ConocoPhillips – Tackling the unique challenges of decommissioning in a mature basin in a cost competitive environment

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Submitted by ConocoPhillips

Impact

The company’s 2014 plugging and abandonment campaign in the Southern North Sea focused on 15 offshore wells across a 541 day work programme. Thanks to the teams adopting a campaign approach to the tasks in hand, proactively engaging with personnel, working collaboratively with vendors and continually challenging assumptions, it only took 435 days. This resulted in costs being reduced by 35%. The learnings from this campaign are now being shared widely across the industry and the approach continues throughout ConocoPhillips’ ongoing Southern North Sea plugging and abandonment/decommissioning campaign.

Description of Best Practice

Being able to safely and successfully eliminate over 100 days from an offshore workscope in a mature basin might seem optimistic, but this is just what a team from ConocoPhillips did on a complex and challenging well plugging and abandonment campaign in the UK Southern North Sea in 2014. In a time where there is an urgent need for the industry to work co-operatively and innovatively to maximise economic recovery from the UKCS, being able to deliver such tangible results has never been more important. ConocoPhillips’ operations in the area date back over 40 years starting with the Viking field discovery in 1968, followed by first gas production in 1972.

Today, the company operates a complex portfolio of platforms, normally unmanned installations, pipelines and subsea developments in the Southern North Sea, which export production with that from other third-party operators to the Theddlethorpe Gas Terminal in Lincolnshire. “Our objective was to safely simplify our infrastructure in the area to reduce the cost impact of assets that were no longer producing,” says Gerry Cooper, UK Well Operations Manager for ConocoPhillips. “We also wanted to enhance the focus of our UK Integrated Operations team and demonstrate the value of collaboration.”

With these Southern North Sea wells originally being developed in the 1970s, there were a number of challenges to overcome. The team was put together incorporating a wide variety of skill sets including, drilling, completion, intervention, fluids and wellhead specialists to ensure the safest and most cost effective solutions and tools were used in all cases. Due the unknowns with 30-40 year old wells, the team had to continually learn, formulate, apply and reassess mitigation strategies making constant suggestions for improvement throughout.

By remaining as flexible as possible and applying a rigorous approach to Management of Change, every scenario had back-up plans identified up-front which was pivotal to delivering the performance improvements. Gerry Cooper adds: “The success of the project really hinged on close collaboration between onshore and offshore, functional groups within ConocoPhillips and our suppliers. Thanks to this teamwork, we jointly delivered an outstanding business result – re-focusing the right people on efficient implementation, reducing operating costs, and safely achieving our goal at a much lower decommissioning cost than originally estimated.”

ConocoPhillips – Collaboration is key for marine logistics

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Submitted by ConocoPhillips

Impact

Tracy Morrison, UK Logistics Manager explains:

“Our efforts are clearly showing results and we have successfully achieved an improvement in vessel productive time, have improved deck utilisation and seen a reduction in the cost per tonne for material shipped.

“We are now building upon this success and as a result of changing work activity offshore, we have now amended our logistics operating model and removed the use of dedicated platform supply vessels to our Central North Sea business.

“We are also continuing to work collaboratively with other operators as part of a shared pool model with neighbouring installations.”

For ConocoPhillips, seeking opportunities to improve efficiencies in our marine logistics by empowering the team to think creatively out with the box has enabled us to focus and reduce costs.

Whilst our work processes within marine logistics have been improved and streamlined, we are now in a position where we are seeing other tangible results. Vessel non-productive time -32%; Cost GBP tonne shipped -7%; Deck utilisation +/-80%.

Description of Best Practice

Marine logistics, or the delivery of necessary plant, equipment and materials from suppliers to offshore installations is a huge cost to oil and gas operators across the North Sea. In the current economic climate, it is essential that new ways of working are developed to reduce these costs, but yet an efficient, safe and reliable service must be maintained to support the ongoing work of the offshore platforms. With this in mind, the marine logistics team from ConocoPhillips, the largest independent exploration and production company based on production and proved reserves, were challenged with looking at how these costs could be managed more effectively across the company’s UK operations.

The first step was to co-locate the marine logistics team with aviation logistics and the integrated planning and materials front-line support group at Rubislaw House as part of the company’s new cutting-edge Integrated Operations Centre. With this came the efficiencies of collaboration, new technology and improved communications.

