Oil & Gas UK Economic Report 2015

internal dip pipes. This removed the risk of the pipes becoming detached during the cassion’s removal and falling onto a gas export line located below and allowed the top of the caisson to be cut away in larger sections than before, saving time and reducing costs. Oil & Gas UK is also driving several pan-industry initiatives to help improve business processes. It has published guidance on how to execute planned maintenance shutdowns more efficiently to reduce production losses. The association has also developed an online portal of spare part inventories across the sector, which will allow companies to source replacement equipment quickly and efficiently with the aim of reducing production downtime. Details of drilling rig availability are also being shared to plan and optimise well operations. The Efficiency Task Force will be reinforcing these efforts with a focus on improving business processes such as procurement, logistics and warehousing.

BUSINESS PROCESS

Behaviour Change – Business Process The industry recognised last year that cost inflation urgently needed to be addressed. Even when the oil price was at $110/bbl, that need was clear and the work that companies started then is already bearing fruit. Some companies are well down the road of reviewing their business processes and identifying where efficiencies can be made and Oil & Gas UK is keen to help share case studies with other companies. One major operator has accelerated the completion of planned tasks by 12 per cent over three months by encouraging offshore teams to use visualisation techniques to enhance the planning of operations and maintenance activities. Another operator has reviewed its inventory management process and re-assigned stock identified as surplus to requirements to productive projects in another location, at a much lower cost and in a shorter timescale than it would otherwise have taken to source the materials. A semi-submersible drilling contractor has, meanwhile, reduced the cost of plugging and abandoning (P&A) wells by 30 to 40 per cent by reviewing its processes and adopting a batch approach. Another major operator analysed how it uses unplanned rotating equipment support. After discussing alternative contract models with its supplier, the company switched from a fixed monthly fee to a pay-as-you-go service and saved about $360,000. Meanwhile, a major engineering contractor introduced a new method to replace defective caissons more quickly in response to demand from a customer. The new approach meant the job could be completed in a third of the time and more safely. Expanding foam was pumped down the caisson, fully encapsulating corroded

STANDARDISATION

Behaviour Change – Standardisation The tendancy for over-specification of products and services, in which both operators and contractors have played a role, has been a great driver of rising costs. It is thought that simplification and standardisation in areas such as well P&A, subsea and valves could deliver savings of more than 15 per cent over the next decade. Individual projects are already under way; for example, anexercise tomap control ofwork and training processes to identify priority areas where standardisation will achieve improvements in efficiency. The findings will help the industry to address duplication of standards relating to safety-critical roles and tasks.

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ECONOMIC REPORT 2015