Finding meaning in standardization and replication

To create meaningful cost reduction – or value creation – the industry will need to be more aligned in its understanding of what exactly terms like standardization and fit-for-purpose mean. Meg Chesshyre reports.

The replicated Heidelberg spar onboard Dockwise’s Mighty Servant I. Photo from Anadarko Petroleum.

There needs to be common terminology and a clear understanding of the different drivers across the entire industry if the goal of significant and meaningful cost reduction (or value creation) is to be achieved, industry consultant Alex Hunt, told a recent London conference.

Hunt is the founder of Woodview Technology, a consultancy specializing in the identification, development and implementation of emerging and new technologies for the oil and gas industry.

In response to the current focus on cost reduction, a number of possible solutions are receiving attention, he told the Subsea Integrity and Efficiency Conference, organized jointly by Subsea UK and the Society of Underwater Technology. These include fit-for-purpose functional specifications, catalog engineering, replication, standardization, equipment reuse, increased use of new technology and improved collaboration. However, following a series of recent workshops, it has become clear that these have different meanings to different companies.

For example, cost reduction implies capex to some operators, but life-of-field ownership costs to others. A more appropriate term might be value creation rather than cost reduction.

Similarly, standardization means interchangeability to some companies and interoperability to others. “We tried to have standard contracts for joint industry research projects. It was an absolute nightmare,” Hunt said. He put up a slide published recently by Ernst and Young, showing that non-collaborators are actually more efficient than collaborators. The cost overruns are less.

Replication is a subset of standardization. It has been used by Statoil on 13 fast-track projects in the last 3-4 years. The Gulf of Mexico uses standard platforms, and Brazil uses replication for its floating production, storage and offloading (FPSO) vessels, partly driven by the limitation of Brazilian shipyards.

Alex Hunt.

There is still a lack of awareness of technology readiness levels (TRL), however, with many companies using the term “proven technology” without stating the TRL that this implies, Hunt said. What is new technology? Hunt had heard low dosage hydrate inhibitors referred to as new technology in a recent presentation. They have been around and commercially available for 15 years, he points out.

Successful collaborations will require the active involvement of customers as well as the supply chain. It is unlikely that many of these initiatives will make significant progress if companies continue to use the same terms, but with different meanings and expectations of the outcomes. There has to be an alignment of goals between customer and client, Hunt said. “You can‘t have a Saville Row suit at department store prices,” he said. Hunt concluded with a message to the oil companies and large suppliers, less important for the small-to-medium sized enterprises, who know it already. “Don’t talk the talk, if you can’t walk the walk,”

Moral obligation

Alan Peek.

The industry has a moral as well as an economic obligation to maximize total production from its aging assets, is the view of Alan Peek, vice president, subsea control and communications, Proserv. He said that Proserv had developed an innovative way of retrofitting an established original equipment manufacturer’s subsea control module with its Artemis 2G subsea electronic module. This technology can be deployed on older infrastructure using retrofit and coexist techniques to secure and enhance production without costly new umbilical lay or complete system change out.

Peek examined a number of case studies where such brownfield subsea control system enhancements have been implemented. In the North Sea, Proserv upgraded CNR’s existing subsea control system on the Toni field enabling it to add two wells without a full system change. On Statoil’s Troll C, the Proserv control and monitoring system dramatically improved the system capability using existing infrastructure. A subsea controls electronic module and surface retrofit at Ithaca’s Anglia field enabled production to continue for from an otherwise unproductive field. A retrofit open communications hub was supplied for Shell’s P6 project in the Gulf of Mexico.

Optimizing water injection

A significant number of North Sea fields are under-performing in terms of production targets, due to poor reservoir pressures, said Scott Wilson, manager, integrated solutions, OneSubsea.

Wilson outlined a single water injection booster pump application, developed by OneSubsea, which can be installed onto a live or shut-in producer well to increase reservoir pressure and therefore, production, allowing an immediate fall in lifting costs. Such pumps can be leased from the supplier, negating capex during these difficult market conditions.

By interrogating relevant reservoir data, a water injection pump can be accurately deployed to increase production rates, which, given the predominance of ullage within the central and northern north sea systems infrastructure should be readily accommodated allowing immediate benefit to the operators’ projects, covering all aspects of development from concept evaluation through to final commissioning.

New functionality through net shape?

Artemis 2G subsea electronic module. Photo from Proserv.

Recent developments in net shape manufacture enable new functionality in offshore components, said Charley Carpenter, Net Shape technology manager for the Manufacturing Technology Centre (MTC). This includes introducing next generation alloys, bi-material components and parts with complex un-machinable design enabling robust manufacture of more resilient components for future subsea applications. He described net shape manufacture using powder hot isostatic pressing (PHIP) as “undoubtedly a game-changing technology.” “When you produce a component by a net shape manufacturing method it comes out the right geometry, and all you have to do is tidy up the mating faces,” he said.

With improvements in capsule design and the introduction of computer process modeling in the early 2000s, the complexity and material efficiency of PHIP components has increased. This has led to the introduction of material efficient PHIP components into the market such as manifolds, valve bodies and wye pieces with reduced inspection requirements, enhanced corrosion resistance and greater functional performance when compared with traditional forged products.

The MTC in Coventry, England, develops next-generation powder metallurgy manufacture routes for the high value manufacturing sectors. Carpenter is responsible for the coordination of a dedicated team of net shape research engineers within the UK’s National Centre for net shape and additive manufacture.

Decommissioning – an attractive option

In the current low oil price environment decommissioning is becoming more of an attractive option, Iva Brkic, an analyst with Douglas Westwood, told the conference.

“Decommissioning might actually take place on the basis that there are around 900 plugged and abandoned wells and around 250 topsides in the North Sea alone potentially qualifying for decommissioning over the next five years.”

She said that in a low price environment operators would like to reduce risk, and that one way to do this was to remove decommissioning liabilities from their balance sheets.

A new incentive for decommissioning is the fact that service companies that carry out decommissioning are now idle, and therefore, might be able to provide services at a lower cost. Delaying decommissioning costs more in the long run (higher maintenance, engineering + removal costs).