Perenco

Source: Energy Digital

Date :1/4/2008 4:57:27 AM

Operations Manager John Sewell tells Exec how Perenco UK is tackling the numerous challenges posed by the North Sea by driving a ‘culture of aspiration’ throughout its operations

Written by James Hurley and Produced by Glen White

The UK oil and gas sector doesn’t have it easy. While it employs almost 400,000 staff directly in the UK, and a further 100,000 in suppliers and other associated businesses, it’s also Britain’s most highly taxed sector. The North Sea is a mature oil province with declining production, yet the UK’s reliance on oil and gas is going up, not down. But as Perenco UK’s Operations Manager John Sewell tells me, the independent oil and gas exploration and production company is well placed to exploit this incongruity.

Aspirations

The company was founded by Hubert Perrodo and began life in the oil and gas industry in 1975 as a marine services provider based in Singapore. It wasn’t until the 90s that the company began to establish a worldwide portfolio of assets through a series of production acquisitions. It now has operations in twelve countries, from Venezuela to the DRC.

It moved into the UK when it took operatorship of ex-BP assets in the southern North Sea on September 17 2003. That acquisition represents a geographically complex spread of seven North Sea gas fields and, crucially, the Bacton Gas Terminal in Great Yarmouth.

“We agreed the purchase in February, meaning the date of purchase to the transfer of operatorship represented a period of just eight months, which is pretty fast,” explains Sewell. “We transferred a significant number of platforms in a very short period of time and changed the overall culture of the operation.”

Exploiting offshore supplies in a mature and highly taxed province such as the North Sea requires an efficient and resourceful approach. Perenco’s strategy involves applying a fresh approach to mature fields.

At the heart of this approach are a set of ‘cultural aspirations’ that Sewell looks to drive into the entirety of the company’s UK operations. “Perenco’s expertise is maximising efficiency in operation. We’re here to extend the life of existing fields and we do that by improving reliability and the availability of equipment and continue to challenge costs whilst maintaining high standards of HSE.”

The company’s key aspiration is to become a ‘respected operator of choice.’ Fine words, but what does that actually mean?

“People will want to come on board at Perenco because they like the culture and enjoy what we’re trying to achieve, but being a respected operator of choice also means we will attract third parties who want to come and do business with us because they like the way that we operate. I expect my people to have certain cultural aspirations that I try to embed across the whole operation,” Sewell says.

These cultural aspirations include ownership, adaptability, responsibility, accountability and innovation. John Sewell explains:

Ownership:

“Ownership is absolutely vital. That’s why if you look at the way we manage our operation we have the majority of key people as Perenco staff. I want people to care about the equipment that we’ve got. I want people to feel that they are proud that they are on the facilities that we own and they feel a part of continuing to look after those facilities.”

Responsibility:

“Another important thing is giving people responsibility. It’s not a case of micro-managing people, but making clear to people what the expectations are and then giving them the responsibility for delivery.”

Accountability:

“Responsibility comes hand in hand with accountability. If it goes wrong, it’s you I’m going to come and talk to. It’s important that people understand that you can’t have one without the other.”

Adaptability:

“I want people to challenge the way we do things, to challenge conventional thinking. Be prepared for challenge, and as a result of that, be prepared for change. I want people to feel comfortable with change – there’s an awful lot that feel naturally uncomfortable. How do we tackle this? We try and demonstrate the benefits of the change and I think we’ve been successful at doing that at Perenco with the different things that we’ve tried. Also, people feel more capable of change if they feel they’re going to own that change and will be responsible for the end result. I want to try and embed a culture where people aren’t afraid to change. We will keep driving at that aspiration. Change is a good, healthy thing that has brought a lot of benefits to this industry.”

