Over the past few years there has been an unprecedented wave of capital spending in the exploration and production industry. Still, the expectations for improved capital efficiency from Integrated Operations and its promise of "faster and better decisions" have not materialized. Industry headlines are filled with notable examples of multi-year, multi-billion-dollar overruns. Indications show that leaders of oil and gas companies may be less satisfied with their overall performance than at any time in the industry's history.

In this paper, the main focus is on inter-organizational relationships between operators and suppliers in the context of Integrated Operations. We have surveyed one large operator, three large suppliers, and some small suppliers operating on the Norwegian Continental Shelf (NCS). The survey included a broad range of technical professionals at different management and business levels and included questions related to the collaborative relationship between operators and suppliers. The paper presents and discusses some of the results from the survey. We will discuss the disconnection between operators and suppliers related to contractual/ incentive based contracts. Further, end results with use of incentive based contracts will be illustrated and possible improvements will be discussed.

Improving collaboration between operators and suppliers offers perhaps the greatest challenge and, we believe, the greatest potential in achieving the much anticipated value creation from Integrated Operations. This paper contributes to this by identifying the key disconnects between operating companies and suppliers.

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