Leading the technology development to meet the industrys deepwater business needs
April, 2010
DeepStar Phase X
Table of Contents
1.0 DEEPSTAR OVERVIEW ........................................................................................................... 1 2.0 DEEPSTAR PHASE X STRATEGY ......................................................................................... 1 2.1 MISSION AND GOALS .......................................................................................................................... 1 2.2 DEEPSTARS VALUE ........................................................................................................................... 2 2.3 DEEPSTARS PHASE X GOALS .......................................................................................................... 3 3.0 INDUSTRY COOPERATION .................................................................................................... 4 3.1 ANTI-TRUST ISSUES............................................................................................................................ 4 4.0 DEEPSTAR PHASE X WORK PROGRAM .............................................................................. 5 4.1 TECHNOLOGY FOCUS AREAS ............................................................................................................. 5 4.2 RESOURCE FOCUS.............................................................................................................................. 6 4.3 OPERATING FRAMEWORK .................................................................................................................. 6 4.4 CTRS .................................................................................................................................................. 6 4.6 WORK PLANS ...................................................................................................................................... 7 4.7 PROGRAM GROWTH............................................................................................................................ 7 5.0 PROGRAM ADMINISTRATION................................................................................................ 7 5.1 DEEPSTAR DIRECTOR ........................................................................................................................ 7 5.2 DEEPSTAR TEAM ................................................................................................................................ 8 5.3 M ANAGEMENT COMMITTEE ................................................................................................................ 8 5.4 TECHNICAL COMMITTEES ................................................................................................................... 9 5.5 Technical Committee Chairperson 5.6 CONTRIBUTOR ADVISORY PANEL (CAP) ................................................................................ 10 5.7 CTR CHAMPION .................................................................................................................................10 6.0 COMMUNICATION PLAN ...................................................................................................... 12 7.0 COST AND SCHEDULE CONTROL ...................................................................................... 12 7.1 COST CONTROL .................................................................................................................................12 7.2 SCHEDULE CONTROL.........................................................................................................................12 8.0 JOINT INDUSTRY PROJECTS (JIPS) ................................................................................... 13 8.1 OPEN JIPS .........................................................................................................................................13 8.2 CLOSED JIPS .....................................................................................................................................13 8.3 SPIN OFF OF NEW JIPS .....................................................................................................................13 9.0 TECHNOLOGY ACCESSIBILITY ........................................................................................... 13 9.1 TECHNOLOGY RIGHTS / ACCESS.......................................................................................................14 9.2 PATENTS - OIL COMPANY PARTICIPANT ...........................................................................................14 9.3 PATENTS - CONTRIBUTING VENDORS ...............................................................................................14 APPENDIX A: APPROVED PHASE X CTRS .............................................................................. 15 APPENDIX B: CTR DEVELOPMENT GUIDELINES ................................................................... 17 APPENDIX C: CTR PROJECT CHECKLIST ............................................................................... 18 APPENDIX D: VOTING PROCESS .............................................................................................. 19
DeepStar Phase X
DeepStar focuses on the front end of the technology cycle by advancing critical fundamental knowledge (science), providing proof of concepts and performing desk studies. DeepStar Phase X focus is on technology development for:
-1-
7/29/2010
DeepStar Phase X
Drilling, completion, and intervention breakthroughs Appraisal and development of geosciences and reservoir engineering Significantly extend subsea tieback distances/surface host elimination Dry trees/direct well intervention and risers in 10,000 feet water depth Continuous improvement/optimization of field developments
-2-
7/29/2010
Value Significant value is generated from a projects final report. The earlier it is completed, the earlier the results can be applied to impact a deep water (DW) projects value. Money and resources are committed. Again, the earlier a project is commenced the earlier learnings/results are available to apply to meet DW business needs. The effective execution of quality contracts minimizes the administrative cost to DeepStar and permits projects to commence ASAP. Objective will be to minimize administrative costs by managing synergies between RPSEA and DeepStar programs. RPSEA offers a significant pilot and demonstration funding opportunity for DeepStar identified technologies.
Phase X Projects
Have all Round 1 initial contracts in place to commence work by 2nd Quarter. Execute contracts in an effective manner.
Align RPSEA UDW program with goals and focus of DeepStar. Pursue shared synergies to reduce inefficiencies. Use DeepStar resources to steer RPSEA program for the maximum benefit of the UDW oil and gas industry.
*The above represents DeepStars base business and will be the priority and primary focus in the first half of 2010. Member participation: Demonstrate greater direct member company participation in projects (subcommittee membership, attendance to meetings/presentations/website usage). Update the website to maximize the benefit to the user. Objective is to maximize DeepStar value to member companies. Having direct involvement in a project considerably enhances value obtained compared to only reviewing project reports on completion.
