Change Culture, Compete On Costs & Deliver: A Success Story On Adapting A Worldwide International Oil Company Organization To A Challenging Low Oil Price Environment
Authors: Saintpere Stéphane , Hannaford Kevin , Ludosan Simona , Ndiaye Adoulaye , Baldy Edouard , Cousin Frank 
Published: October 2017

Abstract
In March 2014, when the oil price was still above 100 dollars per barrel, the management of TOTAL recognized that the profitability and return on investment were too low and decided to launch an E&P cost culture initiative in response to a decade of excessive cost inflation experienced within the industry. The objective was to embed a cost culture at each level of the organization, designed to reduce significantly operating costsand projects development costs.
The E&P branch named its program "4C&Deliver: Change Culture, Compete on Costs and Deliver" (4C&D), with two key objectives: –Deploy a strong cost and performance culture within the E&P organization–Sustainably reduce costs in order to be able to sanction new projects.
All affiliates and head office divisions were requested to contribute to a 3-year cost reduction plan, addressing all manageable costs (Opex, Capex and Exploration Costs) with quantified savings targets.
This was supported by a change management plan in order to lastingly shift the cost culture, while keeping the HSE performance at its highest, considering that improving the operating mode and efficiency would improve control over the day-to-day on-site works.
During the early phases of deployment of this program, one of the main drivers was to generate the cost optimization initiatives from the employees themselves everywhere in the world, aiming at rethinking the working methods from inside (bottom up approach).
The dissemination of good practices, the integration of the continuous improvement philosophy (LEAN) combined with digital transformation and innovations were keys to success.
The program, that was animated at headquarter level relied on a strong network deployed in affiliates, led to outstanding results as OPEX saving targets were exceeded both in 2015 & 2016, making the Total group one of the best performing IOC's.
This paper will describe: –the main aspects of the methodology, and in particular the "bottom-up" approach in the initial deployment that generated a strong adhesion in the program by the employees,–the governance and animation, based on more than 200 program correspondents worldwide and a small central team,–the main initiative types and associated costs savings, illustrated by concrete examples from various entities (logistics, drilling, production, maintenance, support,…),–the transition to a continuous improvement process towards operational excellence.
With 2,300 costs reductions initiatives at the end of 2016, more than 4 billion dollars cumulated savings on operating costs anticipated over 3 years, and highly committed teams, the operating costs have already been reduced by 40 % from an average 10 dollars per barrel in 2014 to 6 dollars per barrel in 2016. This cost optimization program was a first step in the empowerment of all levels in the company towards sustainable value creation.