exceeding expectations

The international publication for PSNCEO update Pg. 6

Issue 14 2010

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Double success in North Sea Pg. 3

Change is the only constant Pg. 10

Core Value Award winners Pg. 13

Preparing today for tomorrow’s challenges Pg. 14

Shutdowns & turnarounds Pg. 16

AristosTM - It’s a safe betPg. 18

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Thank you to everyone who contributed to issue 14 of Network: Alan Watt, Andrew Crawford, Ali Green, Bob Keiller, Bill Riley, Bill Yuile, Brian Mercer, Dave Barwick, David Williamson, Finlay MacLennan, Gerry Cassidy, Guy Rennie, Herb Gaspard, Jeff McDonald, John Kearney, Jonathan Watt, Kerry Rohan , Keith Eagles, Laurie Samuel, Mike Coffelt, Neil MacDougall, Neil McMillan, Pat Milam, Paul McCarthy, Peter Brown, Sharon Vannet, Steve Cobban, Todd Wind, Yulia Kasatkina

Network is published without warranty, and although we make every effort to ensure information is accurate, PSN will not be held liable for damage or losses that result as a consequence of any inaccuracies in or reliance upon such information.This publication has been printed using the latest environmentally friendly printing techniques which include processless plate technol-ogy. This technology removes the need for chemicals entirely at pre-press stage and reduces the chemical element in printing.This paper uses 100% ECF (Elemental Chlorine Free) pulp, has FSC certification for being sourced from well-managed mixed sources and is totally recyclable.Designed and produced in-house by the PSN Corporate Communications Team.

Contents

Change is the only constant... find out how we manage constant, rapid transformation.

Editors’ intro

The theme for this issue is exceeding expectations and we hope you’ll agree

that our contributors have certainly done that.

We have huge contract wins and some well earned extensions. In the following pages you’ll meet the people behind those successes.

If decommissioning is your thing, we will show you how and why we are leading the field.

You’ll find first hand accounts from the centre of the action, including how our people in the Gulf of Mexico helped in a rescue and how a shutdown crew accommodated a change of scope once the work was underway.

PSN is famous for its innovative approaches to people development and in this issue we have more great examples from around the world.

Our technical supplement brings you the future of surveying, delivering outstanding results in our industry right now. You’ll also see why we don’t call our Value Systems experts risk managers; it’s because what they do goes light years beyond that.

On the back pages you can see a great round-up of our community relations work throughout the year.

And if you want to see what our CEO thinks the Spice Girls and Grandmaster Flash have to do with our business, turn to page 6.

This is who we are and what we do. Send us your pictures and stories for the next issue and we hope you enjoy this issue.

Designed and produced in-house by the PSN Corporate Communications team.

Kenna BlackhallEditor T: +44 (0)1224 777014 E: [email protected]

Varihi ScottEditor T: +44 (0)1224 777821 E: [email protected]

Paul ShanksNetwork designer T: +44 (0)1224 777628 E: [email protected]

Chris WalbankTech supplement designer T: +44 (0)1224 777957 E: [email protected]

Refined transition in AustraliaWe hear from Paul Lapsley and Matt Gavin about the successful transition following our major contract win with Caltex.

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Generation Now: KazakhstanWe hear how our relationship with an Almaty based university is helping create a skilled local team.

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CEO updateBob Keiller, CEO explains how we use our Core Values to ensure we keep our customers satisfied.

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Core Value Award winnersThis year’s winners again reinforce that our values run across the entire global network.

Turnarounds & shutdownsAndy Crawford tells us how his team dealt with last minute changes to a shutdown scope, while David Williamson explains what a successful turnaround looks like.

Preparing today for tomorrow’s challengesBrian Mercer explains how his team are helping to turn our ideas into commercial reality.

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page 10

Earlier this year, Shell announced that the workscope for its current joint venture in the UK was being

divided into two separate contracts - the integrated services contract (ISC) and a separate decommissioning services contract. In July we were delighted to be awarded the Decommissioning Services contract, initially covering the Brent Delta platform, and as Network went to press, news broke that we had also been awarded the ISC for Shell’s central and northern North Sea assets. Read on to find out why these two contracts are helping PSN provide a secure and sustainable future in the North Sea.

Continued overleaf...

We congratulate PSN and we look forward to working with them. They are a party in the current contract and so they know this part of our business well.

We also recognise the significant improvements achieved by the Sigma3 organisation in delivering the current contract and would like to express our appreciation for the level of service they have provided for us over the last eight years.

Ken Robertson, Asset Manager for Shell’s central and northern North Sea assets

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Record contract award from Shell in the North SeaThe five year Integrated Services Contract (ISC) from Shell UK limited is worth in excess of $500 million. It is one of the largest contract’s PSN has received in the UK to date and marks a high point in our 25 year relationship with Shell, as Peter Brown, UK managing director explains.

“We are extremely proud to have secured this major piece of work”, says Peter. “We were awarded the contract after a competitive tender process designed to select a single

contractor. Under the contract PSN will provide engineering and maintenance services to the four Brent field platforms – Alpha, Bravo, Charlie and Delta – and the Shearwater, Gannet, Nelson and Anusuria assets.”

“This is one of the largest integrated services contracts in the UK North Sea and the award to PSN reinforces the strength of the long term relationship we have developed with Shell over the last 25 years of continuous service. This contract is an opportunity for PSN and Shell to introduce an exciting new way of working in the central and northern North Sea.

“Our open, innovative and flexible business culture combined with the enthusiasm of our team played a major part in this award and we look forward to working as part of Shell's team to deliver excellence in the challenging landscape of change that is the North Sea.”

PSN will succeed Sigma3, a joint venture set up in 2002 to provide integrated services to Shell for its central and northern assets in the North Sea, which continue its activities until May 2011.

Over 1000 people are currently working within the joint venture, on the Brent and central platforms and within Shell facilities in Aberdeen and it is expected that this workforce will be retained and TUPE over to PSN in May 2011.

For more information on the new ISC contract contact:

Sue StevensTransition manager T: +44 1224 777143E: [email protected]

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Pictured: Shell Nelson platform

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Decommissioning

For our customers, decommissioning involves considerable risk and ties up much needed resources, without there being a financial reward at the end. It tests commitment to

safety and the environment, is wrapped up in strict and often new legislation and involves working with many specialist contractors and third parties. When an operator decides that a production platform has come to the end of its working life and it’s time to plug the wells and bring the equipment onshore, PSN’s unmatched experience and upfront commitment to core values fit the bill.

Insight from the inside out

PSN has been involved in the hook-up and commissioning of production platforms since the early 1970s. We’ve gone on to provide the modifications that have sustained those platforms through their producing lives and can now apply all of that unique insight to ensure the safest and most efficient approaches to decommissioning.

Our long-term relationships with major operators have included decommissioning in the North Sea for a number of years. In recent years, we executed the hook-down, engineering and preparation for removal of BP’s North West Hutton platform topsides from 2006 through to 2008. We have also been extensively involved in a number of studies for the decommissioning of BP’s Miller platform and have performed weight control and integrity work to ensure the safe removal of ConocoPhillips’ Ekofisk platforms.

This is not business as usual

Our success in this area builds on our culture of challenge, innovation and keeping our core values central to every decision. For example, when working on North West Hutton we challenged maintenance assumptions to make the most of the platform’s cranes. We have also developed a set of destruct norms for estimating decommissioning works based on our recent experience on a similar project scope. This will enable us to optimise the process of generating quick, fit for purpose, accurate estimates and workpacks for our customers.

Innovation on iconic Brent

The Brent field, discovered in 1971, has produced 2 billion barrels of oil and at one time provided 10% of the UK’s gas requirement. It has lent its name to the benchmark for crude oil pricing around the world. How its four iconic platforms are engineered down and removed will set the standard for decommissioning in the North Sea.

We will use PSN’s unique risk management tools and Value Systems, and every other available PSN advantage to ensure that optimal and unique solutions are achieved. For example, our pioneering Spatial Solutions expertise takes surveying accuracy to a whole new level: it uses only one operator per survey visit, is much faster than traditional surveying technology and can be used to produce 3D models of the inside of ageing platforms with an accuracy of 50 microns, making it much more cost effective than traditional methods.

New training for a new level of safety

Having health and safety as our number one core value puts our unique occupational and technical safety programmes front and

centre in all contracts. And because we see proper training as a vital element in safety performance, we encouraged and enrolled the UK’s Engineering Construction Industry Training Board in implementing an endorsed programme specifically for offshore people involved in decommissioning.

An industry-wide network

As a member of UK Oil and Gas’s Working Group 4 and founder member of the new industry supply chain body Decom North Sea, we make sure that our experience is fed into the industry and that we are at the fore of learning about and shaping new developments.

Our leading role in these cross-industry bodies also strengthens our ability to understand and collaborate with the many specialist sub-contractors on which decommissioning projects depend, in areas such as cleaning, diving, cutting and heavy lifting.

Benefit of cross-industry collaboration

These relationships with specialist contractors have enabled us to use shared, streamlined work packs, which save time in work pack preparation and improve the level of shared understanding. The risks inherent in decommissioning make a spirit of teamwork essential so having our workers literally reading from the same page is just one way in which we keep the people in our project teams aligned with each other.

