Due to increased volatility in resource and commodity prices, stakeholders from across the value chain are having to adapt to a sustained low-price environment. Given this new normal, participants considered the following questions: what are resource companies doing to adapt their capital outlay, strategy, and execution to low commodity prices? What lessons can companies learn from other industries? How will digital technologies change the way resource projects are designed and constructed? And what will the project organization and supply chain of the future look like?
Some of the key takeaways included the following:
- Accelerate delivery to bring down the costs of energy and resources projects. Many companies are facing increased cost pressure on their projects and see opportunities to accelerate delivery with the improved handling of regulatory, public procurement, and permitting challenges. Such improvement requires the industry to attract more diverse talent, including better stakeholder management and collaboration skills.
- Incentivize contractor performance using creative contracts. Some participants have been able to better incentivize contractor performance using, for example, competitive Front End Engineering and Design (FEED) and alliance contracts for larger projects. Participants agreed that owners should be more thoughtful and clear on which risks can and should be transferred to the contractor and how to ensure that the deal is fair. Additionally, the industry should focus more on setting up “opportunity meetings”—for example, exploring a new technology to improve productivity—instead of just focusing on risks.
- Use technology to better plan, build, and operate assets. Technology is already being used to manage and monitor the costs of existing assets over their life cycle, thereby allowing for better scoping for new assets. Technology can also drive faster and better planning, facilitate stakeholder management, and improve project performance. Compounding the case for technology, participants agreed that a broader adoption of new construction technology would significantly increase safety performance and perhaps help attract the younger generation to the sector.