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QatarEnergy, the integrated state owned petroleum company of Qatar, is the custodian of Qatar’s oil and gas reserves, both onshore and offshore. Its principal activities include exploration, production, sale of crude oil, natural gas and gas liquids, refined products, synthetic fuels, petrochemicals, fuel additives and liquefied natural gas (LNG).
As of 2020 QatarEnergy was the third largest oil company in the world by oil and gas reserves and revenues from oil and natural gas combined amounted to over 60% of the country’s GDP.
The State of Qatar is an 11,586 sq. km peninsula bordering the Persian Gulf and Saudi Arabia, with a population just below 2.75 million. The country has the world’s highest per capita income level, and enviable levels of state spending on public entitlements.
Vast crude oil and natural gas reserves (of 25.24 billion bbl and 24.07 trillion cu m respectively as of 1st January 2018) are its main revenue source, making the country highly vulnerable to global oil market fluctuations. This became evident during the exceptional volatility in crude oil prices between the peaks of 2011 to 2013, and the sharp fall in 2015.
Nationally, the Qatari government – in common with countries across the Middle East – was faced with an urgent need for fiscal tightening to reduce the budget deficit (not a simple matter given Qatar’s obligation to deliver the 2022 World Cup).
The result was widespread redundancies in central government, public administrations and state-owned enterprises including QatarEnergy.
Appreciating that the years of double-digit economic growth may be over, the Qatari government aims to reduce economic reliance on oil and natural gas. It has significantly diversified into non-oil sectors (notably manufacturing, construction, financial services, tourism and leisure) which now account for just over half of GDP.
Fulcrium’s upstream oil and gas benchmarking training engagement arose directly from these volatile market conditions. For the first time in generations, QatarEnergy was experiencing austerity. By deploying international strategic consultancy firms, it had cut overheads and headcount (30% of upstream staff including senior management) and made a number of process efficiencies. In common with the other top international petroleum companies, it had continued to purchase consortium-provider template benchmarking reports, but it was increasingly obvious that these did not provide the means to translate data into measurable value.
Invitations were issued to a number of international strategy consultancies, to consortium benchmarking providers, to oil and gas industry specialist training course providers, – and to Fulcrium.
It was clear from the start of the process that the highly sophisticated and astute senior team at QatarEnergy were looking for an entirely new approach. They had moved well beyond needing incremental improvements in efficiency and cost reduction. And they certainly did not want training to be an end in itself. They had already established an Upstream Benchmarking Centre of Excellence, but wanted to ensure that this translated to identifying value.
They therefore wanted a methodology that would equip their own staff and the staff of their joint venture partners to build benchmarking excellence into every aspect of the business. They explicitly wanted to acquire – and subsequently implement – the levers that would drive exceptional value and create value excellence.
Following the awarding of the engagement, Fulcrium spent four weeks developing a customised training programme.
The requirements were for an in-depth, granular course for one hundred delegates from QatarEnergy; and for higher-level methodology insights for one hundred delegates from joint venture partners QatarGas, ExxonMobil, Shell, BP, Chevron, Total, GE Oil & Gas, and ConocoPhillips. This was delivered over four days in Doha.
Delegates were from many ethnicities and both genders, and were drawn from across the businesses including: drilling and completions, reservoirs and wells, maintenance and reliability, subsea losses, geology/seismic, projects and engineering, operations, logistics, assets, finance, legal, HSSE, and Technology.
Although its primary focus was on Upstream Benchmarking, the programme also drew in other aspects of Fulcrium’s total benchmarking services, including Performance Benchmarking for Value Excellence.
QatarEnergy delegates were amongst the most enthusiastic, bright and professional people to whom Fulcrium has ever delivered training. The company overall was immensely impressive and progressive, clearly committed to radical improvements in its culture and performance to fully equip it for the 21st Century. It certainly lives up to its reputation as the “jewel of Qatar”.
Since the programme was delivered the company has developed its own benchmarking methodologies, and QatarEnergy is more than happy with what the training course empowered:
Fulcrium’s training achieved all its objectives. First and foremost, we wanted to learn the best upstream benchmarking methodology in the world. We are committed to our human capital and wanted comprehensive benchmarking up skilling for our in-house and joint venture partners’ staff.
Through the training course, delegates were able to identify, evaluate and select the most appropriate data sources for benchmarking, and then create a performance framework on which to base our own upstream benchmarking capabilities.
Fulcrium gave us totally independent principles from its own external perspective, untainted by vested interests – exactly what we wanted. We don’t just talk about or pay lip service to value excellence: it is intrinsic to everything we are and what we aim to be. If we are to achieve our vision of becoming “one of the best national oil companies in the world, with roots in Qatar and a strong international presence,” it will be because we partner with exceptional companies like Fulcrium.
