Proceedings of OMAE 2001 20th International Conference on Offshore Mechanics and Artic Engineering 3rd 8th June, 2001,

, Rio de Janeiro, Brazil

OMAE2001/OFT-1150

THE MODERN FIELD DEVELOPMENT APPROACH

Antonio Critsinelis INTEC Engineering 15600 JFK Boulevard, Houston, Texas, 77032

ABSTRACT The front end engineering process for EPCI deepwater field developments employs engineering effort strategically allocated and distributed in a schedule of work, based on the primary design basis information. The prime deliverable is the bid package, which is to be comprehensive but flexible in order to be effective during both, the bid and contract phases. Key issues are the provision of a well balanced engineering and managerial effort throughout the phases: a synergetic and experienced team working under an effective overall plan; and a flexible working approach focusing on client objectives. The knowledge to manage uncertainties, such as those included in the design basis or using new technology is an important and definitive factor in achieving success. The process is always iterative and the subject is driven by a complex combination of internal and external constraints. Typical phases prior to field execution include: Preparation of Contractual Strategy Screening of Field Architecture (Concept Development) Detailing Selected Architecture/Layout and Variations Preparation of Bid Package Specifications Bidder Qualification Bidding Process Contract(s) award

process and insight to problems and solutions, awaiting the phases based on actual development cases. INTRODUCTION / EPCI PROCESS OVERVIEW The ultimate goal is to optimize development economics by achieving earlier first oil, higher production rates, high operating uptime, and maximized recoverable at a lower overall cost with least risk. A technical and economic feasibility model is required to support the field business model for the respective project screening selection and approval process. The screening process and selection criteria are based on risk assessment and expected economic performance. The project is selected on the basis of its economic attractiveness, and the corporate attitude towards risk. Financial resources, profitability, project economic strength and other financial performance indicators define the alternatives that achieve the corporate economic target. Projected economic performance considers an estimated cash flow, which reflects foreseen capital expenditure and operating costs based on a proposed field architecture/layout. An order of magnitude cost estimate of the required intervention and maintenance activities is also required. Projected revenue is established based on an operating and depletion philosophy, predicted field performance and production profile. To launch the project, the permitting process must start well in advance to obtain a timely agreement, sanction and endorsement from third parties such as partners and regulatory authorities. Therefore it is necessary to quickly develop, with preliminary data, a consistent field development concept. Otherwise, it is impossible to carry the concept to the subsequent phases. The project inception process requires risk

This paper discusses the technical and managerial conflicts involved with the interactive process of overlapping disciplines and project requirements. The paper provides an understanding of interface management, decision making

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decisions and establishes targets and thresholds, which will require a well-planned and iterative follow up. In accordance to Inglis (2000) [1], On many projects the optimization phase is not given sufficient time and the project execution moves forward with a sub-optimal solution project value may be sacrificed for schedule advantage.. It is also important to identify and evaluate uncertainties and their respective possible outcomes. Besides a strong requirement to achieve expected field economic performance, there are other very important values to preserve such as safety and environmental protection. While exploration and appraisal drilling programs advance, the front end engineering design (FEED) evolves. Prime objectives are driven by reservoir management strategy, which focus on maintaining reservoir pressure and optimizing overall recovery. The multi-task engineering process will pursue an optimized balance of capital cost and operating costs that ensure achievement of field performance within the established operating philosophy. Intervention requirements for well and reservoir maintenance drive operating costs. For a given scenario, planning a deep water subsea production system will require technical and economic compromise, which will lead to an iterative and multi-disciplinary system approach. The system approach should pursue discipline integration, and leverage the expertise and knowledge of each discipline. Field architecture and layout alternatives should be ranked for the their attributes to meet basic requirements in some major areas such as cost, schedule, design, fabrication, installation, drilling, operation, maintenance, repair, future development and abandonment. Flow assurance is the system soul and, as a virtual discipline, dictates requirements for overall system operability. There are a number of factors that will drive the selection and configuration of the preferred subsea system, but certainly the ability to handle hydrates or wax deposition is one key element. Major cost savings is achieved in the conceptual stage, and subsequent phases will pursue further cost optimisation. However, in this process, time is of the essence and represents a severe constraint, which imposes deadlines for key milestone decisions. Some times these decisions are taken prematurely. A critical path must be identified and certain milestones are set for important project definition and associated actions. Drilling, fabrication, construction, hardware manufacturing and material supply pose basic milestones in the critical path and form the schedule outline and milestones. For the selected concept, a contracting strategy is determined and the FEED process delivers the bid package(s) accordingly. The bid package encompasses contractual and technical requirements. As a result of the conceptual and detailed

