Cutting costs: Why we’re all in it together
Whenever times get tough in the oil and gas industry it’s the big boys that take the blame but, more often than not, it’s the smaller firms, further down the supply chain, that are tasked with finding new and better ways of working.
Today, everyone is talking about cutting costs - 20% currently seems to be the magic number. In practice, this conversation involves some large offshore contractors turning to their suppliers and demanding solutions for efficiencies now.
Since tight job specifications often don’t allow room to seek more cost-effective solutions, the smaller players are typically left absorbing costs and waving off much of their profits. They do so in good faith; hoping that today’s sacrifices will lead to future gains - but once the market stabilises things go back to where they were and, ultimately, no one really wins.
Even though we’re one of the underdogs in this picture – tiny compared to the size of many of our clients – we are grown up enough to sit down with the major companies and engage in meaningful dialogue that benefits all parties.
We then support clients’ cost-reduction efforts by looking at their objectives and working together to jointly change the way things are done in order to achieve greater efficiencies.
Faced with the latest cost-cutting challenge laid down by the operators, we resolved to enter into a partnership with another like-minded firm, Magma Global, to develop an innovative solution which will help reduce costs of well intervention and extend field life.
A high-strength composite pipe product, m-pipe, has been designed by high performance pipeline manufacturer Magma to address ongoing challenges faced by oil and gas operators, including the need to maximise production from existing fields through more effective light well intervention.
Our role in this expert partnership was to engineer a cost-effective and safe solution to optimise the use of the m-pipe®. To this end, we are delivering a complete back-deck package for the deployment and retrieval of m-pipe, including a bespoke compact vertical lay system (CVLS) with a built-in reel, to keep deployment vessel size down and minimise back-deck footprint.
Such is our belief in the innovation’s potential to increase safety, reliability and viability of intervention operations that we promote the m-pipe product as part of our company’s own presentations.
Over the past few months we’ve been invited by clients to share our proposal on cutting costs and how our technology can enhance their operations. We’ve reviewed previous jobs, looking at the processes and procedures, equipment components, as well as equipment utilisation post-delivery.
In each case we were able to identify significant cost reduction – provided the client was prepared to work with us on achieving these targets.
In our experience there’s a growing realisation of the important role played by the smaller firms in keeping costs down across the sector. The answer can no longer be to simply turn to the typical downturn tactic of squeezing the supply chain; instead, we need to strengthen the relationship between operators and suppliers and find ways to standardise procedures.
For too long, inefficient projects and spiralling budgets have been commonplace across the industry. One example we found recently was the large number of man hours and money being spent on re-certifying repeat procedures – costs that could have easily been avoided, helping reduce the overall cost of the project.
In our view, the solution to prevent these oversights from coming up time and again is greater involvement in the design of the equipment from all partners.
To put a reeler and tensioner together in a concise package for Magma’s m-pipe product posed several challenges, and the final design was the consequence of constructive communication between us, Magma and the end users to find the ideal solution for this unique product.
All of this demanded a significant time commitment from all parties, including repeated travel to Houston and Portsmouth by the Maritime Developments team, in order to perfect the design and fine-tune the solution to optimise the m-pipe as well as best satisfy customer requirements.
As a result, the integrated reeler and tensioner system can operate and store the pipe on a minimal footprint. And because of the light weight pipe, and therefore the low tension required to operate it, the structural design of the solution is much simpler than that designed for non-bonded and steel pipes.
The success of our approach with Magma, which has recently led to the details being finalised for the first reeler to go into production, will hopefully act as the catalyst for others to adopt a similarly collaborative approach.
Whether it’s the fall in the oil price that has made people more open to change, or we’ve simply been lucky enough to meet some like-minded innovators, it’s clear to us that there’s an appetite for greater collaboration in the industry at large.
And, speaking from experience, a joined-up approach to reducing costs can bring double the returns.
