31 March 2004 FPCF FLOATING PRODUCTION COOPERATIVE FORUM Michael Taggart Aberdeen Maritime Consultants Ltd.

31 March 2004 D\Floating production Cooperative Forum 1 \\ Aberdeen Maritime Consultants ltd. PESENTATION SUMMARY LEARNING PROCESS DIFFERENCES FPSO TO TANKER ECONOMIC CONSIDERATIONS EFFECTIVE KNOWLEDGE TRANSFER FPCF PROPOSAL

31 March 2004 D\Floating production Cooperative Forum 2 \\ Aberdeen Maritime Consultants ltd. THE LEARNING PROCESS

31 March 2004 D\Floating production Cooperative Forum 3 \\ Aberdeen Maritime Consultants ltd. LEARNING CURVES INDIVIDUAL FPSO PROJECT ? BUILD 2 YEARS PRODUCTION OPERATIONS : 15 YEARS SERIES WARSHIP PRODUCTION EXTRA

31 March 2004 D\Floating production Cooperative Forum 4 \\ Aberdeen Maritime Consultants ltd. LEARNING CURVES INDIVIDUAL FPSO PROJECTS ? SERIES WARSHIP PRODUCTION EXTRA

31 March 2004 D\Floating production Cooperative Forum 5 \\ Aberdeen Maritime Consultants ltd. COATED CARBON STEEL CAISSON PUMP CAISSONS ANYTHING TO LEARN AFTER 40 YRS? CENTRALISERS UNCOATED Cu Ni PUMP STRING SS PUMP BOWL WITH STRAINER BELOW INJECT HYPOCHLORITE COATING DAMAGE ?

31 March 2004 D\Floating production Cooperative Forum 6 \\ Aberdeen Maritime Consultants ltd. FACTORS AFFECTING LEARNING PROCESS LEARNING FACILITATORS LARGE REPEAT SERIES UP TO DATE PRESCRIPTIVE CODES JOB / TEAM STABILITY ANTICIPATING PROBLEMS *** STRAIGHT DEALING FOR TRUE VALUE LEARNING INHIBITORS SHORT RUN / ONE OFF SOLUTIONS GOAL SETTING RISK BASED CODES CONSTANT RE-ORGANISATION REACTIVE ENGINEERING ONLY CONTRACTUAL GAMES & COST CUTS SCHEDULE PRESSURE ***

31 March 2004 D\Floating production Cooperative Forum 7 \\ Aberdeen Maritime Consultants ltd. SOME DIFFERENCES BETWEEN FPSOS AND TANKERS

31 March 2004 D\Floating production Cooperative Forum 8 \\ Aberdeen Maritime Consultants ltd. REQUIRED OPEX SAVINGS / UNIT CAPEX 10% RETURN p.a. 20% RETURN p.a. SHIP STEEL REPLACEMENT (DRYDOCK) FPSO STEEL REPLACEMENT (AT FIELD….NO DRYDOCK) P&I CLUB MAJOR COATING ISSUES & STEEL REPLACEMENT IN TANKERS

31 March 2004 D\Floating production Cooperative Forum 9 \\ Aberdeen Maritime Consultants ltd. CAN AFFORD EXTRA BUILD QUALITY POOR ROOT PASS COMMON ON LESS CRITICAL SHIPS PIPEWORK SOLVE TIG ROOT PASS EXTRA RADIOGRAPHY REPAIR & INSPECT 2 MORE / FAILURE (or ASME B31.3 INSTEAD OF CLASS) CAN EASILY JUSTIFY Cu Ni FOR SOME DUTIES IN LONG SERVICE LIFE

31 March 2004 D\Floating production Cooperative Forum 10 \\ Aberdeen Maritime Consultants ltd. SOME ECONOMIC CONSIDERATIONS

31 March 2004 D\Floating production Cooperative Forum 11 \\ Aberdeen Maritime Consultants ltd. EFFECT OF NPV ON PRODUCTION INCOME AREA 1 >> AREA 2 …… EARLIEST START UP DATE IS PROJECT KING AREA 1 AREA 2 PLATEAU

31 March 2004 D\Floating production Cooperative Forum 12 \\ Aberdeen Maritime Consultants ltd. RELATIVE VALUE OF TIME SPENT DURING PROJECT DEFINITION 1 DAY DELAY HOOK UP OR INSTALLATION 1 DAY DELAY START OF PRODUCTION 1 DAY OF PRODUCTION LOST 5 YEARS AFTER START UP 1 TONNE OF STEEL ADDED 5 YEARS AFTER START UP MAIN GENERATION GAS COMPRESSION

31 March 2004 D\Floating production Cooperative Forum 13 \\ Aberdeen Maritime Consultants ltd. KNOWLEDGE TRANSFER

31 March 2004 D\Floating production Cooperative Forum 14 \\ Aberdeen Maritime Consultants ltd. TYPICAL KNOWLEDGE TRANSFER LAST BUILD ONGOING PRODUCTION OPERATIONS BUILD 2 YEARS PRODUCTION OPERATIONS : 15 YEARS EARLIEST START UP DATE IS PROJECT KING AREA 1 AREA 2 START UP DATE ! SCHEDULE PRESSURE INHIBITS LEARNING HOWEVER SCHEDULE PRESSURE IMPROVES VALUE IT IS GOOD! GATHER LESSONS & INPUT WHEN PRESSURE IS LOWER

