The Why and How of O&G Competitor Collaboration
Last month JWN and Grant Thornton published a report on service and supply companies within the O&G industry. 372 leading companies providing services to oil and gas production businesses were surveyed, and the report highlights that many of these firms are capitalising on cooperating with each other. This is the case even when they are in direct competition, which is an increasing trend at the moment.
The report states that working together with other companies in the field was the second most common solution to employ when surviving a downturn – right after internal collaboration between departments. Such an approach can help suppliers to better understand their customers’ needs and provide services that meet these requirements more precisely. Eventually, it aims to bridge the gap between demand and supply.
Alongside the report, the two companies ran workshops in Edmonton and Calgary, where they received additional commentary from attending service companies. According to Robert Finnigan, Southern Alberta Leader for Grant Thornton, service providers should individually concentrate on areas that they have clear expertise in and consider to be their strengths, and cooperate with other suppliers on the processes that are weaker. To aid companies attempting to capitalise on this technique, Geoffrey Cann, partner with Deloitte, has responded by combining a list of factors that make the adoption to the method easier. Dashboard has highlighted three of its favourites from this list, which we believe are the most advantageous.
Firstly, aligning around a common need will strengthen the work the partners put into achieving their goal. This can be anything from cost concerns, carbon pressures or challenges in terms of production. Secondly, compatible corporate values form a strong basis for cooperation and simplify decision making. Finally, transparency is key to securing all partners are on the same page. As there are yet to be industry wide standards for everything, e.g. data, openness about own operations is vital.
At Dashboard, we know how important it is to our partners to stay on top of current trends within leading companies. We see collaboration as an essential part of business conduct in O&G and have engaged in it with a number of firms in the industry. Cann’s view is certainly useful in regard to maintaining a good working relationship, which is the future for most, if not all O&G companies.