Driving for Competitive and Affordable Projects in the Gulf of Mexico

Abstract

Deepwater developments CAN be affordable in low price environments! One key is to view designs through a new lens as we create our development concepts. This paper describes how Shell un-shackled the talents of the industry's engineering and construction communities to create very viable, low cost development systems for potential Gulf of Mexico prospects. The paper speaks to the ways that corporate orthodoxies were challenged to enable these solutions, engaging Shell's technical experts creatively to define new solutions. The results of our findings were both surprising and compelling. Most importantly, there continues to be space for new, low cost deep water developments. This paper presents an alternative approach to the design and execution of low cost deep water development systems that are demonstrably affordable in a low price environment. The paper describes how Shell un-shackled the talents of the industry's engineering and construction communities to create very viable, low cost development systems for potential Gulf of Mexico prospects. It speaks to the ways that corporate orthodoxies were challenged to enable these solutions, engaging Shell's technical experts creatively to define new solutions. The approach used was simultaneously rigorous and un-fettered. Shell's efforts began by defining bare-bones surface and subsea facilities that included only minimal systems and sparing, and smaller compliments of Operations personnel. Shell relied heavily on input from the contractor community to define these initial, minimum systems. During the subsequent review of these facilities designs, Shell asked of all internal stakeholder a series of key questions designed to make visible incremental costs and functionalities of additional systems above the proposed minimums. This bottoms-up approach resulted in the selection of only high value-added functionalities that mitigate business risk, while making transparent the decision processes that lead to them. The final designs represented very workable, operable and maintainable systems that reduced capital cost by between 15 and 25%, based solely on scope reductions. As a result of this approach, Shell has reset the baseline from which they will develop future prospects. We conclude from this approach that deep water developments can be affordable in low price environments. One key is to view designs through a new lens as we create our development concepts. Most importantly, there continues to be space for new, low cost deep water developments into the future.