Ras Gas Background: The North

Ras Gas Background:

The North Field is the world's largest non-associated gas resource. In 2010, this national asset of the State of Qatar will supply 25 -- 30% of the world's liquefied natural gas, of which RasGas, a joint venture between Qatar Petroleum and ExxonMobil, will deliver about half. From 1999 to the present, RasGas has grown from zero standard cubic feet of production per day to 9 billion standard cubic feet per day and greater than 300 kbd natural gas liquids and have built the infrastructure of the world's premier LNG value chain. Proprietary producing wells are at the start of RasGas' recognized world's premier LNG value chain. Their performance enables each subsequent link in the chain and sustains billions of dollars of present and future investment.

World class wells are not the inevitable outcome of a world class reservoir. Innovation, integration and execution, are central to the way RasGas is organized and managed. Innovation is an important key to success because it not only improves company outcomes, but also the certainty that RasGas assets are delivering maximum value. Innovating while executing, requires a high-degree of integration; something that is not natural to most joint ventures. The RasGas collaborative internal frame-work which includes synergy, systems, comprehension, is vision driven and creates the necessary opportunities and frameworks to continue providing both a world-class product and equally effective customer service. Integral to world class performance is having consistent shareholder support of the new ideas and the innovation needed to achieve those objectives. In addition to providing secondees; a powerful technology base as well as proven worldwide expertise is provided by Exxon/Mobil. Other community partnerships are supplied through colleges and universities.

RasGas features a systematic framework which is required to integrate many elements simultaneously; people, systems, tools as well as many other elements integral to the successful continuation of an international business responsible for providing fuel to the world market. In the successful carrying out of this necessary and important service, innovation is an essential quality for the continued success of RasGas. Though it is necessary for consistent and reliable frameworks, innovation is also necessary to meet the growing and changing demands of a market as well as the inherent variability in a multi-organizational base. Where many other organizations can rely on a "status quo" no such comfort is available in the volatile world of natural gas drilling, processing, and distribution. In order for such a venture, not least because it is a joint venture, to succeed successful communication, allocation of tasks, leadership, interdepartmental understanding, definition of responsibilities, and the effective sharing of information and responsibility between departments is crucial.

Failure to be comprehensive represents loss of opportunity so in the well delivery arena we have taken special care to be comprehensive. Our functional coverage, where we systematically deploy expertise and innovation, covers the continuum of well construction milestones; drill, complete, and produce. For example, even as we have reached our development plateau of 9 BDF per day, the resources devoted to well related research studies have not diminished. Rather, the focus has now shifted from developing production to sustaining production.

In the functional area of well reliability and gas deliverability, we have created an accountable organization of specialists. One accountable group is the Subsurface Group who manages the reservoir and the well life cycle. It is comprised of 1200 people including rig operations, vessels, secondees, contractors and direct hires. SSG is staffed with experienced reservoir, petroleum, production, planning engineers, production petrophysicists, business support, and business process professionals, and a younger national workforce. It is divided into several departments with clear roles and responsibilities that mesh together in a way that complements the other departments and groups within to create the synergy necessary to get the job done. Everything Subsurface does is focused on delivering the potential of the reservoir and long-term, reliable, gas deliverability from our wells.

Problem statement:

Poor technical integration among the Subsurface Group's sections with regards to overall goals and objectives

RasGas Subsurface Group consists of multiple departments each consisting of several sections based on functional discipline. The overarching goal of the Subsurface Group is to effectively manage all aspects of gas supply related to; drilling, completion and reservoir management activities so as to be considered the operator of choice by shareholders. This goal can only be achieved if there is clear alignment and collaboration between the departments and sections. However, in the last few months several problems have taken place resulting in sub-optimal operations, additional cost and negatively impacting the image of the entire group. These problems include the followings:

Individual sections at times communicated independently with Shareholders, often with different messages. For example, during operations, PE, RE, and WMD were each communicating results back to Shareholders instead of sending one unified RasGas response. This confused the Shareholders resulting in the time required to get their direction to be increased. This in turn led to delays in getting instructions to the rig, adding increased time and cost to the operation.

Analysis and final reports for data gathered were not getting generated timely as various sections thought this was someone else's responsibility. This led to a very large backlog of analyses and lack of confidence by the Shareholders that RasGas could provide the reports in a timely fashion.

Findings tended not to be shared between the sections resulting in missing opportunities for enhancement

There was a tendency to have poor working relationships between staff from different sections due to the independent objectives of each section. This led to unhealthy competition and occasional subversion.

