Production assurance - A tool to ensure cost optimal decisions · Production assurance - A tool to...
Transcript of Production assurance - A tool to ensure cost optimal decisions · Production assurance - A tool to...
© Det Norske Veritas AS. All rights reserved.
Production assurance - A tool to ensure cost optimal desicions
03 February 2010
2
What are the objectives of production assurance analyses? Forecasted volume
NPV
Case 8A
MP1: Umbilical and pow er cable
MP6: Pump and motor MP7: VSD pump
MP20x: Tie-in manifold
MP2: Compressor and motorMP4: VSD compressor
MP5: Circuit Breaker Module
MP16: Transformer and HV w et connections
MP20: Process template
0
20
40
60
80
100
-0.5 0 0.5 1 1.5 2 2.5
No. of interventions per year
Cos
t per
inte
rven
tion
(MN
OK
)
MP20x: Tie-in manifold MP1: Umbilical and power cable MP2: Compressor and motorMP3: Anti Surge Valve MP4: VSD compressor MP5: Circuit Breaker ModuleMP6: Pump and motor MP7: VSD pump MP8b: SeparatorMP9: V-cone MP14: SCM MP15: SCM MBMP16: Transformer and HV wet connections MP20: Process template MP21: Bridge spoolMP22: SDU MP8b: Cooler MP23: UPS Bubble size: Deferred volume
per intervention
Downtime distribution
Gas flow rate
Time
ReliabilityReliabilityAvailability – system/production
© Det Norske Veritas AS. All rights reserved.
Production assurance - A tool to ensure cost optimal desicions
03 February 2010
3
Production assurance and reliability management in the oil and gas industry
“The petroleum and natural gas industries involve large capital investment costs as well as operational expenditures.
The profitability of these industries is dependent upon the reliability, availability and maintainability of the systems and components that are used.”
[ISO 20815 - Production assurance and reliability management ]
© Det Norske Veritas AS. All rights reserved.
Production assurance - A tool to ensure cost optimal desicions
03 February 2010
4
Let us consult the ISO standard
”The objective associated with systematic production assurance is to contribute to the alignment of design and operational decisions with corporate and business objectives”
“The standard recommends…[production assurance] processes and activities be initiated only if they can be considered to add value”
”The achievement of high performance is of limited importance unless the associated costs are considered”
© Det Norske Veritas AS. All rights reserved.
Production assurance - A tool to ensure cost optimal desicions
03 February 2010
5
ContentTerminology and project life cycle
Case study- General introduction- Methodology and findings
Conclusive remarks
Questions and discussion
© Det Norske Veritas AS. All rights reserved.
Production assurance - A tool to ensure cost optimal desicions
03 February 2010
6
ContentTerminology and project life cycle
Case study- General introduction- Methodology and findings
Conclusive remarks
Questions and discussion
© Det Norske Veritas AS. All rights reserved.
Production assurance - A tool to ensure cost optimal desicions
03 February 2010
7
Production assurance terms
[ISO 20815 - Production assurance and reliability management ]
© Det Norske Veritas AS. All rights reserved.
Production assurance - A tool to ensure cost optimal desicions
03 February 2010
8
Decision criteria
Produced Gas Volume per Annum, Case 8
21.9
0
21.9
0
21.9
0
21.9
0
21.9
0
21.5
1
19.0
9
16.5
6
13.9
2
11.0
0
8.48
6.69
5.41
4.53
3.52
3.02
2.73
2.21
2.04
1.45
1.45
1.29
0.90
0.90
0.90
21.9
0
21.9
0
21.9
0
21.9
0
21.8
9
21.2
9
18.7
9
16.3
1
13.7
6
11.0
6
8.58
6.77
5.45
4.52
3.58
3.04
2.74
2.19
2.04
1.44
1.44
1.30
0.89
0.89
0.89
0
5
10
15
20
25
2016
2 017
2 018
2 019
2 020
2 021
2 022
2 023
2 024
2 025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
Year
GS
m3
Exclusive SSCS failures Case 8, P50
RISKEX - NPVCost of deferred production and vessel interventions
3NOK/M3Gas, 7.5% discount rate over 25years
0 500 1000 1500 2000 2500 3000 3500 4000
Case 8
Case 9
Case 10
MNOK
P10 P50 P90
NPV
Productionavailability Product price OPEX
Capacitymargin
Availability (item/system)
Uptime Downtime
Equipmentquality
Design e.g.redundancy
Vessel and personnelavailability
Spare availability
System production capacity
Annual sales factor
Reservoirprofile
Revenue
Maintenancefrequency
Vessel and personnel ratesRepair time
Repair strategy
Revenue factors
Cost factors
© Det Norske Veritas AS. All rights reserved.