DeepStar will not dedicate significant resources to collect and analyze data but will measure performance using surveys /anecdotal evidence / IT tracking tools / interviews / success stories.
-3-
7/29/2010
DeepStar Phase X
Oil company participation (Participants) in DeepStar is in the form of a fee for each phase of the program. The fee is considered cumulative for participation entry, considering earlier phases of the program, because prior work is used as the foundation for current and future studies. These fees provide the funds needed by the program to progress technology development activities. It is anticipated that participating companies will also contribute prior knowledge / information where appropriate for the benefit of all of the DeepStar participants. This will allow DeepStar- funded activities to progress industry-needed technology and not duplicate work that has already been done. Vendor (Contributors) involvement in the DeepStar program is primarily in the form of voluntary technology contributions. Each contributing vendor will be asked to provide man-hours or services directed toward technology issues in the area of the vendors expertise. The vendor is not restricted or limited in the amount of technology services that can be provided to the DeepStar program. Contributing an administration fee of $6,000 in each new program phase, vendors will be provided access to pertinent sections of DeepStar reports during the participation period. It is to be hoped that this information will aid or guide vendors in focusing their future technology development programs on those products or services most needed by the oil company participants. Vendors are invited to DeepStar technical meetings, however it may be necessary on certain occasions for oil company participants to meet individually with vendors to protect the confidentiality of that vendors proprietary information.
-4-
7/29/2010
DeepStar Phase X
-5-
7/29/2010
DeepStar Phase X
4.4 CTRs
Cost, Time, and Resources (CTRs) are prepared for each technical study that will be performed in the DeepStar program. The respective committees must first vote on CTRs before presenting the CTRs to the Management Committee for consideration. CTRs must adhere to the CTR format and Champions must be identified for each CTR in order to guarantee that the work will be accounted for, should that CTR be approved in the balloting process. Related CTRs are grouped into the major focus areas as described above. The CTRs outline the task objectives, work scope, and deliverables, along with funding, schedule, and personnel requirements. The CTRs are developed by the various Technical Committees to identify studies or tasks that they recommend the program pursue. Not all committee CTRs will be funded due to program budget limitations. However, CTRs not funded, modified old CTRs and new CTRs may be presented for Management Committee balloting during a phase for reconsideration provided funding is available. The CTRs that are funded may be refined and updated by the Technical Committee as work is kicked-off and progresses. However, any changes to work scope must be approved by the Management Committee and kept within the budgets and schedules established for the program, unless formally revised by the Management Committee.
-6-
7/29/2010
DeepStar Phase X
-7-
7/29/2010
DeepStar Phase X
Management Committee
DeepStar Director
Hani Sadek, CVX
Contributors Advisory Panel (CAP) Co-Chair John Allen, GE Vetco Gray Co-Chair Tom Williams Nautilus Intl Geosciences Committee (X000) Chair: Paul Williamson, Total Administration & Technical Support (X600) Chair: Hani Sadek, CVX Flow Assurance Committee (X200) Chair: Adam Ballard, BP Co-Chair: Lloyd Brown Floating Systems Committee (X400) Chair: Paul Devlin, CVX Reservoir Engineering Committee (X700) Co-Chair: David Kihneman, Anadarko, Co-Chair: Gene Narahara, CVX Systems Engineering Committee (X900) Chair: Michael Choi, CoP
Drilling and Completions Committee (X500) Chair: Phil Clark, CVX Co-Chair: Ashwin Sunthankar Met Ocean Committee (X800) Chair: Cort Cooper, CVX
-8-
7/29/2010
DeepStar Phase X
oversee and guide the execution of the entire DeepStar program. Responsibilities include: Recommend strategic focus and long term vision Provide oversight to systems engineering effort Advise on process and procedure improvements Support DeepStar Program Director Work with technical committees Review vendor grievances and advise actions Review quarterly CAP meeting issues
Further, they provide a coordination link with the various Committee Chairs. Committee members will work with Chevrons DeepStar Team to establish the priority of new work activities as they are brought into the approved Work Program or if modifications to the current program are required through Program Revisions. The Senior Advisors representing their respective oil company's interests on the DeepStar Management Committee decide what actions should be taken based on a (51%) majority-rule voting system. Should an appropriate compromise appear unobtainable amongst the participants, as when there is a tie in the participants' vote on an issue, then Chevron reserves the right, as per the Participant Agreement to make the final decision.
-9-
7/29/2010
DeepStar Phase X
We estimate Technical Chairperson duties will consume approximately 3 weeks of time per year, including attendance at Technical Committee meetings.
