© 2013 Chevron

TTA CY Spool InstallationDMAIC Control Phase Gate

Michael AnthonyMichael JobTTA-MCK

June 2015

© 2014 Chevron

Problem Statement

Over the past 3 years in Cymric, failures in Check Valves at Gauge Setting slots have been leading to pipe wall erosion loss, causing pipes to leak thus creating environmental and safety concerns for operations, while also leading to down oil and maintenance cost, a minimum of about $1500 per failure leak.

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© 2014 Chevron

Project Background

CVX / KSI are required to change out existing check valves to pipe spools on all active Diatomite wells in TTA-MCK.

List was created of existing check valves on gauge setting slots that needed to be changed.

Project handed to KSI Maintenance for installation of pipe spools. CVX required to take well off production for spool installation.

Scheduling work with existing well shutdowns avoids doubling downoil

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© 2014 Chevron 4

IPO

+

Low

0

KSI Crews, API

Spools Complete, Down Oil

Spools

Choke Inspection Queue

OutputsInputs

Process:

Spool Installation

Goal

Down Oil ($/barrel)

Safety (TRIR)

Weather Check Valves: Sell / Return for refurbishment

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Current State

Spool installations scheduled for maintenance crews to do individually based off issued work-orders for each well

Well isolated previous to each scheduled installation KSI crew mobilize, issued permits, isolate / loto, and demobilize for

each spool installation

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Future State

Spool installation added on to choke / temperature inspections or other Maintenance work occurring on wells that need spool installations

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Sustainability / Scalability

Sustainability KSI / CVX continue to identify opportunities to eliminate redundant

work Spool installations continue to be scheduled with other maintenance

work to avoid double isolation and well downtime When Diatomite inactive slots are brought back online check valves

are replaced

Scalability

All CVX operations examine scheduled work and how to best combine existing work to eliminate isolation and well downtime

Combine PM’s, Repairs, Maintenance / Construction Work that have the same isolation points or permits issued

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Financial Verification

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Month1. Spools Installed

2. Capital Avoidance

3. Oil LS Price 4. Barrels Saved 5. Down Oil

Avoidance 6. Valve

Refurbishment / Sale 7. Total Per

Month 8. AFB

November 2 325.60$ 56.15$ 52 2,901.3$ 3,226.9$ 3,283.0$ December 16 2,604.80$ 36.30$ 413 14,984.6$ 17,589.4$ 20,872.5$

January 18 2,930.40$ 29.30$ 465 13,624.5$ 16,554.9$ 37,427.4$ February 14 2,279.20$ 35.67$ 362 12,898.90$ 15,178.1$ 52,605.5$

March 8 1,302.40$ 31.77$ 207 6,565.80$ 7,868.2$ 60,473.7$ April 6 976.80$ 41.50$ 155 6,432.50$ 7,409.3$ 67,883.0$ MayJuneJuly 58,498.20$ 58,498.20$ 126,381.16$

AugustSeptemberOctober

NovemberDecember

January

(8) AFB: Project Total

(1) Spools Installed: Monitored by KSI Superintendent, reported installations based off workorders complete(3) LS Oil Price: Based off CVX LS monthly oil price

(4) Barrels Saved:

Assumptions

(5) Down Oil Avoidance: Oil LS Price x Barrels Saved = Down Oil Avoidance

(7) Total Per Month: Capital Avoidance + Down Oil Avoidance

© 2013 Chevron 9

Non-AFB Verification

CATEGORY METRIC METRIC BASELINE AFTER IMPROVEMENT Unit of MeasureHES At risk behaviors Workers' Compensation Costs Hours

Touch Points Loss of ContainmentDistance Driven Compliance RateRisk Exposure TRIRRisk Exposure inference Rate DAFWRTime Between Motor Vehicle Crash First AidsRisk Priority Number Near Misses

CATEGORY METRIC METRIC BASELINE AFTER IMPROVEMENT Unit of MeasureQuality Turn over rate Sigma level Percentage

Unplanned Absenteeism Rate First Pass YieldIdeas Generated Mean Time to RepairPersonnel Participating Mean Time Between FailureTool Utilization Preventive MaintenanceStandard Operating Procedures HandoffsCp: Potential Process Capability Decision / Approval PointsCpk: Actual Process Capability Recycles / ReworkReliability StandardizationAvailability Proportion Defective

CATEGORY METRIC METRIC BASELINE AFTER IMPROVEMENT Unit of MeasureTime Cycle Time Non-value Added Process Steps Hours

Wait Time Value Added Time Rate

Man Hours Operational Effectiveness Rate1 HR Per Spool

Isolation0 HR Per Spool Isolation

Total # of Check Valves Installed x1 HR

Turnaround Time Production AccelerationOvertime Lead Time Throughput time Process Cycle Effi ciency

CATEGORY METRIC METRIC BASELINE AFTER IMPROVEMENT Unit of MeasureCost Implied Future Value Early Payment Discount Hours

Labor Productivity Space UtilizationCost Per Transaction Full Time Equivalent (FTE) Value

AssumptionsTotal of 192 Spools must be replaced 1 HR x 192 Spools

© 2013 Chevron

SJVBU Lean Sigma Project Summary for Adoption Sharing

Before: Check valves are required to

be replaced with spools

Spools installations scheduled and installed

After: Spools installed with other well

and gauge setting shutdowns Spools installed with choke

inspections

1 hr. gain in time required to install spool with process.

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Lessons Learned, Predicted AFB, and Scalability Summary:• Lessons Learned: Communication between foreman and engineers enables combination of

work to avoid additional shutdowns• AFB: $150,000• Scalability: Combining work through-out departments and between foreman

Graphic(s) or Picture(s):

Before

After