Rethinking an existing process – and saving over a billion dollars

The global energy company Shell faced enormous costs installing deep-sea oil and gas production systems. The existing process relied on dedicated, expensive vessels used to transport and precisely place systems weighing up to 400 tons on the seabed. Operating such a vessel cost about $960,000 a day, and about $80 million per installation.

Following a fall of about 50% in oil prices in 2014–2015, the company’s profitability declined and it had to find a way to cut costs significantly, and fast.

Using the SIT methodology, we re-examined the basic assumptions of the installation process. Rather than focusing on improving the vessel or the installed system, we mapped all available resources and looked for a completely different way to do the job.

Using the Subtraction tool led to a breakthrough idea: give up the dedicated vessel, the most expensive component in the process, and replace it with a simpler setup. The solution, dubbed Floating Foundation, relied on transporting the system by barge and tugboat and lowering it to the seabed in a controlled way using buoys.