In the wake of the BP Macondo Gulf of Mexico oil spill, the oil and gas industry is, and will remain for years to come, under the microscope. And it’s not only politicians and environmentalists peering through the crude-stained eyepiece. The gawking multitudes this time include the media, investors, John Q. Public, and even industry participants.
Going forward, virtually every move the industry makes (or fails to make) will be subject to efforts to ascertain whether the industry can be trusted. Will it take the steps needed to improve its performance, stewardship and reputation?
In some cases, the scrutiny will be fair; in others, it will be politically driven, even twisted. Sometimes the truth will carry the day; other times it won’t see the light of day. But one thing’s for sure, the scrutiny will persist.
There’s considerable evidence the oil and gas industry and its supplier base has room for improvement in terms of its performance and quality. When converted to the scale of the American Customer Satisfaction Index (ACSI), broader oilfield supplier satisfaction ratings significantly trail those of most industries tracked in the ACSI. In fact, oilfield suppliers registered scores much closer to the ACSI laggards (utilities and transportation) than its leaders (durable and nondurable manufacturers).
Yet, as the oil and gas industry searches for ways to improve its overall reliability and performance, it would be wrong to assume the final blueprints for such improvements lie outside of the industry itself. Many of the leading oilfield suppliers highlighted in this and other EnergyPoint reports enjoy customer satisfaction ratings that rival those of the highest-rated companies in the world, companies like as Apple, BMW, Federal Express, Google, Sony, and Southwest Airlines.
Given this reality, how should the industry proceed? Should it continue to operate as it has in the past—making steady, but mostly incremental and sometimes insufficient progress? Or does it more purposefully tap into its proven capacity for problem solving, making larger strides than might otherwise be expected and, in the process, take control of its destiny? We say the latter is the better path forward.
We also say the supplier sector can play integral roles in advancing the industry’s cause and reputation. In the same way decades ago a small group of iconoclastic manufacturers kicked off the quality movement that the entire auto industry embraces today, there exist companies within the oil and gas industry ready to lead the march toward improvements.
Since the Gulf spill hit the headlines, increased focus has fallen the on health, safety and environmental (HSE) practices of the industry. Notwithstanding some ill-informed pundits’ assertions to the contrary, an oilfield supplier’s HSE performance has for years been the first and last factor considered by most customers when selecting providers. It still is.
HSE ratings of suppliers via EnergyPoint’s independent surveys have been materially higher than overall customer satisfaction. And despite overall satisfaction levels reaching a low point in 2006-07 (as industry activity skyrocketed), HSE ratings were not themselves compromised. Current HSE ratings leaders in our land drilling, offshore drilling, services and product surveys are, respectively, Helmerich & Payne, Noble Drilling, Schlumberger and Oceaneering.
The importance of HSE consistency can’t be overstated. A company’s ability to regularly meet expectations can have a direct impact on its total satisfaction rating.
Accordingly, Helmerich & Payne is rated tops in our surveys in performance and reliability among land drillers, while Ensco rates first among offshore drillers. On the oilfield products side, Derrick Equipment holds the honors, and Core Laboratories enjoys the strongest such marks among service providers.
The industry’s integrity and accountability of the industry is also in the spotlight. Not surprisingly, many of the suppliers that score well with customers in accountability and responsiveness also score well in terms of integrity and ethical behavior. In addition to the suppliers already mentioned, those seen as “walking the walk” in terms of organizational character include Newpark Resources, Parker Drilling, M-I SWACO and Rowan Drilling.
The industry would do well to both study and emulate the actions of these leading companies. Those looking to understand how to manage assets and people in unforgiving environments for months at a time—then lift anchor, relocate to another region of the world—should take a closer look at Noble and Ensco. Both are among the best in the world at dealing with such challenges.
Likewise, those striving to combine fit-for-purpose technology, performance, and HSE should acquaint themselves with Helmerich & Payne. And there’s much to be gleaned from Oceaneering and Derrick Equipment for designing products that perform as expected. And Core Laboratories can teach all of us something about world-class consistency, quality and focus. Etc, etc, etc.
In short, the industry need look no further than the many of the companies customers have already identified as being the best at what they do. In doing so, it will find many of the answers it seeks in the most familiar of places.