Interior Department Announces Draft Strategy for Offshore Oil and Gas Leasing

Outer Continental Shelf mapRegionally-tailored plan continues balanced approach to leasing, development; Draft proposal would protect sensitive resources—makes available nearly 80% of estimated undiscovered technically recoverable oil and gas resources on US Outer Continental Shelf

Map: US outer contintal shelf

As part of President Obama's all-of-the-above energy strategy to continue to expand safe and responsible domestic energy production, Secretary of the Interior Sally Jewell and Bureau of Ocean Energy Management (BOEM) Director Abigail Ross Hopper announces the next step in the development of the nation's Outer Continental Shelf (OCS) Oil and Gas Leasing Program for 2017-2022.

The Draft Proposed Program (DPP) includes 14 potential lease sales in eight planning areas – 10 sales in the Gulf of Mexico, three off the coast of Alaska, and one in a portion of the Mid- and South Atlantic.

"The safe and responsible development of our nation's domestic energy resources is a key part of the President's efforts to support American jobs and reduce our dependence on foreign oil," said Secretary Jewell. "This is a balanced proposal that would make available nearly 80 percent of the undiscovered technically recoverable resources, while protecting areas that are simply too special to develop."

Release of the draft is an early step in a multi-year process to develop a final offshore leasing program for 2017-2022. Before the program is finalized, the public will continue to have multiple opportunities to provide input. Today's draft proposal was informed by more than 500,000 comments from a wide variety of stakeholders and states.

"The draft proposal prioritizes development in the Gulf of Mexico, which is rich in resources and has well-established infrastructure to support offshore oil and gas programs," added Jewell. "We continue to consider oil and gas exploration in the Arctic and propose for further consideration a new area in the Atlantic Ocean, and we are committed to gathering the necessary science and information to develop resources the right way and in the right places. We look forward to continuing to hear from the public as we work to finalize the proposal."

The OCS Lands Act requires the Secretary of the Interior to prepare a five-year program that includes a schedule of potential oil and gas lease sales and indicates the size, timing and location of proposed leasing activity as determined to best meet national energy needs, while addressing a range of economic, environmental and social considerations.

BOEM currently manages about 6,000 active OCS leases, covering more than 32 million acres – the vast majority in the Gulf of Mexico. In 2013, OCS oil and gas leases accounted for about 18 percent of domestic oil production and 5 percent of domestic natural gas production. This production generates billions of dollars in revenue for state and local governments and the U.S. taxpayer, while supporting hundreds of thousands of jobs.

A REGIONALLY TAILORED APPROACH
The draft proposal reflects a continuation of the regionally tailored leasing strategies employed in the current 2012-2017 Program that are specific to each planning area. The options in the draft proposal involve sales in offshore areas that have the highest oil and gas resource potential, highest industry interest, or are off the coasts of states that expressed a strong interest in potential energy exploration, while still considering potential environmental impacts, stakeholder concerns, and competing uses of ocean and coastal areas.

Gulf of Mexico:
The draft proposal includes ten sales in the Gulf of Mexico, one of the most productive basins in the world and where oil and gas infrastructure is well established. The draft proposal includes a new approach to lease sales in the Gulf of Mexico by proposing two annual lease sales in the Western, Central, and the portion of the Eastern Gulf of Mexico that is not subject to Congressional moratoria. This shifts from the traditional approach of one sale in the Western and a separate sale in the Central Gulf each year.

"This new approach will allow for BOEM to more effectively balance the sales while providing greater flexibility to industry to invest in the Gulf, particularly given the significant energy reforms recently adopted by the Mexican government," said BOEM Director Hopper.

Alaska:
In Alaska, the draft proposal continues to take a careful approach by utilizing the targeted leasing strategy set forth in the current program, which recognizes the substantial environmental, social and ecological concerns in the Arctic. The draft proposal proposes one sale each in the Chukchi Sea, Beaufort Sea, and Cook Inlet areas.

Also today, President Obama – using his authorities under the OCS Lands Act – designated portions of the Beaufort and Chukchi Seas as off limits from consideration for future oil and gas leasing in order to protect areas of critical importance to subsistence use by Alaska Natives, as well as for their unique and sensitive environmental resources. In December, President Obama used this same authority to place the waters of Bristol Bay off limits to oil and gas development, protecting an area known for its world-class fisheries and stunning beauty.

"We know the Arctic is an incredibly unique environment, so we're continuing to take a balanced and careful approach to development," said Jewell. "At the same time, the President is taking thoughtful action to protect areas that are critical to the needs of Alaska Natives and wildlife."

Four of the five areas withdrawn today by President Obama were previously excluded from leasing in the current 2012-2017 oil and gas program; three of the five were also excluded by the prior Administration. Those areas include the Barrow and Kaktovik whaling areas in the Beaufort Sea, and a 25-mile coastal buffer and subsistence areas in the Chukchi Sea. The withdrawal also includes the biologically rich Hanna Shoal area in the Chukchi Sea, which has not previously been excluded from leasing. Extensive scientific research has found this area to be of critical importance to many marine species, including Pacific walruses and bearded seals.

The proposed Alaska sales would be scheduled late in the program to provide additional opportunity to gather and evaluate information regarding environmental issues, subsistence use needs, infrastructure capabilities, and results from any exploration activity associated with existing leases from previous sales.

Atlantic:
The draft proposal invites public comment on one potential lease sale late in the program for a portion of the Mid- and South Atlantic OCS, which includes areas offshore Virginia, North and South Carolina and Georgia.

"At this early stage in considering a lease sale in the Atlantic, we are looking to build up our understanding of resource potential, as well as risks to the environment and other uses," said Jewell.

The potential lease sale would require a 50-mile coastal buffer to minimize multiple use conflicts, such as those from Department of Defense and NASA activities, renewable energy activities, commercial and recreational fishing, critical habitat needs for wildlife and other environmental concerns.

