In many areas of the global energy industry, oil companies have been "right-sized" to cope with a new business environment. Work still needs to be done; however, companies no longer can justify the economics of doing everything with internal employees. In the absence of in-house employees, some of a company's needs must be outsourced. Additionally, outsourcing often allows certain activities or specialties to reach economies of scale by reducing overhead, combining overhead, or fully utilizing skilled resources. Outsourcing takes several forms, some of which are better suited to a company's specific needs. Companies also find a need exists for outside help earlier in the upstream business cycle, which may involve external input even in a company's strategic development processes.
Intersecting this competitive industry environment is the national oil company (NOC), charged with improving a country's economic base through resource growth, and providing employment for a nation's emerging workforce. Historically, the model used by the NOC has been the multinational oil company (MNC), which has seen the most changes in structure over the last decade in response to the aforementioned commercial requirements of the energy industry. Growing large, fully integrated NOCs reminiscent of the MNC industry of the 1980s may not be a long-term solution for dealing with the global commercial environment of the next century.
This paper describes how companies can cope with an often intermittent need for resources and provides some guidance to growing NOCs for determining future human resource development and forming resource partnerships. MNCs have recently turned to effective project management concepts and are now learning to utilize a number of best-fit resource alternatives to ensure that all technical processes are executed while commercial goals are being met.
Effective utilization of all available resources is an important aspect of successful project management. In simplistic terms, there are two broad classes of resources: inside and outside. Companies directly hire (or own) inside resources. Companies also have indirect relationships with outside resources. Outside resources might include partners, contractors, and vendors. The desired effect of utilizing all available resources is to reach optimum project production at the least cost in the desired time frame. This means companies must learn to appropriately manage not only the timing or schedule of a project but must also understand the quality level required for each output component. Clear judgment of all available resources is critical to achieving these optimum relationships.
Multinational oil companies (MNCs) have been reducing staff or right sizing for a number of years, attempting to find optimal internal and external resource balance to accomplish their financial goals. National oil companies (NOCs) are faced with a different problem: attempting to improve personnel capability while increasing local reserve assets. The current state of the industry offers the NOC an increasing number of resource alternatives. Effective planning for growth and development while utilizing these available sources for the highest and best use may be the best direction for the NOC to take. Primarily this requires effective project initialization and resourcing.
The basic process required to be effective in project resourcing is as follows:
Determine the project goals and task requirements, including quality level
Identify skill sets required
Categorize skill sets for internal and external resourcing
Determine desired growth of future internal skill sets
Determine desired timing of activities
Resource appropriately to meet the quality and timing needs of the project through: