After extensive review and under a robust array of safety requirements, Bureau of Safety and Environmental Enforcement (BSEE) Director Brian Salerno announces that Shell has received conditional approval of two Applications for Permits to Drill (APD) to conduct limited exploratory drilling activities in the Chukchi Sea offshore Alaska. Specifically, the APDs limit Shell to drilling only the top sections of wells and prohibit Shell from drilling into oil-bearing zones.
Shell currently is not permitted to drill into oil-bearing zones because, to do so, BSEE requires that a capping stack be on hand and deployable within 24 hours. A capping stack is a critical piece of emergency response equipment designed to shut in a well in the unlikely event of a loss of well control. Shell’s capping stack is staged on the vessel M/V Fennica, which is currently en route to Portland, Oregon, for repairs. If and when the M/V Fennica is capable of being deployed in the Chukchi Sea and Shell is able to satisfy the capping stack requirement, the company may submit an Application for Permit to Modify the APDs and request to have this restriction reconsidered.
“Without question, activities conducted offshore Alaska must be held to the highest safety, environmental protection, and emergency response standards,” said Salerno. “Without the required well control system in place, Shell will not be allowed to drill into oil-bearing zones. As Shell conducts exploratory activities, we will be monitoring their work around the clock to ensure the utmost safety and environmental stewardship.”
In addition to restricting Shell’s ability to work in oil-bearing zones, the APDs also define limitations related to marine mammal protection consistent with requirements established by the U.S. Fish and Wildlife Service (USFWS). Consistent with regulatory requirements, a USFWS Letter of Authorization (LOA) issued on June 30 requires Shell to maintain a minimum spacing of 15 miles between active drill rigs during exploration activities to avoid significant effects on walruses in the region. Under the limited permits granted today, Shell may proceed with drilling the top sections of two wells at the Burger Prospect, Burger J and V as described in the company’s Exploration Plan (EP), which are located less than 15 miles apart. As such, Shell is prohibited from conducting simultaneous drilling activity at these wells. Specifically, Shell must plug and abandon the top section of the first well before proceeding with any drilling activity at the second well site.
Under the LOA, Shell is also required to have trained wildlife observers on all drilling units and support vessels to minimize impacts to protected species. Shell must stay within explicitly outlined vessel operating speeds and report daily regarding all vessel transits.
The APDs were approved only after careful review of the adequacy of Shell’s ice management plans in the absence of the M/V Fennica as well as the consistency of the plans with protections in place for marine mammals. In addition to redundancy provided by other ice management support vessels, Shell will employ aerial reconnaissance over flights, satellite imagery and other measures to monitor ice floes to fulfill the operational goals of the ice management plan in terms of early detection and site safety. The use of these enhanced technologies will allow Shell to meet its operational requirements for ice management, while conforming to the Hanna Shoal Walrus Use Area restrictions identified by the USFWS.
In addition to defining the specific limitations described above, BSEE’s review of the APDs also included thorough analysis of information submitted by Shell – including well casing design, equipment design, testing procedures, safety protocol, third party certifications of key equipment and rig information – for technical adequacy, safety, and environmental compliance. Shell was required to address any issues and inadequacies identified by BSEE before the APDs were approved.
To ensure compliance with this and other conditions of the APDs, BSEE safety inspectors will be present on the drilling units Noble Discoverer and Transocean Polar Pioneer 24 hours a day, seven days a week to provide continuous oversight and monitoring of all approved activities. The inspectors are authorized to take immediate action to ensure compliance and safety, including cessation of all drilling activities, if necessary. BSEE experts have been engaged in thorough inspections of both drilling units and Shell’s response equipment.
The Burger Prospect is located in about 140 feet of water, 70 miles northwest of the village of Wainwright.
BSEE’s close oversight of drilling operations in the Chukchi Sea this year is consistent with its continuing efforts over the past five years to upgrade safety standards to improve the safety of offshore oil and gas development. In addition, building on the lessons learned from Shell’s 2012 drilling operations in the offshore Arctic and incorporating the recommendations of a Departmental review of those activities, BOEM on May 11, 2015, provided conditional approval of Shell’s Exploration Plan that incorporated the safety requirements set forth in Shell’s Exploration Plan and established numerous additional stringent safety requirements that must be met before Shell can drill into oil-bearing zones.
All phases of an offshore Arctic program – preparations, drilling, maritime and emergency response operations – must be integrated and subject to strong operator management and government oversight, as detailed in Shell’s Integrated Operations Plan;
A shortened drilling season to allow time for open-water emergency response and relief rig operations late in the drilling season before projected ice encroachment;
Capping stack must be pre-staged and available for use within 24 hours;
A tested subsea containment system must be deployable within eight days;
The capability to drill a same season relief well;
A robust suite of measures to avoid and minimize adverse impacts to marine mammals and their habitat, impacts to Native subsistence activities, and other environmental impacts;
and Drilling units and their supporting vessels must depart the Chukchi Sea at the conclusion of each exploration drilling season.
The Department has also published proposed regulations to ensure that future exploratory drilling activities on the U.S. Arctic Outer Continental Shelf are done safely and responsibly, subject to strong and proven operational standards and Shell’s Chukchi Sea operations are being held to many of standards in the proposed regulations.
