TQC Practices Applied to Subsea Completion and Production

Operations Management in Campos Basin

Bráulio Luís Côrtes Xavier Bastos, PETROBRAS, Brazil

Carlos Heleno Netto Barbosa, PETROBRAS, Brazil

José Miranda Formigli Filho, PETROBRAS, Brazil

DOT 1995

ABSTRACT

Since 1978, when the first subsea well in Campos Basin came on stream, more than
210 subsea trees, 22 subsea manifolds and 2000 kms of umbilicals plus flowlines have
been installed and operated on this site. To achieve this universe, not only significant
break-throughs in the applied technologies were necessary, but mainly the development
of a management philosophy to guarantee an optimal cost/benefit relation had to be
implemented.

Total Quality Control (TQC) was chosen for this purpose, and several operational
procedures, data failure banks and respective statistical analysis were established to
provide tools for the managers to achieve the desired goals.

This paper presents several of this control mechanisms, their evolution through time
and some other TQC applications such as: service contract models, functional
specifications for subsea manifolds and standardization of subsea trees interfaces,
highlighting the savings gained throughout all these years.

With a subsea activity average CAPEX and OPEX budget of US$ 500 MM per year, and
a subsea oil production of approximately 500.000 BOPD, Campos Basin is a good
example of the applicability of TQC practices in the search of economical development
of offshore fields, specially those ones in deep water sites.
1) Introduction
Not so long ago, subsea activity was considered a “display window” for Oil Operators
technological capacity, without concern about the real economical benefit of this kind of
exploitation. These were the flourishing times, when the oil price could stand the wastes
created by fancy design practices.

Nowadays this attitude is no longer accepted: as in any other industry, Oil Operators are
facing challenges every day, to assure market competitiveness. According to a recent
research [Ref. 1], in well managed E & P divisions, the waste of time and money may
achieve 30 to 40 percent. Those who can reduce these percentages will certainly
guarantee a leading position in the oil business. Meanwhile, subsea technology itself is
no more an experimental knowledge arena, becoming an effective tool for oil fields
development. The economical impact of this conception can be seen in Fig. 1, where
one can verify that the share related to subsea technology (including drilling and
completion operations) corresponds to approximately 67 % of the total CAPEX of a
typical deep water project.

Approximately 15 years ago, Petrobras faced the compulsiveness to start exploitation in

deep waters, since it was the only alternative to crude importations. Brazilian reserves
are located in increasingly water depths and the company survival is linked to the
development of these fields in a competitive and profitable way; a challenge which most
Operators are experiencing only now. Today, most Operators are facing similar
challenges.

The charts on Figs. 2, 3 and 4 (Brazilian reserves, oil geological potential and
production profile) show the importance of deep waters for Petrobras:

- 59 % of the present reserves are located in water depths greater than 400 meters.

- 66 % of potential new discoveries are expected to occur on the same range of water
depth.

- Future production profile also shows the importance of oil flow originated from those
sites.

Besides new developments, Petrobras has already a significant amount of installed

subsea facilities, which demands careful operational management. Fig. 5 shows a
summary of present and future installations in deep waters.

2) TQC Philosophy
Campos Basin E & P Division, as other Petrobras operational units, adopted TQC as a
management model, following the Japanese school as disclosed by the JUSE
(Japanese Union of Scientists and Engineers). In a broad meaning Total Quality stands
for five dimensions: Intrinsic Quality, Delivery, Cost, Moral and Safety.
The manager role is critical for the implementation of this process. Besides the
leadership to get commitment from the team participants, specific training must be
arranged. TQC will thus provide tools for problem detection and diagnosis, as well as
solution determination procedures.

TQC implementation consists of two different but complementary approaches: Routine

Management, which stands for the maintenance of an existing process within a certain
range of quality, and Improvement Management, responsible for the introduction of
innovations.

2.1) Routine Management

This approach starts with a clear description of the business, using diagrams to
represent the process flow from the suppliers to the final client, including inputs, sub-
processes and outputs (products). With this “Process Analysis”, it is possible to identify
and standardize critical tasks. In addition, each product must be evaluated in terms of
its Intrinsic Quality, Cost and Delivery. The indicators used in this evaluation are known
as “Control Items”, which must have a specific pre-established goal (Results
Monitoring).

Whenever a Control Item fails to achieve its respective goal, a “Problem” occurs. To
deal with that, TQC provides a specific “Problem-solving Methodology”, involving the
whole team. The solution generated from this teamwork must be implemented through a
“Managerial Action Plan”. A “PLAN-DO-CHECK-ACT” (PDCA) cycle thus starts,
monitoring the solution implementation and indicating corrective actions throughout the
process, being repeated until the Problem elimination. After that, new or reviewed
standards are issued in order to assure a new plateau of quality for the process.

