Progressive Subsea Field Construction Benefits Projects Net Present Value

Abstract

In the "lower for longer" barrel price environment, new projects and field developments need cost effective improved approaches; amongst them, the concept of "Progressive Subsea Field Construction". In this alternative concept, construction of elements that are not critical to first oil but only here to support the assets integrity - typically subsea pipelines foundations and consolidating structures - is deferred to the operational life of the facilities, thus benefiting the cash-flow and net present value of a project. This principle is well known to field architects that strive at ensuring that the cash generated from early production is used to finance the rest of the development - "Production while drilling" is a typical example of such approach. In the vision conveyed in this paper, part of the structural construction can be delivered as a continuous (staged) service rather than an initial investment. The paper analyzes two real cases of pipelines in deep-water West Africa, representing the evolution of the state of the art over the past 15 years. It then benchmarks these real cases against a novel approach, to demonstrate the benefits of continuous service in staged construction and integrity management. Results provided in this paper demonstrate that there is benefit to the economics of a project, a minimal increase of 2% of a pipeline system Net Present Value, in setting a monitoring procedure, a monitoring device (like a resident subsea inspection vehicle) and data management system to allow for continuous construction. The paper also demonstrates that economic benefit is furthermore amplified when time comes to extend the life of the asset, in such case the Net Present Value of the same system increases by 5%. Since the case study focuses on pipeline anchoring, the paper also attempts at showing this concept could be used more extensively in full field developments. Indeed, the novel approach proposed in this paper opens the door to a completely novel collaboration model between contractors and operators, establishing continuity of construction during the full life cycle of a field. It aims at generating discussions and new ways of thinking to help the industry evolve towards lower costs of development and more sustainable contracting models.