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The Crude Decline – A Reason to be More Efficient

The recent drop in oil prices has companies protecting their bottom line.  Oil and gas companies are holding on to their budget now more than ever. As the price of oil continues to plummet, organizations will be looking for new ways to minimize costs while still maintaining a high level of employee efficiency.

With a 40% fall in the price of crude since June, 2014, analysts are unsure as to whether this is a temporary blip or a snapshot of what to expect in the future. One thing is for certain, it’s definitely a time for companies to start spending more intelligently and realizing the potential savings that exist in a more efficient health and safety process.

“The fall in oil prices has added to the importance of making the organization more efficient,” a BP spokesman told the BBC. When organizations as large and renowned as BP make bold statements about improving efficiency in the workplace, it begs the question of whether or not we should all be re-thinking our business plans to cope with “the crude decline”.

Reduce costs and improve safety performance using technology

The province of Alberta is known as Canada’s primary supply and service hub for crude oil, oil sands and other northern resource industries. As the world’s third largest proven resource of oil, Alberta’s oil reserves largely contribute to the growth of the global economy. For every dollar invested in the oil sands, $8 worth of economic activity is created with one-third of the economic value generated outside Alberta (in Canada, the US and all over the world)[i]. As the cost per barrel continues to decline, oil and gas companies will cut back on their capital spending for 2015, and now, more than ever, organizations need to ensure they’re focusing on how they can do more with less. The Crude decline should be used as an opportunity for oil and gas companies to evaluate the processes they use in various departments, looking for areas of inefficiency.

Many times the health and safety department is the last to adopt technology that can streamline certain manual tasks like data entry.  However, there are 4 areas within the safety function that should be evaluated in the attempt to reduce costs while simultaneously improving performance.

1. Gathering field level safety data – Many companies have adopted programs that encourage hourly workers to report on all hazards that they see.  With so much data available, the method used to capture that data must be accurate, reliable and simple.  It’s no-longer essential to create mountains of paperwork while running an effective safety program.  A mobile device (phone or tablet) can be used to easily capture information, which is automatically available to anyone else in the company.

2. Tracking Employee Training – The unfortunate circumstance of these difficult times is that employee turnover increases. The complex training requirements of changing subcontractors and hourly workers can stress even the most robust Microsoft Excel model.  By moving away from Excel, you are instantly able to understand your company/group/site’s training requirements and access a library of online training courses that can decrease your training costs and increase your training efficiency.

3. Analyze company data – Accurate data itself does not provide much benefit to advanced safety leaders.  They’re required to analyze the data in search of anomalies that lead to corrective actions to reduce the risk of incident.  Most safety professionals spend more time inputting data and setting up analysis than actually drawing conclusions from the dataset.  When data is collected electronically, it can automatically be categorized and displayed in the form of charts and graphs that allow safety leaders to instantly make decisions and send corrective actions.

4. Presenting an in depth understanding and complete view of HSE performance improvement to management – Like any business unit that drives value, the HSE department is expected to meet its corporate goals.  An inability to provide a synchronized and accurate view of performance may cause the executive team to under-appreciate the return on investment that your decisions produce.  



While the price of oil has taken a turn over the last few weeks, it’s important for companies to use this time to evaluate ways of reducing organizational costs while simultaneously improving performance.  With oil at $45 a barrel, it’s a time for companies to be more diligent in their spending by realizing the potential savings that exist by using technology to create a more efficient health and safety process. Although changes don’t happen overnight, start by focusing on the above four parts of your safety function.

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