Bibby Subsea Delivers Shell Pipeline Agreement

Bibby Offshore’s Houston-based division, Bibby Subsea, has successfully completed a significant contract with Shell Pipeline, a subsidiary of Shell Oil US.

Through its strategic alliance with US diving company, Aqueos Corporation, Bibby Subsea completed the subsea decommissioning project in the Gulf of Mexico, utilizing its diving support vessel Bibby Sapphire.

5Bibby Fraser MoonieFraser Moonie, Bibby Subsea president and managing director

For the 16-day campaign the Bibby Sapphire was equipped with an SMD Quasar work class ROV to disconnect a previously decommissioned eight-inch oil export pipeline from a hot tap tee installed on the Amberjack Pipeline. The team was also tasked with removing the connecting subsea tie-in assembly, 353ft below sea level.

Fraser Moonie, Bibby Subsea president and managing director, said: “Securing this contract was a direct result of our strategic alliance with Aqueos, and we are delighted to have been selected to execute this project; it is an example of the commitment and capability that the teams possess, and builds on completed work from earlier this year.

“It reinforces Bibby Offshore’s successful and long-standing track record with the leading international oil company, in a highly competitive marketplace. I look forward to continually strengthening this relationship through future projects."

Shell Completes Sale of UK North Sea Asset Package to Chrysaor for up to $3.8bn

6Shell logo.svgShell has completed the sale of a package of UK North Sea assets to Chrysaor for a total of up to $3.8bn, including an initial consideration of $3.0bn and a payment of up to $600m between 2018-2021 subject to commodity price, with potential further payments of up to $180m for future discoveries. This sale was announced on 31 January 2017 and has an effective date of 1 July 2016. Completion follows receipt of all necessary regulatory and partner approvals.

The package of assets consists of Shell’s interests in Buzzard, Beryl, Bressay, Elgin-Franklin, J-Area, the Greater Armada cluster, Everest, Lomond and Erskine, plus a 10% stake in Schiehallion. Shell retains a significant, more focused and strengthened presence in the UK North Sea, to which it remains committed.

253 staff transferred from Shell to Chrysaor upon completion of the transaction. In Q4 2017, Shell will record an accounting gain on sale of $1.0bn against the values of both the Shell and former BG assets included in the package. Completion of this deal shows the clear momentum behind Shell’s $30bn divestment programme and is in line with Shell’s drive to simplify the upstream portfolio and re-shape the company into a world class investment.

TechnipFMC Awarded a Subsea Contract by Murphy Sabah Oil in Offshore Sabah, Malaysia

7TechnipFMCTechnipFMC (NYSE: FTI) and (PARIS: FTI) has been awarded a subsea contract by Murphy Sabah Oil for the Phase 1A Block H Gas Development Project. The project is located in offshore Sabah, Malaysia, at a water depth of approximately 1,300 meters.

This contract covers the Engineering, Procurement, Construction, Installation and Commissioning (EPCIC) of the umbilicals, risers and flowlines as well as the transportation and installation of subsea hardware and controls.

Hallvard Hasselknippe, President Subsea Projects at TechnipFMC, commented: “We are proud to have been awarded this contract from Murphy Sabah Oil which demonstrates the strength of our solutions and deepwater capabilities in Malaysia.”

Harvey Gulf Delivers 2nd Large Capacity Jones Act Compliant MPSV

8 2image009Chairman and CEO Shane Guidry of Harvey Gulf International Marine announces the delivery of the second, large capacity 340’ Multi-Purpose Support Vessel (MPSV) significantly enhancing the domestic Jones Act Fleet. This vessel, the M/V HARVEY BLUE-SEA, is a “best in class” Jones Act-qualified vessel that has the technical capabilities to efficiently, effectively and safely perform high quality field development activities. Harvey Gulf now owns and operates the two largest US FLAG construction vessels in the US Gulf of Mexico, having taken delivery of the sister vessel Harvey Sub-Sea in July of 2017.

8 1HarveyBlueseaHarvey Blue-Sea and sister ship, Harvey Sub-Sea, have both been delivered in 2017

The Harvey Blue-Sea & Harvey Sub-Sea have the size, crane capacity, deck space, accommodation, equipment, and station keeping capability that far exceeds any other vessels in this Class. The Harvey Blue-Sea can perform a broad spectrum of subsea installations and removals, inspection, repair and floatel services. It can be equipped to lay umbilical’s and cables and perform well-intervention and hydrate remediation operations. If there is a MPSV job needed in the Gulf, The Harvey Blue-Sea and Harvey Sub-Sea will deliver.

