FPCF FLOATING PRODUCTION COOPERATIVE FORUM

1. Aberdeen Maritime Consultants Ltd. FPCF FLOATING PRODUCTION COOPERATIVE FORUM Michael Taggart www.aberdeenmaritime.com

2. PESENTATION SUMMARY • LEARNING PROCESS • DIFFERENCES FPSO TO TANKER • ECONOMIC CONSIDERATIONS • EFFECTIVE KNOWLEDGE TRANSFER • FPCF PROPOSAL

3. THE LEARNING PROCESS

4. LEARNING CURVES BUILD 2 YEARS PRODUCTION OPERATIONS : 15 YEARS SERIES WARSHIP PRODUCTION INDIVIDUAL EXTRA FPSO PROJECT ?

5. LEARNING CURVES SERIES WARSHIP PRODUCTION INDIVIDUAL FPSO PROJECTS ? EXTRA

6. COATED CARBON STEEL CAISSON CENTRALISERS UNCOATED Cu Ni PUMP STRING SS PUMP BOWL WITH STRAINER BELOW INJECT HYPOCHLORITE COATING DAMAGE ? PUMP CAISSONS .......... ANYTHING TO LEARN AFTER 40 YRS?

7. FACTORS AFFECTING LEARNING PROCESS LEARNING FACILITATORS • LARGE REPEAT SERIES • UP TO DATE PRESCRIPTIVE CODES • JOB / TEAM STABILITY • ANTICIPATING PROBLEMS *** • STRAIGHT DEALING FOR TRUE VALUE LEARNING INHIBITORS • SHORT RUN / ONE OFF SOLUTIONS • GOAL SETTING RISK BASED CODES • CONSTANT RE-ORGANISATION • REACTIVE ENGINEERING ONLY • CONTRACTUAL GAMES & COST CUTS • SCHEDULE PRESSURE ***

8. SOME DIFFERENCES BETWEEN FPSOS AND TANKERS

9. SHIP STEEL REPLACEMENT (DRYDOCK) FPSO STEEL REPLACEMENT (AT FIELD….NO DRYDOCK) 20% RETURN p.a. REQUIRED OPEX SAVINGS / UNIT CAPEX P&I CLUB MAJOR COATING ISSUES & STEEL REPLACEMENT IN TANKERS 10% RETURN p.a.

10. CAN AFFORD EXTRA BUILD QUALITY POOR ROOT PASS COMMON ON LESS CRITICAL SHIP’S PIPEWORK SOLVE TIG ROOT PASS EXTRA RADIOGRAPHY REPAIR & INSPECT 2 MORE / FAILURE (or ASME B31.3 INSTEAD OF CLASS) CAN EASILY JUSTIFY Cu Ni FOR SOME DUTIES IN LONG SERVICE LIFE

11. SOME ECONOMIC CONSIDERATIONS

12. PLATEAU AREA 1 AREA 2 EFFECT OF NPV ON PRODUCTION INCOME PLATEAU AREA 1 >> AREA 2 …… EARLIEST START UP DATE IS PROJECT KING

13. RELATIVE VALUE OF TIME SPENT DURING PROJECT DEFINITION 1 DAY OF PRODUCTION LOST 5 YEARS AFTER START UP 1 TONNE OF STEEL ADDED 5 YEARS AFTER START UP 1 DAY DELAY HOOK UP OR INSTALLATION 1 DAY DELAY START OF PRODUCTION MAIN GENERATION GAS COMPRESSION

14. KNOWLEDGE TRANSFER

15. ONGOING PRODUCTION OPERATIONS PRODUCTION OPERATIONS : 15 YEARS LAST BUILD BUILD 2 YEARS AREA 2 AREA 1 EARLIEST START UP DATE IS PROJECT KING TYPICAL KNOWLEDGE TRANSFER GATHER LESSONS & INPUT WHEN PRESSURE IS LOWER START UP DATE ! SCHEDULE PRESSURE INHIBITS LEARNING HOWEVER SCHEDULE PRESSURE IMPROVES VALUE IT IS GOOD!