If you want expert customised benchmarking skills training that leads to breakthrough performance improvements and value excellence, contact us today.
He was Chairman of BG Group PLC, from May 2012 until its sale to Royal Dutch Shell in February 2016.
Prior to this, Mr. Gould was Chairman of Schlumberger from August 2011 until April 2012 and Chairman and Chief Executive Officer of Schlumberger Limited from February 2003 to July 2011. In previous assignments he was President and Chief Operating Officer, Schlumberger Limited, Executive Vice President Oilfield Services, President of Schlumberger Wireline and Testing, and President of Sedco Forex. He previously held a series of positions in finance and management in Asia, Europe and the United States.
Mr. Gould was a member of the Board of Directors of BG Group PLC from June 2011 to 2016 and Schlumberger Limited from 2002 to 2012. He sat on the Boards of Rio Tinto PLC and Rio Tinto Limited until May 2012 where he was Senior Independent Director and Chairman of the remuneration committee.
He served on the United Kingdom Prime Minister’s Council for Science and Technology from 2004 to 2007. He was Vice Chairman Technology for the United States National Petroleum Councils’ 2007 report “Facing the Hard Truths about Energy”.
Gould joined Schlumberger in 1975 in Paris, after working for Ernst & Young. He received his degree in economic history from the University of Wales at Cardiff and qualified as a Chartered Accountant. He holds an honorary Doctorate in Engineering from the Colorado School of Mines and is an honorary Fellow of Cardiff University.
Julio Dal Poz – Upstream Senior Strategy Advisor at Equinor – Statoil talks to Fulcrium, explaining how benchmarking is used to make Equinor – Statoil a leader in the upstream oil & gas industry.
Giorgio Delpiano, Senior Vice President, Shell B2B business for Western Europe is accountable within the Integrated Fuels Value Chain for the Sales, Marketing and Operations activities of >200,000 B2B customers (from crude to customer) with a yearly turnover greater than $10bn and a team of 250 staff.
During his career at Shell, Giorgio has built a formidable track record in strategy development and delivery with a strong focus on customers and sales: four consecutive years of double digit growth in the most mature B2B environment in the world.
Not all customers have the same value to an organisation. Some customers spend big and some spend small. As such, benchmarking to understand how much value is required per customer segment is vital to developing a customer experience strategy that makes sense.
Giorgio talks to Fulcrium about how frontline observation is critical for strategy formulation in Shell and why senior leaders need to roll-up their sleeves and experience how it feels to work on the frontline with employees and customers during the Baselining stage of benchmarking.
BP Vice President – Group Strategy, Dr Dominic Emery talks to Fulcrium about benchmarking-driven performance improvements in:
Paul Beijer – Vice President Strategy, Planning & Assurance at Shell talks to Fulcrium, explaining how Oil & Gas benchmarking is used to make Shell a leader in the industry.
Dere Ogbe – Head of Competitive Intelligence at Shell talks to Fulcrium, explaining how benchmarking is used in a “purpose-driven” way to compare performance in the oil & gas industry.
Ann-Christin Andersen – Director, TechnipFMC talks to Fulcrium about how collaboration between operators and service companies can achieve 30% supply chain savings.
Covers Pricing, Standardisation, Technology Innovation and Operating Model adjustments in response to an ultra-low oil price environment.
For their part, US light tight oil (LTO) producers saw striking cost reductions of 30% in 2015 and 22% in 2016. This gives a clear indication that many are capable of positioning themselves to raise production in a lower price environment.
“We are witnessing the start of a second wave of US supply growth, and its size will depend on where prices go,” said Dr Fatih Birol, the IEA’s Executive Director. “But this is no time for complacency. We don’t see a peak in oil demand any time soon. And unless investments globally rebound sharply, a new period of price volatility looms on the horizon.”
The largest contribution to new supplies will come from the United States. The IEA expects US light tight oil (LTO) production to make a strong comeback and grow by 1.4 mb/d by 2022 if prices remain around USD 60/bbl. Expectations for US LTO are higher than last year’s forecast thanks to impressive productivity gains.
In the next few years, oil supply is growing in the United States, Canada, Brazil and elsewhere but this growth could stall by 2020 if the record two-year investment slump of 2015 and 2016 is not reversed. While investments in the US shale play are picking up strongly, early indications of global spending for 2017 are not encouraging.
Global oil and gas upstream investment fell by 25% in 2015 and by another 26% in 2016, affecting the major oil companies and smaller independents alike. In 2017 there are modest signs of recovery led by higher investment in the US light tight oil region. Alongside falling prices, costs have dropped significantly: we estimate that global upstream costs declined by 15% in 2015 and 17% in 2016.
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