2.2) Improvement Management

With the elapsed time and the elimination of recurring problems, the process tends to
reach a stable level of Quality which is harder to improve. In consequence, a new
approach - Improvement Management - is mandatory, introducing new technologies or
radically new procedures, with drastic changes in the process. Routine management will
then take charge again to maintain this new upgraded level.

3) TQC Implementation in Campos Basin

According to the adopted model, TQC has been gradually introduced in Campos Basin
subsea operations in order to encompass both new projects implementation (CAPEX
preponderance) and existing systems operation (OPEX preponderance). In both cases,
Routine Management is initially favored by the introduction of Process Analysis, Results
Monitoring and Problem Solving Techniques.
3.1) New Projects Implementation

3.1.1) Process Analysis

In this particular case, it is necessary to centralize new projects implementation
management under a single authority, with a global vision of the whole enterprise
(system approach). This vision is necessary to allow a multidisciplinary task force, with
participants spread through a function organizational structure, to clearly identify the
project objectives, performance goals, clients, suppliers and other agents. In Campos
Basin, this has been accomplished through a single coordination for each enterprise,
harmonizing resources from different origins in a matrix fashion.

3.1.2) Results Monitoring

Besides the traditional physical and financial forecast X realization follow-up, it was
noticed the importance of measuring the “Delivery” quality dimension in terms of oil
and equivalent gas volumes. The importance of this index is directly related to the
project revenues, which are significantly greater than implementation expenses. Fig. 6
shows the adopted graphical follow up, where one can see forecast X actual production
curves for new projects, considering both completion and tie in operations.

Other indicators such as operations duration and efficiency in critical resources

operation (rig, PLSV), also affect the delivery index. Fig. 7 shows tipical figures for well
operations duration, including tree installation.

It is worth mentioning that these indexes have also a direct relationship with the “Cost”
dimension, providing a network of interrelated indicators encompassing all Total Quality
dimensions.

3.2) Existing Production Systems

3.2.1) Process Analysis

Daily routine for maintaining an existing production system is quite different from new
project implementation. Instead of different stages in a logical sequence, with a pre-
defined deadline, in this case there are several similar operations, eventually
simultaneous, recurrently taking place in an endless way. This operations happen in an
almost randomic fashion, as long as wells, flowlines, manifolds and other subsea
equipment suffer failures demanding corrective interventions.

This behavior requests planning and managing specific approaches, based on statistical
analysis and operational research techniques. The “project / enterprise” management
philosophy is abandoned, since classes of equipment with similar design, installation
tools, failure characteristics and resource demands now rule the scenario (e.g.:
deepwater X shallow water wells).
3.2.2) Results Monitoring
In this case, forecast X realization follow-up is possible only on a medium term, given
the randomic behavior of the activities. On the same way, Control Items should consider
this characteristic, related to the intrinsic variation of the processes (bell curve).

On the other hand, as it is done for new projects, the “Delivery” dimension is better
evaluated in terms of oil volume. In this case, instead of produced oil, one should
control lost production, calculated in relation to a previously negotiated potential
reference.

Figs. 8, 9 and 10 show examples of the graphical follow-up of production losses, either
caused by resources unavailability or by operational inefficiency. Separation in these
two loss categories is necessary due to different corrective actions management. Since
the moment when the well, subsea facility or offshore offloading system fails (total or
partially), up to the beginning of the corrective intervention, a managerial action
privileges the scheduling and allocation of the necessary resources. Hereafter,
production loss reduction requests a different approach, focusing the reduction of the
intervention duration. In this stage, although resource allocation still plays an important
role, process analysis for problem and improvement opportunities identification is the
most profficuous area. In this aspect, operation duration, efficiency and lost time
indexes (Fig. 7) are again used, as in new projects management.

Another important indicator, also linked to production losses, is the Mean Time Between
Failures (MTBF) of subsea equipment (wells, manifolds, etc). Fig. 11 shows the MTBF
for subsea wells in Campos Basin. Figs. 12 and 13 show other examples of “Delivery”
quality dimension analysis of different subprocesses in offshore oil production.

4) Corrective Actions

4.1) Prioritization
Once defined a set of Control Items, such as those described above, TQC proposes
standardized actions in order to identify, priorize and correct undesired results
(problems). The first step consists in selection of the most important problems to be
eliminated, achieved through Pareto diagrams. As examples, Figs. 14, 15 and 16 show
the impact of subsea equipment performance in production losses. Fig. 17 shows the
evolution of ten major causes of operational lost time, during installation or intervention
in subsea wells and trees, as an example. Affecting the MTBF, Fig. 18 shows the main
workover causes and their evolution through time. In many cases, the major problem
causes show a decreasing trend, due to the adopted corrective actions.

