BP North Sea business update › rus › content › download › 22778 › 158708 … · upgrade...
Transcript of BP North Sea business update › rus › content › download › 22778 › 158708 … · upgrade...
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1
BP North Sea business update
27th November 2014
UK-Norway Oil & Gas Technology Partnerships
SE
CT
ION
DIV
IDE
R
Tim Smith, Vice President – Communications & External Affairs
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UKCS basin-wide outlook
Production Operating cost
Exploration activity Project investment
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Keeping the UKCS competitive
UKCS Sanctioned
UKCS Unsanctioned
Non UKCS Projects
NPV
Bubble size proportional to total Capital
UKCS projects in BP portfolio
IRR
UKCS vs. other mature basins
• Mature North Sea basin faces challenges
• BP UKCS projects need to compete for global resources
– Materiality (NPV) and Quality (IRR)
Source: data and peer group taken from the Wood Mackenzie Exploration Service mature basins
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Wood Review
• Agreed objective of Maximising Economic Recovery (MER)
from UKCS
• Need for greater resourced and more proactive regulator
• Significantly improved asset stewardship
• Far greater constructive collaboration between operators
• Six industry strategies
Industry
New
regulator:
Oil and
Gas
Authority
• Exploration strategy
• Asset stewardship strategy
• Regional development strategy
• Infrastructure strategy
• Technology strategy
• Decommissioning strategy
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Fiscal review • Announced by HM Treasury in December 2013:
.
“To ensure that the UK’s tax treatment of the
UKCS continues to incentivise economic
recovery as the basin matures”.
• Consultation launched in July.
• Industry requested action on:
- Headline rate
- Single uniform capex allowance
- Cashable tax credit for exploration
- PRT
• Initial report at Autumn Statement, December.
• New tax legislation: post 2015 general election.
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BP North Sea strategy
6
• Risk reduction
• Quality portfolio
• Area development
planning
• Production efficiency
• Renewal of existing
infrastructure
• New wells
• EOR
Focus Maximise the Base
• Major Projects
• Exploration
• Resource Appraise
• Relationships
Invest for the Future
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High value upstream assets
Focus
• Quality portfolio following selective divestments
• Increased equity in operated assets
• Area development planning, e.g. Valhall
Renewal of existing infrastructure
• Offshore – Valhall, Andrew, Magnus & ETAP
• Onshore - SVT & FPS
High value projects
• Kinnoull
• Quad 204
• Clair Ridge
Continued exploration and appraisal
• 27th & 28th round (UKCS) and 22nd round (NCS)
• Snadd and Vorlich discoveries
• Clair appraisal wells
Key - Areas
Norway
Shetland
Central NS
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Clair field – 40 yrs young
‘74 ‘77 ‘06 ‘16 ’50 ‘96 Appraisal wells & seismic Appraisal wells & seismic
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Life Extension Projects
2014
1982 ETAP Magnus
Scope Increased bed space;
critical OE
improvements; integrity
management scopes;
planned maintenance.
Accommodation
refurbishment/expansion;
upgrade drilling rig, replace
BOP; fabric maintenance;
power generation; repair.
Value Aimed to deliver OE of
90%; enable rate
adding well work;
protect proven
reserves.
Return to drilling; step-
change in platform
capability; helping
production to continue into
the next decade.
Spend £0.4bn gross £0.3bn gross
Status Define Execute
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Other work Projects
• Quad 204 Enhanced Oil Recovery (EOR); SVT Gas Sweetening; FPS Enhanced Gas Separate Project
(EGSP); Laggan Tormore condensate pipeline.
• Skarv Well Annuli Pressure Management (SWAPM); Valhall IP platform Crestal Gas Lift (CGL); Ula fire
and gas upgrade – P, Q & D platforms; Butch tie back to Ula.
Operations
• Marine gas oil provision (SVT, Aberdeen and possibly Hound Point)
- RFP expected March 2015.
• Marine consultancy (UK vessel assurance; marine HSE consultancy and general marine consultancy)
- RFP expected February 2015.
• UK North Sea platform supply vessel services 2015/16
- Sourcing strategy being agreed internally. Approach to market likely in 2015.
• Norwegian North Sea engineering, maintenance modifications
- RFP expected in January.
• Scatsta Airport licence holding
- Potential suppliers identified and RFP expected Q1 2015.
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North Sea technology needs
- Integrity management and validation
- Lower cost well access
- EOR in mature water flood fields
- Improving plant efficiency – current industry focus
- Water management
- Decommissioning
Existing BP innovation
Seismic imaging and monitoring of reservoirs
- Seabed Arrays over Valhall and Clair
Enhanced oil recovery
- Gas injection in Ula and Magnus
- LoSal™ water flooding built into Clair Ridge
- Polymer-capabale FPSO for Quad 204
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“Longer, deeper relationships with fewer suppliers”
BP Supply Chain Process Sp
en
d $
Criticality/Complexity
Supplier Engagement Matrix
- Develop long-term relationships
- Become customer of choice
- Leverage BP’s scale and spend
The way BP engages with suppliers is either:
- Direct contractual relationship
- Indirect relationship via 3rd parties
Category specialists cater for specific supply
chain sub-sectors
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Planning for the long term
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Questions?