supply chain seminar - oil & gas...

Supply Chain Seminar

Introduction & Welcome Deirdre Michie Chief Executive

Oil & Gas UK

Supply Chain Seminar

Deirdre Michie Chief Executive

This industry is a national asset

It’s worth fighting for!

Key Metrics Sharp Drop in Price

UKCS Cash Flow Drilling Activity

Production

Cost and Efficiency

Greater Inefficiency

Increased Unit Costs

Increased Activity

30-40%

40-50%

20%

Source: McKinsey Energy Insights; “Meeting the challenge of increasing North Sea costs” McKinsey article

CAPEX

OPEX

What is behind this cost increase?

No other basin in the world has seen such rapid cost inflation

Bold and immediate action is required

• Unless the UKCS adapts rapidly to the prevailing business environment, it will be a much smaller and greatly diminished industry by 2020

• Action now will ensure that the UKCS is as active in 2020 as it has been over the last decade

• The 2020 vision • Actively exploring and maximising recovery of oil and gas

• A supply chain providing a strong engine for growth

• Lifting costs contained at around $20 per barrel

Oil & Gas UK Efficiency Task Force Areas of focus

Business Process Standardisation Cooperation, Culture & Behaviours

Increase offshore productivity (integration of PETF work)

Intelligent logistics sharing

Streamline procurement process

Existing assets: Standard routine

Next generation: Standard tech

Standard routine commodity

Efficiency charter and cooperative standards

Supply chain cooperation events

Everyone has a part to play.

We need to: Re-create a competitive basin and industry

Learn from other Industries

Initiate structural and sustainable change Challenge behaviours

Bill Morrice Managing Director

Technip

Overview of the Oil & Gas Industry – focusing on Oil & gas UK Board and effort around simplification

Steve Johnson Director

Simply Joined Consulting

Supply Chain Forum Update

www.simplyjoined.com

Supply Chain Forum Update

Oil & Gas UK Supply Chain Seminar

30th June 2015

AECC

Steve Johnson

Contractor Co-Chair, Oil & Gas UK Supply Chain Forum

[email protected]

Tel: 01224 900907

Mbl: 07710 340207


mailto:[email protected]

http://www.simplyjoined.com/

Supply Chain Forum Structure

Part of the Oil & Gas UK Operations Directorate – Ken Cruickshank

Well supported by the team of Business Analysts

2 Co-Chairs, representing the Operator and Contractor communities

- Operators – Ali Talpur, Enquest

- Contractors – Steve Johnson, Simply Joined

Open to any company that is a member of Oil & Gas UK, regardless of

size or position within the respective supply chains

Focus is on developing and embracing Supply Chain Management Best

Practice


• Promoting Supply Chain Management best practice and co-operative Industry initiatives

• Model ITTs

• Adoption and use of Standard/Model Contracts – e.g. LOGIC

• Supply Chain Code Of Practice

• Rationalisation of Inventory and Spare Parts across the Industry

• Work with External Parties

• FPAL

• Universities (e.g Guest Lectures, RGU Academic Supply Chain Society)

• Chartered Institute of Procurement & Supply (CIPS) –

• Syndicated Corporate Award

• CIPS Branches – Aberdeen Branch is very active

• OPITO – Supply Chain Modern Apprenticeships in Procurement and Logistics

• Working to ensure that all the good work the industry is trying to do is effectively and

efficiently supported commercially and legally, from the introduction of technical

innovation to the reduction of ‘gold plating’ in current activities.

Supply Chain Forum Activities


Thank You

Steve Johnson

Contractor Co-Chair, Oil & Gas UK Supply Chain Forum

[email protected]

Tel: 01224 900907

Mbl: 07710 340207



mailto:[email protected]

http://www.simplyjoined.com/

Ian Schollar Head of Corporate Delivery

CIPS

The Long Walk to Safety

Leading global excellence in procurement and supply

Procurement and Supply

What does the future look like?

