The last 30 years have been a period of intense change for the North Sea oil industry. Once completely dominated by giants like BP and Shell, the sector has become more fragmented with many newcomers. Recent years have seen the UK oil industry stabilise in the face of an economic downturn, while Norway has seen a boom in production and revenues due to a range of innovative policies.
These changes have highlighted the importance of creating and maintaining the right relationships between buyers and suppliers. Communities like FPAL, which we set up in 1996, have played a crucial part in helping the sector grow and adapt in a complex and dynamic business environment.
As the best solution for managing supply chains in the North Sea, there are exciting times ahead for the community.
Overcoming challenges
Our FPAL and Achilles JQS communities are made up of over 6,000 suppliers from over 50 countries. Over the last 30 years, the community has created supply chains that have had to withstand significant pressure.
The oil and gas sector is always subject to price fluctuations. In 2016, the price of a barrel tumbled from $110 to under $30. This put a huge strain on suppliers, operators, buyers and contractors. In the FPAL community, we saw a steep drop in the number of registered suppliers as companies went bust and fewer contract opportunities were available. But by helping buyers and suppliers collaborate on cost-reduction and increasing efficiencies, a large majority of our members are still operating today.
Health and safety has also been an area of growing importance. Thirty years on from the Piper Alpha disaster, there are still a lot of challenges associated with ageing infrastructure and a drop in investment over the last few years. Our communities are built on a foundation of supplier and contractor auditing and assurance, helping entire supply chains operate in confidence.
Setting a path forward
Achilles FPAL and Achilles JQS will continue to be at the heart of the changes driving success in North Sea oil and gas. By helping buyers and suppliers work effectively together, we create better supply chains that provide better results for all parties including the end customers.
As the North Sea oil industry emerges from the downturn of the last few years, companies are likely to increase investment, boost production and bring in new workers. Moving forward, the buying organisations and suppliers that are part of our communities will be looking to increase their efficiency and collaboration.
Innovation
We help buyers start working relationships with the kind of suppliers they want, and our audit and pre-qualification processes mean they can be sure of potential partners’ capabilities. Our communities make it easier for established companies to diversify their supply chains and inject some innovation and fresh thinking into their operations. As Norway’s recent successes show, innovation is the key to success in a market as complex and dynamic as the North Sea.
Increasing visibility
For suppliers, breaking into an established market takes a lot of work. Or it used to at least. Our communities are designed to increase supplier visibility to get them in front of the people that matter. The Achilles JQS community currently has over 3,600 suppliers and 69 buying organisations. Many of these buyers use Achilles JQS as their primary means for finding suppliers for new projects.
Transparency
We actively reduce the risk in the supply chains we help foster. To join our communities, suppliers have to go through a registration that ensures they are fully compliant with all necessary regulations.
Over the past 30 years we have built up a wealth of knowledge and experience, helping buyers to manage their supply chains in the oil and gas industry. We are sure the next 30 years will be just as productive.
Learn more about Achilles Oil and Gas Europe here.
