Application of Lean Principles to Accelerate Project Development

Abstract

Oil and gas project development in the North Sea is known for large discoveries, requiring the need for highly complex, capital intensive infrastructure, which can take decades to complete. Recognizing that such discoveries were becoming less common, a faster and less capital intensive approach was needed to develop smaller fields. The idea was to target fields close to existing infrastructure that could tie back to current installations and only require a seabed template. Historically, these types of projects would take the company over five years to complete. A dedicated team was established to plan these smaller projects, appropriately called “Fast Track” projects, and was challenged with cutting development time in half. The Fast Track team used lean principles to analyze project lead times and target improvement opportunities. Lean is a methodology made famous in automotive manufacturing, which seeks to eliminate time wasting activities and reduce overall lead time (De Wardt 1994). The primary lean technique employed by the team was value stream mapping. First, the team mapped out the entire project development process, from discovery to production, and identified all the key steps in the process. Second, the team estimated the time it takes to perform each major step in the process and calculated the total lead time for project development. Finally, the team quantified all the sources of delays and developed opportunities for improvement. These opportunities were then ranked based on the potential time and cost savings. With the prioritized opportunities, an improvement road map was developed to steer the team in the right direction. The improvement road map contained a four-pronged approach to cut project development times in half: StandardizationCollaborationStreamlined processesChange management Standardization involved developing standard subsea templates, well designs, and completions equipment to cut the time to develop solutions. Collaboration involved integrating the operator and the service company and making use of teams in different time zones to accelerate well design and planning. Streamlined processes focused on combining decision gates in capital projects and working the well construction process in parallel to the project development process to reduce planning time. Finally, change management involved establishing a continuous improvement process, a system to implement ideas and engrain them into the organization, and a common set of key performance indicators to align different stakeholders and drive execution results. Implementation of these improvement opportunities led to a reduction of over two years in the time needed to complete the development projects: from 5.3 years to an average of three years.

Adoption and implementation potential of the lean concept in the petroleum industry: state-of-the-art

“…Lean techniques and tools such as VSM, visual systems 5 S, standardization, SMED, poka-yoke, quality-in-station (QIS), kaizen and Lean Six Sigma (LSS) are prominent at the operational and technical levels. Tønnessen et al (2015) described the application of VSM in a field development project in the North Sea to determine the main steps in the project's processes, estimate the time required for completion of each step, identify wastes that might cause delay and cost overruns and determine opportunities for improvement. Allan et al (2013) used process mapping to reduce waiting time in an infill development program, whereas Romero et al (2015) and Popa et al (2005) used VSM in a well intervention program.…”

“…Design standardization successfully reduced the cycle time in a field development project. Tønnessen et al (2015) performed design standardization to accelerate the development of small fields in the North Sea by establishing catalogs and specifications for use as a screening tool to guide designers and engineers to develop an appropriate well design concept more efficiently. Similarly, Chessa et al (2013) Lean tools such as poka-yoke, SMED, QIS and 5-whys are also mentioned in the literature.…”

“…For instance, Allan et al (2013) used various lean techniques (e.g. process mapping, standardization and poka-yoke) in reservoir management activities, whereas Chessa et al (2013) and Tønnessen et al (2015) used the lean concept to improve facility and equipment design processes. In addition, Ratnayake and Chaudry (2017) demonstrated the application of the lean concept in the valve requisition process.…”

“…Lean implementation has produced positive results, with most publications reporting reductions in cycle time and costs as the primary outcomes. In a well construction project, the lean concept decreased field development time by 2.3 years by reducing the drilling and well completion cycle time, the amount of non-productive time and the number of injuries (Tønnessen et al, 2015). de Wardt et al (2000) demonstrated that the implementation of Lean Drilling TM in an extended reach drilling project resulted in completion of the project under budget and before the deadline.…”

Evaluation of value stream mapping (VSM) applicability to the oil and gas chain processes

“…manufacturing (Ratnayake and Antosz, 2017b;Stadnicka and Ratnayake, 2017b), information technology (Chen, 2016;Almoghathawi et al, 2017), blasting and coating industry (Shou et al, 2017), aircraft (Stadnicka and Ratnayake, 2017c), healthcare (Mustapha and Fajola, 2016), road and routing operations (Aziz et al, 2017;Villarreal et al, 2016), warehouse and supply chain (Zokaei and Manikas, 2014;Yusuf et al, 2014;Reis et al, 2017), services (Bargshady et al, 2016), aquaculture (Malindretos et al, 2016), fashion industry Oil and gas chain processes (Benjamin, 2016), electronic devices (Pinto and Mendes, 2017), construction (Viana et al, 2012;Marley and Ward, 2013;Formoso et al, 2015) and project development (Tonnessen et al, 2015;Itua, 2015). Other authors explored the VSM integrated with other subjects, such as sustainability of manufacturing processes (Habidin et al, 2013;Helleno et al, 2017;Garbie, 2017), theory of constraints (Librelato et al, 2014) and business process reengineering (Radosevic et al, 2014).…”