Unlocking complexity

oil&gas g

Information from Det Norske Veritas for the Oil, Gas and Process Industries No.1 February 2002

Gullfaks B platform, North Sea

2

New sand strategy

Shah Deniz confirm

presence of worldclass

gas reserves

improves production and

6 7 Unlocking

Gassco AS replaces

Statoil in gas transportation

from the NCS

safety at Gullfaks

see page 4

Management

of Major

Accident

Hazards

complexity

of major accident

hazards

---

Seeking sound

commercial business

in Eurasia

2 Oil & Gas News 1 – 2002

DNV Consulting has formed a new

region in Eurasia consisting of the former

USSR countries and Iran. Half of

the world’s gas reserves and huge oil

reserves are located in the area. We

believe DNV can play an important

role in building confidence between

all parties involved.

The Caspian basin has proved to be a

world-class oil and gas province with large

fields such as Kazakhstan’s Kashagan and

the Azeri Chiraq Guneshli field offshore

Baku. The dismantling of the Soviet Union has opened up new oil and

gas plays to foreign competition in Russia and newly independent states

such as Azerbaijan and Kazakhstan. In addition slow, but significant

politic and economic reforms have opened Iran’s oil and gas wealth to

foreign participation.

These macro-political developments are not yet concluded. Bureaucracy,

corruption and obsolete technical capabilities all hamper sound commercial

business. On the other hand, foreign companies have been slow

in appreciating local needs and legitimate national industrial ambitions.

DNV’s desired way to serve

DNV wants to serve existing clients like ExxonMobil, Shell, BP, ENI and

Statoil in the area. We also want to form rewarding and long-term business

relations with new clients like Gazprom, Lukoil and NIOC.

Local companies will give DNV healthy and low-cost competition and

the customers should appreciate it. We know, on the other hand, that

our clients will face major challenges in forthcoming projects which will

require suppliers with:

• broad and advanced technological skills

• a global service delivery and mobilisation model

• a brand recognised domestically and internationally.

DNV can play an important role in building confidence between consortium

partners and authorities, and towards international financial

markets.

OAO Gazprom and Snam’s Blue Stream gas pipeline project, from Russia

to Turkey across the 2150 m deep Black Sea, is one example where DNV

plays an important part. We have been involved in verification from the

conceptual design stages through to fabrication, with the objective of

certifying the pipeline at the end of installation. Other projects we are

interested in are field development in the Sakhalin waters, classification

of semisubmersible drilling platforms and new gas pipelines.

Our assumption and commitment

It is our assumption that regulatory authorities and oil companies in

Eurasia share a basic premise: resources should be developed with

due regard to safety, the environment, technical integrity and local

involvement.

Authorities and companies should also be aware of DNV’s commitment:

we will deliver our services in Eurasia without any technical or ethical

dilution. Admittedly, it will not always be easy, but it is the only way we

can accept.

We are proud to serve clients in great historic nations and look forward

to compete for our clients’ trust and business in this new area.

Nils Andreas Masvie

Regional Manager DNV Eurasia

Shah Deniz –

biggest BP

BP, which has 25.5% of the shares in the field, has been

appointed as Operator. The Shah Deniz partners are Statoil

(25.5%), SOCAR (10%), TotalFinaElf (10%), NICO

(10%), LukAgip (10%) and TPAO (9%).

Three wells drilled on the Shah Deniz structure so far have

confirmed the presence of world-class gas reserves. Shah

Deniz Partners are planning to develop the field in stages,

starting with development of the East Flank and Crest. For

Stage 1, Shah Deniz Partners are planning investment in

pipelines and on-and offshore installations producing gas

for the Turkish, Georgian and Azeri markets. The peak

capacity of the facilities is 900mmscf/d.

