continuous improvement seminar etf overview€¦ · continuous improvement workforce engagement and...

Continuous Improvement Seminar – ETF Overview

Dr Mariesha Jaffray 1st December 2016

Contents

Case for Continuous Improvement

Oil & Gas UK Re-set

Successful Continuous Improvement

CI at Oil & Gas UK

ETF Project Update

Cooperation, Culture and Behaviours

Case for Continuous Improvement: Significant Industry Challenges

Industry is starting to turn a corner

Operating Cost Reductions

Reduction from Existing Fields

Contribution from New Fields

7.5

8.0

8.5

9.0

9.5

10.0

2014-15 2015-16

9.7

8.0

8.2 8.2

7.17.0

6.5

Tota

l Op

erat

ing

Co

sts

(£ B

illio

n)

7.5

Concerted industry action is required to sustain these improvements

20-25%

40-50%

10-15%

15-20%

Operational Change

Price Reduction

Deferred Demand

Eliminated Demand

TransformationalShort-term? Sustainable?

Not uniform across all our companies, differential impact

CI at Oil & Gas UK: Oil & Gas UK Re-set

CEO

Deirdre Michie

External Affairs and

Communications

Trisha O’Reilly

External Affairs

Communications

Editorial and Design

Upstream Policy

Michael Tholen

Operations Excellence

Fiscal Policy

Energy Policy

Market Intelligence

HSE

Mick Borwell

Health and Safety

Environment

BusinessExcellence

Stephen Marcos Jones

Supply Chain

Continuous Improvement

Workforce Engagement

and SkillsMembership

Relations

Events

Finance and Corporate Services

Graham Elgie

Finance

HR

Legal

Business Services

Business Excellence Objectives are to ensure Oil & Gas UK are“Delivering a first-class service to our membership; embedding a culture

of continuous improvement right across the supply chain and throughout the industry’s workforce; promoting this industry’s excellence

regionally, nationally and internationally through innovative means”

Successful CI Programmes Agreed need for change

- Clear, long term vision

- Awareness of driving & resisting forces

- Capacity and capability

Commitment

- Key leaders

- Stakeholder buy-in & engagement

Structured, planned approach

- Consistent, robust governance

- Communications plan

- Meaningful metrics

- Ongoing review

Objectives are to..

Continuous Improvement Seminar 1st December 2016

Oil & Gas UK

Continuous Improvement

Drive ETF Strategy

Implementation of Project Delivery

Governance

Oversee and support ETF Deliverables

Ensure BE activities are value-adding

ETF Industry Lead Liaison

Facilitation of CI Project cycle

To seek, evidence, promote and provide access to efficient practice across UK oil and gas industry, without compromise to safety, by industry for industry.

Interface with other industry initiatives to ensure alignment and avoid duplication

The Efficiency Task Force (ETF)

• Established in 2015 as a catalyst for rapid behavioural change (internally & externally);

• Led by Walter Thain, technical specialism provided by industry and dedicated Oil & Gas UK resource;

• Drives pan-industry efficiency improvements by encouraging cooperation, focusing on value adding initiatives to create a sustainable sector;

• Initial phase focus: • Business Process; • Standardisation;• Culture, Collaboration and Behaviours.


ETF Structure

Oil & Gas UK Board

Business Processes

Inventory Management

Compression Systems

Procurement

Logistics

Maintenance

Standardisation

Subsea Standardisation

Valves

ETF Steering Group

Co-operation, Culture and Behaviours

Rapid Efficiency ExchangeContinuous Improvement

Network


2

1

1 Improvement Projects2 Cooperation, culture & behaviours enablers

Business Processes: Inventory Management Project

• Total estimated value of UKCS inventory is $£2bn• Improved management of this has cost savings potential in region of $30-50m p.a.• Aims:

(1) Determine appetite for & provide proof of concept for shared cross-industry UKCS inventory

(2) Establish a function cross-industry mechanism for trading material, Determine feasibility of a industry pool of commonly held items


Ampelius Inventory Pilot

Companies Impact

Marathon & ConocoPhillips (trade) • Prevented SNS LOGGS System shutdown

Taqa & Centrica (pump transfer) • Mitigated the need for three month lead time and potential well shut in

Apache, EnQuest, Total, Fairfield (multiple low value tradings)

• Significant cost avoidance

Achieved:• Registration of 23 companies & 100,000 items• Significant trading examples:

• Demonstrated collaboration and trading via inventory management is possible• User group review revealed current platform is not fit for purpose or

economically viable

Next Steps:• Review of inventory management requirements• Consideration of alternative platforms• Maintenance of workgroup collaboration & facilitation of trading


