OGA formalises relationship with operators on supply chain matters
As of January 2018, the Oil and Gas Authority (OGA) is introducing new measures to ensure operators work appropriately with the supply chain and derive maximum value from project activity.
Supply Chain Action Plans (SCAPs) will be initiated whereby operators will be required to develop effective action plans in respect of all new projects including decommissioning activities.
New guidance, entitled ‘Supply Chain Action Plan Guidance’, is now available to help operators to structure and submit their plans.
The purpose of SCAPs is to assist operators in demonstrating their contract strategies and concepts are comprehensive and well-positioned to deliver ‘best value’ in accordance with their Field Development Plan (FDP) or Decommissioning Programme (DP).
The concept of SCAPs was established some years ago in other sectors and proved successful in driving enhanced value and collaborative behaviours into new projects.
Revitalising exploration and maximising economy recovery of the UKCS is dependent on having a competitive and competent supply chain, which can operate efficiently and innovatively to deliver the services and technologies required to unlock the full potential of the basin.
Bill Cattanach, Head of Supply Chain at the OGA said: “Supply Chain Action Plans provide a golden opportunity to drive behavioural change and promote a culture of active engagement between operators and the service sector, where it is accepted many of the solutions to enable MER UK exist.”
The SCAPs have been structured for the offshore environment and the process has been piloted by three companies, based on real projects. The pilots highlighted that early collaboration with the supply chain can significantly reduce costs through process efficiencies, reduced administration and by utilising alternative methods.
The OGA will welcome SCAP submissions from January 2018 and expects that they will be included in all FDPs and DPs from 1 April 2018. At the end of the first year, feedback will be sought from industry and the process refined as necessary.
Workshops are being held in early 2018 to ensure a wide understanding of the structure and expectations for these plans.
Notes to editors:
- SCAP Guidance can be viewed here.
- SCAPs are part of the Wood Review Implementation work, and one of the last work projects to be completed to fulfil the Wood Report recommendations.
- The idea was sponsored for development in the Oil and Gas sector by the Supply Chain and Exports Taskforce, and a small working group comprising operators, service sector companies and others, who have helped produce SCAPs to fit the needs of the industry.
- The OGA’s report on ‘Lessons Learned from UKCS Oil and Gas projects 2011-16’ confirms that best value is derived where the relationship between the operator and service companies is mutually advantageous, based on trust, with both parties having a common goal to deliver top quartile performance.
- The pilot plans were carried out by Chevron, Repsol and Premier Oil.
- The first workshop is being held in the East of England, with others being scheduled for the early part of next year. All operators with 2018 projects will be invited to attend. Engagement with first tier contractors is being organised also.
- Early discussion on SCAP is key to success, and plans will be developed as an ongoing process in parallel with the FDP or DP. There will be a formal assessment process together with a transparent mechanism to deal with any plans not developed to an acceptable level. The response and quality of the PILOT plans suggests this will be a positive process with the potential to drive a renewed culture of “value adding” into contracting strategies leading to a win-win situation for all parties.
For more information, please contact Tracey Miller, Communications Manager:
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