The project objective is to produce, condition and transport

gas to market. ‘We cannot wait to see gas flowing, it is

exciting,’ says project director Geoff Vine of BP. ‘This is an

excellent opportunity to open up gas deliveries from Eurasia,

assisting the energy needs of Azerbaijan, Turkey, Georgia

and hopefully in the future Europe. The size of the

field means that Azerbaijan is now firmly positioned to

become a major gas exporter to Turkey at a time when

globally natural gas is displacing

oil as the preferred

fuel for power generation

and domestic heating.’

Geoff Vine is BP’s Project Director

for Shah Deniz Upstream

---

The Shah Deniz gas field lies in the Caspian

Sea, approximately 100 km south of Baku in

water depths ranging from 50 to 500 m

discovery since Prudhoe Bay

Technology

According to Geoff the field is one of the most difficult drilling

environments in BP’s portfolio anywhere in the world. The field

is deep (4500-6500 metres below seabed) with pressures up to

14,000 psi downhole. It requires complex technology to manage

the depth, tectonic stresses, narrow pore/frac pressure windows,

wellbore stability and numerous shallow subsurface

hazards.

Geoff Vine explained: ‘The development plan is based on a progressive

step-out to maximise learning. A maximum step-out has

been imposed in line with the industry drilling envelope which

will limit the wellbore inclination to 35 degrees or less. The

structure is subject to significant tectonic stresses and associated

wellbore breakout, which is expected to contribute to drilling

challenges associated with the development drilling campaign.

Technical expertise has been engaged to determine the magnitude

of the tectonic stresses and predict wellbore stability issues

for the development wells.’

Project Execution

The offshore facilities consist of a fixed platform based on the

proprietary TPG500 self-installing jack-up design. When production

from the platform wells starts to decline a second drill

centre is planned, to be located approximately 5 km south of

the first installation in approximately 300m water. The second

centre is planned as a subsea satellite with wells tied back to a

subsea manifold, with a multi-phase product transported via

subsea flow lines to the fixed platform for gas/liquid separation.

Gas and condensate will be transported through two 100km

marine pipelines from the fixed platform to the onshore terminal

at Sangachal.

A new gas export pipeline installation will be constructed from

Sangachal through Azerbaijan and Georgia to the Turkish border.

Eurasia

At one blow the gas find at the Shah Deniz field will

potentially make Azerbaijan a major gas player in the inter-

national market. The Shah Deniz discovery is the largest

discovery for BP since the Prudhoe Bay oilfield discovery in

the early 1970s.

Safe logistics

Transporting materials and equipment to a country with no sea

connection is a big challenge. The strategy for construction of

the TPG 500 offshore jack-up is to build it in four hull sections

out of the Caspian and then to deliver them through one of the

canals and assemble and commission them in Baku. The delivery

of the sections is constrained by weather, with the canals generally

freezing in November and not opening again until April.

The schedule is delivery as soon as the canals open in 2004. The

TPG 500 is planned to be installed offshore in March 2005, with

the first gas to Turkey targeted for 4Q 2005.

Beate.V.Orbeck@dnv.com

The Istiqlal rig has been

used for exploration

drilling of the Shah

Deniz field

Oil & Gas News 1 – 2002 3

---

4 Oil & Gas News 1 – 2002

Asset Operations

New strategy for

sand management

Statoil’s project manager Halvor Kjørholt,

who was awarded a prize for the most successful

R&D project in Statoil in 2001,

explains: ‘The results of the project are

of great importance for Statoil, due to

the potential for increased production,

improved safety and design optimization

for new fields.

‘A pilot project is finalised and we are

now implementing the system in full

scale on the Gullfaks B platform. According

to our calculations a total retention

of 30,000 barrels a day on the Gullfaks

field has been the result of our traditional

sand production policy. We think we

can manage to reduce this by at least

50% by making use of the new strategy.’

Increased production

The main objective of the pilot study was

to increase safety and at the same time

assess the potential for reduced inspection

and maintenance, and increased

production. The pilot project was implemented

at three production wells on

Gullfaks A, for which the production

capacity was restricted due to sand production.

The sand production limit was

increased by a factor of ten for the three

pilot wells, giving each of these wells an

average of 1,500 extra barrels of oil a day.