In 2005, Bourbon becomes the 1st offshore operator to adopt an inverted bow vessel, the Bourbon Orca. A look at this innovative design, dubbed the X-BOW®.
In 2006, the Bourbon Orca joined the BOURBON fleet, the very first inverted-bow AHTS designed by the Norwegian ship designer ULSTEIN. The main feature of this vessel: a slender hull water line and a smoother volume distribution in the foreship, particularly suited to the navigational conditions in the North Sea. The payoff: better handling and reduced pitching in rough seas. "While a traditional bow vessel rises on the waves and then drops violently onto the surface of the water, an X-BOW® vessel, less subject to the vertical motions induced by the waves, continues on course more smoothly, while maintaining its speed. And because it uses less fuel to get through the waves, it also helps to save energy," says Tore Ulstein, Deputy CEO and Chief Market & Innovation Officer in Ulstein Group.
The Bourbon Orca in operation
So we can understand why this type of vessel also offers more comfortable working conditions for the crew. "Less shaking, it also means less vibration, less noise and less splashing,"says Arnkjell Brandal, who was the first officer to command the vessel, until May, 2015. This seafarer, used to traditional bows tells us of his first impressions on board. "It was like a shock, paradoxically. This vessel was nothing like what I had experienced before! But I soon felt the difference, especially in traction situations: fluidity, strength and stability!"
Propelled By Bourbon
The Bourbon X-BOW® story starts in 2004, when ULSTEIN was working with BOURBON and several industry players on a project to improve the safety of anchor handling operations. "Trond Myklebust, who at the time was Marketing Director of Bourbon Offshore Norway, challenged us: to rethink the design of parts of the vessel, including the bow," explains Tore Ulstein. For the Norwegian designer and shipbuilder, all the ingredients required to design tomorrow's offshore vessel were assembled: the encouragement of a customer who is a leader in its market, a constant search for innovation, and a strong partnership with leading players. "BOURBON asked us to dare... and together we did it!" Ulstein Deputy CEO and Chief Market & Innovation Officer.
The advantages of the X-BOW® design were revealed late in 2004 and the start of 2005, when tested in a towing tank. As Tore Ulstein explains: "We conducted these tests with scale models, but in real situations, with waves from different directions to analyze the vessel's behavior. The very positive results encouraged us in this direction." In April 2005, BOURBON would go on to acquire its first X-BOW® vessel!
One Innovation Includes
Others If the X-BOW® design remains the flagship innovation of the Bourbon Orca, this vessel is also equipped with a new anchor-handling system and diesel-electric propulsion. "With very good energy efficiency, it is also equipped with azimuth thrusters which allow it to rotate 360° for quick direction changes," says Arnkjell Branda, former captain of the Bourbon Orca.
3D at Depth, a global provider of advanced subsea LiDAR systems and solutions, continues to validate the market for LiDAR technology applications for the Upstream Oil and Gas industry. The company has just announced the completion of the 75th LiDAR spool piece metrology with a 100% success rate for all metrologies to date, using their SL1 & SL2 LiDAR technology. Since 2009, 3D at Depth has employed LiDAR sensor technology to directly address the challenges of subsea data collection and imaging (in terms of range, accuracy, field of view, depth and integration) for metrology survey programs. Today, the company has advanced their proprietary LiDAR technology from the lab through pilot programs and into commercialization. By aligning proprietary technology with emerging LiDAR sensor technology from other industries, 3D at Depth’s objective is to transform subsea data collection, mapping, and visualization programs for a wide range of applications and industries. The SL1 & SL2 technology and the integration of software and hardware provide a 3D LiDAR platform for offshore survey contractor programs that delivers increased performance and efficiency gains over standard (traditional) technology alternatives such as acoustic LBL or Inertial methods.
3D at Depth's in-house technology utilized in the 75 metrologies was developed to greatly reduce the overall cost of each survey, while delivering robust data sets that can be validated and comply with the IMCA recommendations for accuracy - or higher. In each case, 3D at Depth’s solutions made a significant difference by reducing vessel time and increasing data accuracy and quality. 3D at Depth’s average subsea laser metrology took 2.5 hours to complete, which required dual scans for 100% data validation. In comparison, other standard (traditional) technology alternatives such as LBL acoustic or LBL/Inertial mixed measurement methods can take up to 9-12 hours for completion using far higher amounts of equipment infrastructure, to obtain less measurement and visual information in return.
Furthermore, 3D at Depth’s solutions were deployed in water depths of 50-3,000 meters with metrology lengths varying from 6-90 meters, and showed significant improvement in terms of speed, repeatability and resolutions, with a great reduction requirement in project planning and execution. The metrology results included full 3D visualization of the location with seabed digital terrain models (DTM’s), which provide a base line for structure placement and sediment stabilization. Finally, through seamless integration into offshore survey and contractor programs, 3D at Depth and their partner companies have developed workflows that are repeatable and leverage industry-leading point cloud processing tools. The flexibility of the technology allows 3D at Depth clients to continuously optimize those workflows to find new applications for subsea LiDAR.
