F1: ASSET TEAM SIZE BY INDUSTRY
Source: Water Street Partners Non-Operated Asset Team Database
Upstream oil and gas Minerals Chemicals
Does size matter?
RETHINKING THE SIZE OF YOUR ASSET TEAMS
JAMES BAMFORD, JOSHUA KWICINSKI, AND MARTIN MOGSTAD,
WATER STREET PARTNERS, WASHINGTON, DC
NON-OPERATED ASSET TEAMS are under assault. Staring into low commodity
prices, non-operated asset teams in petroleum, minerals, and other natural resource
sectors are under pressure to reduce team
Attempting to shelter their teams – and
make a fair and fact-based determination
of the right team size – many non-operated
asset managers and executive sponsors lack
the data and perspectives to do this well.
It doesn’t have to be this way.
UNDERSTANDING RISK IN A POST-MACONDO AND SAMARCO
Assets can have very different technical risk
profiles; for example, developing an onshore
conventional oil and gas asset is inherently
less risky than an offshore Arctic oil and gas
exploration well or one in deepwater Gulf
of Mexico. Closely related to value or upside
is the risk profile of the asset or downside.
Non-operators post-Macondo and Samarco
increasingly understand the financial and
reputational impacts of Health, Safety, and
the Envrionment (HSE) incidents. On the
whole, this suggests that assets with greater
HSE and technical risk likely need a larger
team providing assurance and leaning in
on critical issues.
Non-operated asset teams typically range
from two to eight FTEs. Teams in the oil
and gas industry tend to be twice as large
as teams in mining, chemicals, and other
natural resource industries, according to
data Water Street Partners has collected
and synthesized on team size in more than
250 non-operated assets across the natural
resources sector (See Figure 1). And asset
teams looking after joint venture (JV) operating companies—incorporated business-es with an independent management
team—are usually twice as small as asset
teams looking after unincorporated JVs
operated by a partner (See Figure 2).
Ideally, non-operators thinking about