Rig moves are an inevitable task for offshore drilling organizations. In today’s climate, the oil and gas industry faces its most transformative period in history. With low oil prices a fixture of the industry at the moment, oil and gas organizations are looking for lean operations to compensate. Always resilient, the oil and gas sector continues its progressive thinking, placing a large emphasis on the need for innovation to leverage its strengths and combat arbitrary cost reductions.
THE RIG MOVE
Rig moves are an inevitable task for offshore drilling organizations. In today’s climate, the oil and gas industry faces its most transformative period in history. With low oil prices a fixture of the industry at the moment, oil and gas organizations are looking for lean operations to compensate. Always resilient, the oil and gas sector continues its progressive thinking, placing a large emphasis on the need for innovation to leverage its strengths and combat arbitrary cost reductions.
Since the mid-1900s, offshore drilling exploration has evolved. Just as drilling processes have evolved, so have the laws and regulations of offshore drilling. Luckily, evolving technologies allow for drilling contractors to remain compliant with the laws and regulations set for the oil & gas industry.
Finding the balance between operational efficiency and profitability while maintaining compliance has proven to be a difficult process with shifting laws and regulation, but having full visibility, optimized processes and accurate forecasting, allows for simplified and more successful rig move processes.
INNOVATING RIG MOVE PROCESSES
There are many events which call for a rig move. Perhaps new contracts require a new operating company, or a vessel moves between geographical areas, causing changes in operating companies for tax and regulatory reasons or major maintenance and rebuilding of a vessel must be performed. Regardless of the reason, the rig move process is measured and thoroughly documented.
Before moving a multi-million or billion dollar vessel, a solution should be implemented to document the many required processes. The solution should help move the site corresponding to a rig from one company to another. In this instance, a site is defined as logistical unit holding the history of all maintenance performed, as well as all financial transactions and inventory values for a rig/vessel. In essence, tracking the details of a site provides the visibility necessary to remain compliant throughout an entire rig move process.
The reasons for rig moves can be regulatory, contractual, taxation or a combination of these reasons. The solution should provide full support for traceability of the rig’s lifecycle to avoid re-classification of the rig to ensure environmental and safety regulations. The solution in place should support local tax and accounting regulations in whatever geographical area the rig is located or its future locations. As an added benefit, the solution should be simple and simultaneously ensure that the rig move is conducted safely.
FULL OPERATIONAL VISIBILITY
The ability to provide analysis necessary to conduct a rig move requires a great deal of visibility. Rig move processes require a lot of data such as accounting currencies, work orders, purchase orders, projects, inventory and purchase transactions, maintenance transaction and more. To make use of this data, drilling contractors can utilize an integrated solution and reap the benefit of analyzing large amounts of accurate, real-time data to make well-informed rig move decisions. Unfortunately, many drilling contractors struggle with disparate solutions because none of their existing systems are comprehensive or agile enough to include these diverse, mission-critical processes, such as a rig move. This makes it time consuming and cumbersome to get the overall financial picture with high chances of potential error source and manual handling.
Traceability, control of transactions and financial visibility enables drilling contractors to move rigs more effectively because data visibility allows drilling contractors more control of the rig move process and reduces added elements of risk.
Having access to a rig’s full maintenance history enables traceability and secure compliance. The environment of global oil and gas companies requires a solution that can quickly adapt to compliance regulations to reduce non-compliance risk. Rig move solutions should enable IFRS, US GAAP and SOX compliance, as well as efficient risk management, environmental compliances along with visibility of the environmental impact and cost of the operations, and support for quality assurance and health, safety and environment management.
Full operational visibility facilitates secure compliance of accounting, environmental and health regulations as well as traceability of a vessel’s lifecycle including maintenance and financial transactions. The right solution will bring you closer to your business, giving you unprecedented vision so you can turn rig move opportunities into nearer term revenue.
OPTIMIZED SOLUTION PROCESSES
In a sector where moving from one sanctioned contract to another is easier said than done, the ability to optimize processes is invaluable. If a drilling contractor does not have an integrated ERP system, and engages in rig move processes, the drilling contractor will undoubtedly, blindly face many manual transactions.
