By Farshad Alikhani
Oil and gas 'Common Fields Development' (CFD) is a strategic consideration for the owner governments. Any owner government, despite its national, political and sectorial tendencies, has always emphasized its deliberations to CFD to promote its national interests.
In other words, there is no disagreement on the issue among any sovereign state's political and economic elites. This consensus has realistically been an opportunity to pursue an effective roadmap to CFD and defend hereby the actualization of international common interests. There are some challenges for some countries in common oil and gas fields' development.
In this context, if the question is why sufficient and acceptable results to maintain international interests in some certain common oil and gas fields have not been fully realized yet, in comparison with other satisfactory benchmarks in some regions, then the following analysis may briefly contribute to the explanation of different aspects of the issue and proposing some remedies to treat the CFD underdevelopment syndrome for the actualization of their on-time and effective collaborations.
Joint development of oil and gas resources among oil and gas-rich countries is of great importance in the era of ever increasing need for co-sufficiency and collaboration. There are pessimistic, as well as, optimistic approaches to oil and gas CFD. I do believe in 'Realistic Optimism' as a sound approach to analyze current and future trends in oil and gas CFD and hereby briefly explain different aspects of CFD.
Role of visionary leadership & energy diplomacy
The politics of cooperation governing CFD is a critical dimension of the issue. Political attitudes of the players may accelerate or hinder the pace of co-operations. A win-win attitude brings about peaceful adjustment of conflicts and can strategically lead to common interest's fulfillment. Other win-lose or lose-lose approaches have been repeatedly adopted by some players in certain circumstances, which past experiences have frequently shown that the defeated parties pursue routes to remunerate the undesired results.
Hence, the adoption of win-win approach can strategically benefit all in the long-run. I do believe that emphasizing on the principles of 'Continuous Dialogue', 'Good Intent', 'Sincerity', 'Purposefulness' and 'Mutuality' is a must for the involved stakeholders. It will, with more likelihood, lead to peaceful adjustment of probable disputes or conflicts. This necessitates on its own turn, the observance of international legal frameworks and traditions.
Negotiations can act as serious means to resolve likely disagreements in a peaceful and friendly manner. The observance of these principles brightens the horizon of common interest's actualization. The security issue is another aspect of the matter. Engaging collaboratively to safeguard common resources can reduce the probability of conflict and can act as an effective mechanism to conflict resolution and hence, contributing to a more secure atmosphere.
The challenge of 'Unified Leadership' has to be handled through adopting collective mechanisms such as establishing a 'CFD Leadership Committee'. This helps to bring about change in the shortest period of time. This committee has to work closely with 'CFD Operational Committee' which follows the effective and timely operationalization of the policies adopted by the leadership committee.
There are various approaches to CFD which I call here as 'Balanced-Developmental Approach' (BDA), which emphasizes the development of all phases of a certain oil or gas field, and 'Imbalanced-Developmental Approach' (IDA), which concentrates on certain prioritized phases of a certain oil or gas field. Each approach has normally its opportunities and deficiencies, if is seen in a real strategic and operational and technical context. There are many reasons regarding when and how to apply IDA or BDA, but the role of governors' 'economic, political, developmental and technical attitudes', besides 'situational contingencies' are important factors to consider among the others, which the leadership committee can decide upon.
Accountable and flexible management
There are some managerial obstacles which may hinder and slow down the pace of CFD. There are some managerial considerations to facilitate the effective CFD. Cooperations lead to the efficient utilization of common oil and gas resources and herby to strategically manage common fields in the long-run. Establishing consortiums for more productivity is a mechanism in this regard. The establishment of 'Joint-Ventures' or 'Common Commissions' for deepening interim co-operations is a widely used recipe to speed up the timely joint-implementation of common projects in a certain common field. Such mechanisms help either to share resources, or diffuse managerial and technical expertise and experiences by the involved parties. As a matter of fact, Outsourcing oil and gas projects to 'Real Private Sector' or 'Real Semi-Private Sector' of the involved governments can synergize the overall shared capabilities.
