Addressing operational challenges in oil and gas has been saved
Addressing operational challenges in oil and gas
Using the downturn to build an agile manufacturing approach to asset development
For decades, oil and gas operators have been experimenting with the right “recipe” to improve capital efficiency and well performance. Take a closer look at how agile project management in oil and gas could provide the consistent designs, stable plans, repeatable results, and better overall performance that the oil and gas industry needs to solve its operational challenges.
Agile project management in oil and gas
In recent years, the concept of “agile” has been front and center in the software application and DevOps world as a means to drastically improve development velocity, scalability, and overall performance. The same guiding principles can be applied to asset heavy industries, helping teams manage field development, well delivery, and other operational challenges in oil and gas.
How can shale operators—and other organizations in asset-heavy industries—use this new asset development approach to improve capital efficiency and well performance? In a traditional assembly-line manufacturing approach, emphasis is placed on well construction efficiency and lean principles to enable speed and scale. By applying agile, the focus on efficiency can be balanced with experimentation and accelerated learning to rapidly identify improvement opportunities. The shift to agile project management in oil and gas could deliver a structured, iterative, and repeatable process. It could also afford time to reflect and adjust field development and well delivery strategies based on near-real-time results of targeted experimentation and rigorous well performance assessments.
Transitioning to an agile manufacturing model
Using agile manufacturing to solve operational challenges in oil and gas will require organizations to rethink traditional ways of working and leverage new and enhanced digital capabilities. In our experience, this process should incorporate six elements.
Foundational capabilities to enable agile manufacturing
To effectively adopt an agile manufacturing approach in asset-heavy industries, operators will likely need to augment two foundational capabilities:
- Operating model transformation: Executives can apply agile manufacturing’s guiding principles of strong collaboration; empirical learning; response to change; and iterative, repeatable processes to drive operating model transformation across the organization, capabilities and processes, data and analytics, and digital tools to make better, faster, more consistent, and safer decisions.
- Digital enablement: The oil and gas workforce is ever-changing, and executives should take intentional and strategic steps to put digital solutions in place that enhance productivity. Operators should prioritize and support core elements of digital enablement—from digital fluency to cybersecurity—to help scale and sustain integrated dynamic planning and operational execution in an agile manufacturing approach.
Oil and gas: Operational challenges, agile solutions
Over the past decade, technology and process innovations have continued to unlock new value in the US unconventional resources sector. As the shale revolution continues to mature and evolve, operators likely will need to change their business model to compete for capital and deliver free cash flow to investors. Agile project management in oil and gas should enable operators to more efficiently deploy capital, maximize reservoir recovery and productivity, and optimize lifting costs across the asset life cycle.