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Consult Before Swinging the Axe

We’ve faced downturns many times before but the rapid spread of COVID-19, the resulting restrictions on working offshore and drastic fall in oil price and has meant that the UKCS has never before faced challenges like this. Most would agree responding to this crisis in a meaningful way should be the responsibility of everyone in our sector, all of us striving to quickly find new ways of working that will limit damage to the industry, ensure safe operations and preserve our assets and industry. But is that what happened during previous downturns? Not entirely. It would be churlish not to recognise that each time there was a lot of positive change but it’s doubtless a lot of opportunities were missed in the scramble to stay in business. Yes, the industry learns each time, but it also bears the scars and each time the basin declines that bit faster.

With a crash this bad the need to cut cost and cut fast is very real for many operators. However, how cost is cut can be the difference between creating innovation and despair. In recent weeks I’ve been fortunate to be having conversations with clients about how we can respond creatively to take cost out of the system quickly and sustainably. Not everyone is in that position and once again blanket cuts are being imposed on many suppliers giving little room to manoeuvre and often stifling the opportunity to adapt. It seems there are two opposite conversations with supply chain going on here, “how can you adapt quickly to help us weather the storm” and “do what you do but do it cheaper”.

The latter of these responses not only undermines trust, but it closes down the conversation and accepts damage to the industry. The supply chain can react to this crisis but to do so the opportunity to think of new ways of working needs to at least be offered. Many UK suppliers have proven their ability to innovate and have significant talent and capability that given the chance can quickly pivot to address the current situation. Intuitively we all know this, and many of us could point to successful, collaborative client/supplier relationships but when contracts departments feeling the pressure intervene with the bluntest tools in their box there’s little thought of getting everyone to bring their best ideas to the table.

We need to work together to avoid broad brush cuts and coordinated activities need to begin immediately and be conducted at a pace. These could include rapid deployment of new and emerging technology, the modification of existing technology and practices or even fast development of completely new minimum viable products. Many new technologies are already in existences that have the potential to be of significant benefit and are readily deployable, but operators may simply may not yet know of them. The UK supply chain has shown consistently that it can innovate, we need to harness this ability quickly to ensure that long term damage to our industry is minimised. If the conversations are closed down, we lose the opportunity to do so. Conversely if there is at least some consultation to allow time for a constructive response before cuts are imposed we immediately increase the number of people trying to find the best possible solution.