Tech Paper: Application of Lean Principles to Accelerate Project Development in the North Sea

lean principlesLean principles cut North Sea development completion by two years

Oil and gas project development in the North Sea is known for large discoveries, requiring the need for highly complex, capital intensive infrastructure, which can take decades to complete. Recognizing that such discoveries were becoming less common, a faster and less capital intensive approach was needed to develop smaller fields. The idea was to target fields close to existing infrastructure that could tie back to current installations and only require a seabed template. Historically, these types of projects would take the company over five years to complete. A dedicated team was established to plan these smaller projects, appropriately called “Fast Track” projects, and was challenged with cutting development time in half.

The Fast Track team used lean principles to analyze project lead times and target improvement opportunities. Lean is a methodology made famous in automotive manufacturing, which seeks to eliminate time wasting activities and reduce overall lead time (De Wardt 1994). The primary lean technique employed by the team was value stream mapping. First, the team mapped out the entire project development process, from discovery to production, and identified all the key steps in the process. Second, the team estimated the time it takes to perform each major step in the process and calculated the total lead time for project development. Finally, the team quantified all the sources of delays and developed opportunities for improvement. These opportunities were then ranked based on the potential time and cost savings. With the prioritized opportunities, an improvement road map was developed to steer the team in the right direction.

The improvement road map contained a four-pronged approach to cut project development times in half:

  • Standardization
  • Collaboration
  • Streamlined processes
  • Change management

Standardization involved developing standard subsea templates, well designs, and completions equipment to cut the time to develop solutions. Collaboration involved integrating the operator and the service company and making use of teams in different time zones to accelerate well design and planning. Streamlined processes focused on combining decision gates in capital projects and working the well construction process in parallel to the project development process to reduce planning time. Finally, change management involved establishing a continuous improvement process, a system to implement ideas and ingrain them into the organization, and a common set of key performance indicators to align different stakeholders and drive execution results.

Implementation of these improvement opportunities led to a reduction of over two years in the time needed to complete the development projects: from 5.3 years to an average of three years.

Click below to view further details and download the technical paper (PDF).

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Source: SPE/IADC Drilling Conference and Exhibition, 17-19 March 2015, London, England, UK

Authors: Roger Tønnessen (Statoil) | Richard Byrnes (Halliburton) | Miguel Franco (Halliburton) | Keith Romaine (Halliburton)

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