Contenu connexe Similaire à LBS GES 2014 - Keynote 2 - Antoine Rostand (20) Plus de globalenergysummit (6) LBS GES 2014 - Keynote 2 - Antoine Rostand1. © 2014 Schlumberger Business Consulting. All Rights Reserved.
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Schlumberger Confidential
LBS Annual Global Energy Summit:
Resources Efficiency and Security
London, England
November 27th, 2014
2. Energy: an impossible equation?
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Source: SBC analysis
Provide safe and affordable
energy to the world
5
Reduce and mitigate impact
on climate change
Renewables
Hydro
Nuclear
Coal
Gas
Fight energy poverty
Bn Tons Oil Equivalent
20
15
10
0
1990 2000 2020
Oil and condensate
1995 2005 2010 2015 2025 2030
Year
Presentation
Focus
3. Onshore and shallow water
Major contributors of last
decade’s discoveries:
Gas
1980 1985 1990 1995 2000 2005 2013
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Oil & Gas: end of peak oil?
5-YEAR AVERAGE OIL DISCOVERED VOLUME (2P DISCOVERIES)
Bn bbl
55
50
45
40
35
30
25
20
15
10
5
0
Source: IHS Edin; Rystad Energy; SBC analysis
+2%
-8%
2010
Deep and ultra-deep water
Billion bbl
Oil
Brazil, Angola and
Kazakhstan
Iran, China, Russia,
Turkmenistan,
Mozambique,
Australia, US and
Canada
4. Upstream O&G: the end of an easy ride?
E&P EXPENSE EVOLUTION VS. CRUDE OIL PRICE
1,400 140
120
100
80
60
40
20
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
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Bn USD, USD/bbl
Source: Rystad Energy; World Bank; SBC analysis
Note: (1) O&G global annual CapEx + OpEx, (2) EIA European Brent annual spot price
0
1,200
1,000
800
600
400
200
0
E&P Expense (1)
Crude Oil price (2)
Oil prices have flattened
during the last years but
not the expenses
5. Oil & Gas companies challenges: what can an MBA do?
SBC’S VIEW ON COMPANIES INTERNAL CHALLENGES
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Source: SBC analysis
Cash from
operations
Operations Excellence
Maximizing production and optimizing OPEX, safely
Capital Efficiency
Optimize portfolio
Ensuring capital discipline and increase project value
Talent shortage
Managing the shortage of senior staff while adapting
to the changes in the industry’s demography
In Country Value
Developing people beyond Oil & Gas
Promoting long term industry development in O&G
countries
6. Cash from operations
Production efficiency : management or technical problem?
MAIN SOURCES OF LOSSES
% of Maximum Production Potential
Compression train
Tanks/ vessels
Wells
Power generation & distribution
Wellhead & subsea equipment
Flowlines/ pipelines/ risers/ exports
Instrumentation & control systems
Benchmark
Efficiency is not
correlated with
facility age
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NORTH SEA PRODUCTION EFFICIENCY
%
85%
80%
75%
70%
65%
60%
Source: 4 years over 180,000 boed North Sea production (3 companies); DECC; SBC analysis
Safety systems
TAR overrun
Pumps
Artificial lift systems
Injection
Metering
Other surface equipment and facilities
55%
04 05 06 07 08 09 10 11 12
7. Capital Efficiency
More companies are doing mega-projects, but delays are still rising
E&P COMPANIES SPENDING >$5BN CAPEX PER YEAR AND MEGA-PROJECTS1 DELAYS
# of companies; years of delay
# of companies Avg. delay (yrs)
17
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Schlumberger-Private
Average delay
# of companies
4 5
7 8
11 12
18
22
15
20
27
32 32
35
30
25
20
15
10
5
0
2.5
2.0
1.5
1.0
0.5
0.0
2000 2001 2002 2003 2010 2012
2004 2005 2006 2007 2008 2009 2011 2013
Source: IHS; Rystad; US PPI
(1)Projects with budget >$1bn
8. Capital Efficiency
Are MBAs capabilities relevant to address O&G project challenges?
MAIN CHALLENGES FACED BY COMPANY
Normalized % of Survey replies
Safety & environment
Technical & economic challenges 6%
8%
External stakeholders
8%
Supply chain
28%
30%
20%
Internal to O&G companies
People & organisation
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Source: SBC Capital Projects Survey 2013; Post-Survey Interview notes
Governance
.