About 50 wells at Gullfaks (60% of the

total) are restricted due to potential sand

production. Sand may result in erosion

in the piping system and in components

such as chokes, pipe bends and manifolds,

which eventually may lead to leakage.

Traditionally, the wells have been

Gullfaks A platform

in the North Sea

restricted by the MSR (Maximum Sandfree

Rate) criterion. Without this restriction

production from Gullfaks could be

increased by up to 30,000 bbld.

Continuous monitoring

‘DNV is continuously developing this

service to enable our customers to

increase production rate above the rate

established from traditional production

criteria,’ says Oddmund Kvernvold,

DNV’s project manager. ‘Another important

factor is to allow for increased sand

production without reducing the safety

level or regularity.’

The service is based on detailed and individual

erosion assessment for each well.

Individual production criteria (Acceptable

Sand Rates), are established for

each well or group of wells, based on the

production and operational characteristics.

Statoil has implemented the criteria

in a web-based software package linked

to the production database for the field.

DNV has successfully assisted Statoil in

developing new criteria for sand man-

agement, which has resulted in improved

safety levels and increased production

from the Gullfaks field in the North Sea.

This enables continuous monitoring of

the production characteristics and erosion

development of the individual wells.

DNV applies state-of-art methods and

models for assessing sand erosion in piping

and other critical components. As a

result of the detailed assessment and follow-up

of operation of various wells and

chokes, the safety level will be enhanced

even at higher production rates.

The success of this project follows that of

an earlier project performed for Conoco’s

Southern North Sea fields during

1996-1999.

For further information, please contact:

Oddmund.Kvernvold@dnv.com

Particle tracks through an MOV

choke applied at Gullfaks A

---

Plant availability

The design and operation of a plant,

combined with high reliability and adequate

redundancy levels of plant systems,

are important in achieving high availability.

Selection and implementation of

appropriate maintenance strategies

improves the reliability of equipment,

and reduces unscheduled plant shutdowns.

Although DNV has always had expertise

and experience in the area of equipment

reliability and plant availability, a worldwide

partnership with Jardine Asset and

Risk Management Solutions was signed

in November 2000. The aim is to

enhance our capabilities and address our

customers’ needs related to reliability

and availability services. Jardine’s reliability

software tools (e.g. MAROS and

TARO) are world-class, and used by

many international companies.

In Asia Pacific the DNV-Jardine collaboration

has resulted in Jardine staff seconded

to DNV’s Kuala Lumpur office,

working closely with DNV staff. A number

of joint projects have been conducted,

Qualification and Innovation

In today’s competitive world, where operating margins are under continuous

pressure, plant availability is a key to healthy financial results.

providing Reliability, Availability and

Maintainability (RAM) studies throughout

the region. In addition, DNV has

been able to provide integrated studies

assisting clients to manage their safety

risk as well as their operational business

risks. The ability to provide this wider

scope of services has been positively

received by our clients in South East Asia.

Cees.de.Regt@dnv.com

Integrating technique and experience

China Petroleum Corporation (CPC) in Taiwan is developing

its first subsea gas pipeline. DNV has been assigned to

deliver a consultancy package following the pipeline from

installation to testing and commissioning.

The 24 km, 36” pipeline is of major importance to Taiwan. It

will transport gas from Yung An in the south to the Thai Power

station in Tung Hsaio.

DNV has been involved since the start of the pipeline project

2 1/ 2 years ago. The primary task has been to act as a secondparty

for CPC. The scope of services includes installation,

testing and commissioning.

In addition DNV will carry out fitness-for-service assessment of

the pipeline. This will follow the “Intelligent Pig” baseline survey

to be carried out at the beginning of this year by Pipeline

Integrity International (PII).

According to CPC the reason for preferring DNV is based upon

a strong track record and the application of DNV’s Recommended

Practice (RP) F101 for Corroded Pipelines. It represents

a “Cutting Edge” technology in the integrity assessment of

corroded pipelines and it allows the customer a higher

The 36" Intelligent Pig at PII headquarters

in Cramlington, England

confidence in the condition of the pipeline. This is achieved

through utilisation of the inspection accuracy inherent in the

respective inspection techniques.

