Almost a decade ago, Equinor recognized that the cost structure for new offshore field developments on the Norwegian Continental Shelf (NCS) was unsustainable. The company set out to reduce costs by at least 25%, and discussions began with service providers about how to achieve this step-change in efficiency.
At the same time, Baker Hughes had been advocating for greater collaboration in the North Sea to achieve better performance at lower cost.
By the time the Johan Sverdrup well construction tender was released in early 2015, Equinor had created a new fully integrated business model aimed at reducing costs and drilling days per well by 50% within three years.
New operating model takes shape
This new model was based on having one main service provider to collaborate closely with the operator and rig contractor to collectively close the gap to the “perfect well.”
Based on this model, Equinor awarded a long-term, integrated drilling and well service contract for Johan Sverdrup to Baker Hughes—the first large-scale contract of its kind on the NCS. Odfjell Drilling was awarded the main rig and rig services contract.
Initially there was trepidation about achieving the project’s ambitious objectives. The three companies created a shared vision to build support and align employees across the partnership—“ONE Team: Perfect Well Deliveries.”
The Johan Sverdrup integrated project was a masterful success that proved the value of integration and collaboration. As a result, in 2017, Equinor expanded its vision and launched tenders to transition all their rigs and assets on the NCS to the integrated model.
With learnings from Johan Sverdrup and new technology and remote operations on the rise, this was the chance to push the integrated approach and transform the offshore industry even further.
IOL3 comes to life
The personnel optimization model called Integrated Operations Level 3 (IOL3) is a new way to leverage the advantages of having one service provider. The concept behind IOL3 is to move any task not physically required to take place at the wellsite onshore.
The goal was to reduce the core crew offshore by 50%, which would radically reduce structural costs, shrink the operational carbon footprint, and improve safety, all while maintaining and even improving service delivery.
To meet the challenge, Baker Hughes reconsidered and fundamentally changed its approach to wellsite roles, and replaced them with new, multi-skilled roles that leveraged more than one technical discipline.
In October 2019, Baker Hughes became the first oilfield service company to transition a rig to IOL3. Baker Hughes shifted half its offshore rig personnel to its ROC in Stavanger. No longer isolated on the rig, these specialists collaborated with other experts in new ways to make better, faster decisions at critical moments in the well construction process. By working remotely, they also avoided the safety risks of working offshore.
Proof of concept
To date, Baker Hughes has transitioned 10 rigs to IOL3 and another three are in transition. About 120 Baker Hughes employees have relocated from rigs to onshore, reducing 900+ helicopter trips, thereby reducing emissions from travel.
At the same time, operational excellence continues. In July 2021, a record-setting well in the Troll field was celebrated by Equinor, Odfjell Drilling, and Baker Hughes. Records include the longest well drilled (10,042 m) and the longest horizontal section (8,033 m).
Baker Hughes is building on its success with Equinor. Earlier this year, bp announced the Clair Alliance, a tripartite agreement with Baker Hughes and Odfjell Drilling to transform well construction activity using IOL3 at the Clair Field, U.K.
Ultimately, Baker Hughes’s goal is to expand the IOL3 model to all its integrated projects worldwide.
The ability to reduce emissions, while improving safety outcomes and operational performance serves as a “proof of concept” that sets the standard for sustainable offshore oil and gas projects in the 2020s and beyond.
Marianne Davenport serves as vice president of Europe and North Sea at Baker Hughes and Chris Jones is the vice president of North America Offshore at Baker Hughes.
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