Work products were generally created in a serial fashion with one section handing off to the next with little or no collaboration. Section members tended to understand only their portion of the work product and had little motivation or interest in understanding the whole.

Staff members would often debate issues with each other at key Shareholder's meetings instead of presenting a unified RasGas response. This led to a lack of confidence by Shareholders in RasGas' technical capability.

These problems are resulting from an antiquated top-down management style within the Subsurface Group. A culture developed that did not promote; integration, collaboration, and teamwork. Consequently, the Subsurface Group has, on occasion, failed to meet the expectations of the Shareholders in fulfilling its drilling and reservoir management obligations.

One solution to the lack of integration is the formation of multi-functional teams whereby representatives from each function (i.e. section) are placed together. This has greatly improved collaboration and sharing of information resulting in improved work products, efficiency, and renewed confidence by the Shareholders that RasGas is the operator of choice. However, the formation of the ASTs in and of itself, was not sufficient to improve integration. There also needed to be a cultural change in the way staff approached their work. Under the AST culture, staff was expected to take less direction from their function, but instead work with their counterparts from other disciplines to proactively solve issues.

Major metaphor: Culture

As a result of the old style management ideology currently in effect, the departments and sections in the Subsurface Group tend to be isolated. Staff was expected to work only on items/issues related to their own discipline. Staff generally were not to be concerned about other disciplines. Effectively though departments needed to work together in order to achieve organization goals, at an individual employee level departments were not working cohesively. This environment of divisiveness and individual competition was ultimately counterproductive in the successful attainment of production and expansion goals (Wolfram, 2002). Culture is identified as the dominant metaphor in that systematically the developed culture of RasGas is the primary impediment to effective management of employee and team development. Because the environment is one of competition as opposed to coordination there is no unified front to present to share holders and often key assignments and processes are either not completed or completed in such a way that is sub-par. It is the culture of the corporation which ultimately must change before any significant changes are observed in performance and overall output.

Value was placed more on achieving individual performance objectives, or at best only section objectives, versus achieving overall RasGas strategic objectives. Staff tended to follow the traditions of an old style, non-integrated work environment whereby individual achievement superseded team achievement (Ackoff & Emery, 1972). Section and department managers tended to follow existing rituals and did not lead by example. They were often observed infighting instead of promoting collaboration and teamwork.

Trust: Sections contain one type of engineering discipline and they do not readily trust other section members leading to duplicity of work and getting second and third opinions. Sections and their managers seemed to be experiencing the silo effect. This lack of trust also conveyed a disorganized front to shareholders (Ackoff, 1981). If different departments were unable or unwilling to work together then how could it be trusted that they were the most effective and efficient choice for continued investment.

Communications: Overlaps of ownership and reporting led to typical communication problems with so many vested stakeholders each with their own interests and priorities (Ackoff, 1981). The spirit of competition also negatively impacted the manner in which employees communicated. The lack of specific definition as well as the highly isolationist company mentality ultimately resulted in a communication breakdown which prevented the effective running of the company.

Knowledge Sharing: Mentoring and cross-training have been declining leading to less knowledge sharing and familiarization opportunities for younger less experienced staff. Section members lack the opportunity to share knowledge and to share in lessons learned. This enforced specialization of employees will ultimately result in poorer results. Cross discipline work is essential in the successful integration and most efficient use of employed experts (Forrester, 1971). It could potentially take months longer to reach a favorable outcome if indeed the most efficient and effective outcome is ever reached at all.

Compartmentalizing of Data and Ideas: There are silos / compartments of information that was not readily communicated across departments (Richmond, 2001). As discussed above this mentality ultimately hinders progress. Employees within a unified organization must be both able and willing to share information across departments in the effort to find the most favorable outcome for the organization as a whole. In an organization where managers are seen fighting amongst themselves and interdepartmental cooperation is not encouraged or enforced it is not likely that there would be an environment of free flowing information.

Coordination and interface management: Between SSG, Operations, Venture and other groups of RasGas is extremely critical in such a dynamic environment to meet the key deliverables from each group and to spot any potential optimization opportunities. Need to create the opportunities to address the right balance of projects and to address immediate and future shareholder needs considering the on-going multiple projects.

Minor metaphor: Brain

There was a general lack of communication between the departments and between sections. Each section tended to work independently from the other sections. This effectively led to distributed control. Staff worked with a mindset that they only needed to be involved in work activity related to their discipline. Each section had well defined duties so that from the department-level perspective, parallel information processing was taking place (Ackoff, 1981).

