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UK Norway Share Fair BP Norway April 20th 2006, Aberdeen

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Presentation on theme: "UK Norway Share Fair BP Norway April 20th 2006, Aberdeen"— Presentation transcript:

1 UK Norway Share Fair 2006 - BP Norway April 20th 2006, Aberdeen
Terje Ohrstrand - Supply Chain Management, BP Norge AS Kjell M. Madsen – SCM Lead, Skarv Project

2 Topics BP Norway – Assets & Licenses
How to become a supplier to BP Norway What we look for in a supplier Estimated spend 2006 Possible Contract Opportunities 2006 Valhall Re-Development Project Skarv Development Project Entry points to BP Norway

3 Key facts BP Norge Exploration and production BP Fuels & Lubricants
564 employees Average daily production: barrels of oil equivalents BP net Turnover: NOK 16.2 billion Result: NOK 8.1 billion Figures as pr. January 2006 BP Fuels & Lubricants 57 employees Turnover NOK 244 million

4 Activities on the Norwegian shelf
Participant in 16 licences Operator for 12 of those Operates Ula & Tambar Valhall & Hod Projects Valhall Re-Development Skarv-Idun Development Partner in the Draugen field

5 Valhall and Hod Valhall production started 1982
Production to Remaining reserves 750 millioner boe Estimated 2006 production boe/d 200 beds Hod production started 1990 Estimated 2006 production 8 500 boe/d Unmanned wellhead platform remotely controlled from Valhall

6 Ula and Tambar Tambar production started 2000 Production to 2028+
Ula production started in 1986 Production to Remaining reserves mill boe Estimated 2006 production boe/d 169 beds Tambar production started 2000 Estimated 2005 production boe/d Remaining reserves 24.2 mill boe Unmanned wellhead platform remotely controlled from Ula

7 How to become a supplier to BP Norway
Identify and connect with customer (BP end user) Registered in Achilles as approved supplier with updated info HSE - Self assesment (NORSOK S-006) Products/Services Track Record of Documented Capabilities Meet minimum HSEQ Req. HSEQ System and Processes HSE Performance HSE matters for allocation of work! We will not find you if your capabilities are not registered! On an ongoing basis, before we approach markets with formal pre-qualifications and invitations to tender, suppliers who manage to connect with the relevant end-users within BP may be able to better understand our demands, challenges and focus areas. That being said, registration in the Achilles Joint Qualification System is also necessary for a supplier to position himself to work for BP Norway. BPN use the Achilles JQS for Stage 1 Pre-Qualification. Although the harmonisation wih FPAL (First Point Assessment Ltd in the UK) has come a long way, there is additional approved supplier information in Achilles that we require for the pre-qualifiction. Hence it’s important that suppliers keep their Achilles information accurate and updated. BP increasingly uses HSEQ capabilities and HSE performance track records as criteria in supplier selection. We see a clear link between the resources you put into creating a safe work environment, and the actual HSE performance achieved. A top-down organisational focus on HSE will contribute towards establishing a healthy safety culture focusing on minimizing risks. Specifically in pre-qualifications, BP Norway assess potential suppliers against defined minimum requirements: To assess a supplier’s HSEQ systems and processes (the inputs), we access the suppliers’ self assesment through the Achilles JQS – the NORSOK S-006 Supplier HSE Evaluation and evaluate it against pre-set minimum scores. A suppliers HSE performance – the outputs – is also assessed. BPN’s current minimum reqm’ts for work offshore: TRIF<1,5 per 200,000 hrs (last 12 months), no fatalities last 3 years TRIF practical example: if you have 42 people working dayshift in a year, BP will accept a Total Recordable Injury Frequency of 1.5 during the year We will generally not accept suppliers that does not meet these minimum requirments. Similarly, HSE also matters for allocation of work and renewal of contracts for our existing suppliers. The Rule: - 70% of personnel involved in BP’s operations represent contractors (BP Group) - 80% of BP’s costs are third party spend - 90% av HSE incidents involves contractors/suppliers BP can only talk about future activity on the basis of getting safety right: An excellent safety performance will lead to increased business opportunities with BP.

8 What we look for in a supplier
BP’s SCM Strategy: STARS Sector strategies – Clear strategies for each sector maximising value whilst ensuring security of supply, enabled by a deep understanding of both BP’s demand and the characteristics of the market Transparency – Clarity on all major cost and performance elements within the supply chain and their comparability with industry benchmarks Aggregation – Aggregating spend to the highest level feasible and to the extent that this increases value Relationships – Distinctive relationships based on performance, market reality, and technology development – access intellectual capital Supply Chain Management – BP’s role in the supply chain understood and optimised Leadership in HSE Track Record of Documented Capabilities The right Products / Services Execution Ability Desired Attributes Better use of technology Improved Ops Efficiency Value Creation Innovative, Creative, Proactive Willing to Share Ideas So HSE Leadership is an important part of what we look for in a supplier (prev. slide) We also look for track record of documented capabilities. Competent organisations with the ability to deliver the right products/services are always of interest. Also, attractive partners have attributes that contributes to better, more effective use of technology. They are innovative, and willing to share their experience and ideas. Estimates show that BP in the North Sea has 750 million boe of brownfield reserves which could be unlocked through better use of technology – an opportunity hopper of significant value potential. Effective working relationships with competent suppliers is important to continue developing and improving our mature field operations - on operations efficiency and field recovery rates.

