11 Secrets of Successful Offshore Operators
In Part I we worked out a cost-based benchmark for forecast services. This helped us see that forecast accuracy is the overriding factor to consider if your offshore operations are high value, or cost a lot to repair or (de)mobilize.
In the second part of this series, we reviewed some hidden facts about the weather business and how these directly impact your weather service's accuracy.
In this final installment, we will examine 11 secrets of savvy offshore operators.
Such operators know the huge cost vs. price differential of weather services and understand that weather companies are not all the same. The secrets that we share here are based on personal experience and observation, and have to do with how successful companies apply these two facts to their advantage.
There are two common features shared by offshore operators, large or small, to which our "secrets" apply:
- Their offshore operations are weather sensitive.
- These offshore project costs/revenues are high, typically hundreds of thousands of dollars a day.
Based on our cost analysis in Part I this means that such companies must pay particular attention to the accuracy of their forecast service. This bears repeating:
In our humble opinion, successful offshore companies pay due attention in a number of ways:
Secret #1: Feedback Between Operations and Procurement
Successful operators have a feedback mechanism between their operations personnel who use the forecasts and the personnel who make the procurement decision.
In smaller companies (or large but decentralized companies), this feedback is usually via a single point of contact (operations manager / drilling manager / marine superintendent, etc.), who has a hand in both operations and procurement.
The advantage of such a system is that the folks in operations have a say in what services they find best to do their work efficiently.
In the absence of this feedback mechanism, procurement has no choice but to select services based on price alone. And if they have bought a poor service, there is no way of telling, since they can't get feedback from operations. And so, operations are saddled with a bad service, leading ultimately to lowered profits, or at worst, loss of life.
Secret #2: Don't Let Bean Counters Direct Your Business
The situation becomes particularly perverse when procurement dictates what can or cannot be used by operations. This sometimes results in purchasing decisions (or indecisions) that fly in the face of common sense.
This author has heard of a large offshore construction company that refused to commission a weather study before their operations in the Persian Gulf (vetoed by procurement - too expensive, no need). They instead chose to perform weather sensitive work in the Gulf during a period known for strong winds called Shamals. The result? They eventually had to hire an on-site meteorologist and suffer three weeks of weather downtime at USD$150,000/day.
Synergy between procurement and operations is vital to an offshore operator's success.
Secret #3: Take Advantage of Trial Forecast Services
The successful offshore operator takes a trial service when offered one. They know they only stand to gain.
In fact, some successful companies we have dealt with insist on trial forecasts before signing up a weather provider, as a matter of policy. This can only be good. The typical trial period is 7 - 14 days, depending on the nature of the work.
The value of trial forecasts is that it allows an offshore operator to evaluate competing weather services. It also allows the operator to constantly scout for better services, at no obligation to themselves. Of course, this presumes that there is feedback between operations and procurement, and that procurement won't veto their selection.
This Secret might seem such an obvious one (since the operator loses nothing, and only stands to gain), but in reality, human nature is resistant to change. The "if it ain't broke don't fix it" mentality is dangerous when applied to weather forecasts, because when it "breaks" lives could be lost.
Last year, we approached a prospective client, a large company in the oil and gas business. They took a look at our rates and commented that our forecast prices were nearly twice the price of their current weather provider. Our rates are by no means especially high, so this came as a surprise to us. However, we asked them if they were satisfied with their current level of service, and suggested they take up our offer of a free trial service. After all, they had nothing to lose. They did, and after the trial, chose our service over their existing, significantly cheaper service. They realized that the cost vs. price issue is a real one. An accurate forecast saves money.
Always look out for the best weather service possible. Free trials help you do this, risk free.
Secret #4: Take into Account Recent Recommendations
Recent recommendations from their clients are a powerful and simple way to bias the selection of one weather forecast provider over another.
The recommendations need to be recent otherwise they lose their value, since you can't know if a forecast provider has adversely altered its internal operations in response to market pressures.