Innovation:

“Be prepared to try different things. That can be in anything from technology, to operations, procedures or HSE, but we want people to use innovative techniques. We also try and keep strong links with people at similar levels in other organisations so we can learn from each other. A transparent relationship can be beneficial for all; yes they’re competitors, but if we can help each other it’s good for the whole industry.” For example, the company is making pioneering use of a mobile application offshore barge (MOAB) at new compression facilities at its Trent platform. “The beauty of that is that when the life of a compressor is over, we can jack the topside and move it away. It’s a big step forward in the decommissioning equation.” Perenco also has the first unmanned compression station in the UK, operated from its control room in Great Yarmouth.

Top three

In August, Perenco took over a number of producing gas fields from ExxonMobil.

As a result of that acquisition, Perenco UK is now the biggest subsidiary of Perenco Global Operations and is a top three operator in the southern North Sea alongside Shell and Conoco Phillips. With the benefit of an expanded portfolio, Perenco expects to be able to improve operational and economic efficiency which will lead to an extension of the productive life and reserves of some of the fields involved.

“We took them over on August 1 this year. The purchase agreement was signed in April. Again, we transferred a significant number of assets in a very short space of time.” How does the company achieve such swift asset transfers, something that can be notoriously problematic thanks to a strict legislative environment?

“The key to that is having a robust transfer of operatorship process,” Sewell says. “We identify the critical things that need to be transferred and have people responsible for doing so. The other key thing is that people in the team doing that are the same people who are going to remain with the asset, not those who are going to get rid of it. This means they have a vested interest in ensuring the transfer of knowledge and data is robust.” It’s a neat example of one of Sewell’s ‘aspirations’ producing a positive and tangible impact.

The company takes a similarly clear headed and innovative approach to tackling a challenge familiar to all North Sea operators; de-commissioning. “I like to think in re-commissioning rather than de-commissioning terms. Although we recognise that there’s an inevitability about de-commissioning we try and find something to do with the existing equipment prior to de-commissioning, from re-injection projects to CO2 sequestration.”

People investment

With the oil price riding high at between $90 and $100, retention is another issue that affects a number of operators in the North Sea. “The whole industry is very busy and there are a lot of projects that are attracting resources. That means it’s difficult to recruit people in the first place but also a challenge to keep them. This is a continuous challenge but we’ve done better in the last twelve months than we had done previously. Hopefully that’s because people want to work for us. But we can’t compete with the salaries that are offered abroad.” What the company can offer, however, is an aspirational culture. “As a company, we show passion, energy and enthusiasm – do they want to be a part of that?”

The company is a major employer in Great Yarmouth and it places a significant focus on Investment in People.

“Working with Kvaerner, we’ve put an apprenticeship program in place to secure three or four apprentices in different trades every year since 2004. I want to get young people into this industry. There is more attention to this across the industry in general now because of the recruitment challenges of finding people with the right skills.” For two years, working with Bath and Loughborough universities, the company has also brought in two graduate engineers annually, a figure which will rise to three next year.

“We invest an awful lot in training. We need to make sure people can work with the equipment we’ve got and also to ensure that we maintain a safe operation. In the last two years, we’ve spent £500,000 purely on the provision of training of our own and contract staff.” Sewell is also on the board for the Skills for Energy partnership, and is passionate about driving a recruitment, retention and training culture throughout his UK operation.

This benefits the local economy, and as Sewell explains, even the renewable industry. “We’re extending the life of the fields which is extending the support infrastructure that comes from Great Yarmouth. We’re also supporting technology skills for future renewables. The eastern region is a hub for renewable energies from wind, biomass to nuclear with the potential of gas storage and sequestration all within the Eastern region. The people that we’ve got have the skills to transfer into any of those industries at a later date.”

Despite a tax regime that is not conducive to investment - there’s a marginal tax rate on the oldest fields of 75 percent – and a rising oil to gas price differential that puts pressure on a gas focused player such as Perenco, the company has positioned itself to exploit the opportunities of a maturing province. “We want to continue to expand in the UK, through both organic growth from drilling and from acquisitions. Hopefully it will be a mixture of both in 2008.”