 A new VHF communications system was introduced from onshore direct to the vessels on contract to us and an alarmed collision avoidance radar early warning system installed in the logistics hub to monitor offshore marine traffic. With this increased focus on communications, co-operation and performance measures, the team were able to trend the non-performance time of vessels offshore. They demonstrated to internal stakeholders that the service could continue to be delivered and maintained adequately using one platform supply vessel less. A shared marine pool model was subsequently introduced. This change also necessitated improvements in the way deck space was managed onboard the remaining vessels and more effective utilisation of these boats so their productive (or in use) time was improved or in other words ‘increased’.

contact: Sandra Duncan
sandra.duncan@conocophillips.com

ConocoPhillips – Making logistical efficiency improvements

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Submitted by ConocoPhillips

Impact

As a result of collaboration on all of these initiatives, we have successfully managed to reduce the company’s passenger cost per flight and at the same time increase seat utilisation. This is a typical example of how integrating our people and improving our work processes facilitated by the use of new technology can clearly benefit the company. Impact of best practice – a clear focus on delivery and where opportunities exist, we have either improved their efficiency or reduced their cost, resulting in: a cost/GPB per person reduction of 12%; an increase in seat utilisation by 7%.

Description of Best Practice

 For ConocoPhillips and the rest of the oil and gas industry, one of the largest day-to-day costs incurred in the management of our offshore operations is helicopters. It’s something we can’t function without yet be complacent and assume that because it’s necessary we can’t make efficiencies and cost savings. This was the challenge faced by the logistics team within ConocoPhillips UK where effectively managing the safe flow of personnel to and from our North Sea operations was paramount.

Making improvements in how we use our available helicopter seats and decreasing the actual costs incurred by each flight was also necessary. The first step was to move the logistics operations team to a co-location alongside the integrated planning and materials front-line support group at Rubislaw House. Being based within the company’s cutting-edge Integrated Operations Centre meant new technology was at hand within the logistics hub. Not only did this allow better monitoring of conditions offshore, it also improved the ability of the onshore aviation team being able to visibility to track flights to and from the offshore installations.

A 7-day service to the company’s offshore operations is now in place, an obvious winner in a 365-day a year business. But could the logistics team continue to make these efficiency improvements, yet still work to reduce costs?

Tracy Morrison, UK Logistics Manager explains:

“By raising the awareness of the efficiency initiative within the group, implementing performance measures and reviewing our existing processes for tracking costs across the business, we have been able to focus clearly on delivery and where opportunities exist, we have either improved their efficiency or reduced their cost.”

The change to the offshore core crew rota from 2 weeks offshore/3 weeks at home to 2 weeks offshore/2 weeks at home brought an additional opportunity for the logistics team to make further improvements. Working closely with the helicopter providers, were able to modify flight schedules and reduce the overall number of flights required to safely service the ConocoPhillips offshore operations in the UK.

Contact: Sandra Duncan
sandra.duncan@conocophillips.com

ConocoPhillips lowers cost and speeds up plugging and abandonment

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ConocoPhillips has made significant savings on a complex and challenging well plugging and abandonment campaign in the UK southern North Sea by taking a ‘campaign’ approach and working collaboratively with vendors.

The company’s plugging and abandonment campaign in the southern North Sea focused on 15 offshore wells across a 541 day work programme in 2014. The teams adopted a ‘campaign’ approach to the tasks in hand, proactively engaging with personnel, working collaboratively with vendors and continually challenging assumptions. As a result, it only took 435 days which reduced costs by 35 per cent, saving over £50 million.

The wells were originally developed in the 1970s so there were a number of challenges to overcome. The team incorporated a wide variety of skill sets including, drilling, completion, intervention, fluids and wellhead specialists to ensure the safest and most cost effective solutions and tools were used in all cases.

Due to the unknowns of 30-40 year old wells, the team had to continually learn, formulate, apply and reassess mitigation strategies making constant suggestions for improvement throughout. By remaining as flexible as possible and applying a rigorous approach to ensuring that risks were controlled as changes were made, every scenario had back-up plans identified up-front which was pivotal to delivering the performance improvements.

Gerry Cooper, UK well operations manager, commented: “Our objective was to safely simplify our infrastructure in the area to reduce the cost impact of assets that were no longer producing. We also wanted to enhance the focus of our integrated operations team and demonstrate the value of collaboration.

“The success of the project really hinged on close collaboration between onshore and offshore, functional groups within ConocoPhillips and our suppliers. Thanks to this teamwork, we jointly delivered an outstanding business result – re-focusing the right people on efficient implementation, reducing operating costs, and safely achieving our goal at a much lower decommissioning cost than originally estimated.”

The learnings from this campaign are now being shared widely across the industry and the approach continues throughout ConocoPhillips’ ongoing southern North Sea plugging and abandonment and decommissioning campaign.

Digitalisation improves efficiency of ship brokering process

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Aberdeen based Shipbrokers Online Limited (Shipbroker.com) launched earlier in 2015, offering an innovative digital platform to manage the shipbroking process that promises to transform the shipping market and drive efficiencies in the brokering process.