Our detailed knowledge of the industry’s decommissioning specialists, what they do and how they do it, is also invaluable in enabling us to make informed evaluations of the new tools and technologies on offer in this burgeoning market.

Raising the bar on the bottom line

Decommissioning is a cost to our customers that has no prize of oil or gas at the end - the way to minimise the bottom line is to raise performance on every other line, especially safety and environmental protection. Our experience has shown that we should expect to recycle well over 95% of topside material.

From our work on other decommissioning projects we’ve learned how to make significant improvements to safety and schedule by performing key module separation before platforms enter the normally unmanned installation phase.

We apply a consistent approach, based on the PSN core value of treating all people with honesty compassion and respect, that enables us to attract asset experienced personnel and retain incumbent personnel.This means that the people who know the platforms best, the ones who have been working on them for years, should not see decommissioning as a threat: it is the next chapter for our industry. Experienced people with a passion for safety are always in demand in our industry and PSN has the support in place to help them build a career in this new area with all the challenges and rewards they’ve come to expect. Keeping the best people saves our customers the time and cost of recruitment and training and the knock-on effects these have on efficiency. This also provides stability for our workers.

Decommissioning is here and PSN is leading the way!

Decommissioning contacts:

Bill YuileBrent DSC project manager E: [email protected]: +44 (0)1224 792169

Neil McMillanDecommissioning business manager E: [email protected]: +44 (0)1224 777301

Customer: Shell

Location: North Sea

Duration: 2010-2020

Scope: Decommissioning services including integrity management; module, process and utility separation; safe shutdown; hydrocarbon cleaning; disconnections and preparation for eventual topside removal

Fast Facts

PSN’s position at the forefront of decommissioning in the North Sea was confirmed in July when we secured the Brent decommissioning services contract from Shell. PSN’s decommissioning business manager, Neil McMillan and our project manager for the Brent decommissioning project, Bill Yuile, explain how our road to being the market leader has been paved with decades of experience and innovation.

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What is decommissioning?

At the end of an oil or gas platform’s working life, wells are plugged and the power on the platform is shut down. Hydrocarbon and utility systems are then depressurised and cleaned before the structure is transported, whole or in sections, to shore. Maintenance, integrity and HSE management is vital for the safety of the workforce throughout each stage.

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As our Relationships Core Value says: “Strong relationships with our customers are vital to our business”. Sounds obvious but being a service organisation we forget this at our peril. It can take many years to build up a good

reputation yet minutes to destroy it. How we behave, what we commit to and how we deliver all shape our reputation. How we behave when customers are facing specific challenges can also impact upon our reputation – if we see a customer in need of support and we step forward – never once looking to exploit any commercial advantage – then we may just secure a customer for life. We saw this recently with BP in the Gulf of Mexico – a hugely important customer in their deepest hour of need – we stepped forward to help straight away.

The text of the Core Value goes on: “We nurture these relationships to understand what our customers want and how we can best deliver it. We expect everyone to contribute in building positive customer relationships.”

Some of you may remember “The Spice Girls” – 1990s UK-based all-girl group that topped the music charts and had some dubious fashion styles. Their first big hit contained the line “Tell me what you want, what you really, really want...” Understanding what our customers NEED, and what they really, really WANT is vital if we are to keep healthy relationships. This is PSN’s “Spice Girls Principle”.

“We welcome candid feedback from our clients – good and bad – because it helps us to improve and stay focused on what customers need. We recognise that a customer’s perception is their reality, so we must take the time to understand an issue from their viewpoint.”

We may think we are doing a great job only to hear the shocking news that our customer has a different view! We need to ask about performance all the time to ensure that we are delivering in line with the Spice Girls Principle. If we don’t ask we may never know.

While it is good to be liked, it is more important that we are respected for our focus on safety, professionalism and our integrity.

Safety and Integrity are covered in two separate Core Values – professionalism results from the sum total of all seven Core Values. If customers perceive us to be focussed on being professional and delivering a great job, they will give us repeat business.

Trying to keep the customer satisfiedBack in 1970, when I was young, my uncle John gave my brothers and me a copy of Simon and Garfunkel’s seminal album “Bridge over Troubled Water” which we played until it was worn out. One of the songs on that album is “Trying To Keep the Customer Satisfied” which is what I’d like to talk about.

To quote another song, this time from the 1982 hit, “The Message” by “Grandmaster Flash and the Furious Five” – “It’s like a jungle sometimes it makes me wonder how I keep from going under.” Being in the service business is a very competitive environment where the survival of the fittest prevails – the

minute we drop our guard, the second we under-perform, the moment we let a

customer down is the instant when they decide that they should use someone

else. It is indeed like a jungle and we need to compete to survive –

the key to this competition, our survival and our success are

our customers. Let’s keep them satisfied.

CEO update

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Our project team in Vietnam is celebrating a second contract extension

from the Korea National Oil Corporation.

PSN will be continuing to provide operations and maintenance on the Rong Doi gas platform for a further two years, taking our relationship with KNOC to seven years.

Our offshore crew has achieved significant operational milestones, for instance, they recently completed 1000 days without a recordable safety incident. Their production records of

over 99% availability have also been maintained, even during a recent drilling campaign.

Ken Doerr, Rong Doi OIM, said of the award, “This extension hands PSN the responsibility to continue with the many operational challenges Rong Doi faces. It also allows us to make uninterrupted progress towards the goal of an all-Vietnamese workforce – a goal we share with our customer.”

Vietnam operations manager, John Popovic, agreed and added, “We have had so many successes with this project, including a very fast start-up, rapid adoption of a brand new safety culture, strong production performance and some superb competence and people development initiatives. I’m very glad that we have the opportunity to stay and see what more we can do in Vietnam and with KNOC.” N

Refined transition in Australia

In June this year, we scooped a major multi-million dollar contract with Australia’s leading refiner Caltex Australia Ltd, to provide integrated maintenance services to its two refineries - Kurnell in

Sydney and Lytton in Brisbane.

The three year contract was a significant milestone for PSN and augmented our position as a leading service provider to the refining industry in Australia. It was the first contract we had won from Caltex, the first hydrocarbon industry maintenance contract we had won in Australia, and expanded PSN’s participation in the refining industry across the globe.

Six months into the contract, Network caught up with Paul Lapsley, Caltex project manager and Matt Gavin, General Manager – Australia, to find out the progress so far.

A successful transition

Paul Lapsley told us “We’ve had an incredibly successful transition, resulting from the great energy and support from the Melbourne team and Aberdeen office. So far, we’ve spent three months working on a transition process recruiting for the contract and filling almost 120 trade and staff positions.

“Another key element was the negotiation on an EBA (Enterprise Bargaining agreement) with the trade unions in both Queensland and New South Wales. This was achieved and ratified by Fair Work Australia in time for the transition date.

“Caltex is a new customer for PSN and refining is a new area for PSN Australia. This is an exciting contract for PSN where we have the chance to demonstrate our capability in Queensland and New South Wales as a world class provider of maintenance and engineering services.

“We look forward to continuing to build on our strong working relationship and delivering effective, efficient and safe operations in line with Caltex’s vision and our core values.”

Matt Gavin added “Caltex respresents one of those rare fits of culture and values between client and contractor. Caltex and PSN share a passion for striving to zero harm, and already we are improving the safety focus on site. Safety, together with the introduction and sharing of best practices and maximising efficiency are mutual cornerstones for this maintenance contract. Caltex is very clear its expectations in this regard and have given PSN the headroom to perform. I expect Paul and his team to deliver exceptional outcomes in 2011.”

PSN was selected because of the culture of the business and its alignment with our own values. Working together we aim to drive significant improvements in reliability and maintenance execution across our two refineries.

PSN recently concluded the transition from the previously incumbent contractor in the space of a week. We are delighted that this transition was concluded without incident and without the business missing a beat - a great start to the challenging path ahead.

Gary Smith, general manager of Refining at Caltex

PSN in AustraliaPSN’s Australian operations form our largest international business unit. The team focus on providing engineering, construction, operations and maintenance services to the oil and gas, water and refining industries. With more than 1,200 personnel, PSN is now the largest contractor servicing the hydrocarbon market on the Australian east coast.

Caltex’s two leading refineries are based in Kurnell in Sydney and Lytton in Brisbane. Caltex is a refiner and marketer of petroleum products.

For more information, contact:

Paul LapsleyCaltex business manager T: +61 439 813 688E: [email protected]

In June 2009 we secured the engineering contract to extend the life of Kumul marine

terminal in Papua New Guinea. This September we celebrated the addition of project management, procurement, construction and commissioning to our scope.

The Kumul marine terminal is an offshore tanker loading facility, located 40 kilometres off the coast of Papua New Guinea. It has been in operation since 1992 and is central to exporting condensate from the country’s newly commercialised gas fields.

Our work, which includes responsibility for health, safety, environment and quality on the project, will transform the terminal’s capacity from 13 million barrels of oil per year to 6.6 million tonnes of liquefied natural gas per year and will extend the life of the terminal by 30 years.

Our senior project manager, Ricky McNally, said, “This extension is a great reward for the work that the team has done to date and we’re delighted to be playing a bigger role such an important development.”

