Companies Largest Energy 7 Operational Excellence … · ConocoPhillips A PEX Network Interview Greg Bussing, Director of Continuous Improvement at ConocoPhillips, discusses why his

Find out more at ww w.p exnet work .com or www .ener gyop exeurope.com

Examples of

Operational Excellence

at Some of the World’s

Largest Energy

Companies

7

7 Operational

Excellence Programs

at Oil and Gas

Companies


Introduction

Oil and gas companies are no strangers to process and operational excellence. The

industry operates in some of the toughest and most politically sensitive places on earth.

Any accidents that occur have a high cost in terms of human life and the environment.

Meanwhile, the volatility of oil prices means that sky high oil prices won’t mask inefficient

operations.

That’s why oil and gas companies have always had to keep a firm eye on how they do

what they do. The CEO of Norwegian oil and gas company Statoil states that "at Statoil,

the way we deliver is as important as what we deliver.”

But with the pursuit of new energy sources such as shale gas and ultra deepwater drilling,

pursuing growth opportunities and maintaining safe operations that are both low-cost and

efficient are proving to be very challenging.

A successful Operational Excellence program can not only save companies millions in

operating costs – it can also enhance business agility, drive innovation, improve regulator

and public confidence and help attract and develop world-class talent. But achieving all of

those aims is easier said than done. So how are some of the world’s leading oil and gas

companies tackling the challenge?

This eBook compiles information about 7 operational excellence programs at oil and gas

companies and includes links to further information and materials. We hope that you find

it interesting!


Did you know?

Chevron's Tenets of Operation are based on two key principles:

"Do it safety or not at all"

"There is always time to do it right"

Read more at: http://www.chevron.com/documents/pdf/OEMS_Overview.pdf?

Fast Facts:

Number of Employees: 64,550 (2013)

Headquartered: California, USA

Oil and gas giant Chevron has been perfecting its

approach to operational excellence for over two

decades.

The main objectives of the company’s Operational

Excellence Management System (OEMS) include:

Personal Health and Safety -= "Promote a

healthy workforce and mitigate significant

workplace health risks"

Process Safety & Environment

Stewardship - "Identify and mitigate

environmental and process safety risks"

Efficiency - "Efficiently use natural

resources and assets"

Reliability - "Operate with industry-

leading asset integrity and reliability"

Safety, not surprisingly, remains the core objective

of the company’s operational excellence program

with the mantra of “Do it safely or not at all” one

of two key principles on which Chevron’s “Tenets

of Operation are based”.

The company has distilled operational excellence

into a set of easy to understand (and hence follow)

guidelines, and also holds leadership accountable

for setting the vision and demonstrating

commitment to operational excellence through

workforce engagement.

Chevron

“The Chevron Way”

http://www.chevron.com/documents/pdf/OEMS_Overview.pdf?


OpEx Fact:

Implementing best practice operating procedures,

can reduce safety incidents by up to 50% according

to Bain and Co, by helping to identify and mitigate

potential hazards.


Fast Facts:


Headquartered: Texas, USA

According to ExxonMobil’s 2013 Annual Report

“Operational Excellence begins with exceptional

employees.” Thus, the moment someone new

joins the company, they receive extensive

training in best practice procedures to ensure

that everyone understand the right way to do

the right things.

The company reports that it delivered a return

on capital employed of 17% in 2013 and cites

operational excellence as the reason that

upstream reliability performance is 3

percentage points higher at Exxon-operated

assets than it is at those operated by third

parties. Additionally, the 2013 annual report

states, energy efficiency improvements have

reduced cash operating costs at ExxonMobil

Refineries.

Read more about Exxon’s “Operations Integrity

Management Systems” here:

http://corporate.exxonmobil.com/~/media/Broc

hures/2009/OIMS_Framework_Brochure.pdf

ExxonMobil

Watch the video about ExxonMobil

and Operational Excellence > click

here

http://corporate.exxonmobil.com/~/media/Brochures/2009/OIMS_Framework_Brochure.pdf




https://www.youtube.com/watch?v=oFFVd8UosqY

https://www.youtube.com/watch?v=oFFVd8UosqY


OpEx Fact:

Operational excellence practices can improve

machine/facility uptime, increase facility capacity,

and lower maintenance and production costs.

McKinsey estimates that world class oil and gas

operators achieve a facility reliability of 95–98% and

maintenance costs that are 30% lower than the

industry average.


Creating a Center of Excellence: The ConocoPhillips

Way

Fast Facts:


Headquartered: Texas, USA

Operational Excellence is an important part of

the company’s continuous improvement

program, according to the company’s website.

The company says that the mission of the

operational excellence program is to “improve

operational performance and deliver a

sustainable competitive advantage”.

