Profile: Total's Daniel Picard Kristin: The First HPHT ... - Aker Solutions

Profile: Total's Daniel Picard Kristin: The First HPHT ... - Aker Solutions

ReviewProfileKOP Brazil Awarded 11Deepwater Trees by PetrobrasJune 30, 2004, Rio de Janeiro, Brazil – The Brazilian oil company,Petrobras SA, has awarded Kvaerner Oilfield Products (KOP) inBrazil a contract for the supply of eleven GLL2000 subsea trees,designed for use in 6,500 ft (2,000 m) water depth.Contract for Phase Two in theAdriatic LNG Terminal ProjectJune 2004 – Aker Kvaerner has been awarded a contract to conductdetailed design and planning activities for future offshorephases of the proposed liquefied natural gas (LNG) receiving terminalin the North Adriatic Sea. The company has previously performedthe front-end engineering for the same facility. The newcontract will run through the end of September 2004 and is worthapproximately $50 million (NOK 350 million).Aker Kvaerner and Shetland CompaniesAgree on Platform DecommissioningJune 22, 2004 – Aker Kvaerner has entered into a pre-bid agreement(PBA) for onshore disposal of the Total-operated Frigg fieldwith the Shetland Decommissioning Company Limited (SDC),SBS Logistics Limited and Onyx UK Ltd for development andexclusive use of the Greenhead base, Lerwick.Aker Kvaerner Contract forDeepStar StudyJune 2004 – DeepStar, a group consisting of 10 leading deepwateroperators, has awarded Aker Kvaerner a contract for a study todevelop a semisubmersible production platform for use in comingultra-deepwater field developments. The study was won in competitionwith a number of deepwater floater expertise contractors,and Aker Kvaerner was awarded the contract based on the company’sleading experience with deepwater floaters.Aker Kvaerner AwardedAdditional Demo 2000 ProjectsJuly 7, 2004 – As well as the DeepStar award, Aker Kvaerner hasrecently been awarded Norwegian government funding for twomore projects in the sixth round of the Demo 2000 program." Integrated SEMI/Steel Catenary Risers (SCR) in Deepwaterand Harsh Environment Conditions (Aker Kvaerner Engineering& Technology)" DeepBooster System (Kvaerner Oilfield Projects)Aker Kvaerner has to date been involved in 27 Demo 2000 projects,attracting approximately $11 million (NOK 78 million) of Demo2000 funding and generating over $42 million (NOK 300 million)in total project value. For further details, see – Shenzhen toHong Kong (Tai Po) Twin18-inch Submarine GasPipeline ProjectJune 23, 2004 – Kvaerner E&C Singapore Pte Ltd (KECS), partof the Aker Kvaerner group, has been awarded a major subseadetail engineering and project management contract by The HongKong and China Gas Company Limited (TOWNGAS) for a subseapipeline. TOWNGAS intends to bring natural gas to HongKong for domestic consumption.Two Million Injury-free Man-hourson the Sakhalin ProjectJune 2004 – The milestone of two million man-hours without losttime injuries was celebrated by the Sakhalin II project organizationin Russia. The customer thanks Aker Kvaerner for “trulyimpressive performance.”PropagatingSubseaSuccessin AngolaBy Vanessa MourantWith 67 subsea wells currently planned,and discussions ongoing to increase to 71,the Dalia oilfield development is deemed to be the world’slargest subsea production system ever installed.23

“Every time we do a test or qualification program,we perform a safe job analysis so we anticipate anyfocuspotential problems that we may face. So far we haveachieved 800,000 man-hours without a lost timeincident on the project, but we must keep up the focus.”Raymond Carlsen, KOP Group EVP and PresidentEric Johnson, KOP VP Sales & Marketing, West AfricaDaniel Picard, Total Project Director for DaliasolutionsRepresenting an estimated developmentinvestment of $3.4 billion (NOK 28.8 billion),the sheer scope of the project, coupled withthe complex challenges associated with theextreme environment, requires technicalinnovation at the forefront of the offshoreindustry. Close collaboration and total commitmentfrom all involved are also prerequisitesfor success.At the end of 2002, operator Total andthe Angolan national oil company Sonangolawarded the contract to Kvaerner OilfieldProducts to commence pre-engineering activitiesfor the Dalia Subsea Production System.Discovered near the Girassol field in Block17, Dalia is located in water depths of between4,000 – 5,000 ft (1,200 – 1,500 m), 84 miles(135 km) offshore Angola. It is the next of themajor “flower” fields and follows the successfuldevelopment of Girassol, brought onstreamin late 2001, and Jasmim, a satellite tothe Girassol field, which began production inthe second half of 2003. Total and its partnersExxonMobil, BP, Statoil and Hydro seethe launch of Dalia, due on-stream duringthe second half of 2006, as a key step in thedevelopment of the deepwater Block 17.Complex ChallengesAker Kvaerner’s subsidiary KvaernerOilfield Products (KOP) commenced the preengineeringdesign and qualification for theproject in September 2002, and was awardedthe contract for the subsea oil production systemin April 2003. The scope covers engineering,procurement and fabrication for allnecessary subsea production equipment.Today, this includes 67 christmas trees andwellhead systems – 34 production wells, 30water injection wells and three gas injectionwells – plus nine manifolds, two work-oversystems and all related connection systems.KOP specializes in advanced subsea systemsand is delivering equipment based on variouscall-offs, starting with an initial contract for42 trees with options for additional trees.“It would have been easy to say we’ll dothe same as we did on the very successfulGirassol project, and use the same contractorsthroughout,” explains Daniel Picard,Dalia’s Project Director at Total. “TheGirassol field was brought on-streamquickly – in record time. However, Dalia istechnically more challenging – we’re talkingabout more than 67 subsea wells, almosttwice that of the Girassol field.”“We are also dealing with a fluid that ismuch more complex – at 21° API (AmericanPetroleum Institute), as opposed to 32° APIon Girassol, the oil is heavier. We need tokeep it hot enough so that it can flow from thereservoir to the floating production storageand offloading (FPSO) vessel. With relativelylow reservoir temperatures, the temperaturewindow is a lot narrower, so we have hugeconstraints relating to flow assurance, whichare extremely demanding. As the largestsubsea production system to be developedin the world, we cannot afford foranything to go wrong.”Shallow water testing will take place inSpain. One of these tests will look at ensuringexperience54

all of the temperature constraints are met. Hotfluids, for example, will be put in components ofthe subsea equipment to check flow assuranceand temperature controls. Christmas trees, controlsystems, manifolds, jumpers and spools –every representative piece of the subsea processsystem – will be tested to ensure everythingworks smoothly once installed. In such a complexsubsea system, accessibility to equipmenton the seabed is naturally much more difficult,making these precautions even more paramount.“We have committed to do many things inAngola, so Dalia is very high-profile for us,”continues Picard. “Throughout the project theAngolan content is continually reviewed. Wealso have very high expectations in terms ofhealth, safety and the environment. When weopen a yard, for instance, we always conduct athorough safety audit. We have to be vigilant atall times if we are to ensure both our people andthe environment are safe and secure.”Raymond Carlsen, KOP’s Group EVP andPresident, reiterates Picard’s assessment. “Theenvironment itself naturally presents a lot ofHSE challenges, particularly with issues such aspressure containment. Every time we do a testor qualification program, we perform a safe jobanalysis so we anticipate any potential problemsthat we may face. So far we have achieved800,000 man-hours without a lost time incidenton the project, but we must keep up the focus.”“The Dalia contract represents AkerKvaerner’s breakthrough for deliveries in thevery demanding market offshore West Africa.We have significant and far-reaching experiencein delivering complex subsea productionsystems for our clients, so in many ways this isquite a normal project for us. Nonetheless it ischallenging – in terms of the extreme conditionsof the field’s location, the type of crude oilto be handled, and the sheer scale of the project.”deliveringprocess system is underway, and this equipmentfabrication schedule is critical – we need to havedrilled sufficient wells for first oil in the secondhalf of 2006, so we can reach plateau quickly.”Total was able to have the FPSO hull fabricationstarted in Korea in January 2004, andexpects to have its hull floated out at the end ofAugust this year. The engineering, procurementand manufacture of the umbilical and flowlinesare also well underway, as are the 30,000 tons oftopside under construction in Korea. KOP’sTranby factory in Norway is handling the manufactureand assembly of the subsea christmastrees. Controls components fabrication andassembly are being handled out of KOP’s plantin Aberdeen in the UK. A further significantelement is the Angolan content, which has alsobegun now. The Lobito Sonamet yard, a jointventure between Sonangol and service companyStolt Offshore, is assembling six manifolds andall the related seabed support systems.Cultivating Environment for CooperationWith different packages being handled inAngola and around the world, developingeffective interfaces with local and other contractors,as well as amongst KOP’s own projectoffices and fabrications units, has also been afundamental factor for success.“The challenge is to ensure the right informationis transferred to the right parties at theright time, so good communication is vital,”remarks Carlsen. “Right from the start we knewwe had to quickly learn how Total likes to run itsprojects and to completely understand the criteriaunder which this field has to be developed. Totalis very focused on delivering their commitmentsand developing the field, and so are we.”“Between us we have managed to create anenvironment that is proactive. With this atmosphereof close dialogue, openness and honesty, we arenow able to discuss potential issues before theyarise and address them before they become aproblem. It has also meant that Total has been ableto provide us with valuable information to aidprogress. I believe this cooperation is fundamentalto ensuring first oil starts to flow on schedule.”Picard agrees, “We also have responsibilitiesto Sonangol and our other partners to fulfill, so wemeet with them frequently to discuss progress.And of course, once the systems are delivered,that’s not the end of KOP’s close involvement.”A large part of the contract is the fabricationand supply of the system, but the other keyelement is the service and assistance that willbe provided when the equipment is installed.KOP will be present to advise the installationcontractor every step of the way and at the startupphase. The company will also be availableafter start-up to provide assistance with maintenanceand life-of-field support.Ensuring Technical Competence LocallyWith the life span of the field expected to besome 20 years, it is important that Dalia has thecorrectly trained people and the right managementin place to achieve future productionobjectives. Ensuring that the necessary technicalcompetence is transferred effectively istherefore essential. KOP, for example, has beentraining more than a dozen young Angolanengineers, mainly in Norway and Scotland,so that they are ready when the field comeson- stream in 2006.Significant Phase for ProjectFollowing the necessary approvals by the “We have to be vigilant at all times if weAngolan authorities in April 2003, the projecthas now been running for just over one year,and as of June this year it is 35 percent complete– in line with the schedule.are to ensure both our people and the“Now is a very key stage in the projectschedule. The studies and procurement are completed,and fabrication of various elements isenvironment are safe and secure.”underway,” says Picard. “The goal is to startdrilling at the end of the year, which is actuallycommitmentearlier than originally planned. The subsea6“Right from the outset when we bid for this project weDalia Subseamade a firm commitment to deliver theknowledgenecessary training to build localcompetence and technical knowledge.”“Right from the outset when we bid for thisproject we made a firm commitment to deliverthe necessary training to build local competenceand technical knowledge,” Carlsenexplains. “We’re extremely serious about thesecommitments. We started training Angolansalmost three years ago to make certain theyhave the necessary offshore and onshoreexpertise. This has involved exposing them todifferent disciplines across different parts of thecompany – integrating them with our teams inOslo and Aberdeen.”Significant parts of the project will behandled in Luanda, in the offices of the AkerKvaerner joint venture with Angolan architecturaland civil engineering company SOAPRO.This joint venture will be used to assist Totaland other client projects with their subsearequirements, and also with other areas. AkerKvaerner is on the way to establishing a new,modern maintenance base in Luanda, givingthe company the firm platform from which todevelop its service offering and local competencein the region going forward.“We have to think long-term,” addsCarlsen. “West Africa offers major growthopportunities for our business, so our investmentin Angola provides a base for futureexpansion. We need to offer predictability to allour clients – if we promise a client something,we have to deliver on that promise if we’re tocontinue to be successful in the future. So Daliais a very important project reference for us.There are also promising oil discoveries onBlock 32; we believe relevant products, developedfor projects in Brazil, are very suitable.Block 32 has water depth of some 8,850 ft(2,700 m), and we are one of the few companiesthat have qualified trees at that water depth.”Delivering ExpectationsTotal’s worldwide strategy is to continue toincrease production according to its stated projections,and West Africa plays a significantrole in helping to fulfill these goals. “We’vestated clearly that we will continue to increaseproduction at a rate of four percent over thenext five years, and that’s what we’re doing.“It’s therefore essential to us that sufficientfields come on-stream in the desired timeframeto achieve these levels. The Dalia field is animportant part of that overall strategy and currentexpectations are that it will deliver 225,000barrels per day (1,500 m 3 /hr). We are also indiscussions to see that increase to 240,000 bpd(1,600 m 3 /hr) during the plateau life of the field.”“Total has been operating in the region forsome time and has made a substantial commitmentfor long-term development in complexfields like Dalia. We need to be able to supplementour resources by having competent contractors,as we have on this project,” says Picard.“KOP is fulfilling its obligations so far,but we cannot be complacent. The ingredientsare there and we communicate well with KOP.We realize it’s not always easy – the logisticsare difficult – but we have a close dialogue andthat’s essential. We have easy access to the projectteam and to Raymond and the rest of AkerKvaerner’s senior management, which is veryhelpful and reassuring in such a large project.”“Today we’re not finished and we knowthat – there’s still a lot to do to achieve the manyproject objectives including safety, quality, cost,schedule and reliability of equipment. From timeto time there will be debates on the challengeswe’re facing. We have different reasons for wishingto deliver this project well but, above all, weall want to get there,” Picard concludes."7

