Every project is different and comes with its own unique challenges but in a world where the cost of oil and gas development in the UK Continental Shelf and other mature sectors around the world has risen substantially in recent years, we have developed a set of golden rules which provide the industry with a best practice approach to delivering value in brownfield developments.
Rule 1: Business case
Brownfield projects are subject to more execution risks than greenfield so the business case needs to be robust with regards delays and increases in cost.
Rule 2: Strategic fit
Early in field life when production is high, all focus will be on maintaining a high operating efficiency. If a brownfield project is being implemented to improve the operating efficiency then this is a good fit. Late in life, the focus tends to be on maintaining the integrity of an ageing asset. Tying back a new field and trying to extend the life of an old asset may not be a good fit.
Rule 3: Value ranked
Once assured, the project should be ranked against the workscopes such as integrity, drilling and maintenance to ensure bed space will be available. This is an opportunity cost which must not be underestimated.
Rule 4: Jacket and topsides structure
Early in the project the capacity of the topsides and jacket to bear additional weight must be understood to allow a high level assessment of the project feasibility, taking into account likely growth in weight during the design process. This seems like an obvious step however it is only at the end of detailed design that the weight of a brownfield project is fully understood.
Rule 5: Alternatives
It is also good practice to consider alternatives to brownfield and minimise the scope of the project. There are several examples where unnecessary projects have been carried out - if a project can be deleted from the ‘to-do list’ or can be reduced in scope, this frees up the asset to carry out more valuable work.
Rule 6: Bed space capacity
It is essential that an accurate assessment is made of the bed space and that senior management commits to this allocation, taking into account the opportunity cost this represents. If additional accommodation is needed this must be resourced and committed to at the point of project sanction.
Rule 7: Definition
Greenfield projects are normally sanctioned at the end of FEED, but for brownfield projects the full scope is usually only fully understood at the end of detailed design. The aim should be to have completed most of the detailed design at the point of project sanction. This will require careful planning and discipline but it is worth striving for as it will significantly reduce risk during the project delivery.
Rule 8: Host systems
Project managers should consider the asset’s host systems to ensure capacities, condition and connections have been confirmed before sanction. In some cases performance tests should be carried out to confirm the capacity has not deteriorated with time.
Rule 9: Organisational capability
Organisational capability must match project complexity. Our approach is to use lean teams to speed up communications and reduce costs. In particular, sufficient resources must be applied to interface with the operations team and their technical authorities who will have to approve the designs.
Rule 10: Performance management
The final rule is to define and plan the performance management method for execution – from weekly progress meetings to deep-dive reviews.
Ultimately these rules are about assessing project preparedness and driving maximum value from investment. They are the key to unlocking value in existing assets through project identification, selection, definition and execution in an operational context.