Decommissioning Joint Industry Projects Workshop

Decommissioning Joint Industry Projects Workshop

27th March, Aberdeen Exhibition & Conference Centre

introduction

6 potential new initiatives identified through either:-

member survey

ideas or recommendations come from our members – not from DNS executive

member consultation

conference sessions

individual meetings

open days

ambition for today’s workshop

1introduce each idea or recommendation to our membership and briefly discuss the perceived benefits

2establish the level of industry interest and possible support for each initiative

3capture names of people interested in participating in a future dedicated workshop for each topic

4capture any initial thoughts or suggestions on the scope or approach to each initiative – who else should be involved?

5prioritise which initiatives are seen as being of most value / benefit (using on-line voting system)

approach to the workshop

6 sessions of 20 minutes each

introduced by an industry official (in most cases)

first 3 sessions facilitated by Dorothy Burke, Decom North Sea

30 minute coffee and networking break

second 3 sessions facilitated by Davi Quintiere, Accenture

voting across all initiatives to obtain some prioritisation

snack lunch and networking

1) Lessons Learned and Knowledge Exchange

the concept :-

many operators and contactors are preparing for their first decommissioningprogramme, and expressing a willingness to work together :-

opportunities to learn from previous projects and share experience

adopt models, templates and guidelines already proven

develop a system for knowledge capture and transfer

promote awareness and use of knowledge transfer possibilities

Lessons Learned & Knowledge Exchange

potential benefits :-

avoid duplication

reduce risks

drive efficiency

reduce costs (to private and public sectors)

promote DNS members North Sea industry expertise to global markets

become recognised as centre of excellence for deeper water decommissioning

2) Streamlined EIA Template

• Following on from the successful Streamlined Template for Decommissioning Programmes initiative, DNS met with DECC’s Environmental Team.

• We discussed the potential for a collaborative project to create a template for DECC, Operators and Environmental contractors to use when writing/assessing an EIA.

• DECC were very supportive and cited the following anticipated benefits:

Reduced time to create the Environmental Impact Assessment document

The appropriate level of detail would be easily understood

Unnecessary information would be avoided

Fewer rewrites would be required

Assessment and ratification by DECC would be much faster

3) Decommissioning Planning Roadmap

Fritz Smedley

Decommissioning Planning Roadmap?

What is a decommissioning planning roadmap and why might we want or need one?

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There is a transition period from facilities operations to decommissioning that happens over a period of time

Each asset is unique but the same topics needs to be considered

There is no documented toolbox for doing this

Decommissioning is different!

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There is a transition period from facilities operations to decommissioning that happens over a period of time

Each asset is unique but the same topics needs to be considered

There is no documented toolbox for doing this

Decommissioning is different!

As a learned member of DECC once said

Different isn’t always better, but

Better is always different

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Traditional Project Phases

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The Boss calls…. “Better start thinking about decommissioning”

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Where are you?

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Where are you?

Perhaps you are in ‘Appraise’

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Where are you?


Perhaps you left it a bit late and went straight to ‘Select’

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Where are you?


Perhaps you left it a bit late and went straight to ‘Select’

The time will come to go through a stage gate…. Are you ready?

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The traditional stage gate process ‘requires’ a specified level of maturity for all aspects of the project, e.g.:

Scope

Schedule

Cost

Quality

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The traditional stage gate process ‘requires’ a specified level of maturity for all aspects of the project, e.g.:

Scope

Schedule

Cost

Quality

Are you ready for Well P&A? Yes, ready to go

Are you ready for Facilities Removal? No, still working on that one

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The ‘process police’ have got you! Come back when you are ready

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Managing Decommissioning Projects – The Process

We, and several of our peers, have found that Decommissioning is different from the capital investment project processes

Yet we attempt to fit this square peg into the round hole of traditional “tried and trusted” procedures and process

Result:

Exclusions

Exceptions

‘Apparent’ non-conformance

Perhaps “fit-for-purpose” means not blindly adhering to existing standards and procedures

There may be a better mouse trap out there

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Managing Decommissioning Projects – The Process

We now believe that decommissioning projects need to be managed differently from traditional capital investment projects

The traditional stage gate approach for projects of Appraise, Select, Define and Execute does not adequately address the unique features of decommissioning

We are now of the view that the decommissioning, or retiring, of an asset is a new phase in the asset life cycle, rather than a new project

This distinction, while seemingly small, has enabled us to look at things quite differently and we believe it will help us better plan, communicate, prepare for and manage the effort

It is an overlapping, staged phase

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The Retire Phase - Graphic

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RetireRetire

The Retire Phase - Overview

Recognises the transition from:

Operate, to

Late Life Asset Management, to

Decommissioning

Illustrates that not all elements mature at the same time or pace

Some are complete prior to CoP

Some occur years after CoP

Accommodates multiple, targeted assessments of readiness

Enhances decision making quality

Increases awareness of decommissioning as a part of asset life cycle

In design, construct and operate, as well as in retire

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RetireRetire

The Retire Phase - Toolbox

There is no standard toolbox today, however there is much consistency in:

The topics people feel need to be addressed

The timing at which these should be considered

What are key enablers for decommissioning to be successful

We believe they can be aggregated within a tool box that will assist in any decommissioning project, of any size, and any complexity

Same process, but perhaps quicker, perhaps easier

This toolbox is designed to help people get started down the road of a successful decommissioning project by ensuring

They start soon enough

They consider the correct things first

They fully understand the scope of the project and the impact of decision making

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Key components of the toolbox

