Cost Optimization in Mega Oil & Gas Projects

2021 ◽  
Author(s):  
Mohamed Ali Awwad ◽  
Ahmed Marei Al Radhi ◽  
Manoj Kumar Panigrahy ◽  
Suraj Kumar Gopal
Keyword(s):  
Life Cycle ◽  
Project Management ◽  
Cost Reduction ◽  
Oil And Gas ◽  
Life Experience ◽  
Continuous Process ◽  
Cost Optimization ◽  
Real Life ◽  
Oil And Gas Industry ◽  
Gas Industry

Abstract Cost optimization is a continuous process in any business to drive cost reduction, while maximizing business value. Currently, cost reduction is being adopted by Oil & Gas firms as a core strategy, in order to maximize the profit margin. With global economies facing recession and wide fluctuations in energy demands, it seems low costs is becoming the safety valve for Oil & Gas companies. The oil and gas industry is under tremendous revenue and costs pressures. The indication is that globally, the oil and gas industry has experienced a huge drop in revenue in recent past. Some exploration and production oil firms have either halted or slowed down their production operations. Companies that manage their costs effectively will gain a competitive advantage. The oil market has less maneuverability with oil cartels determining the international price of oil. Project Costs are the major cost drivers of the Life Cycle costing & so Cost optimization of all mega Oil & Gas Projects became necessitated. Mega Oil & Gas projects, especially at ADNOC Offshore locations, are complex, labor-intensive and located inside Arabian Sea. These workforces are mainly from south Asian countries and so offshore sites are often subjected to the constraints of insufficient labor. These projects face multiple challenges in project management like severe weather, geographical conditions, insufficient work spaces etc. in addition to labor forces. Cost reductions are accomplished through optimization of its strong and robust project management organization, management of uncertainties, high quality engineering, and implementation of value engineering during engineering, procurement, construction and commissioning (EPCC) phases and effective management of changes along with key Stakeholders expectations throughout the project life cycle. This paper is based on the authors’ real life experience in implementation of many complex and mega upstream Oil & Gas projects with ADNOC Offshore who is currently leading multiple projects at DAS & Zirku islands. The most workable methods in this regard are listed here below.

New Well Intervention Means as an Answer to Offshore Minimalist Platform Concept: A Breakthrough from Mahakam, Indonesia

2021 ◽  
Author(s):  
Risal Rahman ◽  
Reyhan Hidayat ◽  
Pratika Siamsyah Kurniawati ◽  
Rantoe Marindha ◽  
Gerardus Putra Pancawisna ◽  
...  
Keyword(s):  
Oil And Gas ◽  
Cost Optimization ◽  
Oil And Gas Industry ◽  
Project Planning ◽  
Gas Industry ◽  
Safety Issues ◽  
Coiled Tubing ◽  
Remote Operation ◽  
Innovation And Technology ◽  
Hazardous Zone

Abstract Nowadays oil and gas industry are encouraging the independents and majors to take a fresh look at the technology and concepts required to develop marginal shallow water fields using a minimal platform approach. Innovation on well intervention means (lighter, smaller and less footprint) that fit for Offshore Minimalist Platform (OMP) is needed, including optimizing time and cost during well intervention activities in OMP. To achieve the objectives, well intervention innovation and technology are the main focuses. Intervention activities commonly done on campaign basis with several units (slickline, wireline, coiled tubing, testing) shall be integrated in a safe manner. The approach of integration shall signify these points:Identifying potential jobs in OMP to be done by well intervention methodsIdentifying necessary well intervention means and methods to support the jobs (combo unit, micro coil, hazardous zone redefinition, remote operation)Creating project planning and schedulingPerforming site visit and risk assessmentImplementation and operational executionEvaluation of overall project execution result The following results were obtained after the integration performed:No major safety issues during operationExemplary method and risk assessment for well intervention activities which can be applied for next campaignsTrials on well intervention new units and method (combo unit, micro coil, hazardous zone redefinition, remote operation), were safely performed with some optimization100% success ratio60% on supply boat arrangement35% efficiency in N2 consumption for CT operation45% efficiency in diesel consumption20% - 40% efficiency in Rig Up Time28% less in Job Cost compared to conventional unit These innovations are proven as reliable method to answer OMP challenges with main advantages on footprint and cost optimization. Through this paper, we would like to share lucrative well intervention breakthrough and innovation in OMP with measurable milestones.

