Drilling & Wells, Supply chain contributor day

We would like to thank everyone who joined us on 14 March at Fornebu. We had a great day with good presentations, feedback and conversations. Here is a recap of the day you can share with your coworkers.

Supply chain contributor day

Drilling & Wells invited key contributors to a gathering on Friday 14 March at Fornebu, aiming to prepare for the ramp-up of Drilling & Wells’ massive drilling scope as part of the Plan for development and operation (PDO) project portfolio. Aker BP have the majority of the greenfield investments in Norway up until 2027. We are already well underway in delivering the PDO scope, four out 14 PDOs are completed and put on production. But there will be a significant tact shift when Yggdrasil, Valhall PWP, Utsira High and SSP kick off in a couple of months.

The day also covered the situation after we have delivered the PDO projects, giving insight in the challenges the industry at large will face with a more marginal market.

The backdrop of the macro environment made this day a timely occasion. We live in an unpredictable world. The price of oil and gas brought to the market will continue to be volatile. We as an industry need to be competitive in this setting.

Aker BP have a vision of being the E&P company of the future, but we cannot pull this off alone. More than 90% of work conducted through D&W, is done by our suppliers. We need to create value to Aker BP through our suppliers, and at the same time our suppliers need to create value.

Long-term commitment on NCS

Drilling & Wells Senior Vice President Tommy Sigmundstad kicked off the day by setting the scene. He emphasized the need for increased productivity, collaboration with suppliers, and maintaining competitiveness in the evolving and expanding energy market. He communicated Aker BP’s commitment to long-term operations on the Norwegian continental shelf (NCF) and the necessity of transforming the industry to adapt to smaller margins and volumes.

Aker BP are going to drill more than 200 wells going forward. This includes our project portfolio as well as exploration and goes beyond 2027. In periods we will double our number of intervention activities. This will be done with a performance, nobody has ever seen or done before on NCS.

Sigmundstad took the opportunity to clarify how suppliers outside of the alliance can get access to Aker BP. The alliance welcomes other suppliers, which can compete with them on cost, can deliver with higher quality, or have new or superior technology. The commercial model and external benchmarking forces this in place. Aker BP have established a Technology Portal where suppliers and individuals can submit their technology proposals.

Shared responsibility and risk

Vice President Drilling Operations Semi Mads Rødsjø conveyed a very important message, underpinning that we need to allow bad news to travel fast. Don’t keep your problems and challenges to yourself, we expect you to share them. Then they will become our common problem and challenge, only then can we tackle them together. In addition, be aware of transportation of risk through the value chain and out to the sharp end, a high-quality plan will result in a safe and efficient execution.

One Team

Tore Christiansen, owner and main sponsor of the hockey club Stavanger Oilers, shared the story from when he took over a bankrupt hockey team and clearly showed the importance of values and how far you can get if you really put them into practice. This helped to underpin Aker BP’s strategy, which is strongly founded on the SAFER values and that One Team is the key to reaching as far as you want.

Production post 2027

In Aker BP we have two dedicated strategic projects aiming to create the next wave of profitable growth after the PDO projects are delivered, Low Cost Reservoir Access (LCRA) for dry wells and Subsea Hopper Project for subsea wells. Both have the identical objective in the mandate, “Unlocking new economically viable resources by identification and developing new technologies, concepts for future field developments and new business models”.

The intention was to present this opportunity to create a common understanding among the Aker BP’s valued contributors about criticality, complexity and urgency. Currently, many of us are in delivery mode, ensuring that we deliver what we have promised to the market, and rightly so. However, we must balance the duality, by using the current runway of projects to set a new standard and drive transformative initiatives in parallel.

There is a significant total volume of reserves if we sum up what we categorize as marginal fields. Bluntly said, for this type of prospects, it is either nothing or something – these reserves will stay in the ground if we are not successful.

Paul Reid, Vice President Concept Development Projects, gave context and insight into the industry challenges. Then Brian MacKey, Project Manager for the Subsea Hopper Project, provided valuable information in the areas which Aker BP are progressing in unlocking these marginal fields.

Perspectives from contributors

We also got perspectives from the audience through an interactive session, asking where to put the effort to unlock the marginal fields. Going forward, the main effort will be put into simplification, standardisation and new technology as key enablers. This is aligned with the work streams the strategic projects LCRA and Subsea Hopper Project are targeting. We saw many specific examples during the day how Suppliers have succeeded with implementing disruptive technology and making business by driving standardization towards the operators on the NCS. These cases inspire and showcase how Suppliers can lead, be ambitious, and drive transformation.

Commitment

Aker BP is committed to deliver on what we have promised to the market and to stay on the NCS for the long run. To be able to do this, we need to work closely with our suppliers. This requires us all to work along a three point agenda, all at once.

1. Deliver day-to-day operations in order to maintain production and cash flow.
2. We must deliver our projects on time, on budget, and with quality.
3. We must transform ourselves and our industry for a more marginal market.

This message was emphasized by Aker BP’s CEO Karl Johnny Hersvik in his closing remarks, reiterating the importance of working closely together with our suppliers (read: contributors) to create value for our respective shareholders and the society.

Thank you all for participating and we are looking forward to seeing you next time.