The M/V HARVEY BLUE-SEA is a Jones Act compliant 340’MPSV, equipped with a 250-ton knuckle boom, active heave compensated crane equipped with 4000 meters of wire. The crane’s winch is below deck, expanding her lifting capacity and enabling loads of 107 metric tons to be delivered to water depths of 12,000 ft. The Blue-Sea has 150 berths, all in 1 or 2 person rooms, 13,000 sq. ft. of deck space and a 24’ x 24’moon pool. It has a S61 (Heavy) Helideck and meets ABS DP2, SPS Code and MLC 2006 certification requirements, among many others.

Trelleborg Designs Rubber Membrane For EU-Funded Wave Energy Project

9Trelleborg SymphonyTrelleborg’s engineered products operation has supplied a bespoke, flexible rubber membrane to WETFEET, a €3.46 million, three-year research and development project designed to foster the exploitation of ocean wave energy.

Funded by the European Union’s Horizon 2020 program, the WETFEET project, which has brought together 12 partners spanning six EU countries, aims to address a number of the major constraints that have delayed the sector’s progress to date and develop innovative technology solutions for use in wave energy devices.

José Cândido, Head of Economy & Industry at WavEC Offshore Renewables, the company leading the project, says: “Wave energy has enormous potential to fulfill part of the global demand for a clean, safe and sustainable energy source and as a result, contribute to the creation of jobs across not only the EU but worldwide. In recent years however, wave energy research has revealed a number of challenges such as the reliability of technical components, high development costs and risks, as well as industrial scalability of proposed and tested technologies.

“WETFEET was set up to address these issues and pull together a team focussed on developing viable components, systems and processes to help fulfill wave energy’s potential.”

To date, the project has seen the development of a set of breakthrough technology solutions integrated into two wave energy converters, a floating oscillating water column and Symphony, a variable-volume submerged point-absorber.

Jacco Vonk, Marketing & Business Development Manager for Trelleborg’s engineered products operation, says: “We are delighted to be working with the WETFEET project. Using our experience and insights in supplying high performance polymer solutions to the offshore wind energy sector, we have developed a bespoke flexible rubber membrane for Symphony to drive forward innovation in the wave power category.

“Our polymer membrane technology ensures that the membrane not only acts as seal to protect internal components from external water pressure, but as a bearing to prevent the hull and compensation tank from colliding. Both of which ensure a best-in-class submerged pressure differential device in a smaller geometry, helping to reduce concerns around the cost of Symphony’s development.”

For more information about Trelleborg’s engineered products operation, or any of its products and solutions, please visit the Trelleborg Engineered Products website.

Chrysaor Awards Three-Year Contract for Central North Sea Assets to Sparrows Group

10Sparrows crane operators offloading cargo from a supply vesselChrysaor has awarded Sparrows Group a three-year crane management services contract for the three operating assets it took ownership of from Shell in November.

The operator became the largest independent E&P company in the region following the US $3 billion deal with Shell earlier this year to acquire the platforms as part of a larger asset package.

The scope of work will see Sparrows operate and maintain seven cranes across the Armada, Everest and Lomond gas platforms located 233 to 250 km east of Aberdeen in the UK Continental Shelf (UKCS).

The campaign will be a continuation of the work Sparrows has carried out over the past decade for BG and subsequently Shell on the three installations. This includes the delivery of offshore crane operations and maintenance, including the supply of rigging lofts and inspection services, as well as overseeing the onshore management of all crane maintenance strategies and related engineering scopes.

Sparrows chief executive officer, Stewart Mitchell, commented: “We have a long and accomplished history working on these assets, having supported Shell and BG for a number of years. This award is testament to our team’s reputation for delivering results and our safe working practices.

“With our unrivalled knowledge of the existing platform cranes on the Armada, Everest and Lomond platforms, we look forward to supporting Chrysaor on these important Central North Sea developments and delivering all their crane maintenance requirements.”

Chrysaor currently has more than 400 staff working in the UKCS.

Cyberhawk Achieves ABS Recognition in US

11Cyberhawk Photo1Cyberhawk Innovations, a world leader in inspection and survey using unmanned aerial vehicles (UAV), has been certified as an External Specialist by the American Bureau of Shipping (ABS) in providing inspections for internal tanks using UAVs.

Achieving ABS recognition means that the data captured by Cyberhawk’s UAVs can now be used by ABS surveyors to make decisions affecting classification surveys of cargo oil tanks (COT) and other bulk storage tanks on vessels.

As part of the External Specialist certification procedure, Cyberhawk completed two internal tank inspections on an Aframax class oil tanker in the USA in collaboration with an ABS Surveyor. The inspection took place in Portland, Oregon, where the Surveyor examined all safety and inspection processes required to accept Cyberhawk’s high quality inspection technique. The two inspections were part of a larger project, involving a survey of all 14 COTs using a drone on a sister vessel. The project was completed in just six days by the Cyberhawk team.