Mike Gaskin, commercial director
- Out with SWL - in with MOLLDecember 2018
- Let's start at the Front EndNovember 2018
- MDL debuts in first mid-stream California projectOctober 2018
- Mexico: bridging the gap to faster recoverySeptember 2018
- MDL delivers first LiveWire spreadAugust 2018
- MDL returns to Norway with TechnipFMCJune 2018
- Double Bibby win for MDLJune 2018
- Halving the headache with a simple approachMay 2018
- MDL awarded California pipelay jobMay 2018
- MDL wins Mediterranean umbilical installationMay 2018
- Three lessons about changeApril 2018
- Delmar and MDL join forces to launch LiveWireApril 2018
- Leading the way in subsea innovationMarch 2018
- Disposing of hidden costsMarch 2018
- RDS completes first GoM mission for Subsea 7February 2018
- Hitting the 150Te markJanuary 2018
- Maritime Developments Year in Review: 2017January 2018
- MDL sets up equipment base in GoM with DelmarDecember 2017
- MDL maximises focus in the AmericasDecember 2017
- A helping hand across the SeaNovember 2017
- Instinct, MaturedOctober 2017
- Oceaneering adds MDL 800Te RDS to global fleetOctober 2017
- Safe as MDLAugust 2017
- Calculated MovesMay 2017
- 24/7 AmbassadorsApril 2017
- MDL Spread concludes Trinidad jobApril 2017
- Turning the frown upside down at ExpoFebruary 2017
- MDL converts Expo leads to RNLI cashFebruary 2017
- Contract award brings MDL tensioner to APACJanuary 2017
- Maritime Developments Year in Review: 2016January 2017
- Winding up the new-buildsDecember 2016
- 800 Tonnes of InnovationDecember 2016
- MDL goes east with new appointmentNovember 2016
- A different cup of teaOctober 2016
- Early project makes a comeback with USA deliveryOctober 2016
- New system redefines global tensioner marketSeptember 2016
- MDL Spread hits anniversary milestoneSeptember 2016
- Latest rental RDS completes first missionJuly 2016
- Asking the right questionsJune 2016
- MDL launches innovative well intervention systemMay 2016
- Portable spread creates new opportunitiesMarch 2016
- An ex-Captain’s perspectiveFebruary 2016
- MDL opens door in AmericaFebruary 2016
- Subsea Expo 2016: Inspiring smart conversationsFebruary 2016
- That's one New Year's resolution worth sticking toJanuary 2016
- Subsea Expo 2016: MDL powers up flex-lay costs reductionJanuary 2016
- Maritime Developments Year in Review: 2015December 2015
- Mission accomplished for MDL PVLSNovember 2015
- Maritime Rentals fleet continues to growOctober 2015
- Maritime Developments' first PVLS sets sailSeptember 2015
- Selling value: The toughest challenge with supply chainSeptember 2015
- Let their hair down: Investment that pays backJuly 2015
- Maritime Developments raises £1,400 for Marie Curie Cancer CareJuly 2015
- Cutting costs: Why we’re all in it togetherJune 2015
- Looking hot this summerJune 2015
- Innovation: Speaking the same languageMay 2015
- Final winch order ready for early pickupMay 2015
- Latest reel drive system steals the spotlightApril 2015
- The Budget: A step in the right directionMarch 2015
- Maritime Developments seals 15th anniversary with first VLS orderFebruary 2015
- Smart thinking at Subsea Expo: It all figuresFebruary 2015
- Bespoke tensioner boosts Maritime Developments’ rental fleetJanuary 2015
- Maritime Developments targets well intervention market with joint ventureJanuary 2015
- Third winch package tips electrical delivery over £12millionJanuary 2015
- Maritime Developments Year in Review: 2014January 2015
- MDL celebrates 15th Christmas with magical fundraiserDecember 2014
- MDL extends competitive edge with electrical pushNovember 2014
- Key appointment boosts Maritime
Developments’ electrical divisionNovember 2014
- Maritime Developments celebrates 15 years in businessOctober 2014
- Maritime Developments marks RDS success with Aker deliverySeptember 2014
- Major winch delivery ahead of scheduleSeptember 2014
- £1,000 raised for RNLI at Maritime Developments’ eventSeptember 2014
- Patent protection secured for Maritime Developments’ tensionerSeptember 2014
- Maritime Developments celebrates 15th anniversary with workshop hog roastSeptember 2014
- Subsea Expo winners’ pit stop at British Grand PrixSeptember 2014
- Maritime Developments at Subsea Expo 2014April 2014
- Lochnagar fundraiser for Paul Lawrie FoundationApril 2014
- West African contract success as further growth targetedApril 2014
- Largest contract to date for MDLApril 2014
- Maritime Developments launches equipment hire serviceMarch 2014
- Bright future for subsea specialistMarch 2014
- ‘Next Generation’ Tensioner designMarch 2013
- Increased capacity at Aberdeen and PeterheadMarch 2013
- Paul Lawrie swings by MDL stand at Subsea 2013February 2013
- Maritime Developments appoints Operations DirectorSeptember 2012
- Maritime Developments appoints Commercial DirectorJune 2012
- Maritime Developments continued expansionMay 2012
- Fast-track US contract delivered on timeApril 2012
- £1.7m contract from international subsea businessApril 2012
- Maritime Developments exhibits at Subsea 2012 in AberdeenFebruary 2012