Dangerous to dinosaurs

There is a need for thinking along new lines in a pressed market, and Offshoreenergy.
dk is trying to inspire its member companies to look at new methods.
The alternative is scaring.
Not being afraid of calling a spade a spade, the statements from Johannes Kromann Bie, Interim CEO Offshoreenergy.
dk, are unambiguous, and they do not paint a rosy picture of an industry where not all of its players are aware of what they have been hit by.
“You cannot remove two thirds of the profit from oil/ gas and then believe that you can all earn the same as before.
As a supplier you must realize that this is the situation you are faced with, so either you have to run your business in a new way, or you may perhaps look at another area like wind power, which at the moment is booming.
If you do not catch the train in that process you risk ending up like a dinosaur lying down waiting to die, and if you believe that the crisis is soon over, then you are wrong,” states Kromann Bie in his usual pointed way, while he, himself, is focusing on what has worked successfully in other situations.
“Wind power is demonstrating a great pioneering spirit.
Here everybody is raised by the idea that they have to do things in a cheaper way.
From the very start everybody knew that the subsidies could not last forever, that is why they were constantly working at reducing the cost of energy.
In wind power the costs are primarily centered around construction, as operation is comparatively cheap, so here the aim is to save up to 40% on new constructions before 2020.
I would like to see the oil/gas industry set targets just as ambitious, and here it is not a question of a figure but more about sending up the balloon as far as possible.
An ambitious target would take us far,” Kromann Bie states, as it is his firm impression that the present depression was unavoidable.
“I do not say that the companies have been totally lethargic, but for a period of perhaps five years they have primarily focused on producing as much as possible in the shortest possible time, whatever the cost.
But we should not forget that according to a report from Wood Mackenzie operational costs increased by 10 to 17% each year, so whatever the cause, a reduction would have taken place within the next 3-4 years.
We have to bend the curve, and here we can take a look at companies making cars, televisions etc.
We have to make an effort to keep the costs down, and the report stated, too, that it was indeed possible to cut down to half the non-value creating activities,” points out Kromann Bie.
“It is possibly more realistic to save some 50%, and even if we naturally must always consider safety it should be possible to standardize, increase efficiency and reduce waste of time by better planning.
” LOOK AT DECOMMISSIONING While Kromann Bie in no way claims to have the solution to all the challenges he is not afraid of proposing some ideas which the members of Offshoreenergy.
dk may grab at will.
One of his alternatives concerns the decommissioning of the present infrastructure firstly in Norway and the UK and secondly – in perhaps five to ten years - in the Danish sector.
“It is not up to us to tell anybody how to do things, but we have to come up with ideas and suggestions.
There is a market for decommissioning in the Danish sector of the North Sea worth some DKK 10-25 billion per year, so here we may run the movie backwards as we are bound to have available many of the competences needed.
We are considering the possibility of taking one step more by looking at the British sector where they have taken the initiative.
They have a group of some 365 member companies fully occupied with decommission.
We shall soon suggest something like that,” states Kromann Bie who is generally suggesting for the industry to look at the marked through new glasses.
“Learn to make business in the present market, and if the oil prices should climb up again, then we can all be content.
It is a question of being proactive.
Too many companies are being lethargic and inactive.
Any responsible operator has to demand activities to be much cheaper to make both ends meet, and that decline must necessarily be spread over the entire supply chain.
Hardly many of the companies being met with a demand for lower prices have been knocking on the door suggesting a lower price for their service, and why should the operator be left with all the problems?” asks Kromann Bie who is generally finding rays of light in the sector for wind energy.
“In the market for oil and gas we are a small nation with small companies, but we are the ones who launched the idea of wind energy, so here we can prove ourselves as the world champions if we grit our teeth.
There are definitely challenges in this industry, too, but here the actors started from another platform, and they are doing a fine job.
Here operators sit down with their suppliers, and that is a concept I feel can reach far.
It is useful to call in the specialists with the good ideas as the operators may rightly choose between them, and I think a lot of ideas are lying in wait under the carpet.
I can only pray for them to be pulled out in the open.
I hope we can introduce such a concept in the oil and gas industry, as such working groups are most beneficial to both parties,” states Kromann Bie, who based on his background in the oil and gas industry is working at setting up two tracks in a new structure of Offshoreenergy.
The work is still going on, but one thing is for certain – he is not sitting down like a dinosaur waiting to die, because that is no option in the present market.
"Johannes Bie, Interim CEO Offshorenergy.dk"
Forlaget Camae 2014-2015. All rights reserved. Subject to typing and printing errors. All prices exclude VAT unless otherwise stated.