DeepStar Phase X
Insure contract implementation Arrange Kickoff meeting Arrange for progress meetings Review monthly reports and provide periodic updates to the Technical Committee Maintain consensus Approve Final Report
Having a Champion from a Participant company is a requirement for all CTRs. The Champion is driving the effort on a day-to-day basis and is the most effective way to execute a CTR. Depending on the type of CTR being performed, he/she may be interacting with the contractor on a regular basis. Where detailed decisions are being made on a daily basis that interaction needs to be daily as well. If the criteria can be set, then the contractor can run with it and communication can be much less frequent. The Champion has responsibility to make sure all items are moving forward and to follow up/expedite all things needed. The key here is to work with the contractor and make sure the key decision-making is done with the approval of the DeepStar representatives. The Champion should be empowered to make tactical decisions on his/her own to keep the project moving. There is a judgment call on their part on what needs to be brought to a sub-committee. Trust is a key element here. The Champion should be working with a relatively small sub-committee to make most of the necessary decisions concerning the CTR. If it is more efficient to have a sub-committee cover multiple CTRs that group together well, that is fine. This sub-committee should be empowered by the full committee to take care of business. This sub-committee should have a systems engineering representative where appropriate. The sub-committee should only bring back items to the full committee for decision-making (vote) that they believe necessary. Trust is a key element here also. The sub-committee should be in communication (that does not mean meetings necessarily) on whatever frequency is needed to make the necessary decisions for the CTR in an expeditious manner. This means very good communication needs to be maintained between the sub-committee and the Champion. Good communication is predominately the Champions responsibility. This frequency might be weekly or monthly or what ever it takes. It depends on the CTR. The sub-committee should only bring back those items to the full committee for decisions that it believes are necessary for consensus by the entire group. Contractual issues are handled between the subcommittee and the Project Director/Management Team. The sub-committee concept is important to ensure that no one companys or persons agenda dominates the path forward or the decision making process.
- 11 -
7/29/2010
DeepStar Phase X
- 12 -
7/29/2010
DeepStar Phase X
the scheduled progress as planned for their CTR group, but the DeepStar Staff will remain the final authority to resolving any scheduling problems.
- 13 -
7/29/2010
DeepStar Phase X
privileges, of those companies that have advanced the technology in a cooperative manner.
- 14 -
7/29/2010
DeepStar Phase X
Appendix A: Approved Phase X CTRs CTR No. 10000 Project (CTR) Title Geosciences Geophysical Characterization and Monitoring from Abandoned Appraisal Wells-Phase 2 Regulatory Permit Cycle Risk Reduction Emerging Technologies Flow Assurance Asphaltene Deposition: Hydrate Transportability Subsea Systems Alternatives to In-Line Inspection for Pipeline Integrity Management, Phase 2 Distribution of Inhibitors on the Sea-Floor @ 10,000 ft Reducing the number of Hydraulic Lines for Intelligent Subsea Wells Floating Systems Riser/Tendon: VIV Suppression, Safety Factors, Monitoring & Simulations Effect of Coupled Horizontal and Vertical Interaction of Steel Catenary Risers with the Seabed within the Touchdown Region Yiannis ConstantinidesCVX Mike Tognarelli, BP CTR Cost $250,000 Champion
10001
$250,000 $20,000
Brian Hornby - BP
Jim Grant
$430,000 $900,000
$400,000
Gary Harrison, BP
10302
$250,000
10303 10400
$250,000 $861,000
10401
$450,000
10402
$48,000
Ed Clukey - BP
- 15 -
7/29/2010
DeepStar Phase X
10403
10404
10500
Floating Systems Integrity Management Requirements and Monitoring/Inspection Technologies Dry Tree Semi-Floating Production & Drilling System for Deepwater Field Development Drilling & Completions Develop highly reliable & high Power ESPsPhase1
$30,000
$333,000 $325,000
Ming-Yao Lee-Chevron
10501
$250,000
10502
Dual Gradient Drilling Flow Stop Valve Phase 1 Management Management Fee Reservoir Engineering Appraisal Technology Gap & Concept Generation Remote Reservoir Pressure Monitoring in Abandoned Appraisal Wells - Phase 3 MetOcean
Hani Sadek
10701
$250,000
$300,000 $350,000
Wind 10802 Development of a 50 yr Current Database 10900 Systems Engineering EPS Gas Offloading 10901 Development with Regulator Involvement Total Funded: *As of May 18, 2010.
