In this white paper, Alvarez and Marsal address the benefits of Lean in the E&P space.
By Alvarez & Marsal
For many years, exploration and production (“E&P”) companies have focused on cost management during periods of rising drilling, completion and operating costs, periods of soft commodity prices or a combination. Historically, many E&P companies have had mixed results in attempts to manage costs and improve efficiency. Cost management has often been directed at suppliers and internal headcount. Instead of focusing improvement efforts on core operations, such as acreage acquisition, well planning, drilling and completions, and field operations, companies have streamlined their back-office functions, including procurement, accounting, IT and human resources. In recent years, many companies have implemented strategic sourcing or other supply chain initiatives with significant results, but in some cases, these initiatives have reached their limit. Consequently, many E&P companies are now recognizing the need to find new and innovative methods to manage costs and improve operations.