Engineering Capabilities and High Performance: The Key Success for Operating Companies
Authors: Alashqar Ameed , Al Shouly Wael , Qamber Najem A. , Alshaiba Abdulla R. , Almadhoun Wael 
Published: October 2023

Oil and gas operators tend to have engineering capability within their organization; however, this capability is one of the difficult attributes to quantify its achievements, scale their performance metrics and measure their performance within specific value stream. This paper will define the types of engineering capabilities and categorize them according to the functions performed into three categories. Furthermore, this paper continues to develop performance metrics measuring each category capabilities in accordance with business strategy perspectives of Profitability, End User and Stakeholders, Internal Processes and Growth & Learning.

Establishing engineering sub-organization in national entities and oil and gas operation & production companies is implicitly decided by their management needs and expectations, e.g. technical assurance for compliance with regulations and standards, quality control on the delivered work, in-house design capability for accelerated design and project delivery, innovation and technology adoption, technical expertise to support operation in improving efficiency and reduce downtime, training and development. The first challenge starts with the shortfall in articulating these companies’ management needs and expectations toward their engineering sub-organization and correlate them to the business strategic syntheses. The second challenge comes to map these business strategy perspectives (syntheses) to the applicable strategic objectives. Then, it comes to formulate Key Performance Indicators (KPIs) or aggregated KPIs to evaluate the strategic objectives by measuring these performance metrics via their formulas. These formulas are fed with corporate information and data whereas to their outputs scaled and target defined.

In process of developing engineering organization categorization and formulating KPIs to each category, a number of key performance indicators (KPIs) are generated to evaluate the categorized sub organization effectiveness based on their organization operating model. Introduction of these KPIs gave better vigilance and assurance to quality of work: this is measured through the number of errors, defects, reworks or scope carryover to next phase that occur in the engineering projects. Also, profitability metric is impacted by number of design and engineering variation claims and their value. While the innovation and continuous Improvement indicator will show the ability of the engineering organization to innovate and improve its processes, methods, and tools. By tracking and analyzing these KPIs, it is possible to determine the strengths and weaknesses of the engineering sub-organization and identify areas for improvement and which engineering categorization most suitable and set the minimum requirements.

These generated metrics are driving improvement behaviors and norms within these engineering sub-organizations. Overall, engineering teams are essential for oil and gas production companies to achieve their objectives, improve their performance, and remain competitive in the industry. Without the right categorization of engineering sub-organization, Oil and Gas production companies may struggle to maintain and optimize their operations, address technical challenges, and innovate to meet changing market demands and maintain high reputation.