$150,000
$200,000 $490,000
$490,000 $5,676,000*
Mike Choi
- 16 -
7/29/2010
DeepStar Phase X
Appendix B: CTR Development Guidelines A standardized system is required for DeepStar committees to ensure that technology development is aligned with the overall DeepStar goals and that the DeepStar program objectives are successfully met. A common Cost, Time, and Resources (CTR) sheet format should be consistently used by all technical committees to ensure that the committees have thoroughly planned projects before execution. They will also be used to ensure that the objectives of these projects are properly communicated to parties outside of the committee, and to provide accountability for delivering the results as approved by the senior advisors. The CTR will: Define the technology or regulatory need Identify the business need for the technology Quantify the value of the technology Summarize the deliverables and work plan for accomplishing the objectives Forecast the budget and manpower requirements Specifies the accountability for delivering the work Secure and record approval for the project
Refer to the CTR Process file on the DeepStar website for complete details.
- 17 -
7/29/2010
DeepStar Phase X
Bid Package CTR Champion and sub Include the following: committee Cover Letter - Request for Proposal Instructions to Bidders DeepStar standard Bid Form Develop if needed Scope of Work/Work Instructions CTR update if needed Documentation Requirements DeepStar standard Publication Requirements DeepStar standard Performa Engineering Contract DeepStar standard Bid Opening Documentation Form to capture key requested info Bid price must be summarized 3 people witness opening Bid Evaluation and Recommendation to Award Include technical and commercial . Bid opening documentation Letter of Award to Contractor Attach Contract DeepStar Contracts Administrator, Two Additional
CTR Champion and/or Committee recommendation for DeepStar Director approval Full Committee copied for Info DeepStar Director
*Prepare Bids A minimum of 3 bids must be received and evaluated. Recommend a bid list of at least 5 bidders Sole source contracts are generally not encouraged. It is possible to sole source a contract where compelling justification can be documented. Typical areas where this might occur either individually or in combination are: o Unique capability or expertise. No other options exist to get work done. o Schedule is critical and time does not permit a bidding process. o Other special business drivers. Please notice that continuation of previous work is not specifically listed above. There may be benefits to consider for follow-on work with the same source. These benefits would emerge in a bid evaluation. These should be carefully considered on a case-by-case basis. Compelling documentation is required on sole source contracts. Consideration should be given to others who might be capable of doing the work. Originals of all of the above including bids should be provided to DeepStar Administrator for the Contract File.
\\Bocntdfs1.boc.chevrontexaco.net\share\ETC\FE Department\FFS\DeepStar\Phase X\Administration\Phase X Bus Op Plan-CH (3).doc
- 18 -
7/29/2010
DeepStar Phase X
Ranking Decisions
1) Any member, including the committee chairman, may call for a ballot. Other people present like subcommittee chairman, subcommittee members, CAP representatives, may call for a ballot, but only DeepStar participating oil companies may vote 2) The person requesting a ballot, who is also the sponsor/champion, must supply specific wording to the chairman. 3) Chairman puts out the ballot and calls for comments from the membership. 4) Each company has the opportunity to comment on the ballot. 5) The chairman and all members are encouraged to comment, but the comments are a separate step from the call for comments. 6) After a reasonable comment period, the chairman and the sponsor finalize the ballot wording or the sponsor may, after hearing the comments, withdraw his ballot request. 7) Chairman puts out ballot for a vote. 'Y - yes support' or 'N - no support' or 'NC no commitment' is voted for each option. A 'NC- no commitment' vote is provided for those who can not support the option being ranked in it's current form, but may be supportive of the option should additional money be found or should other changes be made. 8) Options are ranked from most Yes votes to least Yes votes. Each company has a chance to influence support for their favorite options in the comment period. 9) Should a number of options be tied at the lowest level of support, and there is a need to separate these options, a second ballot of just the tied options shall be called, using the above procedures.
\\Bocntdfs1.boc.chevrontexaco.net\share\ETC\FE Department\FFS\DeepStar\Phase X\Administration\Phase X Bus Op Plan-CH (3).doc
- 19 -
7/29/2010
DeepStar Phase X
10) Those companies wishing to make their vote public should copy all other members. The chairman shall not put out preliminary vote tallies. 11) When voting is finalized, each company's vote is recorded in the meeting minutes. The various committees and subcommittees will use these procedures. In addition to formal written/electronic comments and votes of all subcommittee members, comments and voting may be made verbally by the members present for these meetings and simple majority of those present may decide votes. Should the issues involve work commitments and funding issues that require the final approval of the Management Committee, the subcommittee chairman will report the actual votes received and also the number of votes which were not cast. This will allow the Management Committee to judge the total level of support.
- 20 -
7/29/2010