Operational Excellence
Peter J. Parry | Managing Partner Global Global Oil & Gas Consulting Bain & Company, Inc. | 40 Strand | London | WC2N 5RW | United Kingdom +44 7733 302 300
[email protected] | web:www.bain.com
Upstream Operations Excellence: Excellence: trends and implications NEW UPSTREAM
•
The large Upstream producer competitive landscape is shifting to profitability cost and operational operational metrics metrics away from volume growth growth
Source: ExxonMobil 2014 Analyst Meeting
The past decade has seen the upstream majors fall back NEW UPSTREAM
MAJOR IOC PRODUCTION AND UPSTREAM INVESTMENT 2002-2013
Cumulative Capex FY2002-FY2013 = $1.43T
Major IOCs included: BP, Chevron, ConocoPhillips, ENI, ExxonMobil, Shell, Statoil, Total
Mature fields challenge and EOR potential: Fields aged over 10 years dominate global liquids production MATURE FIELDS
Source: Rystad Energy U-Cube Note: Based on 2012 liquid production including crude, condensate and NGLs
Instability and change continues to impact the industry INSTABILITY
SELECTED INCIDENTS IMPACTING O&G INDUSTRY NON-EXHAUSTIVE
Scotland Speculation on O&G industry based on independence
Alaska: 2012 - Sh 2012 Shel elll exploration rig slips moorings
Libya/Egypt:
France UK 2011 – Furth Further er changes to fiscal regime hit mature field economics
2012 –ban on hydraulic fracturing
2010-11 ‘Arab spring’ uprisings impact oil and gas infrastructure and activity
Violence
Kazakhstan 2014 - fines by government due to production halt/gas leaks
Commercial Environmental Supply
Ukraine
US
Algeria:
Ongoing developments in shale gas and oil redefine industry supply
Nigeria: 2014 Large-scale theft by thieves
Gulf of Mexico : 2010 20 10 - of offs fsho hore re drilling moratorium following Macondo incident
2014 Conflict and renewed cold war
2013 – In Amenas Amenas gas plant attacked
ME and Syria : – onAzerbaijan
On-going African Exploration Boom
2012 – civil war war leads going contract to exit of IOCs
renewals
Syria: Venezuela 2014 Series of protests, political demonstrations, and civil unrest
Source: Bain analysis, Literature search
2012 – civil war leads to exit of IOCs
Argentina: 2012 nationalisation of Repsol stake in YPF
Nigeria 2013 Law on fines on operators responsible for oil spills
Australia: 2012 – infl inflati ation on hits NWS LNG economics
Shortage of talent remains an industry challenge TALENT SHORTAGE
% OF LARGE NOCS STATING AS KEY RISK
NORTH SEA: % STATING AS KEY CHALLENGES IN NEXT 12 MONTHS
• Many oil province provinces s will grow by at least least 50% 50% in the next next 20 years • Shift to unconventi unconventionals onals and new new frontiers frontiers requires new capabi capabilities lities • 50% of staff staff with over 25 years experience experience will will have have left the the industry industry in 7-8 7-8 years years • Requirements Requirements to ensure use of national national staff and and content content will will become become increasingly increasingly significant
Asset Full Potential: Delivery at an individual asset level is ever more vital, four areas can make a big impact ASSET FULL POTENTIAL
DELIVERING ASSET FULL POTENTIAL
1. Capa Capabi bili litie ties s - People - Proc Proces esse ses s
2. Busine Business ss Perf Perform ormanc ance e - Financ Financial ial Impact Impact - Emis Emissi sion ons s
3. Produc Productiv tivity ity and Poten Potentia tiall - Consis Consisten tency cy and and uptime uptime - Reco Recove very ry fact factor or
4. Stakeh Stakehold older er Manag Manageme ement nt - Delive Delivery ry vs. expect expectati ations ons - Engagement, Engagement, support support and and learnin learning g
1. Capability: Building a baseline picture of people and process strength along with a development plan is vital ASSET FULL POTENTIAL
OPERATIONAL CAPABILITY TENABLE AREAS
Wells
Well engineering
Well planning & approvals
Drilling operations
Completions
Well work overs
Production Operations
Production management & optimization
Maintenance planning & execution
Integrated activity planning
Processing storage and transportation
Land, marine and aviation logistics
Reservoir Management
Reservoir appraisal and development
Reservoir Modeling
Well & reservoir surveillance
Technology application & EOR
OBO
OBO strategy
OBO operating model
Technology
Technology strategy
Technology application
Technology performance feedback
HSE
HSE Management Systems
Behaviors & Culture
Performance Management
Legend Weak
Tenable
Strong
World-class
Drilling technology
OBO management resourcing & capability
Occupational Health
People & Process Safety
Environment
