I was at a conference recently talking to a couple of senior legal people from a major oil company when one asked “so what exactly does Epeus add to the Oil and Gas industry then”. All of a sudden I knew what those who sat in front of Lord Levisson felt like but it was a good question.
Put quite simply if every large and complex project that involves a drilling rig or specialty vessel is perfectly planned and defined, executed on time and budget and to the required quality and rigs are ‘drill ready’ so that the investors, managers, owners and clients of that rig realise their financial targets then we don’t need the Epeus that exists today. But of course we know this isn’t the case, industry statistics say that only 4 in 10 projects meet their original targets in terms of budget and time and in our industry we can’t afford to compromise on quality.
Last year nearly all the major Drilling Contractors reported results that had been at some point impacted by shipyard, project or start up delays and as time is money in our world this meant impacts to revenue, share price and reputations not to mention the knock on to the business cases that had been developed against that particular field and well by the Operator and any Investors. We’ve even had people who’s project ran over budget by more than $100m describe them as a success because a multi million dollar long term contract was protected, but with better planning up front and more sight of the potential risks and how to mitigate them at least the understanding of the true costs would have provided the basis for better decision making. With millions (and sometimes billions) of dollars at stake what price do you place on feeling more secure about your prospects and more certain about the risks inherent with the project.
And in case you’re wondering how I answered the question, I simply asked if they could say with certainty that every rig intake project they had on the go at the time was forecasting to be on time, on budget and meet the goals of all the stakeholders so that financial and reputational risks were being managed ……