Managing offshore assets in tight times – the new priorities

This downturn is a wake up call to the owners-of-the-owners of billions of dollars worth of offshore assets, the value of which is dwindling away to dust before our eyes. We are in a race against time to stop a rising flood of red ink, we want to preserve our dwindling cash reserves to:
1] preserve our idle assets in contract ready condition; and
2] to be seen that we are complying with as many mandatory 6, 12 , 24 and 60 monthly routine tests and inspections as crew levels and mothball budgets allow.

We achieve this by developing the in-house expertise to look after our assets with minimal outside help.

Many financial entities that own offshore contracting businesses, don’t know whether their management team is managing the business as economically as possible. Though ultimately, numbers don’t lie, if operating costs look too high, then it may be necessary to bring in a consultant who can look at whether the business is being run in accordance with today’s business conditions.

An earlier post in this series used the colorful metaphor of offshore contractors letting “sacred cows eat their lunch”, meaning that undue dependence on expensive third party outsourcing is an expensive luxury in tight times. The offshore contractors who survive this downturn, will be the ones who have the will and the ability to revert to the basic skills of their core business. This means picking though today’s surfeit of job seekers to find those with the experience, skills, motivation and talent to maintain and operate assets on tight budgets.

No more $500,000 bills from third party workshops. If a job needs a certified person, the company needs to draw on it’s own in-house pool of qualified people. This is nothing new. As we argued in the post “Rig managers intimidated by politically correct scared cows”, we are merely suggesting that offshore contractors revert to running operations the traditional way, i.e. mostly in-house.

In an earlier post entitled “4 Oilfield Mindsets That Are About To Change”, we pointed out that management teams are slow to adjust their perceptions of their business to new paradigms, that:
“Psychologists say that we fill the gaps of our perception with a mental model of how we “think” the world works. When reality changes, we struggle to change our perceptions. Back in the 70s, in the fast moving world of IT, when makers of 14″ hard disk drives couldn’t see the impact of new 8″ drive technologies, entire companies disappeared before perceptions changed.”

Too many of today’s offshore asset managers are like those manufacturers of 14″ hard disk drives. Outsourcing work to third parties is an easy, stress-free and socially acceptable way to run operations. Doing stuff in-house requires mental effort, concentration and management support. Therefore any owners of the owners of the assets, who are reading this, need to recognise this fatal trend before it is too late. Owners may need to bring in their own third party team to evaluate how the entire business is being run.

Also see: “Cold Stacked but Ready-to-Drill”: Modern Technologies which enable offshore assets to be economically mothballed in work-ready condition.

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