Collaborative Networks and Virtual Support Enterprises Jayantha P. Liyanage University of Stavanger, Norway Mike Herbert Onshore Drilling Center, Norway C INTRODUCTION Owing to complexity and dynamism of the industrial set- tings, the business environment today is more prepared to adapt different competitive strategies to retain profit- ability and growth (see for instance, Click & Duening, 2005; Tidd, 2000; Wang, Heng, & Chau, 2007). Smart use of cooperative technologies and establishment of prudent business-to-business (B2B) partnerships are very central to manage risk when business activities are exposed to a much wider range of uncertainties (Shaw, 2006; Wang et al., 2007; Wroblewski, 2002). This is particularly so for high-risk businesses such as oil and gas (O&G) exploration and production (E&P), which is far more sensitive in socio-economical and political terms. This chapter presents such an emerging collaborative and dynamic network environment within the O&G industry on the Norwegian continental shelf (NCS) through a case study. It provides a background of the industry, describes the organization of the network, its structure, and the active strategic components. At the end it also highlights some of the major challenges that need to be addressed in the establishment of a fully- integrated and fail-safe network and an operational enterprise to manage complex assets. This is based on an ongoing industry-wide new development process termed integrated operations (IO) commenced very recently in 2004-2005 dedicated to establish smart offshore asset management practices on NCS by 2015 or so (OLF, 2003). Conventionally, O&G exploration and production business often pays much attention on the technological capabilities and economical excellence as the criteria to lay the strategic road maps for asset development. Application of hardcore technologies often targets pro- duction enhancement for instance in use of multi-lateral drilling, down hole separation, condition monitoring, and so on. The progress in the data management solu- tions has also been relatively slow for a long-time with- out much attention on implementing a major change, and mostly is limited to various off-the-shelf and/or ad-hoc solutions. The organizational environment has been pretty conservative with a classical division into core disciplines and departments. The nature and scale of interactions with third parties followed such an industrial practice that is purely based on a price tag to a given contractual package. Such settings have mostly been subjected to criticisms and constantly been challenged by various stakeholders since the underly- ing bases of B2B transactions are not seen adequately incentive-driven or contributing in its full potential to the value-adding process. Changes in business settings occur as the envi- ronmental conditions for commercially successful business transactions change. Such changes can be internally or externally driven (Davenport, Prusak, & Wilson, 2003; Mintzberg, Ahlstarnd, & Lampel, 1998; Peppard & Rowland, 1995; Porter, 1998). The current situation in North Sea O&G exploration and produc- tion environment is a good example of such a change where a strategic combination between internal and external factors has triggered a major re-engineering process across the entire industry. Interestingly, this major reengineering process has significant organiza- tional ramifications with a rapid advancement towards collaborative dynamic networks (CDN) and virtual support enterprises (VSE) to manage offshore assets in North Sea (Liyanage, Herbert, & Harestad, 2007; Liyanage & Langeland, 2007). BACKGROUND The report no. 38 (2003-2004) to the Norwegian Parlia- ment on the petroleum activities of the Norwegian con- tinental shelf (NCS) directly addressed and underlined Copyright © 2008, IGI Global, distributing in print or electronic forms without written permission of IGI Global is prohibited.