Celebrations in Vietnam PNG’s gateway to the world

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Contract extensions

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PSN KazStroy scoops major contract with AGIP KCO

In October this year, PSN KazStroy was awarded the commissioning contract with AGIP KCO for the Kashagan field in the Caspian Sea – one of the largest and most technically challenging industrial developments in the world today.

A major coup, this three year contract will create 800 positions within the first six months and firmly establish PSN as a key contractor in the Kazakhstan region. Network caught up with Dave McBain, PSN KazStroy business manager and Alan Gordon, PSN operations director, ERC and Asia Pacific, to find out more:

Network: What is the significance of this award?

Alan: The Kashagan field is the largest oil discovery since Prudhoe Bay in Alaska 40 years ago. With nearly 35 billion barrels of oil in place it is expected to reach a production plateau of 1.5 million BOPD. To put that in perspective, at full production Kashagan will supply the equivalent of the total oil production output from the UK.

The new contract will cover both onshore and offshore commissioning to bring the Kashagan field from the construction phase into full operation. Award of this contract not only raises our profile within Kazakhstan, but across the global oil and gas industry.

N: Why were we successful?

Dave: We already work for Agip KCO on the Kashagan field where over 300 of our colleagues are preserving equipment and systems in readiness for commissioning and startup. In September this year our Kazakhstan business achieved two million manhours and 8 years without an LTI. This tremendous safety performance coupled with great

overall project performance was a major influence in Agip KCO awarding us this new contract. The award was also attributable to the building of long-term relationships and the production of a compelling technical and commercial proposal.

A: PSN demonstrated excellent HSE performance on the equipment preservation contract and this certainly was a key factor in the award. We are seen as a ‘can do’ contractor by AGIP who always meets our customers’ expectations for service delivery.

N: What opportunities will this project create?

D: The Kashagan field development is one of the world’s largest and most technically challenging industrial projects and we will require significant manpower and skills to bring it into operation safely. Already we are being supported by PSN business support teams and personnel from our offices in Aberdeen, Singapore and Delhi.

Recruitment has already begun and in line with our localisation core value, we will be employing Kazakh nationals as well as drawing on our network of onshore and offshore expertise around the world.

A: We will be recruiting primarily from within Kazakhstan, in Atyrau but also from other countries to ensure our team has sufficient experience and skills to support AGIP in the commissioning of the facilities for Kashagan.

It is important that we continue to deliver excellent HSE performance on the Kashagan facilities. We are therefore very keen to recruit and transfer personnel who currently work for PSN or have worked for us before.

N: What are you looking forward to?

D: This is an exciting contract award for PSN KazStroy and reflects the strength of our commissioning capability and 30 years experience of successful project delivery. Situated in a harsh and hostile environment, Kashagan presents a large number of complex challenges whereby we can demonstrate our proven commissioning expertise. We look forward to bringing our experienced staff and outstanding safety record to work on this new contract.

Kashagan The Kashagan oilfield in the Caspian Sea is located in the territorial waters of the Republic of Kazakhstan about 80 kilometres south of the town Atyrau in very shallow waters where the geographic location experiences extremes of seasonal climatic conditions throughout the calendar year. The field has a high hydrogen sulphide (H2S) content (19%) and is high pressure.

PSN KazStroy is a joint venture between Production Services Network (PSN) and KazStroyService (KSS), Kazakhstan’s largest engineering, procurement and construction company. Headquartered in Atyrau, PSN KazStroy currently employs more than 450 people in Kazakhstan.

For more information on career opportunities in Kazakhstan, contact:

Nicola GreigResourcing lead - start ups and initiatives T: +44 1224 777405E: [email protected]

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PSN Water has had its commitment to industry leading safety performance

reaffirmed by qualifying for a key award for its work with the Western Australia Water Corporation (WAWC).

The business has successfully qualified for a prestigious IFAP / CGU Safe Way Achiever Award at Gold level, with the notable addition of a Platinum level award which recognises five consecutive years of award at Gold level.

Held on an annual basis since its initial introduction in 1979, the Industrial Foundation for Accident Prevention’s (IFAP) Safe Way Awards Scheme is designed to encourage all industrial and commercial enterprises, large and small, to improve their safety and health performance.

PSN Water was assessed for the award through a combination of self-audits, random desk-audits and supporting documentation, to determine commitment to safety through excellence in training, established systems and procedures and achievement of safety objectives.

Steve Henry, PSN Water’s general manager told Network that six key areas are assessed for this award: management commitment, planning, consultation, hazard management, training and statistics. “We are delighted to have qualified for this influential award” says Steve. “Especially pleasing for us is that our cutting edge AristosTM training received particular acknowledgement through this award. Programmes such as AristosTM that challenge the everyday norm are proving to be critical in unlocking benefits to provide an even safer working environment for everyone.”

As one of PSN’s newest and ground-breaking safety training tools, AristosTM is backed by both PSN and WAWC management, and is proving instrumental in challenging safety culture and driving change in an already high performing organisation.

(See pg.18 for more on AristosTM)

On the morning of Thursday, September 2nd, a fire broke out on the Vermillion 380

platform in the Gulf of Mexico. The platform, standing in 2500feet of water in the Vermillion Bay, about 90 miles from the Louisiana coast, was not producing at the time but there were 13 men on board.

Our senior operations manager, Herb Gaspard, received a call at 9.30am from a platform neighbouring Vermillion 380, asking if we had a boat in the area to help with the survivor rescue effort. We didn’t but while Herb called Coastal Marine Logistics, our general manager of operations, Buddy Brobston, called Air Logistics. Air Logistics were at the scene by 9.35am. Herb also contacted the mariner assistant superintendent

and informed him of all that our team had learned about the situation at that time.

A motor vessel called Crystal Clear was directed to the Vermillion 380 and picked up the 13 men who had spent around two hours in the sea. The Crystal Clear took the men to Vermillion 371 platform, which had a PSN medic on board.

Our medic, Jeremy Rouyea, confirmed that the men were a bit shaken up by the experience, tired from keeping afloat for so long in the water but otherwise in good health. They were given towels and blankets to combat hypothermia and returned safely to shore.

There was no leakage from the well beneath the platform and Herb and his team received a thank you for their immediate response from the Coast Guard Lieutenant. Speaking of that morning, Herb said, “For the people who work in the Gulf of Mexico we’re all neighbours. I did what any one of us would have done and I’m glad PSN was able to help out.”

Generation Now: Kazakhstan

Our relationship with the Almaty based Kazakh-British Technical University gives us the benefit of many more local employees

than our regional competitors and helps us give a bit more back during tough economic times.

The next generation of engineers will be more international and widely skilled than ever before. PSN is playing an increasing role in making that happen. Here, engineering manager, Jeff McDonald, brings us up to date on one of the many ways we’re working to increase localisation and relationships in Kazakhstan.

Jeff: “Over the last three years, the percentage of local workers among our project teams has risen above 70%, which outstrips that of our closest competitors and demonstrates our commitment to PSN’s core values. As an organisation we say that we take into account the economic, social and environmental impact of all aspects of our business. In practice, that means creating bespoke operational strategies, so that we align our business to the local market conditions.

“We’ve been working in Kazakhstan for over 10 years and have seen the immense value and potential of the local workforce. Capitalising on that potential needs investment and we regard supporting education and training is a vital part of building a sustainable business.

“We got involved with the Kazakh-British Technical University to help us find and develop our future business leaders. The university was created in 2001, with support from President Nazarbayev of Kazakhstan and the former British Prime Minister Tony Blair. We sit on the university’s industry advisory board, helping the higher education system align with the needs of our industrial partners and ourselves.

“I have already reviewed and commented on their undergraduate degree programme curriculums and given some ideas to strengthen their brownfield engineering content to meet the future demands of the downstream industry. We have an agreement in place which will enable me to commence lecturing on project management and tailored engineering, bringing in practical examples from our work here.”

Professor David Lal, Dean of the university’s Masters Programme Department, says: “These initiatives will greatly assist our staff, students and other university partners over the next five years. The KBTU is grateful to PSN KazStroy management for their increased

support and this sponsorship will clearly strengthen our mutual cooperation over the coming years.”

Dave McBain, managing director of PSN KazStroy concludes: “Initiatives like this not only help us with succession planning but also help us retain employees as they see greater opportunities opening up ahead. Better retention means less disruption for our customers so everybody wins. Jeff has started a cross-country doctoral research study in understanding the complexities of integrating local content in Kazakhstan and globally, so he’s a great choice to be leading this development. We have excellent relationships with the local communities here and I’m delighted that we have the opportunity to strengthen them.”

Jeff McDonaldEngineering manager T: +7 122 909003E: [email protected]

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Rescue in Vermillion Bay PSN Water goes platinum

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What worked well yesterday might not work at all tomorrow – that’s how fast our industry and the world around us is moving. How do we manage constant, rapid transformation? Project manager, Dave Barwick, believes we all need to change – change a little or change a lot but change something.

We’ve all seen how quickly new companies can enter the energy industry and how suddenly established names can change direction or fade away completely. It took PSN’s own directors a mere 18 months to go from agreeing to attempt a management buyout to leading one of Scotland’s

largest independent companies with a whole new outlook and approach.

