Cost effective shallow water field developments

Means to improve project economics

INTSOK Seminar Paris, 28th May 2015

Ingvar Grøtberg, Manager Field Development

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 Industry Challenge
Subsea as an example

M$/Well Oil price

$30 $120,0

Other
Installation $25 $100,0
Topside 5%
Facility 14%
(FPSO/ $20 $80,0
Platform) Subsea

30% 9-15% $15 $60,0

$10 $40,0

$5 $20,0
30-50%
12%
Drilling &
Riser & Completion $0 $0,0
Flowlines 1991 1994 1997 2000 2003 2006 2009 2012

Cost Distribution Normalized Cost Development

Offshore Development (Typical) - Per Well Basis for Subsea HW

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 The effect of Early Involvement

Starting point End solution

Smarter field architecture
 Reduce hardware scope
 Simplify installation
 Faster and simpler installation – use vessels instead of rig
 Small pre-investment to facilitate future brownfield modifications
 Design equipment for easier and vessel based well interventions to boost recovery rates and reduce costs
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Concept Well construction Process

Topside
versus
Number of

Maintenance cost
subsea
wells
Sand FMC scope

Operation and
Trajectories
removal
Smart wells
Export
Multilaterals
quality

Time

N
Oil price(i)  Oil rate(i)  CAPEX (i)  OPEX (i)  TAX (i)
NPV (i)  
i 1 (1  r )i

Log data
Core data Customer Scope

Production profile
Fluid data Numerical
reservoir
Geological model to
model (base predict
case, other) performance
Testing (e.g. Eclipse,
Sampling VIP)
Timing (delays?) Time
Lift curves Water influx?
 Standardization steps

Increased
cost focus,
reduced oil
Efficiency price
Increase and Cost Standardization
on all levels,
capacity fundamental
Repeat order
and part approach
Copy design, number copies

Subsea Tree Unit Price

reduce
engineering

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 My way or the FMC way?
Item IOC IOC Best
(2013) (2014) Practice IOC
Witness Requests 216 120 26
Witness Notification 48 Hr. / 120 Hr. 48 Hr. / 120 Hr. 24 Hr.
Period
Inspection Release 43 22 5
Certificate
Pre-Production 20 17 0
Meetings
FAT/EFAT Procedure 12 12 7
Approval
Volumetric NDE Approval Approval -
Procedures
Qualification Test Approval Approval -
Reports (Forgings)
Welding Procedures Approval Approval -
Coating Procedures Approval Approval -
Lift / Load Procedures Approval Approval -
MPQ 10 6 0
MPQPs 48 19 1
Standard Component Major NCS Available for
NCRs Require Approval Review at Set
at Set Out Out
Major NCR (Customer Similar to Best Similar to Best
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Practice
 Technological Innovation – Simplification

Surface Xmas Tree Subsea Xmas Tree

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 Functional specifications for SW Xmas Tree

• Based on latest Subsea technology

• Concentric dual bore 5 1/18 X 2 1/16
10K
• Option to drill and complete on 13 5/8 or
18 ¾ Wellhead
• Allows for 7 downhole functions (5
hydraulic, 2 electric)
• Standard Trim Levels: FF, HH
• Optional choke and flowbase connector
• Optimized for virtual flow meter
• Configurable for Diver, or ROV
installation
• Standard electrohydraulic control system
(Option for Direct Hydraulic)

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References
 Specifications and execution
• The SW Xmas Tree is
designed and built
according to international
standards (API 17D)
• It origins from the latest
technology subsea Tree
• The execution model is
lean and efficient
• Requires minimum client
engagement from CA to
delivery of equipment and
documentation
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Applicable Description
Standards
API 6A (ISO Specification for Wellhead and Christmas
10423) Tree Equipment
ISO 13628-1 Design and Operation of Subsea
(API RP 17A) Production Systems – General
Requirements and Recomendations
ISO 13628-4 Design and Operation of Subsea
(API 17D) Production Systems – Part 4 Subsea
Wellhead and Tree Equipment
ISO 13628-6 Design and Operation of Subsea
Production Systems – Part 6: Subsea
Production Control Systems
ISO 13628-8 (API Design and Operation of Subsea
17H) Production Systems – Part 8: Remotely
Operated Vehicle (ROV) Interfaces on
Subsea Production Systems
ISO 15156 Materials for Use in H2S-Containing
(NACE MR-0175) Environments in Oil and Gas Production
AWS D1.1 Structural Steel Welding Code
DNV-RP-B401 Cathodic Protection
AS 4059
NAS 1638)
Cleanliness Requirements for Parts Used
in Hydraulic Systems
 Lean execution

• Customer functional requirements • Based on industrial standards;

only API, ISO, NORSOK, SI913 and
– Opens for standardization FMC Technologies’ experiences
– LLI raw material in stock (independent • Reduction in documentation
of customers) • Reduction in Witness- & Hold points
– Critical comonents in stock • Installation tools on rental basis
(independent of customers)

20-40% price
30-50% lead time
reduction
reduction
120%
30
Delivery time in months

Price relativity in % 100%

25
Current Best Current Best
20 80% Industry
Industry
Practice Practice
15 60%
Supplier based Supplier based
10 Design 40% Design
Accepted Accepted
5
20%
0
0%

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Lean execution – Standard solution
Real case – working differently with one customer

Project based on customer specifications Project based on FMC specifications

Customer specs.

Customer specs.
Customer specs.
Supplier solution

Supplier sol.
Project hours ∆ -20% Documentation ∆ -95% Delivery time ∆ -50%

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 Summary

Improved cost and schedule, hence improve

project economics can be achieved on a
number of existing opportunities by:

 Engage early to explore and optimize

solutions
 Standardization
 Innovative technology to provide
simplified solutions
 Functional specifications from customer
only - opens for:
 Simplified technology as Shallow water
Xmas tree
 lean execution
 maximimizing standardization effects

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 Thank you for your attention!

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