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RCM Consulting Ltd is Registered in England: # 4574282. It is a wholly owned subsidiary of RCM Group Ltd. Registered office: Black Barn, Valley Rd Fawkham, Kent DA3 8LY

Directors: R W Gaisford (Managing), CA Gaisford (sec);  Accountants: West Reynolds: Black Barn, Valley Rd Fawkham, Kent DA3 8LY

                  CRINE - - Cost Reduction Initiative for the New Era - -  CRINE

Text Box: CRINE

The early oil and gas industry in the North Sea had the status of a boom industry. It was developed under harsh and novel conditions where safety was paramount but where development cost (CAPEX) was seen to be insignificant compared with speed of development and the achievement of first production in achieving maximum return on investment which for many years amounted to 25% of the UK’s total capital investment. The government response was to impose a regime of special windfall taxation including at various times; Licence Fees, Special corporation Tax, Petroleum Revenue Tax etc. which were aimed at reducing the return on investment to the developers to an attractive but acceptable level whilst optimising the rent achieved.  This provided income to the public purse. Over time, the UK province became more mature and field discoveries declined in size and accessibility. Increasingly,  development price became a greater element in the investment decision. In the early 90’s, the price of oil dropped from $35 a barrel to $12, finally making oil exploitation in the North Sea uneconomic.

 

Under the inspiration and leadership of Rex Gaisford (now CEO of RCMC), oil/gas field operators, contractors and suppliers together with other key players in the industry responded to this challenge and came together to form the Cost Reduction Initiative for the New Era (CRINE). a co-operative effort to find ways of reducing or eliminating the burden of non-productive activity which by this time beset the UK oil-field development industry.

 

After 12 months of investigation and analysis of the workings of the industry the CRINE REPORT was published. Its recommendation was a revolutionary prescription.

 

The CRINE REPORT was published and presented to the off-shore industry at a specially convened  CRINE CONFERENCE held in the Queen Elisabeth II Conference Centre in Parliament Square LONDON

During the following 12 months, the publication of the CRINE REPORT, its recommendations were adopted and put into practice by the industry, leading to a reduction in the cost of oil and gas field developments of 40% (Ref: Wood Mackenzie).

 

CRINE revolutionised the way of working in the OFFSHORE sector in the UK and  went on to transmute into the CRINE NETWORK and PILOT, together representing a continuous  improvement program subscribed to by the entire industry.

 

The CRINE model and example was subsequently followed in many other parts of the world and in other sectors of  industry engaged in capital intensive investment.

Text Box: The full text of the CRINE summary report as presented to the CRINE conference :
Text Box: CRINE revolutionized the off-shore oil & gas industry