This combination of understanding the old order while being part of the generation leading the new order is shown in our core values and in the ways that our people work.

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A winning focus on fundamental changeAt the end of last year we won the BP E&C contract, which made us BP’s single federal engineering and construction contractor for their UK offshore assets. BP was explicit in its wish to fundamentally change the way engineering and construction is carried out and our win was based on our ability to demonstrate the same objective. PSN’s business manager for the

project, Alan Watt, says this:

“In any transformation, value to the business drives the prioritisation of change. If we tried to change everything at once we would fail. We identify what needs to be changed while maximising the value to the business. Change costs time, significant effort and money, so there has to be a payback in efficiency to ourselves and to our customers to make the effort of change worthwhile.

“On our contract this year, on top of delivering BP’s most significant turnaround season workload in 10 years, we have also tuned our approach, systems and processes in a number of key areas such as engineering assurance, planning, funding, repair orders, SIP interface, and workpacks. Our key drivers for efficiency are simplification and being fit for purpose.

“Continuous improvement is a way of life at PSN, but by using our “Focus On....” approach we have made real inroads into a number of areas that have historically been problematic. We still have a lot to do but we have shown that change doesn’t have to be all about being uncomfortable, it can break bad habits, limiting assumptions and make your job much more rewarding.”

Customer centred changeAnother man transforming how we work is Bill Riley, Manager of Central Engineering, our centre of excellence for networked engineering services. Bill says:

“Our global business moves work and people between projects and countries and Central Engineering has pioneered PSN’s seamless approach. We’ve eliminated the inefficiencies caused by people having to familiarise

themselves with many different ways of working. The main ways we’ve done this is through standardisation of engineering procedures, engagement of global business units and ensuring our management system is consistent and reflective of regional requirements.

“We are also capturing the insight that Central Engineering has through its interfacing with multiple customers and our engineering centres around the world. The biggest changes are coming as we put this insight into action to make a genuine difference, resulting in new or altered business processes within the organisation and changes in the products and services we provide.”

Breaking down the barriers to innovation Earlier this year we appointed our first innovation manager – it is Brian Mercer’s job to identify areas where innovation can be successfully implemented and developed as robust work processes with clear improvement metrics. With a network-wide remit, Brian says:

“One of the projects I’m working on right now is seeing how much more creative, effective and efficient we can be with the very fabric of our network – particularly the IT and business systems that glue us together. PSN’s network is central to our flexible, fast-acting and open way of working but there’s room for our people to get a lot more involved so I’m breaking through any unintentionally created obstacles to facilitate a much greater collaborative environment where knowledge sharing is the norm. This will result in enhanced value for money services to our global portfolio of clients.”

(See pg.14-15 for more on innovation at PSN)

Even the high flyers get an overhaulOne of the most striking changes at PSN is how quickly we’ve grown. This has been caused by more opportunities in the industry, along with our strong reputation, but it has also greatly increased the number and quality of opportunities we are offered. Our tenders have always had a high win rate but now Steve Cobban is radically re-shaping our business

acquisitions team. Over to Steve:

“It’s one thing to try and improve a struggling team; it’s quite another to transform a high performing group of people with one of the best win rates in the business. We‘ve brought in a lot more people to focus on responding to our customers’ day-to-day needs during the business acquisitions process but we’ve also given more space to our senior proposals people so that they can use their insight strategically for PSN’s benefit. Our personnel changes are backed up by our market intelligence system, that grows each year and gives a clear picture of where we are now and what we cold be doing around the world in ten or more years time. As the business world keeps changing it’s important that we not only change with it but that we also keep developing how we find and retain new business.”

The old adage, if you’re not moving forwards you’re moving backwards, used to raise eyebrows and sceptics will warn against change for change’s sake. At PSN we’re proving right across our business that our robust systems, core values and open culture allow us to make radical transformations to our business without missing a beat, while helping our customers keep pace with the future they want to build today.

Our global business moves work and people between projects and countries and Central Engineering has pioneered PSN’s seamless approach. We’ve eliminated the inefficiencies caused by people having to familiarise themselves with many different ways of working.

Bill Riley, Manager of Central Engineering

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helicopters, determining the design for operations requirements for a new fixed platform and significant engineering studies into the structural integrity at one of the onshore gas plants.

“My entire work experience in Melbourne was very broad and because it was client based I got to see and understand the bigger operations picture. “Much of what I learnt was about decision making and project leadership. This experience, combined with my technical knowledge, means I feel like I have a better pan industry approach to business and I am far more delivery focussed now.”

The highlights

When asked about the highlights of his time abroad, Gareth said that the opportunity to live in a city like Melbourne was a major perk. “I attended the Formula One Grand Prix and the Australian Open Tennis – both of which were in walking distance from my flat. I also made the most of where I was based and used any time off I had to travel.”

Back in Aberdeen

Now back in Aberdeen, Gareth still maintains a strong link with PSN’s Melbourne client and acts as the technical interface for a structural integrity model management contract established during his time in Australia. With a trip back to Melbourne already planned, the relationship between PSN’s advanced integrity group and the clients’ inspection engineering group continues to go from strength to strength.

As well as focussing on the job in hand, Gareth has, for the last three years, also been working hard to become a chartered engineer through PSN’s graduate training scheme. He is on track to be fully chartered by the end of this year. N

For Gareth Lindsay his decision to join the PSN graduate programme became his passport to seeing the world. Network finds out more:

A new direction

After graduating with an MEng in Naval Architecture from the University of Strathclyde, Gareth took a new direction, joining the oil and gas industry in PSN’s graduate programme in 2006 as a graduate structural engineer in the Advanced Integrity Group (AIG). Within two years, Gareth’s graduate programme saw him seconded to Melbourne, Australia.

Advanced Integrity at PSN

“I was always keen on structural integrity engineering and I was aware of the value of the opportunity to join PSN”, explains Gareth. “Based in Aberdeen, the AIG (advanced integrity group) is PSN’s centre of excellence for advanced structural engineering and analysis and provides technical support to PSN’s clients around the world.

The team delivers cutting edge solutions to customers in every corner of the world. From overcoming the challenge of breaking through ice at -40 Celsius in Sakhalin, to assisting in the decommissioning of an LNG storage tank the size of a football pitch in Algeria, the group solves some of the most extreme engineering challenges in our industry today.

The graduate experience

“The great thing about a graduate place in the group was the emphasis on technical and personal development,” said Gareth. “Very early on I was given responsibility. I was made accountable for the work I did and I was given the opportunity to work on really advanced engineering work scopes – including the topside decommissioning of the North West Hutton platform.”

The opportunity

It was on a trip to Houston in 2008 that Gareth first heard about the opportunity for an overseas secondment to work on key projects in Melbourne.

“By this point I only had two years’ experience and had gone from having a lot of close hand, very experienced support, to having to figure a great deal out on my own.“

Time in Melbourne

When he arrived in Melbourne, Gareth joined the inspection engineering group (IEG) for one of PSN’s key clients in Australia. Providing a structural integrity programme to 18 offshore platforms, two onshore gas plants and one marine terminal in the Bass Strait region, the role and challenges were completely different to what he had been used to in Aberdeen.

“As part of the IEG, the role meant I was running the structural integrity programme. This included the provision of inspection programmes, the delivery of ongoing integrity projects and modifications and ad hoc support to operations and maintenance. In terms of inspections, I was responsible for managing topside, onshore, underwater vehicle and diving inspections – which was a huge undertaking given the number of assets involved. Working alongside the various inspection and engineering contractors and working and liaising with the internal client project teams were great ways to gain exposure to large parts of the operation and the various industry players in the Melbourne area.”

Some key projects during Gareth’s 18 months in Australia included a Bass Strait wide assessment of heli-deck integrity for a proposed fleet of larger

Mohammad Nabavian, chief of advanced integrity

We are committed to attracting young graduates into the oil and gas industry and try to recruit the highest calibre of engineers. In order to do this we recognise that we need to offer young engineers top class learning opportunities and development experiences that inspire them to carve out their careers with us.

“Gareth has been a model graduate and employee – he is one of the industry’s brightest prospects and the feedback we received from our customer in Australia and the increasing technical support we are providing to them is testimony to this.

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Health & Safety People

Localisation

Responsibility

Innovati

on

Fin

ancia

l

Rela

tionship

s

Inte

grity

Our annual Core Value Awards received a substantial number of entries from teams in all areas of the world and all parts of our business,

reinforcing once again that our values do really run the length and depth of our company.

The theme of this edition of Network is exceeding expectations; the perfect setting in which to showcase our core value award winners for 2010. There are many teams who go the extra mile to produce exceptional results for our business and that of our customers, consciously or unconsciously enacting the ethos of core values. These awards allow us to recognise and award those PSN teams who have shown outstanding commitment and may otherwise have gone unrecognised.

The winning team in each of the seven categories is given £1000 to donate to the charity of their choosing, as well as receiving a plaque and certificate to commemorate the achievement.

