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Majors to Chew up Independents Offshore: Who wins? Chevron Fires Warning To Oil, Gas Independents

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(edited)

Chevron Fires Warning To Oil, Gas Independents

Speaking at Offshore Europe, John O’Brien, deepwater focus manager at Chevron, explained how a change in attitude and the adoption of digital technologies is allowing oil and gas majors to become nimbler and less averse to risk.

Since the oil crash of 2014 it has been labeled the age of the independents. In the age of lower for longer oil prices it has been the flexibility and appetite for risk that has allowed many of the smaller oil companies to flourish. But if John O’Brien, deepwater focus manager at Chevron, is true to his word then they could face tougher competition from the majors right across the portfolio.

“I have a message for the independents out there,” he said. “At the moment, the independents and mediums out there outfox the majors. They are nimbler, they are a little bit more open to risk.

But we have watched, we have listened, and we have learned. Watch out, we are coming for you because we are going to change and change to look like you.”

Edited by Tom Kirkman
Fixed typo in thread title

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Never going to happen. The majors will own the deepwater simply because they are the only ones who can afford to play in that arena. Everywhere else, shallower water, jack-up country and onshore, the smaller to mid-sized companies run circles around them.

The root of the problem is that the IOC’s are process driven and arrogant. If it is not in the manual, and there are thousands of manuals, you will not be allowed to attempt it. Furthermore, their Human Resources and HSE departments have so much input, though rarely held responsible for such, that you have the wrong people in operations who are petrified of the HSE people.

Think about it, in the old days, a line manager would issue a request to HR for a person fitting a certain set of requirements. HR would provide the line manager with a set of shortlisted CV’s which had been verified as to content and the contact details for the candidates referrals. The LINE MANAGER would then interview the candidate, call the referrals and the he/she would select the person to be hired. The line manager would then instruct HR to hire and process the individual.

Nowadays, the HR department is notified that a particular slot needs filled, they select and vet (often with no clue as to what the position actually entails) and the line manager is stuck with the choice.

HSE is a similar issue. After Piper Alpha and Macondo, operational departments are so afraid of offending (and subsequently getting fired) the HSE people, that they do not even question the mandates being pushed on them (usually this is the HSE department trying to justify their existence). You may laugh, but criticizing the HSE department is politically incorrect. If I had written this paragraph while employed by an IOC, I’d be looking for a job shortly.

Take a look at the type of person who chooses, generally, to work for an IOC. What is their driving criteria? The answer is security. They only have to ‘wear one hat’, every decision is by committee, and as long as you don’t rock the boat - you have a secure job for life! You are not forced to make timely decisions on your own and any responsibility is dissipated into the committee.

In the smaller to mid-sized outfits, the teams, by necessity are ‘lean and mean’. Your drilling engineers often debate decisions by senior engineers (the senior engineer has the final responsibility, of course) but this questioning and debate is desired and welcomed. In a field office it is not uncommon for the drilling engineer to stand in for the senior engineer, the senior engineer to stand in for the drilling superintendent (or perhaps the supervisor on the rig), and for the superintendent to stand in for the drilling manager. THAT IS HOW YOU BUILD A TEAM AND ALLOW PEOPLE TO GROW IN THEIR JOBS!

Lastly, IOC’s are so bloated with personnel and overhead that their actual cost to do any function is much greater than that of smaller outfits.

You want safe, hire on with an IOC. You want an exciting career where you actually learn and make a difference - think smaller! 

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Whether it is an IOC or an independent, everyone is now more concerned about getting the most buck out of a barrel and how to save at every step to make it more profitable.

Those days of bloat are gone, during the oil price crash , IOC's learnt  fast what they had to do to survive and be profitable, cost cuttings, efficiencies and getting rid of bloat. They all may not have done it at every level but most did.

Nowadays, things are done in an instant, an email, IM or whatever companies choose to let their employees use to make decisions fast.

Companies that dont adapt, adopt and improve and become efficient and competitive will find themselves to be future fossils.

Just as the majors are moving into the shale patch , they will go back into offshore at various depths and use technologies and new data processes to map , re-interpret old data with new tech and drill again.

Not saying the majors will chase down and buy out every independent that swims in various depths offshore, they will be selective and they will also compete in various water depths if they have good data and can get good data and secure large reserves (large reserves , is relative) .

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