Production assurance - A tool to ensure cost optimal desicions
03 February 2010
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Production assurance in the project life cycles
Spare parts
Maintenance strategy
Maintenance support
Utilization of design margins
Protection from environment
Reliability testing
Self-diagnosis
Buffer and standby storage
Bypass
Feasibility Conceptualdesign
Engineering Procurement Assembly Installation & Commissioning
OperationFeasibility Conceptualdesign
Engineering Procurement Assembly Installation & Commissioning
OperationFeasibility Conceptualdesign
Engineering Procurement Assembly Installation & Commissioning
OperationFeasibility Conceptualdesign
Engineering Procurement Assembly Installation & Commissioning
Operation
© Det Norske Veritas AS. All rights reserved.
Production assurance - A tool to ensure cost optimal desicions
03 February 2010
10
ContentTerminology and project life cycle
Case study- General introduction- Methodology and findings
Conclusive remarks
Questions and discussion
© Det Norske Veritas AS. All rights reserved.
Production assurance - A tool to ensure cost optimal desicions
03 February 2010
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Ormen Lange in numbers Located 120 km north-west of Kristiansund
Water depths 800-1100 m
Estimated reserves 397 billion Sm3
Production started by the end of 2007
Can potentially supply 20% of the British gas market for 30-40 years
Export through Langeled, 1200 km
Need for additional compression support from approximately 2016
© Det Norske Veritas AS. All rights reserved.
Production assurance - A tool to ensure cost optimal desicions
03 February 2010
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Main compression alternatives
Floater with compression Subsea compression
High CAPEX
High manpower cost
Low intervention costs
Safety risk
Halved CAPEX
Low manpower cost
Uncertain life cycle performance
Limited safety risk
© Det Norske Veritas AS. All rights reserved.
Production assurance - A tool to ensure cost optimal desicions
03 February 2010
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An Integrated Approach
Simulation modelCompressor and reservoir
profiles
Reliability data &
system design
• Demand profile• Weather
limitations
Maintenance strategies
Cost per scenario
© Det Norske Veritas AS. All rights reserved.
Production assurance - A tool to ensure cost optimal desicions
03 February 2010
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Objective of analysis
Vessel contracting strategy
Contract a vessel on the spot market on demand
Contract/purchase a vessel dedicated to Ormen Lange
Share vessel with nearby fields
Repair strategy
Repair redundant components on first failure
Repair redundant components when loss of function
Combination of the two strategies above depending upon type of component
Choose the cost optimal maintenance strategy
Scenarios: Combinations of the above strategies
© Det Norske Veritas AS. All rights reserved.
Production assurance - A tool to ensure cost optimal desicions
03 February 2010
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RiskEx – The decision variable
Cost of deferred production + Cost of unplanned interventions= Risk expenditures (RiskEx)
00.10.20.30.40.50.60.70.80.9
1
MNOK
Total RISKEX Deferred production Intervention
∑= +
+⋅−=
T
ii
i
rCPVV
1
iriskediunrisked
)1()(
RISKEX PV
© Det Norske Veritas AS. All rights reserved.
Production assurance - A tool to ensure cost optimal desicions
03 February 2010
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MN
OK
Deferred volume RISKEX IMR RISKEX
The cost optimal solution
Least deferred
production
Lowest total cost
Deferred production Intervention cost
© Det Norske Veritas AS. All rights reserved.
Production assurance - A tool to ensure cost optimal desicions
03 February 2010
18
ContentTerminology and project life cycle
Case study- General introduction- Methodology and findings
Conclusive remarks
Questions and discussion
© Det Norske Veritas AS. All rights reserved.
Production assurance - A tool to ensure cost optimal desicions
03 February 2010
19
Conclusive remarksCase specific conclusions- Approximately 25% cost difference between highest and lowest cost- An integrated approach crucial to obtain relevant decision support
General remarks- Production assurance activities should always be aligned with business objectives- A strategy giving the highest availability is not always optimal with regard to project economy
© Det Norske Veritas AS. All rights reserved.
Production assurance - A tool to ensure cost optimal desicions
03 February 2010
20
Thank you for your attention
© Det Norske Veritas AS. All rights reserved.
Production assurance - A tool to ensure cost optimal desicions
03 February 2010
21
Safeguarding life, property and the environment
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Atle Stokke Consultant Asset Risk Management Mobile: +47 99 69 15 10 Fax: +47 67 57 99 11 Email: [email protected]