Core Value

Award winnersHealth and SafetyWinning team: Philippines team

John Padmore, Tito Lejero, Geronimo Austria, Rufino Faytaren Jr, Gerardo de Chavez, Alan Perez, Federico Salcedo, Rodolfo Cagantas, Regie Tan, Sixto Rabano, Nilo Casao, Gladwin Sanchez

Fourteen years Lost Time Incident (LTI) free – with a team regularly comprising 300 personnel, and tripling during shutdown periods, that’s the equivalent of an impressive 9.7 million man hours. Key to this superb performance is the use of the SHELTER training centre, an interactive facility used during HSE orientation, and for refresher and specific safety courses. The centre has been so successful at improving and maintaining safety performance that the idea has been exported to our project in Chad and, once again, proven to be instrumental in improving site safety performance.

PeopleWinning team: Chad training team

Manual Guarin, Blaire Montero, Alejandro Mapor, Rommel Panopio, Dante Pagtalunan,

Achieving the nationalisation of our projects can only happen when we keep the focus on people. The development of a comprehensive competency assurance process has proven instrumental to this. Chad’s award winning team has already trained and assessed hundreds of local employees ensuring the success of this project’s nationalisation plan.

InnovationWinning team: Caltex bid team, in the UK and Australia

David Francis, Joe Sofra, Rob McEwen, Ian McKay, Paul Lapsley, Sam Goldsmith, Alan Russell, Niranjan Panchal, Brian O’Donnell, Chris Nurcombe, Barry Wilson, Jessica Denehey, Jean-Francois Delvaen, Craig James, Jason Torregrossa, Chris Wootton, Karen McLean, Tony Traynor, Matt Gavin, Lisa Kinnear, John Lodder, Gary Buckley, Duncan Pearce

This team recognised that our skills and talents across a broad set of disciplines could deliver real benefits for a customer in another sector – downstream oil refining. The net result is the award of a contract that is a significant milestone for PSN, augmenting our position as a leading service provider to the refining industry in Australia.

LocalisationWinning team: Bangladesh community projects team, Sangu

PK Rakshit, Norman Pilkington, James McDaid

In a supreme example of a company making a huge difference to a most deserving local community, this team of three rallied the entire PSN network to raise funds to build a much needed multi-purpose building. They exceeded all expectations when the original target of $200,000 was smashed and a new higher target of $230,000 was set and again smashed.

RelationshipsWinning team: BP Focus team in the UKThe entire “Focus Team”, which includes PSN and BP personnel

As a unique collaboration of PSN and BP personnel, our BP Focus team shows that a great culture can be built and produce exceptional results when we work closely together with our customer.

Financial ResponsibilityWinning team: project control and finance teams in Sakhalin

Bob Thomson, Alexey Pak, Maksim Krzhizhanovskiy, Anthony Cheney, Kenny Simpson, Gus MacKinnon, Svetlana Fomicheva, Maria Sunchugasheva, Olga Tolmashova, Tatiana Kim, Fiona Simpson, Simon Muir, Alexander Kim, Maria Eremkina, Alisa Kislyakova, Alexey Dekalchuk and Rodion Avtonomov

This team has made a marked difference to our financial position through hard work and diligence in challenging circumstances that include having to deal in multiple currencies and unfamiliar rules and procedures.

IntegrityWinning team: Gulf of Mexico BP (MC252) team in the US

Kurt Boudreaux, Kelley Boudreaux, Willie Hernandez and David Leblanc

This team has done a fantastic job in recruiting support personnel to assist BP with clean-up operations following the tragic Macondo Well accident. Their keen regard for ethics means that our reputation and business outlook in this region has been strengthened.

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FORMAL REVIEWS

FAST TRACK

CONCEPT

INPUTS

EVALUATE DEVELOP DEPLOY OPERATE

Preparing today for tomorrow’s challenges

When Brian Mercer was appointed as PSN’s Innovation manager earlier this year, he hit the ground running. Since then, he has travelled the network to get the innovation message out, increased his team and set strong foundations to turn ‘light bulb moments’ into commercial reality.

“Our focus on innovation at PSN gives us a unique opportunity to change things for the better”, says Brian. “To drive out traditional approaches and celebrate something new that is exciting, current, and differentiates us as a company.

“In the last year, we’ve laid strong foundations to drive innovation into the heart of PSN. We now have a process in the PSN management system so employees can see how they submit idea and have visibility to its development. We’ve already got 30 projects in development as a result of ideas suggested from all over the network, including Melbourne, Calgary and Aberdeen.

“We have come a long way since the establishment of the function, continually looking for those great ideas, systems and technologies that will help to develop the company’s capabilities. Our key message of ‘Preparing Today for Tomorrow’s Challenges’ and the need to innovate has been taken extremely well by existing and potential vendors and subcontractors. We have already had follow-ups from about 20 companies who are bringing their ideas and technologies to us, ranging from business intelligence systems all the way to the likes of pipeline blockage and leak detection systems.“

Spreading the word

Brian hasn’t wasted anytime getting the innovation message out, visiting various PSN regions to seek out hidden gems and bring ideas to the table. “I’m just back from Melbourne and Perth – where I picked up 10 ideas which are in the process of being recorded”, says Brian.

A new global network of innovation ambassadors has also been established made up of 10 volunteers around the PSN network. Volunteers can help mentor someone with an idea, or simply become an ambassador for innovation by facilitating and encouraging idea generation.

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FORMAL REVIEWS

FAST TRACK

CONCEPT

INPUTS

EVALUATE DEVELOP DEPLOY OPERATE

Our focus on innovation at PSN gives us a unique opportunity to change things for the better

Brian Mercer, Innovation manager

Leading the way

Since Brian’s appointment as Innovation manager, he has added two key members to the team.

Alan Thompson, Global knowledge manager

Alan has over 30 years’ offshore engineering and project management experience, with almost 10 years in knowledge management with PSN.

Alan’s extensive experience in knowledge sharing will be used to develop and facilitate greater interaction between PSN’s business units, functions and global regions – maximising the sharing of innovation.

Ryan Mcpherson, Business improvement lead

Ryan joined the Innovation team in August this year. He previously worked at ITF for three years as a senior technology analyst, where he was a leading figure in initiating and facilitating joint industry projects between oil and gas industry companies and developers.

“Our focus on innovation hasn’t gone unnoticed”, explains Brian. “Through word of mouth, our membership with ITF (Industry Technology Facilitator) and some of the publicity on the role, we’ve already been approached by external companies to bring forward projects that are in the early development stages. We are getting well known around the industry and being approached by a range of potential suppliers and technology companies keen to show what they have. So far, we have facilitated a number of meetings and lunch n’ learns on a range of subjects including Alphastrut (an aluminium version of unistrut), Armawrap, corrosion management systems, and piping and pipeline cleaning technologies. This for me is really exciting and it could in the future lead to joint ventures or partnerships.”

What happens to an idea?

Having an innovation team now means getting your ideas on the Excom’s (PSN Executive Committee) radar has never been easier, as Brian explains. “Simply, pick up the phone or email one of the innovation team and we’ll take it from there. I’m no Duncan Bannatyne and it certainly isn’t a Dragon’s Den approach!

“Once you approach us, we’ll get some initial information from you, then work together to develop a business case, and provide specialist resources to make the project a commercial reality.” The team do this by following two approaches:

Systematic: where an idea goes from concept > evaluation > development > deployment > operation

Fast track approach: a new concept with significant business improvement potential is taken straight from the drawing board

The future

“Right now we’re looking at the key challenges for next year and beyond so we can target our innovation approach. Next year, I plan to provide the same support by visiting St John’s in Canada, places like Atyrau, Baku and Chad / Cameroon to drive home our innovation message.

“We really are preparing today for tomorrow’s challenges. We’re not trying to do something now with yesterday’s solutions. We’re thinking ahead and to me that is a critical message on what we do.

“We still very much want to hear ideas and innovations from all our stakeholders - customers, vendors and employees alike. Developing ideas will help us improve our capabilities and competitiveness. Let’s keep them coming and we can discuss with you how to take them from idea to fruition, so we can all benefit.”

For more information on innovation at PSN, contact:

Brian MercerInnovation manager T: +44 (0)1224 77826E: [email protected]

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What does turnaround

success look like?

PSN is the industry leader in managing turnarounds. Last year we saved our customers around the world a total of 45 445 manhours in planned downtime.

We are able to achieve performance like this because of 2339 skilled PSN people, consistently working to the highest of standards and supported by our global network. Many of these people have also worked with us in developing the tools we use to ensure our structured and effective approach to preparing and executing turnarounds.

Using ONtrackTM, our turnaround and shutdown management system, we begin the turnaround process long before any actual turnaround by gaining a thorough understanding of our customers’ drivers and expectations. From there, we use ONtrackTM for our meticulous planning of turnaround management, turnaround preparation, turnaround execution, and closeout and feedback.

The results: in June we completed a successful turnaround at the Onshore Compression and Terminals Integration project, in the north of England, on schedule and with zero lost time injuries. A highlight in this case was our team’s ability to reduce the scope on a range of work relating to pipework tie-ins and to re-design some pipework so that it could be installed and tested before the turnaround. In August, our team was praised for a complex turnaround that was completed with good HSE performance and zero loss of containment on start-up. In one of our last turnarounds for 2010, we completed 4 hours ahead of schedule, with reduced manpower and no safety incidents, while the platform was running on emergency power.

