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Efficiency gains –compensating for wage hikes and recruitmentchallenges.

”Danish experience from the North Sea.”

Speaker: Mr. Peter BlachCEO - Offshore Center Danmark

WWW: www.offshorecenter.dk

The copyright of this entire training material vests by Offshore Center Danmark. All rights reserved.

The information contained herein is the property of above company and is supplied without liability for errors or omissions.

No part may be reproduced or used except as authorized by contract or other written permission.

Subjects:

• North Sea characteristics

• Challenge #1• Optimizing ROI from manhours

• Challenge #2• Recruitment challenges

• Lessons learned

Efficiency gains

Subjects

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The North Sea:

1859: Oil trace discovery.

1910: Natural gas discovery.

1966: Exploration drilling.

1971: Commercial production.

Defines brent crude oil standard.

Political stability in the region.

Matured infra structure.

Western Europe´s largest oil and gas reserves.

One of the key non-OPEC producing regions.

Totals more than 600 installations.

Efficiency gainsNorth Sea Characteristics

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UK

Aberdeen

Stavanger

Esbjerg

DK

DNL

N

Danish Sector:

Depth < 60 m.

Reservoir rock: primarely chalk -

some sandstone reservoirs.

Permeability: from single digit

mD.

App. 60 offshore installations.

Original recovery rate: 5-7%

Current recovery rate: 25-30%

Production: 350 MBOD.

App. 130 producing wells.

Horisontal drilling.

Water injection wells.

Swing producers.

Efficiency gainsNorth Sea Characteristics

Dan – the largest Danish Oil Field

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Source: Danish Energy Authority

Danish Offshore Activity The Danish Oil and Gas FieldsEfficiency gainsNorth Sea Characteristics

North Sea Infra Structure

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Gas

Oil

Planned gas

Efficiency gainsNorth Sea Characteristics

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Source: Danish Energy Authority

Danish Offshore Activity Installations in the North SeaEfficiency gainsChallenge #1

Optimizing ROI(Return On Investment) from manhours.

Approaches:

• Strategic spare part stock inventory• Long lead items. • Units for refurbishment. • Inventory based on decades of acquired data.• Goal: Elimination of lead time and express orders and delivery.

• Kit systems management• Parts lists management linked to specific replacement jobs. • Cross search facilities on multiple kits and inventory lists.• Ensuring all parts and tools are available for re-ocurring jobs.• Goal: Elimination of unproductive manhours.

• Comprehensive database on component MTBF data• MTBF = Mean Time Before Failure. • Essential to service and refurbishment scheme planning.• Goal: Elimination of unforeseen breakdowns causing production loss

and unforeseen expenditures.

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Source: Danish Energy Authority

ChallengesActivity ChaSeaEfficiency gainsChallenge #1

Optimizing ROI on manhours.

Approaches:

• Strategic inspection schemes• Yearly inspection campaigns to inspect for

abnormalities like excessive corrosion/abrasion, free spans etc.

• Logging and monitoring wear and tear.• Goal: Development of wear and tear curves

for components to ensure an optimum service life before refurbishment or replacement.

• Strategic replacement and refurbishment

• Schemes based on MTBF data. • “Replace before malfunction.” approach.• Goal: Eliminating unforeseen replacement

and refurbishment.

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Source: Danish Energy Authority

Danish Offshore Activity Installations in the North SeaEfficiency gainsChallenge #2

Recruitment challenges.

Approaches:

• Expats vs. Local workforce considerations• Going from 99% expats in 1970 to app. 10% in 2010.• Local workforce emerging as expats. • Adjustments to global conditions.• Flow of expats ensure that danish offshore industry is kept in sync with

global offshore conditions and development.• Goal: Ensuring that the local industry interacts and develops with the

global industry.

• Adjusting business to workforce• Unmanned installations and interventions.• Work class ROV and robot technology. • Diverless solutions.• Goal: Implementation of technology in compliance with available

workforce competences.

• Adjusting workforce to business• Focus on identifying and filling competence gaps.• Continous education of workforce.• Goal: Ensuring that workforce competence level complies with the

requirements from the industry.

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Source: Danish Energy Authority

Danish Offshore Activity Installations in the North SeaEfficiency gainsChallenge #2

Recruitment challenges.

Approaches:

• Cluster activities• Recruitment from inside the cluster.• Profiling the industry through the cluster.• Goal: Gathering of forces in a cluster structure to gain strength and

synergy for the industry.

• Branding of Esbjerg as Offshore Capital of Denmark• Gathering of offshore relevant courses and education in Esbjerg.• Advertising the industry to the younger generations.• Networking and joining forces.• Goal: Full representation of the industry from one branded location.

Facilitating synergy.

• Flexibility in courses and education• Dynamic structures to ensure cooperation between universities,

companies and relevant organisations.• Developing courses and educations to fill competence gaps in local

work force. From 1 day course to Master Degree level.• Goal: Elimination of competence gaps in the available workforce.

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Source: Danish Energy Authority

Danish Offshore Activity Installations in the North SeaEfficiency gainsLessons learned

Lessons learned:

• “Global outlook and international awareness is key to ensure a dynamic and long term viable oil and gas industry.”

• “Adjusting business to available technology and workforce.”

• “Adjusting workforce to available technology and business.”

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Source: Danish Energy Authority

Danish Offshore Activity Installations in the North SeaEfficiency gains

Discussions

Questions?Mr. Peter Blach

CEO Offshore Center DanmarkNiels Bohrs Vej 6DK-6700 Esbjerg

Ph: +45 3697 3670Mail: pb@offshorecenter.dk

WWW: www.offshorecenter.dk