For instance, if a drilling contractor begins a rig move with fragmented systems, there is a risk of lack of visibility of real-time data. For instance, fragmented systems handling rig move processes may cause the finance department months to recognize a rig has been moved to a new geographical area. This delay is a direct effect of lack of visibility and real-time data from a fully-integrated, flexible solution. Lack of visibility and delay of information results in much rework, hindering general business processes.
For example, in this instance, the financial department is forced to backtrack and must manually correct the tracking of procurement and depreciation. Backtracking to correct data creates burdensome overhead costs with an ineffective use of time and money. A solution that is much less manual will lower costs and enable more efficient business processes Enterprise software solution, IFS Applications™, utilizes analysis from its Site Move module to extract necessary data and alert users of what objects need to be cancelled, closed and/or transferred from projects to conduct compliant and well-documented rig move processes. This functionality enables a more cohesive transfer of data, improves documentation for finance, optimizes processes and reduces error postings, manual corrections and transactions.
ACCURATE FORECASTING
In mission-critical processes such as rig moves, innovative management solutions are needed to provide total, real-time visibility. It is important to have full transparency of processes, real-time performance data, and risk and compliance information for all users. Reporting quality improves real-time visibility and increases success of transporting assets.
With proper role-based security, users can easily retrieve queries and reports for internal and external reporting, making compliance and real-time visibility far easier. Faster reporting and accurate forecasting is extremely beneficial in the oil and gas industry, enabling companies to report key performance indicators, financial reporting and environmental impact and cost of the operations reporting.
When considering rig move processes, accurate forecasting provides an opportunity for drilling contractors to prepare and decide what financial transactions need to remain, be closed or be recreated. A solution that simulates existing transactions when moving a company from contract to contract is beneficial because the drilling contractor can evaluate what to do with each transaction in relation to the current rig and company.
Once each transaction has been handled, contractors can project the right cost, depreciation and value in an upcoming contract before the rig move process begins. Being able to see the impact of moving a rig from one company to another, is a benefit of accurate forecasting from an end-to-end, fully integrated, flexible solution. The ability to forecast in this manner saves time and money for drilling contractors, which is critical in the oil and gas industry now, more than ever.
IFS APPLICATIONS FOR RIG MOVEMENT PROCESSES
Real-time visibility, optimized solution processes and accurate forecasting bring value to drilling contractors. These benefits significantly contribute to efforts of reducing overhead and cutting arbitrary costs. Utilizing a flexible, module-based ERP system, such as IFS Applications, will enable more accurate forecasting, visibility and optimized processes, which results in an improved rig move process with reduced risk.
IFS is one of the world’s leading providers of business software to large and midsize companies within the oil and gas industry. IFS Applications for Offshore Service is an integrated industry solution consisting of top-rated offerings for contracting, logistics, maintenance, work order management, finance, project management, procurement, resource allocation, competence assurance, document management and Bi/reporting, as well as HSEQ/Audit management.
The functionality of IFS Applications for Offshore Service encompasses IFS Site Move module. The IFS Site Move module is a unique feature from any other enterprise software system as it executes the reassignment of a rig from one company (legal entity) to another. This functionality eases the job of a CFO and financial department by optimizing processes, which reduce the complexity of financial requirements and compliances. Additionally, IFS Site Move module utilizes system analysis to alert users of necessary transactions.
The fully-integrated system pulls analysis for the rig move including orders to be canceled and closed, invoices to be matched and posted, projects and sales contracts to be closed, transactions to be transferred and the general ledger updated with supplier master data, currency rates and more. IFS Applications for Offshore Service then re-runs analysis until no more actions are required and the rig is securely ready to be moved. The rig move is performed and any remaining obstacles for the rig move are fixed. Finally, after the rig is truly moved to the new company, balances like inventory value and fixed assets are finalized and the rig move process is completed effectively with full traceability and control of costs of the asset.
