Project Portfolio – Eco Project

Nexen Inc. 2008-10

Objectives

Nexen Inc. has been recognized as a global leader in sustainability. In 2008 the company decided to review and further improve its environmental performance, starting with its Canadian operations. It was planned that this work would provide a template for similar projects in other divisions, so that Nexen could remain at the forefront of sustainability for oil and gas companies.

As the project was starting up emissions regulations were changing in each of the four Canadian production jurisdictions (3 provincial and 1 federal). It appeared the new regulations could have material effect on the cost of operations so Nexen management needed to understand the impacts of these changes.

The Eco Project Team was asked to inventory current emissions; develop a prioritized list of emissions reduction projects; draft a strategy for managing regulation changes; and transfer this knowledge into day-to-day operations decision processes.

Fall Line’s Role

Nexen assembled a multi-disciplinary team of district operations, head office operations, environmental and marketing technical professionals guided by a Steering Committee of Canadian Operations Executives. Fall Line Systems was asked to ‘lead from the back,’ acting as a team member and providing guidance to the team. Our objective was to coach the team in structuring the work and aligning the results with the Executive’s objectives.

Results

The team moved very quickly to make a complex, shifting problem understandable to a variety of audiences. The potential cost of greenhouse gas emissions, for one example, ranged from $10 to $125 per ton; starting somewhere from 3 to 25 years ahead; affecting from 1 to 120 operational sites.

The team built a risk based method for senior executive to use in assessing existing operations and new projects. All new investment assessments now include a forecast cost of carbon emissions. The team also built an assessment tool for operational areas to price in emissions reduction savings into area projects so that they could produce a prioritized project list.

The Eco Project tools are incorporated into day-to-day work and the team is disbanded. Everyone is working with much better data appropriate tools and a more solid understanding of this complex area.