engineering generated during the FEED process, a technical package defines the scope of work, technical and functional requirements and set minimum quality standards for procurement, fabrication, installation, testing and precommissioning. Technical specifications should be prescriptive and functional. The optimum blend point of these two conflicting attributes should reflect corporate philosophy, project objectives and should be aligned with the contracting strategy. Pre-qualified contractors, vendors and subcontractors compete in the bid phase that requires appropriate effort to ensure that resource reliability, quality effectiveness and alignment are reflected in the technical and economic proposal. A wellprepared and properly conducted bid process will ensure the selection of the optimum alternatives. Contract(s) is awarded and diligent supervision should be enforced to ensure seamless interfaces and quality performance within schedule and budget. The establishment of a mutually respectful and professional partnership between contractors and the client is extremely desirable. The main contractor is responsible for project implementation including a consistent Safety, Health and Environmental (SH&E) plan and a diligent Quality Assurance System. An effective project management organization will be responsible for planning and control, budgeting, coordination of engineering, procurement, fabrication, construction and installation activities, and logistics to support these operations. In addition, it is essential to ensure comprehensive and effective interface management to align project goals and contractors. SCENARIO The scenario, commonly materialized in the design basis report, is a white paper upon which the development team will endeavor to study, engineer and implement a project. The field development design basis is an attempt to compile available and updated information for the scenario to support the various stages of the field development. The design basis is a live document, and recurring revisions should reflect the process dynamics as a prime single point source of information for all disciplines. The primary design basis should be unbiased from any preconceived field architecture/ layout alternatives. Given an estimate of recoverable reserves, a key aspect of the field development plan is the selection of the production reservoir(s) drainage, pressure maintenance philosophy and gas disposal philosophy. In this respect, reservoir engineering plays a paramount role in defining producing targets, as well

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as requirements for secondary recovery such as water injection, gas lift or gas re-injection. Reservoir characteristics and producing mechanism will drive requirements for the reservoir depletion strategy. Reservoir engineering and drilling strategy govern trends and impose a continuous and dynamic pace to the process, which remains up to the later stages of field architecture and layout selection. Early involvement and close coordination are essential to accommodate the inherent dynamic nature of these development parameters. As exploration and appraisal drilling advance, an enhanced reservoir knowledge builds up and feeds back to the on going conceptual / engineering process. Block boundaries also impose restrictions to field layouts in terms of subsea structure arrangement, especially for developments in which a reservoir extends beyond block borders and unitization is not achieved. For field architecture and layout definitions, crucial information is related to seabed morphology and characterization of geotechnical and geophysical soil properties. Subsea structures location, flowline/umbilical routes, foundation designs, installation methodologies and all disciplines, which involve equipment and soil interaction, are directly impacted by the local terrain conditions. Fluid composition and corrosivity, GOR, water cut, well pressure and temperature and productivity index are typical reservoir parameters utilized in conceptual and detailed engineering phases. These parameters, which are variable over field life, are used in thermal-hydraulic flow regimes studies and other flow assurance simulations of the production system. These analyses determine downhole and subsea structure characteristics such as tubing and flowline sizes, and requirements for insulation, corrosion mitigation and well completion design. In addition to cost, water depth is a major driver for technological development in the offshore oil industry. The inexorable trend towards deeper water depth scenarios poses challenges in the design of mooring systems, risers systems and installation methodologies. Increasing water depths usually impose increasing offset distances, loads, hydrostatic pressures and exposure to the environment. Other key areas are also directly affected such as flow assurance, diverless access, subsea and surface positioning. Metocean data is a prime input for environmentally sensitive subsystems and components. Floating units are expected to provide improved weather compliancy. Risers and mooring systems are designed to withstand extreme sea and current conditions and long-term environmental exposure without failure due to fatigue. The degree of robustness depends

