The Future of North Sea Project Managers - A Balancing Act of Skills -Derek Allan - Shell E&P

What Have I Been Asked to Talk About

An Insight into Decommissioning

The Future of North Sea Project Managers

Collaboration for a Better, More Competitive Future

Decommissioning – A Liability Business

Decommissioning is a LIABILITY Business

For the Operators and UK Government its Bad Business

For Everyone Else – Its Great Business!

Where we need to be – A Great Business to be Part of!!!

Industry Wide Decommissioning in the UK will include: 470+ installations 10,000km of pipelines 5,000 wells 15 onshore terminals

(Source: Decom North Sea – May 2014)

Decommissioning – The Size of the Pie

Associated Expenditure Expected to Reach: £40bn - £70bn over the next 25 years

(Source: Oil and Gas UK)

£54bn by 2060

(Source: Wood Mackenzie)

Decommissioning Forecasts in the UK : 140 Fields could cease over the next 5 years Spend to increase by 50% by 2019 Spend on Decommissioning will overtake spend on

Development projects in 2019

(Source: Wood Mackenzie)

Decommissioning – The Size of the Pie

Decommissioning – What’s the Difference

Decommissioning Projects:

Project are Legally Obliged to Proceed – 100% Positive

Future Market Predictable – Uncertain Timing

Immature Market, with few projects Executed thus far

Scope Driven by What’s in place, Legislation and Execution Model

Asset Integrity Important to Support Post Production Activities

Traditional North Sea Projects:

Projects Need to Meet Investment Criteria/Hurdles

Future Workload Uncertain – Predominantly Market Driven

Very Mature Market – Has Evolved Since the 1960’s

Scope Driven by Technical and Commercial Drivers

Asset Integrity Important to Maintain Production

Decommissioning – Contrasting Drivers

Decommissioning Projects:

Reputation/Legacy

Safety Performance

Abandonment Expenditure

Stakeholder Relationships

Environmental Considerations

People Issues

New Technology/Expertise

Traditional North Sea Projects:

Profitability

Capital Expenditure

On-Stream Date

Lifetime Expenditure

Production

Availability/Reliability

Oil Price

(Safety is a Given)

Sensitive Human

Elements

Operational Phase Before Project

Working with Late Uncertain

ty

Flexibility Around

Timing

Complex Execution Interfaces

Stakeholder

Challenges

Immature Supplier Market

Decommissioning – Projects Dynamics

“ We Don’t Put Our Best People on it!”

“You Can Never Win!”

“ It’s Not Very Interesting!”

“ Low Technical Content!”

“ It Can’t be Done Safely!”

“ It’s Not that Sexy!”

“ The Margins are Low!”

Decommissioning – Fokelore

“ It’s not Very Exciting!”

“We’re Wasting a Lot of Money!”

“ It’s Just One Massive Brownfield Job!”

Decommissioning is a major piece of business on the horizon and will be with us for the next 25 – 30 years anyway

Decommissioning – Some Final Thoughts

Decommissioning is coming and it looks like it’s coming quicker than we would like - are we as an industry ready for it!!!

And we need to change the image – Decommissioning ‘A Great Business to Be Part of’!!!

The Future for North Sea Project Managers

A Move Towards More Decommissioning projects: Does That Mean we Need a Different Type of PM Are the Challenges the Same

A Mix of Projects: Do We Need to Train/Educate our PM’s

‘Commercial Awareness’ could be summed up as:

A Interest in the Business and an Understanding of the Wider Environment in Which an Organisation Operates

Commercially Aware

Collaboration From Two Aspects: Inside the Project Inside the Industry

Collaboration For a Better, More Competitive Future

Oil and Gas UK Safety Awards 2012

‘Workforce Engagement’

Collaboration - Inside the Project

Brent Delta

Dalbrack – Royal Deeside

Collaboration - Inside the Industry