Responsive, cohesive, ethical and accountable management for CFD is a strategic requirement to respond to the developmental needs of the industry and to foster 'Meaningful Change'. Accountability of management towards the achievement of CFD goals in a definite period of time seems to be one of the most vulnerable managerial issues. The appointed bodies by the leadership committee are responsible to accomplish the determined goals. This managerial mechanism promotes the accountability of delegated bodies for their performance. The leadership committee shall be informed on the progress to help lead the overall process. Issues such as 'Early-Production' can be considered as strategic issues by both committees to respond to market demand, if it has reached to disequilibrium. These mechanisms, if implemented effectively, will treat what I call 'The Projects Completion Syndrome' (PCS). Flexible management is a prerequisite to foster requisite leniency in all phases of the development process.
Proactive investment & finance: Key to financial success
The third issue is the effective and timely 'Financing' CFD projects. Close coordination with national parliaments, domestic and international financers are suggestible mechanisms for the harmonization of all CFD efforts. Joint-financing CFD can be achieved through establishing a 'Joint-Financing Committee' (JFC) to foster necessary changes.
Technology, methods and equipment
Technological issues are enough important to cite for promoting CFD efforts. New financial, operational and managerial methods have to be exercised by the involved stakeholders to speed up the effective utilization of common oil and gas fields. Supporting strategists, technologists and manufacturers have to be put on the technology development agenda; procurement from international markets must simultaneously be on the fore of the efforts. The adoption of new technologies for operational efforts such as 'Directional Drilling' or 'Radial Drilling' is of strategic importance for CFD.
New legal frameworks, contracts as catalyzers
Establishing and application of a diversified set of 'Contracts' is another challenge for the involved partners. To initiate new legal frameworks, CFD must be streamlined by a closed harmonization with respective national governments or parliaments and a composition of independent expert groups and institutions.
New frameworks must either actualize the interests of the involved actors who engage in CFD efforts. What I call as a win-win 'Financial Gains Portfolio' (FGP) for the engaged parties can be assumed as the core point of CFD agenda. There will be a real need to review and reorganize present legal frameworks to promote the unity of efforts and interests in CFD. New elaborated contractual and legal frameworks pose serious implications on motivating giant financers and investors.
National interests as well as other stakeholders' interests must be observed, in a broader context, through developing a 'Comprehensive Interests Basin' (CIB) to convince all involved parties to be able to gain what they are pursuing in their interim co-operations. Establishing an expert committee to address potential neglects on contractual issues is important to prevent misunderstandings, resolving disputes or probable corruptive behaviors, which in many cases, seem to be inherent in some oil and gas deals.
Strategic human resources management: The heart of petroleum sector management
Strategic human resources management (SHRD) is a strong commitment for effective CFD efforts by the engaged partners. Adopting an effective and meaningful 'Human Resources Management' (HRM) system based on scientific measures such as 'Performance-based Management' (PBM), or 'Competency-based Management' (CBM) can act as an early-productive mechanism to promote the morale of craftsmen in common oil and gas fields. Human factor is 'the most important element of joint-productivity'.
Co-operative 'intergovernmental relationships' are important for developing common strategies for CFD to maximally increase Returns on Investments (ROIs). For this to happen, the involved stakeholders may find ways and means to legally, politically, managerially and technically evaluate pitfalls and provide time-saving remedies to safeguard common interests through CFD in a broader internationally cooperative and strategic framework.
Overcoming political and more importantly, technical barriers for effective CFD is a liability which can be realistically managed through mobilizing mutual capabilities and initiating visionary leadership, through energy management and diplomacy. The effective implementation of CFD schemes can be achieved through a comprehensive mobilization of common capabilities and engaging in energy diplomacy and multilateral dialogues among the involved stakeholders.
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