Maersk Oil is implementing numerous innovative initiatives across the organisation to help reach a Cost Transformation target for 2016 and beyond. From streamlining the supply chain to using custommade tools to repair buoyancy modules, the cost-savings realised thus far are promising.
When oil prices decline, the will to embrace innovative ideas can wane. On the one hand, innovative approaches and technologies can help us achieve the necessary cost cuts to remain profitable. On the other, it can cost a lot of money upfront and often takes a long time to implement. Despite this ‘doing more with less’ challenge, “Maersk Oil has seen many positive results from innovative technologies and initiatives across the organisation that unequivocally support our Cost Transformation without sacrificing quality or safety,” says Troels Albrechtsen, Vice President of Corporate Technology and Projects.
What’s better is these new programmes reduce costs on core activities. In theory, this means that when the oil price improves, operational expenditure should remain low, and the company will not return to more costly activities and habits.
From streamlining our supply chain in Qatar, to using custom-made tools to repair buoyancy modules in the North Sea, here are just a few innovations recently deployed across the organisation.
Staying buoyant in the UK
Maersk Oil UK saved millions by using a custom-made tool to repair buoyancy modules on the Global Producer III.
In late 2015, Maersk Oil UK needed to replace some buoyancy modules on a riser system on the Global Producer III, something that had not been done before and required a unique engineering solution.
“The buoyancy modules allow the riser to float in an ‘S’ shape to provide flexibility and movement with waves. Rather than replace the whole riser system, which would’ve been time consuming and expensive, the team found an alternative way to fix the issue,” Dan Warrick, Head of Subsea F&P explains. They collaborated with SubC Partner to develop a custom tool which connected to an underwater Remotely Operated Vehicle (ROV). “The tool had to work underwater while connected to the ROV, dock onto the riser, cut the old buoyancy module loose and remove the inner clamp which connected the module to the riser. The ROV then had to bring the old parts to the surface, pick up the new clamp, and buoyancy module and go back down to the riser to allow the tool to install the new parts,” Dan says.
This single tool needed to perform a variety of tasks and had to be developed quickly. The team started with a blank sheet of paper and ended up with a fully functioning tool in six months. A full riser system replacement would’ve taken upwards of a year to complete, cost around USD 25 million, created unnecessary risk exposures from diving work and resulted in significant loss of production. Instead, the problem was fixed for around a sixth of that price and required only two and a half weeks of offshore work, with no personnel in the water.
Repair restoration in Denmark
Maersk Oil Denmark expects to save over 1,000 man hours per year by streamlining offshore tele-communications equipment repair.
In late 2014 the Danish Business Unit (DBU) commenced a lean efficiency programme to address issues with the management of offshore telecommunications equipment repair. “There’s lot of steps when sending offshore telecommunication equipment, such as radios and headsets, onshore for repair,” explains Helle Due Klitgaard, Planning and Performance at Halfdan.
“Maintenance was troublesome because offshore personnel were often unable to locate the correct material numbers and as a result sent it for repair with incorrect identification. The issue was compounded by the sheer volume of equipment being sent to the vendor for repair. They would spend a lot of time examining the equipment to identify the error and matching it to the correct service order.”
Helle collaborated with Jacob Laas Glass, Senior Instrumentation Engineer, to discuss solutions to the problem. It was decided to issue metal boxes with material numbers, pictures and descriptions of all equipment to provide clarity. A system to register the types of errors was also implemented. The information is shared with the vendor and allows them to regularly report all repairs back to Maersk Oil. With the help of the vendor, the warehouse and offshore personnel, the administrators implemented the new system across all Danish assets in October 2015, less than one year after inception.
The results have been positive and expansive, including reduced equipment repair time, better tracking of equipment, accurate registration of repairs, reduced warehouse time and transparent reporting from the vendor. There are now 24 boxes in total, three on each platform in the DBU. It has also been estimated that the system will save Maersk Oil over 1,000 man hours and significant annual costs.
“Introducing innovative cost saving tools and techniques and changing the mind-set within the organisation is no easy feat, but it is necessary to keep systems efficient and reach our Cost Transformation targets.”
Lean Six Sigma in Qatar
Finn is applying years of knowledge and experience he has gained from implementing similar programmes across other Maersk Group businesses around the world.
Maersk Oil Qatar has saved millions through several Lean Six Sigma initiatives.
Finn Holm Dieckmann, Cost Transformation Lead at Maersk Oil Qatar, is leading the application of Lean Six Sigma principles for a range of improvement initiatives in Qatar. Initiatives have already proven successful in Supply Chain, Production Well Testing, HSE, Finance and Purchasing.
Finn describes one such initiative: “The Supply Chain team introduced new control measures in purchasing, to ensure all orders went through a more rigorous review for quality, relevance, availability, price and timing. The new controls also provide the chance to check what inventory is available, creating better transparency.” The team has already prevented spend of USD 1.8 million in just four months by stopping unnecessary purchases.
Within Production Well Testing, a similar project created better visibility in the process and resulted in a reduction in offshore well testing. The team was able to reduce the number of well tests by several hundred per year, without impacting reliability or safety, with an anticipated savings of around USD 500,000 annually. “These are just two examples from many of how applying Lean Six Sigma principles gives clarity on resources, challenges and opportunities for improvement within a standard process,” says Finn.
Faster shutdowns in Kazakhstan
Maersk Oil Kazakhstan produced an additional 100,000+ barrels of oil equivalent by improving the Shutdown Planning and Execution Procedure.
In Q3 2015 Maersk Oil Kazakhstan successfully and safely completed a full field shutdown in just five days, nine days faster than previous shutdowns. This was the result of a newly issued revision of the Shutdown Planning and Execution Procedure, which aligns with global procedures and better coordinates all mobilised work teams.
The revised procedure introduces strict requirements for each stage of the shutdown as well as a clear understanding of tasks and responsibilities between and within the teams. These improvements mean better planning of services and contractors and longer lead times on materials ordering, which reduces shipping costs.
Moreover, the field shutdown optimisation produced an additional 100,000+ barrels of oil equivalent over the nine days which would’ve previously been shut down. Maersk Oil Kazakhstan plans to use the revised Shutdown Planning and Execution Procedure for all future shutdowns.
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