SUPPLY CHAIN NEEDS IN DECOMMISSIONING NOW AND IN THE FUTURE

Transcription

1 8 September 2016 SUPPLY CHAIN NEEDS IN DECOMMISSIONING NOW AND IN THE FUTURE Sam Long Business Acquisition Manager, Decommissioning, Petrofac 1

2 Agenda: 1. Introduction and HSE 2. Petrofac: an introduction 3. Supply Chain and decommissioning now and in the short term 4. Future Supply Chain needs 5. Closing remarks 6. Q&A Disclaimer: as a Contractor, Petrofac cannot comment in regards to supply chain needs to the same degree as an Operator. Opinions expressed herein reflect Petrofac interpretation of market requirements and do not necessarily reflect the expectations of our clients 2

3 PETROFAC: AN INTRODUCTION 3

4 Petrofac in general Petrofac is a major oilfield contractor, providing Engineering and Construction (E&C), Operations and Maintenance (O&M), Well Engineering, training and other specialist services to Operators around the world We employee 18,200 personnel, with a turnover of $6.84BN (2015) We have major operations in the North Sea, Middle East and Asia Pacific 4

5 Petrofac in decommissioning Petrofac has the capability and the experience to help existing and new clients on their journey; whether that s at project start-up, through ongoing and late life operations, onto decommissioning We are building a Centre of Excellence for decommissioning in the North Sea 5

6 Decommissioning is the final phase of the asset lifecycle and involves the whole supply chain CUSTOMER NORMAL OPERATIONS LATE LIFE ASSET MANAGEMENT COP DECOMMISSIONING SERVICE MODEL(S) DISCRETE SERVICES INTEGRATED PACKAGE DUTY HOLDER (INSTALLATION OPERATOR) SERVICE OPERATOR DISCRETE SERVICES INTEGRATED PACKAGE FOCUS AREAS Uptime and production focus FOCUS AREAS Optimised O&M, reduced CAPEX, decommissioning preparation DISCRETE SERVICES INTEGRATED PACKAGE FOCUS AREAS Cost management and HSSE protection SUPPLY CHAIN 6

7 Decommissioning activities can be packaged in multiple ways Individual service lines examples: Well Engineering (P&A) Decommissioning studies and estimates Joined up service lines, common customer interface example: P&A and cleaning/flushing Integrated service lines, with shared Project Management, Project Services and single focal point examples: Duty Holder in Decommissioning Total decommissioning solutions provided by Petrofac and selected partners EPCm of P&A and decommissioning projects DISCRETE SERVICES BUNDLED SERVICES INTEGRATED SERVICES TOTAL PACKAGE SOLUTIONS 7

8 Petrofac decommissioning services and projects CURRENTLY PROVIDING: Well Plug and Abandon campaign, Tullow Horne and Wren (UKCS) Duty Holder in Decommissioning, BP Miller (UKCS) Asset management review, Talisman Sinopec (UKCS) Duty Holder oversight, decommissioning, Tullow Horne and Wren (UKCS) PREVIOUS PROJECTS: Hutton TLP topsides separation project, Conoco (UKCS) AH001FPU strip down and rebuild, Ithaca/Petrofac (UKCS) Bacton Gas Terminal decommissioning, ENI (Onshore, UK) Decommissioning Cost Estimates, multiple, confidential (Europe and Africa) Late Life Asset Management (LLAM), ENI Hewett (UKCS) 8

9 SUPPLY CHAIN NEEDS, NOW AND IN THE FUTURE 9

10 OGUK WBS a baseline OGUK WBS is a common baseline for projects and planning OPERATOR PROJECT MANAGEMENT TOPSIDES PREPARATION SUBSEA INFRASTRUCTURE FACILITY RUNNING/ OWNER COSTS TOPSIDES REMOVAL SITE REMEDIATION WELLS ABANDONMENT SUBSTRUCTURE REMOVAL MONITORING FACILITIES/PIPELIN E MAKING SAFE TOPSIDE AND SUBSTRUCTURE ONSHORE RECYCLING 10

11 Supply Chain and Decommissioning (short term) Macro environment makes decommissioning challenging and costly Drawn from the bottom line Most projects are in early or late planning stages and only a small number are currently in execute mode For many services decommissioning will mean Business As Usual until asset ready for removal: E.g. Duty Holder services that require logistics, catering, helicopters, Even early decommissioning activity will call upon existing skill sets, e.g. FM, scaffolding, and (de)construction Service offering must be within a different culture and different mind-set Bring service to a Project, not an Operation Multi-discipline approach Fit-For-Purpose This will also require innovation in T&Cs and agility in deployment 11

12 Decommissioning drivers are different All parties need to recognise that the drivers are different for Decommissioning EXPLORATION AND PRODUCTION ECONOMICS DRIVEN BY ACHIEVING FIRST OIL OR GAS DECOMMISSIONING ECONOMICS DRIVEN BY COST REDUCTION AND DEFERMENT OF EXPENDITURE PROJECTS MAY NOT PROCEED IF INVESTMENT CRITERIA ARE NOT MET PROJECTS ARE LEGALLY OBLIGED TO PROCEED FUTURE MARKET SCALE UNCERTAIN, MATURE MARKET WHICH HAS EVOLVED SINCE 1960S FUTURE MARKET SCALE MUCH MORE CERTAIN, ALTHOUGH CLIENT AND SUPPLY CHAIN EXPERIENCE IS LIMITED PROJECT SCOPE CAN VARY BASED ON TECHNICAL OR COMMERCIAL DRIVERS PROJECT SCOPE LARGELY FIXED (UNLESS QUALIFYING FOR DEROGATION) DRIVEN BY SAFETY AND ASSET INTEGRITY TO ENSURE PRODUCTION IS SUSTAINED UNINTERRUPTED DRIVEN BY HSE AND REPUTATION MANAGEMENT. INTEGRITY IS IMPORTANT DURING REMOVAL STAGE GATE QUESTION IS DO WE WISH TO CONTINUE WITH THIS INVESTMENT? STAGE GATE QUESTION IS ARE WE READY TO PROCEED WITH THIS EXPENDITURE? 12

13 Supply Chain and Decommissioning (long term) Given the immaturity in decommissioning it is hard to predict future needs Bespoke, over engineered solutions and resulting excessive cost will delay activity in general and should be avoided Think Good is good enough, Fit-For-Purpose Focus should be on cost effective, repeat services Some technology may need to be bespoke and specialist niches will emerge/develop e.g. jacket cutting, subsea mattress retrieval In particular innovation will always be welcomed for P&A and lifting solutions Incremental efficiency gains are essential now and in the future Solutions should be cost effective and relevant to needs 13

14 Supply and demand immaturity A substantial amount of activity beckons in the UKCS, NCS and beyond Annual Insight report (OGUK) is the best marker of anticipated activity and illustrates both volume and complexity in upcoming workload There is much uncertainty as to when this activity will materialise, however it is foreseeable that the current immaturity will be replaced by a very different market place in 5-10 years EXAMPLES: Consortia be prepared to collaborate or to work for/with different partners Aggregation of work Emerging competition and alternative services 14

15 Closing Remarks Decommissioning will be a substantial market in coming years and is an opportunity to build for the future Petrofac is committed to decommissioning, especially within the NS However successful, sustainable and profitable decommissioning will require a different culture and a different mind-set Supply chain must enable cost effective decommissioning in order to realise this opportunity RECOMMENDATIONS Decom North Sea Decom Technology Innovation Platform 15 September Oil & Gas Innovation Centre DECC Pathfinder 15

16 QUESTIONS? Sam long Business Acquisition Manager, Decommissioning