A conceptual model for project management of exploration and production in the oil and gas industry: The case of a Brazilian company

2013 ◽  
Vol 31 (4) ◽  
pp. 589-601 ◽  
Author(s):  
Jesus Leodaly Salazar-Aramayo ◽  
Roseane Rodrigues-da-Silveira ◽  
Mariana Rodrigues-de-Almeida ◽  
Tereza Neuma de Castro-Dantas
Keyword(s):  
Project Management ◽  
Conceptual Model ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Gas Industry ◽  
Exploration And Production

The Impact of Project Management Methodologies on Project Success

2019 ◽  
pp. 418-437
Author(s):  
Hazem Abdulla ◽  
Mukhtar Alhashimi ◽  
Allam Mohammed Hamdan
Keyword(s):  
Project Management ◽  
Oil And Gas ◽  
Project Success ◽  
Qualitative Interviews ◽  
Oil And Gas Industry ◽  
Success Rates ◽  
Gas Industry ◽  
Survey Responses ◽  
The Impact ◽  
Over Time

This study assessed the impact of project management methodologies (PMMs) on project success in the oil and gas industry in the Kingdom of Bahrain. It also explored the different project methodologies used along with their strengths and weaknesses. Quantitative approach with the support of qualitative interviews was used to achieve the objectives of this research. A total of 95 survey responses were received and 17 interviews were conducted. Projects in the oil and gas industry are more about safety than speed, and hence, the use of comprehensive methodologies and applying the relevant methodology elements are important for oil and gas projects. Furthermore, the companies in the oil and gas industry in Bahrain have to pay more attention to their project management methodologies and get it evolved and improved over time to achieve higher project success rates.

Creating the circular advantage for the oil and gas industry

2016 ◽  
Vol 56 (2) ◽  
pp. 585
Author(s):  
Christopher Coldrick ◽  
Rowan Fenn ◽  
David Sahota
Keyword(s):  
Oil And Gas ◽  
Service Providers ◽  
Real Life ◽  
Oil And Gas Industry ◽  
Repair Process ◽  
Materials Management ◽  
Gas Industry ◽  
Management Processes ◽  
Oil And Gas Companies ◽  
The Impact

Maintenance, repair and operating (MRO) materials typically represent 15–20% of the operating costs for a mature oil and gas asset. Of this, a substantial proportion is comprised of high-value repairable equipment such as motors, compressors and pumps. This equipment is often at bottlenecks in the production process and so the impact of materials cost on profitability is magnified by the production ramifications of an outage. Effective management of this equipment is key to the sustainable, profitable operation of any oil and gas asset, and is key to improving the competitiveness of the Australian industry. Oil and gas companies are adopting a variety of models to handle the repair process, with varying degrees of success. Challenges include: poor materials availability and lack of traceability; complex infield materials management processes resulting in costly wastages; difficulty in managing consistency, suitability and specifications of repairs; high cost for those undertaking the repairs; and, correct allocation of responsibility and risk in the materials management process. Developed in collaboration with Australian oil and gas operators, with input from case studies outside the oil and gas industry, this extended abstract discusses the roles and opportunities for the circular economy in helping companies to meet their sustainability and profitability targets. Using several real-life examples, it makes recommendations for vendors, service providers and operators that can have material impact on the profitability of the industry.

scholarly journals Stochastic Simplex Approximate Gradient for Robust Life-Cycle Production Optimization: Applied to Brugge Field

