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Barclays CEO Energy-Power Conference
Paal Kibsgaard
Since its creation in 1995, our IPM product line has assembled a broad range of project
management and integration capabilities, including rig management, risk management,
technology integration, and customization as well as third-party contractor management.
Today we operate well over 60 projects globally with a rich project backlog. Our offering
covers basic project coordination, turn-key well construction, production-intervention
campaigns, as well as production-incentive contracts.
Through this integration offering, we provide additional growth opportunities for our
individual product lines, and we also see good profitability, in particular on our production
incentive contracts, which we manage through the SPM sub-segment of IPM. The SPM
business is one of the fastest growing parts of IPM. We currently have more than 150,000
barrels per day of oil production under management.
In the last couple of years, we have seen a significant increase in the number of integrated tenders
issued by our customers, reaching as high as 30% of the total tender volume, so far in 2013. This trend
appears to be driven by a desire among some customers to reduce the number of suppliers involved in
each project, and to instead seek closer partnerships with companies that have a broader offering as
well as the ability to handle a significant part of a project’s coordination and integration.
In our IPM projects we generally find that the real integration value is created when we
get our various product lines to work together seamlessly, spanning the traditional silos or
dividing lines in terms of work scope, people and technology. We achieve this unique level
of teamwork through a built-in belief in all our product lines that what is best for the project
is best for the company, and also by empowering our IPM managers to be the ultimate
decision-makers in the projects—all of which helps drive our IPM performance.
Creating this high level of project performance in an organization with numerous contractors
from separate companies involved will, in many cases, be more challenging as their
competing financial interests and traditional product line silos will often prevent effective
teamwork and focus on total project performance. Going forward, we see both a strong
need and a clear opportunity to drive costs out of the E&P value chain through significant
improvements in integration quality and efficiency. Given the breadth of our technology
offering, the size of our operations and our integration and teamwork capabilities, we are in
an excellent position to lead, and to capitalize on this trend.
Add to this our ambition to significantly improve all aspects of our business performance
through our internal transformation programs, and our position should become even stronger
moving forward. So based on this, what are our goals for the coming years?
