The transformation program would not have been possible without executive management’s commitment to new technology and a long-term perspective of the business that does not waver in response to market fluctuations. Executive management and the heads of every department are members of the transformation board and report directly to the Chairman and CEO. This means that executive management is accountable for the transformation program’s development, enablement, and deployment. In turn, they lead a cohesive team of line and functional managers who use a top-down approach to implement a step change in performance by focusing on technology, reliability, efficiency, and integration.
The depth and breadth of the Schlumberger transformation is unparalleled by any other company in the oil and gas services industry. The first eight years of our transformation journey have established a new product development method as well as a new process for Technology Lifecycle Management. In addition, our Shared Services Organization combined seven functions to leverage our size in order to facilitate profitable growth and manage business cycles more efficiently.
The transformation program focuses on the delivery of new technologies and business models that involve greater integration. As our customers’ resources become stretched and they seek new ways of working, the adoption rate for integrated services is increasing. Involving customers early in the integration process is a key consideration. We must now use integrated workflows to meet challenges, such as subsurface risk during exploration and increasing ultimate recovery at the end of a reservoir’s productive life. Increased levels of integration will enable us to optimize production while reducing cost per barrel.
One example that illustrates how integration brings value to our customers is the Det norske Ivar Aasen project in the North Sea. Working far ahead of the project start date, we adopted a unique collaboration model where Det norske and Schlumberger project teams are collocated. This makes it easier to integrate services and optimize the resources required between the rig, the shore base, and a remote operations center. The highly efficient approach to staffing levels includes remote operations, multiskilling, and new fit-for-purpose technologies.
Our management system defines the corporate boundaries within which the company operates. We control corporate risks by leveraging our global experience to define the controls used to manage risks and enhance decision making. This is manifested by our business governance structure.
The management system is a fundamental pillar for the new ways of working we are implementing. Our corporate identity is underpinned by The Blue Print, the highest level of our governance structure, which establishes our purpose, ambitions, values, and mindset. This mindset is exemplified by four behaviors: commitment, integrity, teamwork, and drive. Everything we do within the company is instilled with these behaviors.
Structured around a continuous improvement process, our management system allows us to continually improve on a systematic basis to ensure we deliver safe, efficient, and reliable products and services. Managers in our Continuous Performance Improvement organization facilitate deployment on both a geographic and product line level, and determine the best methods to lead people through the change process.
The pending Cameron acquisition is another aspect of the transformation’s focus on integration. In this case, integrating our reservoir and well technology with an industry leader in surface process and flow control will mark the start of a new epoch in drilling and production system performance. Customers will benefit from expanded technical capabilities, improved efficiency, and a closer commercial alignment to lower the cost per barrel and increase hydrocarbon recovery.
The transformation initially focused on improving performance in a market where rising E&P investment could not be met by range-bound commodity prices. The current low oil price market environment therefore makes our transformation goals even more compelling.
The Schlumberger transformation has contributed to consecutive years of financial outperformance that were undeterred when market conditions began to deteriorate in the second half of 2014. By focusing on resource management and exceeding our own standards for service quality, we are addressing the things under our own control. Transformation as a pathway to growth puts us in the ideal position when the market recovers and enables us to continue to manage the critical balance between margin performance and market share.
Where does our transformation story find us a few years down the road? At that time, the entire organization, its processes and systems, will have unified people and technology at an unprecedented level via integrated workflows. The result will continue to improve our customers’ business performance as well as our own.
In our quest to be one of the best-run companies in the world, we do not merely want to position ourselves ahead of the waves of change in the oil and gas industry. Schlumberger intends to be the oilfield services technology company that helps set those waves in motion.