The operating model had changed. The commercial model had not.
Cost Transformation
The problem
An offshore FPSO operation was carrying a cost base that no longer suited a declining field.
Technical teams at the end client, the contractor and the operator were all reviewing the same issues. Each team was diligent; together they duplicated effort and slowed every decision.
The approach
The commercial and delivery model was redesigned around joint technical teams, drawing on the strongest capability in each organisation. A detailed review of contractor costs also found recurring charges claimed outside contractual entitlement.
The outcome
Annual operating costs fell by £15m. The lower cost base extended the asset’s operating life, protecting hundreds of millions of pounds of future revenue.