Operator/Contractor Teamwork is the Key to Performance Improvement
- K.B. Robins (Shell U.K. E&P) | J.D. Roberts (BP Exploration)
- Document ID
- Society of Petroleum Engineers
- SPE Drilling & Completion
- Publication Date
- June 1996
- Document Type
- Journal Paper
- 98 - 103
- 1996. Society of Petroleum Engineers
- 1.6.9 Coring, Fishing, 3.1.2 Electric Submersible Pumps, 1.11.5 Drilling Hydraulics, 7.1.10 Field Economic Analysis, 1.6.6 Directional Drilling, 3 Production and Well Operations, 2 Well Completion, 1.14 Casing and Cementing, 1.10.1 Drill string components and drilling tools (tubulars, jars, subs, stabilisers, reamers, etc), 1.4.1 BHA Design, 1.6 Drilling Operations, 4.1.5 Processing Equipment, 7.1.9 Project Economic Analysis
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The contract strategies developed by the two major E&P companies operating in the North Sea emphasise teamwork between operator and contractors to achieve the common goal of maximising project value. These strategies have had significant repercussions across the whole industry.
This paper compares these strategies, concluding that although they are structurally different, they have the same fundamental objective. It describes the evolution of what these operators consider to be their "core business", with the resultant changing roles for both operator and contractor staff.
Several examples of results achieved through implementing these changes are described, highlighting the need for a structured performance measurement system to quantify the success of these initiatives. Finally the potential for even greater efficiency improvements through further industry wide cooperation is emphasised.
The North Sea is a mature hydrocarbon province. The smaller average size and/or poorer accessibility of new finds require increasingly complex and expensive technology, materials and equipment. Operating costs are increasing relentlessly due to ageing facilities and falling output. The recommendations contained in the Cullen report on offshore safety, and more stringent environmental discharge legislation, have implications for both capital and operational expenditure.
The impact of drilling costs as a percentage of overall project economics has risen significantly in recent years. They can now represent up to 60% of project costs. In order to maintain existing levels of activity and justify future investment, a step change in the cost and performance efficiency of the drilling process must clearly be achieved.
The North Sea is consequently becoming less attractive for investment. The challenge is to remain viable against an increasing number of alternative investment opportunities in other geographical areas. Most operators in the North Sea are now less concerned with competition with each other rather than with the reality of operating in such a mature environment. BP Exploration (BPX) and Shell Expro are the two largest operators in the UK Continental Shelf (UKCS). Between them they drilled, sidetracked or completed 140 wells in 1994 and spent 850M on Well Engineering activity. This represents approximately 50% of the UKCS yearly activity.
This paper describes the experiences of Shell Expro and BPX in implementing their new contracting strategies. These strategies are a reaction to the changing business challenges. Both strategies focus on the entire Well Engineering process i.e. the supply and management of all equipment, supplies, personnel and engineering support for drilling and well maintenance (well service) activity.
|File Size||383 KB||Number of Pages||6|