basically on static and dynamic environmentally-induced loads. Some concepts may be applicable to mild scenarios, and unfeasible for harsher environments. Other concepts are designed to mitigate or alleviate the effect of waves and currents. As mentioned above, a major goal for any development is to achieve significant cost saving and maximize field profitability. Scope, scale, synergies and competition are key aspects to reduce cost. Field location in relation to existing infrastructure may represent substantial cost savings. Tie-backs of remote and marginal fields to an existing host facility have been extensively adopted as a solution to revive field feasibility. Likewise, the ability to export produced oil or gas through an existing pipeline network, or oil to a nearby existing storage vessel, are options that may enhance project cash flow by reducing capital expenditure for the export system. Key drivers for capturing tie-in synergies are tariffs and fees, required investment, metering, gas disposal requirements, compatibility and cost of alternatives. Other types of synergies are also possible depending on the scenario, such as shared infrastructure on a joint development or shared inspection, repair and maintenance support in fields located in the same area or basin. Given a scenario, the next step is to develop alternative architecture and layout options. In this respect, it is necessary to establish a set of preliminary assumptions to serve as a basis for performing further analysis. For example, riser analyses will require information about vessel dimensions, motions and offsets. INTERFACES Deepwater project developments open a wide range of possible combination candidates for selection, involving a variety of components, systems and subsystems. It requires an integrated suite of technology, some mature for use, others still to be proven. The most significant challenge is to accommodate and resolve the various interests in the interfacing disciplines. The selected system must be robust and cost effective for installation and operating, suitable for early and late field production, and able to accommodate future phases planned for the field development. Close coordination of the various disciplines in each activity is required to achieve synergetic and successful multi-tasking targets. An effective interface management minimises technical and economic overlap, whilst ensuring that gaps are not permitted to develop between the different disciplines involved. An experienced and qualified team may be less efficient without interface management, in the unduly assumption that each discipline will provide the best solution

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within each area of responsibility. In fact, the best overall solution is a blend of several well-balanced and connected concept and conflict resolutions, aligned with the project goals. One example of an interface issue is the proper design of downhole and subsea equipment to ensure that materials will be suitable should future souring of the reservoir occur as a result of the water injection program. In this case, definition regarding reservoir management will affect material selection for subsea equipment. If inhibitor injection is the selected mitigation, umbilicals and processing facilities must be designed for this purpose. Furthermore, exotic materials to mitigate corrosion will require specific welding procedures during fabrication and construction. Interfaces are often complex and can vary in level, criticality and nature. Therefore, interfaces should be well identified, categorized and managed from the earliest stages of the field development process. Network archive, regular meetings with logged interface issues and adopted solutions, as well as identification of involved parties, matrix of responsibility and action plans are examples of desirable management approach. The process managers should encourage intensive exchange among disciplines and make each member a potential interface champion. The term interface is very general and it is important to break it down into major categories for a better understanding, and for the establishment of a more efficient action plan. The following interface categories are inter-related: Intrinsic interfaces relate to the physical links existing in an established production system concept among the various components. Discipline interfaces are those related to the areas of knowledge necessary to engineer and develop studies, analyses, designs, investigations and developments sufficient and necessary for the concept, and detailed engineering of the production system and its components. Project interfaces, which are driven by the contracting strategy, are those interfaces existing among contractors, subcontractors, vendors and any external provider, with regard to their scope of work, schedule and responsibilities. To ensure a seamless process and applicable contracting strategy, an efficient and comprehensive package of contractual/technical specifications and diligent project schedule planning should augment the interface management. Inherently, companies in general have their internal interfaces. Clients, consortiums and any other leadership, as

