BP Begins Production from Juniper Project in Trinidad

1bpTTBP Trinidad and Tobago (BPTT) has announced first gas from the Juniper development, the fifth of BP’s seven Upstream major project start-ups planned for 2017. Juniper has begun production on schedule and under budget.

The project is expected to boost BPTT’s gas production capacity by an estimated 590 million standard cubic feet a day (mmscfd).

With an investment of approximately US$2 billion, Juniper is BP’s first subsea field development in Trinidad. It produces gas from the Corallita and Lantana fields via the new Juniper platform, 80 kilometers (50 miles) off the south-east coast of Trinidad in water approximately 110 meters deep. The gas then flows to the Mahogany B hub via a new ten-kilometer flowline that was installed in 2016.

Bernard Looney, chief executive of BP’s Upstream business, said: “Delivered on schedule and under budget, Juniper is a major milestone in BP’s more than 50 years of investment in Trinidad and Tobago. It is the largest new project brought into production in Trinidad for several years and the second major project we have started here this year. Together they represent a significant portion of the new production capacity we expect to bring online in 2017.”

Another major project in Trinidad, the Trinidad Onshore Compression project, began operations in April. In June BPTT announced that it had sanctioned development of the Angelin gas field, which is expected to start production in late 2019. BPTT also announced two gas discoveries which may support future developments offshore Trinidad.

“The safe start-up of production from Juniper is a proud moment for BPTT, and further demonstrates our commitment to helping improve production capacity for Trinidad and Tobago,” said Norman Christie, BPTT’s regional president. “We thank the Government, our contractors and the hundreds of team members across the globe that worked to safely bring Juniper on to production.”

Juniper is BPTT’s 14th offshore platform in Trinidad and its sixth to be constructed at the fabrication yard in La Brea, Trinidad.

Fourchon LNG, LLC Formally Kicks Off FERC Process for $888 Million LNG Facility in Port Fourchon, LA, USA

The Greater Lafourche Port Commission (GLPC) and tenant Energy World USA (EWUSA) announces that wholly owned Fourchon LNG LLC has filed its formal letter to request initiation of the pre-filing review process with the US Federal Energy Regulatory Commission (FERC). Upon completion of the pre-filing process, Fourchon LNG LLC intends to file an application with FERC for authorization to construct the proposed 5 million tons per annum mid-scale liquefied natural gas (LNG) production and export facility at Port Fourchon.

2Fourchon LNG FacilityPictured: Energy World USA’s proposed Fourchon LNG facility in Port Fourchon. Photo courtesy of Energy World.

Once constructed, Phase 1 of the Fourchon LNG project will produce 2 million tons of LNG per year for export, with a program to increase capacity up to 5 million tons in Phase 2. Fourchon LNG also plans to reserve up to half a million tons of LNG per year for domestic use, with the intent of providing LNG to fuel the next generation of offshore supply vessels (OSVs) powered by LNG and operating in the Gulf of Mexico.

“We welcome this critical milestone for the Fourchon LNG project by our tenant Energy World, and we are excited to have the opportunity to add their proposed facility and its services to Fourchon’s diverse and extensive list of offerings,” said GLPC’s Executive Director Chett Chiasson. “We are looking forward to working with Energy World and our community to move forward through the regulatory process and keep Port Fourchon at the forefront of the oil and gas service industry.”

The Fourchon LNG facility is to be constructed to the west of Belle Pass on a site of up to 150 acres located on port-owned property outside of the port’s existing developments.

The project developer, Fourchon LNG LLC, is a newly established project company owned by Energy World (USA) Inc. and is part of the Energy World International Ltd. (EWI) group of companies. The EWI group is engaged in the business of developing, constructing, and operating in property investment, infrastructure, power generation and energy-related projects.

“The Energy World Group of companies has over 20 years’ experience in the safe production, storage, transportation and delivery of LNG to its customers in Australia; and the Group is completing two world class LNG facilities in Indonesia, which will be the reference plant for Fourchon LNG, and the very first import terminal in the Philippines. We appreciate the opportunity to bring this type of new development to Port Fourchon,” said Graham Elliott, Project Director for Energy World.

“Energy World is pleased to commence our first US-based project by kicking off the formal regulatory process with FERC following over two decades of sustainable, safe, and timely delivery of similar projects in sensitive environments across the globe. We look forward to incorporating the LNG produced at Port Fourchon into our global supply chain to fuel our own gas-fired power plants right across the Asia-Pacific region as well as providing a clean, green source of fuel for the next generation of US marine vessels. Additionally, we hope to export to Jamaica and the wider Caribbean, where Energy World is separately proposing to develop an LNG hub terminal and gas-fired power plants consistent with our goal of delivering clean and affordable electricity to developing countries on a global platform,” added Stewart Elliott, Managing Director of Energy World International.

The proposed facility will represent an investment of upwards of $888 million for Phase 1, making it the largest single initial investment in the history of both Port Fourchon and Lafourche Parish.

“Our community has been dealing with an economic downturn for a few years now, so we are excited for the opportunities that this project will provide by bringing hundreds of jobs during the construction phase, and dozens of good-paying permanent jobs once the facility is operational, which will help our young families and workers,” said GLPC Board President Perry Gisclair.

GLPC has been working with Energy World to produce a Preliminary Waterway Suitability Assessment with the US Coast Guard, which will help to ensure that current and future port activities are not adversely affected by the operation of the potential facility. GLPC and Energy World are currently working with the Coast Guard to advance to the next stage of the Waterway Suitability Assessment process for the project. This assessment will also serve to support Energy World’s application to the Federal Energy Regulatory Commission (FERC) for project approval.

“We take our role as advocate for our existing tenants and the offshore service industry seriously, and we are working very closely with both the US Coast Guard and Energy World to ensure that vessel traffic in and out of the port will continue to grow through this development and our other expansion plans stretching far into the future,” Gisclair added.

With the assistance of the Greater Lafourche Port Commission, the South Louisiana Economic Council (SLEC) is working with the Louisiana Department of Economic Development (LED) to identify potential business and tax incentives to help ensure that the project is constructed in Louisiana’s Bayou Region.