As with other oil and gas companies, safety is a

big focus for their operational excellence

program. The company’s most recent annual

report, for instance, says that in 2013,

ConocoPhillips lowered its combined total

recordable safety incident rate, which has

resulted in a 56 percent improvement over the

past six years.

Also in 2013, the company launched what it calls

the “8 Life Saving Rules,” which are meant to

reduce the risk of incidents and guide the

behavior of employees and contractors.

Read more at:

http://www.conocophillips.com/sustainable-

development/safety-health/Pages/operations-

excellence.aspx

ConocoPhillips

Greg Bussing, Director of

Continuous Improvement,

ConocoPhillips

A PEX Network Interview

Greg Bussing, Director of Continuous Improvement at ConocoPhillips, discusses why his company has gone

down the route of setting up a Centre of Excellence, offers his perspectives on the reasons why you’d want

to set one up and identifies the potential pitfalls to avoid.

To read this interview, go to http://goo.gl/bbPg2e

http://www.conocophillips.com/sustainable-development/safety-health/Pages/operations-excellence.aspx



http://goo.gl/bbPg2e


OpEx Fact:

McKinsey estimates that frontline workers at

operationally excellent oil and gas companies

spend 50-60% of their time on value-adding

activities, compared to an industry average of

half that.


The eight lines of inquiry mirror the eight defects that can be found to have contributed to industrial

accidents. It consists of a series of questions that operational leaders can use with frontline staff. They

relate to the following areas:

Routine Operations:

Layers of protection

Safety-critical equipment and instrument

The capability of people performing work

Following procedures

Non-routine operations:

Preparedness for abnormal operations

Breaking containment

Avoiding overfilling or overpressurising

vessels or containers

‘Right material, right place’

BP’s “Eight Lines of Inquiry”

Number of Employees: 83,900

Headquartered: London, UK

While the causes of the Deepwater Horizon

disaster have been endlessly discussed and

debated, since the disaster, BP’s CEO Bob Dudley

has publicly affirmed his commitment to placing

safety and operational risk management at the

heart of everything the oil giant does.

In the year following the disaster, BP set up a new

group called the Safety and Operational Risk

Organization (S&OR), which has the remit and

expertise to provide an independent assessment

of operational risks. But the company is keen to

stress that ultimate responsibility for safety lay

with the line management at platforms, refineries,

ships or chemical plants.

In a 2012 speech to the Rio Oil & Gas Conference,

Richard Morrison, Vice President - Global

Deepwater Response, explained that BP is "further

standardizing the way we identify, quantify and

review risks and execute risk action plans" right

from "the Board Room to the job site."

One example of a new approach that the company

has introduced since Deepwater Horizon is

something called “Eight Lines of Inquiry”. This

technique is a specific set of questions that BP’s

operational leaders can use when observing and

talking with frontline staff, and is based upon the

notion that there are 8 defects that contribute to

industrial accidents.

Read more about operational excellence and

safety at BP here:

http://www.bp.com/en/global/corporate/press/b

p-magazine/issue-two-2012/operational-

excellence.html

BP

Fast Facts:

http://www.bp.com/en/global/corporate/press/speeches/safety-and-operational-risk-progress-and-perspectives.html

http://www.bp.com/en/global/corporate/press/bp-magazine/issue-two-2012/operational-excellence.html




OpEx Fact:

Bain and Co. estimates that more efficient execution of

maintenance activities can lead to a reduction of

emergency and reactive work by 80% to 90% in oil and gas

companies.


Fast Facts:

Number of Employees: Approx. 23,000

Headquartered: Stavanger, Norway

In the Statoil Book, a publicly available company

handbook, CEO and President Helge Lund

writes that "at Statoil, the way we deliver is as

important as what we deliver.

The handbook goes on to outline the company’s

approach to corporate governance, its operating

model and corporate policies. As with other oil

ad gas companies, the centrality of health and

safety permeates much of the material.

One thing that does set Statoil apart, though, is

its People@Statoil process, which includes an

interesting approach the company calls

“Ambition to Action.”

Bjarte Bogsnes, VP of Performance

Management Development, Statoil writes that

“Ambition to Action has three purposes 1)

Translate strategic choices into more concrete

objectives, KPIs and actions 2) Secure flexibility

and room to act and perform and 3) Activate

our values and our people and leadership

principles”

Find out more about Statoil’s Ambition to Action

here http://goo.gl/VQfs5T

Statoil

Taking Realit y Seriously: Towards More Self

Regulating Management at Statoil

There's often a gap between what leadership says it wants and the types of behaviors that their

management processes actually encourage, writes Bjarte Bogsnes, VP of Performance Management

Development at Statoil . Here's the story of how this Norwegian oil and gas company started to close that

gap.

