An oil and gas com­pa­ny saves $75 mil­lion by build­ing a man­age­ment con­trol system

An oil and gas drilling com­pa­ny* in the Unit­ed States engaged us to uncov­er why rig man­ag­er work­loads had increased dra­mat­i­cal­ly. We soon dis­cov­ered that the com­pa­ny lacked a sys­tem­at­ic MCS that enabled them to mon­i­tor remote sites ade­quate­ly and fun­nel issues through the dis­tricts in a time­ly fashion.

The Chal­lenge

The com­pa­ny had about half a dozen oper­at­ing dis­tricts with­in the coun­try. Each dis­trict Vice Pres­i­dent ran it based on what he or she val­ued and wanted.

This caused sev­er­al problems:

• The com­pa­ny essen­tial­ly had half a dozen dif­fer­ent com­pa­nies with­in it, all pulling in dif­fer­ent direc­tions try­ing to reach dif­fer­ent goals.
• Dis­tricts were not aligned or uni­fied to a sin­gle pur­pose. With each dis­trict hav­ing dif­fer­ent KPIs, the com­pa­ny was not work­ing towards the same goal.
• High­er costs to onboard employ­ees. As employ­ees shift­ed from di strict to dis­trict, they had to take in new oper­at­ing sys­tems, struc­tures and information.
• Uneven dis­tri­b­u­tion of resources. Dis­tricts that screamed the l oud­est received the most resources.
• Con­fused cus­tomers would say that dis­trict to dis­trict, “You don’t even seem like the same company.”

The Solu­tion

For four years, we went depart­ment by depart­ment, dis­trict by dis­trict to build and install a stan­dard MCS. With a con­sis­tent MCS built, we were able to improve the work and effi­cien­cy of rig-based man­age­ment and operations.

Besides build­ing a process for real-time mon­i­tor­ing, we also cre­at­ed a dig­i­tal enter­prise dash­board which allowed man­agers to get a quick overview of how the com­pa­ny was oper­at­ing. Man­agers were now able to mon­i­tor how super­in­ten­dents were man­ag­ing the rigs and if they were man­ag­ing their cost appro­pri­ate­ly. This enabled the com­pa­ny to make faster deci­sions and move much quick­er than their competitors.

The Results

The com­pa­ny was able to reduce rig-based injury risk sig­nif­i­cant­ly. Spend­ing on drilling oper­a­tions mate­ri­als and sup­plies went down by over 20%.

Over­all, the com­pa­ny saved over $75 million.

Also, 300 employ­ees were trained to be “change cham­pi­ons”. This effec­tive­ly installed a cul­ture of con­tin­u­ous improve­ment in the company.

At the end of four years, the com­pa­ny expe­ri­enced a com­plete cul­tur­al over­haul – they now have a cul­ture that is effi­cient, data-driven, and inten­tion­al­ly man­aged. This posi­tioned them to effec­tive­ly respond to the rapid­ly chang­ing nature of the oil and gas industry.

* We take client con­fi­den­tial­i­ty seri­ous­ly. While we have kept the brand anony­mous, the results are real.