Real progress – now let’s go faster!

The UKCS Upstream Supply Chain Collaboration Survey

How can energy companies keep driving the collaborative momentum in the North Sea?

The third UKCS Upstream Supply Chain Collaboration Survey, which forms the basis of this Review and Index, was conducted in September and October 2017. It looks at how behaviours towards supply chain collaboration have changed since September 2015.

The speed of effective collaboration

The results of the Survey provide welcome evidence of behavioural and cultural change in the UKCS since our last report. The 2017 results suggest a near-universal acknowledgement by respondents that collaboration is crucial for their company’s future success. 95 per cent, state that collaboration was an integral part of their day-to-day business.  

“Hero” behaviour
Successful collaboration is still dependant on “heroes”, a limited number of individuals with trusted relationships, ensuring that projects are beneficial for both parties and being proactive to find opportunities to collaborate. These three factors together accounted for 65 per cent of the main reasons for successful collaboration in 2017 and as such they continued to drive collaboration for the third survey cycle running.

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Supportive business strategy
More than nine in every ten respondents say that their company is taking strategic steps to improve collaboration. 43 per cent of survey participants considered their collaborative engagements successful in 2017 compared with 27 per cent in 2015. In addition a greater number of respondents are reporting more successful collaboration efforts by their company’s business strategy than by hero behaviour alone, with an increase from 9 per cent in 2015 to 14 per cent in 2017.

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Collaboration Index
The collaboration index measures the effectiveness of companies as partners in collaboration. While individual company scores are kept confidential, the aggregated Index scores are published here, giving an indication of how effectively operators and suppliers collaborate.

The Industry Collaboration Index score has increased from 6.6 in 2016 to 7.1 in 2017. The improved Index scores not only provide further evidence of stronger operator-supplier relationships across the UKCS, but also confirm a welcome change in operator behaviours.

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Collaboration Index Results

Importance of cost reduction

Three years after oil and gas prices started to decline, businesses have adapted to the lower price environment. Activity is slowly picking up and some oil and gas companies are now starting to post positive financial results. However, operating in the mature North Sea is still challenging, cost reduction remains the main reason why oil and gas companies collaborate. However, organisations appear increasingly willing to share knowledge/learning across the industry and are less focused on transferring risk to their partners.

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Even though real progress is now being made, we need to move further faster and maintain momentum!

The UKCS Upstream Supply Chain Collaboration Survey was conducted in Partnership with OIL & GAS UK
In the current environment becoming more collaborative is critical to survival.
If you’d like to discuss this topic with one of our industry experts please get in touch via the contacts below.
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