Application of Continuous Improvement Methods to the Petroleum Upstream Business

Abstract

Abstract Imperial Oil has a strong history and culture of continuous improvement (CI). Historically the benefits seen from CI were less in the upstream business than in the downstream and other areas with resulting skepticism on the method validity for the resources business. In recent years, Imperial Oil has tested a more aggressive application of CI methods in upstream operations with positive results. The technical methods for CI are broadly known. The approach taken at Imperial Oil Resources (IOR) was to develop the management techniques for CI initiatives. A project philosophy was used and processes were established for initiating, staffing, tracking and closing each initiative. Dedicated CI personnel were added and trained. Expectations were set for the delivery of results. Hindsight reviews have been established to verify the success of each effort. The toolset used was expanded beyond the published Lean and Six Sigma methodologies. Methods were added, such as those used for improving the profitability of a target business segment and for assessing reliability issues that have been proven in other business functions. An examination of the challenges encountered by CI specialists indicated the need for additional training in leading and influencing others. Project teams have also been assembled with experts external to Imperial Oil's upstream business using company staff from other business lines. Skills have been developed in engaging suppliers, contractors and regulatory agencies in IOR's projects. Positive results have been realized in a broad array of areas. Maintenance improvements, general operating cost reductions, energy efficiencies, environmental impact and volume improvements have been achieved in existing conventional and unconventional operations at surface facilities, plants, well servicing and support functions. In the second year of operation, the CI program at IOR implemented projects that will provide over 30 million dollars per year in ongoing financial benefits. In addition significant benefits were realized from the application of these methods to reduce operating costs in a planned oil sands mining project. Active projects are expanding efforts into other areas such as drilling.

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