Shell Malaysia embarked on a Low-Cost Exploration and Development (LCD) journey to unlock previously stranded accumulations in the Central Luconia province. By leveraging on the long history of exploration and sub-surface data, a successful exploration campaign with Joint Venture (JV) partners yielded five field discoveries. The current Low-Cost Development strategy focuses on developing these fields with the JV partners through standardized lean well-head platform (WHP) tie-back to existing infrastructure. This paper describes the journey and the paradigm shifts within the company and its JV partners to achieve a WHP design that is low cost, light weight and replicable for future exploration discoveries.
Front end loading work and competitive scoping is applied to establish minimum requirements for safety and operability resulting in barebones functionality with many functionalities removed or scope reduced. This includes evaluating novel technology application such as solar panels for power versus the conventional turbine generators. A key paradigm shift within the company is to challenge company standards and to reconcile the gap between company and industry standards. Company standards are prevalent in the oil and gas industry with standards differing for various operators. A key effort undertaken by the project team is to strip down the differences in company standards and requirements between the various JV partners and industrial standards. To capitalize on the market environment of low oil price, the project steers away from conventional segmented contracting strategy with an EpC approach with competitive bidding to leverage on contractor's capability to further bring down cost.
The outcome of the competitive scoping and the focus on minimum functional requirement is a lean standardized WHP design, half the weight of recent WHP development projects without compromising safety and operability. The standardized WHP design is replicated for three fields within the same PSC resulting in reduced FEED engineering costs and shortened project cycle for future developments. CAPEX reduction is anticipated through leveraging on economy of scale for procurement of materials and equipment as a result of the replication of standardized WHP design.
With this approach of standardized minimum requirement WHP, it allows for new strategy for future field explorations and development by focusing on clustered exploration around the vicinity of existing infrastructure allowing for stranded marginal accumulations to be developed.