Mature Field Production Enhancement Contract ... - Petroleumclub.ro

Petrofac Solutions & Facilities Support SRL- Ticleni PEC<strong>Mature</strong> <strong>Field</strong> <strong>Production</strong> <strong>Enhancement</strong><strong>Contract</strong> Concept

<strong>Mature</strong> <strong>Field</strong> <strong>Production</strong> <strong>Enhancement</strong> <strong>Contract</strong> ConceptPresentation to the Romanian Upstream Conference – 24 March 2011ByMr. Willie Toner – Deputy General ManagerofPetrofac Solutions & Facilities Support S.R.L.Romanian Upstream Conference 201124 March 2011

<strong>Mature</strong> <strong>Field</strong> <strong>Production</strong> <strong>Enhancement</strong> <strong>Contract</strong> Concept• Who are Petrofac ?Agenda• Ticleni <strong>Field</strong>s -- <strong>Production</strong> <strong>Enhancement</strong> Services Agreement – PEC• PEC Mobilisation to Takeover on 1 st November 2010• Key Activities and Progress to date• Technical Considerations – Subsurface• Technical Considerations – Surface• Key Challenges• Q and ARomanian Upstream Conference 201124 March 2011

<strong>Mature</strong> <strong>Field</strong> <strong>Production</strong> <strong>Enhancement</strong> <strong>Contract</strong> ConceptWho are Petrofac ?- What do we do and Where?• Petrofac is a leading provider of facilities solutions to the international oil &gas industry• We design and build oil & gas infrastructure; operate, maintain, and managefacilities and train personnel; and where we can leverage our servicecapability, develop and co-invest in upstream and infrastructure projects• We have 30 years’ experience of supporting oil & gas production andprocessing and a successful track record of several hundred projects• Our key markets are the Middle East and Africa, CIS and Asia Pacific and UKContinental Shelf: these markets account for 70% of the world’s proven oilreserves and 85% of its proven gas reserves• We have 14,000 employees worldwide, with major operating centres in UAE,the UK and India supported by a network of over 20 offices around the globe ,also now in Bucharest and Ticleni ,Gorj County ,Romania• In 2010 Petrofac signed a 15 year <strong>Production</strong> <strong>Enhancement</strong> ServicesAgreement with OMV Petrom to further develop and improve production inthe Ticleni AreaRomanian Upstream Conference 201124 March 2011

<strong>Mature</strong> <strong>Field</strong> <strong>Production</strong> <strong>Enhancement</strong> <strong>Contract</strong> Concept2010 Financial Highlights - Petrofac• Net profit up 58% to US$557.8 million (2009: US$353.6 million); net profit up26% on a like-for-like basis• Earnings per share (diluted) up 57% to 162.46 cents (2009: 103.19 cents)• Revenue up 19% to US$4.4 billion (2009: US$3.7 billion)• Year-end backlog up 45% at US$11.7 billion (2009: US$8.1 billion)• Gross cash balances at 31 December 2010 of US$1.1 billion (2009: US$1.4billion), augmented by receipt of US$0.7 billion of cash advances in January2011Quoted on the UK FTSE 100 INDEXRomanian Upstream Conference 201124 March 2011

<strong>Mature</strong> <strong>Field</strong> <strong>Production</strong> <strong>Enhancement</strong> <strong>Contract</strong> ConceptTicleni <strong>Production</strong> <strong>Enhancement</strong> Services Agreement (PEC)• Signed 6 th July 2010, 15 years duration with a 10 year extensionoption• OMV Petrom retain title to reserves , production and the concession• Petrofac will operate and invest capital funds in further developing the<strong>Field</strong>s with the goal of increasing production and <strong>Field</strong> life• Petrofac will introduce new technology, work practices and enhancedrecovery techniques to achieve this goal• Petrom will reimburse Petrofac on a tariff per Tonne produced basis• There is a Baseline production target with an incremental tariffpayable for Tonnes produced above Baseline• Petrofac will fund OPEX and CAPEX investment from its tariff revenue• There is a Minimum Work Obligation Euro Budget that Petrofacguarantee to invest• A Joint Management Committee guides and directsRomanian Upstream Conference 201124 March 2011

<strong>Mature</strong> <strong>Field</strong> <strong>Production</strong> <strong>Enhancement</strong> <strong>Contract</strong> ConceptPEC Mobilisation to Takeover• <strong>Contract</strong> Signed 6 th July 2010 with a Takeover date 1 November 2010• Mobilisation commenced - 1st August 2010 – 3 months to prepare• Joint Petrom/Petrofac Mobilisation Teams formed with dedicated resources –– 8 work streams covering -HR; HSE; IT; Finance; Business Services ;Wells;Facilities/ Maintenance ; <strong>Production</strong>– Team Charters agreed - Milestones and Deliverables set– Risk Register prepared and managed• Weekly Progress meetings and reports – integrated plan with critical pathactivities monitored daily• Petrofac internal review ( expert team) confirming Operational Readiness lateOctober 2010 before Takeover-Were we ready to Operate Safely???- YES!!Romanian Upstream Conference 201124 March 2011

