The world’s largest energy companies plan to significantly widen a two-year effort to standardize the kit they use to pump oil and gas, hoping they can deliver significant cost savings, said industry insiders.
Discussions have been taking place at the World Economic Forum in Davos, which signals that companies are seeking to tighten their belts permanently even as oil prices recover. Bespoke equipment designed on a project-by-project basis was common during the decade-long boom in crude prices, but looks less affordable after the industry’s worst downturn in a generation.
“Standardization could save the oil and gas industry hundreds of millions of dollars every year,” Bob Dudley, the chief executive officer of BP Plc, said in an interview in Davos.
Major oil companies plan to expand their list of standardized kit to 40 from the initial four items agreed on when they started their collaboration in 2016, also at Davos, the people said. Initially, the project included giant valves, electrical transformers, and two pieces of submerged oil well equipment. Executives believe they can reach a technical consensus with their suppliers on a new list including equipment from across the whole industry.
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