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Journal of Australian Energy Producers
RESEARCH ARTICLE (Non peer reviewed)

Lean times in oil and gas: frugal strategies for emerging as a stronger player

Kai Eberspaecher
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Advisian (WorleyParsons Group).

The APPEA Journal 56(2) 553-553 https://doi.org/10.1071/AJ15059
Published: 2016

Abstract

The reduction of the oil price depressed earnings for oil and gas companies during the past year.

For many smaller players, this lack of revenues can lead to bankruptcy or takeovers. Even some larger companies have fallen casualty to depressed share prices.

The first part of this extended abstract outlines focus areas on the process side to lower costs and improve revenues for operating companies, based on a number of case studies from around the world. In particular, the examples given will look at ways to increase production and reduce costs, increase the efficiency of drilling wells, and improve cycle times between well completion and bringing on production.

The second part of the extended abstract discusses approaches in engineering and project execution that can lead to significant reductions in cost.

Case studies will be used to illustrate how engineering deliverable standardisation decreased development cost considerably for operators. Further case studies will show that engineering practices such as debottlenecking, risk assessments, and technology application (e.g. flow assurance, reliability engineering, etc.) can lead to improving throughput, increasing reliability, and ultimately reducing cost.

A final hypothetical case will be qualitatively evaluated to show the value of retaining flexibility in engineering designs.

The conclusion of the extended abstract will look at how additional organisational measures such as training, performance management, and reporting structures can drive sustainable change and lead to increased profit margins in very challenging circumstances.

Kai C. Eberspaecher is a Senior Associate in Advisian’s Hydrocarbon Practice. Kai started his career as a production engineer with Shell International in The Netherlands and Scotland. Kai then joined BG Group in the UK where he commenced developing the framework for BG’s digital production optimisation approach. Kai subsequently transferred to Kazakhstan as project manager for a debottlenecking project and later became Department Manager for brownfield development activities.

Kai came to Australia to work on the Queensland Curtis Liquefied Natural Gas (QCLNG) project, initially as the Development Engineering Manager for future growth, and later as the Upstream Operations Readiness Manager for the QCLNG project.

Kai is a Fellow of the Institute of Chemical Engineers, a Chartered Engineer, and a Registered Professional Engineer in Queensland. Kai holds a MEng in chemical engineering from Imperial College London, and an MBA from the Tepper School of Business at Carnegie Mellon University in Pittsburgh.