2019 ◽  
Vol 141 (9) ◽  
Author(s):  
Bailian Chen ◽  
Jianchun Xu
Keyword(s):  
Life Cycle ◽  
Net Present Value ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Optimization Techniques ◽  
Production Optimization ◽  
Operating Conditions ◽  
Optimization Under Uncertainty ◽  
Theoretical Argument ◽  
Gas Industry

In oil and gas industry, production optimization is a viable technique to maximize the recovery or the net present value (NPV). Robust optimization is one type of production optimization techniques where the geological uncertainty of reservoir is considered. When well operating conditions, e.g., well flow rates settings of inflow control valves and bottom-hole pressures, are the optimization variables, ensemble-based optimization (EnOpt) is the most popular ensemble-based algorithm for the robust life-cycle production optimization. Recently, a superior algorithm, stochastic simplex approximate gradient (StoSAG), was proposed. Fonseca and co-workers (2016, A Stochastic Simplex Approximate Gradient (StoSAG) for Optimization Under Uncertainty, Int. J. Numer. Methods Eng., 109(13), pp. 1756–1776) provided a theoretical argument on the superiority of StoSAG over EnOpt. However, it has not drawn significant attention in the reservoir optimization community. The purpose of this study is to provide a refined theoretical discussion on why StoSAG is generally superior to EnOpt and to provide a reasonable example (Brugge field) where StoSAG generates estimates of optimal well operating conditions that give a life-cycle NPV significantly higher than the NPV obtained from EnOpt.

The role of project management office in developing knowledge management infrastructure

2020 ◽  
Vol 27 (10) ◽  
pp. 3261-3287 ◽  
Author(s):  
Hani Arbabi ◽  
Mohammad-Javad Salehi-Taleshi ◽  
Kian Ghods
Keyword(s):  
Knowledge Management ◽  
Project Management ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Technical Support ◽  
Practice Management ◽  
Second Phase ◽  
Gas Industry ◽  
Content Type ◽  
The Relationship

PurposeKnowledge management (KM) is regarded as an essential factor in project-based organizations (PBOs), leading to organizational learning across projects. Over recent years, most PBOs have inserted project management offices (PMOs) into their hierarchical charts to manage their projects much more coherently. These offices can correspondingly provide KM facilities in PBOs. Thus, this study aimed to analyze the relationship between PMO functions and KM infrastructure, as KM enablers in organizations, in Iranian oil and gas upstream PBOs.Design/methodology/approachA two-phase quantitative survey strategy was exercised in this research. The first phase was to investigate the relationship between PMOs and KM infrastructure and to prioritize PMO functions and KM infrastructure based on their existing implementation/establishment status in Iranian oil and gas upstream PBOs. The research participants, identified through the website of the National Iran Oil Company (NIOC), were comprised of 46 oil and gas upstream PBOs which applied for exploration and production (E&P) certificate in Iran in 2016 and 2017. Accordingly, a total number of 46 questionnaires were submitted to the aforementioned companies with a return rate of 41 cases. The second phase was fulfilled questioning 19 Iranian oil and gas industry experts to determine the one-to-one effect of PMO functions on KM infrastructure and to verify the first-phase results.FindingsThe results indicated a strong relationship between PMO functions and KM infrastructure. This relationship was significant with regard to “practice management” and “technical support”, having the most considerable connections with KM infrastructure. According to the first-phase results, the main functions of PMOs in Iranian oil and gas industry were “practice management” and “technical support”. Considering KM infrastructure, “structure” showed the lowest mean value while “culture”, “human resources” and “processes and procedures” obtained the highest scores. The results also demonstrated that PMO functions could lead to more improvements in “processes and procedures”, as a sub-component of KM infrastructure, compared with other sub-components. Furthermore, the oil and gas industry experts believed that “organizational culture” in KM could be shaped by most of PMO functions.Originality/valueThis study fulfilled the need for exploring the relationship between PMO functions and KM since academic literature lacked a thorough investigation, to the best of authors' knowledge, pertaining to the effects of PMO functions on KM development in oil and gas PBOs.

