Submitted by Centrica
The Hackathon has been the catalyst for a culture change in how we do business. Centrica’s relationships with its supply chain partners are now closer and more collaborative, with regular, positive meetings with the likes of ADIL, Oceaneering, Ramboll and Cortez coming directly on the back of the event.
Through work with Ramboll, capital expenditure projections on the development of two gas fields was cut by nearly 50%, with the introduction of new equipment already in use outside the UKCS and the associated change in contracting strategy. This positive result stimulated further investigation into this equipment, and the investigation has now been widened to embrace the broader Centrica portfolio.
The Hackathon has also broken down barriers along the supply chain and created a wider spirit of collaboration with and between our contractors. The culture shift has gone wider than just those involved in the Hackathon directly, however, and the positive results we have seen thanks to our improved relationships with these contractors has changed the way we do business with all of our supply chain partners.
Post-Hackathon, closer working with the companies such as Wood Group and Hydrawell has added value to our business and theirs.
The Hackathon has proved that by breaking down the barriers between operators and contracting companies and having honest conversations about what can be done better, projects and investment in the UK can be unlocked to the benefit of the supply chain, the wider industry and lead to a more sustainable, lower cost, efficient North Sea region.
Description of Best Practice
As 80% of Centrica’s annual spend is with our supply chain partners, we understand that working closely with these contracting companies is crucial to our success and the success of the basin. At the Oil & Gas UK Share Fair 2014, we resolved to bring a more collaborative approach to our relationships with all our suppliers; the aim was to break the trend on steadily rising capital expenditure costs, whether that be with improved ways of working new technologies or standardising processes or equipment.
The Unlocking the Portfolio event was designed to find ways for the business and its partners to collaborate more closely on technology to make projects more competitive in the current low oil price climate. The event took place in March 2015 with around 70 new and existing contractors meeting us and each other to discuss projects stuck in the pipeline and the challenges we faced. It was an opportunity for everyone to share knowledge, experience, and capabilities – as well as highlight areas where Centrica could improve its own processes and increase the viability of our projects.
During the day-long event, contractors were challenged to work together and find solutions for stalled projects. Each session was facilitated by Centrica’s ‘Pioneering Practitioners’. During each session ideas were generated, and these ideas and their cost savings potential were collated throughout the day, to give us a final estimate of the savings which could be made. Hundreds of ideas were submitted across the day. The business aims to develop these ideas in the months and years ahead to push ahead with projects, which are currently uneconomic.
Within our own organisation, several ideas have already been implemented on decommissioning projects as well as on a new project in Morecambe Bay – the use of a multi-skilled workforce on the North Morecambe Project which has provided efficiency without excessive strain on cost, as well as improving scheduling during a busy shutdown period. The savings identified for individual projects range from 6% to more than 50%, and some of the ideas are applicable beyond the specific projects which were the focus of the Hackathon.
Since holding the Hackathon, we have shared our experiences with Oil & Gas UK, fellow operators and industry organisations. Given the challenges everyone in the industry is facing, we also recognised that the learnings and ideas we collected during the day and in follow-up sessions would be beneficial to others. To that end, we have shared information with Oil & Gas UK and groups like the Small Pools Technology Development group.
Contact: Ross Davidson, Centrica