DrillSafe – Industry Trends & Opportunities · DrillSafe – Industry Trends & Opportunities...

Working together for a safer world

DrillSafe – Industry Trends & Opportunities

Lloyd’s Register Energy - Drilling


Agenda

• Introduction Lloyd’s Register Energy

• Energy Market – Global view • Drilling Market trends

• Industry wide Challenges

• Example of Key Solutions

• Future proofing our Organization


How we started

Our heritage is genuinely historic • formed in 1760 in Edward Lloyd’s coffee house • to examine and ‘classify’ merchant ships according to their

condition

We have 250 years of global marine history • the world’s first ship classification society and this remains our

core activity today

…and over 100 years serving other industries across society • from energy, rail, food safety to power and manufacturing

Heritage an important part of our culture … and forward-thinking approach to our business


Lloyd’s Register today

• £1 billion turnover

• Over 9,000 employees worldwide

• Four business divisions:

• Marine

• Energy

• Rail

• Management Systems (LRQA)

• Three regions: Asia, EMEA (Europe, Middle East and Africa) and Americas


Our governance

• Organisation has new structure from July 2012

• New parent, Lloyd’s Register Foundation, a registered charity concerned with safety of life and promoting education and research

• Lloyd’s Register Group Limited (Lloyd’s Register) now heads operating group, 100% shares owned by the Foundation

• No external shareholders / non-profit distributing

• Lloyd’s Register Foundation compliant with UK Charities Act


Acquisition growth and partnerships are an important strategic factor for us extending our service platforms:

Expanding the Energy Business

2005 2008 2009 2012

Capstone RBMI

2013

Process engineering and safety

Plant integrity and reliability

Joint venture:

Risk management consultancy

Noise and vibration analysis Drilling expertise Subsea domain expertise Human factors expertise


Energy Services


Agenda







• The long term energy supply grows by >1/3 growth through 2035 to meet demand (1.5% CAGR) • 80% of Energy still to be from fossil fuels by 2035, with natural gas growing the fastest of the fossils • All fuels show growth (Renewables 6.4%; Nuclear 1.9%; Gas 1.9%; Oil 0.8% CAGR 2035)* • Record E&P spending expected in 2014, but at a slower trajectory • Greater uncertainty over oil price than last year • Potential margin squeeze and exploration/development implications

Energy Market – Global view

World Energy Outlook: BP 2014

Primary energy production

BIllion toe

9

Canada

Multi-Year E&P Spending Forecast

United States

Rest of World

Barclays 2013

IEA crude oil price forecast

International Energy Agency July 2014

*World Energy Outlook: BP 2014


Drilling Market Trends

• 2014-2018: Large number of rigs coming into the market with 230 additional units in 2018 • Seismic activity down (predictor for rig demand) • Strong decrease in floater day rates - Jack up’s still strong, but decline expected, as supply increases • Rates trend towards operating cost level • Margin operators and drilling contractors down

0

10

20

30

40

50

60

70

80

90

100

2012 2013 2014 2015 2016 2017 2018 2019 2020

2012 Forecast

Aug-14 forecast

New-build activity


Drilling Market Trends

A. Cold stacked rigs coming into market.

B. Lifetime extension & New Build start

C. Oversupply

D. Rates Falling/ Sublets increasing

E. Cold Stacking Starts Rig

dem

and

Time

A

B

C

E

D


Agenda







Future Technology, Innovation & R&D

Spending on research and development by the oil and gas industry will increase by at least 10 per cent in 2015.

Top 4 drivers as indicated by 250+ professionals and executives from the international oil & gas sector:

• Improving operational efficiency

• Improving safety

• Reducing costs.

• Attracting competent resources

Full findings are expected to be published later this month (September). It is anticipated that the survey will become an annual event.


Industry wide challenges

Industry issue Impacts Foreseen solutions

Shortage of skilled professionals (attracting competent resources)

Barrier to growth across industry Competence assessments and Management, training, technical advice, contracted in technical services

Concerns about rising operating costs and squeezed margins (reducing costs)

Pressure to extend asset life, reduced investment

Asset management, Reliability Engineering, EOR Technology

More global, complex supply chains

(improving operational efficiency)

Reliance on bigger supply chain partners to serve global needs Tougher regulation and rising costs More standardisation

Global Vendor inspection, Smart inspection

Industry safety culture becoming more deeply embedded

(improving safety)

Senior leadership increasingly involved Risk based, rather than tick box

Safety consultancy, holistic risk management approach, People-Systems-Equipment approach


The Energy Challenge

Traditional forms of energy are harder to find - deeper, more hostile, unconventional. As we push the boundaries, new technology present both opportunities, challenges and risks.