Aside from significant time and efficiency savings, the use of UAVs by experienced operators means minimised risks to personnel, offering a safer, more economical solution for detailed structural inspections. One current industry method for COT inspection on tankers is to use a technique called rafting. Rafting involves filling the tank being inspected with water, allowing the ship surveyor to use a raft or dinghy to view critical inspection areas of the tank, inaccessible from the tank floor. Rafting creates a large volume of oil-contaminated water which has to be decanted from the vessel at a port that can handle such waste. Using a UAV eliminated the generation of oil-contaminated water and the safety risks associated with rafting.

ABS auditors carried out a detailed review of Cyberhawk’s UAV equipment, operator training, and maintenance and inspection processes both at Cyberhawk headquarters in Scotland and onsite in the US.

“UAVs are enabling the next generation of marine and offshore surveys and inspections, providing less intrusive, safer and more efficient ways of assessing critical areas,” says ABS Chief Surveyor Joseph Riva. “By applying ABS guidance, Cyberhawk was able to demonstrate its ability to carry out drone inspections and surveys, which can support the class survey process and provide additional savings and efficiencies to the owner and shipyard.”

Chris Fleming, CEO at Cyberhawk, said: “The feedback received from the auditors confirms what we already know – that UAVs offer an incredibly efficient solution when it comes to asset inspection, across a multitude of industrial sectors. Few methods offer the same safety, time and cost advantages.

“The technology is particularly attractive thanks to its use in improving safety. For example, sending unmanned aircraft instead of people into confined spaces to conduct inspections not only reduces risk, but it also effective and efficient.

“Having completed more than 25,000 commercial inspection flights, clients who have worked with us know that they can trust our highly-trained teams to safely capture data and deliver detailed inspection reports in the most efficient way possible.’’

InterMoor Named a Winner of the Houston Metro Area 2017 Top Workplaces Award

12InterMoor workersInterMoor, a leading provider of mooring services, foundation solutions, and offshore installations in subsea services group Acteon, has been awarded a 2017 Top Workplaces honor by The Houston Chronicle. The Top Workplaces lists are based solely on the results of an employee feedback survey administered by Energage, LLC (formerly WorkplaceDynamics), a leading research firm that specializes in organizational health and workplace improvement. Several aspects of workplace culture were measured, including Alignment, Execution, and Connection, just to name a few.

“The Top Workplaces award is not a popularity contest. And oftentimes, people assume it’s all about fancy perks and benefits.” says Doug Claffey, CEO of Energage. “But to be a Top Workplace, organizations must meet our strict standards for organizational health. And who better to ask about work life than the people who live the culture every day—the employees. Time and time again, our research has proven that what’s most important to them is a strong belief in where the organization is headed, how it’s going to get there, and the feeling that everyone is in it together. Claffey adds, “Without this sense of connection, an organization doesn’t have a shot at being named a Top Workplace.”

This year, 2,317 companies in the Houston area were nominated and only 150 made the list. In the survey, InterMoor employees shared that they appreciated the fact that new ideas and different points of view are frequently encouraged at InterMoor. In addition to employer-provided health and dental plans, InterMoor employees are awarded with regular team building activities and a company-matched 401K program.

“We are proud and honored to have been nominated by our employees for a spot on The Houston Chronicle’s Top Workplaces list,” said InterMoor president Tom Fulton. “Despite a challenging industry downturn, our group has been able to maintain a positive and can-do attitude throughout. We strongly believe that our employees’ wellbeing is key to our strong work ethics and, consequently, to our success.”

The Houston Chronicle published the complete list of Top Workplaces on Sunday, November 5th.

MTS Houston Section – Lunch Presentation December 7, 2017- ExxonMobil Hoops Dead-Leg Inspections

13MTSHoustonlogoAt the next MTS Houston lunch on December 7, David Gilbert with ExxonMobil will present a summary of the HOOPS dead-leg inspection project. His presentation will include the summary results of the AUT and Time of Flight Diffraction (TOFD) inspections. David will also present and discuss the project’s diving safety assurance process from both the company and from industry guidance viewpoints.

The Hoover Offshore Pipeline System (HOOPS) runs from the Gulf of Mexico offshore Galveston to Jones Creek, Texas. It transports crude oil from a number of offshore production facilities, including Gunnison, Hoover-Diana, Perdido, Boomvang and Nansen to Seaway’s facilities at Jones Creek and Texas City.

Two pipeline dead legs exist near the GA-A244 platform on the HOOPS pipeline. Dead Legs are sections of the pipeline circuit that contain idle, stagnant or intermittently flowing fluids. They often form part of the circuit that is only engaged during start-ups, shutdowns or regeneration cycles or may be associated with closed block valves, spare pump piping, etc. Since they are not in continuous services they are particularly susceptible to corrosion and degradation.