scholarly journals Theoretical and practical aspects of assessment of innovative activity in oil and gas enterprises

2020 ◽  
Vol 13 (4) ◽  
pp. 531-540
Author(s):  
M. V. Rybin ◽  
D. S. Lobov
Keyword(s):  
Life Cycle ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Innovative Activity ◽  
Gas Industry ◽  
The Innovative Management ◽  
And Performance ◽  
Key Indicators ◽  
Oil And Gas Companies ◽  
Oil And Gas Enterprises

Analysis of theoretical and practical aspects of assessment of innovative activity at national and foreign oil and gas enterprises revealed the necessity of improvement of the existing tools which include the lists of key indicators of efficiency and performance applied within the innovative development programs of the Russian companies. Thereby the authors analyzed national and foreign research paying the most serious attention to theoretical aspects of innovative activity assessment. Among them of greatest interest is the complex approach to application of metrics in scientific and technical development of a company. The authors have also studied the conceptual apparatus and the main terms for the problems under consideration. As a result, the research confirmed the idea that the practice of applying the lists of key indicators of innovative activity in oil and gas industry does not coincide with the results of academic works and the innovative management theory: the current methods are primarily aimed at assessment of the results of innovative activity, several stages of the life cycle of creation of innovation are not subject to monitoring. At the same time lists of key indicators of innovative activity make it possible for the company’s management to estimate economic and resource effects of innovations which corresponds to strategic interests of oil and gas companies.Lists of indicators of efficiency and performance of innovative activity can be improved by means of national and foreign research. It is important to involve more metrics which make it possible to monitor all the life cycle of creation and implementation of innovative solutions.The results of the study can be used as the basis for further research on improvement and development of the lists of key indicators of innovative activity of oil and gas companies.

scholarly journals Economic Impact and Risk Assessment of Sand and Dust Storms (SDS) on the Oil and Gas Industry in Kuwait

2019 ◽  
Vol 11 (1) ◽  
pp. 200 ◽  
Author(s):  
Ali Al-Hemoud ◽  
Ali Al-Dousari ◽  
Raafat Misak ◽  
Mane Al-Sudairawi ◽  
Adil Naseeb ◽  
...  
Keyword(s):  
Risk Assessment ◽  
Project Management ◽  
Economic Impact ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Dust Storms ◽  
Economic Losses ◽  
Gas Industry ◽  
Sand Encroachment ◽  
Damaging Effects

There is a lack of published research on the economic effect and the risk associated with sand and dust storms (SDS) worldwide. The objectives of this study are to estimate the economic impact of SDS on the oil and gas industry in Kuwait, to estimate a risk index for each loss, and to recommend a sustainable system for the mitigation of the damaging effects and economic losses of infrastructures. Hot spots of wind erosion, wind corridors, and dust frequency and severity formed the basis to locate the most susceptible oil and gas fields and operations. Ten sectors with potential loss vulnerabilities were evaluated: exploration, drilling, production, gas, marine, soil remediation, project management, water handling, maintenance, and research and development. Sand encroachment, although not a sector per se, was also considered. The results indicate that sand, and to lesser extent dust, are damaging and costly to the oil and gas infrastructure of Kuwait, with an economic cost estimation of US$9.36 million, a total of 5159 nonproductive lost hours, and 347,310 m3 of annual sand removal. A risk assessment identified three sectors with the highest risk indices (RI): drilling (RI = 25), project management (RI = 20), and maintenance (RI = 16). Sand encroachment also constituted a high risk (RI = 25). Mitigation of sand storms using a hybrid biological–mechanical system was shown to be cost-effective with an equivalent saving of 4.6 years of sand encroachment. The hazard implications of sand storm events continue to be a major concern for policy-makers given their detrimental economic impacts, and require that government officials wisely allocate investment budgets to effectively control and mitigate their damaging effects.

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