Capital project management for offshore deepwater drilling

According to the OPEC World Oil Outlook 2008, upstream exploration and development costs for new supplies of oil and gas have more than doubled since 2000. Expectations are high that these costs will continue to increase in line with the rising costs of raw materials, oil rigs, platforms, storage facilities, pipelines and skilled labor. At the same time, the global drop in oil prices this past year has forced many oil and gas exploration companies to rethink their investment strategies and exercise constraint in committing to new projects, delaying some and cancelling others altogether.

Capital investment in oil and gas exploration and production projects is significant, and as many of the oil and gas fields currently in production near depletion, new sources have to be found. This has led many companies to venture into more remote offshore deepwater reserves.

Deepwater drilling is one of the toughest and most challenging production environments. Each drilling platform is unique. Companies must design, configure, construct and operate facilities in the harshest environments, whilst ensuring compliancy with industry standards governing work processes, health, human safety and the environment.  And platforms need to be robust enough to endure the severest conditions and operate for several decades with minimum downtime.  

For such a high risk and capital-intensive industry, project failure or late delivery of a drilling platform is not an option. Nonetheless, Booz Allen Hamilton^[1] report that more than 40% of capital projects (>$1Billion investment) overrun budget by more than 10%. This is unacceptable in challenging economic times.  Invested dollars must deliver on expectations.  One failed project-a problematic design effort, a platform plagued by equipment delays, or an otherwise on-track project slowed simply by data miscommunication-can potentially jeopardize a project's success and a company's long term goals.

This is why oil and gas companies, like their peers in the automotive, aerospace and defense industries, are mitigating risks and ensuring return on investment by relying on Product  Lifecycle Management applications including Capital Project Management (CPM), 3D design and virtual simulation applications. Working with these applications, engineers can reduce the human and financial risks associated with a variety of operations-related tasks. For example, leveraging the benefits of 3D design and virtual simulation, engineers can carry out real-time design revisions, equipment clash verification, dynamic construction and training simulation and data control-all before any site work begins.

Capital project management enables all project stakeholders-from owners / operators to engineering procurement and construction (EPC) companies, to equipment suppliers, operations and maintenance managers and others-to access a unique repository of project data in a collaborative environment, where asset data evolves coherently and systematically in real-time throughout the life of the project and beyond. This dramatically increases the productivity of globally distributed users reducing non-productive time (NPT) while ensuring compliancy and improving efficiency.

CPM Dashboards provide managers with real-time and accurate key performance indicators (KPIs), enabling necessary corrective action to be taken in a timely manner.

Other advantages of CPM applications include:

• Enhanced decision-making with tighter project governance, sourcing and intellectual property (IP) management

• Increased accuracy of technical document and complex content management
• Optimized work processes for health, safety and environment concerns
• Enhanced  collaboration and data transmittal between owners/operators, EPCs, suppliers and consultants
• Higher efficiencies based on integration with asset management, Enterprise Resource Planning (ERP), and scheduling applications

For information on Dassault Systèmes PLM solutions for Energy, visit our website: www.3ds.com/energy, our interactive showroom interactiveshowroom.3ds.com/energy, or contact the author patricia.doherty@3ds.com.

Reference:

[1] Booze Allen Hamilton Report "Capital Project Execution in the Oil & Gas Industries"