Embracing an Alliance mindset to sustainably unlock offshore production potential
While the global pandemic continues to hamper the overall pace of economic recovery globally, industry projections foresee vaccine rollouts contributing to greater mobility and driving demand, hence also recovery. For the oil and gas industry, rig count continues to trend positively, while signs of industry CAPEX appear cautiously encouraging. These indicators point toward a forthcoming upcycle, with initial activity growth occurring internationally, particularly in the offshore market.
These projections bode well for the Norwegian Continental Shelf (NCS), where activity has remained high in recent years. According to Norwegian Petroleum Directorate, 90 fields were in production at the end of 2020, and, as of September 2021, were producing 2.022 MMbopd. Over the course of the next few years, production is expected to remain relatively stable, with significant investment placed on improving recovery from existing fields.
With an upcycle on the horizon, it is clear the industry faces a new imperative—meet demand for energy today and into the future, while directly addressing climate change. The offshore market, which will play a critical role in the mid- and long-term energy mix, is inherently complex and has its own set of challenges that compound this industry imperative. Logistical challenges, for example, result in bottlenecks that hinder production and hamper OPEX optimization. In addition, these bottlenecks relegate opportunities for proactive optimization, such as well work and intervention, to reactive processes. Moreover, these challenges then facilitate unsustainable business models for service providers, while operators miss significant opportunity to maximize returns from producing assets.
To overcome these challenges and address this new imperative, the industry must adapt to new ways of thinking and implement novel ways to achieve success. By creating business models based on trust and shared value, such as with an “Alliance model,” the industry can collectively carry out projects that optimize efficiency, reduce waste and create increased value in overall production.
Norwegian operator Aker BP explores, develops fields, and produces oil and gas on the NCS. The company is the operator of five assets: Alvheim, Ivar Aasen, Skarv, Ula and Valhall, and is a partner in the Johan Sverdrup and Oda fields. In 2020, Aker BP’s net production was 210,700 bopd.
The NCS operator works with strategic partners in seven Alliances, each assembled to address specific tasks. One such Alliance is the Intervention and Stimulation Alliance, which includes Schlumberger and StimWell Services. Announced in October 2019, this Alliance was established to accelerate and unleash production potential on the NCS. Through collaboration, innovative technology deployment and digitalization, the Alliance is transforming conventional intervention operations, with clear targets to propel hydrocarbon production on new and existing assets.
The Alliance scope comprises intervention and stimulation operations. Schlumberger provides mechanical wireline (slickline), electrical wireline, coiled tubing, pumping, flowback and workover operations on Aker BP’s fixed installations; StimWell Services provides vessel-based stimulation services.
The vision of the Alliance is to be a global benchmark for outstanding offshore well intervention and stimulation operations. The mission is to maximize value creation for customers and partners through shared goals and collaboration across the entire value chain, leveraging the right technologies and data to optimize production at lower costs and emissions. A core purpose of the Alliance is to maximize the learning effect. By keeping teams stable from one project to the next—especially given the repetitive nature of the tasks—the Alliance creates an environment based on continuous learning and improvement. This leads to improved performance over time, including optimization of time, cost and quality.
Offshore well intervention is customarily seen as a reactive application, only sought when well production has been severely impacted. While causes of production decline vary (typically due to well integrity and/or other reservoir-related production issues), empirical studies show that, depending on the type of offshore intervention, production increases of up to 16% can be achieved. This requires no installation of new infrastructure or drilling mobilization, leading to additional production with a lower carbon footprint.
However, challenges associated with intervention cost, complexity and risk still hinder the industry’s ability to take proactive actions. Historically, the offshore industry has deemed intervening on a producing well as too risky. The results can be unpredictable, especially when dealing with severely damaged wells. In addition, the process for selection of wells and fields, and the intervention strategy, is conducted by an operator, often without engagement from service providers. The result is a procurement-led process, with the objective of fulfilling a predefined work plan.
For operators, this often results in higher intervention costs and lower success rates, in addition to deferred or lost production. For suppliers, the approach facilitates business models in which crew and asset utilization planning is unpredictable, causing consistent resource demand uncertainty. For rig-based interventions, and even leaner vessel-based solutions, crews may only be called upon for four or five jobs over a six-month period, which is a financially unsustainable business model.
The operating principles of the Alliance directly address these challenges, driving a fundamental change that promotes a holistic and proactive approach to intervention, to optimize production from existing assets, as well as stimulating new wells prior to production start-up. The commercial model of the Alliance ensures that all parties are moving in one direction toward a common goal. Decision-making and planning are considered for the entire lifecycle of fields and wells, from development through to production and plug and abandonment (P&A), and supplier profitability is decoupled from cost management, and instead driven by overall performance that ultimately creates greater value for the operator. This encourages the use of the right solutions, independent of supplier, while also driving better data collection and quality, and increasing the overall focus on value creation for the Alliance.
