Greater Industry Collaboration Needed by Australian Oil and Gas Leaders

Australia’s oil and gas industry must fix its sights on developing greater collaboration as it brings a range of mega projects into operation, according to a group of sector leaders at a DNV GL-hosted briefing and roundtable event in Perth.

The need for oil and companies to become more coordinated was a hot topic at the DNV GL event, which involved more than 30 industry executives talking under Chatham House rule. This assertion was sparked partly by media attention in February 2014 on the construction of three giant LNG plants side by side on Curtis Island in Gladstone, Queensland, resulting in billions of dollars of duplicated investment. Similar overlaps have been flagged elsewhere.

“The Australian oil and gas industry is simply not collaborating enough. Operators and suppliers across the country would benefit greatly by sharing best practice and the lessons they have learnt in a structured forum. We are doing a lot of things for the first time here. We should be sharing our experiences,” said a board member of an offshore services company during the discussions at the DNV GL-hosted event.

Another participant in the roundtable discussions commented that companies in Australia seem to have an issue with working together, which doesn’t make sense considering that the majority of the country’s major projects are being developed by joint ventures.

Richard Palmer, Regional Manager, DNV GL Oil & Gas – Australia, New Zealand and Papua New Guinea, said “If we want to maintain security of energy supply, our industry has to set our sights on working in deeper and harsher conditions, and keep pushing the boundaries of safety, reliability and performance in our projects and operations. Industry collaboration will be central to achieving that.

“DNV GL has an important role here in bringing together some of the oil and gas sector’s best known operators, suppliers, regulators and industry bodies to develop and maintain industry best practise. We offer open access to more than 170 international oil and gas industry standards and recommended practices. As DNV GL’s presence in Australia continues to grow, we are firmly committed to helping our customers drive innovation through industry collaboration.”

Some senior leaders at the DNV GL’s roundtable discussions agreed that the government also has a role to play in helping Australia’s oil and gas industry to work together more effectively. “The government fines operators who don’t invest in innovation. This doesn’t encourage a long-term view on collaboration. We need the government to facilitate us working together, not force us,” said a senior safety manager for an Australian mega project.

Other contributors suggested that companies should do more to foster internal collaboration before they address the approach of cross-industry working. “The organisational set-up of the bigger oil and gas companies is extremely complex. I sometimes get the feeling that the left hand doesn’t know what the right hand is doing with some operators, and that is an issue that needs to be addressed properly if we are ever going to collaborate effectively as an entire industry,” disclosed a senior manager for an international oil company.

The drive towards greater collaboration was also highlighted in DNV GL’s report, Challenging Climates: The outlook for the oil and gas industry in 2014, in which nearly half of respondents (49%) say they will need to increase alliances with others to share knowledge in order to cope with more challenging environments.