When an industry leader bluntly admits the oil business has been lazy, he isn’t pulling any punches.

Samir Brikho, chief executive of Amec Foster Wheeler, knows his stuff. I was lucky enough to spend time working with him when he was chairman of Offshore Europe in Scotland some years ago. So when he told his audience during the Offshore Technology Conferece (OTC) in Houston that the industry has been lax in increasing levels of collaboration and standardization, they listened.

Brikho said, “Within the oil and gas industry we have been relatively lazy. We have been speaking about collaboration for some time, but when operators have been talking about it, it all sounds okay until they place their order. It is the same the other way with the contractors too.”

The reasons for better collaboration and standardization are compelling. Brikho pointed out that with $500 billion in capex to be spent this year on about 800 projects to extract 60 Bboe, up to $150 billion of that may well be delayed.

“When the oil price was around $10/bbl, operators were making a 10% margin. But when it was $100/bbl they were still only making a 10% margin,” he said. This, combined with the industry’s poor performance on delivering major projects on time and budget, illustrates the necessity to further collaborate.

On standardization, he pointed out that thousands of offshore platforms were virtually all different despite essentially doing similar jobs. Brikho urged everyone to embrace a higher degree of standardization. “We don’t need to reinvent the wheel every time,” he said. “When someone goes to buy a Mercedes car, they do not say ‘I want a 522 or a 523.’ The dealer says, ‘You pick a 500 or a 600, and that’s it!’ That is what we need to do more of in this industry.”

His comments were reinforced by Ian Cummings, vice president of engineering at BP’s Global Project Organization. Speaking on an OTC panel, he highlighted the drive to simplify and standardize specifications. BP estimated it was spending $10 million to $15 million per major project on recreating procurement specifications. In one case the operator had two separate but similar projects ordering the same equipment, with one project team issuing a 1,200-page specifications document and the other an 800-page document. Both were also largely different in terms of their specifications despite the similar kit required.

But it appears the industry is responding. Cummings pointed out that BP “has worked hard” to change that process, with the benefits of standardizing more of its specifications now apparent with reduced schedules and costs.

Specifications were touched upon by Thierry Pilenko, Technip’s CEO, when I talked with him about their 50/50 Forsys Subsea joint venture with FMC Technologies. Pilenko told me he saw “a real opportunity” for operators to look at clusters of projects being considered for development globally and prepare better standardized solutions.

An example of this came from Shell’s Ian Silk, vice president of deepwater projects, who pointed out that standardizing subsea tree designs had helped it shrink global delivery times by up to 12 months.

Looks to me like this industry is now losing the “lazy” tag.

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