With the same technique, specific resource shortages can also be identified, allowing
prioritization of corrective actions (resource allocation). In this case, it may be necessary
to perform an even more careful analysis, using operational research techniques to size
the resource level.
4.2) Corrective Actions
After selection of the targets, TQC provides problem solving techniques which allow the
identification of the deviation primary cause. An action plan is thus elaborated, aiming
its elimination, with detailed description of What, When, Who, Where, Why and How to
do each step. This plan is implemented and followed up through the original Control
Items and other specifically designed, using the PDCA technique. Back in Fig. 17, one
can see the result of this technique in the reduction of rig lost time during to subsea tree
operations. In Fig.18, the same technique was used to reduce the number of workovers
due to SCSSVs, production string and subsea trees.

This strategy frequently leads to modifications in the original process, which presented
undesired results. This modifications must be incorporated in the existing procedures
and standards, since this is the only way to avoid the return of the problem. Since the
beginning of TQC implementation in Campos Basin, more than 200 operational
procedures and standards have been issued, considering only well and subsea
operations.

4.3) Improvement Management

As long as the problem solving process goes on, prioritization is reviewed and pinpoints
the next problem on the row. In this sequence, the benefits achieved get smaller, as
each problem is eliminated. At this point, it becomes necessary to introduce a radical
modification on the process itself, in order to obtain a leap in quality. This modification
depends, most times, on new technologies for materials, equipment or procedures,
which demand creativity and commitment from the operational team. Improvement
programs must foresee information exchange among different technical areas, in order
to allow positive experiences dissemination.

There are several examples of success in the application of this approach:

 Introduction of “bonus clauses” in service contracts - there included rigs, PLSVs and
DSVs - in order to share benefits gained from a better performance, thus creating a
“partnership atmosphere”. The contractor becomes an interested participant of the
process for lost time reduction.

 Use of functional specification, instead of imposing proprietary detailed technical

designs, in purchases of complex subsea equipment (such as manifolds), thus
allowing the supplier to introduce their own ideas, not only to improve the equipment
performance but also to reduce fabrication costs. For manifolds, for instance, cost
reductions around 40 % have been achieved [Ref. 3].

 Standardization of interfaces, bringing considerable cost reduction due to: logistic

and scheduling optimization; spare parts and tools stock rationalization and
purchasing order simplification [Ref. 4].

 Technical design improvement made on tubing hanger orientation devices, ROV

interfaces, production adapter base, pull-in schemes (vertical connection) [Ref. 5 and
6].
 New ways to deal with paraffin build-up in flowlines by the use of foam pigs in a
regular basis, flowing through trees, manifolds and lines of different diameters. As a
corrective solution, a thermo-chemical treatment (SGN) was developed, allowing a
remedial action for worst cases of obstruction [Ref. 7 and 8].

5) Conclusions
TQC has allowed Petrobras to improve its performance in terms of profitability in deep
water fields development. The present Marlim and Albacora projects, plus many other
recent discoveries (Barracuda, Salema, Bijupira, Caratinga and Espadarte) are showing
excelent economical indicators such as a CAPEX per barrel ranging from US$ 1.81 to
4.99 and an OPEX per barrel from US$ 2.15 to 3.47. Similar results can also be
observed in shallower waters. Despite those good results, not all charts presented show
improved performance. Those examples, representing the major challenges
encountered during TQC implementation, have common characteristics such as highly
complex processes and intense resource demanding level, requiring long term
solutions.

The better previsibility of the processes achieved through TQC also reduces the
inherent risk associated to new fields exploitation, which is critical in costly offshore
operations.

To the manager, TQC provides guidelines to focus his actuation on problem solving and
improvement of the process, delegating the daily operational decisions to the team, thus
obtaining commitment with the results.

REFERENCES
1) Erickson, R.: “Quality Improvement: What Does It Mean in an E&P Environment”, in
Journal of Petroleum Technology, April, 1993.

2) Vance, George P.: “Deepwater Field Developments Face Cost, Technology

Challenges”, in Petroleum Engineer International, April, 1994.

3) Beltrão, R.C.C.: “Cost Reduction in Deep Water Production Systems”, OTC7898,

OTC Proceedings, Houston, 1995.

4) Paula, M.T.R. et al: “Deep Water Christmas Tree Standardization - Interchangeability

Approach”, OTC7898, OTC Proceedings, Houston, 1995.

5) Ribeiro, O.J.S. et al: “Deep Water Subsea Completion: State of the Art and Future
Trends”, OTC7240, OTC Proceedings, Houston, 1993.

6) Nagle, F.J.M. et al: “Vertical Connection System for Flexible Pipes: Offshore Tests
and Pioneer Installation”, OTC7260, OTC Proceedings, Houston, 1993.

7) Lino, A.C.F. et al.: “Pigging in Subsea Flexible Flowlines”, OTC7574, OTC

Proceedings, Houston, 1994.