The July 2014 Programmatic Environmental Impact Statement on Atlantic Geological and Geophysical activities furthered the Atlantic area strategy by establishing a path forward to update information on the region's offshore oil and gas resources, which is more than 30 years old. Today's proposal is in line with comments received from adjacent states and reflects the Administration's thoughtful approach to potential lease sales in new areas, pending further public review and comment.

Pacific:
Areas off the Pacific coast are not included in this draft proposal, consistent with the long-standing position of the Pacific coast states opposed to oil and gas development off their coast.

NEXT STEPS
"Public input is a critical part of our process and we encourage citizens and groups to provide comments to help guide our decisions," said Hopper. "We anticipate robust dialogue with stakeholders in the coming months that will help us prepare a program that emphasizes protection of the marine environment and coastal economies and uses the best available science and technology to inform our decision-making.

In conjunction with the announcement of the DPP, the Department is also publishing a Notice of Intent to Develop a Draft Environmental Impact Statement (EIS), in accordance with the National Environmental Policy Act (NEPA). Following significant public comment and environmental review, the Department will prepare a Draft EIS and Proposed Program, and a Final EIS with the Proposed Final Program (PFP).

The Request for Information, published on June 16, 2014, began a process of broad consideration of all 26 areas of the OCS that are available for leasing and gradually narrows as a result of many stages of public comment and environmental analysis. This DPP is the first such narrowing. Prior to any individual lease sale in the future, BOEM will continue to incorporate new scientific information and stakeholder feedback in its environmental reviews to further refine the geographic scope of the lease areas.

The Draft Proposed Program and the Notice of Intent to Develop a Draft Environmental Impact Statement will be available for public comment for 60 days following the publication of the documents in the Federal Register.
For more information, including maps, please visit: http://www.boem.gov/Five-Year-Program/

BP Forms Alliance to Advance Paleogene Discoveries in Deepwater Gulf of Mexico

KeathtleyCanyonUnder new ownership structure, BP, Chevron and ConocoPhillips will combine expertise and resources to unlock Tiber and Gila discoveries and pursue development of a new production hub in Keathley Canyon (see map)

BP has announced it has formed a new ownership and operating model with Chevron and ConocoPhillips to focus on moving two significant BP Paleogene discoveries closer to development and provide expanded exploration access in the emerging geologic trend in the deepwater Gulf of Mexico.

Under the agreements, BP will sell to Chevron approximately half of its current equity interests in the Gila and Tiber fields. BP, Chevron and ConocoPhillips also have agreed to joint ownership interests in exploration blocks east of Gila known as Gibson, where they plan to drill in 2015.

As a result of the agreements, BP, Chevron and ConocoPhillips will have the same working interests across Gila and Gibson and any future centralized production facility. Chevron will hold equity interest of 36 percent, BP 34 percent and ConocoPhillips 30 percent. In Tiber, BP and Chevron will each hold equity interest of 31 percent, Petrobras 20 percent and ConocoPhillips 18 percent.

Chevron will operate Tiber, Gila and Gibson, building on its recent success in starting up the Jack/St. Malo oil production platform in the Paleogene/Lower Tertiary on time and on budget. Operatorship is expected to be transferred after BP finishes drilling appraisal wells at Gila and Tiber.

BP believes combining the technical strengths and financial resources of these three companies will provide greater efficiency through scale, reduce subsurface risk and increase the likelihood of achieving a future commercial development.

"Completing these agreements will enable BP to do three things that are at the core of our strategy in the deepwater Gulf of Mexico," said Richard Morrison, president of BP's Gulf of Mexico business. "It will support continued exploration and development in the Paleogene, which we expect to be a key part of our future in the region. It will allow us to manage and maintain capital discipline by sharing development costs. And transferring operatorship of these assets to Chevron will allow BP to increase our focus on maximizing production at our four existing producing hubs in the Gulf, each of which is still in the early stages of development."

BP discovered Tiber in 2009 and Gila in 2013, and in October 2014 participated as a co-owner in the Chevron-operated Guadalupe discovery.

BP believes that development of portions of the Paleogene trend will require next-generation tools and systems for operating in high-pressure, high-temperature reservoirs. BP continues to pursue development of these technologies through its Project 20KTM initiative, announced in 2012, and will work with co-owners to continue this progress.

Prior to the transactions, BP had a 62 percent working interest in Tiber, with Petrobras owning 20 percent and ConocoPhillips 18 percent. In Gila, BP previously had a 65 percent working interest and ConocoPhillips 35 percent. In Gibson, ownership in the six- lease area varied based on lease, with Chevron, BP and ConocoPhillips all holding stakes.

BP operates four large production platforms in the deepwater Gulf – Thunder Horse, Atlantis, Mad Dog and Na Kika – and holds interest in four non-operated hubs known as Ursa, Great White, Mars and Mars B.

BP is the largest investor and leaseholder in the Gulf of Mexico and a leading oil and gas producer in the region.
Since early 2013, BP has had four major project start-ups in the deepwater Gulf: Atlantis North, Mars B (operated by Shell), Na Kika Phase 3 and Atlantis North Expansion Phase 2.

Poll: 64 Percent of Florida Voters Favor Offshore Oil and Natural Gas Development

APIlogoNearly two-thirds of voters in Florida support offshore drilling for domestic oil and natural gas resources, according to a new poll conducted by Harris Poll for API's "What America is Thinking on Energy Issues" series.

"Florida has an opportunity to expand its energy portfolio and access the jobs and government revenue currently locked away in America's large offshore energy reserves," said Dave Mica, executive director of the Florida Petroleum Council. "We could bring good-paying jobs to Floridians and lift our economy simply by allowing more oil and natural gas production off our shores."

Areas throughout the Atlantic Outer Continental Shelf (OCS) could be made available for oil and natural gas development, creating more than 280,000 jobs, $200 billion in government revenue and 3.5 million barrels of oil equivalent per day, according to a recent study by Quest Offshore Resources.