Buchan Alpha Arrives in Shetland for Disposal

First offshore structure arrives at new Veolia and Peterson Dales Voe decommissioning facility.

The Repsol Sinopec Resources UK, Buchan Alpha oil production vessel, weighing 12,000 tonnes, arrived safely in Lerwick, Shetland on 12/13 August. Decommissioning of the facility is being managed by Veolia and Peterson and is believed to be the first major North Sea floating production vessel facility to be disposed of in Scotland.

3Buchan Alpha 2aThe Buchan Alpha oil production vessel has arrived safely in Lerwick, Shetland for disposal.

A semi-submersible moored floating production vessel, weighing 12,000 tonnes, Buchan Alpha was built in 1973 as a drilling rig and converted for production purposes in Stornoway between 1978-80. The vessel commenced production in 1981 from the Buchan field, located in blocks 21/1A and 20/5A, and has subsequently also produced the nearby Hannay field. Production ceased, as planned, on 12 May 2017 having produced around 148mm barrels of oil.

The contract for disposal was internationally tendered and awarded to Veolia working with their strategic partner in decommissioning, Peterson, who have a proven safety and environmental track record in the decommissioning of oil and gas assets. The work will be carried out at the Dales Voe site in Lerwick. Buchan Alpha is believed to be the first major North Sea floating production facility to be disposed of in Scotland.

Scottish Government Minister for Business, Innovation and Energy, Paul Wheelhouse, said:

Off-station work on Buchan Alpha has been ongoing, with the primary objectives of cleaning, and reducing topsides weight in preparation for tow. It will initially be moored offshore Lerwick in deeper water where the thrusters will be removed to reduce the draught, allowing it to be moved to the quayside within the next few weeks.

Veolia will then begin the dismantling of the steel structure to maximize the recycling rate with the aim of achieving 98% recycling rates.

Estelle Brachlianoff, Senior Executive Vice-President Veolia UK & Ireland said:

"We are expecting a growth in the decommissioning market and the Buchan Alpha contract is a significant example of this type of the potential expansion of this sector in Scotland. These offshore assets will now be recycled to give them a second, third or even fourth life creating jobs and investment in the local economy.”

Sandra Laurenson, Chief Executive of Lerwick Port Authority, added:

“The arrival of Buchan Alpha is another significant milestone following more than a decade of decommissioning at Lerwick where Buchan is the largest project yet. Recent investment, extending the Dales Voe quay and laydown, and progressing plans for an ultra-deep-water quay as the UK solution to future requirements reflect our commitment to capability and competitiveness as a leader in the emerging decommissioning market.”

  • Repsol Sinopec Resources UK is an oil and gas exploration and production company headquartered in Aberdeen and operating exclusively in the UK North Sea
  • It is a joint venture between Repsol SA and Addax Petroleum UK Limited, a wholly-owned subsidiary of China Petrochemical Corporation (Sinopec Group). It arose from the acquisition, in 2015, by Repsol SA, of the global assets of the former Talisman Energy Inc, including its 51% equity interest in the joint venture, previously called Talisman Sinopec Energy UK
  • Repsol Sinopec Resources UK has interests in 52 fields, of which it operates 41, on the UK Continental Shelf, with 12 offshore installations and two onshore terminals

Bluestream Secures Annual IRM Contract of Total E&P Netherlands

Following an intensive tendering process, Den Helder-based Bluestream has been awarded the 2017 Inspect Repair and Maintenance contract with Total E&P Nederland B.V. for 36 offshore sites. This contract strengthens the position of Bluestream as one of the leading service providers of innovative inspection services to the oil, gas and offshore wind market.

4Bluestream copyBluestream working alongside the Total L7 Central Complex for the yearly inspections.

The contract is part of a long-term frame agreement and is a continuation of the long-standing relationship between Bluestream and Total EP that has been in place since 2009. The work scope covers the subsea inspection of 29 platform structures and seven free standing domes on the North Sea Dutch Continental Shelf. Additionally, an experienced Bluestream rope access team will inspect structures of the topsides which are at locations difficult to access with standard equipment.

With the offshore operations to be completed this summer, Bluestream teamed up with Vroon Offshore Services as her maritime partner utilising the Dynamic Positioning class2 vessel ‘VOS Sugar’.

Bluestream will execute the complete inspection and cleaning work in two phases. During the first phase Bluestream’s own fully equipped Inspection Class Seaeye Tiger ROV and the Compact Work Class Seaeye Cougar XT ROV will be used, while a team of qualified inspection divers will be deployed during the second phase.

Adriaen Winckers, responsible for Business Development at Bluestream: “We have successfully supported Total’s operations for eight consecutive years now and are delighted to have been selected again to continue and strengthen this working relationship. The contract demonstrates confidence in our ability to deliver challenging inspection projects. With input and in close cooperation with TOTAL E&P, we raised the bar of professionalism in our in-house inspection department considerably over the last few years and by doing so we have put in a strong and fully dedicated foundation that manages the entire workflow from preparations through to final reporting.”

Pharos Offshore’s Cable Recovery Spread Completes New Scopes

5Pharos 55t cable grab iceland w768h432Pharos Offshore Group have paired their trenching and deburial systems with a rugged cable retrieval grab to aid the offshore industry with a simple to use and quick to mobilize solution for recovering damaged subsea products and out of service cables.

Two of the company’s Cable Recovery Spreads were sent out this month to work on the recovery of 1x Array Cable within an Offshore Wind Farm situated in the Irish Sea, and the recovery of a section of an interconnector off the coast of Iceland.

The company felt that the cable industry could benefit from a simple solution to resolve common issues and supply clients with a varying amount if equipment depending on requirements, more importantly the company were driven to reduce the amount of downtime for the client by providing a fast and efficient service.

The Subsea Cable Recovery tooling is offered as part of a “Menu of Equipment” so that clients could tailor their own package. Typical items include:

  • Mass Flow Excavator or Jet-Trenching ROV for the deburial and subsequent reburial of the product;
  • The cable grab spread (configured for crane launch or as a ROV configured unit);
  • An independent camera and lighting system on the cable grab itself to monitor the recovery;
  • Proximity sensors, gyros and imaging sonars;
  • The personnel to mobilize; operate and demobilize the varying levels of kit chosen.

