|Date Published||February 24, 2016|
|Article Author||Dave O’Connor|
|Article Type||February 2016 Issue|
|Category||Articles, Oilfield HUB|
|Tags||E&P, FCM - Field Cost Manager, Oil & Gas Downturn, Operations Services Suite, ORM - Operations Report Manager, PVM-Preferred Vendor Manager, S&S, SCM-Supply Chain Manager, VRM - Vendor Relationship Manager|
Yeah…I didn’t think so. In fact as one executive described to us ‘I wake up and slide down a pole into a big pile of cash and tomorrow the pile will probably be bigger’.
Those were the days my friend… we thought they’d never end. But they have. With oil at $25 BOE there is a new Sherriff in town and his name is Efficiency.
So what happens now? Producing companies are in turbulent waters with this new reality, and only the strong will survive. Cost control and efficiency is now the topic du jour and for good reason. We all have to do more with less which will undoubtedly test the mettle of all involved. The squeeze is on the service companies, as producers are demanding better rates and getting them. A well that used to cost $5 million is now coming in at $3 million. There is precious little chunks of meat on this once mighty bone and the vultures are circling.
Recently I met with the president of a producing company that subs out their drilling program to an EPC. This EPC has launched a new auction service as part of the procurement process for upcoming drilling projects. It is an interesting idea that surely will push the limits of price competitiveness among the essential services required to drill and complete a well. Remember that whole strong will survive idea? This particular executive told me in no uncertain terms that for the next 12 to 18 months this is the new reality and we better all get used to it. Relationships used to steer the boat to some degree when it came to service company selection, but that concept has now given way to cold hard cash…and how little of it you have to spend.
This auction concept is very similar in many ways to our Oilfield HUB suite of online operations reporting tools. Oilfield HUB consolidates all communications and supporting information throughout the complete lifecycle of a well from vendor management, bid requests and ordering, right through to daily field reports and invoice verification at end of service. The HUB is a universal platform that integrates all gathered information from a well and contains it in one, easily linked and accessible location. This is ideal for cost efficiency and communication among vendors, field personnel, and head offices.
Our service helps producing companies save time and money by having all of their well operations information centrally located with the ability to send closed competitive bids that ensure price efficiency and competition stays strong. BUT the big difference is we help you control the quality of those service companies and qualify them so you don’t end up with a disaster from a less than reputable company that just happened to submit the lowest bid in an auction. This is a win/win for all parties.
There is a better way!!