Hess Lean Advantage Increases Efficiency in Gulf of Mexico Oil Wells
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Cutting Costs, Increasing Efficiency in Gulf of Mexico

Hess has made important progress in maintaining a strong balance sheet and keeping a tight control on spending while continuing to invest in future growth, which it believes will create significant value for our shareholders.

Lean management is a critical driver of its success and a competitive differentiator that can help it successfully weather the current downturn.

In the Gulf of Mexico, Hess is addressing the low oil price environment by working with its suppliers and contractors to apply Lean management to proactively drive efficiency and create value. The objectives are to safely reduce costs and cycle times.

The efforts are paying off with nearly $100 million in savings projected over two years.

Hess introduced a program to share logistics support across installations rather than allowing under-utilized helicopters and marine vessels to pass by competitors' offshore platforms. Hess saved $44.7 million through these innovative vessel and aviation strategies in 2015 — and expects to save another $53.3 million in 2016. And Hess continues to look at other sharing opportunities not only in the Gulf of Mexico but other locations where it operates.

Hess is also working with key suppliers to collaborate with other operators on design and quality assurance standards for complex offshore equipment, such as subsea trees, to shrink delivery times and reduce costs. Achieving a level of standardization on equipment can make development of offshore deepwater fields more economical, efficient and safer.

Standardization programs typically define functional and performance requirements, such as those found in American Petroleum Institute (API) specifications, and some critical geometry and dimensions. This standardization, together with more reliance on the supplier's quality assurance process, results in improved efficiency.