InterviewLookingBy Rolf E. Gooderhamto theFutureInge Hansen, Aker KvaernerGroup President and CEO.“We need to be more strongly identified by ourcustomers as a value creator – a partner on theincome side – rather than a pure cost item.”Inge Hansen, Aker Kvaerner’sGroup President and CEO,acknowledges that formulatinga comprehensive vision forAker Kvaerner will take morethan a few months. But healready has a clear idea ofwhere he wants the companyto be in six-years’ time andof the attitudes that needto be shaped in order toreach that goal.Listing Aker Kvaerner ASA – with its focusedOil & Gas and Engineering & Constructionactivities – on the Norwegian stock marketApril 2 is seen by Inge Hansen as a key development,not least because it has allowed thecompany to start thinking ahead.“It’s also gratifying that the concept behindthe latest restructuring, which converted us froma division of a company into an independentorganization, seems to be working in practice.”Taking a longer view, Hansen says his aimfor 2010 is that Aker Kvaerner will be a successful,international, industrial company with its rootsstill located in Norway. And the first thoughts onhow to achieve this are already emerging.But the immediate focus is on the period upto 2006, where one of the main challenges is continuingto build up confidence in the market whereAker Kvaerner has its core business activities.“In many respects, we’ve already secured thattrust through the restructuring,” he observes. “Wenow have to show that we can live up to it in the longrun. That requires us to be reliable and predictable,demonstrating that we can manage our business.”Reinforcing Corporate Culture“Culture” and “attitude,” two words frequentlyused by Hansen when he talks about the wayforward, represent two sides of the same coin.He discusses the need to reinforce AkerKvaerner’s corporate culture as an internationalgroup, and the importance of nurturing a “riskculture” in relation to its projects.At the same time, Hansen wants to seechanges in mentality in both the work done bythe group and in the crucial issue of health,safety and the environment (HSE).“We need to be more strongly identified byour customers as a value creator – a partner onthe income side – rather than a pure cost item,”he says. “I think we should also perhaps be moreconscious about the way we market ourselves.Norway’s Kristin platform is a fantastic incomegenerator, for instance, but we’re focusing onlyon the cost-efficiency aspects of this project.”Taking on RiskHansen is gratified that the group has created arisk management structure, which he sees asvital. The biggest strides have been made beforethe contract signature stage, with all orders above$100 million now subject to formal review.“In the coming months we will extend thisprocess to contract execution. Our aim is to createand maintain a culture which focuses onidentifying how much risk we can accept –without seeking to avoid all risk, because that’salways a relative term. What we have to do isunderstand the risks we’re accepting and keepthem under control.”Acknowledging that Aker Kvaerner as agroup has come further in the internationalizationprocess than its Norway-based management,Hansen emphasizes that the organizationmust work every day on developing its corporateculture as a competitive parameter. Thatruns parallel to another essential requirement inthis context – the need to start putting tomorrow’sAker Kvaerner leaders into place.Leap Forward for HSEAnd Hansen is fully committed to a quantumleap in HSE – again by encouraging eachemployee’s attitude. Backed by a sense thatformal rules and procedures have reached theirnatural limit, the emphasis will be on everyemployee taking personal responsibility foravoiding unfortunate incidents.“To achieve this, HSE must be embedded inour hearts – around the clock, seven days a week,”says Hansen. “You can’t turn it on at 7:00 am andoff at 5:00 pm. I think a lot of good work hasalready been done here, with some entities – notleast in the USA – reporting outstanding results.”He adds that Aker Kvaerner’s whole managementteam has lined up behind the goal of aquantum leap and signed a declaration committingit to this policy. The shift in attitude mustoccur out at the individual sites, but the leadershipalso has to demonstrate in practice that nocompromises are acceptable here.Not by Price AloneHansen notes that technology is interesting forAker Kvaerner to the extent that the group getspaid for it, and adds that the bulk of the group’sresources are concentrated in high-cost countries.“So, for us to compete on price alone isuninteresting. No matter how cheap you get,somebody can always be cheaper. That meanswe have to focus even more strongly on achievingthe best possible, overall outcome, whereunique know-how and technology can play animportant part.”This provides another example ofHansen’s emphasis on attitudes and awareness.He emphasizes that Aker Kvaerner’s challengeup to 2010 is to identify what its key expertiseshould be and how it will be exploited, whiletaking advantage of global delivery opportunitiesto ensure competitiveness.“We’re perceived as technology driven,but not everything needs to be ours – technologyis also being licensed,” he comments. “Weare involved in market segments where technologyis an important parameter, where it isimportant to be among the leaders – in otherwords, not just a low-cost bidder. I do not seethe group ever becoming a general contractorthat does everything for everyone.”Expertise Makes the DifferenceTaking a broader perspective, Hansen says thatAker Kvaerner’s approach will be to competeover solutions with high expertise (know-howand technology) content. The group’s strongposition on the Norwegian and UK continentalshelves provides a basis for this because theyare demanding areas.Hansen believes the Norwegian continentalshelf will remain one of the key markets for thegroup over the coming decades, offering a varietyof opportunities in areas such as mature fields,deepwater projects and the Barents Sea. Lookingfurther ahead, he sees activities in Russia as a naturalextension of this involvement.The Gulf of Mexico represents anothercentral region, he notes. “This is the world’sbest developed offshore sector. Being competitivethere provides a dimension which shouldn’tbe underestimated.”Brazil and West Africa are also incrediblyinteresting areas, but illustrate the way AkerKvaerner will seek to draw on existing customerrelations to penetrate new markets.“Being a front-runner isn’t always appropriatefor us – here we prefer to piggy-back,”says Hansen. “But we must absolutely discusswith customers where our expertise can be ofhelp to them.”A key component in his vision for thecompany’s future is the way its various components– both national and industrial – can bejoined to create crucial benefits. He acknowledgesthat capital markets prefer focused companiesbecause they are easier to evaluate.“But we must educate them about theadvantages of having engineering and constructionoperations – which account for a third of ourbusiness – and secure valuable synergies withthe oil and gas side in such areas as common systems,shared customers and procurement.”That makes an interesting reflection froma man who has himself moved from the financialsector to leading Norway’s most internationalcompany on its march into the future."“To achieve this, HSEmust be embedded inour hearts – aroundthe clock, seven daysa week. You can’tturn it on at 7:00 amand off at 5:00 pm.”89

