Partnering in offshore drilling projects

Abstract

Purpose-The purpose of this paper is to evaluate to which extent partnering practices observed in earlier research focussing on the construction industry are applied in offshore development drilling projects. Design/methodology/approach-The paper reviews earlier research on project partnering and the relationship-based procurement (RBP) taxonomy. The taxonomy is then empirically applied to describe partnering practices in an incentive-based drilling project in Norway. Findings-Many elements of project partnering observed earlier in construction projects were found to characterize offshore development drilling projects. However, as assessed using the RBP framework, the authors found that partnering elements in observed context rated consistently lower than elements previously reported in the construction industry, indicating a lower maturity of partnering practices in the studied context. Practical implications-The present study provides a multi-dimensional and systematic description of partnering practices in offshore drilling projects. Project owners can utilize this information to identify partnering elements requiring particular emphasis when initiating and managing drilling projects. Based on the findings, such elements include transparency and open-book auditing, integrated risk mitigation and insurance practices and establishment of authentic leadership. The findings further imply that partnering models cannot be directly applied across industry boundaries but must be tailored to fit the salient characteristics of each context. Originality/value-The paper systematically describes to which extent specific partnering elements of the RBP taxonomy are applied in offshore drilling projects.

Reviewing the advancements in offshore drilling technologies in the USA and their global impact

“…However, alongside these advancements, emerging challenges and considerations for the future of offshore drilling are also being recognized. Partnering in offshore drilling projects is an area of concern, as it requires effective collaboration and management to ensure project success (Børve et al, 2017). Additionally, as drilling operations target offshore depleted reservoirs, there is a need to address the maximum allowable well depth while drilling to optimize resource extraction (Chen et al, 2018).…”

Antecedents of “power” and “dependence” in the context of collaborations in construction projects: a systematic literature review

“…Researchers have consistently argued that construction industry lacks an efficient partner selection mechanisms (Wang et al , 2016; de Araújo et al , 2017; Makovšek and Moszoro, 2017). And suggested that wrong partnering decision itself is a significant barrier that impacts the collaboration between two entities (Wang et al , 2016; Børve et al , 2017).…”

“…Clarity of any procurement decision based on bargaining power is influenced by: main contractor's market knowledge (Mahamid, 2017;Melese et al, 2017); Supply chain management priority and value of the product or service to the main contractor (Perez et al, 2016;De Valence, 2018); and Buyer-supplier relationship Co-operation, risk perception demand forecasting mechanism of the main contractor (Walker et al, 2017;Xue et al, 2017;Yang et al, 2017) Project partnering Decision-making, performance improvement, resources, risk perception Market structure "Market structure"-based bargaining is influenced by: competitors offering similar services (Wang et al, 2016;Børve et al, 2017;Kerkhove and Vanhoucke, 2017); Project partnering Decision-making availability of credible substitutes for products and services being offered (Love et al, 2019;Lu et al, 2017); Opportunism scarce products (Thunberg et al, 2017;Walker et al, 2017); and Opportunism entry barriers for new sub-contractors (Thunberg et al, 2017;Walker et al, 2017;Kapogiannis and Sherratt, 2018;Noorizadeh et al, 2019) Power regimes…”

Risk and benefit sharing schemes in oil exploration and production

“…First, we contribute to the emerging stream of literature on new incentive contracts in the oil and gas industry. Here, among the few existing contributions is Børve et al (2017) that evaluates to which extent partnering practices observed in the construction industry are applied in offshore drilling projects and provides a systematic description of partnering practices. Another contribution is Osmundsen et al (2010) that argues that oil service companies must be challenged to design contracts which are suitable for new small companies.…”

“…In the oil and gas industry, however, risk and benefit sharing is hardly used. In Appendix A we discuss an existing example of cooperation between an oil company (Pertra) and its contractors (Maersk and Halliburton) that involved compensation in the form of a tariff per barrel produced (Børve et al, 2017). This is the only case of risk and benefit sharing on the NCS documented in the literature known to the authors.…”