1. A high level schedule from 10 years prior to CoP to 10 years post CoP

Not all projects will require this full period, but many complex ones will

2. A Strategy Matrix for the Retire Phase

Covering scope, control, contracting and technology

3. A Decision Road Map

Indicating key decisions that need to be made, when in relation to each other, by whom

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High Level Schedule

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With thanks to BP for general template structure

High Level Schedule (Zoom View)

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Looks at:

Pre CoP decisions that are primarily (but not exclusively) ‘Strategic’

Post CoP decisions that are primarily (but not exclusively) ‘Tactical’

Result is a timeline that best supports the Retire phase goals

Retire Phase Strategy Matrix

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With thanks to BP for general template structure

Retire Phase Strategy Matrix (Zoom View)

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Looks at:

Project execution options

Scope

Control

Contracting

Technical

Project drivers

Result is a strategy that best supports the Retire phase goals

Decision Roadmap

The decision roadmap brings all of these elements together

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Decision Roadmap (Zoom View)

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Graphical representation is supported by a Decision Log for each decision:-

Description of decision

Timing

Decision making requirements

Alternatives

Outcomes

Decision maker

Assurance

Dependencies

Risks

Recommendations

Actions / Status

Conclusion

Planning for decommissioning is critical for success

It is difficult to start this too early, but

It is tempting to start it too late

Every project is unique, but

Every project faces the same challenges

A roadmap and toolbox to help us plan for decommissioning would help us

Map out the journey before we start

Know where we are going

Have enough supplies to get us through

Identify the tools we need to maintain and, if necessary, repair things

Arrive safely without incident

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Where have we been? Where are we going?

Small pilot group established (facilitated by Decom North Sea)

BP

Marathon

Shell

TAQA

Three workshops held to date

Consensus reached both on the merit and format of the roadmap

Further workshops proposed to consider the detail

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Aker Solutions

Amec

Wood Group PSN

Retire Phase Goal

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Joint Industry Projects27th March 2014

4) Early Contractor Engagement

Early Contractor Engagement

Current Procurement Model

Tender

Define Need

Award

Evaluate

Delivers

• Commodity Pricing

But does not encourage

• Technical Development

• Engagement in Solution Development

• Continuous Improvement

• Alignment with Operator Goal


Define

Need

Execute

A B C

Contractors

Select

Inform

A B C

Contractors

Define

Need

Select

Develop

Capability

Execute

Inform

Could we deliver better results by

doing it differently?


Project Scope

Develop and Describe one or more Models to deliver:

• Contractor Contribution to Solutions

• Enhanced Technology Development

• Incentivisation

• Alignment with Overall Cost Reduction

Addressing

• Pro’s and Con’s of each Model

• Procurement Governance

• Unrestricted Access to all Technologies

• Potential Evolution of Relationships and Capabilities

Multi-party approach to Wells P&A

Introduction

Buzzword – collaboration

But collaborate on what?

Supply chain needs a tangible workload

What could that be?

We have existing model for multi-operator suspended E&A well removal

Could we try to create something for live subsea wells?


Background

Appears to be an increased focus from DECC

Perception simpler wells have been removed

Requirement to tackle more complex wells going forward

Recognition between operators and 3rd parties that a tangible workload needs to be identified


Objective of Initiative

Investigate whether multi-party well P&A campaigns can offer a win-win

What could win-win look like?

Operator – Address DECC expectation, reputation mgmt, efficient removal of a problem

3rd party – creation of sustainable market, leading to investment, for capability, R&D, tooling etc

The more we do, the better we become, increase innovation, drive down cost, increase revenue for 3rd parties


Outline of Initiative

Short term – build value proposition

IS THERE INTEREST?

Medium term – develop a pilot

NEED OPERATOR COMMITMENT

Long term – Feedback on pilot

BASIS FOR A LONG TERM WORK?

6) Marketing Decommissioning

Marathon Oil Decommissioning Services LLC

Overview

The problem we are trying to solve:

People do not seem motivated to join the decommissioning industry

Decommissioning is lacking in innovation and cost effectiveness

To design and implement meaningful improvements, the industry needs to attract and retain good people

The demographics of the current decommissioning workforce is biased towards the very experienced

– Nearing retirement

– More established in their ways

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Contributing Perceptions

Decommissioning is not seen as adding value

However, a dollar saved is the same as a dollar earned

Decommissioning is seen as a necessary evil

Decommissioning is a natural part of an asset’s life cycle

Decommissioning, if planned properly, can influence every preceding phase of the asset life cycle, including design

Decommissioning is seen as simply scrapping steel

Decommissioning is immature, with limitless opportunities for innovation

Decommissioning has huge technical and commercial challenges

Decommissioning is seen as dirty

Decommissioning is about improving the environment

Decommissioning is about doing the right thing

46Marathon Oil Decommissioning Services LLC

The Realities

It is about collaboration more than competition

With peers, contractors and regulators

It is about innovation more than standard application

New technologies

New applications of existing technologies

It is about increased and accelerated individual responsibility

Small multi-disciplinary teams

A challenging mind is more important than an experienced mind

It is about extending the life of the North Sea, not terminating it

The lower the decommissioning cost, the longer the producing life

It is about establishing a career, not just doing a job

47Marathon Oil Decommissioning Services LLC

What do we need to do

We need to increase awareness; more so than provide training

We need a formal marketing plan

We need to generate excitement and enthusiasm

Communicate the positives

Create tangible and visible improvements

Stop focusing on the negative

We need to cast the web wider than oil and gas development engineers

Different industries

Different professions

Different age groups

We need to communicate beyond our industry

We have a history of being suspicious and secretive

We need to be more open and share our successes48Marathon Oil Decommissioning Services LLC

Documents

Decommissioning Joint Industry Projects Workshop