Project ExecutionTamingthe High-TemperedMistressBy John BradburyKristin is a demanding development which breaks newground offshore Norway as the first high-pressure andhigh-temperature gas field to be tapped subsea andexported via a semi-submersible platform.Discovered in 1996, the Kristin reservoir ranksas the highest pressure and highest temperaturefield to be tapped on the Norwegian continentalshelf so far – at 13,195 psi (910 bar) and338˚F (170˚C).Difficulty“The main challenge on Kristin relates to theunderground properties,” says Bård Heimset,Statoil’s Project Director for Kristin. “It is avery difficult reservoir. It is partly due to theproduction capability of the reservoir and thefact that we have a high-pressure and high-temperaturereservoir. It is a big, technical challengefor the people on the project, particularlyfor the subsea components.”Kvaerner Oilfield Products (KOP) is supplyingKristin’s subsea components and isresponsible for qualifying equipment for the subseaproduction stations on time for the well completiondrilling program, although at present,pre-production drilling is underway – withSaipem’s Scarabeo 5 rig and Smedvig’s WestAlpha. “The subsea equipment delivered is on thecritical line for the project,” observes Heimset.DifferencesSo what are the differences between Kristin andany other floater-based project? Kristin is ahighly customized production facility which isbeing built by Aker Kvaerner on a tight scheduleto hit a production date in 2005. Closeproject control has been possible throughutilization of a highly developed managementsystem – Aker Kvaerner’s project executionmodel – and construction methodology,Bård Heimset,Statoil Project Director for Kristin.together with a very stringent change controland interface system to ensure Kristin stays onschedule, has the right quality and can accommodateany increase of Scope of Work.“Kristin is the first subsea development ofan HPHT reservoir with recovery to the floaterand offtake to the Karstø gas terminal – whichis being expanded to cope with the anticipatedoutput,” says Jan Tore Elverhaug, Aker Kvaerner’sProject Director for Kristin EPCH Contract.The biggest driver on the project is a commercialone – the time to first gas – and that createspressure to complete surface and subsea facilitiesfor July 2005 when first gas is due.“Because this is the first HPHT gasfloater, the challenge is the control and safetyJan Tore Elverhaug, Aker Kvaerner ProjectDirector for Kristin EPCH Contract (right)pictured with Finn Reierth, Statoil ProjectDirector for Kristin EPCH Contract (left).systems,” says Elverhaug. “The reservoir pressurewill be choked subsea down to about 3,770psi (260 bar).” Flexible risers to take productionfrom the seabed to surface are designed for4,786 psi (330 bar).Elverhaug states, “Statoil’s and our ownHSE goals are very ambitious and have beendifficult to fulfill. Neither Statoil nor ourselvesare pleased with the results so far. However, weare working on a six-month and long-termaction plan to address these issues, and haveconfidence that we will deliver.” At the sametime he is urging the entire project organizationto follow up these plans even harder as theKristin semi project enters the inshore phase inSeptember 2004.Aker Kvaerner is the main engineering contractor on the project,responsible for building a semi-submersible gas productionplatform under an EPCH (engineering, procurement, constructionand hook-up) contract encompassing:• project engineering and procurement• fabrication of topsides process and utility modules• integration of living quarters, flare, and riser balcony modules• deck and hull mating inshore• supplying all subsea equipment through Kvaerner OilfieldProducts (KOP)• offshore installation by Aker Marine Contractors1011

Major DifferenceThe major difference to any other platform is theamount of exotic materials required to cope withthe wellstream.“We have 94 percent white steel onpipework systems. Exotic steels, titanium, austeneticand superaustenetic feature in this floatingfacility too. I have never been close to anythinglike that,” Elverhaug notes. A second Kristin differentiatoris the criticality of the topsides weight.Extensive use has been made of FRP grating onlarge areas of the topsides and aluminum featureson decks, stairs, gangways, handrails, and tanks.Looming on the horizon is the date for deckand hull mating – August 2004. The hull is due toarrive at Aker Stord at the end of July aboard theMighty Servant 1 from Samsung Heavy Industriesin South Korea. Elverhaug is certain he can meetthat date. “We have had an extremely short constructionperiod,” he says. “We have had to build12,000 tons topside in 13 months.” Normally hewould have four to six months longer to constructtopsides this size. Additionally the living quartersmodules with 2,040 tons and a riser balcony of4,230 tons have to be integrated with the deck.That is where Aker Kvaerner’s project executionmodel has fulfilled its crucial role in keepingthe project on track, guiding project planningand construction. “We have built a model thatcontains the engineering, procurement, constructionand commissioning work. The essential partof that was the construction method,” he explains.ControlElverhaug stresses three main issues forKristin: “Control, control and control.Normally when a project goes wrong you havelost control without knowing it.” He cites aclassic example where a project’s design basisis not sufficiently mature at the start of theengineering, procurement and construction(EPC) phase. Either design work is incompleteor insufficient money has been spent investigatingall aspects. “If you go ahead, you neversee the consequences before the next phase orthe phase after.” So careful planning, controland management of changes and interfaceshave been important on Kristin.Much of that care and control falls to TomHenningsen, Kristin’s Planning Manager, whois responsible for a “precedence network,” whichbrings all project engineering, procurement andconstruction activities together in the correctand logical sequence.He identifies three key ingredients for successon Kristin. Firstly, the project executionmodel interrelates all engineering, procurementThe mistress, meeting quality requirements, is being completed on schedule.“Aker Kvaerner’s ability to maintain the overall installationprogram as we go along has been very importantfor the execution of the project so they are on schedule.”Kristin field development.“They have reason to beproud of their projectexecution model.”Loading of manifolds from KvaernerEgersund Yard in Norway.and fabrication activities in a logical and costefficientsequence by providing detailed descriptionsof standard milestones which have to beachieved, addressing both quantity and quality.MethodologySecondly, the construction methodology optimizesthe most cost-efficient fabrication andassembly sequence within the time constraints.Thirdly, the precedence network containsall the Kristin construction data. “You start withfabrication,” he says. “The question is ‘Howcan we execute the fabrication most efficiently– that is very important in Norway where ourlabor costs are very high.’”Once a fabrication methodology is decided,all engineering and procurement activities arerelated. All this information is fed into theprecedence network, resulting in up to 30,000separate construction activities being identified.“We have never had that many activitiesbefore,” he comments. “Some 15,000 of themare fabrication related, and the rest are engineeringand procurement related.”He says the project execution model definesmilestones which have to be reached, indicatingwhat has to be done when, to what extent and tothe right quality, and by whom. “The project executionmodel is giving the mindset for the people.”ManagementBård Heimset has been pleased with the projectmanagement and change control practiced byAker Kvaerner. “They have reason to be proudof their project execution model,” he says.“Under the engineering, procurement, constructionand hook-up (EPCH) activities, theyhave a sound project execution program overall,where they had an early focus (on critical items)and they were proactive about an early startwhich was critical to the engineering and particularlythe procurement activities. Togetherwe have had a good focus on change control andinterface control between the various schedules.”He continues, “Aker Kvaerner’s ability tomaintain the overall installation program as wego along has been very important for the executionof the project so they are on schedule.”Statoil has implemented its own computerbasedplant information management (PIM)system for Kristin, which has been made availableto all vendors through Aker Kvaerner. Inreturn, Statoil gets all its project information fedinto PIM through Aker Kvaerner’s own centralproject system tools (CPST), enabling access toAker Kvaerner’s latest operational informationon the project – effectively a two-way street forinformation. This electronic system has beenused for approving and issuing information,engineering diagrams and documents.“That type of approval will happen more,”says Heimset. “You get rid of paper. It is a verygood way to get information around to people.1213

Manifold being liftedonboard installation vessel.avoiding scaffolding and its associated erectiontime, which meant less density for finishingwork on the deck.Thirdly, the installation schedule for liftingpre-assembly units into the main deck was“holy” in the overall construction schedule,explains Bjelland, therefore some work wasspread to sub-contractors. “We had 13 monthsfor construction of 12,000 tons, therefore wehad to go out to external suppliers for pre-fabricationof steel and piping,” Bjelland says.Extremely compact topsides installation.HTHP requires exotic materials.Broad involvement in fabrication decisions providegood ideas and a sense of project ownership.It is an effective way to communicate technicalinformation. Before we had loads of files andmeters and meters of technical manuals and soon. Now information is quickly passed on electronically.That is an important issue.” Also hesays it allows early planning for late phase projectactivities such as commissioning. “That hasbeen a success here. There has been extremelygood cooperation.”Effectiveness“The EPCH model has proven to be effectivewhere they brought (together) engineering andconstruction interfaces. That has been handledvery well.” He adds, “There has been clever utilizationof electronic tools on Aker Kvaerner’sdesign and transfer of documentation from themajor vendors – Aker Kvaerner is getting theirAfter six weeks and 12,400 nautical miles, the hull arrived at Stord July 27th.information electronically. A very commonproblem on previous projects is that engineershave had to wait for information from criticalvendors. Now they get it all electronically andthis is the first time that has been done.”Overall, he says Aker Kvaerner performedwell on the semi’s project execution: “We aregenerally satisfied with project execution. Theyhave shown again that they are professional inhandling these major tasks.”Kristin has proved that integration of AkerKvaerner’s and clients’ system tools and documentationmethods has given very good resultssays Bjørn Lindal, Kristin’s InformationManagement Manager, affirming Heimset’spoint about electronic communication. “Kristinis the first project where all exchange of documentationis in an electronic format,” he says.“Databases, 3D product models and electronicdrawings and documents are all taken as theoriginal delivery. Furthermore, they are handedover to commissioning and operations teamsfollowing the project’s part system deliveryschedule. Everyone has access to updated andcorrect information at all times.”Torleif Bjelland is Kristin’s FabricationManager, responsible for executing constructionat Aker Stord. Based on Aker Kvaerner’sproject execution model, he and his teamstarted first in Oslo and were integrated withengineering and procurement teams. “It wasvery important to establish a link between fabricationat Stord and engineering in Oslo to discussand decide the fabrication methodenabling engineering people to take it into theplatform design and schedules,” he says.InvolvedFirst-line managers and blue-collar workers wereinvolved in fabrication decisions, providing asense of project ownership. “That gave us manygood ideas.” Firstly, early outfitting process hasbeen used on pre-built deck units, where pipesupports, deck penetrations, doubler plates, andreinforcements in steel sections are implementedbefore any surface protection is applied.Secondly, a pre-assembly phase was carriedout, outfitting installations with piping,hanging equipment, heating, ventilation andair-conditioning (HVAC) channels and cableracks. This has allowed a large amount of workto be executed in parallel at ground level,KRISTIN FACTSReservoir:Pressure: 13,198 psi (910 bar)Temperature: 338ºF (170ºC)Water Depth: 787 – 1,213 ft (240 – 370 m)Reservoir Depth: 14,760 – 15,900 ft (4,500 – 4,850 m)Wells:16 production wells over four subsea templates. All the productionwells must be drilled before the production starts.Operator and Main Owner (46.6%): Statoil ASATotal Investments: $2.599 billion (NOK 18.2 billion)Reserves:Gas: 1.235 trillion ft 3 (35 billion Sm 3 ) (2005 – 2016)Condensate: 220 million barrelsProduction Capacity:Gas: 646 million ft 3 /day (18.3 million Sm 3 /day)Condensate: 126,000 barrels/day (20,000 Sm 3 /day)Production start: October 01, 2005Export:Gas: to Karsto gas terminal through the Åsgard transport pipeline.Condensate: through Åsgard C to shuttle tankers.License Partners:Petoro AS 18.9%, Hydro AS 12%, Mobil Development Norway AS10.5%, Eni Norge AS 9%, Total E&P Norge AS 3%.14 15