The Impossible Hamster

Economic Growth Stimulated

Increased employment and demand for raw

materials

Skill shortages and supply problems

develeop

Staff wages and raw material prices rise

Inflation picks up as higher costs are passed

to customers

Interest rates rise

Economic growth slows

Interest rates fall

Boom-Bust Cycle

What are the indicators:

Manufacturing

– Output

– New Orders

– Export orders

– Backclogs of work

– Employment

– Quantity of purchases

– Input costs

– Output prices

Services

– Business activity

– Incoming new business

– Business outstanding

– Employment

– Input costs

– Prices charged

Economic Growth Stimulated

Increased employment and demand for raw

materials

Skill shortages and supply problems

develeop

Staff wages and raw material prices rise

Inflation picks up as higher costs are passed

to customers

Interest rates rise

Economic growth slows

Interest rates fall

New orders/ new business

Employment

Quantity of purchases

Backlogs of work/ business outstanding

Input costs Output prices/ charges

Boom-Bust Cycle

What does all this mean for

us?

Who wins? Who loses? Will it matter?

Profit not cost-savings

Outsourcing or insourcing?

Visibility

Collaboration

Complexity

First-Tier Supply Chain

Supplier Development

Supply Chain Development

Supplier Selection

Supply Chain Sourcing

Focus of Buyer Relationship

with the Supplier

Proactive

Reactive

Source: Andrew Cox et al: SCM A Guide to

Best Practice (2003)

Terms Relating to P&SCM

The benefits can be achieved by a mix of:

Reduced

Prices and Costs

Risks in the SC

Timescales

Improved

Service to customers

Quality

Brand

Reputation through sustainable SCs

Compliance to regulations

The Roles and Benefits of P&SCM

The benefits can be achieved by:

Resources

Processes

Systems

Procedures

Commitment

Reduced

Prices and Costs

Risks in the SC

Timescales

Improved

Service to customers

Quality

Brand

Reputation through sustainable SCs

Compliance to regulations

Achieved by

The Roles and Benefits of P&SCM

HIG

H

LOW HIGH

LOW

Acquisition Leverage

Critical Strategic

Degree of market

difficulty

Degree of profit impact

O’Brien’s Version of Kraljic’s Portfolio Analysis Matrix

Respected

Influential

Persuasive Visionary

Strategic

Sharp

Global Collaborative

Executive

Savvy

Required Professional Skill Sets

Bill Morrice,Technip Steve Johnson, Simply Joined Consulting

Ian Schollar, CIPS

Morning Panel Session

Ian Schollar, CIPS &

Phil Broughton

CIPS Presentation of Certificates

Neale Stidolph Head of Strategic Development

Lockheed Martin UK

Lockheed Martin Issues and lessons learned in Aerospace

L O C K H E E D M A R T I N P R O P R I E T A R Y I N F O R M A T I O N 40

Lockheed Martin Issues and lessons learned in

Aerospace

Oil & Gas UK Supply Chain Seminar

Presented by:

Neale Stidolph – Head of Strategic Development Johnstone House, Rose Street, Aberdeen, AB10 1UD, UK Telephone: +44 (1224) 611036

Mobile: +44 (0) 7801 039623

e-mail: [email protected] Web: www.lockheedmartin.com

http://www.amorgroup.com/

L O C K H E E D M A R T I N P R O P R I E T A R Y I N F O R M A T I O N 41 September

15

Aerospace Challenges


F-35 Lightning II

World’s only 5th generation fighter

1,200 suppliers

Mile long factory

9 Country partnership

129,000 direct & indirect jobs

Standards & simplification

Advanced materials & sensors

6-8x more effective

Stealth & secrecy

Secure communications


Aerospace changes

How did the industry / LM used to do things? (Cold

War context)

• Fractured

• Undisciplined

• Unfocused

Why did it need to change?

• Changing market (peace dividend)

• Changing customer acquisition process

• Maturing tools and processes


Transition

How were the changes introduced?

