London, UK,
28
January
2016
|
10:37
Europe/London

Cost reduction and improved efficiency - no idea too big or small!

John Pearson, Group President, Northern Europe and CIS

For anyone involved in the energy industry right now, cost reduction and improved efficiency are much used phrases. However, there is a reason for that. It’s not about helping companies make more money (did you know that only a few operators in the North Sea are making a profit at the moment?). It is about making sure our industry survives.

I head up Oil & Gas UK’s Efficiency Task Force, working with the whole supply chain to improve the efficiency of our industry. I’ve been pleased to see traditional competitors coming together, with some great ideas, and some game changing approaches. This includes talking to other industries and finding out what others are doing – and how they have been able to adapt and not just survive but flourish. It’s a tough ask, but we are starting to see real progress.

Within our business we’ve also been looking at cost efficiency, and again I’ve been delighted with some really innovative ideas. For example we have pulled together a different approach focusing on people, process and performance which we’ve called More4Less. It started with efficient modifications but now we are moving it across to other areas of work. This might sound like just squeezing more out of an ever smaller pool, but it isn’t. This is a radical yet practical approach which we are also looking to transfer to other industries. Basically at every stage we focus exclusively on deliverables that are essential to either; ‘build it, buy it or assure it’ – cutting out waste and non-value. Adopting More4Less has been easier than trying to change our whole industry, but we’ve still seen challenges from customers, and within the business.

However, the thing which has meant the most to me, and made me really proud was a request for cost efficiency ideas from our employees. Ideas from across the business from the board room to the mail room have flooded in. The enthusiasm has been amazing – and it is exactly this sort of engagement and inspiration we need not just to survive but to flourish.

In my last blog I said that we shouldn’t let a crisis go to waste. We know there is a future. It is just a matter of being ready for it. With 2 billion people globally set to become ‘middle class’ over the next 20 years energy, consumption is going to continue to rise, driven by population growth and affluence. Oil and gas will still be a large part of this energy supply.

I am pleased to say that all around me, at an industry level and in our own business, all see this is a good time to sort out that wasteful, silly stuff we have always done, or we have allowed to creep up on us, but really and truly there are better ways. When we see really difficult decisions being made every day, and jobs being lost, being able to actively do something positive is one thing that I am going to support throughout 2016 and beyond.

Meet the blogger

John Pearson is the Group President of Amec Foster Wheeler’s Northern Europe & CIS business. Having worked with the company for over 25 years, John has seen the business grow and transform into a market leading energy services company.

He is passionate about his business and the energy industry and holds a number of positions on additional industry organisations. John is currently the Co-Chair of the Oil & Gas UK (OGUK) Board and, more importantly in today’s climate, is the leader of OGUK’s Efficiency Task Force. He is a member of HMT’s Fiscal Forum working to implement an effective monetary regime in which the UK Oil and Gas industry will grow, and he’s also heavily involved in PILOT MER aiming to secure the long-term future of the UK continental shelf (UKCS)..