• Revisit the nature of the relationship between owner and supplier, so that they can jointly manage the surge in activity while meeting project performance targets. Historically, the quality and availability of contractors have been key to the success of a project. Today, the supply base is consolidating at a fast pace — a situation that is likely to have far-reaching implications regarding the nature of contractor/field owner relationships. Contractors are already being selective about who they work with. A senior manager of a large EPC firm in Houston states that, far from chasing work (as was done in years past), his firm will pick and choose projects in the future.
This is a sobering situation for large oil and gas companies. A senior executive who oversees project management in one such company estimates that the current contractor base has enough capacity to manage only 70 percent of the projects currently in the pipeline. It is imperative that the industry work to bridge the divide and start a dialogue, so that both sides can align their interests and collaborate. Now more than ever before, the world, struggling to secure energy supplies, needs an oil industry that can effectively manage complexity.
Herve Wilczynski (wilczynski_herve@bah.com) is a principal with Booz Allen Hamilton in Houston. Working with companies in various industries, he specializes in supply chain management, manufacturing strategy, and large-scale transformations.
Matthew McKenna (mckenna_matthew@bah.com) is a vice president with Booz Allen Hamilton in Houston. He has more than 20 years of experience in assisting clients across industries to improve business performance.
David VanderSchee (vanderschee_david@bah.com) is a senior associate with Booz Allen Hamilton in Houston, specializing in the energy industry.
