ONS: Costs high on the agenda

Aug 25, 2014

Statoil’s CEO Helge Lund has continued the Norwegian industry focus on standardization, in light of rising costs, on the opening day of ONS (Offshore Northern Seas) in Stavanger today (August 25).

Referring to subsea developments specifically, Lund suggested the industry should develop a Lego-approach, where standard parts are brought together as building blocks for projects.

Image: Linn Cecile Moholt, CEO of Norway's Karsten Moholt, speaking at ONS today.

Standardization, as a theme, has become a buzz-word in the Norwegian sector, dominating the debate in recent conferences such as the Underwater Technology Conference in Bergen.

For some, the debate is about equipment or component specification, such as generators. The keynote sessions heard an example which highlighted the offshore industry’s high levels of specifications – and the result. A generator which took 500 engineering hours to develop for other industries took 37,000 hours for the offshore industry, repeated Linn Cecile Moholt, CEO at Karsten Moholt in a presentation on rising costs.

Looking at where costs were rising, she said “as built,” man hours had risen by 70% compared to 10 years ago, yet the number of skilled (tradesmen) workers had dropped. Life-cycle documentation rose 304% in the same period, she said. In her view, the industry needed to standardize maintenance philosophies, standardize solutions, define competence requirements clearly, improve communication, and look at UK Continental Shelf requirements.

Tassos Vlassopoulos, strategy and marketing director, GE Oil & Gas, highlighted how much costs had risen in the industry between 2005 and 2012, with project complexity and materials and resource costs driving the increase. He said the multiple standards and requirements by different companies also added to costs. He said: “Everyone has their own standard but that’s a problem as it drives costs, it drives lead times, it drives everything.” He said the industry should think about standardization and modularization of projects.

But not all focus has or should be on components, says DNV GL, who today launched a new standard for subsea equipment and component certification, to make such processes simpler and more consistent, for operators and suppliers, while drawing on existing standards, such as ISO 13628 and 10423 and API 17 and 6a. It will cover from the design phase to witness testing. The first version will deal with subsea Xmas trees, well heads and subsea manifolds, with umbilicals and flexible to be addressed next.

Bjorn Søgård, segment director, for subsea at DNV GL, said: “What is the benefit of discussing standardization materials and components without discussing the processes – procurement and manufacturing and documentation, and this (documentation) has to be presented to the end user, so processes are very important and have to be addressed?” Inconsistent processes mean suppliers struggle to stock materials and have to spend more time on engineering, said Anders Husby, head of department, subsea and resources, DNV GL, increasing costs and project schedules. In some cases, requirements are simply higher than they need to be, added Søgård, increasing how much work is required unnecessarily.

More than 60,000 people are expected at this year’s ONS 2014. ONS is a sister event to Offshore Europe, held in Aberdeen in alternating years to ONS.

OE (Offshore Engineer) has its August issue, including Dutch Offshore Region review, on stand 399, Hall C. Come and visit us.