Doing things differently

While cost cutting has been a top priority for many, if not all, in the industry, GCE Subsea members are also look to do things differently – to change the game. Elaine Maslin reports.

Coast Centre Base – the centre of the activity. Photo from CCB.

A challenge was made on the Norwegian Continental Shelf. After years of cost inflation in the subsea business, increasing engineering hours, bespoke design, there was a call for change, standardization and rationalization. And then the oil price crashed and the situation was amplified.

In this new lower oil-price order, companies have been rising to the challenge and the result could see a re-shaping of the industry, across different segments. Those challenging the established norms include GCE Subsea member companies, which are looking to change how things are done.

Coast Centre Base (CCB), which has played a strong part in creating the coastal support facilities that enable others to operate, as well as project managing rig maintenance work, is now positioning itself as a supplement to the established, original equipment manufacturer-led subsea equipment maintenance market, offering an alternative lean and more efficient service.

The product itself also has to change, says Kristian Karlsen, founder and managing director at Fjell Subsea Products. For too many years, product was being designed almost to be too complicated and geared to drive follow-on or spare parts sales, he says. While the oil prices were high, oil companies went along with it, sticking to habits and what they know. Fjell is looking offering a simpler modular approach.

“Thirty years ago, Snorre held more spares on land than it hard parts in the sea. Suppliers just wanted to sell parts. We’re thinking totally differently,” Karlsen says.

CCB

A new player: CCB Subsea.

CCB already has a large footprint. It is looking to grow its role, however, and will be another challenger to the OEMs (original equipment manufacturers). It is already one of the two top rig recertification companies in Norway, a task that is project managed, drawing on the CCB cluster resources. Now it wants to do the same in the subsea business, becoming an aftermarket third party player.

Earlier this year, it bought a majority stake in Logiteam, which has a track record managing and maintaining subsea systems, and created a new business unit (CCB Subsea). As part of the move, CCB Agotnes, home to the likes of Aker Solutions and FMC Technologies, is becoming CCB’s subsea center of excellence. Just as the firm heads up rig re-certification projects, drawing on and managing local resources, often actually on its own coast bases, it wants to do the same for subsea equipment maintenance as the OEMs. This will be overseen by its in-house expertise in the likes of engineering, standards for documentation, technical procedures, etc.

CCB Subsea has already won a contract with Statoil, for maintenance of subsea equipment and tools. This covers demobilization, maintenance and overhauling of subsea equipment under a two-year contract with two, three-year extension options. While Agotnes is the base, it will draw on CCB’s and NorSea Group’s bases up and down the Norwegian coast. Furthermore, the company is rolling out the model globally and taking in inspection, maintenance and repair work.

Driving forces for the move include Statoil wanting more competition in the market, but there is also an opportunity to do things differently, says Arne Aarvik Sales & Marketing Manager at CCB.

This means having one point of contact, which manages the various interfaces involved in maintaining a fleet of subsea equipment, instead of each OEM having an interface with the operator. CCB Subsea can be a leaner organization, with core in-house expertise, but leaning on the cluster. It also wants to look differently at periodic maintenance. Instead it’s looking at risk-based maintenance, reducing costs for the operator, which will become more and more important as the installed base of subsea equipment requiring maintenance increases.

Recent adjustments to recertification of well control equipment barrier systems guidelines provides and opening to do this and make such services less costly, says Nils Fr. Fjærvik, CEO of CCB Subsea and previously CEO of Logiteam.

“At the moment, the cake is smaller than 2-3 years ago and there are more wanting a slice of it, OEMs and third party suppliers,” he says. “But, with this model, we have an opener in terms of low cost. When volume picks up, it will be very attractive. We will have scalability. If OEMs still have ambition in the aftermarket they will have to adjust to a new cost level. This is a shift in how the market operates. The oil companies agree, it [the current market] is not a sound market.”

CCB is also looking to the future, including decommissioning, i.e. plugging and abandonment. “There’s no turn key supplier for this range of services for subsea decommissioning,” says Fjærvik. “But, after you plug the well, there is a lot of activity and you need equipment to do this and what will you do with that equipment once you get it ashore? We are looking at that and talking with specialist providers to put together turnkey solution.”

Fjell

Fjell Subsea is a new entrant to the subsea equipment market. The firm wants to offer modularized subsea equipment, which can be more easily produced and assembled from a set of standard components, reducing engineering hours, procurement time (the parts can be ready in stock), and costs.

The firm was founded in 2012, by Karlsen. To date, it has been developing its products, with the next step being commercialization. While it’s still a small company, it has big ideas led by its modular philosophy.

Late last year, the firm got NOK5.2 million in public funding as part of a NOK30 million project it is working on sponsored by Shell, to qualify a “unified and modularized flying lead system.

“Many cakes can be baked from a few ingredients,” as Karlsen puts it, allowing a small company to do bigger things. “Today, the industry is talking about modularization, standardization of products. We started in late 2011, and founded the company in 2012 to do this,” Karlsen says.

The firm is developing a suite of subsea components, including couplers, hydraulic fluid, or chemical line connectors, ball valves and multi-quick connector (MCQ) plates, all built in a modular way. Fjell’s MQC plate can take up to 52 connectors. Or Fjell can supply just one, using the same components, for example. Similarly, its connectors are designed to take different seals, so that the same components can be used even if a different seal is required, instead of having to have different design connectors.

The coupler systems and MQC plates are ready and now the firm is working on high-pressure ball valves, initially from ½in and 3/8in and then up to 6in for gas lift and injection valves.

Fjell is also starting a qualification program for flying leads, as well as the NOK30 million program to qualify a modularized flying lead system, with funding from Innovation Norway’s IFU program and Skattefunn and help from Innovation Norway and GCE Subsea, which helped with the applications. The firm will also look to deliver ROV panels and larger structures in the future.

But it’s not just about the design, for functionality, it’s also about how product is designed for efficient manufacturing. “We are going to the machining center, seeing how we can design this to get it faster through the machine with best finish and quality,” says Karlsen. “We are going through every step to make this as optimized as possible.”

While activity is low right now, with the entire industry holding its breath for new orders, this year is looking hopeful, says Karlsen, who is eying a global market, from Brazil and Australia to Asia and the North Sea.

Fjell recently participated in a market entry program for Brazil. This program was a huge success leading to a partnership with the well-known and recognized Brazilian umbilical supplier MFX. MFX will work in partnership with FSP during the qualification program.

History

CCB was founded nearly 45 years ago. It is owned 50-50 by Bernhard Larsen Holding and NorSea Group and has been providing services for the offshore industry since the 1970s.

The firm has a string of sites along the coast of Norway, including Mongstad and Agotnes. At Agotnes, CCB covers 90ha, with more than 1000m of quays, 68,600sq m of workshops and warehouses and 20,600sq m of office buildings.

CCB together with NorSea Group is also involved in real estate development, with 13 sites along the coast of Norway and expansion ongoing into Denmark, the Netherlands, Scotland and Las Palmas on the Canary Islands.