TOPICS OF INTEREST
RISK MANAGEMENT/DECISION-MAKING
Better Abandonment Cost Estimates Yield Improved Project Valuations
Developing an asset requires key investment decisions to be made early in the process, and as a result, some critical cost evaluations—such as abandonment—are often ballpark estimates. Adjusting the parameters for evaluating these costs can lead to more-accurate project valuations.
Operating Excellence Through Benchmarking in Upstream Operations
As companies have focused on giant capital investments onshore and offshore to drive growth, they have often focused less on field operations, especially OPEX. This represents an enormous opportunity to address profit squeeze by improving overall cost efficiency in oil and gas projects.
TechnipFMC To Create Two Independent, Publicly Traded Companies
The transaction is planned to be structured as a spin-off of TechnipFMC’s onshore/offshore segment to create SpinCo and RemainCo. The separation is expected to be completed in the first half of 2020.
Aker Energy Moves Closer to IPO
With a $100-million investment and submittal of its offshore Pecan field development plan to Ghana authorities, Aker Energy continues its positioning for an IPO later this year.
Operators Build the Business Case for Drones
Drones are becoming an important tool for energy companies looking to improve on-site safety and operational efficiencies, and the industry is looking for the best way to maximize their value. What are some the challenges in getting these programs off the ground?
API Releases Guide for Drones in Oil and Gas
As drones become a more significant part of energy projects, the guide outlines the steps operators should take in assessing their capabilities to run a drone program and the elements such programs should consider, including safety and regulatory concerns.
Managing Fatigue To Reduce Risk and Improve Work Culture
Companies in the petroleum industry, from exploration and production, to transportation, refining, and distribution, operate around the clock. This paper intends to raise awareness on the impact of fatigue in the petroleum industry and recommend a framework for fatigue risk management.
Establishing Data Ethics in Oil and Gas Operations
The use of data-intensive decision making and smart risk-management solutions has resulted in the improvement of the ethical foundations underlying the industry. These digital tools and machine-based cognitive processes for risk-avoidance have also helped restore the public’s trust in the industry.
Should Cybersecurity Drive Business Decisions?
Cyberattacks are often seen as an IT issue, but the intelligence gained during the development of an effective cybersecurity protocol may serve a broader role as a business driver for energy. What should companies look for in assessing threats?
Financing FLNG Facilities—What Lies Ahead?
Although the FLNG concept has been around for decades, only three units are in the water and operational or under commissioning as of 2018. As the mitigation of technological risks is demonstrated, commercial risks become the focal point and the challenge to financing the capital-intensive projects.
What Project Sanctions Tell Us About the State of the Upstream Sector
Many of the biggest players in the industry—particularly the majors—have adapted their portfolios for “lower for longer” and are once again sanctioning big projects. While we are not back to the heady days of 2010–2014, we have left behind the dark days of 2015–2016.
A Box of Operations: How To Influence What You’re Going To Get
Sizing a person’s “operating box” for making decisions and taking actions to make room for ingenuity and affordable mistakes provides opportunities for his and the organization’s learning. Which factors affect the resizing of the box and how can the limits be adjusted to encourage continued growth?
Ten Things to Know About the Stage-Gate Process for Projects
The average project loses 22% expected net present value at authorization, and only 60% of projects meet all their business objectives once they are completed. Executives can do a lot to increase capital project effectiveness by being committed to the stage-gate process.
Crushing Gold: The Downside of KISS
Mediocre leadership crushes employee gold and can be the unwitting source of unforeseen organizational outcomes.
Hierarchy Theory and the Sound of One Hand Clapping
Application of hierarchy theory helps in understanding complexity and is a tool that you should have in your engineering and management toolboxes.
SPE Americas HSE Conference Begins With a Blast
The 2017 SPE Health, Safety, Security, and Social Responsibility Conference–North America started with a blast on 18 April and continued with a discussion of how the brain works and a brain-centric view of safety.
Want Great Soup? Focus on the Broth
The secret ingredient to good soup is good broth. In the same way, culture makes the difference between reliable high performance and mediocrity in an organization.
The Impact of Styles of Thinking and Cognitive Bias on How People Assess Risk and Make Real-World Decisions in Oil and Gas Operations
Awareness of the different styles of thinking can provide an understanding of the choices people make when assessing risk and making decisions. The purpose of this paper is to show how such knowledge can be operationalized and applied to real-world oil and gas operations.
Safety for a Helicopter Load/Unload Operation on an Offshore Platform: Optimization From Several Viewpoints and the Psychological Aspects of the Marshaller
Helicopter operations are important in the offshore industry but accidents involving them can have fatal consequences. This paper focuses on risk mitigation during the loading/unloading task of a slickline/wireline job from various viewpoints, including the psychological aspects of the crew.