the prime drivers of the process, play an active role in this context. The solution that stems from their internal process will directly impact project direction. Knowledge, interests, power, access, preferences and alliances are examples of aspects that affect decisions. For example, in recognition of the aforementioned interfaces, some contracts require system integration testing (SIT) for all system equipment and hardware, before the system goes offshore. These activities allow earlier design verifications and a better understanding of system performance, installation procedures, durations, resources and critical issues during installation as well as operating performance. Depending on contracting strategy, integration tests address problems of intrinsic, discipline and project interfaces. Moreover, the recent trend to use SCRs, as a natural extension of a pipeline, has posed another interface issue, that creates some added inconveniences for the management process to solve. Usually the emphasis is to ensure long-term endurance and, from this premise, stems a series of requirements that may cross several project interfaces. There are cases in which one company perform the SCR design using information generated by others, such as flex joint characteristics; vessel dimensions, motions and offsets; soil properties and environmental data. The designer will define requirements for pipe supply by the pipe manufacture. The designer will also dictate requirements for fabrication and installation to be observed by the contractor responsible for installation and testing. If the pipeline and SCR are to be pre-installed in a temporary seabed configuration, the route shall be in accordance with restriction due to seabed layout (piles, mooring lines, etc), which was defined by another party. Depending on agreement of design and layout, the SCR may require an anchor system, which will be designed, installed and connected to the pipeline. Another party may come and pick it up and transfer the SCR, using a pull-in system designed and fabricated by the yard, based on guidelines from the SCR design and requirements to ease the offshore operation. The SCR will then be connected to a receptacle, provided by the flex joint manufacturer, but installed in the yard, at a location along the hull, promptly defined by the SCR designer. After connection, a spool piece is installed and the final departure angle verified (should be within tolerances defined by the designer). The system must then be flooded, tested and, if gas line, dewatered and dried using launching facilities designed by the yard, subsea or surface receiving facilities located elsewhere. It seems that the designer plays a central role, but the installation contractor is responsible for the final product and the yard is an important provider, but such an extensive chain of events may dilute responsibilities. In accordance with Shanks et all (2000) [2] SCR should be considered as part of the pipeline system to which it physically

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belongs rather than as part of the floating facility to which it is attached. Testing and pre-commissioning are essential activities to ensure system integrity and fit-for-purpose after overall assembly. Pipeline and flowline testing and system precommissioning are often a cause of interface issues. Some designs simply do not recognize basic requirements to account for these activities. Appropriate access, isolation, piggability or provisions for disposal are desirable functional requirements that should be incorporated in the overall system design to facilitate testing and pre-commissioning. Another significant interface problem is the operational requirement to design the system for start up and shut down conditions. Likewise in other cases, the system must be designed for the exceptions or life-peak load conditions. Time for emergency reaction is the determinant factor to control cool down rates, which eventually apply a severe penalty in insulation requirements. The requirement for an efficient passive insulation scheme will trigger a chain of interface effects, which must have appropriate mechanical properties for installation and long-term endurance, under high hydrostatic loads. Likewise, other mitigation methods such as chemical injection and pigging will significantly affect the subsea system configuration.

Ideally every important definition should be preceded by a sensitivity analysis exercise. A large correlation matrix may be difficult to evaluate and, in this connection, it is important to identify where are the most promising opportunities for optimization. It is essential to prioritize issues and emphasize actions towards the most critical issues/problems. This degree of awareness is very vital in deepwater projects where technology and available solutions are always challenging the envelope. A representative illustration is flowline and riser size selection evaluation. It is a complex exercise to tune a broad range of conditions encompassing development phase, wellbore configuration, subsea architecture and layout, pressure and flow constraints, throughputs, fluid composition and insulation. However, despite the degree of difficulty in fulfilling all input requirements, the flow assurance team has the additional burden of observing constraints from other disciplines and some time, a trade-off is necessary. For instance, line size selection may lead to diameters that are not qualified for the specified water depth and therefore, preclude an attractive alternative of using flexible pipe. In another example, recent studies in mild environments have shown that mid-depth risers connected to terminals for high export crude throughputs to a tanker of opportunity are sensitive to large diameters. Mid-depth loading lines rely on connecting floating body motions and offsets, fluid characteristics (and production profile changes during field life) and environmental loading. Key drivers are pumping capacity and delivery pressure, nominal distance between units, end terminations, excessive loads, interference, fatigue, depth and failure, length and buoyancy requirements and installation. This concept has been recently considered for both export and production systems and, although it represents potential benefits for the field architecture and system flow assurance, trade-off decision must determine the optimum combination of diameter and number of lines. An additional correlation would be line size selection that restricts available contractors that are capable to perform flowline installation, thus reducing competition. Similar conditions occur when, for a given flow assurance premise and certain circumstances, it may be advantageous to select two smaller diameter pipelines (to a shallower commingling manifold) than one equivalent larger diameter pipeline. Decision criteria should encompass major or significant aspects, such as impact on interfaces, schedule constraint for development and design improvement, significant technological challenges (risks) or a reduced number of contractors that are capable to install (cost).

