Standardization and Simplification in BP Richard Keck GoM D

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Standardization and Simplification in BPRichard
KeckGoM DC Technology Manager

• April, 2009

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Outline

• BP Global and Historical Background
• BP Gulf of Mexico Overview
• GoM Drilling and Completions Specific
• Perspectives on Industry Standards

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BP Global and Historical Background

• Early 1990s
• Adopted Business Units are King Strategy
• 40 Separate BUs with Complete Autonomy
• Very Weak Central Office
• Excellent Short Term Profitability

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BP Global and Historical Background

• Late 1990s to Early 2000s
• Mergers with Amoco, ARCO/Vastar
• Quadrupled Size of the Company
• Tried to Keep BU Model

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BP Global and Historical Background

• 2005 - 2006
• Texas City Explosion (March 2005)
• Thunderhorse Listing Incident (July 2005)
• Prudhoe Bay Flowline Leak (March 2006)
• Delays on Thunderhorse and Atlantis
• Market Perception Serial Underperformer

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BP Global and Historical Background

• 2006
• Created Regional Strategic Business Units
• North American Gas (Canada, Onshore US)
• Gulf of Mexico Exploration, New Projects and
  Production
• SPU is the New King

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BP Vs. Exxon Corporate Structure
Bernstein Research Jan 2007
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BP Vs. Exxon Corporate Structure
Bernstein Research Jan 2007
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Forward Agenda and OMS

• 2007
• New Global Initiatives from New CEO
• Excessive Complexity
• Forward Agenda
• Make BP a Simpler and More Efficient Organization
• Operating Management System
• Bring Greater Consistency to Operations

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Gulf of Mexico Deepwater Portfolio
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BP Operated Fields in GoM
Eight (8) Production Platforms

• Usually lt 15 20 wells per field
• Mix of surface (dry) trees sub-sea (wet) trees
• Most of the production is oil

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Standardization GoM vs. Angola

• GoM (2003 2008)
• Holstein, Mad Dog, Atlantis and Thunderhorse
• All different facility designs
• No standardization, no consistency
• Competition between each project
• Angola
• Design One, Build Four
• Greater Plutonio Field Block 18
• GoM (2008 - )
• New projects moving to one standard design

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DW GoM Wells Design Issues

• Issues
• High Cost Environment
• Only a Few Wells Per Field
• Unconsolidated Sandstone Reservoirs

• Solutions
• High Production Rate Wells
• Need large tubing (3½ 7)
• Sand Control Completions
• Need large casing (7 9 5/8)
• No Workovers Interventions
• Too Expensive for Sub-Sea Wells
• Long Term Reliability

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GoM DC 2008 Re-Org

• Before SPU Transformation in 2008
• DC Embedded in 10 Assets
• Each with a Wells Team Leader reporting to asset
  manager
• No functional pull for consistency
• After Transformation
• Created a centralized DC organization
• DC reports to functional VP who reports to SPU
  Leader
• Key levers for success
• Simplification, Standardization
• Better utilization of scarce resources for new
  projects
• Beat our improved drilling performance target by
  15

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Casing Standardization
Reduced tubular inventory by 40
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Typical Well TVD vs. Reservoir Pressure
25,000
22,500
20,000
17,500
Reservoir Pressure
15,000
12,500
10,000
7,500
15,000
17,500
20,000
22,500
25,000
27,500
30,000
32,500
Well TVD (ft)
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Perspectives for Industry Standards

• Our company standards were very hard to create.
• Leadership from was top was essential
• Industry standards much harder
• How does Energistics achieve consensus?
• Are you like BP was 8 years ago?
• Are you like Exxon?

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Thanks To

• John Shaughnessy
• Terry Jordan
• Warren Winters
• Michael Edwards
• Dave Tiffin
• Bruce Guthridge

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Proposed GoM SPU DC RTOC Model
12/11/2009
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Real Time Operations Centers