“Our goal has been to bring mature, validated technologies and best practices from the terrestrial laser scanning market and apply them to subsea applications,” stated Mark Hardy, Co-founder of 3D at Depth. “This strategy greatly reduces our clients’ risk while accelerating adoption of LiDAR technology across a variety of survey programs. In addition, most of our service partners are well versed in laser scanning and dimensional control, and the SL platform aligns easily into those specific survey workflows. Our subsea LiDAR platform continues to establish clear benefits in performance for metrology projects by time reduction as well as offering ancillary data products, which can be integrated into a variety of databases and GIS systems. Not only are we addressing the big data challenge for the digital oil field, but we are also developing 3D ocean intelligence that spans a wide range of applications including asset integrity and life of field. The implications are exciting.”
Metrology surveys play a critical role in delivering first oil or renewed production from wells. With the theme of time is money on some campaigns, subsea LiDAR has removed weeks of project installation time over conventional acoustic methods giving high value across the chain for offshore Oil and Gas exploration and production. In addition, there are large costs associated with conducting those surveys, especially considering vessel time and human resources. Metrologies are closely aligned with all aspects of subsea operations from exploration, production, maintenance and decommissioning. In this performance-intensive environment the value of successful metrology programs can positively affect operational efficiencies, mitigate risk and reduce environmental impacts.
3D at Depth technology is currently available through designated partners and lease programs serving oil and gas, defense, and research industries. In addition to the successful completion of wide area entire field mapping with mm resolution and the aforementioned 75 installed jumpers with measurements derived using subsea laser metrologies, the company recently announced expanded operations and a new office to serve the Asia Pacific market. (3D at Depth Expands Operations)
As LiDAR scanning technology continues to secure acceptance and build momentum in various subsea applications, 3D at Depth will continue to advance the industry through innovative solutions that address data collection, mapping and visualization challenges, and demonstrate performance. The successful implementation of the technology has a wide range of impact for offshore energy, mining, defense and research programs in terms of financial and operational efficiencies.
FoundOcean’s deep-water capabilities were demonstrated once again when Subsea 7 called on them to develop and execute grouting procedures for operations at 5,300 ft. (1,615m) in the Gulf of Mexico.
Prior to this FoundOcean had operated at 4,500 ft. (1,370m) when it successfully installed a crossover fabric formwork in the region. At that time FoundOcean’s project teams considered this to be nudging the limits of safe and practical surface-to-seabed grouting operations.
PLEM stabilization grouting
But when Subsea 7 in Houston contacted them with their proposal, FoundOcean found themselves rethinking their current deep-water grouting methods which yielded a much enhanced solution. At a depth which is equivalent to the height of 3½ Empire State Buildings, nothing could be left to chance that could compromise the project, the safety of the crew and the installed asset.
“FoundOcean’s performance on this non-routine work demonstrated their solid approach to project planning, engineering and execution”, according to Jimmy Griffin, Subsea 7’s Project Operations Manager. “They delivered a full package solution in a short amount of time and successfully completed the work offshore without incident, which enabled Subsea 7 to offer a timely and preferred solution to our client.”
“Due to the depths involved we had to ensure that we could deploy our equipment and execute the procedures safely and effectively” commented FoundOcean’s Engineering Manager, Pauric Whelan. “This project forced an entire rethink of our deep-water procedures and when we finally mobilized, our planning and contingencies provided us, and our client, with a high level of reassurance”. Whelan who is based in Houston continued, “We used our assets here in Houston to complete the works, which I am very proud to have been involved in; and due to its success has demonstrated our capabilities to our clients as they look for solutions with their more challenging deeper water activities.”
The project was successfully completed in June of this year.
InterMoor Inc., an Acteon company, has completed its role in the largest foundation installation project offshore Trinidad and Tobago to date. The final stage of the project involved hooking up Diamond Offshore Drilling Inc.’s Ocean Victory semisubmersible drilling rig to the preset mooring spread InterMoor had previously installed. This step marks the completion of InterMoor’s mooring and foundation installation campaign for BP Trinidad and Tobago’s (bpTT) Juniper gas project.
The hookup took less than four days and required 14 InterMoor personnel offshore, including rig coordinators and superintendents, riggers and engineers aboard the UOS Pathfinder anchor-handling vessel.
Tom Fulton, global president, InterMoor, said, “Our engineering, fabrication and operations teams all worked well together and each played important roles in the successful completion of this project. InterMoor is dedicating more and more resources to maintain an active presence and excellent service to our clients in this part of the world.”
Before the hookup, InterMoor successfully completed a contract with bpTT, which included the initial design of a mooring system, the fabrication of driven piles and the installation of a preset mooring spread. InterMoor designed and fabricated eight piles (1.2 m in diameter by 39 m long) at its facility in Morgan City, USA, and provided offshore project management services for the mooring preset campaign. This included installing the driven piles using H-links and 300 m of ground chain per leg from the Boa Deep C construction vessel. The Juniper project was carried out in a water depth of 100 m with strong water currents.
The mooring solution engineering began in 2011 and offshore installation was completed in early November 2014. The hookup was completed in May 2015.