Compact areas are no obstacle.Kristin’s deck scope covers a utility and aprocess module. Both had to be built in 13months. A 12,300-ton deck for the Kvitebjørnplatform was built in 18 months and a 13,300-ton deck in 20 months for the Njord platform.Much of the fabrication, outfitting anddeck construction took place inside the hugemobile assembly hall at Aker Stord. Part of thedry-dock at Stord was rock-filled and theassembly hall was located in this area wheremodule assembly took place. Once that rockmaterial is removed, it allows a barge to float indirectly under the completed platform andcarry it out for hull mating. “We had to givemore attention to crane capacity because therewere so many big lifts so close together and thatis an HSE challenge,” he recalls. Lifts were limitedto a maximum 360 tons – the capacity ofthe Goliath crane at Stord.SuccessOne of the important factors in Kristin wasStatoil’s early identification of long lead equipmentpackages before contract award, the use offrame agreements and continuous material simulationsays Odd Olav Eide, Aker Kvaerner’sProcurement Manager for Kristin. Furthermore,he points out that some of the exotic pipingmaterial used had lead delivery times up to sixmonths ahead.Templates to subsea installation.Aker Kvaerner’s EPCH contract for Kristininvolved ordering all required material; the onlyexception was the structural steel required for thehull built by Samsung in South Korea. There wereapproximately 2,000 tons of piping materials andmore than 2,700 different articles. “We enteredinto discussions with European manufacturers atan early stage in order to reserve capacity.Consequently, when the exact material need wasidentified, the delivery could be called-off againstthe reserved capacity and the material deliveredat the sites on the necessary dates for construction.This required very good communicationwith the market and piping suppliers,” Eide says.Orders were placed for piping materials inquality carbon steel, stainless steel and exoticmaterials like titanium, duplex, 6Mo andsuperaustenetic. With superaustenetic, thereare only a few approved manufacturers inEurope. The lead-time for delivery was considerable,so requirements for superaustenetic hadto be predicted half a year ahead. As Eidestates, “It is a challenge to order material halfa year in advance.”Using Aker Kvaerner’s project executionmodel made it possible to identify early on thelate delivery of any items, and the potentialimpact on the Kristin schedule. “With integratedplanning, procurement, fabrication and completion,all relevant information is made availableimmediately, and that is a very important tool tobe able to manage all the logistical activities.”DeliveryKristin’s Engineering Manager Stefan Johansson’srole is to deliver topsides which can function asrequired for the field characteristics. Again, usingthe project execution model and with close cooperationwith construction crews from the verybeginning, his team has delivered all the necessarydrawings to the involved fabrication sites intime and with the right quality. But he is underconstant pressure to monitor platform weight – tominimize cost – while design changes have beenimposed. Topsides facilities have to handle bothpressure and temperature at a level of 3,770 psi(260 bar) and 266˚F (130˚C) “That is still veryhigh,” Johansson notes. He says the platform productioncapacities, the water depth and the numberof riser slots were all major design factors.Weight“On the floater, weight and center of gravityhave always been limiting factors,” saysJohansson. During the FEED (front-end engineeringand design) stage, there was a constantdrive to reduce topsides weight – structuralsteel in the design accounts for up to 50 percentof platform weight – and the overall size of theplatform to keep costs down.AKER KVAERNER MAJOR DELIVERIES TO KRISTINSemi EPCHEngineering, procurement, construction and hook-up for thesemi. The contract covering design and fabrication of thedeck, process facilities and utilities – and all module hook up.Contract Value: $714 million (NOK 5 billion)Therefore to reduce weight, steel platinghas been optimized, with 1 mm increments,using thinner plate where possible. Normallysteel plating would be more standardized, butthis would mean over-design in some areas andmore weight. “So the platform is very, veryoptimized to get the weight down,” he explains.Subsea TechnologyKvaerner Oilfield Products (KOP) has a majorrole in the technology development necessaryfor Kristin by qualifying all subsea equipment.The scope of supply covers 12 christmas trees –including one spare – and 12 wellheads, manifolds,templates, production control system,workover systems, intervention tools, umbilicals,terminations and connections.Hans-Arne Andersson from KOP is theKristin Subsea Manager. “What makes Kristindifferent from anything the industry has deliveredbefore is the very high pressure and temperature.That means we have to qualify a largeamount of equipment for this specific project,”Andersson explains. More than 50 separateitems have to be tested and qualified for exposureto the wellstream. “There is a significantqualification program that has been completed,”he said. “With this amount of qualifications,it has been a real struggle to keep theproject within a normal delivery schedule. Weare behind, but are confident that we will meetStatoil’s ultimate need date.”While exotic metals are being used, equipmentexposed to the high temperatures bothexpands and contracts. This metal movement,mainly due to high temperature, has to be overcometo ensure systems integrity. He explainsthat the reservoir pressure is lowered by subseachokes while flowlines are protected by ahigh integrity pressure protection system(HIPPS) which monitors pressure lines – andshuts them down if any design limits are closeto being exceeded.Some of the metals are exposed toextreme temperature ranges from minus 68˚F(20˚C) up to 338˚F (170˚C). “That is thebiggest challenge.” He continues, “There is noother facility that has this high productivityand this combination of HPHT.” Kristin is theproof of the strength of Aker Kvaerner’s projectexecution model and construction methods,together with planning, procurement and informationmanagement methods and systemtools. It has proven how these systems canmanage and adapt to new situations as theyarise – and keep a project on track. The groupsays the Kristin gas production platform willbe delivered on time, March 25, 2005, and itwill become a reference project both for Statoiland Aker Kvaerner."Subsea EPCSubsea production equipment, including four templates,wellheads with christmas trees and control systems,umbilical and associated installation equipment.Contract Value: $142.8 million (NOK 1 billion)PLATFORM CONTRACT DISTRIBUTIONWeight (Tons)Size (Feet/Meters)FC Samsung, Korea Semi-submersible Hull 14,455 250 x 210 x 135/76 x 64 x 41FC – Dragados, Spain Riser Area + Flare 4,230 280 x 100 x 65/86 x 30 x 20EPC Emtunga, Sweden Living Quarters + Helideck 2,010 160 x 50 x 60/49 x 15 x 18EPCH Aker Stord, Oslo & Stord Process Area 6,475 265 x 95 x 75/81 x 29 x 23Utility Area 5,369 280 x 105 x 110/86 x 34 x 33AKER STORD SUB-CONTRACTINGTons & HoursAKER VERDAL Main Steel Utility Module 1,500 TonsKVÆRNER EGERSUND Structural Sections to Utility and Process Modules, 28 Units 1,500 TonsKVÆRNER ROSENBERG 3 Structural Sections 280 TonsSTORD OFFSHORE Aluminum 50 TonsSUNDE OFFSHORE INDUSTRI Structural Nodes 13 TonsMORSKA, (Poland) Structural Outfitting/Aluminum 330 TonsLUSTER MEKANISKE Prefab. Piping 35,000 Man-hoursKVÆRNER EGERSUND Prefab. Piping 35,000 Man-hours16 17

TechnologyOrmen Lange:Breaking NewGroundBy Terry KnottOrmen Lange, currently Europe’s largest gas development, is forginga major new energy supply link between Norway and the UK. Pivotalto the project is the gas processing plant at Nyhamna, now under construction, forwhich Aker Kvaerner is bringing together its internationalexpertise in design, procurement and construction management.On a small inshore island off the west coastof Norway, a patch of rocky ground was ceremoniallybroken in April. Over the nextthree years, that patch will expand in size asthousands of tons of concrete, steel andprocess equipment are shipped onto theisland in a construction operation that willtransform the site into one of the most moderngas processing terminals in the world.For this is Nyhamna on the island ofGossen in the Møre and Romsdal region ofmid-Norway, chosen as the location toreceive gas from the Ormen Lange subseagas field some 75 miles (120 km) away to thenorthwest. In October 2007, gas will begin toflow through the process plant at Nyhamna,marking the start of operations in Europe’slargest current gas development. The project,valued at $9.5 billion (NOK 66 billion) byoperator Hydro, stands out for its plethoraof first-time achievements, not least in bringinggas directly to shore in multiphase flowpipelines from subsea wells in waters up to3,300 ft (1,000 m) deep – Norway’s deepestoffshore field to date, and the most ambitious“subsea to beach” project yet proposed.“The Ormen Lange project is of greatimportance for two countries,” says Tom Røtjer,Hydro’s Project Director. “Some 740 billionft 3 (21 billion m 3 ) a year of natural gas willbe produced at peak from the field’s 24wells, boosting Norway’s gas export capacityby 25 percent. Most of this gas will be transportedthrough the new 745 mile (1,200 km)long Langeled pipeline – the longest in theNorth Sea – to Easington in the UK, supplyingup to 20 percent of the country’s gasdemand. In Ormen Lange we have a veryrobust project based on large gas reserves,around 14 trillion ft 3 (400 billion m 3 ), secondonly to the giant Troll field on the Norwegiancontinental shelf.”© Hydro18 19