Core to the Alliance is the shared culture and mindset, which extends to physical proximity, with a focus on ensuring teams are collocated. While this drives greater integration across the value chain, it also enhances communication and information-sharing amongst the teams, resulting in improved overall planning and a greater ability to adapt to change. The historical procurement-led approach is nonexistent, and early and ongoing communication is a shared responsibility amongst the Alliance team members.
The objective is to work proactively toward a common goal, with each party having an equal voice, helping to blur the lines between initial well construction through subsurface and production optimization—throughout the well lifecycle. The end result is greater collaboration and increases in speed of new technology deployment and overall efficiency. The Alliance team members work together across domains to develop agreed-upon criteria for well selection, in addition to the intervention approach and strategy. This holistic approach significantly increases intervention success rates, while avoiding future deferred production and higher intervention costs.
Through the development of a proactive well selection and intervention methodology plan, agreed upon by all members of the Alliance, the value chain is effectively flipped. Suppliers are no longer waiting on work. Rather, the suppliers collaborate directly with the operator and have equal influence on work plans, which improves strategic planning and promotes a viable and accessible model for vessel, intervention equipment fleet and crew utilization.
Bottlenecks associated with wellsite access have long hampered the offshore industry. This is due to various factors, from limited bed space on offshore platforms to critical emergency preparedness and support crew capacity, supervisor and crew availability, equipment availability, and planning capacity onshore. Logistics planning is already complex, but further compounded by the fact that bed space and emergency and support personnel capacity is shared amongst multiple players (drilling, production, maintenance, intervention).
The Alliance is leveraging crew multi-skilling to further debottleneck operations capacity. Emergency and support personnel provide an ideal opportunity for multi-skilling. By cross-training—intervention and stimulation specialists, production engineers—the Alliance has achieved a significant level of self-propelled autonomy, while significantly decreasing logistical bottlenecks.
In addition, through effective cross-training and expanding crew members’ competency areas, the Alliance is optimizing offshore crew size, which reduces bed space requirements and frees up capacity for other resources, such as specialist personnel for specific operations. With more multiskilled workers, the Alliance has more personnel that can cover higher activity levels and diverse operations without adding to offshore population. The added benefit of this “fixed crew” approach is that the Alliance’s crews become familiar with Aker BP assets. This leads to greater job security and overall crew performance, as opposed to the traditional approach in which crews are traveling to various NCS assets, often with minimal asset familiarity.
No normalized industry benchmarks for intervention and stimulation operations currently exist. The metrics used to measure success vary from one operator to another, and reporting typically fails to connect the work performed to the value added. With a keen focus on performance, the Alliance has developed its own benchmarks for success, while also creating a model that could be adopted across the industry.
At the earliest stages of the Alliance, it was realized that there was a need to measure performance and the value of the work. The Alliance created a cascaded key performance indicator (KPI), beginning with key lagging indicators through which overall performance and value is measured. Each of these KPIs is then broken down into lower-level indicators, resulting in leading metrics that can be monitored on a well-by-well basis and run-by-run basis. These metrics are used to identify areas for improvement, best practices and opportunities to eliminate or perform tasks off critical path.
As part of the benchmarking, the Alliance is also measuring overall value, which it defines as relating the improvement in performance to either a reduction in the cost per additional barrel produced per USD, and/or an acceleration of the barrels produced per USD (putting wells on production earlier or reducing the time a well is not producing or producing at a reduced rate while awaiting workover).
The Alliance also placed emphasis on driving greater predictability. A significant number of interventions are unsuccessful, and many end up requiring additional runs, which drives up cost and time. The Alliance is using historical data and digitalization to make better decisions and be more predictable in determining how successful an operation is likely to be, how long it is likely to take, and how much it will cost. The aim is to avoid the trap of rushing to perform high-potential value and high-cost-but-low-probability-of-success wells, to the detriment of lower-value and lower-cost-but-higher-probability-of-success wells.
COMMITMENT TO INNOVATION
While culture and mindset drive change management, the correct tools and technology are key enablers of progress. Digitalization plays a key role in transforming conventional intervention operations, and the Alliance actively seeks opportunities for improvement and identifies technology gaps for digitalization, performance improvement and shorter lead time from discovery to first oil.
As a first step, the Alliance defined its end-to-end digital transformation roadmap. From there, Aker BP’s EurekaX digital labs collaborated directly with the Alliance and other strategic partners to develop solutions to drive performance. In addition, Aker BP’s Onshore Collaboration Centers (OCCs) play an integral role in the Alliance’s ability to leverage digitalization, Fig. 1. The OCCs utilize the cloud-based Stimline IDEX suite of solutions for planning and execution, providing access to live and fully liberated data from all operations to improve transparency and operational follow-up amongst the Alliance partners.