THE DECISION PROCESS: ISSUES

MORE INTERFACE

One technique used to reconcile two conflicting disciplines is the establishment of a break even point or envelop, in which a particular combination of discipline inputs yields an optimized solution. This can be an easier exercise when reliable data (cost, production rates, etc.) is available. For instance, in a recent study for a long oil-pipeline export system from a deepwater facility, an optimum result was achieved using the traditional technical and economic trade-off between pipeline diameter and pumping requirements. When confronting interfaces, project management often face decision problems where alternatives are more complex than a simple yes or no. It is important to well understand the elements of a decision, and identify correlations with other disciplines or project parameters. An example is the decision to use flexible pipe or steel line pipe for pipelines and risers. Although the subsea layout and top interfaces are directly affected, premature decisions may have a detrimental effect on the project contracting strategy. This decision may segment the market and restrict competition.

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For deepwater field developments, surface processing facilities and associated host hull will play a predominant role in terms of capital expenditure. However, most of the risk and technological barriers are related to subsurface and subsea systems. There are many important decisions involving tradeoffs for cost and risk. However, three major decisions definitively set the course of the project. Note that all three major decisions mentioned below are ultimately inter-related. A major decision regards the type, number and location of wells, drilling and completion designs and schedule. These factors are a well-known source of interfaces that will drive the selection and engineering processes for the subsea infrastructure, riser system and surface facilities. Large reservoirs will obviously require more drainage subsurface targets and drilling centers than a small marginal reservoir. A complex trade-off is will be required to define the subsea well system location and distribution. Concentrated wells will require clustered deviated wells from discrete drilling/ production centers. Conversely, vertical well designs will serve scattered well locations located above respective targets. Drilling will limit the extent of the reservoir that can be reached from one well center, and drive requirements for additional well centers for single well tie-backs. Tie-back wells will require a drilling unit for drilling, completion and intervention. This is an example of a looped technical interface relationship, in which drilling limitation impacts well location and well location affects the drilling program. In fact, every issue and any particular solution, trigger a string of other interface issues. In this example, tie-back wells will require flowlines with consequent schedule interface between flowline installation and subsea drilling and completion activities. Another major decision is the selection of the floating facility type to support field production. This is a cornerstone issue given the implications on project economics and schedule. Tie-backs to host facilities requires proper management to ensure adequate selection of the host, in adherence to aforementioned key drivers for capturing tie-in synergies. Moreover the decision to lease, convert or new-build will impact the project schedule, contracting strategy and project economics (leasing options will offset CAPEX towards operational cost). The interfacing definition to adopt dry completions or a subsea architecture will definitely drive unit configuration. Furthermore, the selection process also involves requirements for storage and respective buffer capacity. Augmenting traditional alternatives, the market is constantly proposing a wide range of new concepts for surface production floating units. Most of these new concepts pursue an enhanced synergy with interfacing systems such as drilling, riser, mooring and export systems. Higher payloads, larger deck area, enhanced hull motions and storage capacity are examples of functional enhancements.

