CATEGORY
Offshore Labor
Labor is a worker/ tradesperson employed in the physical construction of the built environment and its infrastructure. Based on the location they work, labor could be named as Onsite and Offshore Labor
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Offshore Labor Market Monitoring Dashboard
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Offshore Labor Industry Benchmarks
Savings Achieved
(in %)
The average annual savings achieved in Offshore Labor category is 16.40%
Payment Terms
(in days)
The industry average payment terms in Offshore Labor category for the current quarter is 75.0 days
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Category Strategy and Flexibility
Engagement Model
Supply Assurance
Sourcing Process
Supplier Type
Pricing Model
Contract Length
SLAs/KPIs
Lead Time
Supplier Diversity
Targeted Savings
Risk Mitigation
Financial Risk
Sanctions
AMEs
Geopolitical Risk
Cost Optimization
Price per Unit Competitiveness
Specification Leanness
Minimum Order Quality
Payment Terms
Inventory Control
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Offshore Labor market report transcript
Global Market Outlook on Offshore Labor Market
- The global offshore labor market is valued at $66.6 billion in 2020. It is expected to grow at a CAGR of 4.6 percent to reach $76.2 billion by the end of 2023
- The demand for offshore labor is driven primarily by E&P activities, majorly in APAC, followed by ME, and Europe
- Discovery of deep-water assets and offshore wind projects are expected to drive the demand in offshore labor job roles
Market Drivers and Constraints
Drivers
- An offshore well continues to produce comparatively same volume of crude for 10–15 years, whereas onshore wells reach approx. 50–60 percent of production in the first year. This would ensure long demand for offshore labor compared to onshore
- Nearly, 70 percent of the world's oil & gas production comes from mature fields. This high number of maturing fields would demand production and related activities on offshore, to tap the maximum reserves, in order to meet the increased demand globally
- New deep water discoveries are expected to drive the demand for the offshore labor market
Constraints
- Prevailing low oil spend, due to slow recovery of crude oil prices, is affecting new investment in offshore
- Stringent regulatory policies, health and safety measures to be followed on offshore platform would limit the number of labor on platforms
- Since labor has to stay in rigs for a longer duration, companies prefer to keep the crew to minimum, in order to bring down the expenses on accommodation, food, etc.
- Work–life balance for the labor would be compromised, as the working environment is challenging for the labor crew
- Recent developments in drilling, such as increased drilling speed (~100 times), would bring down the drilling time by 50 percent. This would bring down the labor count and requirement
- Automation and efficient drilling rigs have reduced the actual need for field hands on offshore platforms
Sourcing Models
- Currently, it is observed that different models are adopted for each spend category by oil companies; however, in the future, large organizations would opt for hybrid or blended model, due to increased focus on developing a holistic approach for offshore labor role, which could be a temporary or permanent one
- The hybrid or blended model will provide a single point-of contact for all categories of labor across upstream, downstream, and midstream
Master Vendor Model
- Takes the overall responsibility for sourcing temporary and contract staffing services
- All orders go to the master supplier, to be either filled by the master supplier or distributed to a tier-II supplier
Direct Sourcing Model
- Supplier selection from a pre-vetted list of preferred suppliers