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West of Shetland - Supply Base Optimisation

Situation

An operator in the UK offshore marketplace has a long term strategy that focuses heavily on the development of its activities West of Shetland, including an extensive drilling programme and development of a new FPSO (Floating Production, Storage and Offloading) vessel.  This activity was likely to require substantial marine logistics support in addition to their current activity supported out of Aberdeen Harbour.

Problem

The operator’s existing supply base facilities were already significantly utilised, therefore there was a requirement to assess the capacity of these facilities to support the planned additional service requirements.  Given the northerly migration of the operator’s centre of gravity of operations they also had to determine whether the existing facilities would continue to represent the best available option for the long term in relation to cost and operational efficiency.

Solution

The operator approached ASCO as its existing supply base support provider to perform a study a study of the available options and ASCO’s specialist consultancy arm, Insight took up the mantel. In order to determine the optimum solution, Insight adopted a four-step process that considered all aspects of the logistics supply chain including vendor concentration, supply base capacities, capital improvement requirements (facilities), land transportation (road/rail) and marine transportation.
 
In conjunction with the client, Insight identified and agreed upon five port facilities (three on the mainland and two on Shetland) that would (provisionally) have the capability to support the scope of work necessary based on location and capabilities.

Step 1: Activity Profiling

Insight began the process by engaging the client in extensive discussions around future activity patterns to determine the number of Assets (Offshore installations) the supply base would be supporting during the 2013-2021 time frame (dates identified based on last point of variation in the profile).

Step 2: Demand Profiling

From this activity profile, Insight utilised historical and projected activity data to develop a number of core assumptions related to material demand, volumes and type which formed the basis of the custom data model developed.  The model involved the creation of a number of complex mathematical algorithms used to project, predict and create activity scenarios based on cargo demand.

Step 3: Supply Chain Analysis

In this phase a detailed matrix was developed that analysed and compared each of the five port locations across a number of key areas including;
• Existing capability, capacity and infrastructure
• Proximity (transit time) to/from vendor base
• Proximity (sailing time) to/from offshore locations
• Total supply chain length (see below)
• Constraints – physical, legislative etc.

Step 4: Evaluation

The final phase of the project pulled together all of the information generated and performed a full evaluation of each of the ports and developed a Cost Benefit Analysis based on;
• Cost: fuel burn, vessels required, logistics costs and capital improvement costs
• Risk:  Supply, Service, Change Management and HSE
• Scenario:  Modelling of the “what if” scenarios including but not limited to;
o Well control incident
o Offshore blow out
o Changes to the well design
o Changes to activity profile

Results

The final evaluation determined that the operator’s existing facilities would continue to present the optimum solution for them based on the current operating model of a single port location (as opposed to, for example, separating drilling and production support). The client was extremely happy with the level of modelling and depth of analysis performed by Insight and the report provided a platform for the development of their long term logistics strategy for West of Shetland operations.