A third major decision involves the selection of the export system. Likewise as for floating units, there is a wide range of possible alternatives and combined solutions for export systems. A recent study was performed to assist in the selection of the optimum export system for an FPSO based deepwater field development. The study was divided into two stages. The first stage was a high level screening process in which a series of alternatives and variations were identified and ranked. The second stage involved specific engineering studies and cost estimates for a more detailed comparative technical and economic analysis based on the selected cases from the first stage. In such a screening process, reliable results depend on robust selection criteria, which must be (as much as possible!) comprehensive (all desirable attributes accounted for), non-redundant (minimal criteria overlap) and independent (performance of one criteria not affecting the performance of another)[6]. Typical competing concepts for export systems include export through mid-depth transfer lines to an infield single point mooring terminal or to a infield FSO with tanker of opportunity (TOO), direct offloading to a tanker of opportunity, export through a pipeline to a shallow water existing facility and export via DP shuttle tanker(s) to a custody transfer point. The decision path to select the preferred solution involved a combination of technical attributes, risk assessment and net present value cost estimates. A set of technical criteria and a weighted scoring method were adopted for value judgments of major factors such as achievement of the required offloading rate, reliability, installation, operational safety, operating philosophy and maintenance. In addition, the assessment considered future expansion, impact in the envisioned field layout and prior usage history. INNOVATION A strong driver must support the adoption or extension of new technology or novel concepts for subsea systems to out weigh risks. One Key driver for implementing new technology in a project is the need to overcome an obstacle without any available alternative. Note that sometimes the focal point is not within the discipline itself. A viable and less risky solution may be achieved by rearranging boundary conditions from one or more interfacing disciplines. Another prime driver is a significant cost reduction that substantiates the risk of innovation. Comprehensive criteria should be utilized in the risk and reward evaluation of selecting concepts. There are several examples of successful new technologies recently implemented in projects in water depths of 3000 ft and deeper.

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The use of fibre ropes, suction piles and vertical loaded anchors (VLAs) for taut leg mooring system configurations represent a tremendous benefit for layout arrangements, given the significant reduction of mooring system seabed footprint. Modern mooring systems react more efficiently to environmental loading, thus reducing vessel offset, which benefits riser design issues. In a recent project, the J-lay method was mandatory for SCR installation, given a degree of uncertainty with regard to straining the fatigue-sensitive riser structure. A significant cost reduction benefit was the basis for a decision to assume risk and adopt a novel concept, the hybrid reel/j-lay installation method1 [5]. The original premise (no plastic strain) was kept for the actual critical high damage sections by means of using the reel vessel in a J-lay mode for short riser segments. The reel vessel was still used and some beneficial J-lay synergies were captured. There are several ongoing testing programs to qualify full riser straining installation methods. However, these extensive research programs have lost substantial value as risk and residual damage still persist, but at a considerably lower benefit due to the hybrid reel/j-lay installation method. Another example of a project decision based on a beneficial cost trade-off, is in an ongoing gas tie-back project in which, originally, the architecture was based on central manifolds collecting production from wells through infield flowlines. A significant cost saving led to the elimination of the manifolds via replacement with in-line well tie-in sleds. In accordance with Clarke et all (2000) [3], the resultant field architecture is based on a daisy chain configuration, in which the flowlines are routed such that the in-line sleds are laid within 80 ft of each well. The decision to adopt a novel concept introduced challenges to be overcome in other interface areas. The new configuration requires a more complex route selection and pipeline installation, in order to lay and locate the in-line sleds within tighter targets. In addition, steel jumper connections require efficient metrology and more stringent control of in-line sled tilt in the as-laid position. These additional issues also rely on a properly performed survey, as the terrain condition may represent hurdles for installation procedures. Some other innovative concepts and strategies have been thoroughly implemented targeting reduction of the operating costs. Moreover, standardization and modularization are examples of technical philosophies to enhance maintenance and replacement of subsea components. The adoption of intelligent wells and horizontal subsea production trees are example of decisions towards operating cost optimization.
1

