Collaboration is a key theme of the Wood report. Sir Ian has urged operators, the supply chain, government and the regulator to put their collective thinking caps on and build upon existing cooperative practices.
We heard from three senior oil executives who revealed that working together is a key element of the energy business, but more needs to be done if we are to maximise oil and gas reserves in the North Sea.
One executive said: "The challenge the industry faces is in finding ways to collaborate across the whole [North Sea] basin. There's wide recognition that the competition element has taken a bit of a back seat in favour of much deeper collaboration, both between operators and across the whole supply chain.
“The areas of really intense competition come where we compete around exploration technology but when it comes to operational maintenance and improving production efficiency, frankly we have far more to gain by collaborating.”
Another added: "There is potential for a lot more collaboration and the Wood report underlined that. There are huge opportunities through more collaboration, not just between oil companies, but between operators and suppliers to make things easier on ourselves, at a time when the industry is facing some significant challenges."
The third oil boss said: "We will require global collaboration to fuel the world. Oil and gas will still be our primary source of energy and will remain a growth industry for the next generation.
"We have to work smarter, faster, safer, but also cheaper. There needs to be new ways of doing things.”
With leading industry figures leading the way, it looks like more organisations will be working together in the future.
Oil and gas industry leaders have been preaching a mantra of greater collaboration for some time now and it appears the message has hit home.
The most recent survey carried out by Fifth Ring revealed that 88% of respondents believed companies were willing to collaborate more in order to ensure recovery rates for the world’s remaining reserves are maximised.
The much heralded Wood Review and PILOT – the joint programme involving the Government and the UK oil and gas industry, both focus on securing the long-term future of the UK’s reserves. It is clear that greater collaboration and knowledge share can deliver technological improvements and costs savings, which will make marginal developments viable.
One respondent who runs a business, commented, added: “There is a massive effort between the standards bodies of the upstream industry to standardise information and use of standards between the organisations and onward onto company practices.
“A simple example of practical use: if you run a seismic survey and decide to drill a well it is imperative that the positioning system information e.g. Coordinate Reference System being used by both groups is the same. We all know it is extremely expensive to be off by 100 metres and the wrong side of a fault and in fact quite likely that you will miss the sweet spot altogether. This is also true when bringing in pipelines etc. If you are looking for some of the practical upstream cooperation in place then this is a good place to start.”
A key challenge for operators in particular is: how much are they prepared to share without fear of compromising their competitive advantage? Another is: how long can regions like the North Sea remain competitive without increased collaboration?