Ask your weather provider for them.
Secret #5: Continuous Verifications
Particularly in long-term contracts, continuous verifications are important:
- They allow the weather provider to correct for biases in their forecasts.
- They provide objective feedback on forecast performance to both the client and the provider.
Unfortunately, most verifications only fixate on two metrics - the Root Mean Square Error (RMS Error) and the Bias (also known as the Mean Error). [NB: Some operators use the Mean Absolute Error (MAE) instead of RMS Error, but our comments remain the same.] These are useful to a point, but are not useful for comparing the accuracy of two forecast services.
We will delve into this topic in more detail in an upcoming article, but you can easily see why. Take for example a trial run with two forecast services:
|Wind Speed (knots) at Block 555|
|Red Day Weather Services||Wally's Weather Wizards||Observed|
|Red Day Weather Services||Wally's Weather Wizards|
|RMS Error (knots)|
Which would you prefer as your weather provider?
Just looking at the RMS Error & Bias statistics might lead you to believe that Wally's Wizards outperforms Red Day. But if you look carefully at the data, you can see that Wally gets it right when the weather is benign, but can be way off -- under forecasting strong winds by as much as 10 knots. Red Day slightly overforecasts light winds, but is right on the money for strong winds.
So, take unqualified RMS Error / Bias accuracy claims with a pinch of salt.
The issue of verifications is still very relevant for offshore operations. But obviously, there are pitfalls that can snare the unwary operator. We discuss this in an upcoming article.
Secret #6: Supply Observations
A closely related secret to the previous one is providing regular weather observations.
Weather observations help the forecaster determine if the forecasts are on track, and if there are local effects, to correct for them. This is especially important when there are mountains or other significant terrain close by.
Some weather companies abuse client observations by simply adjusting the forecast to match the most recent observation, instead of trying to understand the dynamics of the difference. While such manipulation can be detected using proper verification methods, a simple way out is to provide the observation immediately after the forecast is received.
Properly used, observations can add a great deal of value to your forecast. This is yet another way in which a service with forecaster oversight excels over an automated product.
Some time back, while forecasting for a drilling campaign, we requested for weather observations. The forecast team was initially delighted when our forecasts seemed to match the observations very well. You can imagine their chagrin when after the first week we realized the operator was unwittingly feeding us back our own forecasts for wave heights which they had transcribed into a spreadsheet!
Secret #7: Give Short Term Contracts
This is more suggestion than a real secret, but we feel it is relevant.
Most (if not all) operators we've dealt with who operate producing assets award weather service contracts on a long-term basis, usually 1 to 3 years. We believe this is often detrimental to the operator, since much can change in that period. If the forecast quality drops, the operator has to wait for a long time before being able to remedy the situation, or might have to hire a second forecast service.
Long-term contracts are probably a throwback from the 1980's, when weather providers were few and prices were high. This is much less so today.
Perhaps a better way should be to limit the duration of these forecasts to a 6-month period, with an option to renew? In the meantime, the weather provider's performance should be evaluated by operations and with data from an agreed verification process taken into consideration.
Secret #8: Keep Us In the Loop
It pays to keep your weather provider in the loop concerning your operations. This is especially true for mobile operations (eg: seismic surveys, tows, etc.) or periodic weather sensitive operations (eg: tanker offtakes, diving, etc.).
It pays to let your weather provider know the critical thresholds of each operation you are planning to undertake.
Many companies do not do either, and so lose out on valuable feedback, warnings or expertise that they might receive from their weather provider.
At Terra Weather, it is our standard policy to know every client's operating thresholds, and to know the weather-related risk associated with a particular offshore operation. This is important because we utilize multiple models. In some situations, the models may disagree on certain weather parameters critical to a certain operation. By knowing our client's thresholds and planned operations, we are able to alert them to these conflicts, either in the textual advisories of the forecasts, emails or with a telephone call. This is especially relevant when disconnecting or abandoning the site prior to the arrival of a Tropical Cyclone.
