Critical Components for Successful CollaborationDon VardemanKerr-McGeeOffshore Technology ConferenceMay 2, 2005CollaborationcollaborateFunction: verb1 To work with others (as in writing a book)2 To cooperate with an enemy force that has taken over one's country How Much CollaborationOperator(s) internal team onlyOperator(s) & contractorsOperator(s), contractors & infrastructure playersDrivers & ExpectationsOperator staff size/availabilitySchedule considerationsTechnology ownershipBudget Expectations Long-term perspective Mutual success Risk sharingSwedish Vasa Battleship Sanctioned in 1625Sanctioned in 1625Most ornate ship in fleetMost ornate ship in fleetAdded second gun deck Added second gun deck after keel was setafter keel was setStability test stopped earlyStability test stopped earlySailed with great fanfare in Sailed with great fanfare in 16281628Sank after sailing less Sank after sailing less than a milethan a mileVasa SyndromeDont imitate ideas unless Dont imitate ideas unless you understand themyou understand themGoal confusion Goal confusion --define clear define clear user needsuser needsObsession with speedObsession with speedFeedback system failure Feedback system failure --deal with bad news toodeal with bad news tooCommunication barriers Communication barriers --collaborationcollaborationPoor organizational memoryPoor organizational memoryTopTop--management meddlingmanagement meddlingFrom: Kessler, Eric, et.al. Vasa Syndrome: Insights from a 17th-Century New-Product Disaster,IEEE Engineering Management Review 1Q, 2004RelationshipsRelationshipsExecutiveExecutiveEmpower the project teamEmpower the project teamHow you act when you have problemsHow you act when you have problemsImportant for large problem resolutionImportant for large problem resolutionSteering committees for large projectsSteering committees for large projectsOther ContractorsOther ContractorsInterface management is criticalInterface management is criticalInclude supply chainInclude supply chainDriving standardization across Driving standardization across operator companiesoperator companiesStandardizationOperational familiarityOperational familiarityVendor supportVendor supportRisk mitigationRisk mitigationQuick recovery from Quick recovery from problemsproblemsTechnology ownershipTechnology ownershipApplies to small and Applies to small and large componentslarge componentsContracting StrategyRight strategy for overall development, Right strategy for overall development, market conditions & contractor capabilitymarket conditions & contractor capabilityRisk elements in subcontractor selectionRisk elements in subcontractor selectionOwnership of subs is a plusOwnership of subs is a plusPreference for EPICPreference for EPICFinancially healthy contractorFinancially healthy contractorBusiness Relations Business Relations Between Between OperatorsOperators& Service & Service IndustryIndustryDanielDaniel Valot Valot, CEO, , CEO, Technip Technip- -2004 OTC 2004 OTCTHE WAY FORWARD: A NEW BEHAVIOR? THE WAY FORWARD: A NEW BEHAVIOR?Contracting strategy: Contracting strategy: Clarify & stabilize the rules Clarify & stabilize the rules Limit EPIC contracts to well Limit EPIC contracts to well- -defined scope & technologies defined scope & technologies Allocate risks/costs to the right party Allocate risks/costs to the right partyRelationship: Relationship: Let business people run the show (rather than lawyers) Let business people run the show (rather than lawyers) and provide them some give and provide them some give- -and and- -take authority take authority Forget short Forget short- -term & focus on long term & focus on long- -term partnerships term partnershipsIn their best interest, oil companies should try to re In their best interest, oil companies should try to re- -establish establishan appropriate risk an appropriate risk- -reward balance for their contractors reward balance for their contractorsResults of CollaborationResults of CollaborationTopside DesignHull DesignHull InstallationTopside InstallationSubsea DesignSubsea InstallationSubsea EquipmentTopside FabricationHull Fabrication