15

http://gcaptain.com/technip-begins-work-marine-containment/

http://www.straitstimes.com/sites/straitstimes.com/files/oilrigjurong1e.jpg


Agenda







DrillSafe Perth 8 September 2011


Industry challenge: Objectively assess risk and determine whether to continue with, or suspend drilling operations. Particularly crucial, given high cost of pulling BOP (~ $1million per day)

Industry needs: Transparent and consistent decision making acceptable to all stakeholders Quick and accurate determination whether to pull or not to pull Safety of personnel, environment, and equipment

Challenges further compounded because the BOP is:

• one of a few systems that combine multiple, critical functions • highly regulated • not visible when in operation

Example of Key Solutions; BOP Risk Model

A simple component failure in the BOP may

result in non-compliance and have severe consequences 18


LR has met extensively with oil and gas regulators around the world. All have stated they will accept the Risk Model output

as an acceptable means of assessing risk.

Risk model rapidly assesses risk in an unbiased fashion using host nation’s regulations, as well as company specifications and procedures

• Helps operators manage risk to personnel, environment and assets

• Enables operators to make objective decisions based on sound engineering principals and provides a traceable record

• Can reduce days of non-productive time into hours

• All possible equipment failures and their affects are considered, eliminating the need for last minute analysis when component fails

• Risk Model does not take away or replace human decision making


19



20


DrillSafe Perth 8 September 2011


Continuous Improvement

Example of key Solutions; Holistic Risk assessments Balanced approach to operational integrity

EQUIPMENT PEOPLE

PEOPLE

interaction of people with one another, with equipment and with systems

(Human)

SYSTEMS

working methods and data collection, access and availability at point of use

(Organizational) EQUIPMENT

hardware integrity and performance

(Technology)

SYSTEMS


Massive effect

Internation-al impact

Massive effect

Extensive damage

More than 3 fatalities 5

Major effect National impact Major effect Major

damage

Permanent disability / up to 3 fatalities

4

Local effect Consider-able impact

Localized effect

Localized damage

Major health effect / injury 3

Minor effect Limited impact Minor effect Minor

damage Minor health effect / injury 2

Slight effect Slight impact Slight effect Slight damage

Slight health effect / injury 1

No effect No impact No effect No damage No health effect / injury 0

Happens several times per year in a location

Happens several times per year in our company

Incident has occurred in our company

Heard of in E&P industry

Never heard of in E&P industry

Likely occurrence Probable occurrence Credible occurrence Unlikely occurrence Rare occurrence

> 1 occurrence / year

10 -1 to 1 occurrence / year

10 -3 to 10 -1 occurrence / year



E D C B A

Security

Reputation

Environment

Assets

People

Severity Rating

Increasing Probability Consequence

Manage for continuous improvement

Incorporate risk reduction measures

Intolerable

EQUIPMENT

PEOPLE

SYSTEMS

Business Risk

Example of key Solutions; Holistic Risk assessments


Example of key Solutions; Holistic Risk assessments

0 10 20 30 40 50 60 70 80 90

100

Equipment Performance

General Management

Quality Management

HSE Management

AIM Management

Structure & Responsibility

HR Management & Communication

Training

Competence

Equipment Condition

Equipment History

Equipment Life Cycle


How Balanced is your Act?

People - Human

Inefficient Operations

Systems - Organizational

Non Compliance

Accidents / Incidents

Equipment - Technology

Non Productive Time

Breakdown Maintenance


Agenda






LR Foundation and LR Group invests in R&D from early science to applied research

Emergent technologies

Human & social factors

Structural integrity and systems performance

Resilience engineering

Risk Exposure

Next Resources

Life Extension

Uptime and Efficiency

Smart Supply Chain

LR Foundation LR Group

Commercial-in-Confidence

LRF Research Centres and Scholarship Programmes

Lloyd’s Register Global Technology Centres are set up to respond to Offshore and Marine Challenges

• £100 million in two global technology centres

• For Energy - 5 core Technology programmes: • Risk exposure • Next resources • Life extension • Uptime & Energy Efficiency • Smart supply chain

• Research collaboration with internal and external stakeholders

Commercial-in-confidence

Southampton Global Technology Centre – working with the University of Southampton at the heart of world-class marine engineering and naval architecture Disciplines specialised in to meet current and future maritime challenges: • ship design and naval architecture, • fluid dynamics and acoustics, • oceanography, and • humanities and social sciences