• Process maturity models

• Industry consolidation

• Mapping of requirements

• Innovation initiatives drove targeted improvements to

baseline processes, i.e.

• Safety

• Affordability

• Technology

• Information management

• Successful innovations were shared and eventually

standardised


Making the change

What efficiency, standardisation, terms, quality,

metrics were adopted?

• Better mission analysis

• Standardisation drives interoperability

• Within a ‘platform’

• Within a service branch

• Model-based methods

Did everyone buy in to it?

• Change can appear threatening

• Change is threatening to those unwilling to learn and

grow

• “Nothing succeeds like success”


Benefits

What were the benefits of the standards?

• Product interoperability

• Workforce interoperability

• Enforce adoption of best practices

• Reduce program start-up costs

• Increase execution efficiencies


Know where you need to be

COMMODITY INNOVATION INVENTION

Proven

Fit for purpose

Simple

Cost driven

Existing buying methods

New idea

Lateral shift

Benefit driven

New engagements

New buying model

“Unknown” offerings

On/over the horizon

Low Tech Readiness Level

Partnering / joint effort

Hard problems

Radical R&D

Role of procurement?

Warning: Standards don’t always evolve enough and can hold back innovation


You don’t know what you don’t know!


Sensor

Solutions

Information

Technology

Autonomous

Systems

Materials and

Structures

Energy Solutions Enterprise

Applications

Lockheed Martin & Energy


New manufacturing / new materials


15

Nanotech Desalination

Perforene (in the Lockheed Martin labs)

500x thinner, 1000x stronger, 100x less energy and pressure


Remote Communications

AeroStat

High speed wireless comms

c.80 mile signal range

Low latency (signal delays)

Lower cost than satellite

Mobile


15

Simplify: Sensors & Automation

7,000 sensors

+ Laser fluid monitoring

+ Analytics

= Crew reduction from

200 to 40

Littoral Combat Ship


15

Autonomous Vehicles

Aerial Reconfigurable Embedded

System

Indago

SMSS

Airship:

6,000 mile

range, up to

500 ton load


15

K-MAX Autonomous Flight

Proven by flying >46,000 hours on 24x7 resupply runs without pilots.

Able to carry out emergency response roles.

Up to 6,000lbs lift capacity


Robotics

DARPA

Challenge

Trusted

Remote

Operati

on Of

Proxima

te

Emerge

ncy

Robots Able to drive vehicles,

climb ladders, operate

valves, etc.


High energy laser systems

ATHENA

30kW Lockheed Martin laser system

Disabled a truck engine in a few seconds

from a mile away

Could be applied to oil & gas

i.e. Marine cutting application / decomm


15

Situational Awareness

MED-E

Visualising and working on large, complex data sets

making them easier to interpret and act on

Automated storm

damage surveillance

using drones


Simplify: Information & Analytics

Predictive Maintenance & Quality

Cyber & Industrial Control System Security

Process Safety

Management

• 29% fall in O&M costs

• 22% rise in Plant

Availability

• 50% fall in Outage

Rates

• 10% fall in Insurance

Premium


Power Generation

Prototype in 5 years

The early reactors will be

designed to generate

around 100 MW and fit

into transportable units

measuring 23 X 43 ft.

1.5MW AR1500 turbine

Scottish MeyGen project

Pentland Firth

Wave energy systems


Who are we?

$45bn t/o

120,000 employees

Civil IS & GS division

100 year+ history

Broad range of skills / clients

Long term relationships

Global reach, strength and depth

Innovation

Lockheed Martin


Contact

Neale Stidolph

Head of Strategic Development

Lockheed Martin

Johnstone House

52-54 Rose Street

Aberdeen

AB10 1UD

United Kingdom

Tel. +44 1224 611036 Mobile +44 7801 039623

[email protected]

September 15

Cross Industry Collaboration - Time for some rocket science

Orion test launch, 5th Dec

2014

Horst Fischer Vice President Oil&Gas

Siemens AG

Optimize interfaces in the supply chain for projects and business – Experience from other industries and from a global LNG

project in Australia.