8) Khalil, C.N. et al.: “Thermochemical Process to Remove Paraffin Deposits in Subsea

Production Lines”, OTC7575, OTC Proceedings, Houston, 1994.
 Subsea
Risers Hardware
Flowlines
FPSO
7% 9%
7% 17 %

44 %
16 %

Topsides
Drilling &
Completion

Figure 1: Deep water development costs [ref.2]

Offshore
(W.D. < 400 m)
Offshore
(W.D. - 400 to 23 %
1000 m) 37 %

22 % 18 %

Onshore
Offshore
(W.D. > 1000 m)

Figure 2: Brazilian total reserves (Dec/94)

Offshore
(W.D. - 400 to Offshore
1000 m) (W.D. < 400 m)

Offshore 11 % 13 %
(W.D. > 1000 m)

55 %
21 %

Onshore

Figure 3: Brazilian oil & gas potential new

discoveries (Dec/94)
 1800
1600 W.D. > 1000 m

1400
( x 1000 bopd ) 1200 W.D. - 400 to 1000
m
1000
800
600
W.D. < 400 m
400
200 Onshore

0
95

96

97

98

99

2000

2001

2002

2003

2004
Figure 4: Brazilian oil production forecast

EQUIPMENT INSTALLED PLANNED

(95-2000)
SUBSEA TREES 210 200

SUBSEA MANIFOLDS 22 14

SUBSEA FLEXIBLE LINES (km) 2065 1000

RIGID PIPELINES (km) 1080 500

FLOATING PRODUCTION UNITS 15 11

Figure 5: Petrobras experience with Floating Production Systems (APR/95)

10000
9000
8000
flow rate (m3/day)

7000
6000
5000
4000
3000
2000
1000
0
MAR

MAY
JAN

FEB

JUN

AUG

NOV
JUL

OCT
95

APR

DEC
SEP

Accumulated average production Flow rate - actual

Flow rate - goal Flow rate - forecast

Figure 6: Well completion and

tie in delivery index
 100
80

(days)
60
40
20
0
89
90
91
92
93
94
95

Diver Assisted Tree Diverless / Guidelineless Tree

Figure 7: Average completion duration

4000
3500
flow rate (m3/day)

3000
2500
2000
1500
1000
500
0
JAN\95
JUL

AUG

OCT
93

94

95

JUN

FEB
NOV

MAR
APR

DEC

APR
MAY

SEP

Accumulated average loss Monthly loss - actual

Figure 8: Production loss waiting on rig workover

400
350
flow rate (m3/day)

300
250
200
150
100
50
0
94

95

APR
JAN

FEB

MAR

JUN
MAY

Accumulated average loss Monthly loss

Figure 9: Production loss waiting on DSV

 1200

1000

flow rate (m3/day)

800

600

400

200

JAN\95
JUL

AUG

OCT
93

94

JUN

FEB
NOV

MAR
APR

DEC

APR
MAY

SEP
95

Accumulated average loss Monthly loss - actual

Figure 10: Production loss during rig workovers

10
9
8
7
6
years

5
4
3
2
1
0
84

85

86

87

88

89

90

91

92

93

94

Figure 11: Subsea wells performance (MTBF)

100
99,5
99
up-time (%)

98,5
98
97,5
97
96,5
96
95,5
94

95

JAN

FEB

MAR

JUN
APR

MAY

Accumulated Average Uptime Monthly Uptime - actual

Figure 12: Offshore offloading systems

availability
 8
7
6
5

days
4
3
2
1
0 93

94

95

APR
JAN

FEB

MAR

JUN
MAY
Accumulated average lost time Monthly lost time

Figure 13: Rig lost time waiting on DSV

Oil
Subsea
Transference
Eqpmt.

7.6 % 20.8 %

42.8 % 12 %
Reservoir
16.8 %
Downhole
Eqpmt.
Other

Figure 14: Production loss causes (FPS)

Lift Problems

42.8 %

6.2 %

51 %
Other

SCSSV Failure

Figure 15: Production loss causes (FPS -

Downhole Equipment)
 Paraffin &
Hidrates

23.4 %

Other 14.2 % 60.5 %

Choke Adj.
1.9 % Control Lines

Figure 16: Production loss causes (FPS - Subsea

Equipment)

SubseaTree
Tbg.Hgr.
50

R.Tool
40

Cases ROV
30
Wireline

20
SCSSV

10
W.L.PLUG

0
Flowline
1992 / 1

1992 / 3

BOP
1993 / 1

1993 / 3

1994 / 1

Prod.PKR
1994 / 3

1995 / 1

Year / Quarter

Figure 17: 10 major operational lost time causes

historical data (Subsea wells)

20 Reservoir
SCSSV
No. Workovers

15
Other
10 Paraffin

5 Subsea Tree
Prod. String
0
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94

Figure 18: Workover causes evolution