STEP-based standard may yield 30 per cent savings in the offshore industry

Potential savings per project are in the range of USD 18 - 72 million, which is from 10 - 30 per cent of total costs. In addition, annual savings on operations and staff will range from USD 1 - 8 million per year while execution time on an offshore project can be reduced by up to 6 months.

Figures from North Sea installations dating back over the past three years clearly show that the hand-over of data and documentation is the area with the greatest saving potential. Total hand-over costs of an offshore installation, excluding the actual project execution, are in the range of USD 2.5 - 50 million.

Frustration from lack of common formats

The Coopers & Lybrand report was undertaken last fall on behalf of POSC/CAESAR ó a standardization initiative based on the EXPRESS data modeling language described in STEP. The aim is to reduce costs and enhance the quality of data exchange connected to oil and gas facilities throughout their life-cycle.

According to Coopers & Lybrand, there is a lot of frustration related to information processing among engineers. They spend more than 25 per cent of their time searching for information, adjusting it to their purposes and finally re-entering their "updated" version. This makes them feel that they are not contributing with value adding work and that in fact there is a lack of focus on the information value chain and its impact on working methods and cost factors.

Research found that in general this is due to the lack of common information formats within the offshore industry. Different companies use different formats to describe product data. Without a standard way of sharing and exchanging technical data a great deal of human and financial resources is spent finding the right information, reformatting it and then re-typing it. For example, in one case, transferring parts of an instrument index from one engineering company to another during an on-going project required more than 2,000 man-hours to complete. By representing, sharing and exchanging the data according to the STEP standard, several hundred hours could have been saved.

Standards offer great benefits

Coopers & Lybrand found that the potential savings in the offshore and process plant market are enormous. In order to achieve this, however, they identified the following factors as pre- requisites:

• Data must be formatted and stored according to one standard;
• Changes in working methods must be implemented;
• STEP-based solutions with user friendly interfaces must be developed;
• Open industry networks must be used and information shared between the parties involved.

By implementing these factors the following savings may be achieved throughout the various phases of a project:

• During conceptual development, the time spent to prepare for decisions may be reduced by 10 ó 30 per cent.
• Total engineering costs may be reduced by 15 ó 28 per cent and execution time by 1 ó 2 months. In a medium sized project this represents USD 5.3 ó 20 million.
• Work relations between the main contractor and key suppliers will also improve, reducing execution time by several weeks and increasing productivity by at least 30 per cent.
• The quality of documentation will improve as there would be one information source rather than several, the amount of paper will decrease, and less time will be spent on handling paper and searching for information.
• A common data model will result in more standardized tools, more robust designs, less maintenance costs, re-use of components in a project, and new market opportunities.
• The time spent on planning and execution of commissioning can be reduced by 15 ó 20 per cent, which will mean 40,000 ó 80,000 man-hours in a typical project.
• Hand-over costs may be reduced from today's USD 5 ó 20 million to almost zero!
• The efficiency in operations will improve greatly as the information will be more accurate and readily available from one source and thus reducing time delays. Expected savings in maintenance and operations staff are estimated to 10 ó 20 per cent.
• Standardized systems will mean reduced time and costs spent on the implementation and support of information technology.

The Coopers & Lybrand report clearly indicates that the reward for embracing the STEP-standard will be extremely attractive. By making all resources more cost- and time effective, the bottom line results would be a great incentive to most companies.

Coopers & Lybrand

The Coopers & Lybrand organization is one of the world's leading providers of professional services including accounting and auditing, taxation and a full range of consulting services addressing complex business problems with innovative and integrated solutions. Coopers & Lybrand has more than 74,000 employees in 140 countries with more than 11,000 management consultants world-wide.