DG1 - Decision gate one - concretize DG2 - Decision gate two - continue DG3 - Decision gate three - implement DG4 - Decision gate four - production DNV - Det Norske Veritas. PdQ - Production, drilling and quarters platform with facilities for processing, drilling area without rig and quarters.
Background for the study
Object of and scope of work for the study
Selection of projects
As for the other projects, Martin Linge was removed due to the lack of start-up and production data within the time frame specified for the study. Of the three remaining projects, Ivar Aasen has an execution strategy that most resembles Goliat and Aasta Hansteen.
Focus areas
This study largely uses their original designation when past events are described and, where possible, their present name in the summary and recommendations for the future. Works in the development phase (onshore and offshore) are carried out in accordance with best practice.
Methodology
Execution
This chapter identifies elements in the operational parameters that characterize the three selected projects compared to other developments carried out since 2000.
Location and natural conditions
Reserves base and sales products
Oil rigs also have to handle a certain amount of associated gas, even if it is only injected back in some cases, they also usually have to handle large volumes of produced water and need special water injection systems. This reflects the technical conditions as described above, as well as the fact that the development decision was taken at a time when the level of activity in the industry was very high and costs were generally high.
Oil price and cost trends in 2000-20
The planning assumption is the oil price used by the industry in financial analysis and varies from company to company. Historically, the level of costs in the offshore industry has changed in line with the expected price of oil.
Division of roles between operator, licensees and government
- Licensees and operator
- Government
- Licensees’ role and responsibilities
- Operator’s role
In addition, the PSA is responsible for assessing whether the standards specified in the regulations are good enough. The division of responsibility in the Norwegian oil industry is clear: “The player who bears the risk is also responsible for dealing with it.
Management parameters for a project
The division of roles and responsibilities between the operator and other licensees is described in the License Joint Operating Agreement (JOA). The Safety Forum and the Regulatory Forum are two of the most important venues for such cooperation in the oil industry.
Norway’s HSE regulations
This is a consequence of the systematic approach taken by the regulations and implied in Article 24 of the law. Rather, a series of international standards and sets of rules are referred to as indicators of the required level of security.
Safety functions for a field development
- Risk reduction/barriers
- Leaks and ignition source control
- Ventilation and weather protection
- Detection, emergency shutdown, pressure blowdown and warnings
- Communication equipment
- Firewater and fire pumps
- Emergency power
- Escape and evacuation
Communication equipment and power supplies must be designed and protected to ensure that performance requirements are maintained under hazard or accident conditions. Fire water supplies and fire pumps must be capable of fighting fires, cooling equipment and structures, and washing out gas explosions if this can reduce the explosive pressure.
Overall project description
Location and reservoir description
In the PDO documentation, it was envisaged that the field would be developed with 22 wells (11 production wells, nine water injectors and two gas injectors). The current plan is 12 oil producers, seven water injectors and three gas injectors – a total of 22 wells.
Licence overview and project description
However, the oil and gas qualities provide good flow properties, which is important for stable operation/flow in the reservoir.
Development of plans and costs over the project’s lifetime
According to Acon's experience database, hourly rates in the Far East are about 40 percent ($45) below the Norwegian level of $115. Productivity in the Far East (350 hours/ton) is said to be half that of Norway Yard (175 hours/ton).
From licence award to choice of concept
- Discoveries and delineation up to DG1 – autumn 2006
- Influence of “Barents focus” – politics, environment and regulations
- Feasibility studies – evaluation phase 2006 – DG2
- Assessment of technical safety in the concepts studied
- Concept definition phase
- Assessment of technical safety for the selected platform concept
- Operator’s safety analyses and assessments
- Risk understanding and worker participation
- ASD/government’s assessment of the PDO
The platform is specially adapted for the cold climate in the Barents Sea, with extensive weatherproofing/winterization. The primary and secondary material handling areas are located in the center of the process deck.
From DG2 to the selection of main contractor
PDO process
In addition, the operator must obtain the Petroleum Safety Authority Norway's permission to start drilling activity. In his application, the operator must document to the government that he is able to implement the planned activity in accordance with the regulations.