The track record for these spreads has covered 2 x Interconnectors, 3 x Array Cables and 1 x Export Cable. Upcoming projects may include flowlines, flexible pipe and (with the addition of a new-build grab) sections of pipeline; as the company continue to explore new options across the offshore markets in Europe and beyond.

Boskalis Acquires Subsea Survey Specialist Gardline

6 1BOS Logo Royal2Royal Boskalis Westminster N.V. announces that it has acquired all shares of the Gardline Group (Gardline) as of August 15, 2017. The UK based company's main activities include marine geophysical surveys, offshore geotechnical services and environmental surveys. With the acquisition Boskalis fulfils its strategic ambition to build a position in the offshore survey market and becomes a specialist provider of subsea geotechnical surveys with an exposure to the renewables market and the early cyclical oil and gas market. Gardline operates 15 survey related vessels in addition to 25 smaller vessels including crew transfer vessels and survey catamarans.

6 2GardlineThe consideration paid including assumed debt amounts to approximately GBP 40 million. The current annual revenue level is approximately GBP 60-70 million. Based on the challenging near-term outlook Boskalis does not expect the transaction to be EBIT accretive within the next few years. This transaction however positions Boskalis well for when end-markets recover.

Gardline was established in 1969 and was a second-generation family-owned business. The company's principal offices are located in Great Yarmouth, UK with further activities in the USA, Brazil and Singapore. Gardline currently employs approximately 750 employees including a pool of 100 surveyors. The core geographical market is Northwest Europe, where Gardline is the main competitor of Fugro in marine surveys. With the acquisition Boskalis strengthens its position as marine services provider in Northwest Europe.

Aker BP Awards Odfjell Rig Contract

Aker BP ASA has awarded an agreement to Odfjell Drilling for the lease of the semi-submersible drilling rig Deepsea Stavanger for a period of approximately 9 months, with commencement in February 2018.

7AkerBP Deepsea Stavanger 600x338Deepsea Stavanger

The contract is for exploration and development drilling at various locations in the Norwegian Sea and the Barents Sea. The contract value is estimated up to USD 68 million.

Deepsea Stavanger is owned and operated by Odfjell Drilling, and was delivered in 2010.

Aker BP ASA is fully fledged oil company with exploration, development and production of the petroleum resources on the Norwegian shelf. Aker BP is headquartered in Fornebu, outside of Oslo, with offices in Trondheim, Stavanger, Harstad and Sandnessjøen.

Atwood Oceanics Announces Contract for the Atwood Achiever

Atwood Oceanics, Inc. (NYSE: ATW) announces that one of its subsidiaries agreed to a one well contract at an undisclosed day rate for operations offshore Northwest Africa with Kosmos Energy Ventures for the ultra-deepwater rig, the Atwood Achiever. The new contract will commence immediately following the completion of the well in progress under the existing contract and also includes six one-well priced options. As a result of this contract, the expected earliest availability of the Atwood Achiever is March 2018, assuming no options are exercised. If all six options were to be exercised, the drilling program would be expected to extend until approximately December 2018.

8AtwoodAchieverAtwood Acheiver. Photo credit: Atwood Oceanics

Rob Saltiel, President and Chief Executive Officer of Atwood Oceanics, commented, "We are pleased to extend our drilling operations for Kosmos Energy in Northwest Africa. Kosmos continues to be a valued client, and we appreciate their confidence in the Atwood Achiever." Atwood Oceanics, Inc. is a leading offshore drilling contractor engaged in the drilling and completion of exploratory and developmental wells for the global oil and gas industry. The Company owns 10 mobile offshore drilling units and is constructing two ultra-deepwater drillships. The Company was founded in 1968 and is headquartered in Houston, Texas. Atwood Oceanics, Inc. common stock is traded on the New York Stock Exchange under the symbol "ATW."

M2 Subsea Secures ROV Service Alliance in Gulf of Mexico

M2 Subsea, a global independent provider of ROV services, has formed an alliance with leading vessel operator, Harvey Gulf Marine International to provide subsea ROV services in the Gulf of Mexico.

The alliance will see M2 Subsea’s ROVs utilized on board Harvey Gulf’s DP2 survey support vessel, the Harvey Bronco. The offshore supply ship will focus on the survey and inspection market and will be equipped with M2 Subsea’s 150HP Triton XLX34 ROV system.

The Triton is a heavy-duty work class ROV which is rated to 3,000m depth and well suited for all aspects of subsea operations. The system is complete with a top-hat tether management system and equipped with a survey junction box and auxiliary hydraulics. The vehicle will be utilized for inspections and light intervention activities.

9Mike Arnold M2 SubseaMike Arnold, CEO, M² Subsea

M² Subsea chief executive officer Mike Arnold said: “The Harvey Bronco is a significant milestone for us as we continue to build on our successful vessel opportunities in the US and further enhance our overall service provision.”

“M² Subsea is committed to providing high quality, cost efficient solutions to the subsea market and it is fantastic to see Harvey Gulf recognize the value we can add to their operations through this partnership. We look forward to working closely with the team in the coming years.”

Harvey Gulf Chairman and CEO Shane Guidry commented: “Harvey Gulf is pleased to join forces with a high quality subsea service company in M2 Subsea. This alliance complements our existing fleet of multi-purpose support and light construction vessels, enabling Harvey Gulf to offer a broader range of services and superior performance to all other Jones Act vessel operators in the Gulf of Mexico.”

The Harvey Bronco vessel will be ported at Harvey’s Gulf’s Operation Yard in Port Fourchon, Louisiana and available for immediate work. It is due to be deployed in August 2017 to conduct an underwater inspection of lieu of dry-docking (UWILD) project.

Based in Houston and Aberdeen, M² Subsea is the largest independent provider of ROV services, focused on reducing costs and risks to meet the demands of the low oil price environment.

RJE International Helps China Study the Deep Sea

RJE International are partnering with China's major oceanographic institute to take a closer look at the ocean floor.

The National Deep Sea Center -- founded several years ago to advance China's marine research -- plans to deploy scientific equipment to depths of 6000 meters below the surface in order to gather valuable data from the sediment and surrounding subsea environment.

