Embed Size (px)
Citation preview
Unlocking Subsea Productivity
“Cultural change and greater collaboration - how
the supply chain can help drive efficiency”
17th May 2016
2
Agenda
o Contract Overview o Background o The Case for Change
o Contract Relationship o Critical Success Factors o Overcoming Challenges
o Unlocking Subsea Productivity (USP)
Contract Overview
4
Background
o Contract awarded in February 2013 o Contract value >£ 30M o Contracting parties are Centrica Exploration & Production, Centrica
Storage, Centrica Renewables & Bibby Offshore o Dedicated Subsea Inspection, Repair and Maintenance (IRM) service o Vessel rates fixed for 3 years but have been renegotiated o Contract scope has evolved due to internal and market factors
5
The Case for Change
Problem
• Separate suppliers contracted for DSV and ROVSV services Bundling
2
• - Best cost country sourcing
3
• No contractor involvement in planning requirements - expensive service at last minute
Supplier management
1
Co
mm
erci
al
• Demand planned on ad-hoc basis resulting in high cost of last minute service requests
• No process to systematically plan requirements
• Coordination challenges with stakeholders across regions/entities
Demand management
Process optimization
5
4
Pro
cess
• High cost DSV vessels utilised for most IRM scopes
• -
Standard-isation and redesign
6
Make-or-Buy 7
Tech
nic
al
Initiative
• Consolidation to 1 supplier • Exploited operational synergies across assets,
categories and group • Negotiated strategic contract to fix rates for 3 years in a
heated market
• -
• Supplier involved in planning process
• Forecasting process to plan and freeze demand 1 year in advance
• Pro-active cost tracking
• 3 year planning cycle supported by 6Q, 120 day processes
• Subsea Committee with all stakeholders for alignment and knowledge sharing
• Shifted suitable activities from DSV to lower cost ROVSV’s + reduces HSE risk
• -
- Solution
Contract Relationship
7
Success!
o Safe delivery of 356 vessel days – 96 DSV, 260 ROVSV
o Reduction in OPEX spend of £21M per annum o Risk Based Inspection (RBI) schemes o Cost benefit analysis maturity o Use of innovation and technology
o Seven Seas Light Construction with ROVSV saved £7M
o Maximised production o Emergent work response
o 2014 campaign executed at 2 weeks notice
o Efficient methods of working o Trees campaign under budget despite access issues for 2 days
o Promoted internal Centrica collaboration o East Irish Sea, Centrica Storage (CSL), Projects & Wells
o F3-08 Collaboration (ROVSV Vs Rig saved 50%)
o Strong, open relationship that’s mutually beneficial o ‘Best in class’ example of Supplier Relationship and Performance Management o The right team, working hard to deliver better performance and efficiency
8
Critical Success Factors
o People & Communication o Open and honest working relationship, regular formal and informal meetings, Contract
Management Structure and Team
o Robust Project Controls
o Solid team, relationship, planning process, detailed cost tracking tool and ‘Early Warning’ register
o No contractual or commercial disputes
o Contract Amendment in 2014 closed off ‘gaps’ o Renegotiation handled openly
o Invoice payment average 33 days
o Excellent working relationship, change management and pro-forma invoicing
o Consistent positive cash-flow for Bibby
o Predictable & deliverable
January February March April May June July August September October November December
Pro-Forma to Payment 36 45 37 38 41 38 0 0 0 0 0 0
Actual 32 34 34 34 33 32 0 0 0 0 0 0
Contract 30 30 30 30 30 30 30 30 30 30 30 30
Value Paid (£k) 1,195 125 257 117 199 3,523 0 0 0 0 0 0
0
10
20
30
40
50
Cale
nd
ar
Days
Average Payment Days
9
Overcoming Challenges
OPEX reduced from £25m to £4m per annum
Rate negotiation and project execution analysis
Collaboration with Wells - use of ROVSV instead of rig (50% of the day-rate)
Collaboration with CSL- sharing common costs (saving £1m)
USP (Unlocking Subsea Productivity) collaborative deed- 6 other operators
Problem:
Maximising production from our assets in a low price environment
Challenge:
High cost base and lack of innovation
Opportunity:
Lack of collaboration within Centrica and industry generally
USP – Unlocking Subsea Productivity
11
Background and Feedback
o Operators are looking for safe and sustainable savings & efficiencies o Rate reductions o Preference to tender o Project Management & Engineering (PM&E) o Budgetary proposals - upfront clarity on savings o Collaboration with supply chain - new ways of working
Current environment – repeated pressure on supply chain to cut rates However… is this sustainable?