The contract for the baseline survey was awarded based upon

DNV’s technical capability, and required verification of the

inspection tool capability related to accuracy and supporting

defect-modelling analysis. The services have been carried out

through on-site inspection of calibration technique, document

review, QA/QC procedures and interviews with analysis

personnel.

This is a classic situation in which DNV can bring a complete

package to the client by integrating technical and practical

experience, research, independence and all-around capability

to meet specific needs.

Robbie.Williamson@dnv.com

Oil & Gas News 1 – 2002 5

---

Safety, Health & Environment

Gassco goes for integrated HSE and

Quality Management System

Statoil’s quotation on the Stock Exchange

and requirements in EU legislation

prompted the Norwegian parliament to

establish Gassco as an independent

operator.

The parliamentary decision states that

Gassco, as operator, shall serve all gas producers,

contribute to efficient overall utilisation

of resources on the NCS, be neutral

in relation to all users of the transport

system and have a key role in further

development of the transport system.

Meeting the Petroleum Act

In order to be granted this status by the

Norwegian authorities a health, safety,

environment (HSE) and quality management

(Q) system was to be established

before 2002-01-01.

DNV has been the principal advisor to

Gassco in establishing a management

system based on ISO 9001:2000. The

system is in accordance with all relevant

6 Oil & Gas News 1 – 2002

Gassco AS is replacing Statoil this year as the new Norwegian state-owned

company with responsibility as Operator for natural gas transportation from the

Norwegian Continental Shelf (NCS). With support from DNV, a new management

legislation and new regulations of the

Petroleum Act entering into force 2002-

01-01. In addition to this, Gassco and

DNV adapted the HSE & Q system to satisfy

the special requirements laid down

by parliament.

The work carried out by DNV not only

helped ensure that Gassco was granted

status as operator, but also laid the foundations

upon which this new company

can continue to develop.

New role

Gassco’s new role in the Norwegian gas

market is complex, involving the operations

of some 13 pipeline systems covering

over 5500 km. It is owned through

joint ventures by around 14 different

companies, transporting gas owned by all

the Norwegian licencees.

Gassco will concentrate on system management,

licence administration and

overall supervision of the gas transport

system has been established for Gassco.

infrastructure on the NCS. The technical

operations of the pipelines, processing,

receiving and treatment facilities will

be carried out by the same technical

service organisations as before. The existing

joint venture ownerships will be

maintained.

Gassco’s web site: http://www.gassco.no.

For further information, please contact:

Birgit.Hammerseng@dnv.com

Kristin.Hansen@dnv.com

---

DNV is, together with BP and RAS

Ltd, seeking to unlock the manage-

ment of major accident hazards

within the UK offshore safety case

regime in the North Sea.

The UK offshore safety case regime and

practice has contributed to much learning

and knowledge. It is, however, noted

that needless complexity and emphasis

on satisfying the external regulatory

requirements have often obscured this

knowledge. It has been further obscured

by complex and specialised language

understood by a limited number of

specialists.

Focus on management

BP’s Southern Business Unit in the North

Sea now seeks to unlock the potential for

this knowledge to become increasingly

effective in internal and active management

of major accident hazards. Together

with DNV and RAS, it has established a

project team that has developed a strategic

approach to create a working environment

where management of major

accident hazards becomes a day-to-day

activity. This environment is one where

the focus of attention is on the management

of major accident hazards, instead

of on documents that seek to defend

rather than assist.

Driven by expectations

The work includes aspects of occupational

psychology asking how hazard management

“on the ground” differs from the

Unlocking management

of major accident hazards

picture presented in the safety case, and

why people behave the way they do. For

example, people’s behaviour is largely

driven by their expectations towards the

consequences of their actions. In general,

people pay more attention to consequences

that are immediate and certain

and less to distant, delayed and uncertain

consequences.

