Maintenance Services: The Challenge of Difficult Countries
The experience of SAIPEM, a large Service Company)
By Mr. Bryarlie DEAR, Consultant
SUMMARY
Saipem, one of the leading service companies in the Oil & Gas business, has a good tradition and good reputation working in difficult countries and border areas of the world. Its maintenance services are no exception. The experience gained over the years has helped them to develop appropriate management and the support services required to effectively respond to these challenges
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RISK MANAGEMENT
Saipem’s activity brings it to distant parts of the world, countries with unstable governments, volatile and complex political situations, challenging natural environments and, in a context of highly volatile energy prices. As in its quality process, by struggling to do the best job for its clients and reassure its investors, it constantly tries to improve its future performance based on experience feedback. This is, in fact, one of the key questions on which his clients question him. “What mistakes did you make in the past, and what did your experience bring? “What is your added value? “. In addition to the fact that errors are sometimes very costly, it must avoid the pitfalls and deliver the required quality of work at the required time. Therefore, this Company has developed a process to deal with risk.
In its completed projects and contracts, it analyzed the problems that were avoided due to creative and / or proactive actions and, retrospectively, what should have been implemented to improve overall performance. All this information was compiled into a large database, which enabled it to launch its Risk Management system.
For future projects, brainstorming sessions are planned with experienced project managers and a staff of specialists, to identify potential risks. For each risk, a criticality value is assigned as well as a concept of impact in terms of cost and / or delay. A new step is to identify corrective actions that can eliminate a risk, or at least reduce its likelihood of occurrence, or the magnitude of its impact. The overall costs of mitigating or eliminating identified risks are then integrated into the lump sum price. If the Company wins the contract, the full list of identified risks and prevention and / or mitigation actions is communicated to the project team for its implementation. Throughout the life of the project, a risk register is maintained, regularly updated and documented.
A central management computer system is used to codify and manage all identified risks with a unique reference code and attributes. In this way, a complete Knowledge Management system is created, in order to maintain a good understanding of the activity and maintain good practical solutions. In many cases, good practice is captured through its methods, standard practices and quality system. Today, regardless of the given region of the world or the type of service to be rendered, the Company can quickly and easily begin a project with a long list of known potential risks and remedies to be applied.
Its Risk Register and its Knowledge Management system have been extended to include all opportunities as well.
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CONTRACTUAL ASPECTS
The fulfillment of contractual obligations in difficult regions has an importance which is not comparable with, for example, a European context. The overall economic and social context in which services will be performed is often unstable, and the natural environment is usually remote and exotic. Personnel, specialized services, materials and spare parts are not available. This is why each contract is analyzed by specialized departments to obtain the advice of experts in their various fields, such as Legal, Financial, Insurance, Security. The Company has thus established a series of Golden Rules that can not be broken for any contract and Silver Guidelines that serve to establish its negotiating position, based on past experience.
Some recurring problems to which it pays attention are, for example:
Access to the site
Changes in laws
The exchange rate of currencies
Inflation
Arbitration, Courts and the Contract Language
Responsibilities (pollution, indirect damage …) and their limitations
Remedies for non-payment
Guarantees
The Force Majeure
Rights of suspension or termination of contract
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SAFETY
Safety for employees and their assets is a paramount concern for the Company. It has also found that it must be constantly vigilant to preserve the welfare and happiness of its employees. The fundamental basis of the Company’s philosophy of safety, with its directives and regulations, is clearly explained in a number of specific procedures. The procedures for expatriation, for example to send staff to the field, will define country by country and zone by zone, the skills required, the medical examinations required, the specific knowledge, training and all the other preparations required. Rotations, contact coordinates in both directions, as well as personnel evacuation procedures if they are necessary, are all clearly defined. A detailed country booklet is given to each expatriate to help him prepare for his new mission. Safety begins with preparation.
An International Safety Watch is collated weekly and distributed to managers. It contains detailed reports of relevant news and warnings, country by country.
A local reception team is present at each airport or country entry point to help employees pass immigration, customs, baggage collection, and place them in secure transportation to their project sites or Its guest houses. The first time employees arrive in a country, they must follow a safety briefing. Typical information provided includes, for example, practical recommendations (“Do … do not …”), emergency numbers, identity papers, etc.
In addition to the above activities, safety and security services for transport, work sites and housing are of course all planned and controlled. Regular internal and external safety audits are carried out and many autonomous communications systems and power generating units are maintained. One can not always depend on the proper functioning of the local telephone system, especially during a crisis. Contact and coordination with other societies and embassies or consulates in the region are also maintained in order to exchange information and practices and to pool resources if necessary.
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SECURITY OF LABOR
By working overseas, the Corporation often finds that the local environment and local communities do not share the same values as it relates to workplace safety. Good safety results, for many reasons, are an imperative for it and for all its customers. His challenge then was to define how to share his security values and cultivate a security attitude among all his employees. His conclusion was that he needed to develop leadership in this area. She found that she had to encourage behavior and attitudes that establish an effective culture of security, despite the very different backgrounds of her staff. The qualities required are:
Creating a Security Vision
Staying Focused on Security
Influence and inspire others ·
Be credible and trustworthy
Communicating effectively
Focus on Team Behavior
Share the feedback and congratulate the good results
A training program on Safety at Work was then developed around these points, including an award-winning film. He was given the full program with training, exercises and skills upgrading, from the top of the hierarchy to the bottom, to emphasize the importance of the required change.