siemens.com/answers Restricted © Siemens AG 2014. All rights reserved

Oil& Gas UK Supply Chain Seminar 30 June 2015

Optimise interfaces in the supply chain for projects and

business

Horst Fischer Vice President Siemens VMM Oil & Gas

December 2014 Horst Fischer, PD VMM Oil&Gas Restricted © Siemens AG 2014. All rights reserved

Challenges in the Oil & Gas Industry

View from the Oil Companies

Projects in Oil & Gas are getting larger, more complex and take several years to

develop

Product Suppliers and OEMs acting and manufacturing globally – complex

contracting

EPCs are using distributed project development and engineering centers

Missing all over transparency e.g. in projects

Management of contractual and technical interfaces across the entire supply chain

Global resource management (engineers, manufacturing, raw materials, lead times)

Todays CAPEX project approach leads to multi-vendor equipment and thus to

complex operational and maintenance processes – high OPEX

Cost pressure


Challenges in the Oil & Gas Industry

View from the Product & System Supplier

Projects development and co-ordination – coordinated information flow

Integration into complex supply chain

Slow implementation of new innovative solutions e.g. digitalization

Multiple Ts and Cs in the value chain

HSE policy needs highest reliable products and systems

Low oil price leads to price pressure on products and systems

Overall technical competence from end-user – EPC – product and system supplier

Mid / Long term invest planning vs. short term planning

Local content based on country and political regulations required

Early engagement in end customer decision making process – process alignment

Standardization is required

Price pressure


Conclusion based on challenges

Reduce Cost Per Barrel Oil

Cost pressure Price pressure

Oil Companies Product & System Supplier

We have to change our business model from a typical customer supplier relation

to a strategic partnership model

Learning from other industries – e.g. Automotive Industry

Working as ONE


Working as ONE

A successful partnership model considers the entire Value Chain

Business

Partner

Concept

based on

Value Chain

Technical Solutions

Service Solutions

Business Solutions

Operational Solutions


The Value Chain

Aligned approach and strategy

Operational

Value Proposition Strategic Value Proposition

Aligned strategy for implementation

Channel Management

Products & Systems Supplier

Oil Companies

SI, Sol.-partner E-house builder

EPC

Value Chain

OEM


Value Proposition based on partnership

Common Business Planning Defined scope of supply Frame agreements for categories Business & Technical Standards Global coordination/implementation Partner for Innovation & Solutions Customized service concepts Common project development

Predefined product scope Project information & involvement Solution partner concept Partner for applications, e.g. Rig

Aligned processes Common project coordination/team Aligned frame agreements, pricing FEED Support – Product Catalog

Aligned business approach and strategy

Products / Systems / Packages / Solutions

Oil Company

SI, Solution-Partner E-house builder

EPC

Value Chain

OEM

Clear interfaces management

Global order tracking Documentation standard

Execution excellence Partner Value Proposition

Aligned strategy for implementation

Harmonized global order tracking

Service strategy Transparency over entire

process

Lead time management Factory coordination (slots)

Customized Channel Management

Application with partner


TCO - Future Growth Project,

TCO and Siemens common project development

based on partnership


Future Growth Project based on partnership

MMDC Project TCO-Future Growth

Chevron (50%)

KazMunaiGaz (20%)

ExxonMobil (25%)

LukArco (5%)

PJV

(EPC)1

OEM 1

based on TCO FGP

KPJV

(EPC)2

OEM 2 OEM 3 OEM 50+

C 2

Italy

C 1

Germany

C 3

UK

C 4

France

C 14

USA

CAM Chevron

Siemens

TCO

(Kazakhstan)

TCO

Siemens

Capture

Team

Siemens

Service

Orders / Bids

Communication

Siemens

Motors

Siemens

Drives

Siemens

Systems

Siemens

Engineering


The Oil & Gas Value Chain

Project Value Chain

Shorter time to operate

Reduced CAPEX Reduced OPEX

Optimized Service

Initialized early

Involvement &

Standardization

Tools

Capture Teams

Today: Traditional approach without new concepts

Tomorrow: Optimization approach with partnership concepts


Siemens Process Industries and Drives Siemens Oil & Gas Community & Networking Initiative