The project work is addressing questions

about decision making and perceptions

The project identifies important

issues associated with major

accident hazard management

Management

of Major

Accident

Hazards

of risk in different parts of the workforce.

It is investigating opportunities for safety

improvement through shifting management

emphasis from “command and

control” towards empowerment.

Andy.Bolsover@dnv.com

Oil & Gas News 1 – 2002 7

Photo: Knut Vadseth

---

The objective of the new RP is to provide a rational guidance

and design criterion on fatigue and ultimate limit

state design for free spans subjected to combined wave and

current loading. The RP is based on Guideline No.14

which has been used on a large number of projects and

gained general acceptance in the industry worldwide.

The major developments of the new RP comprise:

• A simplified screening criterion

• Complete fatigue criteria including wave loading

• An ultimate limit state criterion

• Updated models for vortex-induced vibrations of a pipe

in trench

DNV services to the oil,

gas and process industries

We are helping clients within the

following service areas:

• Safety, health and environment

• Qualification and innovation

• Verification and

classification

• Asset operations

For further information,

see www.dnv.com/ogpi

Oil & Gas News 5 – 2001

News

ClampOn Boosts BP

BP has increased the potential of gas production on the

Amethyst field in the North Sea by 29 million standard cubic

feet per day by using ClampOn DSP particle monitors. BP has

installed ClampOn sensors at approximately fifty locations.

Amethyst is a mature gas field with

20 producing wells from four unmanned

platforms. First gas from the

field was in 1990. Sand production

has been predicted to be a problem

for the field since the initial development,

and a sand monitoring program

was launched in December

1999.

Acoustic sand detectors are simple

and relatively inexpensive listening

devices that can be clamped onto

production flowlines, either onshore,

on offshore platforms or floating

production facilities or subsea. They

work by distinguishing between noise

made by sand and by oil and gas flowing

through the pipe. By giving engineers

confidences that their sand control

methods are working, production

from wells can be significantly

increased. The detectors help to maximize

production by providing an

early warning of sand problems so

that quick remedial action can be

taken before the problems pose a risk

to safety or the environment.

DNV issues new Recommended Practice (RP)

for free spanning pipelines

• Improved structural response quantities including pipesoil

modelling

The basis for major technical developments in the RP is

experience of pipeline free-span technology in recent

design and R&D projects performed by the Danish

Hydraulic Institute, Statoil, Norsk Hydro and DNV.

For more information, please contact:

Olav.Fyrileiv@dnv.com

Kim.Mørk@dnv.com

DNV (Det Norske Veritas) is an independent, autonomous Foundation working to safeguard life,

property and the environment. DNV comprises 300 offices in 100 countries, with 5,500 employees.

Oil & Gas News

is a newsletter published by

Det Norske Veritas, Business Area

Oil, Gas and Process Industries.

It is distributed to DNV customers

and stations worldwide. It is also

available at DNV’s web site.

Please direct any enquiries to your

nearest DNV station, or Oil & Gas

News e-mail:

Oil&GasNews@dnv.com

Published by Corporate

Communications

Editor: Beate V. Ørbeck

Layout: DNVE Graphic

Communications

Print: GAN Grafisk AS

A ClampOn DSP

Particle Monitor

installed offshore

A BP team developed best practice

guidelines for the use of acoustic sand

detectors and has been recognised

with a BP Innovation award. It is considered

standard practice in BP to

monitor all sand control wells with

sand detectors, assisting in finding

maximum sand free production rate

in several producing regions.

For more information, please contact:

tonje@clampon.no

Or read more at BP’s web:

www.bp.com/valuestream/sand/main_content.htm

DET NORSKE VERITAS

Head Office Norway

Veritasveien 1,

N-1322 Høvik, Norway

Tel: +47 67 57 99 00

Fax: +47 67 57 99 11

Updated list of all regional

offices at DNV’s web site:

www.dnv.com

5000/02/2002 Design by DNVE Graphic Communications Print by GAN Grafisk 0202-001