NORWAY BRIEF autumn 2012
50-80 professionals A new projects organisation is being established in Stavanger. We plan to recruit between 50-80 project professionals covering the range of expertise across project management, project and discipline engineering, quality, HSE and project services resources. More on page 3
Staffing
up
New investments BP continues to plan for new investments in Norway. “We don’t see the Norwegian shelf only as a prolific hydrocarbon province, but also a good place to do business”, says Bob Dudley, CEO of BP. More on page 2
BRIEF autumn 2012
New investments in Norway BP continues to plan for new investments in Norway. “We don’t see the Norwegian shelf only as a prolific hydrocarbon province, but also a good place to do business”, says Bob Dudley, CEO of BP.
Bob Dudley was appointed CEO in BP 1 October 2010. In this interview he describes how the company will get back on track through relentless focus on safety and managing risk – and by playing to its strengths. You recently shared BP’s forward strategy and 10-point plan with the market. As part of that strategy you said you will have a “relentless focus on safety and managing risk”. How will you do that? That focus on safety comes about in several related ways which can be summarised under the headings
of leadership, operations and checks and balances. Every leader in BP has a duty to be a safety leader. We support them in that duty through training, tools, processes and through the work of our powerful safety & operational risk organization (S&OR).
The key to safe operations is to be systematic and consistent in everything we do. This is why we apply a single global operating management system everywhere in the world.
It is also why we have reshaped our upstream organization into three global divisions - for exploration, developments and S&OR maintains our standards production. This means the same centrally and also has a large deployed team of risk management standards are applied worldwide and people in these global teams specialists who work closely with can share experiences and best our line managers to advise and practice. challenge – and, if needed – to intervene.
We also continually review our standards to see if we can improve them. Several of our standards now exceed regulatory requirements, for example our requirement for any blow out preventer used with a floating rig to have at least two sets of blind shear rams – the pincers that shut off the flow of oil in an emergency. Checks and balances are provided by the many measures we take to ensure that procedures are being followed in practice. These range from managers informally observing the work and asking structured questions to full-scale
formal audits of operations carried out by S&OR. You also talked about BP playing to its strengths and being stronger and more focused. Can you elaborate on what this will mean in reality? When we talk about playing to our strengths we mean focusing our investment into activities where BP has deep capabilities, largely built up over many years. One such strength is exploration, for example. We have been a pioneer in the technologies of exploration, particularly seismic surveys.
Brief autumn 2012
From left: Adrian Littler, Appraise General Manager, Greater Valhall Programme and Duncan MacLeod, Ula Projects Manager, Norway Projects.
Other strengths are deepwater activity, managing giant oil and gas fields and gas supply chains and running a world-class downstream business. We have a number of world- leading technologies in areas such as enhanced oil recovery and petrochemical processing for example - as well as seismic. Also, as a company that works on every continent with 100 years of experience and multiple partners, we have learned a lot about building relationships. At the same time as investing in areas of strength, we are divesting some assets that are not core to our strategy and from which others can derive more value. This will concentrate our business into the strongest areas – making us stronger and more focused overall. In addition to articulating a new strategy, BP has undergone a fundamental restructuring, and has set out its values in a new way. What sort of company do you hope BP will be in 5-10 years’ time? We have created the new safety and operational risk organization and reshaped the upstream, as I mentioned. We’ve instituted the 10-point strategic plan to create value by playing to our strengths and we have also done a lot of work as a management team to define the values that BP represents at its best. We identified five values – safety, respect, excellence, courage and one team. Those are very personal qualities and I think they have struck a chord with people in BP. There is a real sense that this company of thousands of people around the world is pulling together as one team. I think that if we implement our strategy, systematically and steadily, and follow these values, then we have a great future. Our goal is not to be the biggest company, but we certainly aspire to be a great one over time, delivering energy to our customers and value to our investors.
It is widely believed that a significant proportion of the world’s undiscovered oil and gas resources are to be found in Arctic areas. Does BP have plans to explore in the Arctic in the future? We understand both the potential and the challenges of the Arctic. We have worked in Alaska since 1959 and operate a range of oil fields there. We also have interests in the Canadian Arctic. We are open to other opportunities including those in Norway. We also have a lot of experience in understanding the challenges of the Arctic, in particular having conducted oil spill research in the region since the 1970s. We work with a number of industry groups in this area, including the Joint Industry Programme on Arctic oil spill response technology, which is backed by a number of global companies and the largest research initiative of its kind. Over the last five years BP in Norway has invested more than USD 4 billion (NOK 25 billion) on the Norwegian continental shelf. This includes investment in mature fields like Ula and Valhall, as well as developing new fields like Skarv. What does the future hold for BP in Norway? We see Norway as remaining a core part of our Upstream portfolio. In recent years we have invested not just in our existing operations, on the Ula Field and with the redevelopment of Valhall, but also in the Skarv project, which is due onstream later in 2012. We have 15 licenses on the Norwegian c ontinental shelf and are operator on 11 of these. In 2010 we drilled an exploration well in the Snadd North prospect in the Norwegian Sea and discovered hydrocarbon resources. We plan to continue to develop our u nderstanding of this potential development. We will plan to continue investing in Norway and see it not only as a prolific hydrocarbon province, but also a good place to do business.
