P.2 ~ Joint venture combines parents' services to offer fresh approach to consulting
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Offshore: Take Offshore behind some of the events or discussions that led to the formation of io oil & gas consulting and its core service line. What were the key trends that led to this new venture?
Jackson: The offshore industry is plagued with inefficiencies and challenges including finding acceptable design concepts, cost discrepancies, and schedule delays.
With volatile oil pricing, this is a turbulent time for the industry. But even in the face of these challenges, working practices have stagnated. The existing model of contracting is piecemeal with specialist designers, contractors, and project managers coming on board one at a time, with no one group that brings the whole project together at the front end to deliver efficiencies and control that should be standard in an ever-evolving offshore sector.
Offshore: What gaps in the marketplace is the new venture looking to serve?
Jackson:Currently, there is no consultancy in the offshore sector offering complete end-to-end services. io has expertise across the entire value chain and offers technical, financial, operational, and business consultancy services all under one roof.
We provide customers with a holistic approach to development, encompassing all aspects of subsurface, subsea and topside design components that will allow for both time and cost savings. We also give the impartial advice that operators are seeking while benefiting from access to specialist resources to assist in technical and commercial projects.
io acts as a full-project architect rather than just an engineer to effectively manage projects up to the point where investment decisions are made. By becoming fully integrated within an organization, io can ensure that all parties are fully aligned to deliver on time and on budget. It also allows io to inject fresh thinking and insights, balanced with proven and more standardized approaches, to deliver optimum results.
Offshore: Where do you see the most opportunity for io oil & gas consulting?
Jackson:The reverberations of the current oil price are being felt around the globe. There is a noticeable shift in the mindset of the offshore sector, as on-going news of numerous job cuts and project cancellations demonstrates. This is where io has the opportunity to make a real difference and highlight the advantages and efficiencies offered by a holistic systems approach. Contracting relationships are currently fragmented which is holding the sector back, and has made active permanent changes to the pre-sanction project phase difficult to achieve.
io's true value is seen in creating full end-to-end project models in more extreme environments, such as ultra-deepwater, subsalt and high pressure/high temperature fields.
Offshore: Describe how io offers an end-to-end solution not previously offered.
Jackson:io's offering can be compared to a train transportation system. Here, the manufacturer of the train is just one of the components. Even with a top-of-the-line locomotive, you need the tracks, ticketing and signaling systems, amongst others, to ensure the whole infrastructure runs smoothly. If the track signaling system is two years late, nobody travels on the train – you lose revenue for two years and your economic model is at a standstill. It's the same in the offshore arena – if a subsea floater is late, you can't connect the subsea equipment, and nothing flows.
io represents all of the components of a full system in an integrated manner that can oversee all aspects of an offshore project to ensure definite and cost-effective results.
Offshore: What sectors of the industry stand to benefit the most from io and why?
Jackson:io aims to benefit the whole offshore supply chain as a one-stop-shop for major operators, arranging for seamless activity across an entire project.
In today's market, two out of three major projects overrun on price and schedule. In the offshore sector more than any, time is money and any deviation from a set schedule means more cost incurred by the operator, which can run from hundreds of millions of dollars into the billions.
io helps operators take a project through to the final investment decision, including the planning, front-end engineering and design stages by providing full system solutions and integrating a segregated, possibly fragmented, supply chain.
Offshore: What do GE Oil & Gas and McDermott each bring to the venture, respectively?
Jackson:Both parent companies have unique skill sets that, when partnered with the powerful thinking and staff expertise of io, will allow for greater certainty within offshore projects. The combined knowledge and specialist expertise of over 90 years of heritage of McDermott and the phenomenal technical and commercial strength of GE Oil & Gas enables io to deliver greater certainty, efficiency, and insight into offshore projects.
As a world leader in advanced technologies and services, GE Oil & Gas brings strength in subsea productions systems that allows us to be on the cutting edge in production equipment that we bring to projects. McDermott's engineering, procurement, construction and installation (EPIC) capabilities allow the knowledge and to design and deliver full-field solutions to the industry.
Offshore: How do the two parent companies' strengths complement each other in this independent venture?
Jackson:The legacies and expertise of the parent companies put io in excellent standing to deliver certainty and concrete results in all projects. In addition to the knowledge and experience of our parents, we pride ourselves on our team's ability to think powerfully. We realize that many offshore problems require out-of-the-box thinking and will benefit from having people outside of the offshore sector. We are committed to hiring top talent irrespective of what sector these individuals have been trained in. We value behaviors and mindsets as much as experience, and are building a team that can deliver a fresh perspective and agile problem-solving.
Offshore: Although it is an independent venture, how could io help bolster the parent companies' business lines, e.g. subsea engineering and construction for GE?
Jackson:Through io, GE and McDermott are joining forces to help operators in this front-end arena. Ultimately, the industry will see the formation of a large-scale end-to-end consultancy, but the bigger prize for the parents is certainty in the market, more successful investment decisions, and overall confidence being returned to operators.
Offshore: What opportunities do you see in today's marketplace?
Jackson:Currently, there is an opportunity for a step-change in applying a systems approach for offshore developments. As deepwater production is in advancing stages, the development of a new way of working is paramount.
We are developing an approach that reviews all variables of systems engineering, their influence on the operating strategy, and project objectives. This approach should be applied as early as conceptual and definition project stages to ensure economic and operational considerations are woven into an entire project. Recent technological achievements including longer tiebacks and advancements in artificial lift require specific methodology to achieve cost-effective field development planning and execution.
