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Australian Energy Producers Journal Australian Energy Producers Journal Society
Journal of Australian Energy Producers
RESEARCH ARTICLE (Non peer reviewed)

Opportunities for collaboration in the Australian oil and gas industry: learning lessons from more mature basins and international best practice (North Sea, Norway, Gulf of Mexico, Onshore US)

Jonathon Peacock A and Steve Dow B
+ Author Affiliations
- Author Affiliations

A KPMG, 71 Eagle Street, Brisbane, Qld 4000, Australia.

B Corresponding author. Email: sdow@kpmg.com.au

The APPEA Journal 59(2) 683-685 https://doi.org/10.1071/AJ18145
Accepted: 29 April 2019   Published: 17 June 2019

Abstract

As many Australian assets move from ‘project’ to ‘operate’, the challenge is to ‘sustainably optimise’ to provide value to shareholders and attract continued investment. There is an opportunity to learn the lessons of more mature regions and accelerate improvements now, rather than wait. The North Sea, Norway, Gulf of Mexico and Onshore USA provide insights and opportunities for improvement, from operator and supplier collaboration, through optimised operating models and the critical role of government and regulators in improving industry development. These opportunities require key Australian industry stakeholders to be adaptable. They require humility and strong listening skills, steady hands and a keen focus on long-term value. For example, the Efficiency Task Force of Oil & Gas UK launched the Industry Behaviours Charter in 2015, a collective commitment to encourage companies in the offshore industry to work effectively, efficiently and co-operatively. Forty companies signed up and that number continues to rise. Firms are sharing cost cutting initiatives under the Rapid Efficiency Exchange scheme. A second initiative encourages companies to share spare parts. Amec Foster Wheeler has brought in a More for Less scheme to eradicate processes that are superfluous to final outcomes. Operating costs across the UK North Sea dropped by 14% in 2016, operators saving over US$1.5 billion, and this progress continues. The OGA runs an asset stewardship program, sharing best practice across operators and encouraging collaboration. Collaboration there is itself maturing, still with a keen focus on cost reduction, but drivers now include sharing knowledge, new ideas and solutions, not just transferring risk.

Keywords: Australian industry, cost saving, investment, sustainable improvement, value.

Jonathon Peacock leads KPMGs National Oil and Gas practice. He has over 25 years of experience in a variety of strategy, operational and project-management roles. Over the past 8 years, he has led operational-improvement consulting engagements across the resources sector in strategy, finance, operations, commercial, procurement, supply chain and business services. Recently, Johnathon was the project partner accountable for the development of the strategy and operating model for a major Australian oil & gas asset. He was also the partner leading an engagement to design and implement an integrated commercial and production-operations capability for an eastern coast CSG to LNG asset. Prior to joining KPMG, Jonathon was a GM of strategy and GM of corporate projects for large organisations.

Steve Dow is a lean manufacturing professional with over 18 years of experience designing, managing and leading several large lean and business-transformation programs in the UK and Australia. Over the past 7 years, he has consulted to the CSG to LNG industry across the end-to-end value chain, with organisation including Arrow Energy, Shell Australia, Total and QGC. Recently, he was engaged by a large super-major as a continuous improvement (CI) coach to embed a CI culture to drive out cost and improve process optimisation. He also led a program to quantify the benefits and risks of moving a CSG–LNG organisation from an asset-led structure to a functional model and finally a complimentary out-sourced model. Steve has also facilitated detailed strategy-development and process-improvement analysis of the well workover process and upstream maintenance processes. Prior to joining KPMG, Steve worked for Deloitte Touche Tohmatsu in the Strategy & Operations team. He has also worked for Schneider Electric and BAE Systems in the UK.


References

Oil and Gas Authority (OGA) (2016). ‘Analysis of UKCS Operating Costs 2016.’ Available at https://www.ogauthority.co.uk/media/4514/ukcs-operating-cost-analysis.pdf [verified 3 May 2019]’

Oil and Gas UK (O&G UK) (2015). ‘Industry Behaviours Charter.’ Available at https://oilandgasuk.co.uk/industry-behaviours-charter/ [verified 3 May 2019]’