ONS '14: Subsea industrialization needed to take cost-cutting deeper


ONS '14: Subsea industrialization needed to take cost-cutting deeper

ANNE EKERN, Contributing Editor

STAVANGER, Norway -- “As an industry, we have to break an unsustainable curve of constant cost increases,” said Tore Halvorsen, FMC’s senior V.P. for Subsea Technologies, while addressing an ONS conference session in Stavanger, Tuesday morning. Furthermore, said Halvorsen, “Within the area of subsea, ‘industrializing’ some of the solutions we are offering may be one answer.” 

Halvorsen used the cost per well to illustrate the recent and negative cost trend within the subsea sector. “We have seen a tripling of the cost over the last 10 years, which is unacceptable. During the same period, the oil price also tripled, so you may ask whether the industry has become somewhat complacent,” Halvorsen said.

According to Halvorsen, the main drivers to reduce costs are volume, technology and cooperation. “Increasing volume and getting to a critical mass will help drive the cost downwards. This is challenging, partly because customization and tailoring solutions has become the industry trend, but also because technology penetration takes time,” Halvorsen said.

Furthermore, Halvorsen said that technology is the most important driver for bringing down the subsea cost level. Instead of using the term, “standardization,” Halvorsen talked about becoming more “industrialized” while choosing simpler solutions as one of the answers to subsea cost-cutting.  He used well templates as one example. While the average weight of a well template was approximately 650 tonnes in 1990, the comparable weight in 2000 was 100 tonnes.

“We have seen already made several step changes within the subsea area, but there is still a vast potential,” Halvorsen said. “Although it is still early days, we are looking at the potential for simplifying and possibly reducing the size and the weight of subsea robotics by as much as 30% to 50%.”

Like several other speakers at ONS, Halvorsen is calling for more efficient cooperation, as well as improvements within the area of documentation. “When dealing with customers, there is a huge difference between the documentation needed for existing partners and new customers. While five specs may be sufficient when working with existing partners, a new partner may require as much as 250 specs before entering into an agreement,” Halvorsen said. “Needless to say, this will add to the cost level.”

Halvorsen concluded by saying that a close interaction between oil companies and vendors/suppliers is needed, but the industry is in a good place, as most players are  feeling the urgency to make changes. “Each oil company has a long history, and a lot of experience being turned into individual specifications. We must trust each other’s experience more, and be willing to ‘industrialize’ solutions.” 

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