Case studies

Transforming Lundin's shelf interests

Deloitte Norway helps oil explorer build a platform for growth

Without taking shortcuts, Lundin Norway transformed a small operations team into a lean, safe, full-scale production company with the right organization and infrastructure in place in less than three years.

Three years after it was founded, Lundin Norway struck oil in its first exploration well on the Norwegian continental shelf. The 2007 discovery at the Utsira High area in the North Sea revealed a substantial reservoir, kick-starting Lundin’s Edvard Grieg development.

Five subsequent finds followed on the shelf for Lundin, including the giant Johan Sverdrup discovery. Since its first strike eight years ago, Lundin can take credit for half of the resources found on the shelf.

Its stunning success rate and growing resource base fueled an idea among the company’s leaders, who recognized an opportunity to blossom into a full-scale exploration and production company. Lundin submitted a plan for developing and operating the Edvard Grieg field, and following its approval by authorities in 2012, the company was set to become the operator of a manned offshore installation.

“At that point, Lundin was starting with a small, yet highly experienced, team with a goal of commencing production by late 2015. This was extremely ambitious,” explains Svenn Erik Edal, Nordic Oil & Gas Industry leader, Deloitte Norway. “But, they didn’t want to take any shortcuts. They had an opportunity to build an operating model that was process-oriented, cost-effective, and promoted safety from day one.”

Making ambition a reality

Lundin management turned to Deloitte Norway for guidance in building its offshore operations organization. “We had the industry knowledge they needed, along with Deloitte Norway personnel who have years of operational experience on the shelf,” Edal says. “We also had done similar work with other operations, developed a methodology based on leading practices, and offered Lundin new ways of thinking to help ensure a culture with strict focus on continuous improvement.”

Deloitte Norway professionals worked with Lundin to identify the priority operational and support processes necessary for startup and operation of its Edvard Grieg field. The Deloitte Norway team was immersed in all phases of the process, from helping Lundin identify regulatory requirements and analyze occupational risks to developing workflows and key performance indicators.

To improve work processes and implement barriers to reduce risks at the offshore facility, Deloitte Norway categorized all reported industry incidents and accidents on the Norwegian shelf, analyzed those events, and linked them to the work processes where they occurred. “This is work with risks attached, and due to dramatically fluctuating price levels and costs, operational efficiency and safety are crucial to this industry,” Edal says. “We have gone to great lengths to help Lundin ensure that when production commences, risks will be mitigated and Lundin will achieve its goal of being a best-in-class operation.”

Lundin’s first manned offshore facility is projected to begin producing its first barrels of crude oil in late 2015. The company’s management team, however, already considers the project a tremendous success.

“Assisted by Deloitte Norway, we were able to transform a small operations team into a lean, safe, full-scale production company with the right organization and infrastructure in place in less than three years,” says Kari Nielsen, head of field operations for Lundin Norway. “Deloitte Norway not only has experienced oil and gas industry advisors, but it also offers high-value services that we see from no one else. They brought the toolbox, solutions, and strategic thinking we needed to assist us every step of the way.”

“Deloitte”, “we”, “us”, and “our” refer to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. See additional information.

operating model
The operating model for the Edvard Grieg field was process-oriented, cost-effective, and promoted safety.
ludin
Lundin was able to transform from a small operations team into a full-scale production company in less than three years.

Deloitte named a leader in Business Transformation Consulting by Forrester.
Source: Forrester Research, Inc., The Forrester Wave™: Business Transformation Consultancies, Q3 2015.

Deloitte named a leader in global business consulting based on capabilities and strategies by IDC MarketScape for the fifth consecutive year.
Source: IDC MarketScape: Worldwide Business Consulting Services 2015Vendor Assessment by Cushing Anderson, February 2015, IDC #254320; IDC MarketScape: Americas Business Consulting Services 2015 Vendor Assessment by Cushing Anderson and Jim Westcott, February 2015, IDC #254318; IDC MarketScape: EMEA Business Consulting Services 2015 Vendor Assessment by Cushing Anderson, Metta Ahorlu, and Curtis Robinson, March 2015, IDC #254680; IDC MarketScape: Asia/Pacific Business Consulting Services 2015 Vendor Assessment by Cushing Anderson, Mayur Sahni and Takuya Uemura, February 2015, IDC #254319.

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