The newly launched online platform will create a more efficient, cost effective and transparent shipbroking environment by replacing traditional shipbrokers with an advanced and user-friendly online service.

The technology behind shipbroker.com uses the most up-to-date digital processes but works in much the same way as leading travel or real estate search engines.

The company was established to put the power into the hands of vessel charterers and operators by creating an online marketplace that offers significant savings in brokerage fees and removes unnecessary complexity from the process. It also makes tendering a completely transparent exercise.

The founders of Shipbroker.com have over 30 years’ experience in the shipping and oil and gas industries and have been on both sides of the chartering process.

Kenny MacLeod, Shipbrokers Online Limited’s Chairman said: “After more than two years of development and testing the platform is now ready for use. Against a backdrop of increasing uncertainty in the oil and gas industry, now is the time for a disruptive technology like Shipbroker.com. It demonstrates tangible solutions to help charterers and the supply chain cut costs and creates efficiencies to help secure the future of the industry”.

“We are speaking to a number of interested charterers and vessel operators and look forward to working with them as they continue to trial the platform.”

Please view a video describing how efficiencies are achieved here.

PlanSea Limited- Cost reduction of UKCS marine support operations through efficient fleet scheduling

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Submitted by PlanSea Limited

Impact

  • The study has shown that there is potential to improve the efficiency of the vessel fleeting arrangements by moving to a schedule where vessels service multiple locations.
  • This has the potential to reduce considerably the number of vessel days procured through the efficiencies which in turn will offer cost savings.
  • More work is required to validate the scale of actual savings.
  • improved data management has the potential to greatly enhance operations control and oversight of KPIs
  • Reduced overall vessel time at sea will enhance Health, Safety and Environmental impacts
  • Additionally the software has the potential to impact positively on operations where the assets have a more diverse geographical spread and where fleeting decisions are more complex.

 

Description of Best Practice

Marine support constitutes a large part of the OPEX budget. Any savings realised translate into lower lifting costs, which in turn can support extended field life and, in some cases, new field viability.

A single Platform Supply Vessel (PSV) can cost around £3.5M in annual charter fees, with fuel and port costs adding substantially to the overall cost. There are circa 250 PSVs in the North Sea, circa 1500 PSVs globally.

There is enormous complexity involved in planning and scheduling material for offshore. This means that many operations simplify the process by “fixing” sailing schedules well in advance, forcing other schedules to work around these fixed points. At present, there are very few decision support tools in this area that could help break this logjam.

Nexen Petroleum UK Ltd commissioned PlanSea, a spin-out from The Robert Gordon University (RGU), to examine their UKCS operations to determine whether recent developments in machine learning and optimization could impact positively on their marine support costs.

The study used PlanSea scheduling software to reschedule 65 weeks of recent historical operational offshore support activity under realistic and pessimistic assumptions and using the same data and core fleet. The outcomes were compared on KPIs with the results of actual operations.

Features of the PlanSea scheduling software include :

  • maximising vessel utilisation and efficiency through optimised scheduling
  • right-sizing” vessel fleets
  • minimizing spot market (short term hire) exposure
  • supporting vessel sharing/collaboration schemes (in line with the recent Wood Report)
  • managing operational information including strong interoperability with enterprise information systems
  • minimising time at sea (thus minimising health, safety & environmental risk)

 

Contact: Jim Cargill
jim@plansea.co.uk

Petrofac, Faroe Petroleum and Eni Hewett collaborate to reduce logistics costs

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Petrofac, Faroe Petroleum and Eni Hewett have established an innovative cost-saving partnership to drive efficiencies and commercial synergies across their UK operations in the southern North Sea.

The tripartite agreement sees collaboration between Petrofac as the duty holder and the respective equity owners and operators of the Hewett, Schooner and Ketch gas fields to share logistics and accommodation services across the facilities.

Faroe Petroleum has invested in a new variant of NHV’s Augusta Westland 139 helicopter, enabling an increase in passenger numbers and freight capacity, and will share the usage of the helicopter with Eni Hewett.

In exchange, offshore personnel contracted to the normally unmanned Schooner and Ketch assets will stay nearby on the Eni Hewett complex rather than returning to shore each day, cutting down travel time and ensuring cost efficient mobilisation of personnel. The arrangement also allows for greater flexibility when deploying personnel as Petrofac can mobilise its workforce, as required, across both operations.

This approach will see the partnership deliver significant cost reductions and effectively manage resource mobilisation through a collaborative and open commercial arrangement.

Walter Thain, managing director, Petrofac Offshore Projects and Operations said: “To deliver the greatest value for our customers we always place a strong emphasis on cost management. The challenges we currently face as an industry are unprecedented and require us to constantly think differently and be innovative in the approach we take commercially to operations and engaging our supply chain.

