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ECONOMIC REPORT 2015
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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
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.
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.
BUSINESS PROCESS
STANDARDISATION