BP Norge is staffing up A new projects organisation is being established in Stavanger. We plan to recruit between 50-80 project professionals covering the range of expertise across project management, project and discipline engineering, quality, HSE and project services resources. The new organisation will develop a projects capability in BP Norway to service future projects from the Valhall, Ula and Skarv hubs through to 2050. The teams will be primarily working in Norway and be part of BP’s Global Projects Organisation. Greater Valhall Programme BP and partner Hess have big plans to further develop the Valhall area, and the Greater Valhall Programme (GVP) will appraise the future development options for maximising recovery from the field. In the last 30 years almost 1 billion barrels of oil have been produced, now the plan is to recover a similar amount from the field. We will add two new 25 slot platforms, one in Hod and one in the western area of the
Valhall field. In addition the Life of Field Seismic arrays on the seabed will be extended to cover the two new areas. In addition, major modifications projects such as upgrading the produced water facility on Valhall will also be conducted. The total investments for the core developments are likely to exceed USD 4 billion (NOK 25 billion). Major Modifications Projects BP in Norway has a significant portfolio of major modifications and upgrade activities on the Ula and Skarv assets. These activities include a flare and power upgrades as well as potential future tiebacks to our facilities. In addition, there is significant activity associatewith the gradual decommissioning and removal of facilities related to Valhall. It is anticipated that the level of investment on these projects in the future will be over USD 0.7 billion (NOK 4 billion).
Good behaviour creates trust “We depend on the relationships we have and respect each other and those we work with”, says Rebecca Wiles, Managing Director, BP Norge. BP established its first upstream office in Stavanger in 1974, but has been in Norway since 1920 through Norsk Brændselsolje. Since then, our presence in Norway and our assets have developed considerably. The Valhall field was part of the first licensing round on the Norwegian Continental Shelf in 1965, and will celebrate its 30 anniversary of production this autumn. “At the same time we will be switching the production to the new platform on the Valhall field centre to produce for at least 40 years more. This incredible field will be further developed through the future “Greater Valhall Programme” which will include a new Hod platform, a new flank platform, and an extended LOFS – Life of Field Seismic,” says Rebecca Wiles, Managing Director, BP Norge. A trio for Ula Ula field production was enhanced this spring thorugh the subsea tie-in of the Dong operated Oselvar field, making it a trio for Ula; Tambar started its production in 2001 through Ula, and Blane in 2007. The gas from the Oselvar field will be injected into the Ula reservoir to enhance oil recovery. “Also on the Ula field, we have been flowing some appraisal production from a deeper reservoir, the Triassic. This is a more complex reservoir system than the existing Jurassic Ula field, but we will be continuing our appraisal to establish the best development concept for this resource”.
The development of the Skarv field was approved in December 2007. The Skarv FPSO was constructed in South Korea and was moved out to the field in August 2011. “Unfortunately a harsh winter followed, but we completed the pull in of the 13 r isers during May this year. Final commissioning work is ongoing, and production is planned to start in the last quarter of 2012. “ Huge investments “All these activities underline that we are heavily involved in continuing to develop the areas which we have been awarded on the shelf. The last five years BP in Norway has invested more than USD 4 billion (NOK 25 billion) in new activity, which has resulted in a lot of work for Norwegian suppliers, including in the Helgeland region. “ “In 2011 we established our new core values globally. One of the values is respect. This means that we respect the world in which we operate. It begins with compliance with laws and regulations. We hold ourselves to the highest ethical standards and behave in ways that earn the trust of others. We depend on the relationships we have and respect each other and those we work with. We value diversity of people and thought, and care about the consequences of our decisions, large and small, on those around us.” We work as one team. We are BP.
BP in Norway BP Norge is the proud operator of these fields: Valhall The Valhall field entered production in 1982, and it is estimated that production will continue until 2050.
and install an integrated processing and hotel platform. The hotel facilities were put in use in 2011 whereas the processing facilities will start o perations in 2012. Simultaneously there is a transition from platform generated power to power from shore through a cable from Lista. The facilities on the Hod field consist of one unmanned platform 13 kilometres south of Valhall, which is remotely operated from Valhall. A p re-project is currently underway to evaluate building a new platform on Hod with the aim to increase the recovery rate of the field.
The field is developed using six centrally placed platforms and two flank platforms. The flank platforms are normally unmanned and located six kilometres north and south of the central facilities. Due to subsidence in the seabed and the need for more efficient operation of the field, it was decided to re-develop the field,
Skarv The Skarv field located in the Norwegian Sea, is b eing developed with a Floating Production, Storage and Offloading vessel (FPSO) and related subsea systems. The FPSO, constructed in South Korea, will have one of the world’s largest gas processing plant placed onboard a ship. It was towed to Norway early 2011 for final completion, and was anchored at the field in August 2011.
In connection with this, evaluation work is taking place to consider building a new platform on the Valhall west flank, e xpanding the Life of Field seismic program and upgrading the capacity for produced water and gas handling on Valhall.
After reaching a production peak in the early 1990s, and a subsequent decline in production in the mid-1990s, the Ula field has received a new lease of life using new technology and by receiving production from other fields in the area. Tambar, Blane and Oselvar process their hydrocarbons on Ula.
Ula Production on the Ula field started in 1986, and is expected to be maintained until 2028 or longer.
The facilities on the Tambar field consist of one unmanned platform 16 kilometres south of Ula, which is remotely operated from Ula.
Key facts BP Norge AS (BPN) is part of the BP Group, which again is one of the world’s largest integrated oil and gas companies. BPN carries out production and exploration for oil and gas on the Norwegian Continental Shelf. The company’s head offices are located in Stavanger. BPN has 15 licenses, and is the operator of 11 of these. The company’s share of the 2011 production amounted to 34 600 barrels of oil equivalents per day. BPN invested NOK 4 494 million in 2011. The main investments are for the development of the Skarv field and activities in connection with the new Valhall field centre. For more information, please visit www.bp.no
Following hook up of the subsea systems to the FPSO, the production on Skarv will commence in 2012.