Total Integrated Solutions Reduce Costs in the Gulf of Mexico
Authors: Slocum Tom B. , Baez Carlos A. 
Published: December 2007

Abstract
The major service company's bundled service concept has evolved to provide Gulf of Mexico operators an alternative solution to managing discrete service operations themselves - a new approach called total integrated solutions. Traditional drilling and workover operations require the operating company to coordinate numerous service companies and products on-site. Economic changes in the oil industry have caused operating companies to reduce staffing levels and service companies to merge and consolidate operations. Service companies are now expanding technical staffs by hiring experienced operating company engineers and are focusing on providing a total solution that involves not only providing products and services but engineering and often complete project management.
Substantial cost savings have been realized by offshore - operators through the total integrated solution approach in various types of drilling, workover, and abandonment projects. The majority of the cost savings is directly related to the many efficiencies created by the teamwork of this approach. These efficiencies result from the implementation of new technologies, proper preplanning improved coordination, communication networks, safety programs, additional training, and a well-focused project team assembled by the team coordinator (project manager).
Measurements of performance have proven that the new totally integrated-solution team concept can be superior to traditional methods in generating cost savings. By establishing project objectives and goals before job execution, various measurement parameters are identified and tracked throughout the project to quantify the performance improvement. The service company is motivated through a risk/reward incentive. The case histories included in this paper illustrate the cost reductions that may be achieved by using a total solution approach instead of the traditional discrete service approach.

Introduction
Many changes have occurred in the oil industry in the past several decades, but none is more important than the restructuring of the operating and service companies in the past 15 years driven by the need to improve productivity and lower total operating costs. The following sections summarize the changes within the operating and service companies that have led to the new business relationships that are developing today.

The Operator
Historically, the majority of all drilling, completion, and workover programs were prepared by the oil company engineer or consultants with technical assistance from service companies. Many of the fundamental services were provided by the operating company itself. In the 1960s, most operating companies divested themselves of their service businesses. The company engineer continued to perform all of the required engineering calculations and was responsible for providing all of the technical information relating to the specific project. The company engineer still relied on the experience of the field operating personnel to provide past histories and field data to support the proposed well plan. Service company input was considered valuable by the operating company but was never as valued as their own company's experience. The preplanning phase was structured around in-house company experts: engineers, technicians, geologists, geophysicists, managers, analysts, operations personnel, and research scientists.
The traditional solution process, built around the use of in-house experts to solve problems, began to change in most oil companies during the early 1980s. Domestic economics had changed after the oil boom of the late 1970s, and most oil companies began to reduce their organizational structure. This affected many technical support personnel, engineers, and geologists. Research budgets and support were also reduced in response to the lower prices and profit margins. Fundamental research by operating companies became a luxury that most operators could not afford.