The importance of operational excellence
Euro Petroleum Consultants discuss the increasing importance of operational excellence for producers and suppliers alike
Tamimah Dhaher, GM, Middle East and Andy Gibbins, VP Middle East, both of Euro Petroleum Consultants on about why operational excellence is so important
For the first time, in 2015, the Oil & Gas and Refining & Petrochemicals Middle East Awards will include a category on Operational Excellence, reflecting the increasing importance the subject has for producers and suppliers alike.
The category, entitled Operational Excellence Strategy of the Year is defined to identify the best projects or strategic initiatives designed to drive OE and achieve lasting business performance improvement. Entries are welcome from producers and suppliers alike.
As we all know, 2015 has been a year of significant change for the oil, gas and petrochemicals industries. Falling oil prices and rebalancing of gas prices have had a major impact on the profitability of companies working in the sector. This has created new pressures as companies look to find ways to create sustainable competitive advantage.
The reality is that we don’t know how long this is going to last. If we did, we would all be making a fortune as investors.
However we don’t know – how many of the experts predicted the depth and severity of this oil price crash. For sure, some had predicted this current fall but it is fair to say that most had not. This meant that many organisations were taken by surprise and well defined, long-term plans had to be rethought.
All companies have been forced to rethink their strategic priorities. Some projects have been cancelled or deferred and cost savings are being sought. There is a strong realisation, however, that cost cutting, although important at this time, must not be carried out in a way that will impair the long term success of organisations.
Reductions in expenditure in areas such as maintenance, reliability and staff training can have potentially damaging consequences, impacting risk and long term reliability of assets. The cost of getting it wrong can far outweigh the savings. Process safety incidents and occurrences of force majeure can have lasting consequences for businesses.
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Cost optimisation achieved through effective implementation of Operational Excellence programmes is a far better way to adapt to the new reality and at the same time, improve business performance in a positive and lasting manner.
Many producers in the region are developing and implementing OE programmes, learning from the good practices of leaders in the topic. At the same time, solution providers are looking for ways to best support those companies looking to improve operational performance.
We believe that having this new category will further raise the profile of operational excellence and will allow best practice sharing between organisations, something that is vital in order to achieve long term success.
According to Andy Gibbins, Vice President MENA for Euro Petroleum Consultants, “Operational Excellence is no longer a nice thing to have, it is a must have. We believe that this new award category will raise the profile of OE, which is vital at this time. We look forward to receiving entries from across the region and across the industry.”
The award is being sponsored by Euro Petroleum Consultants, who provide consultancy, training and organise leading conferences on the subject of Operational Excellence in oil, gas and petrochemicals. Their next Middle East event ‘OpEx MENA 2015’ will take place from 6 – 8 December in Abu Dhabi. See www.opex.biz for full details.