Condensate loading jetty.View of processing facilities.Norwegian Contract FirstWhen the Ormen Lange gas arrives onshore, itmust be treated, turned around and redirected tothe UK through the Langeled pipeline. And thatis where the $2.5 billion (NOK 17 billion)Nyhamna processing plant will play its vitalrole as the hub for the field development.In March last year, Aker Kvaerner won afiercely contested $137.5 million (NOK 950million) contract from Hydro and the OrmenLange development partners to carry out frontendengineering design (FEED), detailed engineering,procurement and constructionmanagement support for the Ormen Lange gasproject. Although Norway has several gasreceiving terminals along its coastline, thismarks the first time such a contract has beenawarded solely to a Norwegian-based company.“We wanted a contractor that could carryout the FEED and continue to work with usthroughout the project,” notes Røtjer. “The gasplant is on the critical path for a 2007 startup, anddefines the overall schedule. Aker Kvaerner’sstructured project management approach, itsquality control in engineering and procurementactivities, plus competitive bid price definitelymade it the best choice. We are confident thattogether we can achieve our goals.”Røtjer also acknowledges that another keyinfluence in the decision was Hydro’s highly successfulGrane offshore development, which benefitedfrom Aker Kvaerner’s project managementexperience in bringing the development in $145million (NOK 1 billion) below budget.One of the key factors in Grane’s successwas the long FEED period, enabling the projectto reach a very advanced stage of definitionbefore detailed design began, thereby avoidingthe all-too-frequent changes which can comealong later with associated penalties in cost andtime. For the Nyhamna plant, Aker Kvaerner hasagain performed an extensive FEED phase, completingthis last January before moving on to thedetailed design in its Lysaker offices in Oslo.Major EPC AwardFurther Ormen Lange success for AkerKvaerner came in July this year, when the companywas awarded a $290 million (NOK 2 billion)engineering, procurement and construction (EPC)contract for the gas reception and export areas ofthe Nyhamna gas processing plant. The projectwill call on the services of several companies inthe group, including Aker Kvaerner Engineeringand Technology, the construction yards at Verdaland Stord, and Aker Kvaerner Elektro. This is oneof three EPC contracts that will be awarded underthe existing EPCM contract.Quality ManagementØystein Haukvik, Aker Kvaerner’s ProjectManager for the Ormen Lange work, identifiessome of the key elements of the company’sproject management model – part of AkerKvaerner’s Global Execution Excellence initiative– which helped win the contract.“A lot of experience from across the grouphas gone into this generic planning model forlarge projects,” he explains. “It identifies theinter-discipline dependencies and interfacesvery clearly, and this gives us better quality controlon both our own work and that of the many“In Ormen Lange we have a very robust projectbased on large gas reserves, around 14 trillionft 3 (400 billion m 3 ), second only to the giantTroll field on the Norwegian continental shelf.”vendors in the project – we don’t just input manhoursto the model, but quality progress too. Wewill be expending some 1.2 million hours overthe course of the contract, and this advancedmanagement tool will mean we can keep verycareful control of quality, schedule and budget.”The model has also demonstrated its flexibilityand value by allowing Aker Kvaerner toincorporate the activities of the civil engineeringdiscipline required for the plant design andconstruction, for which Norwegian civil engineeringspecialist Multiconsult has beenbrought into the team as a partner.The team in Lysaker has pulled on AkerKvaerner’s wider international engineering capabilities,ensuring the best experience is beingbrought to bear on the Ormen Lange design.Engineers not only from Norway, but also fromAker Kvaerner’s operations in Houston andZoetermeer in the Netherlands, are contributingexpertise gained in international projects inonshore gas processing and chemical manufacturing.Another Aker Kvaerner company, KPGIbased in Mumbai in India, will work under subcontractto the main project during detailed design.“Having this high-quality, low-cost engineeringresource in India available to us alsohelped us win the bid,” says Haukvik. “KPGIwill create the detailed 3D model of the plantand issue construction drawings.”Handling the GasThe Nyhamna plant is designed to export 2.5billion ft 3 /d (70 million m 3 /d) of processed gasand handle up to 63,000 bpd (10,000 m 3 /d) ofcondensate. When the wellstream from OrmenLange arrives at Nyhamna at around 1,300 psi(90 bar) pressure, it will first be routed to “slugcatchers” to remove slugs of liquids, whichcould damage the process plant.“There will be four slug catchers,” explainsJanne Harstad Rasten, Aker Kvaerner’sEngineering Manager for the project. “Each ofthese will be 512 ft (156 m) long, giving a separationarea of 344,500 ft 2 (32,000 m 2 ). We believethese are the largest of their kind in the world.”In addition to condensate and water, the gasflow will also contain another liquid component,monoethylene glycol (MEG), an antifreeze continuouslypumped from Nyhamna to the subseawells and injected into the wellstream to preventthe underwater flowlines from freezing due toice-like hydrate formation – at 3,300 ft (1,000 m)under the sea, temperatures are around 32˚F(0˚C), creating conditions where hydrates canform and block flowlines.Leaving the slug catchers, the fluid streamwill be heated, and then wellstream liquids willbe separated from it. The exiting gas will bedehydrated and compressed to 3,050 psi (210bar) in three 48 megawatt compressors beforebeing exported into the Langeled pipeline – likethe rest of the Nyhamna facilities, these compressorswill be electrically driven by powertaken from the national grid, and will produceno atmospheric emissions.Ormen Lange Process SchematicPressurecontrolWell fluidsfrom OrmenLange wellsGasSlugcatchersMEGrecycleto wellsDehydrationLiquidsSeparationMEG will be regenerated and recycled tothe offshore wells, while separated producedwater will be cleaned to a very high specificationand discharged into the sea. The condensateseparated from the wellstream has a marketvalue and will be stored in an underground cavernwith 5.3 million ft 3 (150,000 m 3 ) capacityhollowed out from the rock some 195 ft (60 m)below the surface of the island, before beingperiodically exported via a purpose-built jettyto sea-going tankers.Environmental CareGreat effort has gone into the design to ensurethe 2,300 people living on the island will not beadversely affected by the plant’s operation.“We have carried out many environmentalimpact assessments,” adds Rasten, “and havestrict controls on atmospheric and marine emissions,noise, and visual impact. In all aspects ofplant operation we are applying best availabletechnology to ensure we achieve the highestquality in health, safety and the environment.”Over the course of construction, some 800concrete foundations will be built to support8,400 tons of structural steel, 24,000 tons ofpipework and 11,400 tons of equipment, allinterconnected by 620 miles (1,000 km) of electricalcables and 580 miles (930 km) of instrumentcables, conveying 10,000 hard wiredDew point control20 21RecompressionMEGregenerationCondensatestabilizationsignals from around the plant. At peak, the constructionworkforce is expected to reach 2,500.In time, gas pressure will fall in the OrmenLange reservoir, requiring offshore compressionto be added in order to keep the gas flowingto shore, probably around 2015-2017. Themain alternatives for achieving this will beeither a new offshore compression platform orsubsea compression. The latter course, preferredon economic grounds, requires this technologyto be fully developed and tested in time.Aker Kvaerner is already at an advanced stagein the development of a subsea gas compressor,and is eager to support Ormen Lange with this.Both Røtjer and Haukvik agree that thetwo major challenges facing them at Nyhamnaare the scale of the plant – this stretches foralmost 4,900 ft (1,500 m) along the coastlineand goes back into the island almost 6,600 ft(2,000 m) – and the construction schedule.“The schedule for the Ormen Lange terminalis shorter than was available for otheronshore gas terminals in Norway,” Haukvikpoints out. “It’s tight in all phases and requiresmost bulk materials to be ordered early. But weare confident that we have the right people andthe right tools to carry out this job successfully.We will be ready in 2007.”When the first gas begins to flow from OrmenLange, the small patch of rocky ground on Gossenbroken last April will be a very distant memory."ExportcompressionStorageGas exportCondensateexport

usinessThe Aker Kvaerner OperationsOperations & Maintenance SupportBusiness ModelChallenging and Changing the North Sea Contracting GameBy Jeremy CresswellIn 2003, Aker Kvaerner Operations (AKO) was established in Stavanger. Eight months later, it openedits doors for business in Aberdeen. Created by Aker Kvaerner group as a response to the dramatic changein North Sea market conditions, its brief is upstream operations services – primarily managing tail-endproduction, marginal field operations development and operations consultancy.Model“When asked what we do,AH001 operated by Aker Kvaerner Operations.I say everything that an oil companydoes, except take ownershipof the reservoir itself.”With a starter pack of two core contracts – Friggin the Norwegian sector and the Amerada HessAH001 floating production unit on the UK side– Aker Kvaerner Operations’ CEO, MD ToreNedregaard, was able to hit the ground running.Nedregaard arrived at AKO in November2002 with an oil company heritage, includingworking in the Frigg field. Indeed AkerKvaerner’s experience with this field was a catalystto creating AKO as a differentiated entitywith an operations focus.It represents a natural evolution of the group’scapabilities and essentially complements AkerKvaerner Offshore Partner, where the main focus ison engineering, construction and support services.The Frigg contract had initially been heldby the group’s Offshore Partner unit, as was theAH001 package.Learning FastNedregaard’s view is that it is essential toclearly define operations from engineering,construction and related support, while alsorecognizing the linkage. This is important,given the shift towards “duty holding” contractorsthat is now taking place in the UK sector.“When Frigg operations were originallyawarded to Offshore Partner, they haddifficulties understanding what the customerwanted,” says Nedregaard.“They couldn’t understand how relativelysmall details – that one wouldn’t spend muchtime on in a project environment – assumed greatimportance in an operations environment.”“But I think Aker Kvaerner learned veryquickly from that. We understood that weneeded to have a different set of people and adifferent set of attitudes. As a consequence,AKO was established, including a view to getout there and partner with oil companies.”Not only are traditional operators inNedregaard’s sights, but also the new generationindependents, many of which comprise ahandful of highly experienced, former seniorsfrom the majors. His objective is to provide notMD Tore Nedregaard,Aker Kvaerner Operations CEO.just a one-size-fits-all partnering service, butalso one that is tailored to real rather than presumedneeds.Tailored Approach“When asked what we do, I say everything thatan oil company does, except take ownership ofthe reservoir itself,” says Nedregaard.“As a top-of-the-ladder contracting group,we can use our own internal capabilities such asAker Geo to assess a reservoir; we have theability and facilities to build infrastructure; andwe now have the capability to operate a facilityand to remove it at the end of the day. We canprovide the complete package, if someonewants that, or just elements.”But what about the mid-ranking independentssuch as Talisman, Kerr-McGee or Apachethat have substantial balance sheets and significantexpertise and capability in their own rightand which are looking for switched-on contractorsto partner with them?“I think this is exactly what has happenedwith Amerada Hess,” Nedregaard responds. “Ibelieve they have realized that contractor partneringis right for them. They can identifyassets and, if they don’t have sufficient manpower,they can ask a contractor like AkerKvaerner Operations to become involved. Inthis respect, I see Hess as being on the leadingedge of an evolution that will dominate theindustry in the years to come.”“With the AH001, Hess has found a businessmodel that enables them to continue in theNorth Sea without the burden of managing anoperation. With Aker Kvaerner and AKO, theycan be very comfortable with outsourcing theoperation’s responsibility. They can get the bestof both worlds.”Hess had expected to cease productionwith the AH001 (Ivanhoe/ Rob Roy fields) in2005. However, under the deal with AKO, thedrop-dead date is pushed back to 2007, at leastbased on $20 oil, with 2010 a longer-term goal.DeliveryThat said, what makes Nedregaard believe thata company such as AKO can deliver sufficientreturn both to itself and a client oil companywhose infrastructure it assumes responsibility for?“That’s the magic that makes AKO sovaluable: we are delivering,” he says. “Thereare a number of drivers in an oil company, butyou almost have to have been in one to understandwhy a major cannot excel both on findinggiant new fields off Africa and keep agingassets delivering efficiently, or finding a way ofdealing with marginal discoveries.”“We talk to the oil companies at a strategiclevel and connect budgets with the actual drivers.You find in so many operating organizationsthat, while there is a budget, there is a disconnectwith the true business drivers.”There’s a common thread that runs throughmost oil companies: if you’re employed by amajor and you have a choice (which the best peoplealways have) as to where you work – an almostsub-economic North Sea asset or the biggest newproject – you will take the latter. It’s normal.”“AKO’s advantage is our specialization.We’re doing it by being that bit more dynamicand clever, making decisions on Tuesday andnot on Friday (sooner than later) and having atotally different mindset. We’re a small organizationand we’ll always be a compact organization.There is no way we’ll let ourselves growtop-heavy with several layers of management.”Competitive … ReallyWhile Nedregaard is confident that AKO willblossom, he still has to battle with industrymindsets, not least the misconception thatNorwegian companies are expensive.“We have done a very detailed study, takinga standard platform in the UK sector and asimilar one in Norway and compared costs. Wehave also commissioned a Wood Mackenziereport, mapping comparative costs of UKCSagainst NCS. The outcome is that in relativeterms, the difference in lifting costs per barrel iseight to ten percent in favor of the UK. McKinseyhas also run a study and they came up with eightpercent – not much different from our result.”“And yet, when people visit Stavanger,walk into a pub and order a beer, they assumethat everything else in Norway is just as expensive.It’s just not true.”Driving the point further, Nedregaardhighlights that it was Aker Kvaerner’s Verdalyard in Norway that won the UK Buzzard fieldplatform jackets EPC contract in the face ofstiff international competition.“In AKO we are factually oriented. Wechallenge every so-called established truth; wehave to. Although we have only two operationsat the moment – AH001 and Frigg – we are alsoacting as consultants for major oil companieson how to reduce their costs of operations.Clearly, they have seen that they have somethingvaluable to offer.”“We are absolutely confident there’s a significantamount of business out there to capture.”"“In AKO we are factually oriented.We challenge every so-calledestablished truth; we have to.”22 23

