Leading benchmarking and advisory services firm launches global study of offshore assets to assist operators in improving production operations efficiency and reducing costs.

DALLAS, TEXAS – September 14, 2016 – HSB Solomon Associates, LLC (Solomon) announced the launch of its Worldwide Offshore Production Operations Performance Analysis (Offshore Study) for operating years 2015 and 2016. This multi-client initiative assesses the offshore asset performance of similar types of offshore operations (e.g., deepwater floating platforms, FPSOs, and fixed structures) within a given region and globally, as illustrated in Figure 1. More than 20 exploration and production (E&P) offshore operators with over 100 individual offshore assets participated in the previous study. The goal of the study is to assist operators in optimization and rationalization, improving production efficiency, and combating the impact of reduced oil prices on operating margins. The study identifies areas of strength and opportunities for improvement based on peer assessment.

Figure 1. Offshore Study Region

For the last 20 years, Solomon has conducted numerous offshore benchmarking studies for a large number of producing operators, assessing more than 1,000 offshore assets in 20 countries around the world. Most of these assets have participated in Solomon’s studies multiple times in various years. Solomon has pioneered normalization methodologies for major cost categories that enhance peer-to-peer asset performance comparisons by leveling the playing field for the scale and complexity of operations. The normalized metrics augment Solomon’s traditional in-basin peer group comparisons.

Offshore assets are compared within three large asset categories in several regions of the world. The two main areas of focus are operating cost and production maximization (uptime reliability). Solomon has established a collection of proprietary metrics for both aspects of operations excellence critical to offshore success. Optimizing operational expenditures (OpEx) is crucial to maintaining margin and cash flow, as well as sustaining competitiveness during periods of low oil and gas prices.

The Offshore Study analyzes significant cost drivers for the various production systems, provides a valuable competitive perspective, and for operators with global portfolios, offers consolidated company-level performance to track regional and global offshore OpEx and production efficiency.

For the 2016 study, the scope is expanded to include support overhead and management staffing and cost. Given the low oil price environment, operating companies have expressed significant interest in extending the performance assessment beyond direct field operations to include the engineering and business and management functions supporting field operations.

Participation will enable clients to drive their offshore operations performance to higher levels of excellence and establish their companies’ competitive position among offshore operators. The study kick-off meetings will begin in November 2016. Data gathering will begin in early 2017, when full-year cost data are available.