, well engineering manager for Shell UK E&P
and founder of that company's Gamechanger technology development process, talked of technological maturity where the more mature the technology, the less risk of failure.
And we all know mistakes can be expensive.Barwis
described a North Sea drilling operation 5 years ago involving a single well on a high-pressure, high-temperature prospect where the reservoir temperature was 310°F (154°C).There were considerable problems on the operation.Shell
was pushing the drilling technology envelope, and it went seriously wrong.The project was US $55 million (£35 million) over the authorization for expenditure budget, Barwis
said."The NPV (net present value) of that reservoir will never be positive," he
story illustrates the cost of trying new technology and failing."If we understand the cost of failure, a crucial consideration is probability" Barwis
suggests the industry needs to change its perspective from value of cost and the value of failure to the probability of cost and failure."Oil and gas exploration and production may be the least risk averse endeavor in the industrial world," he
...Barwis pointed out Shell is making "extensive use" of online bidding, which he said is good for procurement staff within operators and for vendors,"Because we are not spending $100,000 putting a bid together."
The same factor applies to contractors, he
suggested."It is good for the operator and good for the supplier.
"E-bidding is here to stay, I am afraid, and you are going to see more of it."
Asked if e- procurement could be altered to reflect the overall value of using new technology - which may not be covered purely by the bid price on an invitation to tender - Barwis
suggested that issue is better tackled by licensing authorities within national governments, which could amend licensing rules to provide incentives for innovation.
"If it becomes more capitalistic, you would see technology being slammed into the ground a lot faster than it is now," Barwis