UK supply chain won £1 billion in contracts from Statoil Aberdeen

All the largest contracts for the operational phase on the Statoil operated Mariner offshore field have been awarded to companies established in Aberdeen, Statoil has revealed. Contracts awarded by Statoil Aberdeen to the UK supply chain have now surpassed a value of GBP 1 billion. 

“In the tendering process for operational contract scopes we are pleased to experience excellent capacity and quality in the UK supply chain. We also see a constructive response to the challenges we are all facing,” said Gunnar Breivik, managing director for Statoil Production UK and head of the company’s Aberdeen office.

Speaking at the Oil and Gas Industry Conference in Aberdeen today, June 17, Breivik underlined that the efforts to increase efficiency and reduce costs need to continue.

“We will need even more collaboration and contributions from the market to obtain a sustainable cost level that will allow us to continue investments in Mariner and possible new field developments over the next years and decades. We need to work together in a different way going forward than we have done in the past,” he said.

The Mariner Field, where production is expected to start in 2017, is located on the East Shetland Platform of the UK North Sea, approximately 150 kilometres east of the Shetland Isles.

He pointed to the recently awarded contract with Schlumberger UK for drilling and well services on Mariner as an example of an innovative compensation format aimed at creating win-wins.

“The aim is a long-term partnership with a performance-based compensation format rewarding actual performance — metres drilled and completed — rather than usage of time and material. Together we are now establishing an integrated operations team in our Aberdeen office, working closely with both the service supplier and the drilling contractors to plan and optimise operations. The ambition is to work side by side to meet the challenges in the market, driving performance, creating value and dividing risk,” Breivik said.

 

Ambition to increase recovery

 

In his presentation of the Mariner field development, he focused on size – the size of the platform and the size of the prize:

“Dry weights of the platform at installation total around 58,000 tonnes of steel – 7.5 times the metal used in the Eiffel tower. The footprint of the steel jacket is larger than Aberdeen Football Club’s pitch at Pittodrie,” he noted.

“But more important are the sizable resources in the field. There are around two billion barrels of oil in place. Our business case is based on 250 million barrels of recoverable reserves. But we clearly have an ambition to increase that, and our teams in Aberdeen are well underway with designing a drainage strategy that could reduce risk and costs and increase recovery,” Breivik said.

 

Encourage the young

 

Commenting on the industry challenges, Breivik stressed the need to continue encouraging young people to seek a career in the oil and gas industry.

“Although we are growing in Aberdeen, Statoil is on a company wide basis in the process of implementing internal changes that will reduce the number of employees significantly. The supplier industry is also going through a tough time. These changes are painful but necessary.

Internally, we have been very conscious of upholding recruitment of graduates and apprentices, because this is a long term industry that will need young and bright minds for many decades ahead. My perspective is that the people that will turn off the lights on Mariner are probably not born yet,” Gunnar Breivik said.

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