With declining oil and gas reserves at Statoil’s Veslefrikk field on the Norwegian shelf of the North Sea, the predicted profit margins will be negative by 2007/08. However, by reducing the operational expenditures, the positive value-creating lifetime of the field can be extended by several years.

Critical issues:

• Veslefrikk started its production of oil and gas in 1989. Today, the oil field produces some 33,000 barrels a day
• A mapping of the current operations at Veslefrikk identified many potential areas for improvement
• The challenge for the project team was to develop and implement practical and cost-efficient solutions which meet all safety and production requirements

Solutions:

We:

• Mapped the current operations with respect to work processes, activity level and cost
• Carried out a Risk Based Operation assessment to challenge present activities in order to reduce overall activity level
• Prepared future maintenance and operation work processes and management principles
• Developed a new organisational model
• Prepared manning and cost estimates for budgeting
• Performed risk and reliability evaluations of the new operation to ensure compliance with safety and production requirements

Value delivered:

• Basic maintenance and operational costs have been reduced by approx. 25 percent per year
• Combined with other initiatives related to onshore administration, logistics, warehouse and material administration, the overall operational expenditures are reduced by approx. 20 percent
• Veslefrikk is Statoil’s first real tail producer, and the project was a high priority in the Statoil organisation
• The method developed for meeting tail-end production challenges was recognised as a Statoil best practice