9 Investments in Norway

10 Estimated 2006 Spend (mill USD gross)
The figures are based on estimated & budgetted spend for The largest increase compared to 2004 is within the Drilling/Wells Sector (increased activity and ”carry-over” from 2004 due to rig strike/ lockout, delayed start-up of the Valhall IP program). 2005 Planned Drilling Activities: Drilling activities – 3 strings for much of 2005: 2 wells Ula – at least 1, max 3 6 wells Valhall IP 8 wells Valhall Flank In addition there will be well intervention activities. Production Operations: Mods&Main (AKOP), Platform Services (R&M), Catering (Universal)...ABB, Score, Bjørge Kran og Løfteteknikk... Business Office Support: IT, Accounting Services, Travel, Telecom. Logistics: Marine (Platform Supply & Stand-by vessels), helicopters and base services (CHC, Farstad, Asco, Rovde...) Facilities Engineering & Construction: Project spend: VRD & Skarv, Hod WI... Seismic: Geospace, PGS, Schlumberger

11 Possible Contract Opportunities 2006
Operations RE Maintenance (NCS+UKCS) Compressors Pumps Vendor Based Maintenance Services (NCS) Valves, Cranes & Lifting Eqm’t Instrumentation FA’s (NCS) Industrial gas FA (NCS) Electrical Consumables FA’s (NCS) Other Projects Tambar Multi-Phase Pump Ula Gas Upgrade Valhall Flank De-Bottelnecking Valhall Re-Development Sub-Sea Installation Valhall DP Derrick De-Commissioning Drilling & Wells Drilling Fluids (NCS+UKCS) Directional/MWD Service (NCS+UKCS) Slick Line Services (NCS+UKCS) Logistics Platform Support Vessels (NCS) (Stand-By Boats) Valhall Re-Development Project Skarv Development Project These are broadly the sourcing activities we can see coming up during For some of these activities we will go out and tender in the market, for others we might not. Generally, any decision to extend existing contracts are made based on supplier performance, including HSE performance. Within the Operations sector, BP is currently in the market for improved, integrated RE maintenance services for our installed base of gas turbines across the North Sea. This will be followed by similar arrangements for compressors and pumps towards the end of the year. During 1H05, we’re re-structuring BPN’s maintenance services contracts for lifeboats, valves, lifting eqm’t and other vendor-based maint services. We may also approach the market for inspection services. Also enter new frame agreements for instrumentation equipment and for gaskets, as well as for procurement of industrial gases and diesel fuels. Within the wells sector, we’ll re-assess many of the regional NS well services contracts (fluids, dir drlg, electric wireline,….), as well as the BPN coiled tubing services. Towards the end of the year we may also start approaching the market for a deepwater rig for the Skarv Dev’t project pre-drilling. Within the logistics sector, we’re currently in the market for a long-term helicopter transportation contract for the Valhall & Ula fields. Also, during 1H05 we expect to secure PSV’s beyond the current contracts, which run to +/ (option periods). Significant upcoming modification projects at BPN’s producing fields include….

12 Valhall Re-Development – New Production & Hotel Facility
New Facility Design Life years Hotel single bed cabins Oil production capacity mbopd Gas handling capacity - 5 million Sm3/day Total liquid capacity mbpd (oil & water) Weight topside + hotel ~ tne Weight jacket ~ tne Power from Shore km HVDC cable Oil Export - Future offshore loading/EOR

13 Valhall Redevelopment – Preliminary Schedule
ITTs will be issued either directly from BP or via Mustang in Houston See Procurement plan at

14 Skarv - Project overview
Export Pipeline : 80 km, 26”, Water depth m ÅTS – Tie In Gassco commence FEED April 06

15 Skarv FPSO FPSO with subsea tie-backs.
FPSO Design Capacity : 85mbd & 670MMSCFD Largest Harsh Water Gas Processing FPSO Oil Export via shuttle tanker. Design for 95% Operating Efficiency Timing: FEED thru 4Q 2006, PDO 1Q 2007 Operate 3Q 2010

16 Skarv Subsea layout

17 Skarv FPSO Contract Structure

18 Skarv FPSO Contract Overall Schedule

19 Skarv SURF Contract Overall Schedule

20 BP Norway PSCM Entry Points
Valhall and Ula PUs Supply Chain Manager Hans Ole Lørup Operations & Logistics Arnfinn Bærheim Bjørn Landsvik Bjoern.Landsvik Crawford Page Wells Ian Kerr Millar Reidar Håland Agreements/ Purchasing Jarl Iversen Performance Management Terje Ohrstrand Development Projects PU VRD PSCM Simon Bateson Skarv PSCM Kjell Magne Madsen

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