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PROTECTIVE MARKING (as appropriate)
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Importance of
TOPSIDES
in Delivering MERUK
Gunther Newcombe Director
Exploration & Production
Topsides Conference
March 2016
PROTECTIVE MARKING (as appropriate) Outline
• UKCS & OGA Context
• MERUK Topsides Approach
• Topsides Focus Areas
• Key Messages
Slide 1
PROTECTIVE MARKING (as appropriate) UKCS Context
Exploration Production Costs
Difficult environment with low oil price but turnaround evident
1970 2015
1.6 mmboe/day
Exploration wells Daily production Average lifting cost per barrel (£)
Notable success 2015
60% success at $6/boe
> 150 mmboe discovered
Production up by >9%
with new fields & PE
increase to nearly 70%
1964 2016
We
lls
Oil
pri
ce
($
)
0
20
40
60
80
100
120
140
160
10
20
30
40
50
60
70
80
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
43bn barrels recovered
Up to 20bn barrels remaining
70% of UK’s total primary energy
Operating efficiency
improvements
OPEX reduction $30/boe to $16
Sustainable transformation next
Slide 2
PROTECTIVE MARKING (as appropriate)
Energy Bill in Parliament & MERUK Strategy & Corporate Plan issued
DECC
EDU
LED
Framework Document
Energy Bill 2015
OGA
Executive Agency
(Civil Service)
DECC
OGA
Independent
Authority
DECC
Evolution of the OGA
Historically
Calendar
April
2015
Calendar
Summer
2016
Calendar
About the OGA
Licence offshore oil & gas
Licence onshore oil & gas
Licence carbon storage
Industry culture
Commercial behaviour
Greater collaboration
Investment in UKCS
Value creation
Industry development
Building the OGA
Slide 3
PROTECTIVE MARKING (as appropriate)
MER UK Boards
Purpose Deliver tangible benefits in support of MER UK
Objectives • Developing strategic approach & 5 year plans
• Deliver tangible and quantifiable results
• Tripartite approach with industry, regulator & government
MER UK
Boards
Meetings with Government, Industry & Regulator 3 times per year
Slide 4
Exploration
Technology
Asset
Stewardship
Decommissioning
Regional Development
& infrastructure
Supply chain,
exports & skills
Cost &
Efficiency
Phil Kirk, Chrysaor Ray Riddoch, Nexen Paul Goodfellow, Shell John Pearson, AMECFW
Paul White, GE Colette Cohen, Centrica Neil Sims, Expro Group
Gunther Newcombe Gunther Newcombe Gunther Newcombe Stephen Marcos-Jones
Angela Seeney Angela Seeney Angela Seeney
Phil Kirk, Chrysaor Ray Riddoch, Nexen Paul Goodfellow, Shell
Topsides Focus
Frequency Quarterly Support OGA / OGUK
Industry lead Support lead
PROTECTIVE MARKING (as appropriate) OGA Asset Stewardship
OGA Monthly Performance Pack 2015 A number of key areas focus on topsides delivery
Slide 5
PROTECTIVE MARKING (as appropriate)
Mariner
Solan
Kraken
Conwy
Cygnus
Catcher Stella/
Harrier
Western
Isles
Clair Ridge
Edradour/
Glenlivet
Laggan
Tormore
Schiehallion/
Loyal
ETAP
Flyndre/
Cawdor
Cayley/ Shaw
UKCS Projects
WOS
Brownfield & Greenfield Project Delivery Sub-Optimal Slide 6
OGA Data Base
PROTECTIVE MARKING (as appropriate) Project Costs
UKCS Project Cost Management needs improvement
Slide 7
Average 27%
PROTECTIVE MARKING (as appropriate)
ecitb.org.uk 9
Efficiency
& Waste
The mind-set of Lean in
Oil & Gas Projects
Technology & Case
Studies from other
sectors.