InterMoor is the only mooring service company worldwide that offers full services for both temporary and permanent moorings.
Harlingen-based SeaZip Offshore Service has entered into a partnership agreement with Heerema Marine Contractors (HMC). HMC, the world’s market leader in transporting, installing and dismantling offshore oil and gas installations, has contracted service vessel SeaZip 4 for its annual project activities in the North Sea for the coming summer months. SeaZip Offshore Service is thus getting off to a successful start in the international oil and gas industry.
Delivered early this year, SeaZip 4 is the fourth Damen Fast Crew Supplier 2610 in the SeaZip Offshore Service fleet. She is one of the first ‘Twin Axe Bow’ service vessels to be deployed in the offshore oil and gas industry. All other vessels of this type provide services for the offshore wind industry.
Robust audits passed
HMC praise the performances of both the vessel and its well-trained crew. Mr Jan Reier Arends, Managing Director of SeaZip Offshore Service, said: ‘In the build-up to this project we passed all the audits that were required. I am proud to learn that a leading market participant such as HCM has indicated that we have also managed to perform the practical test in 24/7 services properly’.
Since late May, SeaZip 4, which was designed for the transport of passengers and small freight, has provided logistic services to support operations in the North Sea, which HMC carries out for various international clients. The leading part is played by SSCV Thialf, the largest crane vessel in the world, which is fitted with two 95-meter high cranes. SeaZip 4 performs logistic services for Thialf and various HMC vessels.
Highest conceivable quality and safety requirements
HMC are committing themselves to the most feasible operational quality and safety and, thus, they place high demands on their partners. ‘Our compliance with the international oil and gas industry standards brings about considerable opportunities for our organization. This first assignment fits well with our ambition to add value to the innovative offshore energy industry with the help of excellent vessels and management services’, said SeaZip Managing Director Mr. Arends.
Subsea 7 S.A. (Oslo Børs: SUBC, ADR: SUBCY) announces that it has signed an agreement to form an alliance with Houston-based KBR, Inc. (KBR) and its wholly owned subsidiary, Granherne Inc. (Granherne), to collaborate in the delivery of Concept and Front End Engineering and Design (FEED) services to the global offshore oil and gas industry.
The alliance will bring two market-leading companies together to ensure the most cost-effective solutions are presented to clients in the early concept evaluation phase of a field development project. KBR's and Granherne's expertise in field development planning, concept evaluation and FEED will be complemented by Subsea 7's subsea project management and engineering experience and the application of technology and know-how to enable improved cost-benefit evaluation for clients.
Within the co-operation agreement between the companies, Granherne will support Subsea 7 on concept and FEED studies and Subsea 7 will support Granherne with subsea engineering and technology. The alliance will operate on a global basis using the existing resources of the two companies.
The alliance further provides the opportunity for KBR and Subsea 7 to collaborate in the execution phase of offshore projects. The combined experience and capabilities has the potential to deliver the full scope of any project. The decision to collaborate will be on a project-by-project basis and will be based on a clear and differentiated value proposition to the client.
Jean Cahuzac, Subsea 7 Chief Executive Officer, said: "This alliance will drive improvements in the offshore market with two leading independent companies working together to deliver greater value for clients worldwide. I look forward to strengthening our relationship with KBR through this alliance which provides the opportunity for early engagement in the project lifecycle when value creation can be optimized and where we can introduce enabling subsea technologies and know-how at the critical concept evaluation stage. This is key to assisting the offshore oil and gas industry to adapt to the lower oil price environment."
Stuart Bradie, KBR President and CEO, said: "This alliance combines the complementary skill-sets and know-how of two leading offshore contractors working together to ensure a greater contribution at the early stage of projects. Together, both companies can ensure that offshore oil and gas development becomes more economic and we look forward to continuing our already strong working partnership with Subsea 7."
Maersk Drilling has been awarded a 5-year contract extension for the semi-submersible Heydar Aliyev rig with BP Exploration (Shah Deniz) Limited acting as Operator of the Shah Deniz field . The rig will continue working on the development of the Shah Deniz field in the Caspian Sea offshore Azerbaijan. The extension is in direct continuation of the current contract ending May 2016 and extends the contract until May 2021. The estimated value of the contract extension is up to USD 523m.
“We are very pleased with the extension for the Heydar Aliyev rig and look forward to continue our long standing cooperation with BP,” says Claus V. Hemmingsen, CEO in Maersk Drilling and member of the Executive Board in the Maersk Group, and continues: “With this contract we continue to build our contract backlog providing further revenue visibility. It is very encouraging that we continue to build backlog in this very challenging market.” The Heydar Aliyev rig (formerly known as Maersk Explorer) was delivered in 2003 and is designed for year-round operations at water depths from 40m to 1,000m (147ft to 3,280ft).
PII Pipeline Solutions (PII) recently celebrated 1000 successful pipeline inspection runs of its Next Generation MagneScan™ inspection tool for assessing metal loss features, deformation and geometry plus advanced integrity assessments in oil and gas pipelines. Using high resolution Magnetic Flux Leakage technology (MFL), PII’s signature inspection system has distilled and enhanced the capability of all multiple legacy MFL, caliper and inertial measurement unit (IMU) mapping systems into a single system, reducing the number of runs required to meet a specification.