Tasks definition: No production activity descriptions or production standards are defined or followed -- There are no common grounds for data analysis or priorities. There is no common surveillance program. The necessity of task definitions which are clear and concise is for the purposes of more efficient activity as well as ensuring accountability (Churchman, 1971). It has been shown that employees in a work environment with stringent accountability requirements

Accountability: Unknown or misunderstood accountabilities for surveillance and production activities. Ownership not fully defined and sections have not agreed on ownership resulting in misunderstandings pertaining to who will be performing the work and when it will be completed. Decision making and common goals not addressed for new and missing activities. Without accountability there is less motivation for precise and timely work (Gleick, 1987). There is also the increased likelihood that important aspects of jobs will be left out or forgotten as a result of thinking it would be handled by another employee or department. In the instance of such a misunderstanding, it is also impossible for specific blame to be allocated as it is impossible for the mistake to be effectively corrected and prevented from happening again.

Better Distribution: Sections are assigned work to just several experienced personnel leading to overwork. The overwhelming lack of trust even within departments also indicates that it is unlikely that in the event of a work overload that there would be intra-or inter-departmental assistance (Dewey, 1989). Also even if it were clearly evident that another expert or department might be better equipped to address an issue or could be possessing of information relating to an assignment that the employee or department initially assigned the task would reach out and ask for assistance or input.

Technical Analysis: No consensus on what the data was saying. Data is analyzed and scrutinized by different sections who added their own unique perspective. When there is no cohesive report to present to shareholders, it not only jeopardizes continued involvement in the organization but it has the potential to create panic in this industry (Singer, 1959). Individuals as well as individual governments rely on the cohesive presentation of facts and figures regarding available and projected fuel resources. In the event that departments are not working together, those facts and figures cannot be relied on effectively. If there is the inability to predict available stores as well as realistic projected supplies then not only is there panic in the immediacy regarding fuel which will negatively impact the market and thus the shareholders, but it also jeopardizes future projects.

Standardization of Processes: Each Section has overlapping and duplicated processes which requires optimization and standardization. One such process, the PLT is less efficient and it is used over several sections. Standardization assists in reducing the learning curve of new users. It also reduces the unnecessary redundancy of processes and procedures. The elimination of duplicated processes ultimately saves money for shareholders as well as increasing the efficiency of different departments. The time spent not performing redundant operations may also provide departments with more time to pursue other projects which may have been neglected or nor pursued at all because of a lack of time.

Discussion of Applicability:

Customer (beneficiary or victims of the situation): The customer in this context, or more pertinently the shareholders suffered as a result of the isolationist mentality employed by the SSG. Though ultimately individual employees and by extension individual sections and departments were all focused intently on the production of reports results and progress within their specific field there was no integrative work done (Wolfram, 2002). This resulted in conflicting reports as well as missed deadlines and ultimately the failure to meet production goals.

Actors (those directly affecting the situation): Employees in this organization though highly skilled in their respective fields were not skilled in effective communication. Though there was a clear definition of specific duties, responsibilities, and goals there were no guidelines on the protocols regarding interdepartmental cooperation and communication. Employees approached their tasks with the mindset of competition as opposed to cooperation. This often lead to a hostile and ultimately unproductive workplace environment (Churchman, 1971).

Transformation process (what is happening in terms of inputs being transformed into outcomes in this situation): Asset Surveillance Teams have been utilized. This effectively combines the efforts of multiple departments in order to provide a unified front for the benefit of both Shareholders and Company executives. This unified team enforces a mentality of cooperation and mutual advancement (Boulding, 1956).

Weltanschauung (worldview of participants -- the underlying narrative that addresses the question "why bother with this situation of endeavour?"): Though the results of RasGas have been largely positive, employees as well as shareholders have become aware that with increasing demand, there will be an increased need for effective communication. Currently, departments struggle to work effectively together often resulting in disappointing outcomes. With the increased responsibility of greater commitments to the world fuel supply, there will be increased pressure on the existing system of cooperation and communication. As it stands, it is unlikely that it will be able to meet market and by extension shareholder expectations. The implementation of AST protocols though may ease this burden (Gleick, 1987).

Owner (the entity most affected by the particular situation): The owner of the RasGas group is actually a joint venture of two large fuel providers. These organizations represent not only the financial but also the energy interests of millions of individuals worldwide (Singer, 1959). It is essential that a more cohesive work method be developed in order not only to facilitate the successful attainment of work goals, but also to ensure that the owners of RasGas are able to continue expanding research and drilling in order to meet the energy needs of the world at large.

