The POSC/Caesar Project POSC/Caesar for BETTER BUSINESS Study Report

1. The POSC/Caesar Project POSC/Caesar for BETTER BUSINESS Study Report Prepared by 10.11.97

2. 1. Management Summary • 2. Introduction • 3. Summary current situation • 4. Vision, Benefits and Challenges • 5. Business Opportunities - Examples • 6. Market & potential new Take-up projects • 7. Proposed Activities • 8. Risks & Barriers / Key Success Factors Attachments: • A. Current Situation - details • B. Benefit areas - detailed descriptions • C. Key factors on the road to the future • D. List of Companies and people contacted

3. Purpose of the Business opportunity study • Based on the current situation develop how POSC/Caesar can best make significant contributions to the future improvements within the industry • Description of opportunities & challenges • Develop a Business opportunity study for the POSC/Caesar Project & “ community “ • Document the factors that can be influenced • Raise awareness of both management & engineering on the potential of standard solutions There are enormous opportunities for industrial improvements in using standardised / open solutions as POSC/Caesar

4. Summary - Information Based on interviews, meetings, workshops and talking to people, all together more than 50 persons, and by studying other industries, status can be summarised as: • There is a need for access to quality information earlier in fast track projects • The volume of information seems identical, although the handling is reduced significantly • Large sums are expended on the transfer of data from the execution to the operational phase • The storage of as-built documentation is more at the producers, but there are still complaints about too much DFO and to detailed requirements • The oil companies do not fully use Functional specifications • There are very costly consequences of company specific systems; production and hand-over of electronic information • There are no definitions or systematic follow-up of the information cost or revenues The understanding of the importance of information differs very much by the average engineer

5. Why Change • A standard is needed to solve the flow and sharing of information through a life time and across the different organisations and systems. This will avoid dependency on one particular software system • Fast track projects presume parallel work and available information • New contract formats and the suppliers and contractors autonomy demand open information between the different organisation/parties • A common and open data format is needed to facilitate standardisation and re-use of information • A POSC/Caesar model enables the transfer of experience and knowledge • Improves safety and quality

6. Implementing the Vision - NORSOK Realisation NORSOK Still major challenges : More than 80 % of Documentation/IT recommendations still open • Information/documentation to have one source and one owner • Information handling between the parties to be handled electronically • Electronic based information being the original • Open systems and information sharing to facilitate parallel work • Common databases to secure replication and experience accumulation and transfer • Project and quality management tied to technical information NORSOK Achievements: • NORSOK has caused a shift in industry ; - major benefits are achieved: • Simplifying technical solutions - Use of standard specifications • Smarter ways of working • Open / co-operative attitudes / new contracts structures / new alliances • More early involvement of suppliers • Increasing electronic based documentation / information and less paper Information Management is Crucial for Changing working methods - Open solutions will be a pre-requisite to achieve this

7. Step changes for improving the efficiency of field development and operations can only be achieved through the following changes: Working methods Contractual matters Life cycle understanding Technology Peoples attitude to change / competence development Understanding of Information as part of the value chain Implementation of tools that allow working relations with no “borders” - based on POSC/Caesar solutions Change enablers - field development & operations Field business development Best Practice Transfer Project1 Project 2 Concept Project 3 Project 4 Detail Engineering Life Cycle Information Next Fabricate/ Construct MC/Comm Operations Support/Modifications/Abandon Information Information Information Installations Components Systems This study for the POSC/Caesar for Better Business study is mainly focusing on information and enablers to provide information to support other factors for change

8. Key success factors • Management to lead the way • Keep an ’open book’ attitude across the industry to achieve substantial industry benefits • Do not under-estimate human ’inertia’ • Assure continous communication with all involved parties • Move away from discipline ’silos’ and introversion • Continous work towards ’process orientation’ • Information sharing and information reuse • Learn from ’best practices’ through continous benchmarking • Need to understand Information as a Value Chain • Be holistic, address simultanously.. • working methods, technical solutions and support systems/tools • training • Common logical solutions will be established for many operators across the North Sea Change of mind set will hurt

9. Major Business Opportunities - all phases • Potential saving over all phases of the life time, in many areas: • Concept dev.: 10 - 30 in time • Eng Efficiency : 15-28% • Quality: 10 - 30 % • Hand-over : 60 % • Commission : 20 - 40 % • Ops : 10 - 20% in some • areas • IT Costs : 10 -20 % • … • ... Concept Develop- ment Engin- eering Commis- sioning Fabrication Production Installation Abandon Exploration Concept Develop. Engineering Efficiency . Working Relations (Contractors < > suppliers) Cost Benefits Information Values Standardisation 600 Comm. efficiency Commissioning Efficiency 400 200 Hand-over . 100 Operations Efficiency Time

10. Based on industry requirements the following areas of focus are proposed: Training / seminar for better POSC/Caesar understanding on all levels in the oil & gas community Further development of the POSC/Caesar Reference Library Overviews of toolboxes available and their practical use Promote and support use of POSC/Caesar based applications Promote new take-up projects All parties in the oil & gas community have a role & responsibility in planning for use of POSC/Caesar based solutions Oil company mngmt must declare requirements for POSC/Caesar based solution for all information handling Main contractor mngmt should take the opportunity to gain competitiveness in being more effective Key suppliers - equally Employees - take the responsibility of gaining new competence Proposed activities Oil Co’s / Main Contractors / Key Suppliers all must take the opportunity in using POSC/Caesar based solutions to gain competitiveness

11. Risks & Barriers As for all new technology and new working methods POSC/Caesar based solutions represent a number of barriers & risks, however, can be controlled if taken actively serious: • Human factors • fear of new working methods / modes / responsibilities • what about my job in the future • competence lack • Implementation • changes in on-going business • resource requirements - major / need top skill • ownership / consequences of new methods • Support /Technical • management commitment • new versions of POSC/Caesar to come • POSC/Caesar applications only at its start - no practical experience Through management of risks the POSC/Caesar success can be achieved