The state-wide telephone poll, conducted for API by Harris Poll among 610 registered Florida voters also found that:

· 90 percent agree increased oil and natural gas production could strengthen America's energy security.
· 85 percent say increased oil and natural gas production could help lower energy costs for consumers.
· 80 percent say increased oil and natural gas production could benefit federal and state budgets through lease payments, royalty fees and other sources of revenue.
· 58 percent say that the federal government does not do enough to encourage U.S. oil and natural gas development.

The Florida Petroleum Council is a division of API, which represents all segments of America's technology-driven oil and natural gas industry. Its more than 625 members – including large integrated companies, exploration and production, refining, marketing, pipeline, and marine businesses, and service and supply firms – provide most of the nation's energy. The industry also supports 9.8 million U.S. jobs and 8 percent of the U.S. economy.

Methodology
The telephone study was conducted by telephone on January 15-19, 2015 by Harris Poll on behalf of the American Petroleum Institute among 610 registered voters in Florida, with a sampling error of +/- 4 percent. A full methodology is available upon request.

"What America is Thinking on Energy Issues" is a public opinion series provided by API, offering data to inform policy discussions and ensure policymakers and others know Americans' perspectives on key energy issues.

GE and Statoil Launch Ambitious New Collaboration to Accelerate Development of Sustainable Energy Solutions

GE-logoStatoillogoGE and Statoil have now announced a new collaboration to accelerate the development of more environmentally and economically sustainable energy solutions to help fuel the future.

This joint technology-focused program is aimed at driving an industrial response to some of the biggest challenges facing global oil and gas production, including flaring, CO2 and methane emissions, and water usage, while also optimizing business operations.

Jiff-ImmeltGEJeff Immelt, chairman and CEO of GE. (Photo: GE)

"In order to respond to the growing energy demands of the world, continued investments in technology and innovation are critical to helping develop long-term, low-cost and more efficient energy solutions," said Jeff Immelt, chairman and CEO of GE.

"The collaboration we are announcing today with Statoil brings together two leading technology players, and allows us to leverage our global network of engineers and technologists to make a profound impact on the development of energy solutions that reduce environmental impacts. Through this collaboration, we hope to be a model for the rest of our industry, and to inspire thinking, creativity and innovation in addressing the challenges of more sustainable energy."

 

Elder-SaetreStatoilEldar Sætre, president and CEO of Statoil. (Photo: Ole Jørgen Bratland)

"The challenge of achieving more efficient and sustainable energy production is too large for one entity to address alone," said Eldar Sætre, president and CEO of Statoil.
"The private sector has a responsibility to leverage its skills and expertise to contribute to the development of new solutions. Collaboration is a key component to achieving important positive change. This initiative with GE is a good example of an innovative approach to accelerate innovation and help address the energy needs of today and for the future."

Driving efficiency through innovation
The program will focus on developing new approaches to create efficient, low-cost technologies for oil and shale gas production while simultaneously reducing emissions. In its initial stage, the collaboration builds on a foundation of concrete projects already initiated that address key sustainability dimensions of the industry, including:

• Reduce flaring and lower CO2 intensity through innovative application of CNG In A Box ™ as part of the innovative Last Mile Fueling solution: Provide a full-service natural gas fueling solution for operations by capturing, compressing, and using natural gas that would otherwise be flared at well sites. Compressed natural gas (CNG) can be used to fuel rigs, vehicles and equipment, thereby reducing or replacing the need for diesel.

• Reduce water usage through CO2 stimulation: Use liquefied CO2 stimulation to both reduce water usage in fracturing operations and increase oil and gas production.

• Increase fuel efficiency through gas compressor optimization: Increase performance, efficiency, and extend maintenance intervals through optimization of gas compressor components.

• Increase fuel efficiency with Turbine Online Water Wash technology: Increase performance, and reduce planned and unplanned turbine downtime by cleaning turbines during operation.

The collaboration, in later phases, will also pursue work on a range of solutions, from the rapid scale-up of technologies that help address the operational needs of the industry today to longer-term solutions that can support the industry as it matures to meet tomorrow's energy needs.

Initial estimates show that the successful execution of these first five projects could result in significant combined CO2 savings. The Last Mile Fueling solution in the Williston Basin in North Dakota has the potential to reduce the equivalent of 120,000–200,000 tons per year of CO2 emissions through reduced diesel fuel usage, while the other projects being developed hold potential for similar, or even larger, reductions. Additionally, the collaboration aims to reduce water usage as well as methane and NOX emissions, while at the same time increasing oil and gas production.

Calling all innovators
In the spirit of this collaboration, GE and Statoil are also launching a global Open Innovation Challenge. Knowing that great ideas can be conceptualized outside of their own companies, the Challenge will invite innovators from around the world and beyond the oil and gas industry to develop potential solutions to make energy production more sustainable.

LorenzoSomonelliGEoilandgasLorenzo Simonelli, president and CEO of GE Oil & Gas. (Photo: GE)

The first phase of the Open Innovation Challenge specifically aims to address the use of sand in unconventional operations. Focusing on sand—which requires thousands of truck trips to transport this proppant onto the site when drilling new wells—has the potential to reduce the environmental impacts on local communities, lessen emissions and make energy production more efficient. GE Oil & Gas and Statoil will help fund the commercial development of winning approaches.

"While the actions directly involved with producing energy have an impact on more sustainable energy production, so too do indirect operations that surround production," said Lorenzo Simonelli, president and CEO of GE Oil & Gas

"At GE we know that some of the best ideas we have brought to life were initially conceptualized outside of our company. That's why we're launching the Open Innovation Challenge as part of this collaboration to solicit ideas for a most unique challenge in onshore operations. With the collaboration between GE and Statoil, we can bring scale and resources to ideas that target more sustainable energy solutions, and can help develop and implement these technologies in a way that benefits us all."

New Industries Announces Delivery of Offshore Laboratories

The state-of-the-art labs will be deployed to minimize oil spill response time.