10RJE AP120623019383RJE will partner with China for a closer look at the deep sea. Photo: Wang Wensheng /AP

RJE will help the Center recover the equipment mooring after it completes its months-long study. When the data has been collected, the equipment will be released from its anchor and float to the surface to be recovered by researchers.

In the likely event the equipment surfaces far away from its original location, the Center plans to use our ATT-400/6KM Acoustic Transponder and our STI-350 Surface Acoustic Receiver to retrieve it.

"Operating at depths of 6000 meters is always a challenge," said Bruce O'Bannon, the VP of Sales at RJE. "But our line of acoustic beacons and receivers are up to the task."

The ATT-400/6KM Transponder is a small, battery-operated acoustic beacon that is designed to withstand the enormous pressure of the deep ocean. It assists in recovering subsea assets and equipment when paired with the STI-350 and DPR-275 acoustic directional receivers.

This opportunity was made possible through Qingdao Haiyan Electronics Co., Ltd, a company based in China and a partner of RJE.

DNV GL Applies Data Analytics Techniques to Reduce Downtime

Opportunities for digitalization are currently being embraced by the oil and gas sector. However, there are few practical use cases of it yet. Lundin Norway and DNV GL have developed the first step in a solution for predicting unplanned shutdowns of Lundin Norway’s Edvard Grieg production platform.

11DNVGJ EG Rowan2 Photo Lundin NorwayLundin Norway’s Edvard Grieg production platform. Photo credit: Lundin Norway

The Edvard Grieg production platform is a modern hydrocarbon processing facility that has been in operation for nearly two years. It is located at Utsira High in the North Sea and operated by Lundin Norway (65%), OMV Norge (20%) and Wintershall Norge (15%). The energy required by this infrastructure is monitored by more than 2,000 sensors. Is it possible to identify in the data generated by the sensors that critical equipment is about to shut down before it happens? And thereby take preventive actions to avoid production disturbances?

The aim of this project was to demonstrate the suitability of data analytics techniques to detect events that might cause an unplanned shutdown, and thereby initiate necessary preventive actions. Lundin and DNV GL - Oil & Gas gave four students the challenge to develop a data analytics application. With some fresh minds on board and supported by experienced experts from both companies, progress has been beyond expectations.

“In a very short time frame, the project team has come a long way in substantiating the value of using data analytics techniques to improve our operations,” says Kari Nielsen, Head of Field Operations, Lundin Norway. “This is very encouraging and motivates us to continue our efforts.”

“We’ve seen similar results in several other digitalization initiatives we’ve had lately. Engineers with domain knowledge of oil and gas operations are critical to complement the data analytics approach. This means that DNV GL, as a technically skilled company, has a significant role to play in the digital future,” says Kjell Eriksson, Regional Manager Norway, DNV GL - Oil & Gas.

The students created several statistical models which they trained using the data generated by a selection of the sensors available in the system. An application was built to analyse the results of each statistical model and generate a warning message any time there is a high probability that a trip can occur, giving the operator a time window to take preventive actions.

“It’s been a huge inspiration to work with such a motivated and creative team. Experienced engineers who have been in the game for some time benefit from having unbiased and fresh digital minds on board,” says project manager Francisco Martin-Recuerda, DNV GL – Oil & Gas.

See more about the digitalization in the oil and gas industry here.

Read more about DNV GL’s Veracity industry data platform here.

Synectics Secures Surveillance Contract for Major USA Floating Platform in Series of Offshore Wins

12Synetics C3000 1 PTZ Power Base 2 RGBGlobal surveillance business Synectics has secured contracts for a range of high profile offshore oil and gas projects, including a major USA deep-water floating platform in the Gulf of Mexico, three LNG Floating Storage Regasification Units (FSRUs) and two Very Large Crude Carriers (VLCCs).

The scope of works for the Gulf of Mexico development includes the provision of 37 Full HD Class 1, Division 1 COEX™ C3000 camera stations with integrated power base to monitor both hazardous and safe area zones.

Synectics’ COEX camera stations are widely used by many of the world’s most challenging oil and gas, marine and critical infrastructure environments to ensure continuous, reliable image capture in all lighting, weather, and operational conditions.

Explosion proof and certified to international standards including CSAus, ATEX, and IECEx, the C3000 hazardous area camera stations deployed on the floating platform will utilize Synectics’ recently launched integrated power base technology.

This technology is particularly suited to offshore and marine applications where cost-efficient, practical use of space is essential. The self-contained base can house fiber optics and provides integral power conversion, enabling camera compatible mains connectivity and eliminating any need for a separate junction box.

The FSRUs and VLCCs will also utilize a combination of COEX C2000 and C3000 camera stations – in each case as part of an end-to-end surveillance solution driven by Synectics’ command and control software, Synergy 3.

In addition to delivering stand-alone camera control, video playback and secure incident/evidence management, Synergy 3 enables fixed and floating vessels to integrate surveillance data with third-party systems – such as radar and AIS ‒ in order to improve situational awareness and threat detection.

Synectics, which has over 30 years’ experience developing solutions for the oil, gas and marine sector, will provide Factory Acceptance Testing (FAT) for each project at Synectics' global operations center in the UK, with commissioning for the five vessels provided by the regional office in Singapore.

Darren Alder, Synectics Divisional Director for Oil and Gas, said: “To say it has been a challenging few years for the oil and gas industry is an understatement, yet during this time we have continued to secure key contracts by offering tailored end-to-end solutions and specialist technology that meets precise needs.

“The uniquely demanding requirements of offshore security and surveillance have always played to our strengths in this respect, a fact reflected by these recent contracts with industry-leading names. With factors including a decreasing deep-water cost curve and increased investment in LNG supply chain infrastructure now driving offshore market optimism, these latest awards demonstrate our ability to add value for our customers in terms of improved security, safety, and situational awareness.”

ITF Hosts Decommissioning Debate During SPE Offshore Europe to Fast-Track Technology Solutions

The Industry Technology Facilitator (ITF)’s latest Innovation Network Tech Talk event will bring together technology developers, industry bodies, service companies and operators to discover the opportunities for efficient and cost-effective decommissioning and well abandonment.