16. ONGOING PRODUCTION OPERATIONS PRODUCTION OPERATIONS : 15 YEARS OTHER PRODUCTION OPERATIONS & INDUSTRIES LAST BUILD BUILD 2 YEARS OTHER BUILD IMPROVED KNOWLEDGE TRANSFER BETTER TAKEN OUT OF PROJECT TIMESCALE! / PARTLY OUTSOURCED? SEPARATE LESSONS INTO BUILD SPECIFICATION PROJECT LESSONS INTO OPERATING & MAINTENANCE TECHNIQUES ALSO EXCHANGES DATA WITH OTHER OPERATORS AND INDUSTRIES

17. REASON FOR FPCF IF IT MAKES ECONOMIC SENSE TO STIFLE LONG TERM FEED BACK DURING THE BUILD PHASE TO ENSURE MEETING START UP DATE, THEN……. IT CERTAINLY MAKES ECONOMIC SENSE TO GATHER LESSONS OFFLINE & ANTICIPATE PROBLEMS EXPERIENCED BY OTHERS. YOU HAVEN’T IMPLEMENTED ANY LESSON UNTIL IT IS PUT INTO A BUILD SPECIFICATION OR A MAINTENANCE / OPERATING ROUTINE. EVEN THEN – ONLY WHEN THE YARD ACTUALLY DOES IT! IF A COMPANY CANNOT OR WILL NOT INVEST IN DOING THIS IN HOUSE THEN……. IT WOULD MAKE SENSE TO JOIN WITH OTHER COMPANIES AND USE A CONSULTANCY PROVIDED THAT THE SERVICE PROVIDER GENERATES INPUTS THAT CAN BE PASTED STRAIGHT INTO A BUILD SPECIFICATION, MAINTENANCE ROUTINE OR OPERATING PROCEDURE.

18. FLOATING PRODUCTION CO-OPERATIVE FORUM

19. PROPOSAL PHASE 0 • ESTABLISH INDUSTRY INTEREST + ACTIVE CONTRIBUTION PHASE 1 • GATHER OPERATOR PROJECT & OPERATIONAL EXPERIENCE • GATHER SHIPYARD PROJECT EXPERIENCE • GATHER TANKER MAINTENANCE EXPERIENCE PHASE 2 • WRITE BEST PRACTICE NOTES • MOUNT ON WEBSITE PHASE 3 • RESTRUCTURE FOR ONGOING KNOWLEDGE SHARING

20. FPCF WORKING PRINCIPLES ACTIVE INPUT REQUIRED FROM PARTICIPANTS • CASE HISTORY & WHERE POSSIBLE PHOTOGRAPHS • SOLUTION ADOPTED / PROPOSED • ORDER OF MAGNITUDE COSTS OUTPUT FROM ABERDEEN MARITIME (WEB BASED) • ISSUE ALERTS ON WEB SITE • DRAFT BEST PRACTICE, WITH COST INFORMATION, WHERE AVAILABLE • OUTPUT TO BE ANOMYNOUS (IN TERMS OF OPERATOR & FPSO)

21. COST & TIME PARTICPATING FEE • 3 off £5000 INSTALLMENTS (2004, 2005, 2006) • BASED ON MINIMUM 12 PARTICIPANTS • THREE YEAR RUN SCHEDULE

22. ORGANISATION

23. BENEFITS / FURTHER INFORMATION ANTICIPATED PAYBACKS • COST SAVINGS - REDUCED REWORK OFFSHORE IN EARLY OPERATIONS • COST SAVINGS - BETTER CAPEX Vs. OPEX DECISIONS • COST SAVINGS - REDUCED SHUTDOWN FOR UNPLANNED MAINTENANCE • INCREASED REVENUE – PROJECT SCHEDULE COMPRESSION WITHOUT COMPROMISING TECHNICAL INTEGRITY • REDUCED WASTE - ‘ENGINEERING’ AT THE RIGHT TIME REDUCING REWORK CONTACT FOR MORE DETAILS • WEBPAGE www.aberdeenmaritime.com • E-MAIL mike@aberdeenmaritime.com • PHONE +44 7969 682 969

24. ACKNOWLEDGEMENTS Aberdeen Maritime would like to thank the following for their valuable and ongoing input in developing this concept:- • EM&I • Danny Constantinis • Judy Burdett • Dr. J.R MacGregor • Marine Technical Limits • Matt Lewin