NEW-Industries-LogoNew Industries, Inc. has announced the delivery of two laboratories and two operational modules to CSA Ocean Sciences, Inc. (CSA). The mobile laboratories, outfitted with oil spill water monitoring equipment, instrumentation, and supplies, are designed to minimize response time for marine environmental operations and enable rapid mobilization of required equipment to an oil spill incident.

New Industries is an industry frontrunner in the development and manufacture of state-of-the-art service modules that provide laboratory, storage, and operational space for offshore use. The modules are certified structurally to Det Norske Veritas (DNV) 2.7-1 standards, the most stringent in the world, as well as American Bureau of Shipping (ABS) container safety standards, ensuring the highest quality in offshore safety and handling.

Lab container exteriorThe mobilization-ready modules, commonly referred to as "vans" or "cabins," are manufactured at the New Industries facility in Morgan City, La. In addition to meeting DNV and ABS container safety standards, the modules are A60 fire rated and have been outfitted with a fire and general alarm system that complies with the latest U.S. Coast Guard standards. Due to the potential hazards posed by a laboratory environment, New Industries supplemented customary module construction with the inclusion of loss of oxygen sensors and the assurance of proper air changes for personnel in order to maximize safety.

"This was an exciting and challenging project to take on," said New Industries Project Manager John Flores. "It's comforting to know we provided CSA with more than just standard laboratories and operational vans. We provided them with units they can feel safe in while operating in harsh environments offshore."

"New Industries has the level of expertise and sophistication required to incorporate both functionality and safety into these mobile units," said CSA Senior Scientist Jodi Harney. "This program will

Okeanus Announces the Addition of DT Marine Winches to their Rental Fleet

Winches are available for individual rental or part of a Launch and Recovery Package.

Okeanus FinalOkeanus Science and Technology, LLC (Okeanus) is pleased to announce the addition of three types of DT Marine winches to its fleet of oceanographic and marine scientific rental equipment. The winches can be outfitted with various types of cable and synthetic rope to perform nearly any job requiring the launch and recovery of subsea equipment and assets.

With three horsepower options available for rental (25, 50 or 125 hp), Okeanus' selection of winches feature line pull capacities ranging from 4,000 to 20,000 pounds. The 25 and 50 hp winches, typically included in rental packages with smaller equipment, can be spooled with 2,000 m and 6,000 m of ½-inch line respectively, while the 125 hp model can be spooled with 6,000 m of .680-inch line for dependable towing and launch of large pieces of equipment.

Each model is highly reliable and simple to operate, and can be outfitted with a variety of coaxial cable, wire rope or synthetic rope to tow survey equipment or perform sampling operations. Winches are available for rental individually or as part of one of Okeanus' customized Launch and Recovery packages, which includes an accompanying A-Frame, Hydraulic Power Unit (HPU), hydraulic hose and valve kit, and appropriately sized block to match the cable type in use. A Launch and Recovery equipment rental package can be tailored to suit nearly any project's specifications.

"We at Okeanus are pleased to add this fleet of DT Marine winches to our equipment rental catalog as another way to continue to serve the subsea and oceanographic research and survey markets," said Benton LeBlanc, Vice President and General Manager of Okeanus. "By providing all critical components necessary for the successful launch and recovery of underwater assets, Okeanus creates value for its customers from the deck to the seafloor by giving them the ability to lease these assets rather than having to purchase them."

McDermott Derrick Barge 50 Lifts 3,250-ton Jacket in Gulf of Mexico

McDermott International, Inc. ("McDermott") announces that the Derrick Barge 50 ("DB50") recently completed the installation of a drilling and production platform in the U. S. Gulf of Mexico continental shelf that included the heavy lift of a 3,250-ton jacket. This lift establishes the record for the largest jacket lifted by the vessel to date.

Mcdermott-MEGALODOPhoto: The McDermott heavy-lift vessel, Derrick Barge 50, installed a 3,250-ton jacket in the Gulf of Mexico.

"This milestone for the DB50 further demonstrates that McDermott has the right assets to meet the demands of our clients," said Scott Munro, Vice President, Americas/Europe/Africa. "The project specified that the jacket be lifted, not launched and our heavy-lift vessel fit the criteria, providing the flexibility required to install a jacket of this magnitude and its corresponding deck."

The six-pile platform was lifted by the DB50 in tie-back mode over the stern of the vessel in waters 391 feet deep over an existing well site. Piles were driven to a designed penetration of 430 feet and a 2,300-ton drilling and production deck was then installed on the jacket.

Following this successful project execution, McDermott has been awarded further transportation and installation contracts for the U. S. Gulf of Mexico that are expected to be executed by the DB50 in during the first half of 2015.

The DB50 is capable of lifting surface loads up to 4,400 tons and lowering up to 480 tons in 11,500 feet of water.

InterMoor Completes Juniper Mooring and Foundation Installation Contract

Juniper-gas-project-offshore-Trinidad-and-TobagoInterMoor, an Acteon company, has successfully completed a mooring and foundation installation campaign for bpTT's Juniper gas project offshore Trinidad and Tobago. This is the largest foundation installation campaign offshore Trinidad and Tobago to date.

InterMoor provided engineering and design services to identify the most reliable and cost-effective mooring solution and performed configuration studies as part of the mooring analysis. The company designed and fabricated eight piles (4 ft in diameter by 128 ft long) at its facility in Morgan City, Louisiana, and provided offshore project management services for the mooring preset campaign. This included installing the driven piles using H-Links and 1,000 ft of ground chain per leg from the Boa Deep C construction vessel.

Trinidad restricts boat-to-boat transfers, so transporting the piles offshore using a single boat presented a challenge. However, InterMoor was able to complete the installation with the eight piles and additional equipment on the vessel's deck. The Juniper project was carried out in a water depth of 330 ft, with strong water currents.

The mooring solution engineering began in 2011 with the initial front-end engineering and design (FEED) study, and offshore installation was completed in early November 2014. Jacob Heikes, project manager at InterMoor, said, "Despite numerous logistical obstacles to overcome as well as the expedited schedule necessary to complete installation engineering and pile, chain and H-Link fabrication, the foundations and pre-set mooring lines were installed successfully and on time."