Talent availability / skill
pool management
Team alignment
Availability & quality:
Critical equipment
Engineering service
Contracting and
Procurement
Assurance & risk
management
Framing, decision-making
and FEL
Aggressive targets
9. 1990 Now
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Capital Efficiency
What can we learn from other industries?
Photographs from Renault, Airbus, Ariane Espace, northjersey.com
Lower costs
Faster developments
Higher quality
10. Talent shortage
Will the Oil & Gas industry become the coolest industry?
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PTPS PER AGE BRACKET ON A GLOBAL BASIS
Percentage of PTPs
Note: Excluding China and oilfield services companies
Retirement rate: 20% for 55y-59y, 50% for 60y-64y, 70% for 65y+
Recruitment targeted inputted in the demographic profiles as follows: 40% in 20y-24y, 60% in 25y-29y
Attrition at 2% (people leaving the E&P industry)
Source: SBC O&G HR Benchmark 2013
11. Talent shortage
Upstream O&G : do not forget the engineers and scientists!
PTPS BY DISCIPLINE VS. RESERVES AND OPERATED PRODUCTION1
2012, # of PTPs, Reserves in MMboe, Operated Production in kboe/d
2P reserves (mmboe) 1P reserves (mmboe) Operated Production (kboe/d)
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R² = 0.92
n3
0
n2
0
n1
0 5000 10000 15000
R² = 0.96
R² = 0.95
19000 0 5000 10000 14000 0 4700
EXPLORE
# of PTPs
Reservoir
&
Production
Eng.
G&G Eng.
Oil-weighted2
Gas-weighted
DEVELOP PRODUCE
Drilling
&
Completion
Eng.
Product
effect
R² = 0.95
Note: 1 For confidentiality reason, company data and numbers of PTPs have been modified to mask sensitive information
2 Oil-weighted: oil production >50% of total production
Source: SBC O&G HR Benchmark 2013
12. In Country Value
O&G industry can plan ahead: why don’t we do it for In Country Value?
EXAMPLE: JOB CREATION IN A SUB-SAHARAN
Craftsmen
Welders pipe
Civil Craftsmen
Operators
Machine Operator
Driver heavy duty
Technicians
Mechanical
Engineers
Formal education time when needs to be supported
Time to start recruitment for training/certification
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EDUCATION AND TRAINING TIMELINE
AFRICAN COUNTRY
Cumulative number of people (FTE)
Engineers Craftsmen
Technicians Operators
Source: SBC analysis
Mechanical
Electrical
Lead time to certify/train to work in industry
Time to start work
Years
2015 2020 2025 2030
Today
ILLUSTRATIVE
13. MBAs can help solve O&G industry challenges
MBA’S POTENTIAL CONTRIBUTION
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Cash from
operations
Source: SBC analysis
Operation Excellence
Organizational Behavior
Capital
Efficiency
Project Management
Supply chain integration
Talent shortage
Leadership development
Project Management
Local content
development
Local entrepreneurship
Policy definition
Notes de l'éditeur I am sure that most people in this room will agree that project execution is an issue today.
We have plotted in light blue the average delay for megaprojects (i.e. over one bn$). In 10 years, the average delay has been multiplied by 4, moving from 6 months to 1.8 years.
The O&G industry is now performing far worse than other capital intensive industries.
We have also plotted here the numbers of companies spending more than $5bn of CAPEX per annum, the bars. In the same period, we moved from a world where 4 companies were spending this kind of money, to a world where 32 companies are in this league. Nearly 5 times more. When we asked for the reasons affecting project’s performance, the majority of companies reported that issues internal to the organizations constitute the main challenges
First of all, lack of skills in project management and technical domains.
Second, issues around governance of these mega projects: how to set targets and timing, how to approve budgets and improve decision-making quality?
Third, supply chain issues, like engineering services and contracting & procurement. Obviously these depend also on the external market but decision on who to hire and how to contract is clearly under management control
External issues are still there, but with much less weight than internal capabilities issues.
In my mind, this summarizes well the industry issue today: we are facing major challenges to deliver and these challenges are ours, they are not externally driven. They are mainly under management control, and many times influenced by unrealistic expectations from senior management.
So, what management should do? (Exhibit 4) We heard this morning how other industries have profoundly transformed their approach to projects to survive.
As a result, they reduced costs, accelerated their developments and increased the quality of their designs.