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Oil Field Services and Engineering

Oil field services, engineering, and equipment companies must respond decisively to the cyclical downturn.

Industry analysts anticipate that low oil prices will cause energy companies to cut investments for new projects by at least 25%. Overcapacity has emerged in most heavy asset markets, while volumes have collapsed for many well services firms, particularly in North America.

How do these companies respond? In a world of razor-thin margins, successful oil field services companies are establishing cost-competitive operations and rationalizing their asset bases. They’re making targeted technology investments that deliver near-term advantages. They’re finding new ways for contractors and clients to collaborate more effectively and discovering mutual efficiencies that eliminate unintended costs and complexities. And they’re examining acquisition opportunities and exploring innovative business models that challenge the historic boundaries of the sector.

Action Plan for Long-Term Prosperity in Subsea Oil and Gas

Operators and suppliers face new challenges as the subsea oil and gas industry matures. To continue to prosper, they must take action in these areas:

  • Strengthen subsea planning throughout the supply chain. Sharpen the focus on long-term maintenance planning and demand greater transparency from equipment suppliers around material availability to eliminate delays in the delivery of materials to rigs and pipe-laying support vessels.
  • Enforce standardization of equipment. Enable compatibility across generations and ensure rigorous governance of technical specifications to further alleviate bottlenecks and “complexity creep.”
  • Establish a robust subsea maintenance strategy from the outset of new projects. Account for the costs of failure, anticipated equipment performance, and the trade-offs between repair and replacement.
  • More clearly embed service and maintenance performance in new subsea equipment contracts. Operators should contractually ensure sufficient supplier maintenance and refurbishment capacities to service anticipated demand. They should also adopt detailed service-level agreements and governance models to reduce failure rates for older equipment and tools during interventions.
  • Ensure the technical integrity of subsea installations. Perform rigorous integrity reporting and gather better data about equipment history and performance.

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