Tom Fulton, InterMoor's global president, added, "This project demonstrates InterMoor's strategic involvement in the region and highlights our superior capacity in oil and gas industry projects in the Caribbean / South America."

During the installation campaign, InterMoor's sister group company MENCK was also involved, providing the hydraulic hammer. InterMoor's locations in Aberdeen, Scotland; Stavanger, Norway; Morgan City, Louisiana; and Houston all contributed to the project.

InterMoor was an ideal candidate for the project given previous successful driven-pile and conductor campaigns in Brazil. The company provided a turnkey service for the mooring presets in Shell's BC-10 Parque das Conchas offshore development and the Papa Terra field for Petrobras and Chevron.

Harvey Gulf Agrees to Outsource the IHM (Inventory of Hazardous Materials) to Metizoft

HarveyGulfHarvey Gulf and Metizoft have signed a framework agreement on maintenance and quality assurance of the Inventory of Hazardous Materials (IHM). Vessels with IHM documentation must according to the requirements of IMO Guidelines - Ship Recycling; MEPC 197 (62) be maintained at all times and reflect the actual ship sailing. More and more shipping companies see the need to comply with the more stringent requirements, says Chief Marketing Officer Øyvind Sundgot.

"This agreement is one of several benefits of Harvey Gulf's focus on Health, Safety and Environment, which also form the basis for system solutions to the company's vessels," says Corby Autin, Executive Vice President of QHSSE / HR. "The agreement initially includes 10 vessels in operation, and future new buildings will be subject to continuous maintenance and quality assurance of documentation at Metizoft.

"Through the agreement with Metizoft, IHM documentation is maintained according to the current regulations and Metizoft is helping to ensure that we comply with the requirements at all times."

More and more countries have ratified or are at least getting closer to ratifying the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, which addresses the requirements for IHM and makes ship owners responsible for compliance.

"We are very pleased to be a partner in Harvey Gulf's focus on the environment. The collaboration shows that Harvey Gulf is strategic in their choices in terms of meeting future requirements," says Sundgot.

Changes in the market earlier than expected
"A lot has happened in a short time, and this future requirement that will include all of the world's seagoing vessels above 500 tons deadweight at an earlier stage than some anticipated," Sundgot adds. "The European Union formally adopted the requirement on 30 December 2013, with some adjustments based on IMO - Hong Kong Convention. The new EU Ship Recycling Regulation means that EU-flagged vessels of 500 GT and over will be required to carry an Inventory of Hazardous Materials (IHM). When calling at EU ports, vessels from non-EU countries will also be required to carry an IHM identifying all hazardous materials on board. This means that the maintenance and quality assurance of the documentation is strengthened and it will therefore be very important for owners to have control of this."

Inventory of Hazardous Materials (IHM) requirements.

- EU-flagged newbuildings are required to have onboard a verified IHM with a Statement of Compliance at the earliest by 31 December 2015 and at the latest by 31 December 2018.
- Existing EU-flagged vessels are required to have onboard a verified IHM with a Statement of Compliance at the latest by 31 December 2020 (or if the ship is to be recycled, the IHM should be on board from the date when the European list of ship recycling facilities is published, expected to be by the end of 2016).
- Non-EU-flagged vessels calling at EU ports are also required to have onboard a verified IHM with a Statement of Compliance at the earliest by 31 December 2020.

A known difference is in the material declarations (MD) for the EU SRR, which will include two additional hazardous materials.

- PFOS (Perfluorooctane sulfonic acid) shall be prohibited. PFOS is chronically toxic, injurious to reproduction, carcinogenic, toxic to aquatic organisms and widely distributed in the global environment. In the marine industry, it can be found in fire-fighting foams of the type AFFF on vessels carrying inflammable fluids and those with helicopter decks, rubber and plastic materials (i.e., cable sheaths, PVC flooring, gaskets and seals) and coatings (i.e., paint).
- HBCDD (Brominated Flame Retardant) is to be listed in the IHM. HBCDD is very persistent, bioaccumulative and toxic to aquatic organisms; it causes long-term adverse effects on the aquatic environment. It is classified and labelled as dangerous for the environment. In the marine industry, this can be found in expanded polystyrene (EPS) used for cryogenic insulation, such as for liquefied gas tanks (LGT), refrigerated areas, thermal insulation boards (i.e., foam materials), rubber and plastic materials (i.e., cable sheaths, PVC flooring, gaskets, seals) and coatings (i.e., paint).

Metizoft has 8 years of industry experience in Ship Recycling and has provided project documentation to about 600 new buildings internationally and collaborating with leading shipyards and ship owners. "There are still a lot of shipping companies that do not know how to handle this, but there is no need to wonder anymore. We have proven on behalf of several major players in the industry that we can handle this. We want to meet the requirements on behalf of ship owners," says Sundgot.

Ennsub Completes Sealing Work on Wheatstone LNG Platform in Australia

Subsea products and equipment manufacturer Ennsub has successfully completed the design, manufacture, testing and installation of bespoke sealing systems for the Wheatstone Liquefied Natural Gas (LNG) platform off the coast of Australia.
The company was approached by a tier-one marine contractor to design two different systems to provide an external and internal sealing system for 64-off 8" NS ballasting pipes located at each corner of the platform.

WheatstoneThe Wheatstone LNG Project is being developed in Australia.

Ennsub was responsible for the design and supply of all equipment, including downline recovery winches, remote disconnect heads and isolation plugs. Following an intensive factory-acceptance test programme, which simulated the offshore conditions, four Ennsub engineers were mobilised to Australia to perform the installation of the 128-off bespoke sealing systems.

The solution presented by Ennsub replaced the alternative grouting solution which was being considered by the end user and the success of the operation exceeded all parties' planned timescales with Ennsub's engineers successfully completing the installation in half the time allocated.