How do we convince them to engage in…
12
o Market driven DSV/ROVSV day rates o Non-productive time (NPT) borne solely by each project
o Transits, waiting on weather (WOW), crew-change, diver deco, etc.
o Independent costs o PM&E o Client specific o Third party and procurement costs o Mobilisation and demobilisation costs
o Challenging to realise efficiencies between projects
Traditional Subsea Projects…
o Standalone ITT for DSV/ROVSV Services o Independent campaigns with no synergies o Schedule challenges: vessel availability (Historically...) o Independent support and procurement o Independent Project teams
Traditional Subsea Costs
13
Bibby’s Proposal
Unlocking
Subsea
Productivity
Vessel
Share
Cost
Efficiencies
Collaboration
14
Bibby’s Proposal: Vessel Share
o Framework with key clients o Dedicated project delivery team o IRM management database o Schedule control to support shutdown and vicinity opportunities o Managing and minimising risks across campaigns o Works scheduled to ensure maximum efficiencies: transits, proximity, work
type, etc. o Streamlined processes
Access to vessels with no minimum commitment
15
Bibby’s Proposal
Unlocking
Subsea
Productivity
Vessel
Share
Cost
Efficiencies
Collaboration
16
Bibby’s Proposal: Cost Efficiencies
o Framework in place o Fixed Vessel day rates that include PM costs: CTR for each scope o Dedicated team: reducing S-curve inertia and cost of quality o Scale opportunities: shared transits, crew-change, third parties, port and
harbour dues, mob/demob costs o Management of non-productive time: shared costs o Procurement cost efficiencies: shared campaigns/client preferred vendors
Commercial Risk Mitigation, Rationalisation & Consolidation
17
Bibby’s Proposal
Unlocking
Subsea
Productivity
Vessel
Share
Cost
Efficiencies
Collaboration
18
The Exercise
o Campaign Planned o 8 x Historical IRM projects selected o Subsea portfolio managed o Water depths and crew-changes considered
o The Outcome
o Significant reduction in non-productive time o Synergies across campaigns o Scale opportunities across projects o Effective cost efficiencies o IRM opportunities become more viable
19
The Results
Efficiency Model
Traditional
0
5
10
15
20
25
Mob / DeMobAll Transit /
DP/Field Entry WorkingStandby
WOWWOT
BreakdownDeco
Day
s
Efficiency Model Traditional
20
The Results
o Typical Project IRM costs (per project): o Average vessel day rate: c£Xk o Non-productive time: c£Xk o PM&E: cX%
o The potential cost savings (per project):
o Overall cost £1.8million to be shared o NPT: Average saving of £235k per project o Share % of NPT o PM&E: Built into vessel rate, additional
engineering depending on SOW o Reduction in vessel days from 54 - 41
£-
£100,000.00
£200,000.00
£300,000.00
£400,000.00
£500,000.00
£600,000.00
TraditionalProject Model
Efficiency Model Saving perProject
£531,293
£296,581
£234,711
Non-Productive Time (NPT)
21
Traditional Versus Efficient
44% 56%
Traditional Model
Working Time Non Productive Time
59%
41%
Efficiencies Model
Working Time Non Productive Time
22
o Charter Agreement finalised o IRM campaign builder design complete o 3 clients signed Charter o Working on first campaign
Operator and Contractor Engagement
o Facilitated workshop with 18 representatives from 6 operators
o Charter principles o Challenges- Behaviours and mind-set,
schedule control & client-specific needs
23
Pursue New Opportunities
o Innovative working relationship with key clients o Traditional project costs significantly reduced o Non-productive time minimised o Savings opportunities and economies of scale realised o Efficient framework for a cohesive approach to project delivery o Sustainable
Maintain Status Quo or
Innovate & Pursue New Opportunities
