FEATURE
THE BEST PART OF BREAKING UP…. BY LEIGH FRAME
T
he subsea industry is steeped in conservatism. The ‘IBM buyer’ is prevalent (remember, no one ever got fired for buying IBM) and in these conditions the turnkey approach to contracting system builds continues to dominate. Customers prefer to spend millions of investment dollars ‘protecting’ themselves from delays, which in many cases can be managed and mitigated with careful planning and diligent project management. However, believing that the more responsibility you heap onto your primary contractor the less risk you assume, can be a misguided approach. One would also imagine that the possibility of saving 20-30% of your system procurement cost would be a tantalising incentive to consider disaggregation; to carefully evaluate the trade-offs between contracting for turnkey supply versus taking some integration responsibility, and by implication, some risk. There exists a real opportunity in the market to review and develop procurement models that suit those customers prepared to accept some of that risk and who have an appetite for realising the significant available gains in dollar terms. The irony is that the subsea industry has already taken perhaps the hardest step on the path to disaggregation -
when customers pushed to acquire systems that were ‘open’. In other words, to procure the wet plant from one vendor and to require that the resulting cable system could accept terminal equipment from any unspecified vendor and that the system would provide, within certain boundaries, a predictable transmission result. This was surely a giant leap towards disaggregation given that previously, the wet and dry equipment always came from the same vendor, the transmission performance of the system was perhaps the single most important parameter to the customer, and correcting any mistakes in the specification of the wet and open part of a system, post-implementation, is practically speaking impossible. In addition, any consequences of a badly designed open system are likely to echo chillingly round the Customer’s management corridors for much of the 25 years of the system’s operation. And yet… if we look back over the last ten years of open system procurement, it’s hard to identify any single cable which has had material issues with transmission performance or commercial losses resulting from open system procurement, much less the pattern of difficulties that might have been predicted to arise from such a seismic shift in our industry’s procurement approach. It’s undeniable JANUARY 2023 | ISSUE 128
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