Bayesian Networks Helpful in Shale Risk Management
By using a Bayesian network, a probabilistic graphical model, in their shale operations, companies might eliminate some of the hurdles they face in these areas, an expert said at the 2016 Unconventional Resources Technology Conference.
Why Business Advice Is Often Bad Advice
Whether using internal expertise or outside consultants, projects and initiatives can go awry due to cultural issues and bad management advice. This can have implications for many aspects of a business, including process safety.
A "Normal" Accident -- The Loss of the RAF Nimrod XV230: A Failure of Leadership, Culture, and Priorities
Analyzing accidents can demonstrate how much they have in common with everyday operations. Business principles and sound engineering practices can be at odds.
Optimized HSE Processes Central to Operational Risk Management Strategies
Change is constant in the oil and gas industry, bringing an increase in operational risk. As companies acquire and develop assets around the world, they must reduce their risk exposure by improving operational integrity.
Action Science: Moving Away From Defensiveness and Silo Behavior in Our Work
A subject field perhaps little known in the oil and gas industry is action science, a strategy for increasing the skills and confidence of individuals in groups to create organizations and to foster long-term individual and group effectiveness.
Managing Nontechnical Risk in Offshore Projects
Nontechnical risks, primarily around HSE or social responsibility, increasingly pose risks to project timelines. To manage these risks, companies are seeking systems that can ensure quality performance in these operational areas.
Situational Awareness, Cognitive Biases Influence Decision Making
“Decision Making: What Makes a Decision Good,” was the topic of a recent webinar held by the SPE Human Factors Technical Section.
A Strategy For Driving Step Change Reductions in Capital Project Cost
Many companies are seeking 20% to 50% reductions in project costs. This level of capital cost reduction requires serious rethinking of the strategy for developing and executing projects.
Use of the ALARP Principle for Evaluating Environmental Risks and Impacts of Produced-Water Discharged to Sea
As low as reasonably practicable (ALARP) is common for management of safety risks, but harder to apply to environmental risks. This paper explores the differences and proposes a modified method to support environmental risk analysis.
The Role of Psychological Factors in Major Project Cost and Schedule Overruns
We are comfortable with the reality of swift intuitive judgement being the primary decision-making approach of experienced engineers in emergency situations. But as the engineer in the situation has less experience available to him/her, how do psychological factors affect outcomes?
Choice of Development Concept—Platform or Subsea Solution?
Valuation of the enhanced flexibility offered by platform-based development solutions and sequential subsea solution is difficult. This leads to the question: Are development solutions being selected without taking sufficient account of option values?
Group Decision Making: A Powerful Force for Good and Bad
The understanding of decision-making processes is critical in ensuring project success and safety. Project failures—and disasters—can result from the lack of understanding or implementation of sound principles.
Built-In Bias Jeopardizes Project Success
In spite of massive investments in project management best practices and the organizations to implement them, major oil and gas projects continue to experience cost overruns and schedule delays. A root cause that has not been sufficiently explored is the built-in bias toward overconfidence.
Explaining Human Judgment Failures: Heuristics and Biases from the Laboratory to the Field
This regular column addresses the social side of engineering. We are pleased to include an article written by two of the more prominent names in decision-theory research. Dale Griffin and Thomas Gilovich describe interesting and important insights from the study of heuristics and biases.
Managing Subsurface Uncertainties in Facilities Design
Bridging the gap between facilities and reservoir engineers is critical in designing systems that are flexible enough to allow a spectrum of reservoir feed conditions to be accommodated over the life cycle of the field. While subsurface uncertainties can't be eliminated, they can be managed.
Integrity Maintenance of Petroleum Pipelines
In this paper, a data-driven model is applied to derive optimum maintenance strategy for a petroleum pipeline. The model incorporates structured expert judgment to calculate the frequency of failure, considering various failure mechanisms.
Value-Focused Thinking: The Foundation for Decision Quality
The oil and gas industry is technical and challenging. Because the technical issues are dealt with by humans, we also face social, psychological, and cognitive issues which are frequently as challenging. In this regular column, we address the softer side of engineering.
Challenges of Accurate Cost Estimation for Facilities
Cost estimation for facilities depends on early concept selection and critical inputs, often complicated by uncertainty in one or more of the critical inputs. Empirical cost models and cost modeling methods using these inputs vary in degrees of scope, comprehensiveness, and robustness.
Better Decisions: A Two-Way Street
Engineers in the oil and gas industry make tough decisions for a wide variety of issues, including risk and safety, and about design and other types of tradeoffs, as well as operational assessments.
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