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The Third Efficiency Leap – Focus on People, Process and Technology

An increased focus on integrated operations in the North Sea is starting to show results. Oil companies working on the Norwegian continental sector (NCS) return with improved operational results as a direct consequence of implementing concepts for integrated operations.

As many of the mature fields are entering tail production, oil production is falling and the running expenses are increasing. The oil companies are turning to operational concepts utilising realtime information and communication technologies for optimising operation offshore in the need for cost efficiency.

According to The Norwegian Oil Industry Association (OLF), (1) the potential of integrated operations is huge with 8% to 10% increased production, a 4% to 5% increase in extraction and a huge 30% reduction of operating expenses measured from the 2003 level.

ConocoPhillips in Stavanger, Norway, reports that US$19 million was saved after 20 months of operation in their onshore drilling centre. (2) The savings come from improved decision making, more effective work processes, reduced transport and optimised manning levels. British Petroleum (BP) in Stavanger, Norway, reports a reduction in offshore staff of 10 to 12 people, due to their onshore operation centre. (3) 

The industry seems to agree that there is a significant economic gain in implementing concepts for integrated operations. In fact, the belief is so strong that the Norwegian government has requested the Norwegian Petroleum Institute (NPD) to form an initiative within the petroleum industry to promote the use of integrated operations concepts on the NCS.

The oil industry is talking about a third efficiency leap in production in the North Sea. The leap introduces state-of-the-art technology and more effective use of existing technology, but will just as much have to focus on people and work processes.

From a Solution Provider’s View

National Oilwell is a worldwide leader in the design, manufacture and sale of comprehensive systems and components used in oil and gas drilling and production, as well as in providing supply chain integration services to the upstream oil and gas industry.

The company is a major contributor to automation and technology development and also has a portfolio of systems and concepts for integrated operations. The company is also a proud participant in some of the integrated operation workgroups and studies lead by the NPD.

This article focuses quite philosophically on ‘integrated operations’ and some of the challenges that need to be addressed from the viewpoint of systems and solution providers.

Some Definitions

To ‘integrate’ is defined, in its most suitable context, as “to join two or more objects or make something part of a larger whole, or to become joined or combined in this way”. (4) ‘Operation’ can, by the same encyclopaedia, be somewhat defined as “the controlling of something or the managing of the way it works”. Combining these two words to read ‘integrated operations’ can therefore provide a loose definition of “joining objects to a larger whole for the purpose of common control and joint management.”

With the fibre optic networking installed in the late 1990s in the North Sea, together with implementation of information and communication technology (ICT), the gap between onshore and offshore organisations reduced considerably. Broadband fibre networks were the main enabler for melding the onshore and offshore organisations together.

Currently, a shift in organisation can be seen as an increasing number of support functions and work processes are transferred to onshore locations for safety reasons, to optimise performance and reduce operational cost. At the same time, rig systems and rig equipment are becoming increasingly sophisticated and automated. Oil companies are installing onshore operation and support centres with close communication with the different rigs. Service providers and other third party organisations are following. The need for collaboration across the different locations and across professions is dramatically increasing.

‘Collaboration’ is defined as “the act of working together with one or more people in order to achieve something.” Collaboration can in a broader term exist between people, between systems and as a bridge between people and systems and so on. ‘Co-operation’ is similarly defined as “the act of working together to achieve a common aim”. In other words, collaboration with a common aim.

From a solution provider’s view it seems vital to define arenas where these collaboration types can be established and to define tools that would enable and endorse collaboration. The key to success would be to understand how to achieve collaboration. Different collaboration types will now be discussed.

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