“1000 runs is a major milestone for a product that PII has developed from vison to reality and is now proven and continues to gain market share,” said Martin Bluck, Magnetics Product Manager at PII. “Every year we are serving more customers with more runs and delivering more reports. Next Generation MagneScan™ is a robust and accurate inspection tool that delivers a level of verification accuracy that sets new standards within the industry and ensures safety and peace of mind for our customers.”
Launched in 2009, Next Generation MagneScan™ has delivered over six years of year over year growth in numbers of runs. This super-high resolution, multi mission tool has provided increasingly high levels of first run success and reliability to customers on six continents across the globe, with proven performance, offering a higher specification of data than previously available from a single run. Next Generation MagneScan™ tools have completed 50,000+km of inspections in pipelines from 6” to 36” with a longest run of 560km since launch, and achieved 95% first run success in 2013, 2014 and to date in 2015 at time of publication.
A major part of Next Generation MagneScan’s™ success has come from the inherent system capability to deliver excellent performance on dig verification, coupled with PII’s focus on evolving the service in response to customer issues and tailoring new offerings to meet the customer’s needs. In order to make each inspection commercially flexible and cost-effective for the customer while maintaining excellent metrics, the Next Generation MagneScan™ tool is run in a standard configuration, with data processed, analysed and reported as required to comply with the customers’ specific requirements. This allows customers to choose combinations of data from MFL, caliper or IMU at a range of resolutions from High Resolution, to Super High Resolution Plus. Because data is recorded from each module at maximum resolution, the client has the option of revisiting the data up to Super High Resolution Plus without the need for an additional run. In 2013 and 2014, 70% of runs included mapping and 49% of reports were delivered at Super High Res specification or higher.
From Next Generation MagneScan’s™ first run, PII worked with its customers to gather dig verification data to validate and improve published specifications, and to develop new improved specifications to address specific customer concerns. Feedback from blind test programs conducted by major customers around the world has been a key enabler to develop and validate these new applications, the results of which have been subsequently published in technical papers.
Next generation MagneScan™ was launched into the same market segment as PII’s existing MagneScan™ inspection tool offering new complementary services. Next Generation MagneScan has secured both new customers and additional runs with existing customers by offering 1) a higher resolution specification and 2) novel applications to deal with previously unaddressed threats including Pinholes and Spiral Weld Anomalies.
A leading provider of pipeline inspection and integrity management solutions for operators worldwide, PII Pipeline Solutions has provided integrity services to the global oil and gas industry for 35 years.
Total has started production from Dalia Phase 1A, a new development on its deep offshore operated Block 17, located 135 km off the coast of Angola. Dalia Phase 1A will develop additional reserves of 51 million barrels (Mb) and will contribute 30,000 barrels per day (b/d) to the block’s production.
Image courtesy: Nigeria Energy Intelligence
“The Dalia FPSO came on stream nearly nine years ago and with the addition of Phase 1A will still produce around 200,000 b/d. It is the latest milestone in the success story of Block 17, Total’s most prolific license with cumulative production reaching two billion barrels in May 2015,” explained Arnaud Breuillac, President Exploration & Production. “Dalia Phase 1A demonstrates Total’s commitment to maximizing value through the optimal use of existing facilities. These types of profitable satellite tie-back developments play an important role in maintaining production levels and generating additional free cash flow for the Group.”
The Dalia Phase 1A project involves the drilling of seven infill wells tied back to the Dalia Floating Production Storage and Offloading (FPSO) unit.
Total Exploration & Production in Angola
Total celebrated its 60th anniversary in Angola in 2013. In 2014, the Group’s equity production reached 200,000 barrels of oil equivalent per day (boe/d), coming essentially from Blocks 17, 0 and 14. In early 2015, Total’s operated production exceeded 700,000 boe/d, making it the country’s leading oil operator.
Total operates Block 17 with a 40% interest alongside Statoil (23.33%), Esso Exploration Angola Block 17 Ltd (20%) and BP Exploration Angola Ltd (16.67%). Sonangol is the concessionaire of the license. The Group operates four FPSO units on the major production zones of the block: Girassol, Dalia, Pazflor and CLOV.
Total also operates with a 30% interest the ultra deep offshore Kaombo development located on Block 32. A final investment decision was made in April 2014 to develop Kaombo’s estimated reserves of 650 Mb via two converted FPSOs with a total production capacity of 230,000 b/d.
Offshore Network have developed a whitepaper examining EnQuest and Wintershall’s production optimization strategies – http://bit.ly/optimisationwhitepaper. The free whitepaper has been created in the lead-up to the 2nd Offshore Production Optimization Conference which includes speakers from Nexen, Repsol, Wintershall, DEA, TAQA, OMV Petrom and more.