“Reducing the cost of operations in the UKCS is a collective industry responsibility and we are absolutely committed to playing our part. By delivering cost reductions and synergies safely we benefit our customers and support a broader step change in the culture of the UK oil and gas industry.”

Graham Stewart, chief executive of Faroe Petroleum, said: “Since taking over operatorship of Schooner and Ketch last year, we have focused on a number of measures across the supply chain designed to improve operational efficiency without compromising safety which we feel is especially relevant in this new era of low commodity prices. This arrangement is one such innovative measure, which entails the sharing of key services which will materially reduce offshore operating expenditure, and improve operational efficiency.”

Centrica – Rose well abandonment

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Submitted by Centrica

Impact

The job was executed in 9.5 days vs the estimated 6.5 days due to slight issues which arose. Although the completion was delayed by 3 days it was still completed in half the time that option 1 would have taken.  By adopting this new method, the project was completed in less time and with reduced risks of increased costs occurring due to complications occurring.  By looking for new innovative processes available we have improved our efficiency by plugging the well using less time and less costs.

Description of Best Practice

Whilst preparing to decommission the Rose field in the Southern North Sea, it was identified there was a challenge to isolate the over pressured Plattendolomit formation.  Due to tops of cement and casing configuration within the well, there were only limited options available for setting the abandonment plug.  Three options were considered, reviewed and the best approach selected.

The option Centrica chose to go ahead with was to perforate and wash 200ft interval using Hydrawell’s Hydrahemera System.  The Hydrahemera operation was new technology originating from Norway.  It is the first dual string abandonment application in the UK and during the review process was found to have a good track record and extensive onshore testing.  By using this method the process was estimated to take 6.5 days as opposed to 18 days for option 1 (to cut and pull then pilot mill 1000ft of 9-5/8 casing).

The Hydrahemera system allows for a well to be plugged across multiple annuli without performing a section milling operation.  The well is washed down from top to bottom perf and then back up from bottom perf to top perf to clean thoroughly behind multiple perforated casings.  Cement is then pumped into the well and the well barrier is established.

Contact: Jonathon Lilley, Centrica

Shell – Hand held infra-red scanner for piping and structural replacements

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Submitted by Shell

Impact

  • Significant increase in speed – replacing previous surveying and engineering process (including hand-offs and waiting periods) with a more integrated and rapid approach.
  • This increase in speed reduces the integrity risk associated with temporary repairs.
  • More efficient use of platform beds (core crew resources)
  • More efficient use of inspection resources by reduced requirement to inspect temporary repairs

Description of Best Practice

We have changed the way we go about surveying and engineering of like-for-lie pipespool and structural replacements. We store an infrared handheld scanner offshore for undertaking surveys and have instructed core crew members in the use of them. Scan data is uploaded and converted to a full fabrication isometric within a few hours of receipt. The isometrics is then passed onto a fabricator for manufacturing.

Contact: Wessel de Haas, Shell

Nexen – Journey to change beliefs to improve water injection rates

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Submitted by Nexen

Impact

Nexen’s cultural beliefs and the marginal gains campaign soon became integrated into everyday procedures – and soon the results were plain to see.

The water injection campaign helped drive a 40% improvement in water injection rates across within six months of implementation.

Description of Best Practice

Nexen Petroleum UK management team set on journey to evolve Nexen’s performance from a top quartile position to become to a Best-In-Class operator.

Leadership understood that workforce collaboration and two-way communication was crucial in achieving cultural transformation, specifically in influencing a paradigm shift to create new experiences, beliefs and behaviours to deliver top business results and establish a common language which would drive accountability both individually and collectively across the whole business.

A suite of tools were developed to equip employees in implementing the changes but to naturally engrain the new ways of working into everyday tasks. The toolkit consisted of eight cultural beliefs and the deployment of four working tools – focussed recognition, storytelling, feedback and accountability.

One example was recognising the need to improve our water injection performance. Nexen ran a series of multi-discipline engagement workshops to empower employees into changing beliefs and experiences about the importance of water in enhancing production, which helped drive a 40% improvement in water injection rates.

To implement change, establishing a clear purpose and understanding was essential. The company set out clear messaging on why water injection was extremely important to our operations. Nexen created new experiences that led to the implementation of the right processes to make water injection a priority. Water injection is now a top focus offshore and features on the top line in our daily reports.

Nexen was also inspired by the concept of Marginal Gains Theory, created by the British Olympic Cycling Team, which involves breaking down routine work activities to find small efficiencies or enhancements which accumulate into significant benefits and savings.  Nexen’s leaders encouraged onshore and offshore teams to work together on campaign focused on driving improvements and better working practices from everyday tasks.

Contact: Ray Riddoch, Nexen Petroleum U.K. Limited