supply chain excellence - offshore...
TRANSCRIPT
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SUPPLY CHAIN EXCELLENCE – MAKING A DIFFERENCE IN DECOM
Sam Long
Business Acquisition Manager,
Decommissioning, Petrofac
16 November 2016
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Agenda:
1. Context and purpose
2. Petrofac: an introduction
3. Where are we – a time for change
4. Role of the individual
5. The role of a company
6. The role of industry
7. Closing remarks
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 or opinions of our clients or partners
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Context and Purpose: supply chain excellence
• Era of MER and on the cusp of decommissioning
• Work to be done to make both effective and affordable
• Buy side and sell side behaviours and processes must be FFP
• Avoid boom and bust models
• Align Supply Chain to be effective and reflective
There are activities to be taken at individual, company and industry
level to bring this about:
• On-going efforts to envisage the right means of doing business
• Awareness raising, both internal and external
• Building for the future, internal and external
Me Us
All
Making a
difference
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PETROFAC:
AN INTRODUCTION
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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
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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 late life and decommissioning
in the North Sea
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Late Life Asset Management and decommissioning services
ENGINEERING STUDIES
DUTY HOLDER
OPERATIONS
AND
MAINTENANCE
LATE LIFE ASSET MANAGEMENT
WELL ENGINEERING
OPTIMISATION
DECONSTRUCTION
DECOMMISSIONING
VERIFICATION
&
REGULATION
PROJECT
MANAGEMENT
SUPPLY
CHAIN
MANAGEMENT
HLV
MANAGEMENT
DISPOSAL
MANAGEMENT
PLUG AND
ABANDONMENT
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Buying and selling models in decom
TOTAL PACKAGE
SOLUTIONS
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
• P&A and
decommissioning
Project
Management
Total
decommissioning
solutions provided
by Petrofac and
selected partners
INTEGRATED
SERVICES
BUNDLED
SERVICES
DISCRETE
SERVICES
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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,
Repsol Sinopec (UKCS)
• Duty Holder oversight, decommissioning,
Tullow Horne and Wren (UKCS)
• Duty Holder – Late Life Asset Management
(LLAM), ENI Hewett (UKCS)
• Studies – various (confidential)
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)
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WHERE ARE WE?
A TIME FOR CHANGE
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Where are we?
Time for MER in the North Sea is now
Time for decommissioning is coming
• G Newcombe, OGA Oct 2016: ~19 CoPs vs 15 FDPs
A number of issues prevent truly effective Decom from
happening in the current market
• Short term issues: affordability
• Medium term issues: cost control and estimation
• Long term issues: ill-suited frameworks,
models and approaches
Innovation will happen, but may need nurturing
• The industry can overcome significant hurdles once focussed,
e.g. Safety Case regulations
• Requires a different culture and mind-set in the industry,
across the supply chain and within individuals
Nurture
1. verb. care for and protect
(someone or something) while
they are growing
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ROLE OF
THE INDIVIDUAL
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What can I do to make a difference?
This is a different era in the basin and in the industry
• Unlikely to be involved in a major greenfield development
• Likely to be involved in a decommissioning project
• Guaranteed to be involved in MER
A different mind-set is required to make both effective
• Be passionate
• Advocate change
• Be conscious that Decom is end of life
• Innovate in your own space
Am I likely to personally
see a new jacket and
platform installed in the
NS in my career? Participate…
Innovate…
Me
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THE ROLE OF
A COMPANY
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Role of a Company
Develop people who are “fit for decom”
• New roles for graduates in 2017
• Building a team, Decom recognised alongside E&C and O&M
• Emphasis on right size, with right culture and right approach
Develop awareness
• Explain what is required and why
• Enable decision making (investment, effort)
• Prepare people for the future
Develop the Supply Chain
• Change in behaviours, strategies and models (buy/sell side)
• Build (new and old) relationships that suit requirements
• Work to the new norm, not the old way
E&C O&M
Decom
Us
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Role of a Company continued
Develop the right services, in the right time frame
Short term needs
• Only a small number of projects are currently in execute mode
• Affordability and cash flow impact: BAU for now
• Logistics, catering, FM, (de)construction
• However… bring service to a Project, not an Operation
• Requires innovation in T&Cs and agility in deployment
Long term needs
• Avoid bespoke, over engineered and costly solutions
• Think “Good is good enough”, “Fit-For-Purpose…”
• Focus should be on cost effective, repeat services.
e.g. NUI conversion, Park and Defer, Walk2Work
• Steps taken by Petrofac – optimise crew, optimise maintenance,
optimise rotas, share logistics, share facilities, innovative P&A
OGUK Share Fair
Sept’16
Current emphasis should
be on LLAM, not decom
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MER comes before Decom: Petrofac model
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THE ROLE
OF INDUSTRY
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Making it work, as an industry
Decommissioning impacts society,
environment, people, £
How do we make it more
sustainable/affordable /“sensible”?
How do we nurture it to
be more effective, quicker?
What happens if we don’t nurture it?
Maximise an opportunity, not the cost
Identify ways forward, time to change
MER and LLAM are the keys to successful decom
• Must strive to buy time through MER
CoP?
Decom?
MER/LLAM
Buy time
here
Which priority, when?
How do we get here? Time
$
All
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Role of Industry: OGA Decom Board
OGA Decommissioning Strategy
• Strategy published Q3’16
• Calls for new ways of working in decommissioning
• Drivers are to be cost effective, environmentally sound and safe
• Tripartite working – enable a different approach for Regulator, Operator,
Contractor, Supply Chain and tax payer
• Minimise the cost of decommissioning in an appropriate manner
OGA Decom board, Delivery Programme and themes
• Agreed priorities for 2017
• # 1Cost certainty and reduction
• #2 Delivery capability
• #3 Regulatory guidance
WIP, but working together
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Delivery capability
Team effort. Two elements under development: #1
Supply Chain capability/capacity
Objective: develop transparency in supply chain capability which,
supported by a robust demand profile, would allow creation of a predictable
decommissioning market.
Sponsored by Nigel Lees (Wood Group)
Progress
• Methodology currently under review
• Decom North Sea and OGA MER Supply Chain board involvement
• Work will draw upon the 2014 Arup report
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Delivery capability
Two elements under development: #2
Optimised execution and contractual models
Objective: develop, review, challenge and assess new and existing
models for decommissioning project execution and contracting.
Sponsored by Jonathan Brown (RSR), Sam Long, (Petrofac)
Progress
• Agreement to combine two elements into one, due to overlap between
execution and contracts
• Initial focus on Framing Workshop and suitable methodology for workshop
• Agreement to seek facilitation
• Intent is to map pros and cons of a number of models, identify barriers that
prevent some from being realised and create a roadmap for possible new
forms to become effective
• Barriers can be both perceived and real
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CONCLUSIONS
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Concluding remarks
• Can we make a difference?
• Can we afford not to?
• Disseminate, improve awareness of drivers, and of blockers
• Think, act and behave in a different way for MER and decommissioning
• Participate in dialogue, bring about change in thinking
• Innovation isn’t just about technology…