Economic Report 2018

Each of these categories have seen significant reductions in brownfield capital investment in recent years, as outlined below:


• Well capital investment has fallen by almost three-quarters between 2014-17, largely driven by the reduction in development drilling activity (see section 3.8), improved drilling efficiency and market conditions resulting in lower contractor and rig rates. The latter have fallen by more than 50 per cent throughout the downturn. • Surface capital investment fell by 77 per cent between 2014-17, the result of reductions in engineering, procurement, construction and installation reductions, and a fall in maintenance, modifications and operations activity. • Subsea capital investment declined by around one-third, driven by a reduction in market rates and a reduction in the installation of subsea equipment.





Starting in 2015, Shell UK pioneered a systematic approach for driving competitive cost performance and operational excellence. Its efforts to become fit for the future have delivered material improvement by reducing operating costs, running their assets more efficiently with less downtime, increasing production and improving environmental performance.


Improvements from 2014-2017 in Shell UK’s Upstream business include: • 25% increase in production efficiency

• 70% reduction in operating cost • >50% fewer hydrocarbon releases




The Callater discovery well results came in during August 2015, with a subsea bundle development delivered just 21 months after discovery and first oil achieved in May 2017. The project came in five weeks ahead of the field development schedule and delivered a 10 per cent saving against budget and an outstanding safety record. The project’s success was attributed to following an effective collaborative approach from the beginning, and where possible, using pre-existing arrangements and trusted relationships with contractors.



The successful outcomes achieved by the Callater Project teamwere the result of a number of factors, namely:

• Project start-up following quick and positive internal and partner alignment • Ramp-up less than 6 weeks after award with the supply chain through the collaborative approach • Critical items of scope definition and long leads completed early • Application of learnings from the Efficiency Task Force Subsea Standardisation guideline • Flexible mind-set by the team to achieve the best answers within delivery context • Small team size, efficient communications, no man-marking or role duplication




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