Our customers measure our turnaround performance on all the criteria listed at the top of this article and so do we. That’s why we can say we’re the best.

David WilliamsonProjects director T: +44 1224 777163E: [email protected]

Scope change during shutdown?

No problem

We’d been preparing for this platform shutdown since January and began, according to plan on 29th August. As always, the preparation included going through every item in the scope to see what could be rationalised and what could be safely and efficiently deferred until the next planned shutdown, which in this case was intended to be in 2011. We began with workpacks, materials and manpower all lined up to suit the scope.

On 30th August our customer asked us what the impact would be if we included some of the deferred items in our current scope, so that they could eliminate the need for a planned shutdown in 2011.

The additional scope included four vessel inspections and one piping repair order.

Since winning this contract in 2009 we’ve already received commendations in the PSN 2010 Core Value Awards categories of Innovation and Relationships. We had a superbly executed project start-up and are pioneering some of the new tools and systems that are being developed in PSN. So, of course our team responded positively to this latest challenge.

In conjunction with the duty holder’s shutdown team, we ordered additional materials, compiled additional workpacks and revised the plan. We also made adjustments to our manpower provisions so that we’d have the right people available to complete the extended scope.

The shutdown was completed within the revised schedule and without any safety incidents involving PSN personnel.

It’s exciting to be part of such a committed, can-do team. We have four more years to go on this contract and I think we are demonstrating our ability to deliver in support of our customer’s business needs.

Andy CrawfordAssignment manager T: +44 1224 792051E: [email protected]

Shutdowns are one of the most complex offshore activities so our first shutdown for a new customer is a big event. This autumn a new North Sea customer added some big items to our scope on day two of a planned

shutdown. Assignment manager, Andy Crawford picks up the story.

Here’s a question for you: How do you think our customers measured the success of the 17 turnarounds we carried out last year. Is it zero

lost time injuries? The successful completion of planned turnaround activities in line with the planned schedule? Providing competent and

qualified personnel? Incident-free start-up of facilities? Or timely closeout and handover of

documentation? David Williamson, our projects director, has the answers.

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as the first of its kind in Scotland and has been an important feature in the many awards for people development that we have won in recent years.

The technical programme covers training for all discipline personnel including: process engineering and design, electrical engineering, instrument engineering, electrical and instrument design engineering, piping engineering and civil / structural engineering. Delivered almost entirely outside of working hours, this training provides an opportunity for the local team to develop their competency and knowledge in their chosen discipline, while still maximising productivity and delivery for our on island clients.

The programme encompasses a wide variety of training methods from standard classroom teaching provided by PSN material experts, to online distance learning, hands on day-to-day mentoring to on the job surveying at onshore and offshore facilities. All

of this helps develop the technical knowledge and skills fundamental to engineers and designers in the brownfield industry.

It will be rewarding to follow the progress of our developing Russian national engineers and designers as they progress through the programme and develop their careers with PSN. They are a credit to our network and will benefit developments on Sakhalin Island for years to come.

Contact: Finlay MacLennanSakhalin Business Manager T: +7 (4242) 453670E: [email protected]

Faced with unique challenges in a remote location, our Sakhalin business unit has relied on innovative thinking to address areas critical to the delivery of engineering services across our SEIC and ENL contracts. Below are details of how we’ve used

new techniques in the handling and management of information and data and how we’re bringing the best in training to our local personnel.

Information management

Our biggest information management challenge on our SEIC contract has been to manage data sets for each facility in addition to performing standard document management. Both the type and quantity of data management required was new to PSN. To meet our customer’s needs we turned to new, streamlined technologies.

We developed standardised design tools and centralised databases so that the integrity of the data would be consistent across all our design offices working on the contract, which are located on three continents. We also improved our ability to share data between our offices and with our customer’s systems by using low bandwidth methodologies.

By standardising and streamlining, we’ve been able to save our customer time in populating their maintenance systems. The efficiency of our systems also mean that information transfer is very quick and easy, which ensures our customer’s maintenance systems reflect the as-built status of the plant.

We have supplemented this work by introducing web-based reporting tools, which enable documents such as equipment and valve registers to be viewed from any design office.

Overall, we’ve taken the challenge out of data management. Our systems take a huge quantity of different types of data from offices around the world and put it at our customer’s fingertips.

Technical training

Hiring local people on technically demanding projects in remote areas is a challenge at which PSN excels. Our Sakhalin contracts, 4000 miles from Moscow, have provided the perfect opportunity for us to see if we could create a four-year bespoke technical training programme for people in at least six disciplines.

To overcome the lack of suitable technical training courses and providers, we have built the foundation of our training programme on the ground-breaking PSN Design Academy. The Academy has been recognised

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Sakhalin Energy Investment Company (SEIC) contract

Scope: Technical support services contract, including engineering and project management for all SEIC facilities including three offshore platforms an onshore processing facility and pipelines, including two booster stations, LNG terminal and oil export terminal.

Duration: Since September 2006

Manhours: 989 960 completed to date

Safety performance: 4 years without any recordable safety incidents

Localisation: 60% Russian employees, 40% other nationalities

Awards: 2008 PSN Core Value Award for Localisation. 2010 PSN Core Value Award for Financial Responsibility, shared with STSN contract

Exxon NefteGas Limited (ENL) contract

Scope: Engineering, procurement, construction and commissioning services for all ENL facilities on Sakhalin Island and the nearby Russian Federation mainland, including the Orlan offshore platform, Chayvo onshore processing facility, wellsite, oil and gas export pipelines, and Dekastri offloading marine terminal.

Duration: 2007 - 2012

Manhours to date: 530,300 to date

Safety Performance: 3 years without any recordable safety incidents

Localisation: 76% Russian employees, 23% other nationalities

Awards: 2010 PSN Core Value Award for Financial Responsibility, shared with PSNS contract

Project facts Location: Sakhalin Island, Russia

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Sustainability

Sustainability is a key word in everything we do at PSN. Aristos™ is no exception. How do we sustain Aristos™? We give our projects and

regions the capability to deliver it themselves and the power to take ownership and innovate. Ownership of Aristos™ is in the hands of every member of the Aristos™ Club. Join the Club and you will become a shareholder in the safe life chances of 8,500 people, now that’s what we call a safe investment.

With Aristos™ we are taking safety and placing it firmly in the hands of those who really need it – not just HSE professionals, but people like you, like me, like all of us, after all we are the ones who get hurt when it goes wrong not the HSE department.

Adaptability

Adapting to local needs is always challenging but most successful when people who really understand what works locally are engaged in shaping

what we do. Aristos™ is being delivered around the globe by locals in ways that really work, tuning in to the issues relevant for each region. The examples we use to get the safe behaviour message through are reworked locally to meet familiar environments – it’s no use talking about lighthouses in Chad or Startrek in Russia!

Flexibility

It’s all about keeping the learning the same whilst fitting in with all the systems in use by our huge number of different clients wherever they

are - all the various rules, regulations, processes and procedures in many different countries. Aristos™ is not about rules or procedures but about the way we act and the choices we make. Aristos™ complements our client’s behavioural programmes, it doesn’t replace them – that’s why our clients are so keen for us to roll out Aristos™ on their sites; they know it means our people will make the right choices.

Effective

There’s only one way to find out if people have changed how they do things – ask them. Aristos™ has never been about what the management team

think works. It’s driven by our people and 2,000 have told us how it has changed their approach to make them safer at work, at home, at leisure and when they travel – that’s what we call effective.

Behaviour

Behaving safely at work is a great starting point. What makes Aristos™ different is that it can be transferred to all parts of daily life. It doesn’t

just start and stop with work, we are all presented with choices and decisions continuously and Aristos™ encourages us to stop, take a moment and make the right choice.

Evolution

As the evolution of Aristos™ continues one of the main questions asked is ‘What next?’ How do we keep Aristos™ fresh and at the forefront of our

minds? The answer of course lies with us all. A habit only becomes a habit when it is practised repetitively until it becomes second nature. Each one of us within our working environments have the solutions to embed Aristos™ and share best practice and continue the evolution and growth. PSN employees can visit the Aristos™ Sharepoint site for more information on Aristos™ - including ideas and suggestions from the various locations where Aristos™ is part of everyday life.

Two way process

We welcome feedback and ideas on our Aristos™ programme, so if you have an idea get in touch. We are also looking for anyone interested in becoming

an ambassador for Aristos™ in PSN.

For more information on Aristos™, contact:

Kirsten SavilleCorporate HSE T: +44 1224 777353E: [email protected]

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Environmental initiative in Sakhalin

Yulia: “With our biggest turnout ever, PSN people from across our Sakhalin contracts, plus their families and friends, descended on Tunaicha lake near the Okhotsk sea. This is a favourite spot for picnicking and camping and we were delighted when people visiting the lake on the day of our clean up decided to join in and help.

“We provided plastic bags and disposable gloves and arranged for a local authority truck to remove the litter we collected. At the end of the day we

filled nearly 400 bags, which were then disposed of appropriately.

“Okhotsk’s leading official thanked us for our efforts, through a speech made on local television. We also made the local news bulletin during prime time.”

Each year Yulia Kasatkina, our HSE lead on our ENL contract on Sakhalin Island, organises a day where our workers turn their attentions to cleaning up the local environment. This year’s task was to clear a local

beach of the litter that had accumulated over the summer.