With oil prices taking a substantial hit as of late, industry is faced with even bigger challenges when looking to improve production rates and to maximize recovery. 2015 is expected to see the first annual increase in production on the UKCS in 15 years so it's clear that the efforts being made by industry to improve approaches are working but there's still much more to be done. EnQuest's President for the North Sea and Wintershall's Technical Director and Deputy Managing Director gave presentations on production efficiency challenges in the North Sea at the Offshore Production Optimization Conference in November 2014. This whitepaper reviews their approaches and includes:
A review of EnQuest’s production optimization model and how they developed a methodology to stabilize OPEX whilst simultaneously boosting brownfield production
A look at the late-life planning at Brage and the proposed activities Wintershall have in place to improve production from this asset
Future considerations and development plans for EnQuest and Wintershall within the North Sea and how collaborations with the oil and gas community should play a part in this
You can review the whitepaper at http://bit.ly/optimisationwhitepaper.
Bugsier Reederei can look back on a history that spans over a century. The company, with the largest tug fleet under German flag, will celebrate their 150th anniversary in 2016, and will also mark the delivery of the newly purchased Damen ASD 2411. The tug, to be delivered from Damen Shipyards Sharjah, will be named Bugsier 22 and serve as a harbour tug in German ports.
A basic balance
With a strong tug fleet, Bugsier has been catering to the offshore oil and gas industry for decades as well as the thriving offshore wind energy market. “We operate tugs, which are commonly known to work in both ports and offshore – consequently we enjoy a high degree of utilisation. However, in an effort to decrease our daily balancing act of what tug to assign to which job and strengthen our port operation, we decided to order a standard harbour tug,” states Bugsier Business Development Manager Sven Schroeder.
This brought them to Damen. “We had previously delivered four ASD 2411 units to Hamburg, so we could quickly fulfil their requirements. This, in combination with the proven performance and efficiency of the ASD 2411, solidified the purchase,” states Damen Sales Director Frank de Lange.
This will be the first purchase agreement between Bugsier and Damen. Mr. Schroeder explains the reasons behind the contract: “Value for money was one determining factor,” he says. “We were on the lookout for a swift fleet addition for harbour towage and, from our point of view, the Damen ASD 2411 is a logical addition to our fleet of highly sophisticated and manoeuvrable vessels and meets all our requirements.” The ASD 2411 incorporates a state-of-the-art hull and skeg design with recent developments in fender, fairlead and winch design, as well as excellent sea-keeping features and towing characteristics.
The truth is in the numbers
Complying with Bugsier requirements, the Bugsier 22 will be 98% standard with minor modifications and specific German flag requirements. Damen having already delivered 90 vessels of the ASD 2411 design was an additional benefit. “One simply cannot ignore the fact that Damen builds many tug boats – thereby gaining competitive advantage over other shipyards with respect to design and operability,” states Mr. Schroeder. “We are looking forward to serve our harbour clients with our first Damen product in the future.”
RigNet, Inc. (NASDAQ:RNET), a leading global provider of managed remote communications solutions, telecoms systems integration (TSI) services, and collaborative applications to the oil and gas industry, announced that its RigNet TSI business has been awarded a multi-million dollar contract to deliver communications systems and infrastructure for a greenfield multi-train Gulf Coast LNG liquefaction and export facility. The award of this contract by a leading Texas energy producer continues RigNet's long-term success in the delivery of integrated telecommunications systems for this important part of the United States' energy export infrastructure.
"Every EPC project presents its own unique opportunities and challenges," said Mark Slaughter, RigNet's CEO and President. "Our combination of engineering expertise and broad range of services enables RigNet to provide a single-source, turnkey solution that helps maximize uptime for complex facilities. The long-term relationship with the customer, and experience gained in serving other LNG liquefaction plants, helps RigNet deliver a uniquely high quality outcome."
RigNet TSI's scope of work includes the integration and delivery of critical facility communications infrastructure, including Structured Cabling, Local Area Network (LAN), Wireless LAN (WLAN), Telephony, Public Address/General Alarm (PAGA), Closed Circuit Television (CCTV), Access Control (ACS), Intrusion Detection (IDS), and Personnel Radio systems for this facility, the first of its kind in the Americas.
"This project demonstrates RigNet TSI's ability to deliver proven, reliable and cost-effective communications solutions to the LNG industry," said Gerry Gutierrez, RigNet TSI Group Vice President. "We are proud to be a valued supplier with this energy producer as they expand their capabilities to export American LNG to markets worldwide."
NYC-based PIRA Energy Group believes that pessimism about oil prices because of the Iran nuclear deal and economic concern about China and Europe are overdone. In the U.S., the stock excess modestly widens. In Japan, crude runs continue to rise while product stocks rise on lower demand. Specifically, PIRA’s analysis of the oil market fundamentals has revealed the following:
European Oil Market Forecast
Brent crude prices lost ground over the last few weeks with bearish news/sentiment leading to a selloff of non-commercial (financial) net length in oil. However, pessimism about oil prices because of the Iran nuclear deal and economic concern about China and Europe are overblown. Under the Iranian nuclear agreement, incremental Iranian oil will not likely hit the market until the second quarter 2016. The ECB and Chinese authorities have enough levers to pull to maintain economic growth momentum, and there has been enough stimulus injected into the financial system to provide uplift to global growth in second half 2015. Near-term crude oil fundamentals have been tightening with high refinery runs this summer and sequentially flat/declining U.S. crude production. With crude stock declines, prompt prices have strengthened as expected. Gasoline cracks are very strong and should remain healthy for the next few weeks at least but will continue to decline from their seasonal peak earlier this month. For middle distillates, with high refinery production in the Atlantic Basin and new distillate-oriented refineries ramping up in the Middle East, stocks will build. Diesel cracks will continue to erode over the next one to two months before seeing some seasonal recovery. Recent European refinery margin strength, the best in many years, will fall below last year’s levels by 4Q15.