The free event will be held during the week of SPE Offshore Europe at the Chester Hotel, Aberdeen on Tuesday, September 5 at 6pm.

According to the latest cost estimate from the Oil & Gas Authority (OGA), the predicted price tag to decommission UKCS oil and gas infrastructure is £59.7billion. The OGA has challenged the industry to cut the cost of dismantling all current and proposed offshore facilities by at least 35% to less than £39billion.

13 1Roger Esson Decom North SeaRoger Esson, Chief Executive of Decom North Sea

In an interactive session supported by Decom North Sea, the Tech Talk will tackle the decommissioning challenges faced by the industry as well as showcase new technologies and the latest developments in decommissioning activity.

Roger Esson, Chief Executive of Decom North Sea, John Wiseman, Managing Director of Fairfield Energy and Proserv CEO, David Lamont, will provide an overview of industry needs.

13 2Dr Patrick OBrien ITFDr. Patrick O’Brien, CEO of ITF

Dr. Patrick O’Brien, CEO of ITF said: “Well plugging and abandonment activity in the North Sea is accelerating with nearly half of total decommissioning expenditure depending on cost and technical efficiency in this complex area. Though progress has been made by operators to reduce the financial burden and remove unnecessary complexities, the implementation of new technologies will play a crucial role to keep costs and risk to a minimum. ITF is working closely with its members and technology developers to strengthen collaborative initiatives and support the industry with this inevitable undertaking.”

Roger Esson, Chief Executive of Decom North Sea, added: “The objective of safe, efficient and cost-effective North Sea decommissioning can only be achieved if industry embraces the adoption of leading technology. This event mirrors Decom North Sea’s key objective to connect capability with opportunity, by promoting the developer community to the sector and providing a platform to showcase innovative and leading technology.”

Decommissioning will be a prominent feature at this year’s SPE Offshore Europe with the addition of a Decom Zone. This dedicated area will feature more than 20 decommissioning technology and service providers, and a conference theatre programmed in association with the industry's key associations including ITF, Decom North Sea, iMechE and SUT. ITF’s CEO, Dr Patrick O'Brien will host a conference session titled: 'ITF: Well Abandonment Technology Solutions to Increase Efficiencies and Reduce Costs' on Tuesday, September 5 from 2.30pm. The session will provide insight on the uptake and impact of technology developments in the industry so far with presentations from some of ITF’s developers.

ITF launched its global online Innovation Network last year to raise the profile of oil and gas SMEs direct to its membership of operator and service companies. The Innovation Network is an active online community enabling oil and gas SMEs to promote their technologies and services direct to end users and also keep up to date with the latest technology needs of the industry.

For more information and to register, click here.

Xodus Appoints New Director to Drive Decommissioning Strategy

Xodus Group has appointed Enrico Salardi as its decommissioning director to lead the company’s experienced ‘decom division’ which was formed in 2015.

Mr. Salardi has more than 20 years’ experience in the management of oil and gas assets. He joins Xodus from operator Quadrant Energy where he was senior project manager for a number of decommissioning programmes in Australia.

14Enrico SalardiEnrico Salardi

“Xodus has been ahead of the game when it comes to decommissioning, from advising governments to strategic planning,” said Mr Salardi. “I am joining a very experienced team that has worked on managing processes and the execution of work on many assets in the North Sea and around the world.

“I hope my knowledge will add to this and provide the team with an insight into what challenges the operators are facing and how we can help ease the demanding process of decommissioning, including reducing associated costs.”

Throughout his career, Mr. Salardi has managed many projects in various phases of their lifecycle around the world, including Italy, Nigeria, Norway, Libya, Croatia, Egypt and Australia. After more than 15 years working for Italian supermajor Eni, he joined Apache in Perth, Australia where, besides decommissioning work, he also managed a number of new development projects.

As several assets in the North Sea reach the end of their lifespan, the latest cost estimate from the Oil and Gas Authority has predicted the cost of decommissioning the UKCS oil and gas infrastructure is £59.7 billion with an ambitious goal of completing this work for less than £39 billion.

Xodus’ integrated capabilities cover the entire offshore decommissioning process from facility design to project execution and long-term monitoring and can help clients ensure that their requirements are understood and managed.

Mr. Salardi will work alongside Xodus’ decommissioning lead, Peter Tipler, who will continue to focus on delivering the innovation, collaboration and strategic solutions that are required to reduce the overall cost of decommissioning. He helped form Xodus’ decom division which has undertaken over 100 decommissioning projects globally ranging from M&A due diligence and commercial advice, to training and detailed planning and approvals for decom execution.

Mr. Tipler recently helped Xodus deliver a decommissioning ‘trend survey’ to Japanese government organisation JOGMEC (Japan Oil and Gas and Metals National Corporation) to provide oil and gas companies in the country with a better understanding of the decommissioning process and how to manage their global asset and abandonment liabilities.

Wim van der Zande, CEO of Xodus Group said: “Enrico has vast experience of working at all stages of an asset’s lifecycle and his recent work in directly managing a decommissioning project will provide our team with valuable insight of an operator’s perspective. He will bring his learnings from global decommissioning projects to our key areas, including the North Sea, which we hope will lead to further cost savings for our clients.

“As we’ve shown over the last few years, Xodus is a trusted advisor in decommissioning. Our team can apply its deep understanding of decommissioning from execution of projects globally to focus on the key drivers that materially impact the overall cost for operators.”

OEM Group Appoints Engine Expert Malcolm Christie

15Malcolm ChristieOEM Group has appointed industry veteran Malcolm Christie in a senior technical support role in response to growing its UK and international business.

Mr. Christie has more than four decades’ experience in the marine, and the oil and gas industries and joins OEM Group from 41 years at Turner Engine Powered Services where he latterly held the position of technical estimating manager for nine years.

Mr. Christie is a time served experienced engineer who started his career as an apprentice diesel engineer before going on to hold roles including service engineer, workshop foreman and technical engineer. He has also worked internationally on oil and gas projects in the Middle East, Asia, Far East and the United States.

