Today's operating environment faces a rising tide of stakeholder scrutiny, increased drilling and operating costs as well as rising cost of capital. Economic globalization brought us closer to the frontiers of accessing and developing new resources while the globalization of telecommunications brought our stakeholders immediate connectivity. Organizations are now being challenged to take a more critical look at how risk management, HSE performance, organizational culture, and project execution are central to sustainability performance and securing their license to grow.
Securing and maintaining a license to operate is no longer enough; it is the "new normal." Whereas the focus before was building a reputation to operate in the current block, we must now look to develop the current block with the aim of attaining preferred access to the next block. In order to secure your license to grow, you must demonstrate a track record of socially responsible and environmentally sensitive project development. Our organizational processes do not currently or consistently take this new requirement into account.
In addition to being a powerful source of market differentiation, sustainability performance can also help manage critical Non-Technical Risks (NTR). The identification and early management of NTR, such as community-related issues and sensitive environments can significantly improve current and future Net Present Value (NPV) and an asset owner's ability to access critical areas of market growth. These same NTR can account for up to 70–75% of cost and schedule failures in projects in the form of schedule delays and cost overruns, lost deal opportunities, and a host of stakeholder-related issues. In the current landscape, there is no major oil and gas company that has established itself as the leader in the arena of NTR. The opportunity is now for a leader to emerge.
In this document we explore the:
Common NTR requirements across the oil and gas industry;
Progress that is being made against management of the NTR;
Emergence of non-technical performance (NTP) metrics; and
Organizational changes that are being made to optimize NTP and to more aggressively manage project NPV.