Well construction and maintenance partnerships have come of age for the Operator, based on their success in the North Sea environment. This paper examines those critical success factors and provides an overview of how the Operator moved from the back to the front of benchmark performance tables through the application of partnering.

The well construction partnerships typically include the Operators well engineering group, the drilling contractor, the Deviation Drilling and MWD contractor, the well testing contractor, the data acquisition contractor and the cementing contractor.

The Operator currently has three partnerships in place. All of these are driven by a commercial engine that rewards 'best in class' performance through an independently benchmarked process as well as providing 'continuous performance-contingent' contracts that removes termination clauses and regular tendering and puts the power for contract continuity in the hands of the partnership. This commercial environment has provided an incentive for all the partners to make long term investments in the partnership.

It is considered that true alignment of goals has been achieved with a win/win strategy being applied at the wellsite as well as at managerial and organisational levels.

The role of other critical success factors such as; leadership, core strategies and rules, integrated team-working, specialised partnering training, an organisation designed to focus on performance and rewards systems are examined.

This paper provides a comprehensive review of the key factors leading to significant performance improvement for the Operator and provides a generic checklist for well construction partnering / alliance efforts elsewhere.

Partnering - The Operator's Perception
The background.

Nederlandse Aardolie Maatschappij (NAM) is the Shell Group Operating Company in the Netherlands. Employing around 3000 staff, NAM produces around 175M m gas per day and around 40,000 bbl per day oil and condensate from hundreds of offshore and onshore installations. NAM is Europe's largest producer of gas.

The Golden Opportunity (GO) project was initiated by NAM's Well Engineering (drilling, well maintenance and repair) business, as a response to their 1992's performance data which showed a major improvement opportunity available in NAM's rig operations.

Initially it was thought that a strict follow-up of poor contractor performance was the key to success, with a focus on attempting to recover costs for consequential damages.

When benchmarking consultants assessed NAM negatively on aspects of contractor relations in early 1993, it was realised that significant changes were necessary. Close inspection revealed that NAM's well construction business had a practically unworkable structure of contracts and that the type of relationships that NAM had with their contractors did not foster superior performance.

It was decided to implement a partnering approach to the business in order to deliver a significant performance improvement.

NAM's initial partnering strategy consisted of four actions;

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    splitting NAM's rig-related work portfolio into two partnerships; one for offshore work and one for onshore work.

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    reducing the number of key contractors in each partnership to 3 - 5, so that they would be able to work together as 'well construction teams'.

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    sending everyone directly involved to partnering skills training - to define and then to work towards common objectives.

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