The MPE’s assessments and conditions – Proposition no 64
Contract strategy
Concept selection Supply Detail Plan Procurement Construction Splicing and assembly Towing to Hammerfest Installation Coupling Commissioning Commissioning Logistics, transp.
From contract award to start-up
- First phase after contract award to HHI – 2010-11
- Assessment of weight and cost control
- Sevan concept – construction
- Ability of the platform EPCI contractor to accept turnkey responsibility
- HSE at the construction site
- Completion of the Sevan platform
- Quality of risk management
The order backlog at HHI was very high during the construction of the Goliat FPSO and the number of employees and contract workers increased significantly. Completion of the project was included in the EPCI contract – in other words "turnkey for all systems".
Subsea installations, drilling and well operations
- Project execution for subsea installations
- Drilling and well
- Power from shore
- Loading system for oil exports
The contractor aimed to complete its part of the work on Goliat within the original schedule. Other important measures are the use of physical barriers on the rig that prevent discharge of waste and wash water to the sea.
Offshore hook-up and completion
- Execution strategy for remaining FPSO work in Norway
- Marine installations and completion
- Increase in scope of work
- Commissioning and handover to operations
- Decision on start-up (based on Auditor General’s report, 2019)
An application for consent to commission the Goliat FPSO was submitted to PSA on 13 February 2015. Eni sent a letter to PSA on 11 March 2016 to say it was ready to commission Goliat.
Production phase until the spring of 2019
- Production preparations and readying for start-up
- HSE incidents after start-up
- Goliat – electrical systems and ignition source control
- On stream – regularity, HSE and safe operation
- Regularity, HSE and safe operation – wells and subsea installations
- Status for the project in the second quarter of 2019
PSA assumed that the findings in Equinor's report were followed up by Eni and Equinor. It has emerged from interviews with PSA that the barrier management system developed for Goliat is assessed to have the potential to be one of the best in use at NCS.
Operator’s organisation, partner follow-up and government
- Project organisation and manning
- Involvement and quality control by Eni’s base organisation
- Partner’s role and involvement
- Government’s role
This report was used in the pre-start-up risk analysis carried out by Equinor's project and operational organizations and representatives. Eight of these were carried out in the production phase, i.e. from 2017 to today.
Overall assessments
The project’s preconditions and parameters
From the beginning of the PSA's formal supervision of the Goliat development in 2008 until today, a total of 25 audits have been carried out. The PSA carried out five audits of Eni while consent was under consideration (from 15 February 2015 to 19 January 2016).
FPSO concept maturation and execution
Extract from Eni’s report on its experience
Learning points
The project's mandate, organization and responsibility should have been clarified early and with more overall responsibility for the project management. Clearer requirements should have been set by the operator for the contractual relationship between HHI and its engineering.
Overall project description
Location and reservoir description
Licence history and project description
Aasta Hansteen and Snefrid Noord are expected to produce around 23 million scm of gas per day on plateau. The Aasta Hansteen field is operated from Harstad by Equinor's operating organization in Northern Norway.
Development of plans and costs over the life of the project
Experience shows that hourly rates in the Far East are approximately 40 percent (USD 45) below the Norwegian level, which is USD 115. Completion costs were underestimated and increased from NOK 0.6 billion at DG3 to NOK 1.3 billion at DG4 .
From licence award to choice of concept (DG2)
- Feasibility studies and DG1 in the period up to 2011
- Concept studies – evaluation phase up to DG2
- Choice of concept and DG2 – November 2011
- Assessment of technical safety in concepts studied
- Operator’s safety analyses and assessments
- Risk understanding and worker participation
The preferred answer was offshore charging from a small condensate storage integrated into the platform hull. The Aasta Hansteen platform is by far the largest Spar in the world to date.
From DG2 to award of main contracts
PDO process
The figure shows that the weights of Aasta Hansteen deviate slightly from the average for reference projects, except that the share of structural steel is high. However, it became clear that the decision to incorporate condensate storage into the hull had greater consequences than expected.