Of course, the client is still responsible for keeping us in the loop on their planned operations.
Recently, we provided forecasts for a rig move to a regular client. They were due to be on site on a Tuesday, and they had previously advised us that they would be jacking down that same day. Meanwhile, one of our models predicted a sudden increase in waves well exceeding their thresholds on Thursday, while another had a similar increase a day earlier, on Wednesday. So, the increase was imminent, but the timing was uncertain. This would not have been a problem if they were jacked down by Tuesday as planned.
Without letting us know, the client were forced to delay the jackdown to Wednesday. The model that best matched their situation forecast for the Thursday increase, so the client did not see any increase in the waves on the forecast and assumed all was well for a Wednesday jackdown, and we did not know they were in any potential danger.
Fortunately, they were delayed further, and eventually had to move into safe harbor for other operational reasons. The increase occured on late Wednesday, which would have caught them in the middle of the jack down.
The point of this tale is that:
Secret #9: A Single Point of Contact
When the weather turns nasty, responsible weather providers call to warn their clients. Because this can happen at any moment, the savvy operator gives their providers a 24×7 single point of contact.
The need for a single point of contact, available around the clock cannot be overemphasized. Often, weather disasters occur over the weekend or at night. Having a single point of contact also helps the forecaster - always pressed for time - to avoid giving into the temptation of issuing a written or faxed warning when really what saves the client's bacon is a timely telephone call.
Secret #10: Pay Attention
High-quality weather forecasts are not just a product, they are a comprehensive service.
Among many other things, this means that the responsible weather provider has a system by which their clients are adequately warned about impending threats to their operations.
At Terra Weather, we use an escalating warning system for weather threats (Tropical Cyclone threats are handled slightly differently):
|Threat Profile||Action Taken|
|Probable threat, 5 or more days away.||Textual warning highlighted in the daily forecast.|
|Likely threat, 3 - 4 days away.||Email update to key client personnel.|
|Imminent threat, 1 - 2 days away.||The key contact is called.|
(The textual warning on the forecast is retained for as long as it is relevant.)
We have this escalating system in place so that our clients are guaranteed to be fully informed if a threat is very likely or imminent, but are not needlessly bothered for less likely threats. (Note: This is a matter of experience and judgement, and is another area where forecaster oversight can add great value to a weather service, far above merely automated ones. Automation has value too, in providing better tools for the forecaster to arrive at his or her decision.)
All responsible weather providers have a similar warning system in place. So, if you ever receive a call from your weather forecaster, please pay attention. The call is both to ensure that you are fully appraised of the situation and to give you the opportunity to ask questions.
Recently, one of our clients was towing a jackup rig when a Tropical Cyclone began developing, its track threatening to intersect their tow route. When, from our emailed appraisals it became obvious that the danger was imminent, the operator initiated a conference call with our duty forecaster and their key operations personnel. Changes were made to the heading and speed of the tow based on our recommendations. A costly re-route to the south was avoided.
The result was a very successful tow, completely missing the storm with minimal change to their schedule.
Secret #11: Give Feedback
All responsible weather providers try to continuously improve their operations. One key tool for this is the feedback form. This is much more than a blind fulfillment of ISO requirements. Client feedback, carefully processed, internalized and acted upon, ultimately pays handsome dividends in terms of repeat business.
Most weather providers recognize this. It's just common sense.
Successful offshore operators understand the value of feedback and take advantage of it by readily providing it whenever necessary, either through a form of some kind or with an email. Ideally, feedback should be constructive, highlighting key failures or successes. This helps your weather provider address deficiencies in their operations or reinforce (through training or operational changes) positive processes.
I hope this article has helped you gain some insight into the true cost of weather services, how weather companies work, and perhaps even given you some ideas how to improve your own business processes.
My thanks to David Fellowes (Just Developments) for commenting on this article. Any errors are of course the sole responsibility of the author.
Cost is King
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