Lundin and TechnipFMC to Make More Projects Profitable
Thursday 26 October 2017
Lundin Norway and TechnipFMC will collaborate in an effort aimed at making more development projects on the Norwegian shelf profitable.
The plan calls for better utilization of the expertise in both companies to identify the smartest solutions.
The companies are planning a new contract format where TechnipFMC will carry out both the early phase work and the actual development project for subsea tie-in projects, working based on their own specifications.
Lundin will give the supplier access to its organisation to identify any technical challenges at the earliest possible stage, at the same time allowing the project team in Lundin to stay small and focused.
“One of our most important contributions to this work is to place our trust in the suppliers,” said Kristin Færøvik, managing director of Lundin Norway.
“We must trust that they can deliver high quality work without having to build up a parallel organisation to keep checking over TechnipFMC’s shoulder. It is certainly more interesting for the suppliers to get on and do their jobs, rather than being questioned all the time, although of course monitoring will take place,” added Færøvik.
By allowing the contractor to contribute in designing the delivery specifications, the supplier will be able to propose optimized solutions at an early stage.
Reducing divisions
Many technical challenges in previous projects could have been avoided or solved more quickly if the correct expertise had been involved at an earlier stage, or if different disciplines had communicated better, the company explained.
“It was therefore a requirement when we chose a contractor that they had expertise in their own organisation within both subsea production systems, and all cables and pipelines that link the field to a platform,” said Færøvik. “This should eliminate the possibility that the two companies will blame each other for problems.”
As the operator and customer, Lundin will grant access to all their relevant knowledge and expertise. And the supplier company will be given far greater access to both technical and commercial information that the operator has about the project than has ever been the case before.
“The actual contract is designed so that both parties will benefit from the field becoming profitable. It is therefore also important that both companies understand the commercial consequences of both the technical and general designs,” she added.
In practice, this means that TechnipFMC will be involved before the FEED phase. This will ensure that the optimal technical solutions are found.
This cooperation agreement takes Lundin Norway one step further in its approach of working with suppliers. This is a continuation of the model that was used in the development of the Edvard Grieg field.