The oil and gas industry has drastically changed in the past decade. The vast majority of Earth’s oil and gas deposits have been already uncovered years ago while modern-day technologies allowed us to mine them faster than ever.
The resources are rapidly becoming scarcer while finding a decent team of engineers is challenging for a number of reasons. Even so, there are ways to improve the governing aspect of any project if one knows what to look for. Today we’ll talk about how can the oil and gas industry companies and their employees improve their project management skills and execution, so let’s dive in.
Redefined contracts and forms
The first area where oil and gas industry managers are lacking is contractual in nature. According to dr. William Wallace, most contractor companies actually know very little about contract laws, which combined with the interest of protecting their prospects oftentimes leads to disaster.
The first way to improve the efficiency of applied project management skills is to redefine contracts and sub-contracts for short-term employees working on individual projects.
The inflexibility of current contract forms leaves so many skilled engineers and potential employees either uninterested or ineligible for certain positions. Furthermore, contract forms that were developed decades ago are still being used today with very minor tweaks.
Such contracts favor relatively inexperienced employees who don’t mind working overtime instead of skilled engineers who could get the job done incomparably faster, not to mention more accurately and reliably.
An ideal way to redefine the aforementioned contracts is to devise multiple types of contracts and subcontracts depending on not just positions, but the actual intellectual and physical requirements of potential employees. The 7-week-course trainees shouldn’t be left out simply because they don’t have decades of experience, but neither should they be prioritized by companies on a tight budget simply because their wages are more affordable.
Assess risk management decisions with more accuracy
Every step taken in any given project presents a risk of some kind. Whether it be the choice of staff, a miscalculated weekly budget, or poor research, or something as small as not having enough rain suits for a wet day, all factors of risk should at least be noted on paper.
When a risk factor is recognized but not acted upon, it becomes a gamble. Now, gambling in one of the world’s biggest industries can go either way, but unfortunately, it usually leads to disasters.
With the prices of oil and gas fluctuating at a rapid rate and the fact that most deposits are drying up quicker than ever, surgical precision in decision-making is mandatory.
Although the concept of risk management is terribly broad, the fundamental skill that project managers should acquire as soon as possible is the ability to observe as many factors as possible. If there are a plethora of factors, delegate decision-making and research. The most common, as well as the most obvious pitfall of risk management, is to overlook or underestimate a factor or two.
Revise strategies
The idea of creating a functioning net of connection between companies and their off-shore branches is not a new one, but it’s the one that most oil and gas companies struggle with.
Essentially, it boils down to the tempo of launching new projects and the ability to integrate them into the current structure.
The expansive strategy of sealing multiple contracts in terms of supply or acquiring papers for access to additional deposits may seem like a good idea given that the pressure from ever-rising competition is becoming more pronounced. After all, the vast majority of resources on the field can’t perish, and the bulk of the machines are too huge and heavy to be stolen.
However, the upkeeps of the workforce and maintenance of the gear will invariably drill a hole in any budget, no matter how enormous it may be.
On the other hand, being laser-focused on individual projects without taking up the opportunity to launch a few more is another gamble. No matter how much research goes into a particular project, unpredictable events may halt even the most carefully orchestrated one.
Companies should revise their strategies and adapt to their own particular circumstances. A fool-proof plan is inconceivable, and a good plan is a flexible one.
Expand teams and inventory ahead of time
Timing is crucial for any project, regardless of which industry we’re talking about. Being understaffed or underequipped is a common mistake that is often made due to poor research. However, even in the best-case scenario, a company can find itself in a dire need of employees and gear due to malfunctioning machines, workers going on sick leave, and resource breakage.
Another common mistake that is just as easy to make is not having enough replacements in terms of both workforce and inventory. Every project manager is bound to their given budget, and the resource allocation is the field where most are lacking the required skills.
Millions are wasted on wage upkeep and machine maintenance if those assets are bought cheap, whereas the same scenario is sure to follow if the crew is experienced but underequipped, or machines are terrific but unmanned.
Prepare contingency plans for every project
Preparing a ‘plan B’ for every project within the structure becomes harder the more projects are undertaken. Even so, having a backup plan for each and every one of them is mandatory if they’re to endure weeks and months of changing schedules, unpredictable events, mishaps, and uncertainty.
This is especially important nowadays due to the pandemic. Workers may not come to the field; resources will inevitably be wasted on unnecessary ventures; the prices may skyrocket or plummet; the deposits may be dry after all.
Being mentally prepared for negative events can help project managers retain their wits, but having actual backup plans in case anything goes awry means that they will be able to properly act in time. The more research goes into any venture and the more focus is diverted into proper risk management, the smoother the execution of any contingency plan will be.
We hope that this brief guide was useful to you and that you’ve learned something new today on the project management improvements in the oil and gas industry. Make sure you are staying safe in these times we are all going through and have a good one, guys!
Author of the article is Andy Malone