Scott Macknocher, managing director of Ennsub, said: "This was a great opportunity to demonstrate our design, innovation and supply capability on such a prestigious project. Our experienced design team gained a real understanding of the industry and project application.

"We are very pleased with the success of the operation and performance of both the equipment and our experienced offshore technicians. The solution significantly reduced the planned installation time and had major cost saving benefits for the end user. This project is an excellent example of our capability to deliver bespoke solutions on similar projects."
Aberdeen-headquartered Ennsub recently opened a new production facility and office in Teesside, adjacent to the area's highly capable supply chain and with access to a large skilled workforce and excellent transport links.

Damen to Supply Customized CSD 650 Dredger plus Support Vessel to Van Oord

Damen-VanOordDamen has signed a contract with leading dredging and marine contractor Van Oord for the supply of a CSD 650 custom suction dredger together with an FCS 1605 Fast Crew Supplier, initially for operations in the Caspian Sea. Designed and delivered by Damen Dredging Equipment in Nijkerk, the Netherlands, the vessel will leave the yard at the end of January and travel overland to the Caspian Sea, from where it will begin operations in April.

"Van Oord requires a cutter suction dredger at short notice because of the large number of ongoing dredging projects. Damen's expertise combined with Van Oord standards will result in a fit-for-purpose addition to our dredging projects in the Caspian Sea", says Peter Bunschoten, Project Director at Van Oord.

Ural River
The work began immediately on the 60m dredger, designated the Ural River, to bring her up to the required specification.

Modifications now underway include the adding of a bow to enable a change of her classification from sheltered waters to coastal operations. The vessel is also being fitted with additional tank capacities to allow her to operate without support for an extended period of time in the remote locations where she will be working.

DAMEN-FCS-1605The fact that this particular CSD 650 was already equipped with anchor booms to allow easy moving of the side anchors was very helpful in minimising the time required for modifications, as the shallow waters in which it will be operating are not suitable for a Multi Cat to provide support.

Van Oord also required a number of safety and environmental features to comply with its exacting standards, which Damen has fulfilled.

Support vessel with 30 knots
Support for the CSD 650 is being supplied in the form of a Damen FCS Fast Crew Supplier 1605 with a top speed of 30 knots. Capable of taking up to 23 passengers, this sturdy workhorse is ideal for supporting the Ural River. Damen is one of the few shipbuilders able to provide complementary vessels at short notice for projects such as this.

IWCF Launches New Enhanced Standard in Drilling and Well Intervention Training

IWCF logoThe International Well Control Forum (IWCF) has launched a new training standard in drilling and well intervention for top achieving candidates and is urging operators to get involved.

The move is in direct response to the Oil and Gas Producers (OGP) guidelines following the Macondo and Montara incidents and aims to drive up competency standards and improve safety for those working with wells. Thousands of contractors and workers have to pass exams in drilling and well intervention every two years to enable them to work at offshore and onshore well sites.

Photo: Dave Price, CEO IWCF

David-Price-CEO-IWCFThe Enhanced Standard is only available to candidates who have achieved at least an 80% pass mark on previous exams and demonstrate significant experience of undertaking well control training in their past. The content is primarily based on real industry well control incidents involving simulated exercise, team work and peer-to-peer review and feedback.

It focuses on enhancing technical knowledge using case studies in a team based environment. Candidates are assessed in a similar manner as on a standard course and can be expected to achieve higher results.

IWCF is the independent organization that sets global training standards for well control.

David Price, CEO of IWCF said: "Introducing the enhanced training will encourage candidates to strive to be the best and will challenge them in new ways in a replicated well site environment. After a successful pilot scheme, we are now looking for operators and training providers to sign-up as ultimately it will help create a safer environment at offshore and onshore well-sites. We are making strides to create a step change in well control competency to help the industry avoid another significant well-related tragedy, but we need operators and contracting companies to get behind these changes."

Founded by the oil and gas operators in 1992, IWCF administers well control training, assessment and certification programs and is committed to creating a step-change in well control knowledge. Since then, IWCF has certified over 160,000 people in almost every continent through more than 220 accredited training centers.

IWCF is investing in new facilities at its headquarters in Montrose, UK to improve training for well control assessors and instructors who address drilling operations and well intervention activities. The organization is also introducing new levels to well control training including a new level 1 introductory online course, which will be available free to anyone with an interest in the industry.

To help enhance users' online experience, IWCF has re-launched its website this week which includes a fresh design, easier navigation, better functionality and will also be fully responsive to mobile devices so it can be viewed on the move.

PIRA Energy Group's Weekly Oil Market Recap for the Week Ending January 25th, 2015

piraNYC-based PIRA Energy Group reports that the outlook for 2014 global oil demand growth was revised down significantly. In the U.S., stocks built this past week for the seventh consecutive week of inventory builds that have uncharacteristically occurred in the middle of the winter. In Japan, crude stocks draw, but finished products build. Specifically, PIRA's analysis of the oil market fundamentals has revealed the following:

Why Was 2014 Oil Demand Growth So Weak?
The outlook for 2014 global oil demand growth was revised down significantly over the course of the year. Some of the deterioration in the outlook since January 2014 can be attributed to slower economic growth, but the 0.5 MMB/D over-prediction of demand growth from June 2014 cannot. The lion's share of the discrepancy occurred in Japan (0.2 MMB/D) and the U.S. (0.2 MMB/D) – the demand forecast for the developing world was almost perfect. The source of the forecast errors in Japan and the U.S. appear to be for a number of reasons unrelated to longer term trends.

Another New High in U.S. Commercial Stocks
Stocks built this past week for the seventh consecutive week of inventory builds that have uncharacteristically occurred in the middle of the winter. Inventories are at all time highs and are now 119 million barrels, or 11.4% higher than last year. Crude stocks had the largest weekly build in over ten years and are now 13.3% higher than last year. Product inventories are 9.4% higher than last year but the bulk of that is outside the four major products.

