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Design and implementation of an optimization program for an upstream asset at one of the leading oil companies

Abstract

As part of this project, the engagement team from Deloitte CIS developed an operational performance improvement program for an upstream asset, at one of the leading, vertically-integrated oil companies. The major task of this project was to develop a list of measures, aimed at extending the economic life of the asset up to 2016.  An implementation plan was also prepared.

Challenge

The current state of the upstream asset was such that, if the established activities did not change, the economic life of the asset would expire by 2011.

The main reason for this was declining production and a great number of inactive wells. The situation was also complicated by the remoteness of the asset in question, which limited the opportunities for cutting operational costs (with respect to the contractor service costs).

Approach

The Deloitte approach consisted of preparing measures, in three main categories, depending on the level of impact on asset operation.

Radical transformation – activities, aimed at changing the management and investment approaches, as well as instigating radical operational changes for the asset.

Lean production – measures, aimed at raising the effectiveness of operating processes, with no need for radical changes.

Quick solutions – measures, aimed at raising the effectiveness of business and operating processes, to be implemented in the shortest time possible, following their approval. In order to achieve effectiveness, as soon as possible, we worked closely with the staff of the oil company during this project, which allowed us to be effective at the project implementation stage.

We also analyzed the company’s cost structure and developed a model for the allocation of costs to wells.

Solution

Measures, aimed at raising the operating process effectiveness of an upstream asset.

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