Business FocusBanking on theCooperativeBy By ??????By Darius SnieckusThe UK and Norwegian governments are promoting it as “win-win.” Operators arereorganizing to do it. So just what will “cooperation” mean to life in the maturing offshoreoil and gas provinces of Europe? Aker Kvaerner’s Marketing Director FrancisKiernan talks about the opportunities presented by this “borderless” world.Through its operations offshore Europe, aregion now easing into “Third Age” maturity,the oil and gas industry is gradually teachingitself how to cooperate, chiefly by keeping thequestion “why?” at the center of discussions onfuture developments. Beneath the waters separatingthe UK and Norway there are still combinedhydrocarbon reserves of some 100 billionboe. And no one would make the case againstexploiting this share subsurface resource to thefullest – with the provision, naturally, that it bepumped out at an economic per barrel cost.To this end, a new economics – or at least theemerging operator-contractor ecosystem that isforging it – has started to take shape on the NorthWest European continental shelf (NWECS).Oil companies such as Royal Dutch/Shelland ConocoPhillips have nailed their panEuropean colors to the mast by integratingtheir respective operations on the NWECS andin the new-look relationships evolvingbetween contractors and their independent oilproducers – many of which are recent arrivals.The potential reward generated by closercooperation is looking increasingly practicaland financially attractive.Last summer, Shell put pen to paper followinga year-long strategic rethink on its oiland gas activities in Europe. The result, setwithin the larger frame of a worldwide restructuringthat targeted “more value and reducedglobal operating costs” equal to $500 – $800 millionwithin three years, was the formation of EPEurope, a “new gen” oil company harnessingoperations experience and technology fromeight European countries under one executivemanagement team.Behind this vision of unification, the Shellman who shepherded the restructuring,Technical Director Kieron McFadyen, suggestsEP Europe reflects the need among North Seaoil companies for a new psychology of “connectivity”to make the most of the changingEuropean theatre of operations. Though “efficiencies”were key to Shell’s plan, what theoperator was angling at was the acceleration ofinternal communications. “Time is money”remains a truism.A few months beforehand, ConocoPhillipshad set out its plan for a strategic ring-fencingof operation on the UK and Norwegian continentalshelves (UK and NCS) with the like aim of“maximizing operating efficiencies” upstream.Based on a long-standing, cross-border axisbetween its UK Britannia development and itsEkofisk complex off Norway, ConocoPhillips’pan European corporate structure will overarchthe Greater Ekofisk, Greater Britannia,Southern North Sea and Partner Operations &Business Development units, with offices inAberdeen and Stavanger bridging the divide.“Combining our Norwegian and UK businessactivities will enable us to further leveragethe expertise and strengths of 40 years of operationsin the North Sea and to build on our significantlegacy assets in the region, exploit theconsiderable growth potential we envision andcontinue as a contributor to both the Norwegianand UK economies,” says ConocoPhillips’President of Europe & Africa, Henry McGee.Aker Kvaerner, one of the longest-servingcontractors on both sides of the NorthSea, has not been slow to recognize the firstsigns of this fundamental shift in the market,underlines Marketing Director FrancisKiernan, and is moving to position itself to“leverage experience and technology builtthrough 30 years’ project work” in theseneighboring offshore sectors.“We are uniquely placed due to our significantpresence in the Norwegian sector and ourability to leverage our wide range of serviceson the UK and NCS,” he says.Encouraged by various initiativeslaunched by Pilot in the UK and KonKraftin Norway – the government-industry bodiescharged with extending the economic longevityof their respective country’s offshore resourcesand both vocal advocates of closer cooperationand freer trade across the maritime boundary –Aker Kvaerner has set up a cross-border workgroup that is currently in the “latter stages” offormulating a business strategy for this integratedmarket.“We are uniquely placed due to our significant presence in the Norwegian sectorand our ability to leverage our wide range of services on the UK and NCS.”“It is Aker Kvaerner’s intention to be asignificant player in this larger market,”Kiernan states. “We are in the process of finalizinga development model that addresses boththe issues of cost and value and allows us toleverage the use of our existing product base.”Part of this “entry” strategy involves dispellingthe “popular myth” that the Norwegiansector is that much more expensive than the2425

UK, he continues. “Independent research commissionedby (UK analysts) Wood Mackenzieindicates that in the 20-year window between1990 and – projecting forward – 2010 the overalldifference in lifting costs is somewherebetween five to eight percent.”Government ApprovalStarting from the shared challenges being facedby the UK and Norwegian offshore sectors, thetwo countries’ governments are putting finaldetails on a long-awaited industrial agreementthat aims to provide a “firm basis” for investmentin new infrastructure in the region, whilesetting out the terms for a framework treaty oncross-border cooperation.This treaty would improve life on the UKand NCS in many ways. For one, it would pave theway for deliveries of Norwegian oil and gas to itsNorth Sea neighbor, just as the UK loses energyself-sufficiency in 2006; for another, keepinginfrastructure operational – on the Tampen/BrentFLAGS system, for instance – will make it possiblefor several production optimization projects,such as Statoil’s Statfjord Late Life development,to meet budgetary requirements.For North Sea oil companies and theircontractors, the new cooperative spirit has furtherbenefits. Not least among these is the factthat, according to a group of Pilot-KonKraftwise men, some $2 billion could be savedacross the two provinces through collaboration.Another, as spelled out in a 2002 report, is the13 billion boe identified as still lying undevelopedin a 37 mile (60 km) wide “corridor” alongthe UK-Norway maritime boundary.On the UK side there are seen to be 32potential field developments with 75 discoveries“worthy of commercialization,” while inNorwegian waters some 31 developments andseven not-yet-commercial finds lie untapped.Moreover, spending in this cross-border“corridor” through 2010 is projected to amountto $171 billion, with another $35 billionexpected to be spent in the 10 years that follow.The upshot is that each one percent savings incapex will equate to an economy of $35 million/yr,while each one percent savings in opexwill net $50 million. And if decommissioningcosts were trimmed by five percent through“cooperative practices,” costs would comedown by $150 million.The UK and Norway long championedtheir vested interests on the NWECS, but settinga precedent in cross-border cooperation is onesure means of kick-starting behavioral changealong the length of the supply chain in bothcountries’ offshore sectors.Independent ThinkingThe independent oil companies that have joinedthe ranks of operator on the UK and NCS of lateare being looked to by many, not least governments,to help redefine offshore activity in thetwo provinces. North America’s Apache, EnCana,CNR and their “New Oil” colleagues, along withthe legion of smaller, often venture capitalistbacked start-ups, appear to welcome the chanceto change the guard in the region by applying newbusiness models to their operations.This new “Third Age” commercial ethos isbringing a sense of the “new” to contractualrelationships emerging between operators andcontractors. Many mainstay North Sea servicecompanies speak of targeting a market increasinglyinfluenced by new entrants propelled bydrivers of cost effectiveness and “individuallyfocused relationships” with contractors.For Aker Kvaerner, one of the demands oflife on the UK and NCS is the juggling of longestablishedbusiness relationships with first-tiermajors and those new customers “looking for adifferent type of service.” It is becoming a questionof managing the intermittent needs of theindependents with providing the more “continuousservice” requested by larger asset holders.Lower expenditure is not the sole driver for theindependents: “responsiveness” is at least ofequal importance.According to Kiernan, Aker Kvaerner hasbeen building on its customer base in the UK andNCS “in line with (its) belief that the independentsector requires long-term relationships, theapplication of proven technology, and the abilityto deliver a complete range of bundled services.”Just as the North Sea is changing for operators,so it is for contractors. Development workis evermore reliant on cooperative strategies,with majors looking for contractors to take ongreater responsibility, independents happy forthe experience and a contractor who can bringexpertise and regional knowledge to the table.With the NCS some eight to ten years“less mature” than the UKCS, it is only a matterof time before many reform-minded independentsmove to ply their trade off Norway.Canada’s Talisman Energy, for one, made theleap recently via a build-on asset deal thatencompassed operatorships in the NorwegianNorth Sea along with the acquisition ofConocoPhillips’ stakes in two further licenses.Whatever the eventual shape of theNWECS, there is no mistaking that a “substantialand internationally competitive” independentssector remains some distance off. Themake-up of both the UK and NCS operatingfraternity is still polarized between super independentsthe scale of Apache et al and the raftof small start-ups. Equally certain, however, isthe opportunity represented by the companies –and following on, of those contractors and suppliersthat best cater to their future requirements– is not to be denied either, a reality seenin the fact that private equity investment inEurope’s oil and gas sector as a whole jumped127 percent from 2002/03, a year in which totalPE spending on business fell by 20 percent.“Aker Kvaerner believes now is the time toprepare for the operations and projects that willbe developed ‘across the median line,’” statesKiernan. “A key to this preparation is an understandingof the primary, legal and technicalspecifications that currently separate the operatingenvironments. As a veteran contractor inthese provinces, we are well placed to do so.”“Finally, of course, unless there is an overallbusiness advantage here in terms of costreduction for the operator, there is no addedvalue,” he concludes. “We can help show oilcompanies how to gain that value.”"“It is Aker Kvaerner’s intention to be a significant player in thislarger market. We are in the process of finalizing a developmentmodel that addresses both the issues of cost and value and allowsus to leverage the use of our existing product base.”Operations & Maintenance SupportBy Jeremy CresswellTeesside AllianceDelivers Winning FormulaFor a company to be effective in business, it mustcare about clients. Nurture those relationshipsand remarkable results are possible, asdemonstrated by Aker Kvaerner’ssuccesses on Teesside.26Huntsman’s Olefins facility.27