The government’s assessments and conditions – Proposition 97 (2012-13) to
Contract strategies. Prequalification, tender documents and format
From DG3 until the platform arrived in Norway
- Construction phase at HHI
- Platform EPC contractor’s ability to accept turnkey responsibility
- HSE at the construction site
- Completion at the construction site – readying for offshore completion
The ministry will come back with updates on the project in the Proposal on a new balancing of the budget for 2015. The operator also familiarized himself with HHI's organization of the work and use of subcontractors.
Subsea installations, drilling and well operations
Project review for subsea installations
No significant HSE non-conformities or injuries were reported while the rig was in western Norway. Experience shows that simple offshore platforms should take a total of six months to complete, while the project used eight.
Drilling and well
Offshore hook-up and completion
Marine operations
Flare system
Start-up decision
One of the four risers is instrumented to record the drift loads in order to be able to calibrate the uncertainty in the models. Although the project faced some challenges which caused a slight delay in the completion phase, it was never important to go live until the facility was completed in compliance with the prevailing safety requirements.
Production phase from start-up to the spring of 2019
- Production preparations and readying for start-up
- On stream – regularity, HSE and safe platform operation
- Regularity, HSE and safe operation – wells and subsea installations
- Project status at the second quarter of 2019
Instability and operational failure with images projected on the large screen in the control room. According to the statistics used in the design process, these conditions will occur at an acceptable frequency in relation to the criteria for an operational helicopter.
Operator’s organisation, partner follow-up and government
Project organisation
Aasta Hansteen came on stream on 16 December 2018 and gas was exported to Polarled from the next day. No serious incidents with HSE consequences have been reported or notified since inception.
Partner role and involvement
Government’s role
Overall assessments
The project’s preconditions and parameters
Platform’s concept maturation and execution
Early on, however, it became clear that the decision to install a condensate storage tank in the ship's hull had greater consequences than expected. SCRs were developed and adopted as export risers for deepwater TLPs in the Gulf of Mexico.
Learning points
Making the topsides for Aasta Hansteen was also a large and demanding project, but nothing extraordinary by NCS standards. The Aasta Hansteen surface is configured in the same way as a conventional structure on a fixed platform, while those on Goliat are very special due to its circular shape.
Overall project description
Location, licensees and reservoir description
Licence history and project overview
Development of plans and costs over the project’s life
Technical costs were underestimated to NOK 0.9 billion at contract award and increased to NOK 2.4 billion by DG4. Completion costs were underestimated, rising from NOK 1.1 billion by DG3 to NOK 2.6 billion by DG4.
From licence award to choice of concept (DG2)
- Discoveries and appraisals up to DG1
- Feasibility studies – evaluation phase up to DG2
- Input from the government – final choice of concept
- Description of the chosen concept
- Assessment of technical safety in the concepts studied
- Concept definition phase up to PDO
- Risk understanding and worker participation
- Government comments on the concept during PDO consideration
- Contract strategies and awards
A summary is given of the safety assessments that the operator has given particular attention to in the early phase and in the basis of the decision to implement - the PDO. The topsider was the largest contract in the Ivar Aasen project and included several sub-deliveries – process plant, gas compression, separation, water injection, flare boom and measurement.
From DG3 until the platform arrived in Norway
Execution of the EPC contracts
Weights for the Ivar Aasen tops are compared to average values for 16 different platforms (reference). What can be read from the figure is that Ivar Aasen deviated little from the average for the reference projects.
Platform EPC contractor’s ability to accept turnkey responsibility
The dry weight of the top provides the basis for costing and is an important figure for weight reporting and control. Weight composition varies from platform to platform, but a notable deviation from the average warrants further investigation.
HSE at the construction sites
Risk management and monitoring of mitigation measures were actively used.
Drilling and well operations
Reservoir understanding and well planning
Choice of drilling concept
Drilling and well operations
Offshore hook-up and completion
Marine installations and completion
Commissioning and handover to operations
Production phase from start-up to the spring of 2019
Production preparations and readying for start-up
On stream – regularity, HSE and safe platform operation
Drilling and well operations were delivered about twice as fast as planned, and rig time was reduced by 500 days compared to PDO. This is attributed to modern technology and good integration of the platform and ground organizations with the help of modern communication systems.
