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28 EXPANDING THE USES OF NA VAL OCEAN SCIENCE AND TECHNOLOGY 



worst, nonexistent. There is a need for better mutual disclosure and technical 

 interchange between ONR and the oil and gas industry to maximize private 

 investment in the U.S. national interest. 



Before addressing the reciprocal transfer of offshore technology between 

 ONR and the private sector, it is helpful to review the existing state of the oil and 

 gas industry with special regard to technology outsourcing and strategic 

 partnering. Specific offshore technology needs can then be more effectively 

 examined and understood. 



There are two traditional technology strategies in the petroleum industry; (1) 

 companies own all technology, having a full suite of internal capabihties (com- 

 mon among major companies); or (2) companies outsource (i.e., contract out) all 

 technology needs and rely completely on outside suppliers (common among 

 smaller independent companies). A third approach incorporating advantages of 

 both strategies is now emerging in the industry. Some companies are beginning 

 to adopt a strategy in which they own core technologies and outsource the re- 

 mainder. This allows a company to retain highly focused, business-oriented 

 R«feD while relying on suppliers for other support. The change has been driven 

 by cost/benefit analyses, rapid changes in technology, a redundancy and overca- 

 pacity of technology supply, formation of strategic business units within corpora- 

 tions, and an increased emphasis on international operations. This new technol- 

 ogy acquisition strategy suggests that the offshore oil and gas industry might be 

 open to technology transferred from ONR. 



Strategic partnering between major corporations and smaller suppliers can 

 be used to achieve alignment between two very different organizations. For 

 strategic partnering to be successful, several factors must be present: (1) mutual 

 trust, (2) multilevel relationships and commitments, (3) appropriate use of core 

 competencies, (4) common goals, (5) cultural and strategic compatibility, (6) 

 integrated decision making and information systems, and (7) open and frank 

 communication (David Clementz, Chevron Petroleum Technology Company, 

 personal communication, 1995). Historically, strategic partnerships have a low 

 success rate (e.g., a study of 50 industrial alliances by Slowinski (1992) showed 

 that only 50 percent lasted four years or more). This low success rate is primarily 

 due to lack of compatible strategies, unclear or conflicting objectives and time 

 frames, cultural barriers, inabiUty to fulfill customer expectations, and lack of 

 implementation plans and alliance management (David Clementz, Chevron Pe- 

 troleum Technology Company, personal conununication, 1995). The same prob- 

 lems may surface in interactions between ONR and the major oil and gas compa- 

 nies. 



The major technology needs of the offshore oil and gas industry (i.e., explo- 

 ration, production, and pipeline) can be divided into the following subsets: 



• Environmental needs 



• Floating drill platform needs 