U.S. Stock Excess Modestly Widens
This past week’s 2.8 million barrel inventory increase was 1.6 million barrels larger than the build last year for the same week, slightly widening the year-on-year inventory excess to almost 147 million barrels, or 13%. The product excess narrowed by 1.6 million barrels, but the crude excess widened by 3.2 million barrels despite this past week’s substantial crude inventory decline.
Japan Crude Runs Continue to Rise, Post-Turnarounds, While Product Stocks Rise on Lower Demand
Crude runs posted a second straight significant rise as maintenance continues to wind down and unplanned outages have restarted. Crude imports fell back and crude stocks posted a 3 MMBbls draw. Finished product stocks built by a slightly lesser amount, with gasoline, gasoil, and kero demands falling and their stock levels rising. The indicative refining margin remained good and little changed. Stronger gasoline cracks offset declines in the other major cracks.
Fracking Policy Monitor
EPA's study thus far did not find evidence that fracking “led to widespread, systemic impacts on drinking water resources in the United States.” A judge in Wyoming has temporarily put a halt to the BLM’s rules for fracking on federal lands. Texas and Oklahoma passed laws that would prohibit local bans on fracking. Also in Oklahoma, a state Supreme Court ruling makes it easier for it to sue for damages resulting from earthquakes.
U.S. LPG Prices Outperform
Mont Belvieu LPG prices stood strong for a second weak despite sharply lower broader energy market pricing. August propane futures at the market center were mostly unchanged on the weak despite sharply lower crude oil, thus propane’s ratio to WTI strengthened yet again, to near 36% of US benchmark oil. Augy butane at MTB fell a fraction of a percent to settle just under 58¢/gal. Prompt ethane prices gained 1% with stronger natural gas prices.
Ethanol Manufacturing Margins Declined for the Eight Straight Week
Most U.S. ethanol prices rose slightly the week ending July 10, supported by higher corn costs. Manufacturing margins in Chicago have decreased for eight straight weeks, however, as recent increases in raw material costs could not be fully passed through.
U.S. Production of Ethanol-Blended Gasoline Decreases
Ethanol-blended gasoline production declined sharply to a six-week low 8,837 MB/D the week ending July 10 as total gasoline output dropped and ethanol made up a smaller percentage of the total pool. Ethanol output fell slightly to 984 MB/D, down 3 MB/D from the previous week, but up 41 MB/D year-on-year.
Incremental Iranian Oil Now Expected in 2Q16
PIRA updates its view on the return of Iranian oil given the timeframe laid out in the nuclear accord finalized on July 14. We now believe incremental Iranian oil will hit the market in the second quarter of 2016, likely April or May. Once sanctions are lifted, we expect Iranian crude production to rise rapidly, from 3.0 MMB/D currently to full capacity of 3.5 MMB/D by the end of 2016. Our forecast for 2016 Iranian production is close to PIRA's June Reference Case, although first half production is slightly lower and second half production slightly higher.
Finalized Nuclear Deal Confirms Incremental Oil Not Likely Until 2016
The final nuclear deal reached by Iran and the P5+1 is in line with PIRA's expectations that incremental Iranian oil will not hit the market until sometime in 2016. The deal is to be adopted within 90 days, perhaps sooner, but implementation is not likely to occur in less than four to six months. Sanctions relief is dependent upon IAEA verification that Iran has implemented specific nuclear-related measures, which will take time to establish, verify, and report. There is also still potential for delays or slow movement during the process. For now, PIRA assumes Iranian oil exports will increase by 300 MB/D in the first half of 2016. Increases are expected to slow thereafter, and we expect Iran to reach full crude productive capacity of 3.5 MMB/D in 2017.
The information above is part of PIRA Energy Group's weekly Energy Market Recap - which alerts readers to PIRA’s current analysis of energy markets around the world as well as the key economic and political factors driving those markets.
After 10 years of diplomatic negotiation, the UN P5+1 countries (the US, the UK, France, China, Russia and Germany) at last reached an agreement to unwind economic sanctions on Iran in return for significant international control and surveillance over its nuclear activities. The long-awaited deal will revive foreign investment in Iran, as Western IOCs renew pre-sanction projects. Brent dropped $1.15 to $56.70/bbl on the back of the announcement, with markets fearing a worsening of the global supply glut.
