CASE STUDY: We helped a leading oil & gas company bridge the knowledge gap on marine seismic projects costs.
OilGasCo, a major global integrated oil & gas company, undertakes marine seismic acquisition campaigns around the world to explore deep water oil and gas fields. These campaigns usually require an advanced marine fleet with towed streamers and acquisition and recording technology. OilGasCo lacked clarity on the cost structure of the rate they were paying firms for these services— so when it was time to renegotiate their contract, they came to us for help.
To begin with, we met with key stakeholders of the marine seismic acquisition category to understand their needs and goals. Once we established their requirements, these were our next steps:
Our Should-cost model helped OilGasCo understand what a fair and reasonable day rate for seismic acquisition activities should be. It also validated their assumptions and helped them gain an understanding of their supplier’s financial health. The cost model that we built provided them with the capability to account for different geographic locations for the campaign and the crew. With built-in flexibility, OilGasCo was able to do their own sensitivity checks to ensure that they were paying a reasonable price for acquisition and recording. Our detailed instructions on using and updating the model also made sure the process would continue despite personnel turnover. A win-win for all parties involved.
CASE STUDY: Our benchmarking study helped a leading Oil & Gas company negotiate an effective contract for purchases for a new construction project.
A major Oil & Gas company that was embarking on a big construction project brought us in to develop a benchmarking study. This would be used to benchmark against RFPs from different suppliers. The goal was to use the information to ensure competitive pricing and terms, which was critical as the company was building multiple large offices at various locations.
We contacted over 50 companies that had similar buying power in both the client’s industry and other industries that conduct similar large-scale purchases on a global scale. We then created a questionnaire covering different information related to discount schedules, along with other terms and conditions. Next, we conducted a study by guiding each participant through the questionnaire and compiling and analyzing the data. We created a comprehensive report using the data and presented it to the client. This gave them a clear idea of how their current pricing terms compared to others and enabled them to use this data to analyze RFP responses.
Using the data gleaned from the benchmarking study, the client gained valuable knowledge about pricing terms, conditions and discount schedules. They then used the knowledge to revamp their negotiation strategy and develop a more robust contract with their suppliers.
CASE STUDY: Our AIM & DRIVE ® process helped a leading oil & gas company reduce costs and increase efficiency.
A major Oil & Gas company faced significant problems when evaluating the construction of an onshore gas asset, one of their major projects. The viability of the entire project was challenged by the deteriorating prospects of gas revenue from lower gas prices and inflationary trends in engineering and construction labor costs in the region. This was where we came in. Anklesaria conducted a series of AIM & DRIVE Cost Challenges on each major apex element with the engineering firm—ranging from gathering lines, trunk lines, power supply and distribution to field compression facilities and well pumps.
We worked together with the client and their EPC supplier, including project managers, construction experts and engineers from various disciplines. We used a number of key strategies to solve the problem: first, we changed various material specifications to reduce unit process, overall quantities required and amount of construction time and labor required. We also standardized designs of certain high volume materials, integrated and modularized certain electrical and electronic equipment.
Then we went further: from reducing wastage of material during construction to eliminating the need of certain construction steps and activities. We also recommended revisiting the testing and inspection approach for finished work. While stressing the need to adopt construction approaches and planning that reduced the risk of downtime due to weather conditions. We also helped close the gap between the originally assumed and the current market unit cost rates for materials, construction labor and equipment.
Our efforts led to a 20% unit technical cost reduction from the initial budget estimate. Each strategy employed and revised process made a significance difference in cost avoidance. Anklesaria’s process also led the team to develop a revised concept and budgetary estimate in record time.
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