Release date: 20 December 2017
We made some bold statements at the start of 2017 about delivering seven major Upstream projects. It’s often been believed that oil and gas companies cannot deliver mega-projects without overspending and running late. We’ve proved it is possible. I’m proud of the teams that have made these seven projects happen, underpinning the credibility of BP’s business.
I was confident at the beginning of the year, despite feeling a lot of eyes on us. But these projects happen over a number of years and, generally, when a project is going awry, you see the problems early on – for example, if engineering or construction are problematic. That was simply not the case for us. The seven projects were well advanced and although there could have been issues in a commissioning phase, my confidence really lay in their track record, meaning they were in good shape for delivery.
We set an aspiration more than a decade ago to systemize our project delivery; in 2005, for the first time, we brought together all the BP project people across the world at a conference. We wanted to build a community of projects professionals.
Five years later, we created a single organization that became accountable for projects – from creation to delivery. That was the precursor to today’s global projects organization and many of the projects we’ve seen come online this year were established in that era.
We’ve made huge progress in a number of areas, but I’ll cite just a few examples. One fundamental tactic has been what we call ‘engineering for value’ whereby we’ve become much clearer about what we ask our BP and contractor engineers respectively to do. It’s about designing what we believe is fit for purpose, rather than ‘gold-plating’ projects.
Inside our own business, we looked at our teams and organised ourselves to standardize. That has meant creating global teams, for example, our global subsea systems team that is now the one-stop shop for anything subsea. They are a group of professionals who really understand the components that we consistently use in our assets.
Finally, I point to our skillsets. We identified areas where we had gaps in the past, so we made a concerted effort to fill those by employing professionals from elsewhere in the industry or even outside it. So, there’s not one thing where we can say, ‘we did that and it all changed’. Projects are hugely complex pieces of business, but we have become more systematic, helping us to deliver with more consistency in our outcomes.
We look at what others in the industry say about us; it’s not for us to decide how well we’re working. We receive benchmarking data from a company called Independent Project Analysis (IPA). They analyse projects across the industry and every year they provide an assessment of our performance relative to our competitors. It is clear from this data that we have seen sustainable improvements year-on-year. This tells me that we are headed in the right direction.
When I say leadership, I don’t just mean one person. There are so many areas where people are making a difference. Take safety; we created roles called site safety leaders – they are the people who set the tone and create the safety culture at a particular site. Their accountability has made a phenomenal difference. On a quarterly basis, we get more than 90 people from around the world on a call and we talk about safety performance, what is happening and what lessons we’ve learned.
We’ve improved leadership when it comes to managing our contractors as well. In the past, we’ve had a tendency to take over things if progress is not what we expected. But we no longer do that. We ask our contractors to do a certain job and our role is to ensure they deliver what we ask of them, in the right time frame.
The integration of our operations and wells teams has also been really important for successful projects – and the great leaders in those organizations have had a big impact on our ability to deliver the final outcomes.
Cost and schedule are always drivers on projects, but safety is the most critical component. As start-ups approach, there is self-inflicted added pressure because you want to reach the finishing line. But we’re absolutely adamant that we only start up when we are ready. And we only do so if we can start up safely and keep going. There is no race to the finish line; there is no point starting up a project only to shut it down again or, worse, to risk an incident.
Between the projects and the operations organizations, we have developed a robust set of assurance requirements whereby we work together to analyze all the checks and balances that need to be completed before we are ready to ‘switch on’. Those allow us several barriers of protection to ensure the project is safe for production.
In GPO, by the end of this year we’ll have worked close to 90 million man hours. Five years ago, we were looking at about two million hours. Our recordable injury frequency at 0.08 is lower than industry average, but still too high. We continue to strive for zero.
Looking ahead to 2018, the projects we’ll deliver next year don’t start now – they started several years ago and have been working through the same processes as those we’ve brought online in 2017.
But there’s still a lot to learn from this year. Nothing is ever flawless and we’re doing root cause analysis around the start-ups to identify opportunities for improvement. We’ll build the lessons into the way we create, design and build future projects. In some cases, the lessons come in the early days of the projects, so we’ll start to see those improvements made on the projects for 2020 and later.
In summary, we’re still reflecting and there’s further progress to be made. We’re looking outside the industry too; we’re examining how London’s Olympic Stadium was built, how London’s Crossrail project is going. We want to learn from other sectors, find out what they’re doing that our industry may not be. This is the next stage of our journey; BP must sustain this level of project success.
In a competitive world, we need to continue enhancement and improvement – but 2017 has not been a by-chance outcome. This is a systematic way to deliver BP's largest pieces of Upstream business.