Mature fields - and the need for speed - Portfolio mangers seminar - Losby 110510 Sveinung Sletten V.P external affairs, Petoro AS
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Mature fields - and the need for speed Portfolio mangers seminar - Losby 110510 Sveinung Sletten V.P external affairs, Petoro AS
What is SDFI – and Petoro?
• The State Direct Financial Interest
= A portfolio of direct government owned oil and gas
reserves, fields and facilities for processing and
transportation.
• Petoro AS
= A government owned management company which acts
as the owner of SDFI on behalf of the government in
licenses and other joint ventures where SDFI has an
ownership share. Petoro’s goal is to maximize the
economic value of SDFI – based on sound business
principles.
2 Mature fields - and the need for speed
From oil to money (PET to ORO)
…and from money to more money
32
30
28
26
24
22
20
18
16
74
7122
72 7120
70
14
12 Harstad
10
8
6
67
2
4
Yearly SDFI
cash flow
~100 bn. NOK
65
T rondheim
Kristiansund
6205
6204
6203
6202
62
5
5
35 36
33 34
29
31 Ber gen
32 Oslo
6 0
25 26 27
6
24
Stavanger
15 16 17 18
19
58
6
12
10 11
7 8 9
4
3
1 2
3 Mature fields - and the need for speedPetoro offshore Norway
Others • Petoro act as owner on behalf of the
government (§11)
• Role: licensee in the offshore licenses/fields
IOCs – Votes for the government share
– Jonit venture cooperation
• Commercial goal
– Max. value of the SDFI
– Influence through ownership/competence – not by
exercising authority
Total ca 50 bn remaining boe.
• Monitoring Statoils marketing/sales
– Max. value, just distribution of cost/income
CRITICAL PERFORMANCE INDICATIORS (kpi)
• Financing, management, owner control:
Cash flow (bn NOK)
– Parliament funds operations
EBITDA (bn NOK)
– The Minister is the General Assembly
Production (kboed)
– Professional board
Basis operations and maintenance (NOK/boe)
– Government rules for economic control asplies
Reserves addiont (mill bbls)
– Audit General
Serious incidents frequency
4 Mature fields - and the need for speedAt a cross roads – the rest is up to us
A success story Can continue to
be a success story
Kilde: OD 2009 Kilde: OD 2008
5 Mature fields - and the need for speedMany challenges to be met
Time criticality
Mature areas Progressing
Coordination, area mature IOR:
solutions, lifte time projects Drilling more
of mature fields production wells
are er critical
Efficiency gains:
More efficient, safe
and environmentally
acceptable operations Diversity/collaboration:
Diverse opinons,
investment power
Industry reputation:
Important – long term
Continued profitability:
Fields on assembly line: Simpler, cheaper,
Industrializing a faster developments
mature business
6 Mature fields - and the need for speedLarge unexplored areas – but mature fields critical
Petoro/SDFI:
Mature fields
produce 80%
today, 80%
in 2025
Source: NPD
7 Mature fields - and the need for speedMature fields –backbone of further development
80 pst.av SDØE-produksjonen fra ti felt i 2010 - og i 2025 Andre felt, funn og prospekter
1 200
Snøhvit
Snorre
Grane
11 000
000 Heidrun
Gullfaks
Kvitebjørn
Oseberg Area Unit
Ormen Lange
800 Åsgard
kboed
Troll
600
400
200
0
8 Mature fields - and the need for speed
Kilde: RNB 2010Big platforms + small discoveries = win-win
Challenge:
Increased production
and new discoveries
within the lifetime of
mature fields
9 Mature fields - and the need for speedExample from the UKCS
2002-estimat
CAPEX1 (kolonne), USD millioner Væskeproduksjon (linje), 000 b/d
2006 estimat
1200 600
Toppnivå
produksjon
1000 500
Apache overtar
operatøransvar
800 400
fra BP i jan 2003
600 300
Nye
investeringer
400 Produksjon 200
ekspandert og
levetid for felt
forlenget
200 100
0 0
1972
1975
1978
1981
1984
1987
1990
1993
1996
1999
2002
2005
2008
2011
2014
2017
2020
2023
Kilde: Wood Mackenzie
10 Mature fields - and the need for speedMature phase – a new investment boom
Produksjon
Investeringer
Tid
11 Mature fields - and the need for speedMature fields need driving force
Investeringer i moden
fase tidskritisk for NKS
• Many large fields are in a mature phase
• Production falls, unit costs challenge to profitability
• Operations steal resources from long term IOR
• Investments for enhanced production while the fields have sufficient
financial muscles
• Internatonal competition for companies’ capital and competence
• Risk of under-investments and loss of resources
• Petoro only big player to focuse solely on the NCS
12 Mature fields - and the need for speedPetoro’s strategic platform
Vision
Petoro – driving force on the Norwegian Continental Shelf
Main objective
Maximising the economic value of the State’s oil and gas portfolio
Principal tasks Strategy
• License
management in •Realise potential in, and near,
mature fields
the joint ventures
•Holistic and timely development
• Monitoring
of the gas value chain
marketing/sales
•Seek business oportunities in
• Financial the North
management
13 Mature fields - and the need for speedAmbitions for maturing reserves 2020
73% of Petoro’s ambitions for maturing
reserves by 2020 relates to existing fields
• 735 mill boe oil in existing
Exploration - fields can be matured by
fields 1,8 bn boe 2020
9% • Drilling more wells is key to
Exploration -
achieve this
discoceries Fields
4% 73 %
• 580 mill boe gas, NGL og
condensate in existing fields
Discoveries
can be matured by 2020
13 %
• Operations related projects
– ie low pressure production
Achieved is key
1% Felt:
Kilde: RNB2010 56% olje
Volumes from long term exploration 44% gass
(beyond 2020) not included
Kilde RNB 2010
14 Mature fields - and the need for speed
14Champion of prioritization
80 % of value in first 10 assets, 95 % in first 20
80%
Accumulated NPV
License management:
• Active
• Selective
• Administrative
15 Mature fields - and the need for speedEvaluation criteria of assets
Value
Verdiskapingspotensialet
Ressurs og Kommersielt
reservetilgang Operasjonell
effektivitet
”Besluttet” NPV
HMS
Prioritisation of Petoro’s efforts
Limited resourced More in-detpth work
Behov for kontinuitet
”Fremtidige utfordringer”
Petoros strategi
Kvalitet på operatørens
Partnersammensetning
virksomhetsstyringsystem
Verdi
Statoil-Hydro merger
” Increased dominance, Other
reduced diversity”
16 Mature fields - and the need for speedInfluencing business decisions
Ability to
influence
spending Actual spending
IOR Maturing
pilots reserves
Area Drilling more
• Progress monitoring
developmentProduction
options wells • Challenge and support
Drilling
efficiency
operators (partly by
leaving them alone…)
Availability
Integrated Operations
of drilling
• Feedback/learning
operations strategy
rigs • Benchmark
• Transfer of experience
Drainage
strategy
Active (but not quite
Pro-active partner as active) partner
Decision phase Execution phase
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