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Subsea Europe 2008The Value Chain in Subsea

Chris Braithwaite, COO Wellstream International

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The Give & Take of Value Creation

Stakeholders

PlateauCapacity

Decline

Opex $ NPVCapex$

Ramp up

Execution

Production (bopd)Revenue $Liquids, Gas, Water Injection

FO

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Value Measures – NPVP

V R

even

ue

NPV

PV Opex

PV Capex

Reserves

Oil Price

Well Capex

Facility Capex

Opex

What is Key?

Bas

e $

NPV $

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Building Blocks of a Typical “Subsea” Development

• Development Drilling• Completion• Control and Flow Production• Station Keeping• Real Estate for Surface Fac.• Supporting Risers• Processing Facilities• Product Storage• Oil Export• Gas Disposition

Wells

Subsea

Hull & Moorings

Topsides

Oil Export

Gas

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Subsea Elements

• System Engineering• Concept & Layout• Interface management• Installation• Pre-comm & Start up• Risers• Flowlines• Pipelines• Trees & Wellheads• Work over Equipment• Manifolds• PLETs & SLEDs• Connectors• Jumpers

• Control Equipment• Umbilical & Flying Leads• UTAs

Wells

Subsea

Hull & Moorings

Topsides

Oil Export

Gas

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Subsea Spend Breakdown

Average annual expenditure in 2005-2009

Subsea Concepts $7.0bn

Engineering & PM $0.9bn

Subsea Equipment $2.7bn

Risers & Flowlines $2.0bn

Installation $1.4bn

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Value Case Study – Flexible Flowlines & Risers

RisersFlowlines

Wells

Subsea

Hull & Moorings

Topsides

Oil Export

Gas

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Frade

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Flexible Flowline or Riser Composition

CarcassPrevents collapse under external hydrostatic

pressureFluid Barrier

Acts as the boundary for conveyed fluidInterlocked Pressure Armour

Resists internal & external pressure in the hoop direction

Inner Layer & Outer Layer of TensileArmour

Provides both hoop and axial strengthInsulating Layer

Reduces heat lossOuter Sheath

Protects against seawater ingress and other mechanical damage

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Pipe Completion Components

• End Fittings• Bend Stiffeners & Restrictors• Installation Aids• Seabed Stabilisation• Buoyancy

Flexible Pipe

Bracelet Anodes

Subsea Bend Stiffener Assembly

Distributed Buoyancy Modules

End Fitting Assembly

Topsides Bend Stiffener Assembly

I-Tube Interface Flange

Split Flange Hang-Off

Grayloc Interface Assembly (Hub, Clamp,

Gasket, Test Head)

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Wellstream Cost Model (Offshore Flexibles)

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Pressure Armour Value Chain (1)

WHARF

Coal Beds = 2 x 70KT

Ore Beds = 2 x 180KT Sinter Plant

Redcar Coke Oven

SB Coke Oven

Redcar BlastFurnace

Rubble Ore

Blast FurnaceCoke

& Breeze

SinterBrickettes

MoltenIron

B.O.S. PlantBillets, Blooms,Slabs Basic Oxygen Making Steel Plant

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Pressure Armour Value Chain (2)

CDP Specific OD wireDrawing Process

Hot Rolling (Flexlok & sour only)

Hot/ColdProcess

Cold rolling to final shape & correct tolerances

Heat treatment(stress relieving)

Option

Coiling

WIL PO

Corus

Delivery

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Fluid Barrier Value Chain – PVDF

WIL POSolvay Solexis

Raw Material

Mining Fluorspa Hydroflouric AcidConversion

Monomer feedstock and Inorganics

Add

MonomersPVDF

Polymerisation

Delivery

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Ancillaries Value Chain – Bend Stiffeners

WIL PO CRP PU MaterialProcurement

EquipmentPreparation

StiffenerMoulding

Tool Manufacture Tool Preparation Post Cure

StiffenerDemoulding

StiffenerFinishing

SteelworkPriming

ProductTesting

Packing &Shipping

SteelsMaterials

SteelFabrication

ComponentNDT

StressRelieving

Component Machining

ComponentCoating

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Frade

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Value Creation for Subsea Field Performance

• Focus on Reliability and Quality Assurance• Understand the depth and complexity of the value chain• Reach deep into the supply chain for value• Optimise the interfaces

Operating Needs

Design

Supply Chain

Manufacture

Installation

Commission

Operate

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Value Creation Opportunities Operator Perspective

• Increase field availability, accelerate and increase recovery• Long distance tie-backs, stranded assets• Tailored solutions for fluids (high GOR, heavy oil, high water cuts)• Operating flexibility, future expansion, synergy with existing

infrastructure• Mitigate flow assurance problems• Easy and quick installation, pre-commissioning & start up• Improve intervention capability• Contribute to optimization of surface facilities• Standardization, modular approach• Appropriate level of local content