Status for the project in the second quarter of 2019
Operator’s organisation, partner follow-up and government
Project organisation and manning
Dedication and decisiveness in solving the problems that quickly arose have also been an important success factor. The interfaces between the various sub-projects and those with Edvard Grieg gradually created a number of challenges.
Partners’ role and involvement
The government’s role
According to the operator's staff, the main problem with this process was that it took place in two rounds and therefore caused some delay in the schedule. The result was, however, an acceptable solution, although several of those interviewed for the study believe that there had been solutions that were even slightly better.
Learning points
This probably reflected a combination of the generally high level of costs in the industry, conservative estimates and an expensive development solution in relation to the reserve base. The operator's originally recommended concept has significantly more robust finances in relation to the reserve basis and the uncertainty this gave.
Technical maturation and quality
- New solutions versus standardisation
- Technology qualification
- Main topsides layout
- Application of safety principles in the planning phase
- Weight control
- Basis for cost estimating
- Decision assumptions
The evaluation of the Goliat, Ivar Aasen and Aasta Hansteen projects showed that the safety approach in the early phase largely used the same methodology, regardless of the operator and development solutions. Until the PDO, little attention was paid to weight estimation in the Goliat project.
Project execution
- Expertise and organisation
- Concept selection process
- Execution strategy
- Prequalification and selection of contractors
- Contract follow-up and project management
- Risk management
- HSE in the project execution phase
There was a clear awareness in the project that the quality of the input of the decision (Feed) was poor, but nevertheless the desire prevailed not to spend more time before the submission of the ZOP. As a result, the project was left without a "Norsok guarantor" before the detailed engineering and procurement process ran properly.
Production and operation
HSE in the production phase
The platform faced some minor challenges in the initial phase, which affected production, but which have not had any impact on HSE. The decision to install its own main generator was made after PSA audited the design of the rig's electrical system and.
Supervision and follow-up
Self-regulation in a project
Partnership’s control of a project
Government supervision of the activities
Development of plans, costs and economics over the life of projects
Priorities, capabilities, technological developments and other unclear conditions during the implementation phase increased the scope of work with associated costs and delays. Late/lackluster prioritization and low productivity low staffing accelerated scope expansion.
Industry perspective
Position of Norwegian industry
Operators must take full EPC responsibility and, given the industry's experience to date, contracts in the Far East should be limited to pure manufacturing contracts (see Johan Sverdrup). In the wake of this process, the NCP experienced more technological innovations, which laid the foundation for developing discoveries that were considered non-commercial while improving recovery from production fields.
EPC as a contract strategy
Its top five international markets by turnover in 2017 were the UK, Brazil, the US, Angola and South Korea, with the latter being the largest. These technological advances have also laid the foundation for the growth of international traffic in the overseas supplier industry.
Europe (Norway) versus Asia
The decisive factor for Norwegian competition appears to be the capacity available in the market, as contract continuation and capacity have proved to be the biggest cost drivers in previous projects. This means that, when planning the work in the next phase of the project, all available methods should be used in conjunction with good quality plans and carefully prepared risk analyzes with accompanying mitigating measures, which ensure that all the challenges normally faced in the respective stage are well thought out, planned and taken into account.
Overview of operator’s work process and methodology
Requirements at the level of documentation and the operating system to be used must be clarified early enough for inclusion in the terms for all important deliverables. The division of responsibilities between project and operations must be crystal clear from mechanical completion of the first system until all systems are handed over to operations.
Partners and the partnership’s responsibility
Requirements for the level of completion at handover must be established and never deviated from if this poses a safety risk. The main rule in the production phase: shutdown if there is doubt about safe operation.
Government’s role
It focuses attention on project execution in the various companies and informs the NPD, so that its follow-up can be improved in the early phase. The PSA ensures that HSE requirements are met with an acceptable level of risk from concept selection, through project development and into the production phase.
Supplier industry in general
Much of the increase since the PDO reflects a weaker NOK exchange rate compared to the rate forecast in the PDO. However, there are two very different solutions – the Norwegian model, with the quarters in front, and that.