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LOGISTICS
Logistics is one of the biggest problems with maintenance service contracts in remote or difficult areas. It requires constant attention, even for small operations. The on-site delivery of suppliers or subcontractors is sometimes difficult even in Europe: one can therefore imagine the problems encountered in the proper execution of maintenance contracts in distant regions! The complete approach to having the right specialist, which is first available, plus obtaining a visa and ticket reservations, can seem like a tedious and endless process, especially when the maintenance problem to solve Is urgent. Additional delays may be expected if the customer has to approve the subcontractor’s price quotes prior to his visit. Sometimes suppliers refuse to send staff to places where the Company has contracts. Telephone support, and / or the computer controlling systems or special remote equipment, is in some cases a good solution, but this can not solve all the problems. In the Petroleum business where extraction facilities must operate with an efficiency of almost 100%, it must be realized that, in some critical cases, urgent assistance by competent specialists must be implemented.
The same requirements exist for obtaining spare parts on the site. The Company’s procurement system was extended and improved several years ago to meet its worldwide needs for its projects and its fleet of boats. With a network of regional offices covering the entire planet, all connected via cable and satellite, it can now cover its purchasing requirements 24 hours a day, 7 days a week, literally anywhere and anytime.
Buying alone is not enough to have spare parts on site. The Company learned that it had to deal with special requirements for packaging for shipping or airfreight. Special labeling (eg “customer” barcode), documentation and accurate packing lists, especially in the case of partial delivery by a supplier, have become necessary and must increasingly be The local language, as well as in English if you want them to pass the customs. The use of shipping agents working with tracing software is often required to discover where a shipment is immobilized somewhere and re-activate its transfer to ensure on-site delivery time.
Staff is of course the most important part of the Company’s business. Recruitment, experience, training and assurance of appropriate language skills are the basic starting point. In addition to its own staff, it has an internal company specializing in the supply of qualified personnel, through direct contact and through a network of several hundred agencies around the world. Obtaining work visas for all these different nationalities, ensuring their validity for the duration of the service contract, is normally dealt with directly in the country where Human Resources and logistics staff can work hand in hand to manage The flow of inbound and outbound staff. For obvious reasons this process must work “as on wheels”. Any interruption means that someone, assuming a critical function for continuous service, is no longer on the spot to do his job.
The gradual replacement of expatriates by local nationals mitigates the logistical problem, but often requires several years of training and good experience in the field before being effective. Good skill insurance programs are needed to keep track of progress and successfully pass through relays, to get confident employees and satisfied customers.
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SUSTAINABLE DEVELOPMENT
Sustainable development means adopting activities and strategies, covering the Company and the needs of its partners today, while protecting, supporting and enhancing the natural and human resources that will be needed for the future. This is probably for the Company today the most difficult and complex challenge. Its activities disrupt the traditional lifestyles of life in social and economic terms and have an impact on the environment.
A good measure of how a company is in terms of sustainable development can be defined by using the simple table below:
Level Sensitivity Quality
1 Ignorance Chaotic society, only goal: profits
2 Reactive Reaction to external pressures
3 Proactive Company with responsibilities
4 Wider involvement Flexibility, anticipation, links with governments and NGOs
5 Sustainable Improvement of social and ecological structures
In the social field, the presence of the Society produces the migration of people seeking jobs, and, by mixing populations, creates ethnic and social problems. The consequences can be unsafe situations and even expropriation by local populations or governments. Health problems, for her and the local context, are additional factors that need to be managed.
The impacts on the environment are evident, because the Company’s work can generate soil and water pollution, noise, ecosystem destruction, topography modification and, more importantly, Exploitation and depletion of natural resources.
In terms of economy, on the positive side, the Company hires and trains local staff by giving them new perspectives for their future. It supports and stimulates the local economy through local purchase and subcontracting to local companies. On the negative side, its action unfortunately tends to generate inflation, and to bring about a change in economic values by virtue of belonging to the Western system, and therefore to its basic principles: individualism and the monetary system. This in turn increases the local economic imbalance, and traditional activities and existing social structures tend to disappear.
A number of actions accompany its maintenance service contracts and are a good starting point for someone who wants to be more involved in the Sustainable Development process in this type of activity:
· Training of local staff
· Nationalization of posts
· Purchase local products and services
· Energy efficiency of processes
· Carbon footprint
· Rebuild damaged parts and equipment instead of replacing them
· Code of ethics
· Quality Certification 9001
· OSHAS 1800 Security Certification
· ISO 14000 Environmental Certification
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CONCLUSIONS
In summarizing these experiences, the advice I will give to companies wishing to work in difficult countries is to respect the following points:
A thorough review of the contract with experienced project managers, technical staff, lawyers, financiers and insurance advisors to fully understand the contractual obligations. The financial and commercial optimization of the contractual solutions is required in order to offer an optimal offer.
Most decisions must be made locally. On the spot, local management has the best understanding of complex situations that are difficult to summarize and explain to a general direction. In addition, there is often jet lag and differences in working weeks (holidays) that reduce the effective windows of communications. Moreover, if the local managers have to wait for instructions from the head office, their reaction time is necessarily slowed down.
A muscular local support in the country is necessary for the overall operation to succeed. This includes high level commercial contact with the client, a good legal department, a good financial and accounting team (especially if the client is slow to pay), and a good technical team able to provide good solutions to problems encountered.
However, an experienced branch is needed at headquarters to fully understand field operations and provide appropriate guidance to field staff. Proper understanding of the stress and difficulty of working in difficult environment will also help the seat to carefully select the appropriate profile of the staff who will be sent to the field.
Security measures are a fundamental obligation. They must be continually checked as we do for safety and quality.
The unfailing commitment of Human Resources is required to support both expatriates and local staff. Knowledge of the country’s customs and labor law, as well as that of its labor market, is invaluable in maintaining a good team.
A good logistics department is of course an absolute condition to deliver technicians, goods, and services on time in the country and on site.
In general, it is important to maintain a creative approach to all the new problems that will be encountered …