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Aristos™ – It’s a safe bet

S B

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In 2009, we launched our unique safety training course AristosTM, a one day experience that aimed to look at our behavioural triggers, to bridge the gap in our risk perceptions and make a step change in our safety performance. Here Kirsten Saville, the newest member to the AristosTM team, gives us an update.

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Action Medical ResearchAberdeenshire Colts Rugby Football Club (ACRFC)Aberdeen Maritime Museum – Energy ExplorationLouisiana Tech University Archie Foundation Banchory Academy Barnardos Cancer Research UK Canadian Red CrossChildren’s Hospice Association Childline Children’s Medical ResearchCLAN (Cancer Link Aberdeen and North)Cults Academy Debra Life Fergus House - residential care homeGrampian Society for the BlindGlencraft Go4SET projectHaiti Foundation Halton Media Training Instant NeighbourMaggie’s Cancer Caring CentreMahir Mamedov clinicMarie Curie Cancer Care

Newton Dee CommunityPang Na Village SchoolSailors Society Sakhalin Appeal for Alxey IgnatievSt. Andrews Hospice Spinal Injuries ScotlandThe Prostate Cancer CharityTransition ExtremeWildhearts

Core Value Awards CharitiesHealth and Safety: TALIM Medical CentresPeople: Doba Primary SchoolInnovation: TBALocalisation: Jagatpur Asram Anathalaya Orphanage, Bishawa Maitree Buddha Bihar Temple, The Missionaries of CharityRelationships: MacMillanFinancial Responsibility: TBAIntegrity: TBA

Thanks to the generosity of our employees and contacts, one year into our campaign to raise £500k, and ‘Help find Glencraft a New Home’ we have raised a staggering £142,000. To mark this milestone we were delighted to receive ‘the royal seal of approval’ in the form of a three year Royal Warrant to supply beds to Her Majesty the Queen.

Lisa Duncan, general manager of Glencraft said: “To have been re-awarded the Royal Warrant is an honour and signal of the strength of our business and the quality of our products. There is no doubt the last 12 months have been incredibly tough and we are still at the start of a long journey but this good news comes as a real boost to the business.”

Duncan Skinner, chief financial officer at PSN and a director of Glencraft said: “We are delighted to have reached this point whereby Glencraft will, once again, become

a supplier to Her Majesty the Queen. Nevertheless, Glencraft still has a long way to go to become fully sustainable and we need to encourage customers buying beds to come to Glencraft where they are promised quality good enough for the Royal Family.

“Our fundraising campaign is ongoing and we would urge local businesses to consider dedicating their support and fundraising efforts in 2011 to help ensure Glencraft is a long term sustainable enterprise.

Glencraft is an Aberdeen-based furniture factory that employees blind, partially sighted and disabled employees. In 2009 the company went into liquidation and 30 employees faced an uncertain future. PSN stepped in and agreed to use our business knowledge, industry contacts and fundraising expertise to help breathe new life into the Aberdeen based charity and change the livelihoods of the former Glencraft employees. For more information on Glencraft visit www.glencraft.co.uk

Living Values in 2010

Helping local communities where we live and work is at the heart of our localisation core value. Within PSN, our Living values Committee allocates funds to those charities nominated by employees. Listed below are just some of the charities and organisations that have benefited from our support in 2010.

For more information on community relations activities, contact:

Kenna BlackhallCommunications officer T: +44 (0)1224 777014 E: [email protected]

Glencraft given royal seal of approval

Instant Neighbour giving tree

In support of the Instant Neighbour Giving Tree employees from the Aberdeen office purchased over 150 gifts to make sure local underprivileged children received a gift this Christmas. The team also purchased food parcels for pensioners on low incomes.

Wildhearts Santa run On Sunday, 12th December, a team of 40 enthusiastic PSN runners dressed as Santa will complete the 6km fun Santa run to raise money for WildHeart’s, a dynamic Scottish charity. Starting at Pittodrie Stadium, this 6km fun run aims to get people together to raise money for WildHearts, a charity transforming lives by giving people a hand up, not a hand out. WildHearts use microfinance to give people in the developing world the chance to work their own way out of poverty.

PSN employees help change the face of men’s health

Throughout November, PSN employees joined millions of people grow a ‘Mo’ (moustache) to raise funds and awareness for Prostate Cancer, changing their appearance and the face of men’s health around the world.

PSN regions Australia, St. John’s and the UK all established corporate teams, to raise over $10 000 USD for this vital cause. Each participant started November 1st clean shaven and grew a moustache for the entire month. Funds raised from Movember are donated to organisations to support a broad range of innovative, world class programmes in the fields of research, education, support, and awareness for Prostate Cancer.

19

Core ValuesOur core values are the guiding principles under which we operate. Faced with difficult decisions, we choose options that best meet our core values.

Health & SafetyThe health and safety of our people is our greatest responsibility. This makes it our top priority with no room for compromise. Safety is at the heart of everything we do: the way we plan, the way we prepare, and the way we work. This goes beyond simply following rules and regulations. Our passion for safety extends to everyone who may be affected by our activities. We are proud of our reputation for health and safety yet we are never complacent and look for ways to improve. Learning from others is as important as sharing our own lessons with our peers.

We expect every one of our people to be a leader in health and safety. It is everyone’s responsibility to assess, look for, intervene and stop any unsafe or potentially unsafe activity. Anyone who steps in to prevent a potential accident will be fully supported by the Company. To watch an unsafe act and do nothing is unacceptable.

PeopleOur people are our business - we treat each other with honesty, compassion and respect. Our people are our main business asset and their skills make us better than our competitors. We treat people fairly and reward them competitively - this goes a long way to attracting the best people and retaining the excellent people we already have.

We value an open culture where people are prepared to give and receive constructive feedback. We encourage people to contribute ideas that improve the business - we want everyone to be part of the team. We want to be thought of as professional, the best at what we do and focussed on delivery.

Everyone in our organisation is part of a worldwide network of skills, talent and experience, and is encouraged to use that network.

LocalisationWe nurture local businesses and skills to encourage sustainable community development. Through our network of expertise and experience, we bring value to the communities where we work. We draw on lessons learned and best practices from all over the world.

We recruit and train local people who enrich our global network by bringing their experience, culture and diversity into our business.

We are committed to achieving high local content wherever we operate. We justify this investment with the ongoing successes that can be seen in our people, projects, and the communities where we work.

We work with our customers, contractors, partners and suppliers to improve the efficiency of our operations by conserving resources, reducing waste and emissions, and preventing environmental pollution.

InnovationWe actively look for better ways of doing things, never satisfied with “good enough”. Our culture encourages people to collaborate, share ideas across our network and learn from each other. We recognise that not all innovations succeed but we test ideas quickly and learn early without taking large risks.

Our people are at the core of innovation. Applying ideas that improve tools, processes, and systems only work because our people have the skills and attitudes that embrace innovation and keep it moving forward.

RelationshipsStrong relationships with our customers are vital to our business. We nurture these relationships to understand what our customers want and how we can best deliver it. We expect everyone to contribute in building positive customer relationships.

We welcome candid feedback from our clients - good and bad – because it helps us to improve and stay focussed on what customers need. We recognise that a customer’s perception is their reality, so we must take the time and have empathy to understand an issue from their viewpoint.

While it is good to be “liked” - it is more important that we are respected for our focus on safety, professionalism, and our integrity.

Financial ResponsibilityWe expect to receive fair reward for our business performance. Consequently, we expect to be paid on time just as we expect to pay our suppliers and sub-contractors on time. We carefully manage financial risk and demand clear reporting of financial performance in our business.

Our business strategy is based on steady growth by selecting only those jobs we can deliver safely and make a profit.

IntegrityWe act openly and with honesty - our code of ethics sets the minimum standard for our behaviour. People have different moral and ethical values - we respect this and set our own minimum standards which all our employees must follow. We will ensure that all of our operational activities comply with applicable local rules, regulations and other requirements.

We will investigate any ethical violations or complaints and take appropriate action.

Our long-term reputation depends on doing the right thing within these core values - even if it adversely affects our business prospects in the short-term.

extraSeeking out the value in

your assests

Weighing the optionsRunning the numbers to find the most effective solution with Value Systems.

Surveying the scenariosUsing cutting edge measuring equipment to accurately model environments.

Measuring UpGetting the most out of any asset requires precise and

complete understanding of all the factors. Our specialist groups can provide data and analysis from a complete

asset lifecycle overview to a three dimensional environment accurate to a fraction of a millimeter.

TECHNICAL SUPPLEMENTIssue 5 2010

Network

Point cloud modelling is only one of our measurement capabilities in this example used to model a large Clyde crane on a subsea support vessel. The model created was carefully structured to enable it to be exploited in Finite Element Analysis (FEA) for subsequent stress simulations. Our other solutions allow us to measure to high accuracies down to 25 microns or long distance single measurement to 600m.

