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tions in both capital expenditures (CapEx) and ope-
rating expenditures (OpEx) and identifying process
and practices that can overcome diffused ineffi-
ciencies.
One of the major causes of inefficiency is the enor-
mous variety of technical requirements between
projects, even for the same end-user! Analyzing
the technical requirements encountered in various
projects, it can be noted that: There are different in-
ternational standards but also many different Ope-
rator Specifications as well.
JIP33 has identified
standardization as a key
“opportunity to reduce
inefficiencies in the oil and gas
industry
Standardization is a key lever
The oil and gas industry has a wide range of stan- we can pull as an industry to
dards (international, end user and manufacturer) “structurally reduce large capital
for engineering and procuring equipment and ma-
terials. The only thing they have in common is that project lifecycle costs
they are different, project by project, even in briefs (McKinsey Energy Insights)
from the same customer.
The World Economic Forum (WEF) is an internatio- The following key elements were identified to rea-
nal organization, whose purpose is for public-pri- lizing value:
vate cooperation committed to improving the state 1. Standardization Requirements
of the world. It commissioned a study of the oil and Industry adoption means repeatability for the
gas sector, which revealed the extra budget and supplier leading to improved
extra time mentioned above. efficiency, reducing schedule and cost risk.
WEF recognized that finding a solution to the pro-
blem required worldwide consensus and decided 2. Essential Minimum
to collaborate with the International Association of Aim not to harmonize existing specifica-
Oil and Gas Producers, (IOGP), members of which tions, but to create a new set of minimum
produce 40% of the world’s oil and gas, to address requirements to meet essential needs
the situation. only.
Vendor can standardize production processes
Because requirements are to a cost-effective design.
standardized, in addition to the 3. Defined Optionality
“increased quality, suppliers Choose from the options given within
can also focus more on the standardized specifications.
No changes by the user, supplementary
continuous improvement and requirements added by users will erode
more innovative designs the benefits of standardization.
A set of specifications, aiming to cover the abo-
Together they created Joint Industry Project (JIP ve philosophies has been identified for the various
33) with the objective to drive a structural reduction equipment and materials as follows:
in project costs and schedule improvement. • A Supplementary Specification to an in-
Starting from 2016, JIP33 has identified standardi- dustry standard
zation as a key opportunity to reduce inefficiencies Containing a set of “minimum requirements”
in the oil and gas industry. sufficient to purchase equipment that meets
the functional needs of users.
These new standardization efforts creating a
common set of requirements that can be used • An Information Requirements Specifica-
by across the supply chain on all projects al- tion or “IRS”
low for collaborative design execution, between Containing a list of pre-defined documents
end-users, contractors and suppliers like never and contents required to be delivered by the
before. supplier
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