In some cases, concepts that are extensively adopted for mature shallow water development turn into to a novelty when extended to deeper water scenarios, in which many other factors come into play. For example, large diameter export trunklines are being considered to offload production from large deep-water fields. This application requires technological advances to overcome problems such as more complex installations and the requirement of bulky terminations, piggable in-line Ys, connectors and large diameter steel catenary risers. Another interface problem can be captured in this topic; large J-lay vessels that are capable of installing large diameter trunk lines in deep water sections, may be not appropriate for the installation of the shallow water pipeline section. Therefore, a second vessel may be required, thereby significantly impacting cost, project logistics and contracting strategy. Besides equipment and concepts selection, the management and engineering processes are also areas for innovation. As described above, the screening process for field architecture and layout optimization is a comprehensive and complex exercise, which entails extensive simulations involving multiparameters and variables. In this regards there are some field computer-based development planning tools that assist in achieving optimized solutions for field developments. An effective system should include a high degree of flexibility, allow real time screening interaction, address all relevant disciplines and provide means to perform quick and multiple alternative comparisons. Financial and statistical capabilities, as well as a comprehensive and reliable database are also essential elements. CONTRACTING STRATEGY A complex matrix of factors needs to be considered when developing the contracting strategy for project implementation. In fact, contracting strategy is as important as any other technical discipline, and should be considered at the earliest stages of field appraisal and exploration, together with the conceptual and engineering phases. Bidding contracts should be a natural consequence of bidding concepts. A better have one solution than none philosophy among organizations, may lead to considerable loss of value in a project. This approach may derive from a reduced staff allocated in a flawed organizational structure, faced with a complex, segmented and challenging development process. Too often, under the pressure to meet stringent project decision schedules, poor planning, the use of a conventional previous project go by approach may be utilized without recognition of project opportunities and particulars. According to Nooteboom (2000)[4], an effective modern approach

Patent Pending Author is inventor.

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requires a different contracting mindset and a project execution that is largely parallel, rather than the conventional linear, or sequential step-by step approach.. Project planning and scheduling will define the project work breakdown structure and the project activity network. As expected, planning identifies applicable links, critical path, as well as key milestone events and resources. Given schedule constraints, envisioned required resources and potential synergies, a part of the problem is to equate how to farm out the scope. This will basically drive the degree and nature of project interfaces. However, project schedule and scope both stem from the selected concept and definitions generated during front-end engineering, which makes the scope a moving target that will converge as the project progresses. The contracting strategy should be active to recognize the process dynamics, and flexible to accommodate whatever is necessary. A fundamental factor in defining contracting strategy is how much competition is available among companies or consortiums having the necessary skills and organizational robustness to handle the required scope and risk. The degree and nature of operator involvement will directly affect the way the project overall scope is partioned. By setting project goals and thresholds, the operator will start delineating the strategy by, firstly, identifying his own scope and role in the process. Competition is a key factor to optimize cost and still guarantee achievement of project goals with a higher degree of quality. An example strategy that has been used as a means to foment guided competition is to assign the preliminary engineering to some select potential contractor, which will develop and support their respective proposed development solution. Selected concepts will proceed for further phases. In accordance with Mitcha (1996) [8], The major advantage of this approach is that the contractors are encouraged to produce the most effective engineering solution and the operator is able to make a detailed comparative evaluation of each contractors performance (in terms of technical expertise, planning, cost control, general management, etc).. Some approaches are more prescriptive in which the operator positions itself within the process as the prime coordinator and responsible for integrating the major block or component interfaces. This role may require the early involvement of multi-disciplinary consulting companies to support the inhouse performance during conceptual screening, front-end engineering and even partial procurement. This approach usually leads to three or four major fixed price EPCI contracts for project execution, with contract clauses that promote connectivity among contract scopes to guarantee observance of interface issues. In addition, there is a strong requirement

