The oil and gas sector should take a tab out of the aviation sector’s commercial playbook, according GE Oil & Gas’ Neil Saunders.
Saunders, who is the senior vice president of products and projects subsea systems, said a straight “knee-jerk” cost cutting reaction falls short of solving the industry’s problems.
“I think part of the positive sentiment right now is that this downturn can do us some good,” he said.
“It can sharpen the focus on costs and with that I think sharpen the sentiment on true costs.”
He referenced the aviation sector’s ability to treat service firms as full lifecycle providers as a starting point.
“I think if there was one thing I would like to see it would be a shift in the collaboration and transparency,” he said.
“The transactions are clunky and probably a bit out-dated.
“We have a huge part to play in that. Let us in, let us help and don’t get us in too late.”
Saunders insisted a more holistic approach was critical to recovery.
He said: “It’s not enough asking us to take 15% off the price of a remote for example.
“Actually they should be telling us what they are trying to achieve with the remote, with the TV and with the whole room.”
A contractual model, which rewards functionality, should replace straight price wars, according to the subsea expert.
He said: “In aviation there’s a commercial model where if the engine is operational we are getting paid and if it’s not we’re not.”
Ultimately Saunders’ added: “We are there for our customers. We will weather the storm with them and when the market picks back up we will be there still.”
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