Low Oil Price – No Time to be Smart?

Pieter Kapteijn, Dir. Technology and InnovationMaersk Oil, Copenhagen

IO Conference Trondheim Norway

29 September 2009

Overview

• A non-scientific model for IO readiness…..

• What can one learn from 8 yrs of IO?

• what hinders IO implementation

• what helps

• Maersk Oil:

Integrated Asset Management programme (IAM)

• Questions

IO Readiness and Oilprice…?A non-scientific model

10 20 30 40 50 60 70 80 90 $/bbl

low

high

reducing cost making moneysurvival

% ROI< 5% 10% 15%

> 2015?

improving margins

What can one learn from 8 years of IO?

1. The concept actually works!

2. Technology is no longer the issue

3. Many successful Production and Drilling Operational implementations• Time to pay-out relatively short: 1-2 yrs

• Value of collaboration environments now proven

4. Rate of adoption is increasing• But still low as a %-age of potential value

5. Change management issues better understood

What hinders adoption of IO?

1. IO message remains complex and difficult to “sell”• in an industry that likes to manage “unbundled” activities

• subsurface uncertainties “use up” all risk tolerance

2. Management understanding of IO concepts• model based control and use of real-time dynamic data:

robust learning versus planning/designing for success

• Is IO an operating model or a business model?

3. Leaders from a pre-digital age• we will need the big crew change….

• gaming is the new learning

What helps adoption of IO?

1. Lower margins and environmental/CO2 constraints will require a more holistic, systems approach• More complex optimisations and trade-offs

2. More fields move into EOR phase• EOR is very surveillance/optimisation intensive (WAG)

• upstream will become a CO2 sink (CCS, EOR)

3. NOCs will demand lifecycle value maximisation• Right level of smartness to be “designed in”

• IO and technology become competitive differentiators

4. And … the bulk of the value is still to be realised in recovery improvement

CO2 will become a source of valueto Oil Companies

Connected value chains require IO

Maersk Oil Technology Programme

1. Integrated Asset Management one of 5 Technology Themes

• abundance of positive IO project results to make the case

2. Managed at Maersk Oil executive level

• Technology and Innovation Board: 3-5 year rolling plan

• coordinated with IT/IM strategy

3. Phased, staged implementation approach

• to gain confidence and acceptance of approach

• Using only proven technology

• targetting production and staff productivity improvement

4. Initial projects: well monitoring and surveillance

9Technology Planning/Roadmapping

Technology Theme Yearly 2008 2009 2010 2011 2012 2013 Budget Budget

T&IB Appr. Total in $ US + Funding 2008 2009 2010 2011 2012 2013 2010 > 2010

#4 Environmental Footprint

Techn. Infrastructure Projects: IT/IM, M-Pact, Applications

#1 Advancing Completion and Stimulation

#2 Deepwater and HTHP

#3 Waterflooding and Enhanced Oil Recovery (EOR)

#5 Integrated Asset Management (IAM)

DUC EOR Study

Al-Shaheen Babelfish ProjectProd Surv. UK

Prod. Mon. DK

Rot. Equipm. Monitoring

Integr. Prod. System Modeling

.

Year

ly T

echn

olog

y Pl

anni

ng C

ycle

Rolling 3-5 year plan to achieve excellence in target capabilities

BASICS

MONITORING(Passive)

SURVEILLANCE(Active)

OPTIMISE(Predictive/Proactive)

10Integrated Asset ManagementStaircase

• Common data shared across required disciplines • Visualise well and reservoir status• Know what key decisions are required on what you monitor• Data cleansing algorithms run automatically

• Established asset data hierarchy• Data availability and ownership (systems of record)• Infrastructure fit for purpose• Roles & responsibilities defined & documented• Capability of engineers to use required tools

• Reliable Data shared across required disciplines • Trend data to understand well and reservoir behavior patterns • Semi automated well test validation• Integrate real time data and models• Active management of performance and condition exceptions

• Use information to predict behaviour• Anticipate problems and opportunities• No manual data entry• Automatically generate options for optimisation• Prioritised and focused interventions

Proposed Projects

Future Projects

Aligned Initiatives

DOCC Esbjerg - Babelfish Qatar - PASC Aberdeen

Key:

DU

C M

onitoring & D

iagnostics

MO

UK

Production S

urveillance GP

III

Int. System

Modelling

MO

UK

Production S

urveillance & optim

isation all assets

Rotating E

quipment M

onitoring

- top quartile performance -

Conclusions

1. In Production Operations and Drilling IO projects it is nowpossible to be a “fast follower”

• but tailoring existing solutions to the asset remains a challenge

2. Maersk Oil is committed to become good at IO

• we consider it a “must have” capability

• to be a successful player in an EOR and CO2 dominated future

3. We can still improve our sharing of IO experiences and results across the Industry

• particularly at management/leadership level

4. The IO journey continues

• and our younger staff love it!

Thank you for your attention

?

Questions?