More likely than not, your utility is already or soon will be procuring battery energy storage as part of its grid modernization strategy. In fact, according to BCC Research, the global market for grid-scale battery storage technologies is projected to reach nearly $4.0 billion in 2025, up from $716 million in 2015. Battery costs have fallen dramatically over the past decade. However, events in the Democratic Republic of the Congo are putting the brakes on further cost reductions. Here’s a look at what’s happening and how you can approach your battery procurement planning in light of these events.
Buckeye Partners presents a webinar in our Q&A with the Experts series.
In this webinar recording, Buckeye Shares:
- How they've used data to achieve >$10M in cost reduction through improved supplier negotiations and bids
- Specific strategies they've used across CapEx and OpEx categories
- How they've prioritized and executed on specific cost reduction opportunities
- And lots more...
We’re thrilled to share that more than 60 Oil & Gas executives attended our Annual Oil & Gas Executive Forum on June 22, for our best event yet.
The 2017 Executive Forum provided a platform for sharing and discussing new cost-cutting strategies
Each Executive Forum is designed to enable operators to exchange innovative approaches to cost reduction with one another. This year’s event featured:
- A keynote speech by the Vice President of Global Supply Chain at Hess Corporation
- Spotlight presentations on pressing Supply Chain concerns led by 7 industry leaders:
A New Mindset for a New Market. Former CEO of Maersk Oil Houston discussed the importance of cost control in Oil & Gas and provided a new perspective on the market
Cost Reduction in Practice. Director of Strategic Sourcing at DCP Operating Company, Sr. Commercial Manager at Motiva Enterprises, and Head of Procurement at Jonah Energy shared how supply market insight and data were used to decrease their operating costs
Cost Reduction Outside the Box. Vice President of E&P Services at WPX Energy and Head of Procurement at Statoil explained how rising costs were averted by their companies
Elevating Costs. Director of Supply Chain at Southwestern Energy spoke about the factors that drive business unit engagement and their effects on category management success
- Networking opportunities that brought together over 67 executives across 38 firms
A keynote speech on current economics of Oil & Gas and how to envision Supply Chains of the future
We want to extend our gratitude and appreciation to all who attended the Forum and shared their perspectives on the Oil & Gas market. If you would like more information about any of the presentation topics, please send us an email at firstname.lastname@example.org.
In this latest clip from our Energy Intelligence Group, we share how recent political actions could affect Oil & Gas supply chains.
Specifically, we share which categories would be at risk in the event of a NAFTA renegotiation, as well as the impact of recent Executive Orders on "Buy American" rules and the importation of steel and aluminum.
Recently, the O&G world has been faced with challenges around supply and prices for critical materials. Just a few months ago, we covered the risks facing O&G firms when President Trump issued a first-of-its-kind memorandum mandating that American pipelines use only domestic steel. And just last week, the Department of Commerce (DOC) made a tariff decision that will affect supply and prices, this time around OCTG. Read on to learn what happened, what the risks are, and how Supply Chain teams can tactically reduce risks.
Oil & Gas Supply Chain teams have built up a tried and true toolkit of approaches to cost reduction spanning everything from negotiation strategies to RFP’s to demand planning.
But beyond that standard toolkit, what are the most innovative Oil & Gas firms doing to drive cost out of their organizations?
In today’s article, we provide specific examples of out-of-the-box ideas that other Oil & Gas firms are using to creatively reduce costs. We’ll also share several tools from renowned creativity experts to help Supply Chain teams think about how to brainstorm their next big idea.
This post is the first of a two-part series on rig stacking. Part 2 will cover stacking in onshore drilling.
Are you actively tracking which Oil & Gas service providers have made the decision to stack their rigs? While rig stacking was the farthest consideration from our minds just three years ago, today it’s a concern of grave importance for E&P’s.
In today’s post, we cover the different methods of rig stacking, why they matter to E&P’s, and what impact they can have on your operations and cost structure.
Two Methods of Rig Stacking
Since the market downturn in mid-2014, stacking of rigs has become a strategy commonly employed by service providers to save money, helping weather the storm that is low-cost oil. For those new to the world of stacking, it can take two different forms:
- Hot (or Warm) Stacking involves paying a skeleton crew to stay on the rig and conduct regular maintenance to ensure a smooth reactivation when the equipment is once again in demand and brought back online.
- Cold Stacking is the equivalent of shuttering a factory in manufacturing—rigs and equipment are packed up and stored, and employees tied directly to the operation of the equipment are laid off.
On January 24th, President Trump issued a memorandum mandating the use of domestic steel for American pipelines. For Oil & Gas firms, this could drastically alter the viability of existing capital and maintenance programs and pose a threat to procuring critical materials.
On March 8th, we were joined by 30+ Oil & Gas firms to discuss what risks the memorandum could pose, including questions like:
- How will the memorandum affect steel plate prices?
- What supply constraints will O&G firms face?
- Which items are most at risk of price escalation and short supply?
- What can we do to prepare?
- And much more...
As suppliers enter 2017 looking to recover lost margin with double-digit price increases, we’ve found that the operators with the most successful responses are the ones who most effectively use data.
In this post, we share how Oil & Gas Supply Chain teams can respond to the 5 most common arguments suppliers use to raise prices.
1. “My costs for X are up”
We often hear suppliers come to the negotiating table with arguments like “our overhead is up by 3% this year” or “our labor costs are up by 5%, which means that our costs are rising by 7%”. So what are some effective ways to respond to a supplier who necessarily has better visibility into their own cost structure? We suggest starting with 3 key questions:
- Have the costs really gone up that much?
- What are the other cost drivers doing?
- Are factors like supply/demand offsetting the cost structure?
Developing a standard negotiation packet filled with market data on the particular item or service can be an effective way to respond. In this case, we suggest starting with a cost model that breaks down the cost of the item into its individual cost inputs, and then tracking how those inputs have moved with the market over time.
For example, if a joints supplier came to you saying “the price of labor for steel mills services is rising,” you could instead point to the other commodities that are exerting downward pressure on joints. In the graph below, we can see that steel has a much stronger impact on the price of joints than iron and steel mills services does, suggesting that the overall outcome should be a price decrease.
Everyone knows that commodity markets are volatile – but volatility can also translate into opportunities to capture market declines and turn them into savings. So how can downstream procurement teams ensure that suppliers pass on savings from market declines in chemicals, which are critical to operations?
Last year, we shared the top chemicals that Oil & Gas firms should be saving on based on actual market data that tracked changes in input commodities, margin, and overhead from 2014 to 2015. Before prices start going back up, it’s time to assess whether you’ve taken advantage of the declines that have occurred since the peak of the market. Read on to see an updated list of top chemical savings opportunities for downstream firms.
The Top 5 Chemicals You Should Be Saving On:
1. Ammonia: 43.6% Decline Over Last Two Years