A working party set up by Norway's Ministry of Industry & Energy has set operators a target of a 45 50% reduction in cost and time required for field development.
Tore Torvund, senior vice president of operations for Norsk Hydro AS, told the recent Offshore Northern Seas conference technology is only one of the requirements for meeting this aim.
"Technology alone cannot do the job," Torvund said. "Progress and changes in several other areas are also necessary, and the new scenario calls for improved relations between all actors in the North Sea: authorities, oil companies, contractors, and labor unions."
Torvund warned that contractors and suppliers cannot meet tighter cost margins and deadlines if they have to start from scratch for each project.
However, U.K. companies reported positive experiences of developments in alliance with contractors. U.K. operators aim for a 30% cost reduction.
BP'S EXPERIENCE
Mike Curtis, general manager of development and facilities engineering for BP Exploration Operating Co. Ltd., listed some of his company's results in partnership developments.
BP's North Sea Hyde gas field was placed on stream on schedule and more than 20% under budget.
This was "...a result which pleased not just the owners but also the contractors in the alliance, who received 55% of the savings in addition to their normal profit," Curtis said.
BP's Unity project was delivered on time and 28% under budget.
Andrew field development has estimated costs 20% lower than would have been the case if traditional approaches had been followed.
"Costs for major equipment and materials packages have been significantly reduced through, among other things, use of functional rather than detailed specifications," Curtis said.
BP teams assembled for recent developments typically are composed of about 12 persons, compared with about 150 only 2 3 years ago. Contractors' and suppliers' staffs are vital components of recent project teams.
INNOVATION
"Far from stifling innovation," Curtis said, "all parties are continuously coming forward with new ideas to increase efficiency, reduce costs, and shorten the project schedule."
So far, cost reductions have been achieved through the efforts of a relatively small number of companies, Curtis said. Greater potential exists for cost reduction via a coordinated program for the whole industry.
Nevertheless, Torvund was concerned that blind pursuit of cost reduction could ultimately hit technical progress.
"If we want technology to be a driving force," Torvund said, "we must demand from our contractors and suppliers that they are active in development, implementation, and use of new problem solving technologies.
"But we must also give them the opportunity of keeping abreast. We hardly do that if the only important criterion we use when awarding contracts is how far daily or hourly rates are squeezed."
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