Read the full article here: http://goo.gl/VQfs5T

Bjarte Bogsnes, VP of

Performance Management

Development, Statoil

http://www.statoil.com/en/About/TheStatoilBook/Downloads/The%20Statoil%20book.pdf

http://goo.gl/VQfs5T

http://goo.gl/VQfs5T


Shell’s Philip Sullivan on the Evolving Role of the

Process Professional

Fast Facts:

Number of Employees: Approximately 92,000

Headquartered: The Hague, The Netherlands

Shell's 2014 strategy cites operational

excellence as one of the key differentiators for

its business in the year ahead. "Intense

competition exists for access to upstream

resources and to new downstream markets. But

we believe our technology, project-delivery

capability and operational excellence will

remain key differentiators for our businesses,"

the company states on its website.

The company has been using Lean and Six Sigma

methodologies as part of its operational

excellence program for many years, but the

focus has moved from experts doing Lean and

Six Sigma to the business to something that is

embedded within the business itself.

“I think the big shift in Shell in the last five or six

years has been enabling the business line and

building capability within those lines through

coaching skills,” explains Phillip Sullivan, Senior

Consultant - Process Leadership at Shell.

Shell

Oil giant Shell has been finding success by looking at ways of getting process improvement out of the heads of a

few subject matter experts and into the hands of everyone in the business.

“By moving away from project models only and working with the people to look at their work [...] you embed

the capabilities and the operational performance management into the way people work,” says Phillip Sullivan

Senior Consultant, Process Leadership, at Shell. “That sets people up to continually look for improvement

opportunities with the process that they're operating.”

In this interview, Sullivan offers his advice on enabling that cultural shift about the impact this shift has had on

the skills required by process professionals. To read this interview, go to http://goo.gl/hWkk5q

Philip Sullivan

Senior Consultant,

Shell Process

Leadership

http://www.shell.com/global/aboutshell/investor/strategy.html


Fast Facts:

Number of Employees: 82,300

Headquartered: Rome, Italy

Italian energy company eni says that “the

constant and systematic search for operational

excellence is a fundamental component of eni’s

culture and a key value to sustain its

competitive advantage and guarantee constant

attention to safety, health and environmental

protection.”

In a short booklet that details the company’s

approach to operational excellence the

company briefly describes what it sees as the

“culture of operational excellence” as well as

the keys to reaching it. It includes “encouraging

the dissemination of operational excellence

culture at all levels,” setting, monitoring and

“remodulating” performance targets, and the

planning and development of competency

training.

ENI

(Extracted from eni’s operational excellence policy booklet)

“eni considers innovation as a key element for operational excellence and stimulates creative

processes providing incentives for virtuous behaviours.

eni pursues the continuous improvement of processes, competencies and products as a lever to

enhance operational performance.

eni is committed to increasing the efficiency of its activities while promoting respect for health,

safety and the environment, paying constant attention to the effectiveness and reliability of the

company’s processes.”

Read the full policy here: http://goo.gl/OTtWLF

Eni’s Culture of Operational Excellence

http://www.eni.com/en_IT/attachments/governance/governance-controls/controls-internal-control-system/eni-regulatory-system/policy_operational_excellence.pdf


Delivering best in class operational performance is

no longer an option – it's a central imperative.

Taking place in London, September 23rd-25th, this year’s event provides a unique opportunity for the

industry’s operational excellence leaders to share proven best practices for operations performance

transformation, including how to:

Achieve operational excellence across the value chain to ensure capital and operational

efficiency

Improve collaboration with oilfield services to improve logistics

Create value in multi-field operations

Use operational excellence to improve refinery processes

Secure frontline engagement from the start

Make the connection between improved data management and process improvements

Use metrics as a "vital sign" of the effectiveness and the efficiency of operational improvement

efforts

Create networks of excellence and enable knowledge transfer to maximise process excellence

Enable predictable business results with improved project information control

Use high performing OE tools to assess capital investment risk

Featured speakers include:

Hear from Statoil, Shell, Centrica, GDF Suez

and more!


PEX Network is a free to join online network, with a library of multimedia resources from top

executives on BPM, Operational Excellence, Lean Six Sigma, Continuous Improvement and other

process excellence related topics. Becoming a member is easy and lets you instantly tap into insight

and information from your peers from around the world!

In addition to online resources, PEX Network organizes 30+ targeted face-to-face events globally

per year with industry specific focuses on Financial Services, Telecoms & Utilities, and Energy. We

also hold major cross industry summits on process excellence in Orlando, FL (PEX Week) and in

London, England (Process Transformation Week) every January and May.

Join 95,000 + process professionals by

becoming a member of PEX Network today!

What are you waiting for? Join your peers and

get networking!

http://www.pexnetwork.com/join

http://www.pexnetwork.com/join

Documents

Companies Largest Energy 7 Operational Excellence … · ConocoPhillips A PEX Network Interview Greg Bussing, Director of Continuous Improvement at ConocoPhillips, discusses why his