“AK Engineering Services is the engine roomof growth for engineering services at AkerKvaerner,” says Paul Hardy, a TeessideAlliance Manager.With 2,300 on its payroll in the UK, thiscompany is a potent force … one that offers thepeople, skills, technologies and know-howrequired to deliver the forward-looking solutionsthat today’s upstream energy sector demands.In essence, today’s AK EngineeringServices business in Britain was seeded in1994, when a five-year maintenance contractwas struck with chemicals giant ICI, includingits Wilton Olefins complex on Teesside, andwhich involved transfer of workshop resourcesand its central engineering workforce.“We achieve these targets28through innovation, betterplanning, sharing of resourcesand new engineering technologiesin order to work morecost-efficiently while takingfull account of HSE.”Huntsman’s Olefins facility – maintained by Aker Kvaerner.“This gave us a bedrock of capability to executemaintenance contracts on Teesside,” says AkerKvaerner’s Paul Hardy, who was later involved inthe management of this 450-strong workforce asOperations Manager for Wilton and Billingham.More of the Wilton story later. But the ICIdeal opened the door to other business beingsecured by Aker Kvaerner in one of Britain’sbackbone chemicals and petroleum productsindustrial locations such as ConocoPhillips’ OilTerminal at Seal Sands operated for Norpipe,which largely draws its feedstock from theNorth Sea – via the Ekofisk Pipeline network –where it is cleaned, reduced in pressure and forwardedto North Tees Refinery.Notable among such clients is BASF,which initially asked for assistance in redesigningits maintenance and operations strategy atits Seal Sands facility under an Americanmethodology called Everest.This presented Aker Kvaerner with theopportunity to harness the skills base conferredunder the ICI arrangement, marry those with existingNorth Sea offshore contracting expertise andbreak into the petro-chemicals support market.There is a strong logic as naphtha andpropane are “cracked” at the olefins complexto produce ethylene and butadiene, which arethe petrochemical industry’s basic buildingblocks used to manufacture virtually all plasticconsumer products made with chemicals,while BASF uses feedstocks from North Teesrefinery in producing base chemicals fornylon products.“This was us starting to build a portfolioof ‘blue chip’ clients,” recalls Hardy.“BASF had an ambition to reduce itsfixed-cost base and turn it into a variable-costbase that would, in terms of maintenance, becontractor led.”“They wanted to redesign their maintenanceoperations by offering to transfer theirentire contractor workforce, thereby becomingan alliance partner with AK EngineeringServices while, at the same time, moving keytechnicians into an operational role to supportfront-line maintenance.”That transition took place over a ninemonthperiod founded on an Alliance-style,incentive-based risk and reward contractfocused on improvements in areas such as centralizedplanning, engineering support, designcapability, rotating equipment management andtotal valve management.Workforce flexibility was an essential element.Hardy says, “It’s about being able tomigrate people in and out with workflow, thepeaks being major plant shut-downs.”The fruitful BASF relationship continuestoday and demonstrates how a focused operationsand maintenance contractor with a wideclient base can successfully maximize opportunitiesand flexibility to move personnel aroundand share best practices.Forging an AllianceReturning to Wilton, it was in July 1999 that ICIsold a number of key Teesside units – olefins,polyurethane, paraxylene and Tioxide – toHuntsman, the largest privately held chemicalcompany in the world.As Aker Kvaerner was the incumbent maincontractor at olefins and already had prior Tioxideexperience, it became obvious that it should seekto widen that remit to include polyurethanes andparaxylene, both of which are co-located atWilton, and also the Tioxide business at Greatham.The reason why Huntsman took this route isclear enough … there was a need to streamlineand make more efficient the businesses it hadbought. And today, this process is most advancedat the olefins plant, according to Hardy.“Huntsman was looking at opportunitiesto reduce costs, innovate and implement adifferent contractor approach,” he says.“Consultants engaged to review the strategysuggest that, while all contractors wereextremely competent, there was duplication ofroles and overlapping functions.”“An alliance-style arrangement was proposed,whereby key contractors with the abilityto influence maintenance strategy and costsshould be re-engaged under a contract that providedopportunities to earn enhanced profits inreturn for delivering innovative solutions andsmart working. The direct result is the creationof a win-win relationship.”“Within the olefins alliance there is amanagement team headed by me and supportedby Huntsman and other lead contractors, all ofwhich report to the alliance board where thestrategy is steered.”At the heart of the alliance are eight key performanceindicators (KPIs) – safety (OSHA –Occupational Safety and Health Administration)rate, safety compliance, task management, overtimepercentage, maintenance ratio, loss accounting,budget compliance and standard scaffolds.An annual target is set for each.An overall maintenance target cost is alsoagreed annually among the alliance partnersincluding, of course, Huntsman. And AllianceManager for AK Engineering Services is PaulHardy himself.“We achieve these targets through innovation,better planning, sharing of resources andnew engineering technologies in order to workmore cost-efficiently while taking full accountof HSE,” he says.“We reward the workforce out of anymonies gained from the KPI scheme for theirpart in safety performance. But this is a rewardfor excellent safety performance; it is not payingfor safety performance.”Encouraged by Huntsman, Aker Kvaerner isnow extending the gain-sharing approach furtherdown the supply chain with key sub-contractors.Also, the olefins success is being extendedinto polyurethane, paraxylene and Tioxide, theobjective being to further reduce Huntsman’sUK fixed- and variable-cost base.“There is a theme with Huntsman in that itshows how working together can help theclient, while also moving us up the valuechain,” adds Hardy.Into EuropeUntil now, the primary focus of the businesshas been the UK market, but change is afoot.Aker Kvaerner has ambitions in ContinentalEurope, and BASF, ConocoPhillips, DuPontand Huntsman are seen as the key.A preliminary network has been establishedand, in the case of Huntsman which hasoperations in the Netherlands, key contacts arealready in place.Says Hardy, “Migrating our skills intoEurope is a natural progression for us. We’rerecruiting project managers in anticipation ofwinning work; we’re also recruiting expertisefrom the pharmaceuticals and nuclear maintenanceindustries to enable us to move into thoseareas as they are also key to expansion.”“I’ve made a number of presentations tothese new project managers as part of theirlearning about Aker Kvaerner’s track recordserving the needs of petrochemicals in the UK.”“Lessons learned are a key component ofour strategy to ensure we don’t trip up as weenter these new markets.”Hardy agrees that Aker Kvaerner’s alreadyconsiderable presence on the Continent, includingthe upstream technology and project engineeringskills at the group’s Zoetermeer officesin the Netherlands, should help make it easier forAK Engineering Services to carve a wider EUmarket. Russia and China are also in its sights."Today’s close, working relationshipbetween clientand contractor is the resultof considerable effort on both sides, as WiltonbasedHuntsman Olefins Engineering ManagerKevin McQuillan confirms.“Relationships between client and contractorhave evolved since the original transitionsidebarin 1994. After that change, it took us a whileto work out the best way to work out a mutuallybeneficial relationship. This has evolvedover time into today’s alliance arrangement,”says McQuillan.“It was important to work together and tomove from standard incentives contracts tomore inventive arrangements and to ensureclarity of role … contractors knowing whatthey’re expected to do.”That said, McQuillan says today’s way ofdoing business means Huntsman is increasinglyreceptive to suggestions from AkerKvaerner on how work programs should betaken forward.“We have created an environment withinwhich AK Engineering Services can contributeto maintenance decision-making in a supportive,non-confrontational way.”“The foundation of this is in the contractualrelationship where both parties gain ifcost savings are made.”McQuillan is keen to see the gain-sharingapproach extended further and he acknowledgesthat this is where the group’s North Sea supplychain experience should prove invaluable.“That’s the direction we’re trying to takeand Aker Kvaerner might have better leveragewith some of our suppliers than we havebecause of their experience. They alreadyhave fairly big input.”“Our strategy is to minimize interfaces andwe need to recognize that in some areas,handing over responsibility of sub-contractmanagement to Aker Kvaerner might deliverbenefits to both parties.”“It is important for Huntsman’s success,and ultimately for Aker Kvaerner, that wework together to ensure continuous improvementin our overall control of maintenancecosts. Our contractual relationships providea good framework and we are currentlyengaged in an initiative to understandand improve productivity at all levels.”29