Partnership initiative

Quality Vision

Quality Principles

The Siemens Industry Petroleum Club aims to foster the exchange among leading oil

and gas professionals from around the world. It is designed as an exclusive networking

platform for major stakeholders and experts interested in discussing important issues at the

heart of the industry, exploring key trends, developments and challenges as well as sharing

their ideas and insights.

In a series of exclusive events at various industry gatherings around the world, the

Siemens Industry Petroleum Club offers you the unique opportunity to meet with

likeminded peers in an informal atmosphere, to interact with Siemens Oil & Gas experts

and to develop new relationships and partnership concepts

Andrew Wareing General Manager

Nissan Europe

Cost Optimisation in the Automotive Industry

Neale Stidolph, Lockheed Martin Horst Fischer, Siemens AG

Andrew Wareing, Nissan Europe

Panel Session

Ian Rattray Supply Chain Manager

MOL Energy UK Ltd

Surfing the Storm

Surfing the Storm – Identifying the correct supplier to suit the organisation, exploring new tendering processes for corporate fit Oil and Gas UK – Supply Chain Seminar 2015

Collaborative Partnership Model

What percentage of your companies skills are

accessed by an operator to unlock the most economic

value?

Less than 50%

50% - 70%

70% - 90%

More than 90%

43%

36%

12%

9%

December 2014 we asked 100 senior executives and

managers from major contractors and suppliers

Agenda: Who we are MOL in the UKCS The challenges we face Supply Chain Partner Strategy Partner Selection Process Value Process going forward

MOL Group is an integrated international oil and gas company, working in the upstream and downstream sectors, active in around 40 countries across three continents, with a dynamic international workforce of nearly 30,000 people and a track record of more than 100 years in the industry.

MOL Group: an introduction

Downstream: “Efficiency”

Downstream and midstream assets in CEE:

4 refineries, 417 thbpd

1.700+ filling stations

2 petrochemical plants

Gas Transmission: 5.560 km pipeline in Hungary

Upstream: “Growth”

576 MMboe SPE 2P reserves

940 MMboe Recoverable Resource Potential

97 mboepd production

Production in 8, exploration in 13 countries

LOWER RISK

NORTH

SEA KRI

PAK

RUS KAZ

HUN, CRO

Why the North Sea?