to have a well-defined scope, evident statements of responsibilities, provisions to allocate uncertainties and clear project progress and performance measurement criteria. This type of contract is more sensitive to scope variations, which will require negotiation, based on a pre-defined unit price breakdown. An alternative to accommodate uncertainties in regard to the extent of scope typically used in pipeline installation contract, is the adoption of fixed price contracts with payments based on prices quoted on a unit basis and actual performed units. Other philosophies are more functionally driven and delegate, with some degree of oversight, to a main integrated service contractor/consortium, the overall project coordination, engineering, execution and integration. The scope is open and the expected deliverable is a system that meets regulatory compliancy, production thresholds, operating philosophy and the specified functional requirements within schedule and budget. This approach entrusts to a large integrated company the assignment to conceive, engineer and implement project execution. A risk and reward philosophy with a target price will incentive the main contractor to be efficient in order to maximize project profitability and share the rewards. Whatever contract philosophy is used, it is important to promote incentives for higher performance, and provisions to avoid unbalanced risk between parties. Moreover, an efficient contract must be flexible for adjustment when a well-defined scope or extent is not achievable. More detailed scopes provide a higher degree of control and predictability in the execution process. However, this may preclude attractive solutions, which were not envisioned during the concept and engineering phases. Selection of experienced, capable and resourceful contractors, in a competitive basis, will mitigate risk of poor performance. Therefore, besides cost, it is essential to create mechanisms to enhance the selection process such as pre-qualification procedures and detailed and comprehensive proposals evaluation. The selected contractor must demonstrate financial strength, project management capability, experience with successful contacting strategies focused on key project drivers, available resources (personnel, equipment, facilities, etc), technical and engineering capabilities compatible to the degree of complexity of the project, interface management capability to liaise with subcontractors and manage a complex project network.

CONCLUSION Field developments involve a complex and iterative process, which requires appropriate resources, planning, management

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and most of the time risk decisions. Close coordination of the various disciplines in each activity is required to achieve synergetic and successful multi-tasking targets. Flow assurance is the system soul and dictates requirements for overall system operability. The process comprises several interfaces and the best overall solution is a blend of several conflict resolutions, aligned with the project goals . Major cost savings is achieved in the conceptual stage through screening of competing field architecture and layout alternatives. Reliable results depend on robust selection criteria, which must be comprehensive, non-redundant and independent. The selected system must be robust and cost effective for installation and operating, suitable for early and late field production, and able to accommodate future phases planned for the field development. Safety and environmental protection are as important as achievement of projected economic performance. For deepwater field developments, surface processing facilities and associated host hull will play a predominant role in terms of capital expenditure. However, most of the risk and technological barriers are related to subsurface and subsea systems. A strong driver must support the adoption or extension of new technology or novel concepts for subsea systems to out weigh risks, such as the need to overcome an obstacle without any available alternative or significant cost reduction that substantiates the risk of innovation. A viable and less risky solution may be achieved by rearranging boundary conditions from one or more interfacing disciplines. Scope, scale, synergies and competition are key aspects to reduce cost. It is important to identify where are the most promising opportunities for optimization and it is essential to prioritize issues and emphasize actions towards the most critical issues/problems. Whatever contract philosophy is used, it is important to promote incentives for higher performance, and provisions to avoid unbalanced risk between parties. A fundamental factor in defining contracting strategy is how much competition is available among companies or consortiums having the necessary skills and organizational robustness to handle the required scope and risk. Defining scope is always a challenge. More detailed scopes provide a higher degree of control and predictability in the execution process. However, this may preclude attractive solutions which were not envisioned during the concept and engineering ACKNOWLEDGEMENT The authors wish to thank INTEC Engineering for the support which added value and depth to this paper.

REFERENCES [1] Inglis (2000).Bonga Field Layout Optimisation, Proceedings of Offshore Technology Conference, OTC 11872, Houston, May. [2] Shanks et all (2000) Field, Platform specifics for the design of steel catenary riser, Offshore Magazine, Houston, October. [3] Clarke et all (2000) Canyon Express A deepwater Affair in the Gulf of Mexico, Proceedings of Deepwater Offshore Technology, New Orleans, November. [4] Nooteboom (1999) Deepwater Filed Facilities System Selection Criteria Proceedings of Offshore West Africa Conferecne and Exhibition, Houston, March. [5] Silva et all (2000) Reel/J-lay Method The New Technology of Petrobras for Steel Catenary Risers Installation in Deepwater, Proceedings of Deepwater Offshore Technology, New Orleans, November. [6] Center for Chemical Process Safety of the American Institute of Chemical Engineers, Tools for Making Acute Risk Decisions. [7] Snell et all (2000), Deepwater Concepts Selection, Understanding the Risk of Innovation, Proceedings of Deepwater Offshore Technology, New Orleans, November. [8] Mitcha et all (1996), The Heidrun Field Development Overview, Proceedings of Offshore Technology Conference, OTC 8084, Houston, May.

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