Japanese Crude Stocks Draw, but Finished Products Build
Crude runs rose fractionally on the week and crude imports declined sufficiently to produce a crude stock draw. Finished product stocks built, with all the major products other than kerosene showing an increase, but nothing dramatic. Demands on gasoline and gasoil were modestly higher, but stocks built for both due to a rise in yields. The kerosene draw rate throttled back on the week as yield rose and demand was slightly softer. Indicative refining margins remain strong.

Prompt Demand Sends Asian LPG Flying
The action this week was in the Asian LPG markets. Prices roared higher on stronger prompt demand, particularly out of Japan, and thin immediate availability. Cash propane prices ripped $100/MT higher for cargoes arriving 2nd half February to the highest levels this year. Butane prices also rose in illiquid cash markets to be called at a $30 premium to C3. Saudi CP futures gained, with current bets on a $25 improvement in February CPs. However, steep backwardation in the CP and propane FEI curves hints that the prompt strength in Asian LPG markets may not persist for too much longer.

Ethanol Prices Fall
The week ending January 16, U.S. ethanol prices tumbled to their lowest values since June 2005. Stocks were the highest and manufacturing margins were the poorest since January 2013.

Ethanol inventories Rise to Two-year High
U.S. ethanol production rose to 979 MB/D last week, up slightly from 978 MB/D during the preceding week. Inventories built by 158 thousand barrels to 20.4 million barrels, the highest in nearly two years.

Death of Saudi Arabia's King Abdullah Unlikely to Alter Oil Policy
King Abdullah of Saudi Arabia died January 23. Crown Prince Salman has assumed the throne, and Prince Muqrin was named the new Crown Prince. Furthermore, the succession plan now appears to include a younger generation. PIRA believes the change in leadership is unlikely to alter Saudi Arabia's current oil policy of letting the market dictating prices and protecting market share.

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.

DW Monday January 26th, 2015: The Oil Price Tide Will Turn

Dougl-west.MondayIn their January Oil Monthly Report, the IEA noted "A price recovery – barring any major disruption – may not be imminent, but signs are mounting that the tide will turn" and their demand growth forecast of 900,000 bbl/d for 2015 was maintained. They are not alone, the EIA expects global consumption to grow by 1.0 million bbl/d in both 2015 & 2016, and some forecasts suggest U.S. gasoline demand may, in 2015, grow by the most since the 1970s as falling prices boost consumption.

Oil prices are presently being held down by oversupply – but for how long? Production from wells declines naturally at some 9% p.a., and even with costly intervention at perhaps 5% p.a. With global demand at some 92 million bbl/d, this suggests a requirement to replace in excess of 4.5 million bbl/d of production in 2015 and more in 2016, etc., but where will the new oil come from? The IEA has suggested the U.S. oil production may grow by 0.5 million bbl/d in 2015 but could start to peak as early as 2016.

Investment in production is already being hard hit. Around 400,000 low output stripper wells each pump less than 10 bbl/d, but in total produce three-quarters of a million bbl/d and are prime candidates. At the other end of the scale, BHP Billiton for example has said it would cut back on its planned $4bn spending on its US shale assets. Projects underway worldwide will of course add production and OPEC probably already has near 2.5 million bbl/d of spare capacity. So overall, we may reach a point of balance in 2015-16 and then see undersupply of oil and rising prices. Furthermore, we must not forget there is always potential for supply disruption, OPEC has at times lost some 2 million bbl/d, non-OPEC producers near 1.2 million.

The bottom line is that unless we keep adding production, surplus capacity will be quickly eroded. The next oil price surge is already being set up.

John Westwood, Douglas-Westwood London
+44 203 4799 505 or
www.douglas-westwood.com

Mexico’s Bidding Round Will Remain Competitive Despite Delays and Uncertainties, Says GlobalData

GlobalDatalogoWith Mexican oil open to private investment for the first time, the country's initial bidding round is expected to remain competitive despite low oil prices, delays and a number of uncertainties, according to research and consulting firm GlobalData.

The company's latest report* states that the first bid round, which began on 11 December 2014 by offering 14 shallow-water exploration blocks, is currently scheduled to offer additional areas, including unconventional and deepwater opportunities, in the first half of 2015.

Adrian Lara, GlobalData's Senior Upstream Analyst for the Americas, states that no indication has been given of the expected levels of biddable profit oil in the shallow-water Production Sharing Contract (PSC). Furthermore, full details of the other contract models are yet to be released.

Lara comments: "With the international crude oil price having dropped from nearly $110 per barrel (bbl) in the first half of 2014 to its current price of below $50 per bbl, the government has already been forced to deviate from its original schedule.
"In the past week, the government has admitted that it may need to further delay high-cost areas, such as unconventionals. On top of this, the new schedule appears ambitious for a regulatory agency organizing its first ever licensing round."

Despite these delays, Will Scargill, GlobalData's Upstream Fiscal Analyst, notes that the lower oil price should not significantly affect the competitiveness of bidding on the shallow-water exploration blocks, as the adjustment of royalties to prevailing prices and profit shares to profitability mean that it should remain possible for investors to achieve attractive rates of return.

Scargill explains: "Comparison of the regime with that applicable to shallow-water areas in the US Gulf of Mexico at oil prices of $60 to $80 per bbl suggests that bids offering the government an initial 20% share of profit oil may be competitive. When discovered fields are offered, the government take is likely to be higher due to the lower risk.

"For deepwater areas later in the round, the government is expected to offer royalty and tax licenses, reflecting the high costs and risks associated with this type of exploration and development. Although the full details of this contract model have not yet been disclosed, it is expected to use a similar adjustment mechanism for the biddable additional royalty to that used in the PSC."

*Mexico Upstream Fiscal and Regulatory Report

Quest Provides Clarity, Insight and Vision

QuestOffshorelogothe past 12 years, Quest Offshore's consulting division has been commissioned by leading energy companies, industrial conglomerates, tier one OEMs, the finance industry and other members of the supply chain as well as industry lobby groups to provide expertise in assessing the current and future market conditions of a variety of offshore oil and gas related industries.They have successfully assisted their clients in understanding the complex dynamics of the global oil and gas production and exploration market, and have provided expert analyses allowing them to make optimal strategic decisions in reaching their short and long-term goals.