He has experience in leading a number of large-scale global projects which have harnessed tangible results including projects on drilling rigs which required the main engines and generators to be upgraded to increase power output, with no increase in footprint. This also included upgrading and replacing associated ancillary equipment. Mr. Christie successfully achieved this goal while increasing power by up to 50% for each marine package. These projects were completed on time and in accordance with Class rules and strict emission regulations.

PIRA Energy Market Recap for the Week Ending August 14, 2017

16PIRALogoU.S. Stock Deficit to Last Year Continues to Widen

Commercial oil inventories resumed their decline, falling 4.6 million barrels this past week led by a 6.5 million barrel decline in crude oil. The stocks of the four major products built 1.9 million barrels last week, the first build in eight weeks, and gasoline contributed 3.4 million barrels, a hefty build after seven consecutive weekly declines. Cushing crude inventories have generally drawn since early April and this past week they had their first significant build of 0.6 million barrels; next week’s inventory is forecast to show a slight increase, as the HollyFrontier Tulsa outage continues. Crude inventories are forecast to show another substantial decline next week.

Summer Over Already?

Spot on-peak energy prices were lower y/y (but higher m/m) in most Eastern markets with a few notable exceptions. Loads in the East fell by 2.8% as cooling demand fell from the warmer than normal prior year. ERCOT and SPP loads rose slightly. Henry Hub spot prices averaged near $2.96/MMBtu in July, up 4 cents from June levels. Milder forecast for August weather has colored recent NYMEX trading, with the market sending prices to an injection season low below ~$2.80/MMBtu. PIRA has revised down balance of year prices as well as some longer dated forecast. Longer term price recovery in 2018 and 2019 is still on the cards due to underlying structural tightness.

CA Carbon Pricing Tempered by Upcoming Auction

With cap and trade extended, California carbon allowances reached multi-year highs in July (though on low volumes). As the Aug. auction approaches, pricing has retreated to levels closer to the expected 2018 auction reserve. Inflation indicators that will set next year’s auction floor slowed in June. Upside pricing potential is limited in the near term by growing surpluses as unsold allowances return to the market - likely beginning in Nov. CARB must soon determine the implementation of moving allowances unsold after 24 mos. to the APCR. By the end of this year, CARB must adopt a Scoping Plan consistent with AB 398. The adopted Cap and Trade Amendments include linkage with ON, but a 2018 link is not a certainty.

U.S. Inflation Remains Sluggish; World Industrial Activity Is Solid

The U.S. core CPI stayed sluggish for the fifth consecutive month in July. Vehicle prices continued to fall at a faster pace than usual, and rent increases were unusually subdued. Global industrial production growth accelerated during the second quarter. In the developed world, the U.S., the euro area, Japan and Canada reported healthy results, while the U.K. disappointed. In emerging Asia, expansion in trade supported industrial activity, but an increase in the high-tech sector inventory was a negative influence.

LPG Prices Continue to Strengthen Relative to WTI

For the third consecutive week, propane and butanes prices have strengthened relative to WTI. The propane/WTI ratio of 67% is abnormally high for the stock build season and is more like the winter demand season ratio. Propane stock build for week ending August 4th was virtually non-existent, and propane stocks remain on the low side of the five-year average. This contributed to the 4.4% week-on-week increase in propane prices. The rise in ethane prices is tied to the commissioning of three world-scale steam crackers through the end of the year.

Margins for Manufacturing Ethanol in the U.S. Improve

The EPA announced it will reject the petition to shift the point of biofuels obligation from the refiner and importer to the blender. RIN assessments were lower during the week ending August 4. U.S. fuel ethanol exports declined to 85.3 million gallons in June. Brazil returned to a net export position in July. European ethanol prices declined.

Mild Weather and Growing Production Weigh on Market

Last week’s smaller-than-expected weekly storage report added fuel to this week’s NYMEX rally, with the Sep’17 contract recovering more than 20 cents off last Friday’s calendar year low. As supply gains continue to weigh on the market sentiment amidst seasonally waning power burns, we see little support for price gains in the immediate future. Contributing to price recovery headwinds are the August balances, currently shaping up to yield a ~25 BCF reduction in the Y/Y storage deficit. Even so, we remain steadfast in the underlying strength of demand due to structural growth.

Time To Move Along

Arguing with the August Crop Production report at this point is futile. The numbers will either be confirmed or disputed at the end of next week after a thousand samples are taken from Ohio to South Dakota during Crop Tour. The markets cannot sit around and wait however as other influences take over for the rest of August, especially in soybeans as wet weather over the next four weeks should have a dramatic effect on the national yield.

As India Stalls, China Quietly Sucks Up Global Excess within Limits

As active spot buyers and sellers, and as the only acknowledged “price sensitive” buyers, Indian companies get a lot of press in the global LNG trade as evidenced by the recent kerfuffle with US liquefaction developers regarding possible contract re-negotiations. The fact is, Chinese buyers have –without comment – been sucking up close to 30% of incremental global LNG supplies this year, the largest incremental buyer this year. While this 38% Y/Y increase in imports on the part of Chinese buyers is wholly sanctioned by contract obligations, it was not necessarily a given that these contracts would be honored to such an extent – at least not initially.

Improving Nuclear Availability in Continental Markets Bearish for Sept. and 4Q Prices

Since early spring, the markets have been focused on the drought in Southern Europe, which has led to increased tightness across Italy, Spain, Switzerland, and France. Moreover, the bullish sentiment has been sustained by record low nuclear output in France, with total generation of 225 TWh in the period January-July, the lowest level since at least 2001. While hydro remains well below year ago levels, nuclear outlook in France and surrounding markets is now turning bearish.

Russian Force Majeure Maintains Bullish Coal Market

Coal prices moved higher again this week, spurred on by a force majeure declaration in the Far East of Russia. Wet weather damaged railroad infrastructure, curtailing coal exports from the ports of Vostochny and Maly. This was the latest in a litany of several external forces that have served to tighten prompt physical balances and push market prices higher. CIF ARA forward prices increased by the largest extent, breaking the pattern of the previous several weeks. For the prompt market, the risks remain skewed to the upside as demand is seasonally high, although PIRA continues to assert that rebalancing fundamentals will exert downward pressure on balance of the year pricing, although the downside has been trimmed due to sizeable stock draws.

