1. 1 Uptime and OPEX(OPerational EXpenditure) considerations on aging installations. ”Gained IRM(Inspection Repair & Maintenance) experience from the North Sea.” Speaker: Mr. Peter Blach CEO - Offshore Center Danmark WWW: www.offshorecenter.dk The copyright of this entire training material vests by Offshore Center Danmark. All rights reserved. The information contained herein is the property of above company and is supplied without liability for errors or omissions. No part may be reproduced or used except as authorized by contract or other written permission.

2. Subjects: North Sea characteristics Challenges Approaches Lessons learned Uptime and OPEX considerations on aging installations Subjects

3. 3 The North Sea: 1859: Oil trace discovery 1910: Natural gas discovery 1966: Exploration drilling 1971: Commercial production Defines brent crude oil standard Political stability in the region Matured infra structure Western Europe´s largest oil and gas reserves One of the key non-OPEC producing regions Totals more than 600 installations Uptime and OPEX considerations on aging installations North Sea Characteristics

4. 4 UK Aberdeen Stavanger Esbjerg DK D NL N Danish Sector: Depth < 60 m Reservoir rock: primarely chalk Permeability: down to single digit mD App. 60 offshore installations Original recovery rate: 5-7% Current recovery rate: 25-30% Production: 350 MBOD App. 130 producing wells Horisontal drilling Water injection wells Swing producers Uptime and OPEX considerations on aging installations North Sea Characteristics

5. Dan – the largest Danish Oil Field 5 Source: Danish Energy Authority Danish Offshore Activity The Danish Oil and Gas Fields Uptime and OPEX considerations on aging installations North Sea Characteristics

6. 6 Source: Danish Energy Authority Danish Offshore Activity Installations in the North Sea Uptime and OPEX considerations on aging installations Challenges Challenges: 1.Installations out of design life time 2.Declining reservoir pressure 3.High and increasing water cut 4.Tie in of new discoveries 5.Aging process facilities

7. 7 Source: Danish Energy Authority Danish Offshore Activity Installations in the North Sea Uptime and OPEX considerations on aging installations Approaches Challenge #1: “Installations out of design life time.” Approaches: Life time extension calculation Restricted operating conditions: Pressure, Flow, Sea state, etc. Decommissioning Ongoing decom Front End Engineering & Design studies on operating installations. In situe reinforcement/upgrading Reinforcement bracing. Increasing deck loads. Subsiding. Anode replacement. Recoating etc. Structural retrofits. Monopiles, Modules etc. Corrosion/abrasion monitoring Intelligent pigging scheme. Coupons inspection. NDT. Ultrasound.

8. 8 Source: Danish Energy Authority Danish Offshore Activity Installations in the North Sea Uptime and OPEX considerations on aging installations Approaches Challenge #2: “Declining reservoir pressure.” (20%/yr). Approaches: Lift gas Simple and reliable technology to maintain flow. Water injection Maintaining reservoir pressure. App. 3 BBL of water pr. 1 BBL oil. Gas injection Gas injection. As gas request allows. Swing producers. Fracture Aligned Sweep Technology Controlling flow of injected water. Well arrangement. Coiled tubing intervention Shut down of selected marginal discoveries whilst maintaining production from well.

9. 9 Source: Danish Energy Authority Danish Offshore Activity Installations in the North Sea Uptime and OPEX considerations on aging installations Approaches Challenge #3: “High and increasing watercut.” Approaches: Process upgrade Separators, Heat exchangers, Cyclones, Water treatment facilities, etc. Tracing of injection water Shut down of injection wells. Drilling of new injection wells. Protection systems High Integrity Pressure Protection System. (HIPPS) Age

10. 10 Source: Danish Energy Authority Danish Offshore Activity Installations in the North Sea Uptime and OPEX considerations on aging installations Approaches Challenge #4: “Tie in of new discoveries.” Approaches: Unmanned Slim Tripod Adapted for Rig. (STAR) Standardized modular approach. Manned/unmanned. Helipad. Low cost. Both CAPEX and OPEX. Standardized. Reusable. Horisontal/Directional drilling Multiple marginals on same well. Cased hole completion. Coiled tube intervention. Tie in to existing centres Power supply. Pipeline to nearby center. Service from nearby center. Shuttling. Source: Ramboll

11. 11 Source: Danish Energy Authority Danish Offshore Activity Installations in the North Sea Uptime and OPEX considerations on aging installations Approaches Challenge #5: “Aging process facilities.” Approaches: Strategic spare part stock inventory Long lead items. Units for refurbishment. Kit systems management Parts lists management linked to specific replacement jobs. Usually outsourced. Comprehensive database on MTBF data Mean Time Before Failure. Strategic replacement and refurbishment Schemes based on MTFB data. “Replace before malfunction.”

12. 12 Source: Danish Energy Authority Danish Offshore Activity Installations in the North Sea Uptime and OPEX considerations on aging installations Lessons learned Lessons learned: “Reliability/Uptime is a function of redundancy and maintenance procedures.” “Flexibility in every aspect is key to embrace future technologies and produce “last oil” for decades to come.” “Substantial CAPEX investments do not necessarily reflect on future OPEX costs.”

13. 13 Source: Danish Energy Authority Danish Offshore Activity Installations in the North Sea Uptime and OPEX considerations on aging installations Discussions Questions? Mr. Peter Blach CEO Offshore Center Danmark Niels Bohrs Vej 6 DK-6700 Esbjerg Ph: +45 3697 3670 Mail: pb@offshorecenter.dk WWW: www.offshorecenter.dk