HIGHER RISK

BALANCE RISK AS WELL AS SEEK NEW ACCRETIVE EXPLORATION AND DEVELOPMENT OPPORTUNITIES

Utilise opportunities that arise from lower oil price environment

Targeting more balanced portfolio in terms of country risk

More focus on exploration

Obtain know-how outside CEE

Establish new strategic partnerships

2015

Mgt Systems

Partner

ships

2014

People

Non-op JVs

2016

Operatorship

Best

Practice

2017

Growth model

60k and beyond

2018

Sustain ability

Growth Plan

Cost base

COSTS AND REVENUES

OIL PRODUCTION BY FIELDS SINCE 1975

EBITDA vs REINVESTMENT RATIO

UNIT OPEX

Venture • - 30% unit cost

• 2x speed

• 90% predictability

Unit Cost Reduction – 6 Key areas

1. ASSET

2. SPEED OF DECISION MAKING

3. PORTFOLIO MANAGEMENT

4. PEOPLE/PROCESSES/TOOLS

5. DISRUPTIVE IDEAS

6. SUPPLY CHAIN

• Speed and delivery

• Strategic relationships

• Simplification

• Standardisation

• Interface management

$ 1 - 3 / BOE

$ 1 - 3 / BOE

$ 1 - 3 / BOE

$ 2 - 4 / BOE

$ 0 - 3 / BOE

$ 3 - 8 / BOE

$ 8 - 24 / BOE

Traditional vs Non traditional

Collaborative Partnership Model

BS 11,000

Isolation

Involvement

Effectiveness

Star line

Circle Random

Communication strategies

Adding value from the supply chain

Production Wells Projects

Production – profit, growth, reputation

Contractor 1

Contractor 4

Contractor 3

Contractor 7

Contractor 2 Contractor 8

Contractor 13

Contractor 11

Contractor 9

Contractor 14 Contractor 6

Contractor 5

Contractor 10

Contractor 12

MOL MOL

MOL Out

Managing the portfolio

Acquisitions

Partner Selection Process

FPAL preselection

2,000 +

Initial engagement

50

Tier 1

25

Collaborative/ Commercial assessment

One to One

13

Preferred

partners

5

70%

Collaboration

30%

Commercial

Working together

Value Creation

Staying together

Culture fit

Trust

Collaborative

leadership

Client focus

Innovation

Creativity

Traditional BUT low

cost commercial

measuring

Vessel rates

Modelling

Day rates

Partnership Contracting

Strategic Partnerships:

Suppliers are part of the economic solution

Early engagement with clear understanding of value drivers

MOL + Suppliers construct the value model

Target to beat the market

Long term business partner

Plan Purpose Picture

The right partnerships

Beat the market Commitment Relationship

Trust Understanding

Expertise Assistance

Advice Anticipation Innovation

Interface management

Communication Risk management

Performance management

John Griffiths Head of Supply Chain,

Centrica Exploration and Production

Simplification and Standardisation

© Centrica plc, 2013

This document, and its contents, are strictly confidential and may not be used for any purpose by any person other than the intended recipient, and may not be reproduced or distributed to any other person or published, in whole or part, anywhere. Neither Centrica plc nor

any of its affiliates, representatives or employees, makes any representation or warranty, express or implied, as to the fairness, accuracy or completeness of any of the contents of this document, nor will they have any liability relating to or resulting from their use.

Standardisation and Simplification Cost Efficiency – The Need for Change

OGUK CIPS Conference

John Griffiths, Head of Supply Chain, Centrica Energy


Centrica – a leading integrated energy

company

• FTSE top 40 company

• 28 million customers in UK and North America

• Operate across the energy spectrum

• Diverse investor in our Supply Chain


UK and Netherlands – Assets and Operations

3 Manned platforms

1 FPSO Vessel

9 Normally unmanned

installations

3 Terminals

84% Operated production

85% Gas

Geographically diverse

Among the top UK gas

producers in 2014


In 2014 the energy world changed

Jan-15 Jan-14

NBP (Winter 2015)

Brent (Month Ahead)

AECO (Winter 2015)

Index (1st Jan 2014 = 100)


The opportunity for change

Source: Oil & Gas UK

The cost of operating on the UKCS


Several complementary workstreams

Short term

Short to medium term

Short, medium and long term

To unlock our portfolio we need to be profitable in a low price environment; we

want to shift our culture to : • deliver more cost efficiently and more productively,

• be open to new ways of working, learning and collaboration, and

• embrace technology


What and how - 100 in 100

We need to take

costs out of the

business

Dec 2014

Let’s take out

£50MM

Jan 2015

No, make that

£100MM in 100

days!

1 Feb 2015

What about next

year? We need

sustainable savings

April 2015

Evolution of the business challenge

http://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://www.wired.co.uk/magazine/archive/2014/03/ideas-bank/mark-pagel&ei=T8BVVY_uC4y1Ud2ogKgE&bvm=bv.93564037,d.d24&psig=AFQjCNGhlHobT-SORgep4G9AsTMQmlo4Lw&ust=1431769529321531

http://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://www.timeanddate.com/calendar/&ei=795VVaWJHMjnUsCfgIgN&bvm=bv.93564037,d.d24&psig=AFQjCNE4uBituA0GhM_ac5_rTwF95gXEMg&ust=1431777371546382