Business Focus: Maritime HydraulicsCloning forCost ReductionACG Central: Drilling control room duringtesting of drilling facilities in Baku.By Amanda Powell“Again, becausewe are not startingfrom scratch,it is easier toensure smootherstart-up andoperation ofthe systems.We know whatthe issues areup front andwe have alreadyidentified andresolved anytechnicalchallenges.”In the space of three short years, MaritimeHydraulics, Aker Kvaerner’s drilling equipmentand systems specialist, has scooped three keycontracts for drilling packages to be installed onplatforms in the Azeri, Chirag and DeepwaterGunashli (ACG) Field Development, in theAzerbaijan sector of the Caspian Sea. This majoroil complex is being developed by BP-operatedAzerbaijan International Operating Company(AIOC). The drilling equipment packages arebeing designed and built by MaritimeHydraulics to a standardized configuration, anapproach that is bringing significant cost savingsto client and contractor alike, as well asimproved efficiencies and greater reliability.With more than 30 years’ established trackrecord in designing and building world-classdrilling equipment, the team of engineers atMaritime Hydraulics had been looking at waysto reduce costs through standardization forsome time. As Thor Arne Haaverstad, VicePresident – Equipment at Maritime Hydraulics,explains, “There are opportunities for standardizationin several aspects of drilling equipmentdesign and manufacture, especially on a multipleplatform field development project. Fromthe work we had already carried out, we wereseeing a reduction particularly in engineeringman-hours and in the time required for testingprior to delivery.”It was August 2001 when MaritimeHydraulics received the news that it had beenawarded a contract to supply a completedrilling equipment package for the first phaseof the Azeri, Chirag and Deepwater GunashliDevelopment for BP/AIOC in the Azerbaijansector of the Caspian Sea. The company’s expertisehad already been demonstrated on contractswith BP for the Valhall project and Hydro forthe Grane project, giving the firm an importantedge over its competitors for delivery of fullyautomated drilling equipment system packages.The ACG Central project called for a fullyautomated drilling system package withadvanced control systems for one of the fiveplanned platforms that would form the entireproject. Four of these platforms are planned tohave drilling facilities onboard.The Start of StandardizationAbout a year after the award of the ACGCentral package, Maritime Hydraulics receivedthe contract for two more drilling equipmentpackages: the West and East Azeri platforms.The design for the West Azeri package is basedon equipment used for the ACG Central package.And for the East Azeri platform, the packagethat is being delivered this autumn is a 90percent duplicate of the West Azeri package.The fourth package for Phase 3 is planned to bean exact replica of the East Azeri equipment.The drilling facilities for all four platformsare fully automated with the most advanced controlsystem available in the market today. Allpackages include control system, derrick, topdrive,pipe-handling equipment and other relevantdrilling equipment designed to meet themost demanding requirements for safety, efficiencyand working environment. Project implementationand engineering is being carried outat Maritime Hydraulics’ headquarters inKristiansand, Norway. During the installation andcommissioning phase, activity transfers to thecompany’s operations base in Baku, Azerbaijan.Driving the Cloning ConceptThe impetus for using standardized equipmentpackages on the contract has come from theACG Central: Hook-up of topsides at yard in Baku, Azerbaijan.client, as Haaverstad comments. “BP/AIOC’sstrategy for this development focuses on theuse of a cloning approach. They saw that bystandardizing the design of equipment forapplications that were fundamentally similar,the cost savings could be considerable, especiallyin such a populated, multiple platformenvironment. It was a concept that we hadalready embraced in our own operations, butthis is the first time that a major oil companyand operator has driven it through into execution.It gave us the chance to demonstrate whatcould be achieved.”And achieved they have, not just on standardizationof drilling equipment but also onentire drilling facilities. Estimates from MaritimeHydraulics show that when management, procurement,engineering and workshop time arecombined, it is possible to achieve a 50 percentman-hour reduction overall. For engineeringman-hours, the figure can be as much as 70 to80 percent. “The design is a known quantityand the equipment is familiar; this all savestime,” says Haaverstad. Savings in procurementhas also been generated by the ability to purchase… more easily, quickly and cost-effectively…standardized components rather thancustomized one-off designs.Efficiencies in assembly and testing arealso being achieved with fewer man-hoursbeing expended. There is also a reduction in therequirement to incorporate design changes,simply because the need for change is minimizedthrough standardization of design.Benefits All AroundFor the customer, allthis is translating intoa considerable reductionin price. Theother major benefit isthat the quality andreliability of the equipment can be improved.“Again, because we are not starting fromscratch, it is easier to ensure smoother start-upand operation of the systems. We know what theissues are up front and we have already identifiedand resolved any technical challenges.”In addition to equipment cost, Haaverstadis also expecting a considerable reduction ininstallation and commissioning costs for allparties. And in terms of schedule, Haaverstadsays, “We have demonstrated that delivery timecan be reduced by more than 25 percent, a criticalfactor in enabling clients to bring productionfacilities on-stream earlier.”Maritime Hydraulics has been engaged toprovide operational support, servicing and spareparts on the ACG project. This support activity isbeing handled by the office in Baku, which hasbeen considerably strengthened to be able to providea responsive, experienced service level to therigs in operation. This operational support agreementwill be central to the company developing along-term relationship in this dynamic market.A Major Step ChangeHaaverstad emphasizes that BP’s application ofthe cloning philosophy on ACG has brokenthrough the barriers to bring about a stepchange in methodology for this kind of fielddevelopment. It is also the first time that thedoors have opened up for Maritime Hydraulicsto execute deliveries based on cloning for an oilmajor. The added bonus is substantial cost savingsfor both customer and contractor. “The winwineffects are there all around. We believe theopportunities for similar applications elsewherein the world are enormous. Thanks to the foresightof BP, we have been able to demonstratethat our thinking was right. The potential costsavings are simply too attractive to ignore.”"“The win-win effects are there allaround. We believe the opportunitiesfor similar applications elsewhere inthe world are enormous. Thanks tothe foresight of BP, we have been ableto demonstrate that our thinkingwas right. The potential cost savingsare simply too attractive to ignore.”30 31

Business Focus: Aker Marine ContractorsMoving into SubseaInstallationBy Meg ChesshyreSubseaBuilding on 25 years of large-scale marine operations, Aker Kvaerner subsidiary, Aker MarineContractors (AMC), in co-operation with minority shareholder Boa Offshore, is moving into subseainstallation. The first assignment for the newly delivered specialist deepwater offshore constructionvessel Boa DeepC has been template installation for Statoil in the Barents Sea. It is being charteredby Aker Marine Contractors from Trondheim-based shipowner Boa Offshore on a project-by-projectbasis. ROV services are being provided by Oceaneering under a cooperation agreement with Boa.Torkil Jacobsen, Vice President of MarineOperations for Aker Marine Contractors,explains, “Building on our extensive experiencefrom installation of the big gravity-based structure(GBS) platforms, it was a natural move forus to engage in subsea installation contracting.”Boa Offshore’s $100 million plus investment inthe new dynamically positioned vessel is to meetthe subsea market demand in the North Sea andthe deepwater needs of the Gulf of Mexico,Brazil and West Africa. The Boa DeepC alreadyhas a workload in the North Sea and West Africaand is currently being bid for work in 8,202 ft(2,500 m) water depth in the Gulf of Mexico.Jacobsen adds, however, that there is still an elementof wait and see. “Customers are curious tosee how the vessel performs, before committingto further contracts.”First Barents Sea InstallationJacobsen says that the vessel has performedflawlessly so far, meeting both AMC’s andStatoil’s expectations. Statoil’s Snøhvit installationprogram, which began mid May, includedfour templates, one central distribution unitand one pipeline end manifold. Each structureconsisted of a foundation/protection structureweighing around 200 tons apiece and an 80-tonmanifold. The structures have been installed in820-984 ft (320-350 m) water depth in theSnøhvit and Albatross fields, 100 miles (160 km)off Hammerfest in northern Norway. This is thefirst Norwegian offshore installation in theBarents Sea.Boa DeepC is then due to go to Statoil’sKristin field for pre-installation of the suctionpiles and the complete 16-leg mooring systemand the installation of a 185-ton template. Towoutand installation of the Kristin platform willbe performed by Aker Marine Contractors nextspring using vessels from Maersk SupplyServices, with whom Aker Marine Contractorsalso has a frame agreement.In January/February next year Boa DeepCmobilizes to West Africa for floating productionstorage and offloading (FPSO) contractorMODEC International. The contract is for theinstallation of the mooring system and connectionof the FPSO in a water depth of 3,280 ft(1,000 m) for Canadian Natural Resources’deepwater Baobab project off Ivory Coast,West Africa. The scope of work includes operationsplanning, transport of the mooring systemfrom Aker Marine Contractors’ base atStavanger to the Baobab field and pre-installationof the anchors and the bottom chain. Upondelivery of the FPSO at site, connection of apolyester segment in each line will be completedduring hook-up of the FPSO.The hull for the Boa DeepC was built atthe Jing Ling shipyard in China then brought to“Building from the strength of our extensive GBS experience, it was a natural movefor AMC to engage in deepwater installation contracting. To be successful you needa special construction vessel, so that’s why we started this cooperation with Boa.”Boa DeepC about to receive template from Aker Marine Contractors’ crane barge, Conlift.Spain a little over a year ago, where it was outfittedin Vigo at the Factorias Vulcano yard. Itwas christened in late April by Siv Irene Skadsen,Project Manager for Statoil’s Snøhvit project ata ceremony in Stavanger harbor attended byapproximately 250 guests. The bare hull for asecond vessel, known as Boa DeepC II, is beingcompleted at Jing Ling, but it has not yet beendecided where it will be outfitted. The decisionwill be made once there is more information onthe performance and contract position of thefirst vessel.Deepwater CapabilityBoa DeepC has a 250-ton crane, capable of workingdown to 6,561 ft (2,000 m). The 9,000 dwtvessel is 394 ft (120 m) long with a free deck spaceof 12,378 ft 2 (1,150 m 2 ). Total thruster capacityis 6,900 kW. It is equipped with a 23.6 x 23.6 ft(7.2 x 7.2 m) moonpool and two OceaneeringHydra Millennium design work class remotelyoperated vehicles, rated to 9,843 ft (3,000 m).The permanent marine crew complement is 15,but it has beds for up to 100. Facilities includeoffices for clients, hospital facilities, a saunaand gymnasium.The new vessel’s offshore constructioncapabilities include subsea structures and systems,risers, tie-ins, flowlines and umbilicals.Jacobsen says it is one of only a handful of vesselsworldwide with such deepwater capability.“We hope that is a good niche market for us.”He adds that it has been specifically designedfor harsh water environments to give longerweather windows. “We haven’t seen those harshenvironments yet, but we have good expectations.We hope to be able to extend the NorthSea season and work in locations such as thewest of Shetlands.”Anne Mürer, President of Aker MarineContractors, comments, “To be successful indeepwater installation contracting, you need aspecial construction vessel, so that’s why westarted this cooperation with Boa.”Ole T. Bjørnevik, enthusiastic entrepreneurand owner of Boa Offshore, is also verypleased. “The decision to embark on constructionof this new generation vessel without firmlong-term employment was admittedly a boldone, so I am very pleased with the way the vesseland its crew have performed, and with theclose and constructive cooperation with AMC’sexperienced personnel.”"32 32Installation33

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