<strong>Mature</strong> <strong>Field</strong> <strong>Production</strong> <strong>Enhancement</strong> <strong>Contract</strong> Concept• Mobilisation Highlights• HSE risks identified and managed• 920 staff transferred from Petrom to Petrofac + 40 hired• Bucharest office established• Ticleni office and Oil <strong>Field</strong> facilities handed over• 12,000 fixed assets transferred for Petrofac use• ERP - SAP system implemented in 2 ½ months• 90 Service and Material supply Agreements “transferred”• Communications and data transfer system established• Bridging Documents prepared covering key activities• 2010/11/12 Financial budgets prepared and approved• Regulatory Compliance and Legal requirements met• Key assets inspected and condition appraisedRomanian Upstream Conference 201124 March 2011

<strong>Mature</strong> <strong>Field</strong> <strong>Production</strong> <strong>Enhancement</strong> <strong>Contract</strong> ConceptKey Activities and Progress to date• 2010 <strong>Production</strong> target exceeded by 1%• 2011 <strong>Production</strong> targets ahead by 7.2%• Water Injection Pilot scope developed – work commences early April 11• Upgrade works commencing: optimizing the lifting systems,repair/replace the lifting controllers, identify the problems in the oilcollection system, etc.• Work Patterns /Hours & Human Resource deployment changes made• HSE awareness and Safe system of work audit programme established• A further 100 + support agreements placed• New Collective Labour Agreement signed with Unions• KPI ‘s and individual job descriptions and goals set• Petrofac “Specialists” consulted– <strong>Production</strong> -Maintenance- HSE-Subsurface• Minimum Work Obligation activity and spend for 2011 agreedRomanian Upstream Conference 201124 March 2011

<strong>Mature</strong> <strong>Field</strong> <strong>Production</strong> <strong>Enhancement</strong> <strong>Contract</strong> ConceptTechnical Considerations – Subsurface• Gas lift – to be re-designed or replaced by PCP or SRP systems• Water Injection pilot:– FDP – water injection pilot in Ticleni <strong>Field</strong> (Upper Helvetian)– Drilling a new injector – complex investigation program (full suite logging,coring, special core analysis)– New surface facilities to be installed for water injection (injection lines,injection skids, connection pipes, etc.)– Injection of tracers for better monitoring and lateral connectivity analysis– Improvement of produced water collection, treatment and re-injection– Improvement in measuring system and strategy (quantities injected,produced, water analysis, pressure measurement, production logging)– Well treatments in case of water channeling and/or non uniformdisplacement– Monitoring and performance analysis of the pilot for water injection extensionat full field scaleRomanian Upstream Conference 201124 March 2011

<strong>Mature</strong> <strong>Field</strong> <strong>Production</strong> <strong>Enhancement</strong> <strong>Contract</strong> ConceptTechnical Considerations – Surface• Infrastructure upgrades required– Access roads to the wells– Oil and gas collectors, pipe lines, flow lines– Compression and gathering station– Workover rigs• High technology for production enhancement– Stimulations: acidizing, frack-pack jobs– Well operations to reduce the number of workovers: optimizing the lifting systems,gravel pack, sand consolidation, better completion (perforation, packers, screens,downhole separators, etc)– De-waxing: chemical, mechanical, hot oil– Real time monitoring at well heads and in gathering stations– Latest software for reservoir and well performance analysisRomanian Upstream Conference 201124 March 2011

<strong>Mature</strong> <strong>Field</strong> <strong>Production</strong> <strong>Enhancement</strong> <strong>Contract</strong> Concept• Key Challenges• Maturity of <strong>Field</strong> and Facilities• Minimizing the production decline in depleted reservoirs• Indentifying behind pipe opportunities• Capital investment needed, particularly in Well workovers• Work practices and aging workforce- improving personnel performance• Achieving a Return on Investment for all parties• Adding Value and Cost ControlRomanian Upstream Conference 201124 March 2011

<strong>Mature</strong> <strong>Field</strong> <strong>Production</strong> <strong>Enhancement</strong> <strong>Contract</strong> ConceptWhy the PEC concept works for us ?- Petrofac has;• Resources -– Human; Capital; Experience• Expertise --Broad and deep portfolio to call upon• Flexibility --Able to react quickly• Effective Business systems and decision processes• Focus -–On working safely and delivering results on this AssetRomanian Upstream Conference 201124 March 2011

<strong>Mature</strong> <strong>Field</strong> <strong>Production</strong> <strong>Enhancement</strong> <strong>Contract</strong> ConceptOur Values• Petrofac is a culturally diverse, international company, united by sharedvalues.Petrofac people are:– safe– ethical– innovative– cost-conscious– responsive to customersand always focused relentlessly on delivering resultsWe will instill these Values within our Ticleni Operation.QUESTIONS??Romanian Upstream Conference 201124 March 2011