An example of digitalization is the production hopper system, which uses a combination of domain expertise and historical data to assist Alliance team members with well intervention candidate selection and methodology. The digital production hopper considers key metrics, such as focus on business case and cost/bbl and recovery, to assist in the development of a perspective intervention strategy.
Operationally, the Alliance is leveraging remote operations and automation to drive greater operational efficiency and consistency. Leveraging an ecosystem comprised of digitally enabled hardware and sensors, combined with an edge computing platform and complemented by a cloud-based E&P data environment, the Alliance is utilizing data to support an evergreen intervention selection process, while also automating repetitive or hazardous operations.
In its first full year of operation, the Alliance executed 80 well intervention and stimulation operations, delivering in excess of 30,000 bpd of incremental production—which was achieved by protecting, recovering or adding production through existing well stock and new well deliveries. Since inception, the Alliance has delivered significant change, driving production optimization from existing assets and reducing the overall carbon intensity per barrel produced, Fig. 2.
Remote operations. In one NCS field, the Schlumberger Performance Live* digitally connected service was used to remotely deploy and improve well integrity evaluation operations in more than 50 wells. Aker BP sought a solution to evaluate cement and casing conditions prior to making decisions regarding P&A, sidetracking or intervention. Using the digitally connected service, two engineers that typically worked on site were able to work remotely, while also driving greater collaboration among the team members and domain experts for faster decision-making.
Multiline intervention unit. For wireline intervention, the Alliance has utilized a new multiline intervention unit (manufactured by Cameron, a Schlumberger company, in Norway), which is DNV 2.7-1 and NORSOK-compliant and built for ATEX zone 1 operation, Fig. 3. The multiline unit can house and operate two different cable types without needing an additional winch. It can operate multiple types of cables and is capable of performing the entire scope of wireline operations—from the simplest slickline operations to complex intervention operations on tractor, to heavy duty open-hole logging. The unit also contains an acquisition system, which eliminates the need for a separate logging container for e-line operations, and puts the engineer and winch operator side-by-side during logging operations.
The multiline intervention unit was built to be future-ready, with emphasis placed on ensuring digital connectivity and the ability to perform remote operations. Recent upgrades to the unit, as part of the Alliance collaboration, ensure it is built for today and the future offshore environment. Fully connected, the unit’s integrated sensors and control systems enable remote inspection and system health checks, in addition to remote operation and automation.
Commitment to sustainability. Each member of the Alliance is fully committed to driving high performance, sustainably. A good example of this is the utilization of StimWell Services’ Island Patriot Vessel, which was specifically designed to stimulate the world’s biggest wells in a single mobilization. Fig. 4. The aim is to make this a carbon-neutral vessel, and has various initiatives to drive this effort. In 2021, the vessel was modified to enable use of a shore-based power supply, as opposed to main engines, as a power source while ported. In a typical year, this translates to a reduction of approximately 840 tonnes of CO2 emissions. In addition, the Alliance is on a journey to identify solutions for more sustainable operations and continuously researching opportunities to reduce emissions, such as fuel cells and emissions capturing.
Inter-Alliance mindset. Expanding integration even further, the Alliance worked with Maersk Drilling—an Aker BP Alliance partner since 2017—to reactivate the Maersk Reacher, Fig. 5. The ultra-harsh environment jackup rig is assisting with well intervention, stimulation and accommodation for normally unmanned installations (NUIs) in Valhall field. Built in 2009, the Maersk Reacher is a 350-ft, Gusto-engineered MSC CJ50 rig in NORSOK compliance. For collaboration with the Alliance, the Maersk Reacher has been mobilized with reduced drilling equipment and a focus on delivering the most efficient well intervention and stimulation set-up, benefiting from the many years of performance and benchmarking focus in well construction.
The intervention-dedicated rig is equipped with a general coiled tubing intervention set-up, pressure control stack on the rig floor, wireline operation, stimulation lines, and a winch and hose-transfer system. A good example of leveraging a mutually beneficial supplier ecosystem, the Maersk Reacher will increase efficiency, due to limited exposure to shuttling periods.
ALLIANCE VALUE ADDED
With capital stewardship and environmental sustainability at the core of all activity, the Intervention and Stimulation Alliance operates with a focus on production optimization and extending the life of existing assets, combined with an emphasis on leveraging technology and uniquely developed supplier ecosystems, to transform conventional intervention operations. Built on a shared value model, the Alliance is reshaping not just the industry’s stimulation and intervention approach, it’s changing the industry’s overall perception of the application.
This strategy is pushing forward an autonomous Alliance vision with a clear value proposition, where digital tools, end-to-end transformation, commercial models and value-sharing results are enabling a self-propelled Alliance that essentially creates its own work through an evergreen and more sustainable portfolio.
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