EUA Fundamentals Turning Bearish in Upcoming Months

Ongoing post-2020 market reform talks (with an upcoming meeting on September 13th) can offer a degree of price support for European Carbon prices, as can rising implied carbon prices from German coal-to-gas switching. However, PIRA expects that the increasingly poor supply-demand fundamentals in the EU ETS will outweigh those more positive indicators in the coming months. This includes the increases in auction supply starting in September, and expected decreases in power sector EUA demand for the remainder of the year.

Japan Gasoline Demand Kicks Higher for Upcoming Mountain Day Holiday

Japanese runs continue rising post-turnaround. Crude imports rose as expected and crude stocks built 5.1 million barrels. Finished product stocks were modestly lower, with good draws on gasoline, gasoil, and jet. Aggregate demand was higher and continues to rise, on trend. Gasoline demand kicked up 151 MB/D, which was close to expectations with the upcoming Mountain Day holiday and stocks resumed drawing by 0.35 million barrels (50 MB/D). Gasoil demand was surprisingly higher by 60 MB/D and stocks drew 0.37 million barrels (53 MB/D). Kerosene demand jumped 44 MB/D to a strong 125 MB/D. Refining margins were slightly lower on the week, but remain supportive to rising runs, for the moment.

Financial Stresses Move Higher Amid Global Tensions

Stresses ticked up significantly, this past week, largely because of the potential for conflict with North Korea. The St Louis financial stress indicator ticked slightly higher, but other indicators showed a much bigger rise in stress. Volatility (VIX) jumped much higher, while high yield (HYG) and emerging market debt (EMB), along with other non-Treasury credit indicators, all posted noted losses. Commodities were modestly higher, with energy pretty much in line with overall performance. The dollar was on balance, slightly weaker.

U.S. Inventories and Production Increase

U.S. ethanol inventories built in four of the five PADDs last week, reaching 21.3 million barrels. It was the first increase in three weeks. Domestic ethanol production jumped 10 MB/D to 1,012 MB/D though output outside the Midwest dropped to a three-month low 80 MB/D. Ethanol-blended gasoline production fell 116 MB/D to 9,296 MB/D as the summer driving season draws to a close.

August WASDE

If Yogi Berra was still alive today he’d probably reach into his famous bag of one-liners and proclaim, “It ain’t over ‘til it’s over”. That may be true but as a friend said yesterday, “Thursday is just another large hole poked in the already sinking boat that is the U.S. farm economy”. With fewer bushels to sell, and sinking prices, the last thing that a Midwestern farmer wanted to hear was that the SE U.S. was expected to harvest record yields, but that’s exactly what happened.

High Nuclear Production is Denting Gas Demand

Even though many coal and nuclear power stations will eventually be shut down, in the short-term gas still needs to contend with these other fuels for market share. With winter coming and the near market gas curve in contango, this competiveness looks at greater and greater risk. But these risks are only tempered by the fact that hydropower is still hobbled. Nevertheless, the story of gas demand over the past year has centered on the gas-to-power renaissance. A lot of it has been assisted not only by increased price competitiveness versus coal, but also the absence of cheaper thermal capacity in the form of hydro and nuclear production. Two of these supportive elements are disappearing at the moment. In August, we are seeing how not only nuclear is reasserting itself in European balances, but how gas is also pricing itself increasingly less competitively versus coal.

Seasonal NOx Emissions Fall in May/June

Preliminary Seasonal NOx data for the CSAPR Update program show emissions have fallen in May/June - in line with the lower 2017 cap. In particular, covered coal units with SCR saw their average NOx emissions rate drop. Individual states such as PA, IN and MO saw very large YOY emissions decreases, while others like TX were up, flagging the possibility of binding variability limits (AR and MS appear most challenged). Allowance pricing remains in the range of $600 to $650/ton. EPA recently announced it would not delay implementation of the 2015 Ozone NAAQS, which could tighten seasonal NOx limits down the line.

Saudi Arabia: Foreign Exchange Reserves Post a Small Increase in June

Saudi’s foreign exchange (fx) reserves for June increased $1.7 billion from May levels to $501 billion. It was the first increase seen since May 2016. The three month average draw rate of fx reserves slowed further to $2.6 billion, having been as high as $9.1 billion in March 2017. Since oil prices moved structurally lower in mid-2014, there have only been three other individual months where fx reserves have risen month-on-month. In this context, the increase posted for June is of itself noteworthy. More so, the slowdown in the fx reserve draw rate occurred during a period when oil prices had been generally declining.

Global Equities Ease on Increased Tensions

Global Equity markets fell back broadly on the week from record highs on increased global tensions. In the U.S., the S&P 500 eased -1.3%, with banking, retail, and energy being the weakest performers. Consumer staples and utilities managed to hold their ground, showed only modest changes and outperformed. Internationally, most of the tracking indices performed worse than the U.S, with Europe being the weakest performer, while the Latin America tracking index was the best and showed little change.

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.

DNV GL Carries Out Its First Offshore Drone Survey

DNV GL surveyors have carried out the classification society’s first offshore drone survey on the semisubmersible vessel Safe Scandinavia in the North Sea. This 25,383 GT tender support vessel (TSV) is owned and operated by Prosafe, supporting Statoil’s drilling operations off the coast of Norway. Using camera-equipped drones, DNV GL’s drone pilots checked the TSV’s fairleads and their connection with the vessel’s two columns as part of the intermediate survey.

1 1DNVGL Drone Survey Safe Scandinavia Image 2DNV GL has carried out its first offshore drone survey on board the tender support vessel Safe Scandinavia. Credit: DNV GL

“Innovation is one of Prosafe’s core values. We are very pleased that we chose to try the drone survey, as it helped us optimize our survey requirements and allowed us to save significant amounts of time and money. Normally, this kind of operation would cause disruption to our client for several days. The drone survey took only a few hours and was just as effective,” says Ian Young, Chief Operating Officer at Prosafe.

