production assurance - a tool to ensure cost optimal decisions · production assurance - a tool to...

Atle Stokke03 February 2010

Production assurance - An approach to ensure cost optimal decisions

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Production assurance - A tool to ensure cost optimal desicions

03 February 2010

2

What are the objectives of production assurance analyses? Forecasted volume

NPV

Case 8A

MP1: Umbilical and pow er cable

MP6: Pump and motor MP7: VSD pump

MP20x: Tie-in manifold

MP2: Compressor and motorMP4: VSD compressor

MP5: Circuit Breaker Module

MP16: Transformer and HV w et connections

MP20: Process template

0

20

40

60

80

100

-0.5 0 0.5 1 1.5 2 2.5

No. of interventions per year

Cos

t per

inte

rven

tion

(MN

OK

)

MP20x: Tie-in manifold MP1: Umbilical and power cable MP2: Compressor and motorMP3: Anti Surge Valve MP4: VSD compressor MP5: Circuit Breaker ModuleMP6: Pump and motor MP7: VSD pump MP8b: SeparatorMP9: V-cone MP14: SCM MP15: SCM MBMP16: Transformer and HV wet connections MP20: Process template MP21: Bridge spoolMP22: SDU MP8b: Cooler MP23: UPS Bubble size: Deferred volume

per intervention

Downtime distribution

Gas flow rate

Time

ReliabilityReliabilityAvailability – system/production



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Production assurance and reliability management in the oil and gas industry

“The petroleum and natural gas industries involve large capital investment costs as well as operational expenditures.

The profitability of these industries is dependent upon the reliability, availability and maintainability of the systems and components that are used.”

[ISO 20815 - Production assurance and reliability management ]



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Let us consult the ISO standard

”The objective associated with systematic production assurance is to contribute to the alignment of design and operational decisions with corporate and business objectives”

“The standard recommends…[production assurance] processes and activities be initiated only if they can be considered to add value”

”The achievement of high performance is of limited importance unless the associated costs are considered”



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ContentTerminology and project life cycle

Case study- General introduction- Methodology and findings

Conclusive remarks

Questions and discussion



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Conclusive remarks




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Production assurance terms

[ISO 20815 - Production assurance and reliability management ]



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Decision criteria

Produced Gas Volume per Annum, Case 8

21.9

0

21.9

0

21.9

0

21.9

0

21.9

0

21.5

1

19.0

9

16.5

6

13.9

2

11.0

0

8.48

6.69

5.41

4.53

3.52

3.02

2.73

2.21

2.04

1.45

1.45

1.29

0.90

0.90

0.90

21.9

0

21.9

0

21.9

0

21.9

0

21.8

9

21.2

9

18.7

9

16.3

1

13.7

6

11.0

6

8.58

6.77

5.45

4.52

3.58

3.04

2.74

2.19

2.04

1.44

1.44

1.30

0.89

0.89

0.89

0

5

10

15

20

25

2016

2 017

2 018

2 019

2 020

2 021

2 022

2 023

2 024

2 025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2038

2039

2040

Year

GS

m3

Exclusive SSCS failures Case 8, P50

RISKEX - NPVCost of deferred production and vessel interventions

3NOK/M3Gas, 7.5% discount rate over 25years

0 500 1000 1500 2000 2500 3000 3500 4000

Case 8

Case 9

Case 10

MNOK

P10 P50 P90

NPV

Productionavailability Product price OPEX

Capacitymargin

Availability (item/system)

Uptime Downtime

Equipmentquality

Design e.g.redundancy

Vessel and personnelavailability

Spare availability

System production capacity

Annual sales factor

Reservoirprofile

Revenue

Maintenancefrequency

Vessel and personnel ratesRepair time

Repair strategy

Revenue factors

Cost factors



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Production assurance in the project life cycles

Spare parts

Maintenance strategy

Maintenance support

Utilization of design margins

Protection from environment

Reliability testing

Self-diagnosis

Buffer and standby storage

Bypass

Feasibility Conceptualdesign

Engineering Procurement Assembly Installation & Commissioning

OperationFeasibility Conceptualdesign






Operation

Presenter

Presentation Notes

Protection from environment: Reliability testing: Self-diagnosis: Buffer and standby storage: Bypass: Spare parts: optimisation – in stock (strategy) or ordering when needed Maintenance strategy: ad hoc vs. preventive maintenance Maintenance support: high maintenance support vs. low maintenance support Utilization of design margins:



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Conclusive remarks




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Ormen Lange in numbers Located 120 km north-west of Kristiansund

Water depths 800-1100 m

Estimated reserves 397 billion Sm3

Production started by the end of 2007

Can potentially supply 20% of the British gas market for 30-40 years

Export through Langeled, 1200 km

Need for additional compression support from approximately 2016



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Main compression alternatives

Floater with compression Subsea compression

High CAPEX

High manpower cost

Low intervention costs

Safety risk

Halved CAPEX

Low manpower cost

Uncertain life cycle performance

Limited safety risk

Presenter

Presentation Notes

- A subsea gas compression system is currently being evaluated as an alternative to compression on a floater. - Subsea compression on Ormen Lange would represent a major technological advancement for subsea processing systems - Ormen Lange license is currently executing the “Maturing of Technology Phase” of a multi-year technology qualification program.



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An Integrated Approach

Simulation modelCompressor and reservoir

profiles

Reliability data &

system design

• Demand profile• Weather

limitations

Maintenance strategies

Cost per scenario



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Objective of analysis

Vessel contracting strategy

Contract a vessel on the spot market on demand

Contract/purchase a vessel dedicated to Ormen Lange

Share vessel with nearby fields

Repair strategy

Repair redundant components on first failure

Repair redundant components when loss of function

Combination of the two strategies above depending upon type of component

Choose the cost optimal maintenance strategy

Scenarios: Combinations of the above strategies



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RiskEx – The decision variable

Cost of deferred production + Cost of unplanned interventions= Risk expenditures (RiskEx)

00.10.20.30.40.50.60.70.80.9

1

MNOK

Total RISKEX Deferred production Intervention

∑= +

+⋅−=

T

ii

i

rCPVV

1

iriskediunrisked

)1()(

RISKEX PV



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MN

OK

Deferred volume RISKEX IMR RISKEX

The cost optimal solution

Least deferred

production

Lowest total cost

Deferred production Intervention cost



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Conclusive remarks




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Conclusive remarksCase specific conclusions- Approximately 25% cost difference between highest and lowest cost- An integrated approach crucial to obtain relevant decision support

General remarks- Production assurance activities should always be aligned with business objectives- A strategy giving the highest availability is not always optimal with regard to project economy



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Thank you for your attention



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Safeguarding life, property and the environment

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Atle Stokke Consultant Asset Risk Management Mobile: +47 99 69 15 10 Fax: +47 67 57 99 11 Email: [email protected]

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production assurance - a tool to ensure cost optimal decisions · production assurance - a tool to...

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