2017 Offshore Strategikonferansen Konkuransekraft- Hva er gjort og gjøres for varige endringer Stavanger 6. Februar 2017
TechnipFMC in figures 2 $17B 21 Vessels Stock Exchange listings NYSE and Euronext Paris Total company market capitalization (1) 20 Plants 48 $16B 44,000 Countries of operations Total company Backlog (2) Employees (1) Source: Public market quote from Bloomberg, LLP; Combination of market capitalizations of FMC Technologies and Technip as of Jan 6, 2017; EUR/USD exchange rate of 1.05361 as of Jan 6, 2017 (2) Backlog as of Sep 30, 2016 (FMC Technologies: $3.02 billion; Technip: 12,28 billion), EUR/USD exchange rate of 1.09072 as of Oct 28, 2016; Source: individual company data as found in the European Prospectus filed on Jan 13, 2017 Celebrating TechnipFMC 2
Hvordan TechnipFMC møter et utfordrende marked Aktivitetsdrevet kostnadsreduksjon Redusere kostnadsnivå i organisajonen Forbedre egne arbeidsprosesser Varig kostnadsreduksjon Optimisere flåte og fabrikk kapasitet til fremtidig aktivitetsnivå Mål: Bevare vår lederposisjon gjennom denne vanskelige perioden vi er i Utvikle og introdusere ny teknologi og nye produkter Dimensjonere arbeidsstyrke til fremtidig aktivitetsnivå Integrerte kontrakter Jobbe tettere med våre kunder Dagens presentatsjon 3
Utvikle og introdusere ny teknologi og nye produkter Connector 4
Product Cost Reduction Example Hydraulic Connectors 43 Parts 640 Parts 5 5
Jobbe tettere med våre kunder Oil og gass UK Dvalin 6
Applying the Theory to Subsea Prospects The theoretical exercise demonstrated the impact of applying preferential requirements. 170% Duration % X 160% Operator X Scope Global Operators 130% 120% UKCS Focused Operators 110% Reference Case: Adopting a Fit for Purpose Approach 100% Position Fabrication 9 Installation 8 Umbilicals 9 Subsea Valves 9 Pipelines 9 Survey 7 Trenching and Backfill 9 Detailed Design 8 Flexibles 9 SPS Controls 9 SPS - Trees 9 1 Closest to Reference Case 9 Furthest from Reference Case 150% 140% To establish what cost savings could be realised, the Standardisation Themes were applied to two economically challenging prospects. West Wick Cost % 90% 90% 100% 110% 120% 130% 140% 150% 160% West Pegasus There is a journey necessary to achieve viability for subsea developments. Global Operators UKCS Focused Operators 170% Reference Case 7
A Simplified and Fit For Purpose Approach Cost efficiency savings from applying a simplified and fit for purpose approach to prospects. Alternative to a Caisson Riser Dropped Object and Over-trawlability Flexible Riser Design Analysis 500m Zone Single Pipeline and Umbilical Trench Applying the Standardisation Themes to each prospect provided a simplified and fit for purpose approach where 25% Cost Savings were realised!! Wider adoption of the Standardisation Themes to other prospects will provide sustainable savings going forward. Dropped Object Cone Combining the umbilical and the pipeline in the same trench realised significant savings. 8
Dvalin Working Smarter Together 4 Sustainable cost reductions requires that the Client and Contractor work smarter and more integrated 4 Close corporation during development of documents Client located at Contractor office for short communication lines 4 Common understanding of needs to ensure the right quality at first issue - Client review only one time 4 Challenge established practices replacing need to have with must have 4 Reducing cost with less document transfer, less 3rd party verification and optimized use of site inspectors 4 Using functional requirements rather than detailed specifications, giving the Contractor the opportunity to optimize solutions 4 Question Status Quo limit repeat testing of well proven technology 9
Dvalin Working Smarter Together 4 DEA Norge AS is leading the change with implementation of DnV RP O-101, Technical Documentation for Subsea Projects 4 Significantly reduce the amount of documentation transferred between Client and Contractor for review, more for information 4 Effectiveness of the RP will be measured in the project through introduction of quality KPIs 4 Measuring documents that have to be reissued for client review (i.e. more than one issue) 4 Missed/waived Review/Hold points in inspection plans indicates unnecessary quality assurance requirements 4 Measure success versus existing documentation practice 4 Compare with similar project: document volume issued for review, total no off review cycles, manhours spent 10
Integrerte kontrakter TechnipFMC Noen betraktninger Trestakk 11
Typical Case Study 12
Early Commitment by Client - Why should he? Level of Trust/ Perceived client value High Client Commitment curve Medium Low Low Medium High Maturity of project DG0 DG2 DG3 Value-oriented Dialog with customer Technical 13
Re-balance the procurement strategy to exploit the benefits of longer-term partnership Push towards FEED/ Design Competition contract models 14
The basic principle of iepci Risk Management Mitigation and re-allocation of commercial risks 4 Mitigation of project risk 4 Early involvement of Alliance addressing criticality of technical interfaces and planning of offshore activities 4 Alignment of commercial incentives on contractor side means reduced risks to Client 4 Knock-on effect of delay in scope eliminated/absorbed by contractor 4 Redistribution of remaining project risks between Client and EPCI contractor SPS and SURF separated SPS and SURF integrated Project risk distribution 15
Trestakk Summary 4 Tie-back production to Åsgard A 4 Gas injection for pressure suport 4 5 wells; 1 template with 2 production and 2 gas injection wells and 1 satellite production well 4 Control via a new umbilical from existing template 4 Minor topside modification works 4 Main marine season 2018 Discovery well drilled in `86 Appraisal well in `87 Participants PL091: Statoil (Operator) 59,1% ExxonMobil 33,0% Eni 7,9% From Statoil Trestakk Kick-off presentation 08.11.16 16
Summary Trestakk ifeed Cost improvements Q3 2015 to Q4 2016 18% 2% 5% 100% 75% iepci Benchmark price before optimization Scope optimization Net scope changes post start ifeed Net market effects iepci contract value Q3 15 Q3 15 Q3 16 Q1 16- Q3 16 Q3 15 Q4 16 Q4 16 Total cost improvement: 4% + 14% = 18% of iepci price at start of optimization study Q3 2015 17
Konklusjon 4 Store muligheter til å oppnå varige kostnadsreduksjoner 4 De markedsdrevne kostnadsreduksjoner vil reversere før eller senere og bli en kostnadsøkning 4 Vi bør slutte å kun referere til kostnadsreduksjoner. Vi bør differensiere mellom varige og ikke varige reduksjoner 18