What and how - 100 in 100

Urgent need to change

• Falling commodity prices

• Job losses across the industry

Create a compelling vision of our future

• £100mm of cash savings will help

create a safe, sustainable business and

help protect position

• Simple communication of how we get

there

Make it real and visible

• Created space where everyone could

contribute

• Communicated quick wins

• Everyone knew about the progress of

the challenge

The Result: 1,418 ideas with

potential savings of

£266mm


100 in 100 – the approach

Typical Cost

Reduction Approach

UKNL Approach

• Top-down targets only

• Everyone told what to do & where to cut

• Hard to get buy-in from organisation

• Not sustainable

• Shared mission (find £100mm of cash in 100 days)

• Organisation empowered

• Engaging campaign

• Shared successes and progress

• Better buy-in as the solution came from the organisation


108

The Trigger

• Opportunity rich, but costs too

high to deploy

• Consider full lifecycle reduction

(reach back)

• Interactions with supply at cross

purposes

• Needed targeted solutions

around our challenges

What and how – The Hackathon


What and how – The Hackathon

• Meeting of more than 130

new and existing

contractors to discuss

projects stuck in pipeline

• Opportunity to share

knowledge, experience and

capabilities

• Hundreds of ideas

generated and renewed

sense of collaboration with

supply chain


Decommissioning 33

Subsea developments 28

Ways of working 27

Brownfield 26

Very shallow reservoirs 19

Subsea Well

Abandonments 17

Southern North Sea

long reach drilling 13

Technology & Innovation 11

Collaboration 10

Other 3

Grand Total 187

The Results

• Reviewed nearly 190 ideas

from more than 70

companies

• Proceeding with nearly 140

– one already implemented

• Sharing relevant ideas with

PILOT/industry


The Hackathon – next steps

• Ideas from the Hackathon being

implemented in two SNS

decommissioning projects this year;

now evaluating new development well

at York and progressing Pegasus

prospect

• Re-engaging with contractors to

investigate ideas further for potential

future projects

• Sharing learnings, ideas and outcomes

with industry so knowledge is not lost

• Recognition that internal campaign on

cost efficiency was also required


112

Problem statement

• Today around 210 small discoveries (<15mmboe) remain undeveloped on the UKCS; equating to >1.1bn boe.

• We believe developing and deploying technology focused on standardised (non-bespoke) subsea tie backs, pipelines and brownfield modifications will unlock the potential while working closely with the ongoing development of new well designs.

What and how – Small Pools


Small Pools – The Prize

113

Source: Wood Mackenzie

Producing fields

Ongoing developments

Currently locked fields

Fiel

d r

eser

ves

(mill

ion

bo

e)

All UKCS discovered fields ranked by reserves

small pools (3-15mmboe)

• Small pools collectively account for more than 1billion boe

• This equates to 3-5% of the total discovered reserves on the UKCS –

or 13-20% of future production


Small Pools - Roadmap

114


This document, and its contents, are strictly confidential and may not be used for any purpose by any person other than the intended recipient, and may not be reproduced or distributed to any other person or published, in whole or part, anywhere. Neither Centrica plc nor

any of its affiliates, representatives or employees, makes any representation or warranty, express or implied, as to the fairness, accuracy or completeness of any of the contents of this document, nor will they have any liability relating to or resulting from their use.

Cost Efficiency – The Need for Change

OGUK CIPS Conference

John Griffiths, Head of Supply Chain, Centrica Energy

Ian Rattray, MOL Energy UK Ltd John Griffiths, Centrica Exploration and Production

Panel Session

Forthcoming Events – 2015

02 July

Breakfast - Leadership or collaboration - finding the key to industry success

Aberdeen Exhibition and Conference Centre, Bridge of Don, Aberdeen, AB23 8BL

9 September 2015

Offshore Europe Aberdeen Breakfast Briefing – The Economic Report


6 October 2015

Aberdeen Breakfast Briefing


4 November 2015

PILOT Share Fair


5 November 2015

Oil & Gas UK Awards


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