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Finding common ground in oil and gas

Now is the time for stronger collaboration on capital projects

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Seeking transformative collaboration

The oil and gas industry is not known for doing things in small ways, whether it’s creating the world’s largest valve or tackling the most ambitious capital projects. As projects grow in size, scope and complexity, companies must manage greater risks. With more people working on expansive capital projects, parties must work as a cohesive unit and have the right information readily available. A stronger collaborative ecosystem is critical to manage risk by making partnering easier — “old ways” simply cannot suf fice. Transforming collaboration depends ultimately on creating a culture to support knowledge sharing, creating and adhering to processes that embed collaboration at their core, and establishing the necessary technical infrastructure.

On-time, on-budget, and on-spec delivery are ever more critical as the number of capital projects in the oil and gas industry continue to grow in size. Overruns, delays and increased risk directly impact the bottom line and the workforce, as well as supporting industries like mining, steel production, contracted goods and parts manufacturing. Project overruns are the biggest reason many large projects are scrapped.

Companies are building increasingly complex structures to find and produce hydrocarbons. These mega-projects in oil and gas come with significant inherent risk. Typically, this risk is managed though global joint venture (JV) partnerships across many companies, making collaboration critical among these partnerships. In our new industry study, 52 percent of respondents cited the delivery timeline as the biggest factor driving the need for better collaboration over the next three to five years.

To understand more about the current state of collaboration in oil and gas, we conducted the 2014 IBM Oil and Gas industry Study, speaking with industry leaders who represent about one-third of those 180 large global capital projects. We explored which collaborative approaches would be ideal and how to close any gaps.

We introduce the idea of a collaborative ecosystem to enhance collaboration inside and between companies. Proactive improvements in collaboration can enable organizations to manage projects more efficiently. To be transformative, collaboration has to strengthen the capabilities of the project’s people, processes and technology, all within a reliable, more secure environment.

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Meet the authors

Spencer Lin

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, Global Chemicals and Petroleum, Industrial Products and Global CFO Lead, IBM Institute for Business Value

Bruno Flach

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, Research Manager, Natural Resources Optimization, NA IBM

Keith Moore

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, Industrial Products Industry Consultant