Really bad decisions being made right now to hit OPEX targets in the upstream, anyone know what is the reason for the latest example of insanity?
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False economics.
Save $100 Opex because of a tracked metric even if costs $100,000 profit.
Benchmarking is a joke especially when the direction given by management is that we want to beat everyone at everything which is impossible.
Just wait until you see what’s left of the service line budgets coming up. If you thought your support was poor now, wait until you get no response and end up having to do the work yourselves… oh wait, you can’t do anything because you have to trust your service functions. The cracks have formed and it’s just a matter of time before the budget cuts result in a mishap. Just hope that ‘nobody gets hurts’ or do we even believe in that anymore?
I wonder how much money is wasted each year with LPS and issues that sls fabricate?
By all means, we should benchmark where it makes sense. But I’m not exaggerating when we’re being told to spend time on creating plans to trim fractions of pennies on the dollar when performance products are making more than double the competition’s commodity grades. Hundreds of dollars per tonne more than the competition, so we have always focused on getting more pounds out the door. This is applying a refining mindset to specialty products.
And no snarky retorts about us not being in specialty businesses. You can go look up where we’re making a lot of money in the heritage chemicals org and figure it out.
Nothing like a corporate plan opex hack to get Sr. managers in survival mode, by cutting back on donuts , expats, and travel....."Own the mistake and move on....not."
Management are mo--ns
Our turnaround costs in our refineries and chemical plants is three times the industry standard based on benchmarking studies.
Yes, we need to get our variable costs under control in our operating units.
Bottom line, hire more contractors during turnaround season. Contractors are lower salary than an EMTEC employee and we do not need to pay retirement or medical benefits to contract employees.
No picnic in Annandale this year, Syrup cut and ran left us this dumpster fire , I miss Mr. Frosty 🍦RE have a plan……
EMPS refining-heavy operations management is leaning hard into benchmarking and operational efficiency, even for high margin chemical sites that make way more money getting additional pounds out the door than worrying about moving up a couple percentage points on energy cost per pounds. We might make less production and money over the next few years, but our variable costs will be much improved!
Our Leadership are willing to do anything to reach their promised opex cuts. They will cut all assets to bare bones and by the time it causes leaks etc, they will be happily retired. No such thing as leading for the long term any more; just lead for the next Annual report and bonus
OP, it's not only the upstream. It's everywhere in the corporation. Everybody is making bad decisions for many reasons. First, oil is down to about 70 bucks. Second, Product Solutions is not doing well. It's losing customers due to this year's budget cuts. Low Carbon Solutions is a low income solutions company. Really a zero income solutions company. They are burning through cash and have no revenue. It's Darren's pet project. Annandale keeps wasting money. And so on. So, next quarter's earnings will be low. The management committee knows it and it's squeezing every business for money and cutting OPEN and CAPEX to ridiculous levels. So, middle management is making bad decisions to meet the irrational targets set by Darren. It's everywhere.
They barely made any money last year. Sarcasm. Like I have said before . When the earnings started rolling in after 2020, it was euphoric at a minimum. Like cake to a fat kid. All rationale went out the window . Plus I will never say savings again either.
Safety first.
(to go)
@OP - VP and above bonuses and rankings driven by next quarter targets. It’s why we continually see irrational decisions, followed 12-18 months later by a complete reversal. But it was always “the right decision at the time”!
Corporate benchmarking made by someone who has no idea about the actual business.
Someone padding their bonus package