Despite the negative implications of and uncertainties around today's lower oil price environment, Quest believes that significant opportunities exist for companies willing to make immediate long-term strategic decisions. As with any significant structural shift in a large industry, the recent outlook changes will create inefficient market situations that well-positioned and opportunistic companies will be able to seize. Quest expects that as oil prices begin to stabilize, merger and acquisition activity will increase. Suppliers to project development activities will undergo significant restructuring, reshuffling the dynamics of most offshore oilfield service markets. Companies who take advantage of these opportunities will be well positioned for the next growth cycle.

Quest's consultancy practice works with clients to provide comprehensive data-driven advice and analytics. Using our market expertise and in-depth analysis, Quest can assist in planning for and reaching your business development goals. Through Quest's strategic advisory services, sector specialists work with you to identify profitable opportunities to maximize your company's current market position as well as identify valuable targets to expand your offerings. Markets in which we have extensive relevant experience include:

Market Due Diligence
* * Mergers & Acquisitions
* * Initial Public Offerings
* * Debt Transactions
* * Litigation Support

Offshore Market Positioning
* * Barriers to Entry
* * Competitor Analysis
* * Cost Analysis
* * Supply Chain Analytics

Re-organization/Efficiency
* * Market Assessments
* * Cost Analysis and Reductions
* * Growth Opportunities
* * Market Modeling

GAC Secures Worldwide Agency Contract with BG Group

GAClogoGAC, a world leader in global shipping services, has been appointed sole provider of hub agency services for the worldwide LNG fleet of BG Group.

The agreement also covers crude oil and LPG shipments to accommodate BG Group's expanding cargo range.

The new five-year contract took effect on January 1 with GAC providing hub and ship agency services and a range of value-added solutions covering the movement of BG Group's cargoes around the world.

Kumar Ganesan, General Manager for GAC Global Hub Services coordinated the negotiations along with Bob Bandos, Managing Director of GAC Shipping USA. Bandos had first established the relationship with BG Group in 2001.

"This global contract with BG Group is an outcome of mutual reliability, a commitment to thinking long-term and a willingness to listen to each other," says Ganesan. "It's the product of a partnership that continues to grow stronger."

"We have been working closely with the BG Group for more than a decade and we look forward to supporting the company in its global LNG, LPG and Crude Oil business growth."

GAC operates Hub Agency Centers in Dubai, Houston, Singapore and Grangemouth, coordinating port calls globally for fleet operators

PIRA Energy Group Announces the Appointment of Gema Postlethwaite as CEO

piraPIRA Energy Group, a leader in global energy market analysis, announced today that Gemma Postlethwaite, the company's current COO, will assume the role of Chief Executive Officer effective immediately. Dr. Gary N. Ross, PIRA's founder and current CEO, will become Executive Chairman and will continue to lead the company's oil group.

"Since Gemma came on board as COO in early 2014, she has had a transformational impact on the business," said Dr. Ross. "She has a keen sense of how clients' needs are changing and how best to address those needs. In a short period of time, we've rebuilt our online platform and created a roadmap for better delivering data and analysis to more types of energy professionals. With Gemma onboard and with our newly expanded management team, the future is extremely bright for PIRA and its clients. I am now able to focus primarily on making our oil group and its products even stronger."

Dr. Ross built PIRA to help clients understand the entire energy market through rigorous fundamentals analysis. Today, PIRA has grown into one of the world's leading energy analysis companies, covering all energy commodity areas. Its "total view of the energy market" takes a bottom-up, fundamentals analysis of supply and demand as well as a top-down macroeconomic approach. PIRA's team of experts and comprehensive data tools serve a full range of worldwide clients, from upstream to downstream companies, physical players to investors, government to private entities, and those focused on the short term to those that need long-term perspectives.

"As PIRA approaches its 40th year of operations, I am thrilled to move into this new role," said Ms. Postlethwaite, who over her 15-year career has held leadership positions at major information-services companies. "Gary's vision and passion for the business have made PIRA the leader in our industry and an invaluable source of information and advice to our clients. I firmly believe no other entity understands the complexities of this market better than the incredible team of experts at PIRA.

At a time when our clients face very volatile market conditions, we are renewing our commitment to them — the commitment to provide the most expert, objective and integrated analysis of worldwide energy markets. We take this commitment seriously. It shapes the way we work every single day. I am excited to share what's coming next with our clients."

Aquatic Recognizes 1,000 Days Without a Lost-Time Incident

With a strong focus on health and safety, Aquatic Engineering & Construction Ltd, an Acteon company, has achieved 1,000 consecutive days without a lost-time incident.

Aquatic2The photo shows a typical mobilization of an 11.4 m reel. This is a contract lift carried out under strict supervision, and as such there would be a lift plan in place prior to the start of the lift operation. In addition, there would be a method statement prepared, a risk assessment and tool box talk, which would be signed by all participants in the activity.

Aquatic's president, Chris Brooks, said, "I am proud to announce that, on Sunday, 14 December 2014, Aquatic reached the health and safety milestone of 1,000 days without a lost-time incident. This remarkable achievement is the result of the hard work and commitment of everyone at Aquatic. Both the professionalism of our health, safety, environment and quality team and the dedication of everyone who receives training and support from them have enabled us to reach this milestone.

"1,000 days without an incident means we have consistently safeguarded all our people, on- and offshore, and the people we work with on clients' vessels," he continued. "We are diligent about safety, and we work with awareness at all times to stay safe. We are committed to avoiding any incidents in our global operations."

Aquatic will share the news with customers and suppliers in a special issue of HSEQ e-AquatiCall; Aquatic's corporate newsletter. This will highlight the company's health and safety focus across a range of projects and achievements.