Environment (what lies outside the situation): RasGas is one of if not the largest single supplier of natural gas in the world. As such the majority of the world's gas needs rest within the direct purview of the company heads. The continued expansion of drilling operations is not only essential to the continued success of the company but also the continued energy supply for the world at large. Successful carrying out of the daily operation of this company directly affects futures around the world (Gharadajedaghi, 1999). Though the world is moving to cleaner more environmentally friendly energy sources, currently natural gas is one of the primary fuel sources for everything from heating to space exploration. Without the effective communication and management of so essential a company it is possible that there could be very serious worldwide ramification.

Methodology: Systems Theory- A Socio-cultural View

In the context of an organization so in need of organizational overhauling, the only methodology applicable is one which focuses on the organization as a socio-cultural entity. Within this methodology, five specific systems are identified and prized among the countless systems evolving from interdepartmental interactions (Gharajedaghi, 1999). Openness, purposefulness, multidimensionality, emergent property, and counter-intuitiveness are the principles upon which the methodology is founded.

The application of openness to a management system indicates that no individual problem or quandary can be addressed without taking into account the contextual totality of the environment. To work solely on a problem such that an overworked scientist let work go unfinished or without assuring the quality of the output without taking into account the isolationist mentality of the employees would not solve the problem at all. Rather it is essential that each potential problem or point of interest be evaluated as a single aspect of a larger organic system in which nothing is spontaneously created or destroyed. Because social systems mimic biological ones, if a negative behavior or process is not identified and corrected it is likely that this process will perpetuate itself ad infinitum. In the case of RasGas, competitive upper management propagated the same isolated competitiveness to all other departments.

Purposefulness is a system governed by both culture and a perspective of self preservation. Individuals choose on a personal level and subsequently on a team level and then a departmental level to do things which will ultimately serve their best interests mediated by the existing culture within the environment. In a cultural environment in which promotes cooperation and interdepartmental sharing, then it is likely that employees would adopt these behaviors and work cooperatively. However, given the climate of RasGas, it is conveyed to employees that they should act in an isolationist fashion seeking independent success and achievement as opposed to working towards communal success.

Multidimensionality is typically defined as the incorporation of multiple points-of-view or multiple facets of a single situation into the manner in which said situation is addressed. However, in the context of this example, it is essential that multidimensionality be taken to mean the cooperation between diverse fields and experts. Multidimensionality should be applied in the context that each department should be able to contribute effectively to the work of every other department. Rather than working against each other the work of each can be enhanced and expanded through cooperation.

Counter-intuitiveness addresses the fact that even the most logical action given the contextual situation may produce results contrary to those sought. This possibility must be forseen and planned for. In the context of RasGas, the development of a competitive environment among the employees rather than fostering more effective work, ultimately resulted in a breakdown of efficient communication and work output. Essentially, because those individuals in upper management positions did not address this system results were rather negative in terms not only of production and information output but also in terms of the development of a healthy and effective work environment.

Emergent properties is the unexpected positive results of effective cohesion. In the context of RasGAs no such properties can currently be identified. However, with the implementation of AST protocols and the encouragement of cooperation between employees as well as the simplification of redundant processes it is likely that a great many emergent properties will be uncovered. Not only will RasGas be more efficient and profitable it may also lead the way in fuel research not only locating emerging fields but possibly expanding into more ecologically safe and friendly fuel options. As the more positive phenomena of workplace cooperation and interoffice communication are perpetuated so too will the likelihood of useful properties seen in the aftermath of such growth.

The application of a soft system of management to this problem is not to imply that the problem itself is "soft." Rather, that a method of addressing issues which incorporates more abstract variables and the belief that the system is one which is not bounded physically (Checklan & Poulter, 2006). Ssm assesses corporate environments epistemologically meaning that it is a method of addressing a corporation as a whole system the construct of which is hypothetical or implied as opposed to physical. This method of management allows for dynamic solutions such as the implementation of an AST system where a more "hard" approach would prevent such actions. In a hard management style, each department would necessarily be viewed distinctly from each other department. The ability to integrate and overlap said departments would pose a problem in that it would represent a fundamental theoretical impossibility (Checklan & Poulter, 2006). It is necessary to approach this corporation from a soft perspective specifically because of the existing divisiveness of the corporate culture.

PART B

Peter Senge developed five disciplines which were intended to create three core principles in companies which were intended to transform said companies into "learning organizations." These core principles; fostering aspiration, developing reflective conversation, and understanding complexity were ultimately intended to not only transform companies but also make them more effective and machines of self perpetuating efficiency (Sternman, 2000). Senge's five disciplines; personal mastery, mental models, building shared vision, team learning, and systems thinking were not necessarily intended to be implemented sequentially. The first four disciplines can be developed concurrently and in varying order depending on the needs of the individual organization.