Iran holds the world’s fourth-largest oil reserves and second-largest gas reserves, whilst being the second largest OPEC producer after Saudi Arabia. In 2014 total Iranian production, heavily driven by gas and condensate production from the giant South Pars field, amounted to 6.7 mboe/d. During the sanction period, however, Iran had limited access to technology from the West and complex LNG export terminal projects stalled. Vast capital inflows will now be required to develop under-invested Iranian fields, however, due to the large reserves base, DW believes appetite to invest in Iran will be strong amongst major operators.
Whilst no sanctions will be lifted before December, DW believes that Iranian liquids production will rise to a 2015 average of 3.5mb/d, based on pre-sanction production levels and available oil currently stored in storage tankers off Iran. Further production gains are expected as additional development phases of South Pars come onstream, while the removal of sanctions will clear supply bottle necks out of the Persian Gulf. IOC investment in the country’s huge potential will further boost production as sanctions are rolled back, though any new projects will see a lag of several years from lease acquisition to production phases.
Global oil prices have been weighed down in recent months by resilient US production, record Saudi output, continued weakness on the demand side, and the Grexit prospect. Whilst commodity prices are unlikely to be aided by an opening of Iranian taps, the true tidal wave of Persian crude could be later rather than sooner.
IFS, the global enterprise applications company, has signed an agreement with Alliant RigServ LLC to join the IFS Partner Network as a Referral and Services partner for the deployment of IFS Solutions in the offshore oil and gas industry in North America. The new alliance supports IFS’s strategy to build a long-term partner ecosystem that benefits both companies with greater market penetration through enhanced technology and knowledge resources for IFS solutions.
RigServ is an established supply chain and technology consulting company that offers best-in-class solutions to companies such as Maersk Drilling, KS Drilling, SapuraKencana Drilling, Marathon Oil, Ensco, Seadrill, Xtreme Drilling, Vantage Drilling and Ocean Rig. RigServ’s current active projects include supply chain consulting, technology and systems consulting, supply chain outsourcing, enterprise business intelligence reporting, process improvement, ERP systems management, catalog maintenance and cleansing, inventory reviews, full lifecycle software development, business transformations, project management, quality management and equipment monitoring.
As a member of IFS’s growing Partner Network, RigServ’s services will expand to include implementations of IFS’s robust enterprise resource planning (ERP), enterprise asset management (EAM) and enterprise service management (ESM) software solutions, which are recognized by the oil and gas industry for performance, functionality and flexibility.
“We are delighted to be on-board with IFS. Our team members are experts in the oil and gas business and know its inherent challenges from the rig floor to the board room,” said RigServ’s Director Christopher Collins. “IFS’s enterprise solutions are well-known and highly regarded throughout the oil and gas industry and we are excited about the enormous value this partnership will bring to our business.”
“We are pleased to expand the IFS Partner Network by forging relationships with the best technology and consulting partners in the business, such as RigServ,” said Dean Flitter, vice president of services for IFS North America. “This strategic alliance will help increase our resources, which is an important part of our global growth strategy to target larger, global accounts.”
Effective as of July 16, ConocoPhillips for its convenience provided a notice of termination for the three-year ENSCO DS-9 drillship contract. Under the terms of the contract, ConocoPhillips is obligated to pay Ensco termination fees monthly for two years equal to the operating day rate of approximately $550,000, which may be partially defrayed should Ensco re-contract the rig within the next two years and/or mitigate certain costs during this time period while the rig is idle and without a contract. ConocoPhillips is also contractually obligated to reimburse certain costs that Ensco incurs due to the termination of the contract for ConocoPhillips’ convenience. Given these contract terms, Ensco does not anticipate a material negative impact to its financial results for 2015 and 2016 as a result of this termination.
ENSCO DS-9 was recently delivered and had been scheduled to commence its initial drilling contract for ConocoPhillips in the fourth quarter of this year.
After 3 years with the company, Mick Slater has been appointed to the role of Operations Director. With an MBE to his name and over 40 years of industry experience including more than 30 years in the Royal Navy, Mick will hold overall responsibility for HSE, IT, HR and Compliance. Mick comments: “I feel privileged to accept the opportunity that the BOD have presented me with by this appointment. We have a great foundation and some very talented people here at Bibby HydroMap and I’m keen to build on this and play an active part in key operational and strategic decisions that will ultimately enable the continued, successful growth of the company.”
As part of the company’s focus on efficiency, the newly created role has followed a restructuring of the senior management team. Bibby HydroMap Managing Director Andrew McLeay comments: “After a challenging year for many of our offshore clients, we are optimising our operations and creating added value, whilst continuing to grow the business and diversify our services.”
“The last two years have brought significant change within the company, and we now employ over 115 personnel from a range of disciplines and backgrounds. The successful rebrand from Osiris Projects to Bibby HydroMap, alongside the launch of Bibby Athena and our survey ROV d’ROP, has opened up new opportunities and increased our global presence. The appointment of Mick to the Operations Director role will help to develop the business further and solidify our position as “The seabed survey company of choice.”
LQT Industries, LLC, a full-service provider of high quality accommodation facilities, design-build construction services, and support services to the oil and gas industry, has provided eleven (11) aluminum accommodation modules to support onshore and offshore operations for the Gulf of Mexico. The aluminum modules supply major oil and gas production companies with accommodations for 64 personnel along with support facilities.