The Value Chain In Subsea

Subsea Europe 2008 The Value Chain in Subsea Chris Braithwaite, COO Wellstream International

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The Give & Take of Value Creation Capacity

Plateau

Decline Production (bopd) Revenue $ Liquids, Gas, Water Injection

Ramp up Execution FO

Opex $

Capex $

NPV

Stakeholders

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PV Revenue

NPV

What is Key?

Base $

Value Measures – NPV

NPV $

PV Opex Reserves Oil Price

PV Capex

Well Capex Facility Capex Opex

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Building Blocks of a Typical “Subsea” Development • • • • • • • • • •

Development Drilling Completion Control and Flow Production Station Keeping Real Estate for Surface Fac. Supporting Risers Processing Facilities Product Storage Oil Export Gas Disposition

Wells Subsea Hull & Moorings Topsides Oil Export Gas

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Subsea Elements • • • • • • • • • • • • • •

System Engineering Concept & Layout Interface management Installation Pre-comm & Start up Risers Flowlines Pipelines Trees & Wellheads Work over Equipment Manifolds PLETs & SLEDs Connectors Jumpers

• • •

Control Equipment Umbilical & Flying Leads UTAs

Wells Subsea Hull & Moorings Topsides Oil Export Gas

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Subsea Spend Breakdown Subsea Concepts $7.0bn

Average annual expenditure in 2005-2009

Engineering & PM $0.9bn

Subsea Equipment $2.7bn

Risers & Flowlines $2.0bn

Installation $1.4bn

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Value Case Study – Flexible Flowlines & Risers

Risers Flowlines

Wells Subsea Hull & Moorings Topsides Oil Export Gas

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Frade

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Flexible Flowline or Riser Composition Carcass Prevents collapse under external hydrostatic pressure

Fluid Barrier Acts as the boundary for conveyed fluid

Interlocked Pressure Armour Resists internal & external pressure in the hoop direction

Inner Layer & Outer Layer of Tensile Armour Provides both hoop and axial strength

Insulating Layer Reduces heat loss

Outer Sheath Protects against seawater ingress and other mechanical damage

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Pipe Completion Components • • • • •

End Fittings Bend Stiffeners & Restrictors Installation Aids Seabed Stabilisation Buoyancy End Fitting Assembly

Subsea Bend Stiffener Assembly

Bracelet Anodes

Flexible Pipe Grayloc Interface Assembly (Hub, Clamp, Gasket, Test Head)

Distributed Buoyancy Modules

Topsides Bend Stiffener Assembly

I-Tube Interface Flange

Split Flange Hang-Off

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Wellstream Cost Model (Offshore Flexibles)

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Pressure Armour Value Chain (1) Coal Beds = 2 x 70KT Redcar Coke Oven Blast Furnace Coke & Breeze SB Coke Oven Redcar Blast Furnace

WHARF Rubble Ore

Sinter Brickettes Ore Beds = 2 x 180KT

Billets, Blooms, Slabs

Molten Iron

Sinter Plant

B.O.S. Plant Basic Oxygen Making Steel Plant

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Pressure Armour Value Chain (2)

Corus

WIL PO

Hot Rolling (Flexlok & sour only)

CDP

Specific OD wire Drawing Process

Hot/Cold Process Cold rolling to final shape & correct tolerances

Coiling Delivery

Option Heat treatment (stress relieving)

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Fluid Barrier Value Chain – PVDF

Raw Material

Solvay Solexis WIL PO

Mining Fluorspa

Hydroflouric Acid Conversion Add

Monomer feedstock and Inorganics

Delivery

Monomers

PVDF Polymerisation

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Ancillaries Value Chain – Bend Stiffeners

WIL PO

CRP Steelwork Priming

Steels Materials

PU Material Procurement

Equipment Preparation

Stiffener Moulding

Tool Manufacture

Tool Preparation

Post Cure

Component Coating

Stiffener Demoulding

Component Machining

Stress Relieving

Steel Fabrication

Component NDT Packing & Shipping

Stiffener Finishing

Product Testing

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Frade

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Value Creation for Subsea Field Performance • • • •

Focus on Reliability and Quality Assurance Understand the depth and complexity of the value chain Reach deep into the supply chain for value Optimise the interfaces Operating Needs Design Supply Chain Manufacture Installation Commission Operate © Wellstream International Limited. Duplication in full or in part is prohibited.

Value Creation Opportunities Operator Perspective • • • • • • • • • •

Increase field availability, accelerate and increase recovery Long distance tie-backs, stranded assets Tailored solutions for fluids (high GOR, heavy oil, high water cuts) Operating flexibility, future expansion, synergy with existing infrastructure Mitigate flow assurance problems Easy and quick installation, pre-commissioning & start up Improve intervention capability Contribute to optimization of surface facilities Standardization, modular approach Appropriate level of local content

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