BE Magazine - Volume 5, Issue 1 - (Page 13) the right solutions for the world’s energy needs. One of the truly exciting things that is happening right now is the influx of many of the world’s most talented young people into the world of energy. This will do more than anything else to change the nature of our business over the next decade. These people want to change the world, and they will not be content to do things in the traditional way. SAVE THE DATE! Of course, in the upstream business, there has always been a high level of intercompany collaboration in our many joint ventures. But it will be necessary to take that collaboration much further, and work with a much wider range of people and businesses. I’ve already mentioned our hydrogen energy joint venture with Rio Tinto and General Electric, and our partnership with British Sugar and DuPont on biofuels. At the moment, these are the exceptions. In the future, they will be much more the norm. And not just with big established companies either, but with entirely new energy players such as agricultural companies and biologists, venture capitalists, and young start-up companies that will provide the very diverse range of skills and knowledge we will need to bring our projects to fruition. At the same time, we will need to see increased levels of collaboration with contractors and suppliers. At BP, we want to move toward fewer, longer-term strategic relationships with our contractors and suppliers. In the past, short-term contracts have often resulted in difficult working situations and unnecessary confrontation. We all know this. By building longer-term relationships, it will be easier to align our interests. And by jointly planning work challenges in the future. To succeed in this new environment, we will have to support each other and work together in ways we have never contemplated before. I have no doubt that we will make mistakes along the way, but I also have no doubt we will succeed in the long run because the future of our industry depends on it. Volume 5, Issue 1 | BE MAGAZINE 13 © BP p.l.c. The mission of the Engineering and Construction Contracting Association is to promote thought leadership for the process, industrial, and related industries. It achieves this through its annual conferences, which are recognized by the industries it serves as the leadership forum for the future. Don’t miss its 40th annual conference to be held Sept. 3–6, 2008, at the Westin Kierland Resort in Scottsdale, Ariz. >>more over long periods, contractors and suppliers will be able to build and retain skills and increase their capacity. Closer cooperation between companies and suppliers can also help in the area of standardization. In the past, we have tended to treat every new project as a one off, and there have been good reasons for this. But we have found that by using the same basic concepts more than once, we can remove some of the complexity from the operation, as well as cutting down dramatically on design and construction man hours. And by standardizing components, we can deliver economies of scale as well as making it easier for operators to move between different locations where the systems and machinery are essentially the same. At our ACG project in the Caspian Sea, we are using standardization to deliver six large offshore platforms, pipelines, and onshore facilities in a phased development. The cost, scheduling, and productivity gains from standardization have been enormous. The Phase 1 platform delivered first oil six weeks ahead of schedule. Phase 2 was four months ahead of schedule. So the benefits of this approach are very clear to us. Of course, there will never be a onesize-fits-all approach. What we expect to see is more standardized solutions in specific basins and in particular regions. Collaborating with governments around the world is also going to be vital. Future activities will be more and more contingent on governmental requirements around energy security and climate. Cooperation between industry participants and government will be critical in creating the right regimes to ensure clean and reliable energy supplies at the right price. There is also opportunity for collaboration around technology. As an example of this, we are currently working with the U.K. government and other industry partners to establish the Energy Technologies Institute. This is a very good example of the kind of collaboration that needs to happen more, in my view. Public and private sector coming together, pooling their resources, sharing knowledge and expertise to develop new energy technology solutions that can be deployed commercially in the United Kingdom and elsewhere. Again, the scale of the challenge is too large for any company to succeed independently. If you look at the challenges we face today as an industry, they are much tougher than any we have faced before. Increasing demand, supply challenges, and concerns about energy security and climate change are factors that are transforming the landscape of our business in a way that makes it very different from the industry I joined 30 years ago. We have had many decades of business as usual. But we are in a new situation. The approaches we have taken in the past have achieved an enormous amount, but they will not be sufficient for us in the future. We have to be more flexible. We have to be more open to new ideas. We have to find new ways of working together. Our industry has an outstanding track record of delivering on the toughest challenges. We will face many more even larger http://www.ecc-conference.org/
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