A Sustainable Future for Offshore Projects

Io Oil & Gas Consulting is an independent entity whose recent creation came as a result of a collaboration between McDermott and GE Oil and Gas, and it is concerned with grappling with the legacy of inefficiency in the planning and execution of offshore projects. As Edward Hernández, its Vice President of Operations for the Americas puts it, “When the market was selling oil at US$80-100 per barrel, operators could work in the same old ways but at US$30- 60 a barrel companies are forced to become increasingly efficient and find new ways of working.”

The firm is greatly concerned with the way offshore projects hinder the integration of their engineering and procurement planning divisions by having departments and companies employed for different aspects of a project’s EPC work, in what he is quick to refer to as “silos”. This term refers to organizational structures of isolation that do not contemplate the way in which comprehensive communication between these divisions could result in a much more needs-based and efficient approach to sourcing and design of engineering plans. As a consequence, Hernández believes, “The owner ends up having assorted teams that are devising separate strategies around subsurface, subsea, and facilities. Engineering companies are separated from equipment providers that have experience and know what is required technologically in the design. This execution philosophy often causes delay and rework, and is more likely to arrive at a solution that is not very cost effective.”

Io Oil & Gas Consulting is also identifying trends among offshore operators that can be implemented into the integral solutions package that they offer their clients. "Companies are outsourcing operations to other businesses and maximizing value of capital. Operators are leaning toward service contracts to avoid high-capital out of pocket investments,” Hernández explains. The routes of investment in the industry are also changing in ways relevant to operators and to companies such as io Oil & Gas Consulting. “Entities are also less likely to invest in high development cost assets such as in remote area, oil shales, or places with extraordinary operating conditions without more certainty, which is exactly what io Oil & Gas Consulting is trying to bring to clients,” he points out.

Mexico represents an important segment of activity for io Oil & Gas Consulting, and Hernández is positive about its future. “Our company views Mexico as a primary focus and as the most important Latin American market at the moment.” The firm is particularly interested in the ways in which it can assist the NOC in handling its transition into this new market. Hernández specifies, “PEMEX is facing the challenge of developing fields that have complex fluids, deeper water depth, and tougher environmental regulations. Utilizing the best technology, methodologies, and industry knowledge in order to meet these challenges will be key, and io Oil & Gas Consulting can offer that.”