1 2DNVGL Drone Survey Pilot Safe Scandinavia Image 1DNV GL surveyor Fryderyk Hoga begins the drone survey on board Safe Scandinavia. Credit: DNV GL

“This was a great opportunity for us to demonstrate our drones’ abilities to check the condition of remote external components in challenging offshore conditions. The inspection only required the semi-submersible to de-ballast, then we flew the drone approximately 25 metres below the main deck to check the condition of the fairleads and their connections to the columns that hold up the TSV. With wind speeds of approximately 15 knots, this went very well and the survey showed that the fairleads and their connections were in a good condition,” explains Cezary Galinski, Project Manager Classification Poland at DNV GL.

The classification society has carried out multiple drone surveys on both ships and offshore units, inspecting many areas on board, ranging from tanks and cargo holds to external structures such as jack-up legs. The inspection of such spaces can be both costly and time consuming, and even in some instances potentially dangerous. Using drones to visually check the condition of remote structural components can significantly reduce survey times and staging costs, while at the same time improving surveyor safety.

DNV GL has built a network of trained drone pilots based in Gdynia, Piraeus, Singapore, Houston and Shanghai. This allows drone survey inspections to be offered from any of these hubs. At the same time, DNV GL is developing guidelines and updating our rule set to reflect the use of remote inspection techniques.

Video

Statoil and Partners Makes Second Small Gas Discovery in Barents Sea

2Statoil BarentsSeaStatoil and partners OMV and Petoro have made a small gas discovery in the Gemini North well, northeast of the Wisting discovery in the Barents Sea. The well also proved oil.

The well was drilled in license PL 855. This is the first well drilled in the acreage awarded in Norway’s 23rd licensing round.

“The well was drilled with the ambition of proving up additional oil resources in the vicinity of the Wisting discovery, but like the previous Blåmann well, we discovered gas,” says Jez Averty, senior vice president for exploration in Norway and the UK. “While this well proved a non-commercial gas discovery, the results provide grounds for cautious optimism for additional potential both within this license and the Hoop Area” Averty continues.

We have over time secured a significant portfolio in the Hoop-area and what we have learned from this well will be important when we plan to test some of that acreage in 2018,” Averty points out.

The discovery is in the Hoop area, approximately 30 kilometers northeast of the Wisting discovery. Recoverable volumes are estimated at 0.4-1 billion standard cubic meters (BCM), approximately 2-6 million barrels of oil equivalent (BOE). In addition, there was proved oil, amounting to approximately 0,5-2 million barrels of recoverable oil.

This is the third discovery in Statoil’s 2017 Barents Sea exploration campaign, following the Kayak oil discovery announced on 3 July and the Blåmann gas discovery announced on 17 July.

The well was drilled by the “Songa Enabler” semisubmersible drilling rig, which will now move to the Korpfjell prospect in license PL859 in the Barents Sea southeast.

Licensees in Gemini North (PL855):

  • Statoil (operator) 55 %
  • OMV 25 %
  • Petoro 20 %

Licensees in Korpfjell (PL859):

  • Statoil (operator) 30 %
  • Chevron 20 %
  • Petoro 20 %
  • Lundin 15 %
  • ConocoPhillips 15 %

Crowley Supports Stampede Platform Tow-Out and Installation in Gulf of Mexico

Crowley Maritime Corp.’s ocean class tugboats and 455-series high-deck strength barges recently played an integral role in the safe, successful tow-out and installation of Hess’ Stampede tension-leg platform (TLP) in the deep waters of the U.S. Gulf.

Demonstrating both nearshore and offshore capabilities, six Crowley vessels worked together alongside other third-party assets to deliver the oversized, overweight platform, tendons and other equipment from the Kiewit facility in Ingleside, Texas, to the site of the Stampede floating production facility, about 150 miles offshore in 3,400 feet of water.

3 1STAMPEDE STAGE1 CrowleyjpegPhoto credit: Crowley Maritime Corp.

In the first stage, Crowley’s ocean class tugboat Ocean Wind and the 455-series barges 455-3, 455-5 and 455-7 worked together with other contracted vessels to deliver from Kiewit to the offshore site many 300-foot sections of nine 3,400-foot tendons that would secure the TLP to the seabed. From there, the company’s Ocean Sun and Ocean Sky, along with several third-party tugs, towed the TLP through the Ingleside Channel to offshore waters. After a scheduled brief stop at a holding location, the convoy of vessels began the second stage of the tow in offshore waters.

3 2STAMPEDE STAGE1The Ocean Sun, Ocean Sky and two third-party anchor-handling tugs safely towed the Stampede hull for four days before reaching the project site.

Upon arrival, Crowley’s tugboats began the third phase of work, positioning and stabilizing the platform using the tugs’ dynamic positioning capabilities while the TLP was secured to the tendons. Crowley positioned the tugs in a stationary star pattern and used their tow wires to hold the platform steady in the middle. After Hess and its installation contractor, Heerema, completed installation and the platform was made storm safe, Crowley’s assets were demobilized and returned to nearshore waters.

“The tow-out and installation support work we provided was highly successful,” explained Crowley’s Mike Rampolla, general manager, offshore services. “This project was an excellent example of the types of projects Crowley’s offshore and heavylift personnel and assets are ideally suited for. We have several future jobs in the pipeline and look forward to bringing our full capabilities together to ensure successful outcomes for our energy customers.”

Crowley’s ocean class tugs are modern ocean towing twin-screw vessels with controllable pitch propellers (CPP) in nozzles, high-lift rudders and more than 147 metric-ton bollard pull. The first two ocean class vessels, Ocean Wave and Ocean Wind, are classed as Dynamic Positioning 1 (DP1) tugboats and are twin-screw tugs with an overall length of 146 feet, beam of 46 feet, hull depth of 25 feet and design draft of 21 feet. The second two tugs of the class, Ocean Sky and Ocean Sun, are classed as DP2 and are 10 feet longer. All four vessels are capable of rig moves, platform and Floating Production, Storage and Offloading (FPSO) unit tows, emergency response, salvage support and firefighting.

The Stampede site is the largest undeveloped field in the U.S. Gulf of Mexico and, once operating fully, the floating production facility will have capacity for some 80,000 barrels of oil per day.