Page 43 - Impiantistica Industriale

Driving costs down to a $35 a barrel threshold will zed topside design and modular jackets. A Norwe-
require a combination of strategies. These will in- gian operator and an offshore oilfield services com-
clude regional hubs with reusable, modular deve- pany reduced the breakeven cost of a wellhead
lopment concepts, agile project delivery, digitally platform by 30 percent through the use of a modu-
powered operational excellence; and innovative al- lar development concept that allowed construction
liances. All four of these levers are necessary to un- to start in parallel with detailed engineering design.
lock currently uneconomic reserves and to speed
up the pace of growth. In today’s up and down market, break-even cost
is emerging as a key indicator for assessing the at-
Agile methods and modular, reusable concepts are tractiveness, economic viability and profitability of
now challenging well established beliefs about the future energy projects. Most companies have set
amount of capital required and cycle times betwe- a goal to lower the break-even cost through the
en discovery and first oil. adoption of digital technologies, like advanced
analytics. This paper examines the break-even cost
Driving costs down to a $35 a phenomenon and reviews technology options for
barrel threshold will require a further reducing break-even cost so that oil com-
pany profits can be optimized.
“combination of strategies.
These will include regional Break-even cost variables
hubs with reusable, modular A project is considered at “break-even” when its
development concepts, agile net present value (NPV) is zero. Thus, when the
project delivery, digitally present value of the negative cash flows from the
exploration, development and production are com-
powered operational excellence; pensated for by the present value of positive cash
and innovative alliances. All four flows expected from the oil sales, the project is at
of these levers are necessary break-even.
to unlock currently uneconomic The break-even calculations take on different cha-
reserves and to speed up the racteristics depending upon the possible market
situations:
pace of growth • When oil prices are increasing, new in-
vestment areas and innovative production
Exploration and production (E&P) players are using techniques are assessed. Included in the bre-
these methods to shave off 20 to 30 percent of ak-even calculation are all exploration costs,
their original project development schedules. The reservoir assessment, field development,
marginal-field specialist Oranje-Nassau Enegie, for distribution network development, as well
example, accelerated time from discovery to first as production costs and taxation. Costs are
gas at its P11-11 field (in the southern North Sea) considered from a full project life-cycle point
to 28 months by employing a reusable, standardi- of view.

Geological factors
Location
Market variables
Operating expenses
- Maintenance
- Energy consumption
OpEx - Manpower Prod.
Reservoir management OpEx
- Recovery techniques (2ndary, EoR)
Transportation & administrative
Taxes & royalties Half
cycle
Well development financing costs
Well pad & well construction
Reservoir management CapEx
- Recovery techniques (2ndary, EoR)
Facilities construction
Workovers
Decommissioning Full
project
life cycle
Field development financing costs
CapEx Engineering & design (FEED, EPCs)
Export pipelines
Infrastructure
Exploration
Block/area leasing
Reservoir characterisation
Costs influencing Oil & Gas
industry break-even prices
Exploration Development & Delivery Production

Impiantistica Italiana - Maggio-Giugno 2020 41