integral to businesses success.
“Collaboration is particularly helpful if you’re solving a specific issue, but I think when you’re looking to innovate and take a leap forward in technology, competition is helpful too.
“I think competition helps drive a lot of innovation, I think we need to make sure we keep these things in perspective and balanced.”