Making space for ground-breaking solutions If you like the sound of first-time fits, reduced costs and risk mitigation then read on to find out why Spatial Solutions’ industry leading innovations could offer you that and more. Guy Rennie, manager of Spatial Solutions at PSN gives us the lowdown.“Spatial Solutions is PSN’s internal capability in the field of 3D/4D data acquisition, analysis and exploitation. We provide customers with unrivalled insight of their projects spatial and related analytical characteristics”, says Guy. “The information we can capture and exploit has many applications throughout a project life-cycle and supports interpretation, analysis, communication, design, planning, fabrication, engineering, construction, and decommissioning. Accurate dimensional information is increasingly critical and can quite simply make or break a project.”

Established in late 2009 when Guy Rennie brought his innovative proposition to the table, Spatial Solutions is the most recent service to be added to the PSN mix. Whilst Spatial Solutions services will continue to grow and diversify, the teams main focus is to capture and exploit survey data for customers assets, typically laser scanning specific areas of an asset where the customer has repair or modification work to carry out.

For PSN or customer design and structural disciplines to do their job as effectively and accurately as possible they require up-to-date spatial information of the reality on the asset – not design models or drawings which can often vary from as-built drawings or not account for modifications that impact their specific scope, as Guy explains.

“The other potential problem lies in the fact that industry staple tools such as PDMS can only work to constraints of the orthogonal projection which means you cannot create true as-built models within PDMS because the reality of as-built data is it does not precisely align to the ideal world of design models.

“The objective for Spatial Solutions is negating or controlling these risks to ensure there are no ‘failures to fit’, clashes or other spatially related errors impacting any aspect of our clients work. We’re doing this by challenging the traditional way of doing things and we’ve already made impact particularly in regard to reducing offshore man-hours with our new methodology.

Guy Rennie, PSN Spatial Solutions Manager

An international expert in his field, Guy has 25 years experience at the cutting edge of spatial and related analytical engineering in a diverse range of industries. His ability to identify improvements within the oil and gas industry has its foundations in military reconnaissance intelligence where he learnt the science of photogrammetry and remote sensing before going on to 20 years of spatial engineering around the world on projects in Formula One, defence, aerospace, automotive, geospatial and marine.

Guy has a passion and clear focus to drive this area of expertise to the heart of the PSN business and position Spatial Solutions as a leader in the industry.

For more information on Spatial Solutions at PSN, contact:

Guy RenniePSN - Spatial Solutions Manager T: 01224 777157 E: [email protected]

360 degree dome imagery captured from the scanner is used to create TruView as well as provide the colour values used for rendering the point cloud. TruView is a powerful plug-in to Internet Explorer that allows our customers to view and navigate colour rich point clouds and extract basic measurements or annotate and mark-up for online and remote collaboration sessions.

“Our competitors use two surveyors offshore even for simple small jobs, we’ve done hundreds of repair orders in this first year for PSN’s BP project team with only one man offshore per trip, yet we increased productivity by over 100% in some cases. That’s a 50% reduction in offshore man-hours with increased productivity, one of the reasons BP gave us positive feedback on only our second offshore trip when over 25 repair orders were captured against a targeted 10.”

The colour of innovation

Since the first laser surveys were carried out designers and engineers have been delivered point clouds in black and white. This has been the accepted standard globally for many years in the industry, until this summer when Spatial Solutions raised the standard significantly, as Guy explains.

“This was a no-brainer for me, a designer is going to have far better interpretation of a complex offshore environment if they’re looking at colour image rather than black and white so that’s what I introduced. We now reference colour imagery from the site and in post process we render the corresponding colour values from the image to the laser scanning model which results in what appears to be a colour photograph but is in fact a multi-million point 3D laser point cloud, making it far easier to reference and identify distinct elements. One of my team has experience exploiting laser point clouds for Hollywood movies so we have taken the next step to produce High Dynamic Range (HDR) imagery that

has a truly stunning level of quality and clarity.”

Satisfied customers: PSN’s BP Focus team

This year the team carried out offshore surveys on a number of BP assets in the North Sea, particularly on BP Magnus and Schiehallion for the TAR projects.

“The work started before we even had the team fully operational which put us under significant pressure but thanks to the calibre of my team we pulled it off. Spatial Solutions also facilitated the BP designers to work directly with laser point clouds within their familiar PDMS environment, negating a previously significant bottleneck. We have had great support and cooperation from the BP Focus team who placed a lot of faith in us getting the job done.

“This integration of Spatial Solutions within PSN has proven itself with the close working relationship established with the designers – our primary end users. As we introduce more innovations and work with the design teams throughout PSN, our objective is to create the most efficient and cost effective ‘survey-to-design’ interface in the industry.

“We put Spatial Solutions under pressure from their inception and they delivered”, says Alan Watt. “We have demonstrable results showing significant cost savings against our external survey providers, increased productivity and with their new methodology a significant reduction in offshore man-hours. The introduction of full colour point cloud has

also been a revelation.

“With a major workload, supporting BP’s TAR’s carried out over the first twelve months of the contract, we have seen a 98.85% first time fit rate and Spatial Solutions were a significant factor in supporting us to achieve that. I’ve been pleased to report their impact to BP and first to recommend their service to others in the business.”

The future

Spatial Solutions isn’t just another survey operation as Guy explains, current and future capabilities and objectives will define a new level of service.

“As the name suggests we’re about providing a solution to almost any aspect of spatial issue influencing a client. In oil and gas most things with the exception of geophysical survey and analysis.

“So whilst this first year has been about getting the primary services in place, for 2011 on we will be turning attention to major transformations of how offshore surveys and fabrication processes are executed as well as looking at subsea solutions where we have some very strong potential to significantly shake things up.”

The message to the readers out there is if you have any measurement and analysis issues ahead give us a shout - Spatial Solutions can probably help!

Supporting customers to define strategies that will best deliver value and cost efficiencies is what we do best at PSN.When a North Sea operator was looking for a life of field solution that would support its asset life extension to 10-15 years, our Value Systems specialists were commissioned to use our unique Value Systems approach to provide a framework within which the full possible extent of power generation options could be identified, evaluated and screened in a structured and auditable way.

A major consideration in undertaking the work was that the operator had already invested significant time and resource in addressing the problem without arriving at a clear and final definitive strategy. PSN was approached to provide support to take the project forward as part of a select study to review the options and to develop the recommended solution. During the initial evaluation of the study scope, it was decided that Value Systems should actually lead the study team and delivery of the report, which is the first time that the group has been tasked with such a role.

Value Systems methodology provides a framework within which the rationale for selecting the preferred option takes account of the customer’s overall strategic direction and corporate objectives. In close consultation with the customer, Value Systems performed a cost benefit analysis and option selection review to identify and recommend the most economically viable power solution.

Our approach was initially concerned with articulating and ranking the relative importance of project value drivers in order to inform selection between options at key stages in the study programme.

Using the PSN process of Valve Systems analysis, project value drivers were identified, discussed and evaluated. Factors influencing the decision making to be applied during the study were consolidated into overarching ‘project values’. These were used as the decision criteria to differentiate between the attributes in the screening of options.

A programme of data gathering was undertaken to extract and consolidate operating experience, opinions and related issues. Initial identification of options was informed by their alignment with the two principal value drivers: that of providing a life of field solution and delivering enhanced power system availability. This yielded an extensive range of some 30 possible options.

Options less aligned to the overall strategic objectives or otherwise clearly undesirable and/or unachievable were eliminated to permit strategic focus on options which will yield the greatest benefit with the limited resources.

In parallel with the technical evaluations that were carried out, an economics assessment was carried out, principally based on RAM (Reliability, Availability and Maintainability) analysis, to inform management decision making by evaluating the financial benefits arising from enhanced availability of plants resulting in increased revenues.

This methodology provides

• Early definition of the project value system – a definition of the project value drivers and their relative importance

• Early identification of options most closely aligned with project strategic objectives

• Concentration of resources towards most viable solutions

• A structure within which option selection can be rationally articulated and an audit trail defined

• Economics analysis to enable the customer to justify every stage of the investment with their corporate management

Benefits

• A clearly defined optimal life of field solution based on the customer’s strategic objectives

• A strategy for early replacement of obsolete and unreliable equipment

• An accelerated transition plan to enable early mitigation of risk of power generation failure

• Improved reliable water injection system that accounts for >70% of the platform load

Value added

• Identified cost savings of approximately £1Million per year CO2 tax

• Delivered project 2 weeks ahead of schedule

• Delivered 33% budget saving

• Flexibility to allow integration with other life of field projects

• Increased life of field revenues

Dr Keith Eagles Principal Consultant and Head of Value Systems Tel: +44 (0) 1224 777718 Mob: +44 (0) 7774 478165 E: [email protected]

Sharon Vannet Value Systems Risk Analyst Tel: +44 (0) 1224 778547 Mob: +44 (0) 7507254712 E: [email protected]

For further information on the range of Value Systems services we offer, contact:

Delivering exceptional quality solutions beyond expectations

FINALOPTIONSKICK OFF

DEFINE VALUE DRIVERS

DATA GATHERING

STUDY EVALUATIONS

ECONOMICS RAM MODELLING

COST/BENEFIT

DEVELOPOPTIONS

ValueManagement

Risk

Man

agem

entD

ecision

Analysis

This flow diagram shows the methodolgy we use in Value Systems to work towards developing a valid set of options for the customer.

exceeding expectations

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