The Role Of Information Technology (It) In Reducing Offshore Operating Costs
Authors: Stern M.J. 
Published: October 2008

The rapid changes in information technology (Iv and its application have helped to improve efficiency and reduce operating costs offshore.

Developments in IT itself, in terms of technology organization and standards together with cultural change have created new opportunities.

In the application of IX the most significant impact on Operations costs and effectiveness has come from the use of information throughout the lifecycle, and improved telecommunications.

This paper describes recent developments in IT and its application, and cites examples where oil companies have derived major benefits.

INTRODUCTION

There has been a widespread business imperative to reduce costs throughout the oil industry, driven to a large extent by the falling price of crude in real terms. These pressures have been particularly prevalent in North Sea Operations, with the development of smaller and increasingly marginal fields. Information Technology (IT) clearly plays a significant role in these calculations, both in terms of its intrinsic cost, and of its application in optimizing performance. IT costs have in the past, not always been understood by management, who have perceived them to be ever spiraling upwards and out of control: The more important issue is, however, getting value from the IT dollar and using IT for more effective Operations.

This is of increasing significance with IT becoming an essential part of virtually all different functions including:Process ControlLogistics (including maintenance)EngineeringSafetyGeosciences and Drilling IT itself is changing rapidly to the customer's advantage in terms of:technologyorganizationservices, such as facilities managementsoftware productsstandard's

Hence a strategy for reducing Operational costs through the effective use of IT must address the changes in the IT industry as well application within the business. as their relevant.

DEVELOPMENTS WITHIN IT

Cultural changes within the oil industry and technological and organizational changes within IT have had a direct impact on the service provided and the cost of that service.

The oil majors are demonstrating a willingness to accept that their problems are not unique and to work together in partnership. For example, Chevron and Amerada Hess are developing an integrated maintenance, materials and purchasing package for the North Sea - which contrary to previous practices will also be available on the open market. Similarly Logica are developing a common Personnel Tracking System.

Partnering arrangements are not only proceeding between Operators, but also with suppliers, who are now working together to produce "industry solutions" rather than selling hardware, proprietary software and other discrete options.

In organisational terms, the requirement for IT is now predominantly driven by business advantage rather than technical novelty, although in practice the advice given tends to depend on the source, with traditional IT departments often unlikely to propose outsourcing, and software development firms to recommend packages. Nevertheless, recent radical measures include the outsourcing of complete departments - such as BPX contracting out accounting to Andersen Consulting - in addition to the traditional outsourcing of certain specialist IT services (eg disaster recovery or payroll).