Purpose Deliver tangible, relevant & cost effective initiatives to the Oil & Gas Industry which will help
promote, support and develop collaboration and trust in Project Delivery
Objectives 1. To encourage & guide Industry to adopt Collaborative working techniques in Projects
2. To deliver Project Management knowledge resources which support cost and delivery efficiency
3. To share knowledge and good practice in Leadership and Behavioral competence
Core areas
How to Collaborate
& Trust
Challenging
Blockers
Strategy
Collaboration
Development of a
‘Project Management
Toolkit – Principles of
Collaboration for Project
Managers’
Blockers
‘Challenge & Change’ ½
day workshops by
Leading experts and
captured as online
videos to share
Knowledge
Sharing
Continued developed of
Project Management
Microsite for online
Learning Resource with
‘Experience Exchange’
portal
Efficiency
& Waste Reduction
Knowledge
Sharing
ECITB Work Group established in 1Q 2016
Projects Collaboration
Contact Keith Scott ([email protected])
Slide 8
PROTECTIVE MARKING (as appropriate) Production Efficiency
Loss Areas
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Planned Plant Losses
Export Losses
Reservoir Losses
Well Work Losses
Planned Shutdown
Unplanned Losses
Production Efficiency
0% 20% 40% 60% 80% 100%
PE Target
Target
Unplanned losses are major cause of production loss
UKCS Production & PE
Top 20 PE Performance
Slide 9
PROTECTIVE MARKING (as appropriate)
Some great examples ….and still room for improvement
Nexen delivered a
40% improvement in
water injection rates
and 30% improvement
in productivity
Golden Eagle
• Senior leadership commitment from MDs
• Increased transparency on data and plans
• Stewardship across each lifecycle stage
Enhanced stewardship strategy
• Track and review ‘company scorecards’
• Leading and lagging performance indicators
• Increase efficiency, value and accountability
Data-driven approach
• MER UK approach upstream and midstream
• OGA enhanced oil recovery strategy
• Early planning for decommissioning
Managing late-life assets
Improved Production Efficiency
Slide 10
PROTECTIVE MARKING (as appropriate)
OGA Monthly Performance Pack 2015
Equipment Reliability
Common success factors in Nuclear Industry
Craft Ownership &
Maintenance Supervision
Proactive Engineering
& Focus on Long Term
Preventive & Predictive
Maintenance
Successful Work
Management
Operating Experience
& Benchmarking
Intolerance of
Unanticipated Equipment
Failures
Focus on Critical
Systems
Elimination of Design
Vulnerabilities
Resolution of Long
Standing or Repetitive
Equipment Problems
Contact [email protected]
Slide 11
PROTECTIVE MARKING (as appropriate)
OGA Monthly Performance Pack 2015
Wrench Time
12 hour shift breakdown
Engagement of workforce critical for improving performance
Slide 12
PROTECTIVE MARKING (as appropriate) Role of Technology
Technology application improving value
Small Pool Development
Asset Integrity
Well Construction
Decommissioning
Technology Leadership Board
Key Themes
Asset Integrity Management
Non-Intrusive
Inspection
Corrosion Under
Insulation
Slide 13
PROTECTIVE MARKING (as appropriate) Inspection & CUI
Innovative approach to inspections & CUI will improve efficiency
• Major contributor to production downtime
• Often involves personnel entry into confined
spaces
• Systems should be depressurised, isolated
and gas-freed before maintenance work is
carried out
• Hazardous and costly process which leads
to minimising the frequency of inspections
Vessel Inspections Corrosion Under Insulation
• CUI is responsible for up to 60% of pipe leaks in
resulting in huge value loss
• Asset Integrity is a key ingredient to Maximising
Economic Recovery (Sir Ian Wood, Final Report
2014)
• UK onshore & offshore process plant
infrastructure is a vital asset for maintaining
economic production
Slide 14
PROTECTIVE MARKING (as appropriate) Technology Screening
Technology opportunities include transfer from other industries
Sniffer Dogs Acoustic Emission
Ultrasonics Pulsed Eddy
Current
Guided Wave
Ultrasonic Radiography
A wide range of techniques and maturity
Slide 15
PROTECTIVE MARKING (as appropriate)
OGA Monthly Performance Pack 2015
Decommissioning
Conventional Lift
Good planning & regional approach can offer significant savings
Slide 16
Piece Small
Topsides Decommissioning
-
10
20
30
40
50
-
1.0
2.0
3.0
4.0
5.0
201
5
201
7
201
9
202
1
202
3
202
5
202
7
202
9
203
1
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3
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5
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7
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9
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3
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5
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7
204
9
Annual
Spend
(£bn)
Cumulative
Spend
(£bn)
Project Management Facility Running Costs Make Safe
Preparation
Removal
Onshore Disposal
37%
Wells, pipelines & substructures
63%
£47bn
PROTECTIVE MARKING (as appropriate)
• OGA working closely with Industry & Government
to deliver MERUK
OGA Monthly Performance Pack 2015
Key Messages
Focus will make a difference
Slide 17
• Delivering efficient topside performance is critical
• Focus on all aspects of topsides from design,
efficient operations to decommissioning
• Challenge on industry to share more best
practices & verify improvements