The stakes are usually high with any field development plan. After all, it’s your guidebook for how you will develop an oil and gas asset, manage its impact on the environment, anticipate and handle risk – the consequences of getting anything wrong can be enormous.
However, the strain upon some field development plans is much greater than others – perhaps because of complexities in the partnership agreement, perhaps because the margin for economic success is smaller, perhaps because economic success could change the trajectory of a firm or even a region.
We recently helped a client with just such a high stakes field development plan. The state oil company was working with a global contractor on a new offshore project, and stakes were high in terms of delivering a field that was not only successful commercially but also benefitted the country’s people and economy.
As this was the company’s first offshore project, they needed support in making the best possible decisions for the field, and setting up their teams to carry out field development plans by themselves in the future.
And while no two field development processes are ever the same, there are a few key lessons our experts have learned over the years that helped guide us through this project.
Lesson 1: Build relationships before you build projects
Although it’s usually technical or commercial factors that raise the stakes for a field, the first challenge in these kinds of field development plans is almost always social.
Large oil projects are inevitably complex melting pots. In the room at any one time you can have representatives from multiple organisations all with their own interests, objectives and preferred ways of working. Perhaps you have multinational groups, offering up language barriers or the chance for easy cultural misunderstandings.
In the offshore project we worked on, we were fortunate that the teams involved had been involved in other large projects before. They were high quality people who knew how to ask for help, and that made it easier for everyone to work together.
However, one major challenge we found was getting documentation out of the contractor. This was crucial for getting the project off to the right start – before we got into any technical considerations, we had to make sure we were all aligned on the right timeframe, and any delays in getting paperwork through was going to set that goal back.
It was a problem born out of a clash in how each company wanted to operate. But the solution was a social one – so early in the project, we went out of our way to forge relationships with and between the project leaders from both companies, to make sure that everyone was talking and knew exactly what each party needed and when.
These relationships are also crucial when you get to the commercial negotiation side of field development plans. In order to make sure everyone comes away from a project satisfied with their share, you need to be able to stand in their shoes and see from their perspective – and you can’t do that without building relationships.
Lesson 2: Look for what makes your field unique
While we’re on the subject of the groundwork for a field development plan, the next factor to bear in mind is what makes your particular project unique. Of course, every oil and gas project is unique in one way or another, but when the stakes are higher, so too is the importance of understanding the particular context of your project.
For example, with our project there were several environmental factors that made planning more complex. While the project site was offshore, the country itself had a high proportion of rainforest coverage and was incredibly proud of that fact. This meant that any supply chain and logistics decisions had to fit around a strong intent on protecting local people and the environment.
That meant that part of our field development plan had to involve engagement with both local and global activists to ensure the environmental concerns were front and centre in planning.
Lesson 3: Anticipate, anticipate, anticipate
Our last lesson is perhaps the most important: anticipation. As consultants, anticipating what a client needs before they know they need it is par for the course. But when you’re drafting field development plans for high-stakes assets, you need to be even more attuned to what a firm will need over the course of the project to prevent costly delays and disasters down the line.
With our client, we knew that to make the highest quality decisions for the field development plan, we needed to be involved with them and their contractor very early on in the concept phase. That meant we could influence the contractor to look at a variety of options and engage stakeholders even before there was a field development plan in the works.
Because we were involved early, we were able to better anticipate what the project would need. One of the recommendations we made was a third party review for the field development plan in addition to the review the contractor would do, as well as help them find the right expertise for this review in line with their procurement process.