Singapore Global Technology Centre – working with global research network to advance technical innovation and support economic growth in the region Research themes of Joint Industry Projects: • Subsea drilling and well control equipment • Risk (including asset performance management and life extension) • Deep-water / floating offshore installations • Enabling / emerging technologies (including renewables)

Next Generation Risk Management Tools

• Time dependent model

• Continuous 3D risk picture

• Enhanced prost processing

• ALARP analysis

• Detailed accidental loads

• Offshore and onshore

• Oil and Gas industry is continuously looking to reduce risk

• Complexity of statistical models and physical phenomena models has increased

• Amount of data is overwhelming to anyone other than risk analysis experts

• EXPLORE translates information to a usable format that safety engineers and managers can understand and use to reduce risks

EXPLORE – Next generation technology for risk assessment

Condition Based Monitoring A New and Safe Way to Detect Forces on Riser Tensioners

Early Warning

Transocean is using the system to establish accurate, empirical baselines for normal tension variation, and this gives them the means for detecting problems in the making or simply knowing when service or exchange needed.

This new way monitoring forces can reduce risk of downtime by providing an early warning of problems, which cause unplanned stresses on the tensioners.

View of the Riser Tensioners over the moon pool

• Problems with the marine riser tensioners (MRT) on drilling rig lead to downtime

• Lloyd’s Register collaborated with client to solve the problem of how to measure the forces on the MRT

• We identified fiber optic sensor system that met these criteria:

• Free of any ignition source

• Lifespan of 20 yrs without needing calibration

• Would not violate the OEM

• Client calculated the mechanics for optimal sensor placement

• Now they can monitor the stresses and anticipate when equipment needs repair or replacement

Wave-in-deck loading Making waves to save lives

Wave in Deck is a collaborative project between Lloyd’s Register Global Centre (GTC) and the Institute for High Performance Computing in Singapore.

The project uses technology to simulate the devastating waves formed in extreme oceanic storms and measure their impact on offshore fixed platforms. The aim is to determine how high above sea level a fixed platform should be to avoid being structurally damaged by these extreme waves. This crucial distance is known as air gap.

If the air gap is not high enough a platform can be engulfed and collapse if it is hit by a large wave.

Wave in Deck researchers are using computer simulations to measure the impact of these waves of on the deck of a virtual platform. This will help to determine the optimum air gap for fixed platforms and assist design engineers in the design of fixed platform structural shapes and interfaces.

Why Wave-In Deck research is crucial.

Seabed subsidence and rising sea

levels due to global warming mean that

new research is necessary to predict

wave-in-deck loadings for new designs

and to reassess the impact on existing

fixed platforms. The knowledge gained

from the research and studies will be

used to help design a state-of-the-art

wave basin in Singapore.

Smart Asset Management RFID as an enabler

RFID application in supply chain and operation could have a dramatic impact on reducing downtime, enable asset optimisation, risk based inspection, assurance and compliance.

Benefits include :

• Instant identification

• Not lost through illegible stamping, mechanical damage or corrosion

• Electronic upload. Can be used to link to: Manufacturing and repair records, Maintenance history and database

• Usage, service history and loading

• Installation records and Well file, What was run into well, Who ran it and when

Smart Asset Management through

Secure tracking

Real-time ID of genuine parts

History and maintenance record

End-to-end life cycle tracking

Context specific recommendations

Rich data for analysis

Enhanced Oil Recover

Partners: Lloyd’s Register Consulting, LR Senergy, Welltec, and DTU

Objective: Develop novel technologies for predicting and performing optimal control of the flow between wells and the reservoir.

Funding: DKK 14M from The Danish National Advanced Technology Foundation

Total budget: DKK ~29M

Duration: 4 years

Work Packages:

WP1: Well flow modelling

WP2: Reservoir-to-well connectivity

WP3: Reservoir uncertainty analysis

WP4: Integration and optimization

OPTION - Optimizing Oil Production by Novel Technology Integration

Lloyd’s Register and variants of it are trading names of Lloyd’s Register Group Limited, its subsidiaries and affiliates. Copyright © Lloyd’s Register [Entity]. 2013. A member of the Lloyd’s Register group.

Duco de Haan SVP – LR Energy - Drilling E [email protected]

Working together for a safer world

ModuSpec and WEST Engineering Services are now Lloyd’s Register Energy - Drilling

mailto:[email protected]

DrillSafe – Industry Trends & Opportunities · DrillSafe – Industry Trends & Opportunities...

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