Business Processes: Procurement Project

• Tender inefficiencies are well known, particularly duplication• Anecdotally, tender activity is 4 times higher for the same amount of work• Improvements in tender efficiency hold a saving potential of £25m per year

Aims to:• Determine the extent and nature of duplication in the tender process and best steps to

reduce/remove this• Develop good practice framework and proof of concept during expression of interest,

ITT, tendering and pre-qualification process


Procurement Progress

Recent Achievements:• Working Group established• Review of process waste & potential savings (£25m/4%) in sample projects

(tenders from four contractors)• Development of Tender Efficiency Framework & webpage• Launch of Tender Efficiency Frame work at Share Fair & policy dinner

Next Steps:• Ongoing webpage development, expansion of framework into guideline• Board Managing Directors & Supply Chain Representative/Business

Development Manager workshop 15/12/16:- Share work done to date- Explore potential barriers and enablers- Secure commitment to adopt, engage & feedback- Generate implementation plan


The Tender Efficiency Framework


Standardisation: Subsea Technology

• Application of standardisation practices to project delivery can realise substantial cost savings

Short-term aims • Development of simplified, standardised approach to subsea development design, manufacture and installation across UKCS and proof of concept via case study application

Long term aims • Development of optimisation guidelines for application across UKCS

Progress to Date • Industry workshops completed to generate good practice guideline standardisation themes of: codes, standards and specifications, alternative methodologies, process and hardware

• Retrospective case study application of theory• Real life application to Centrica Pegasus West Case study

Next Steps • Presentation of results of Chevron West Wick Case study• Handover of project to O&G UK to plan implementation phase• Scope other areas for potential application


Four previously executed projects revisited applying the standardisation themes Substantial savings potential

UKCS Theoretical Retrospective Case Studies

Case Study 2UKCS subsea pipeline tieback

Total Savings: £13m = 18%

Case Study 1FPSO riser system

Total Savings:£7.75m = 25%

Case Study 3Subsea manifold & bundle

Total Savings:£26m = 15%

Case Study 4UKCS subsea pipeline tieback

Total Savings:£14.5m = 28%


Applying the Theory

Research Findings

Centrica West Pegasus

Potential efficiencies that could be applied to subsea developments by adopting a fit for purpose and a more simplified approach to projects.

The objective of undertaking this prospect review was to establish what cost savings could be realised when applying the findings identified to date to an existing prospect considered ‘economically challenging’.

Industry Review Previous Initiatives

Industry Review – Cultures, Behaviours and Practices

Standardisation Themes

Real Life Case Study-Prospect Review


Range*

Project Management and Engineering 20.4% 24.7%

Procurement, Manufacture and Fabrication

14.8% 28.3%

Transportation and Installation 16.3% 33.6%

The above % indicates the savings achieved within these groupings.

Overall Percentage Savings 20.4% 24.7%

Efficiency Cost Savings

* Dependant on Field Option

Standardisation is feasible:

• Real life application can realise significant savings (20-24%);

• Approach is not just limited to subsea application;

• Further cost savings are possible through application to other areas.


Cooperation, Culture and Behaviours Enablers


Collaboration Index


Cooperation, Culture and Behaviours Enablers: CIN

• Established December 2015 with representation from 30+ companies

Provides an active body for CI experts from the UK in Oil and Gas to support delivery of the Oil and Gas Industry Behaviours Charter

Acts as a focal point of contact between the member companies of Oil & Gas UK on all relevant issues including participation in Rapid Efficiency Exchange, CI events;

2016 survey output –Development of Task Finish Groups:

1. CI Continuing Professional Development (tie in with ECITB CI Standardisation) – Darren Clyde, Aker

2. Cultural & Behavioural Change (tie in with IBC) – Stuart Insch, Expro

3. Shared Learning/Collaboration (REE) – Nick Readman, Total

4. Interface and learning with other industries – Philip Oliver, Shell

5. Supply Chain Value Stream Mapping - Gary Downs, Aker


CIN Members

24

Cooperation, Culture and Behaviours Enablers: REE

• To facilitate cross industry learning and sharing of case studies

• 50 industry efficiency improvement case studies

• Highlight challenges being faced to encourage potential solutions

• REE v2 being developed

• Inclusion of workforce engagement element

• Ideas submission portal

• Activity tracking/follow-up assessment

• Discussion forum


What we need from you…

Advocacy & support

Contribution – case studies & challenges

Involvement in delivery of key projects

Application of good practice guideline and feedback

Idea generation


[email protected]#oilandgasuk

© 2016 The UK Oil and Gas Industry Association Limited, trading as Oil & Gas UKPetrofac ETF Roadshow - 16 November 2016

continuous improvement seminar etf overview€¦ · continuous improvement workforce engagement and...

Documents