31 March 2004 D\Floating production Cooperative Forum 15 \\ Aberdeen Maritime Consultants ltd. IMPROVED KNOWLEDGE TRANSFER LAST BUILD ONGOING PRODUCTION OPERATIONS BUILD 2 YEARS PRODUCTION OPERATIONS : 15 YEARS SEPARATE LESSONS INTO BUILD SPECIFICATION PROJECT OTHER BUILD OTHER PRODUCTION OPERATIONS & INDUSTRIES LESSONS INTO OPERATING & MAINTENANCE TECHNIQUES BETTER TAKEN OUT OF PROJECT TIMESCALE! / PARTLY OUTSOURCED? ALSO EXCHANGES DATA WITH OTHER OPERATORS AND INDUSTRIES

31 March 2004 D\Floating production Cooperative Forum 16 \\ Aberdeen Maritime Consultants ltd. REASON FOR FPCF IF A COMPANY CANNOT OR WILL NOT INVEST IN DOING THIS IN HOUSE THEN……. IF IT MAKES ECONOMIC SENSE TO STIFLE LONG TERM FEED BACK DURING THE BUILD PHASE TO ENSURE MEETING START UP DATE, THEN……. IT CERTAINLY MAKES ECONOMIC SENSE TO GATHER LESSONS OFFLINE & ANTICIPATE PROBLEMS EXPERIENCED BY OTHERS. YOU HAVENT IMPLEMENTED ANY LESSON UNTIL IT IS PUT INTO A BUILD SPECIFICATION OR A MAINTENANCE / OPERATING ROUTINE. EVEN THEN – ONLY WHEN THE YARD ACTUALLY DOES IT! IT WOULD MAKE SENSE TO JOIN WITH OTHER COMPANIES AND USE A CONSULTANCY PROVIDED THAT THE SERVICE PROVIDER GENERATES INPUTS THAT CAN BE PASTED STRAIGHT INTO A BUILD SPECIFICATION, MAINTENANCE ROUTINE OR OPERATING PROCEDURE.

31 March 2004 D\Floating production Cooperative Forum 17 \\ Aberdeen Maritime Consultants ltd. FLOATING PRODUCTION CO-OPERATIVE FORUM

31 March 2004 D\Floating production Cooperative Forum 18 \\ Aberdeen Maritime Consultants ltd. PROPOSAL PHASE 0 ESTABLISH INDUSTRY INTEREST + ACTIVE CONTRIBUTION PHASE 1 GATHER OPERATOR PROJECT & OPERATIONAL EXPERIENCE GATHER SHIPYARD PROJECT EXPERIENCE GATHER TANKER MAINTENANCE EXPERIENCE PHASE 2 WRITE BEST PRACTICE NOTES MOUNT ON WEBSITE PHASE 3 RESTRUCTURE FOR ONGOING KNOWLEDGE SHARING

31 March 2004 D\Floating production Cooperative Forum 19 \\ Aberdeen Maritime Consultants ltd. FPCF WORKING PRINCIPLES ACTIVE INPUT REQUIRED FROM PARTICIPANTS CASE HISTORY & WHERE POSSIBLE PHOTOGRAPHS SOLUTION ADOPTED / PROPOSED ORDER OF MAGNITUDE COSTS OUTPUT FROM ABERDEEN MARITIME (WEB BASED) ISSUE ALERTS ON WEB SITE DRAFT BEST PRACTICE, WITH COST INFORMATION, WHERE AVAILABLE OUTPUT TO BE ANOMYNOUS (IN TERMS OF OPERATOR & FPSO)

31 March 2004 D\Floating production Cooperative Forum 20 \\ Aberdeen Maritime Consultants ltd. COST & TIME PARTICPATING FEE 3 off £5000 INSTALLMENTS (2004, 2005, 2006) BASED ON MINIMUM 12 PARTICIPANTS THREE YEAR RUN SCHEDULE

31 March 2004 D\Floating production Cooperative Forum 21 \\ Aberdeen Maritime Consultants ltd. ORGANISATION

31 March 2004 D\Floating production Cooperative Forum 22 \\ Aberdeen Maritime Consultants ltd. BENEFITS / FURTHER INFORMATION ANTICIPATED PAYBACKS COST SAVINGS - REDUCED REWORK OFFSHORE IN EARLY OPERATIONS COST SAVINGS - BETTER CAPEX Vs. OPEX DECISIONS COST SAVINGS - REDUCED SHUTDOWN FOR UNPLANNED MAINTENANCE INCREASED REVENUE – PROJECT SCHEDULE COMPRESSION WITHOUT COMPROMISING TECHNICAL INTEGRITY REDUCED WASTE - ENGINEERING AT THE RIGHT TIME REDUCING REWORK CONTACT FOR MORE DETAILS WEBPAGE PHONE

31 March 2004 D\Floating production Cooperative Forum 23 \\ Aberdeen Maritime Consultants ltd. ACKNOWLEDGEMENTS Aberdeen Maritime would like to thank the following for their valuable and ongoing input in developing this concept:- EM&I –Danny Constantinis –Judy Burdett Dr. J.R MacGregor Marine Technical Limits –Matt Lewin