Understanding that the path to success is often paved with positive collaboration, earlier this year two major players in the oil and gas industry, GE Oil & Gas and McDermott, pooled their talents in new joint-venture io oil & gas consulting. Total World Energy speaks to Dan Jackson, CEO of the new joint-venture, who explains the ethos of the company and how it will challenge accepted norms in the industry to make projects more commercially viable for clients…
Q: Tell us about the background of io oil & gas consulting? What is the reason for establishment? Who are the key players involved and how did the idea come about?
The offshore industry is in a state of flux and there is an urgent need for decisive change. Inefficiencies and challenges, including finding acceptable design concepts, costing discrepancies and schedule delays, are rife. This, coupled with volatile oil pricing, spells a turbulent time for the industry. However, even in the face of these challenges, working practices have stagnated and the offshore business needs to rethink established ways of working in order to better handle increasingly complex projects. EY states that a staggering two out of three offshore projects run over budget or are delayed and cancelled. That statistic is exaggerated the more remote, challenging and complex the project is.
There is currently no certainty in the planning stage and projects are falling over during execution because of poor planning at the front-end stage. io is here to change that, along which the damaging disconnect between operators and contractors.
io is a new model of offshore consultancy that combines industry expertise and powerful thinking to deliver greater certainty into the design and planning of offshore oil and gas developments. We provide the right balance of consultancy and engineering to effectively manage and deliver full field development plans.
io is born out of the shared vision of GE Oil & Gas and McDermott – that there is a better way forward for the offshore industry. Though io operates fully independently from both companies, it is able to draw on their enormous industry strength, contracting expertise and resources of them to overhaul the operator-contractor relationship.
Q: What is the company’s core business and main goals?
io has a big idea and an even bigger ambition – to transform how the offshore industry works, to make projects more commercially viable through project cost savings of 30-40% and to deliver much needed certainty/
As io is the first and only consultancy to offer full field provision, with all technical competencies covered, we ensure certainty in the blueprint at the planning stage. Certainty in the planning means certainty in the contracting of the tender stage which means far more certainty during execution.
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. io has expertise across the entire value chain and offers technical, financial, operational and business consultancy services all under one roof..
Q: Could you detail your approach – how you will provide a holistic approach, reset industry norms and simplify the cost base in order to create up to 40% project cost savings?
io’s approach to project planning encompasses all aspects of subsurface, subsea and facilities. We deliver end-to-end solutions in full field development, including technical, financial, operational and business consultancy services.
By taking this approach, we guarantee that we put the right people with domain expertise and a deep breath of knowledge onto every project to provide specialist expertise and organisational insight. We have created a pioneering approach to systems thinking that allows operators to make conscious decisions around contracting strategy.
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 organisation, io ensures that all parties are fully aligned to deliver on time and on budget. We work with a client in an integrated manner, to ensure consolidated thinking. We bring our deep knowledge of the contractor community to manage and coordinate across the entire supply chain, allowing for better planning and problem solving with an independent, free-thinking perspective.
By reducing complexity and managing the intricacies of each part of a project, io reduces cost and schedule risk. It is recognised within the industry that standardisation is imperative in driving down costs, and io is part of that simplification process.
Q: What regions will you focus on in offshore oil and gas?
All regions. io is a global business with headquarters in London, an office in Houston and a presence in Asia coming soon so we are operating in all the major hubs for offshore developments.
Q: Evidently you are still in early days, but what has the company been focusing on so far since inception, and what is the plan for the rest of this year and 2016?
io is a start-up and we have had an extremely positive first quarter. We are already working on our first project and our plan for the rest of this year and next is to focus on a relatively small number of clients who understand the issues currently facing the offshore oil and gas industry.
Q: Is there significant competition in the market? How will you differentiate yourself from the competition?
io has clearly set a trend with a recent flurry of contractor joint ventures and alliances. Whilst there are a number of companies who offer services in the offshore oil and gas area, we firmly believe that io’s transformational approach to delivering end-to-end solutions is unique and not found anywhere else in the industry.
Q: Where do you see the business in 5 years’ time?
A thriving large-scale, end-to-end consultancy working on full field greenfield development projects;delivering certainty to the market. io’s consultancy will have resulted in more successful investment decisions and overall confidence being returned to operators. We expect to see a consistent growth of clients during the venture’s first few years and will have a sizeable global team working on both significant full field projects as well as some medium sized projects.