The primary scope of work for this project was to examine the pipe segments in the dead-leg zones for internal wall loss that might have been caused by microbial influenced corrosion (MIC), or any other local internal corrosion mechanism.

The basic tasks included the following:

Contractor selection – with contracts awarded to Aqueos Subsea and Bibby Offshore.

Vessel, dive system and crane assurance inspections.

Subcontracting of Sonomatic to develop a site-specific kit for the NDT inspection, including mock-up SIT.

Mobilization of the Bibby Sapphire to GA-A244.

Uncovering each dead leg and preparing the pipe sections for inspection.

Performing NDT inspections.

Upon completion of NDT work installing grout/sandbags and mattresses to support and protect each dead leg.

David Gilbert has over 30 years' experience in the offshore diving industry and is currently the ExxonMobil USP Diving and Subsea Construction Advisor. David is responsible for planning and safe execution for all US Production subsea projects. He is involved with several diving industry organizations and is currently serving as Chairman of the US GoM Diving Safety Work Group.

January 25, 2018 – Lunch, Shell Deepwater Development -Edwin Verdonk, Shell International E&P
February 22, 2018 – Lunch - To be announced
March 22, 2018 - Outlook Conference
March 24, 2018 - Clays Tournament - (Online registration will open November 15, 2017)

InterMoor Appoints New Global CEO

14Mark JonesInterMoor, a leading provider of mooring services, foundation solutions and offshore installations in subsea services group Acteon, has named Mark Jones, global chief executive officer. Key objectives of this new role include building more structure and greater collaboration amongst business units, focusing on areas of growth and mobilizing new services across the regions, with the goal of strengthening InterMoor’s global position.

Mark, currently vice-president at Acteon, has a significant track record within the oil industry in leadership roles, having been managing director for a division of EXPRO, as well as prior to joining Acteon being head of strategy and business development for Siemens Subsea.

Bernhard Bruggaier, vice president operations at Acteon, said “Building on his strong track record and experience, Mark will work closely with our worldwide locations to ensure that we continuously improve our services and deliver them consistently to the highest standards across the globe. Mark’s appointment as global CEO of InterMoor further strengthens InterMoor’s position as the global market leader in all of Acteon’s mooring related services.”

On the announcement, Mark Jones stated “I feel privileged to be considered for this opportunity and am looking forward to working with the InterMoor team towards our global vision. The breadth and depth of knowledge and experience within InterMoor is second to none in this specialist field”.

Further to the appointment of Mark Jones as CEO, Blair Wilson will undertake the role of global director of operations, reporting directly to the CEO, and leading programs of work to implement InterMoor’s reinforced global strategy.

PIRA Energy Market Recap for the Week Ending November 6, 2017

15PIRALogoGlobal Oil Surplus is Mostly Gone

Booming world economic growth to stay strong and durable with credit conditions remaining constructive. Upward oil demand revisions continue. This demand growth together with the OPEC/non-OPEC cuts have substantially reduced surplus stocks in 2017. OPEC’s surplus stock estimate is way too high for it ignores required stocks for both new infrastructure and for increased U.S. crude and product exports. Hence, OPEC is likely to keep the cuts longer than necessary with a resulting positive benefit to prices. 2017’s 1 MMB/D flow deficit together with strong demand growth keep stocks declining in 2018 despite overall supply exceeding demand growth. Crude oil prices are revised up again. The upside risk to prices remains supply interruptions with many countries looking vulnerable while the downside risk is U.S. rig count resuming its upward trend. The call on refining is very strong and will continue to support relatively robust margins, even in the least sophisticated capacity. Gasoline cracks stay healthy while diesel cracks increase further assuming normal weather. WTI-Brent strengthens but stays wide enough to allow U.S. exports. Brent-Dubai generally will have to be weak enough to keep the arb open from the Atlantic Basin to Asia.

U.S. and Europe Ethanol Prices Bottom in October

U.S. manufacturing margins decline. RIN prices jump. Brazil ethanol output in the South-Central region drops in the first half of October as the harvest winds down. U.S. biodiesel output of 149 million gallons in August equals a record high.

Liftoff Delayed – Not Cancelled

More than a few physical traders have commented that this month’s bid-week felt more like a lackluster injection month, rather than the kick-off to the heating season. When considering the direction of winter prices, it is critical to understand that the sub-$3 futures settlements for November are sending a strong message about supply concerns. Yet, we see the market messaging evolving as the industry begins to clear excess supply. Indeed, it bears mentioning that Henry Hub cash prices last December averaged $1 over November, with the arrival of more seasonal temperatures. Should cold weather arrive early, it is easy to imagine a step-change in cash prices unfolding next month.

Fall Maintenance/Summer Heat

The return of extreme temperatures to Southern California in late October coincided with seasonal outages of generation (including Palo Verde 1) and transmission (including the PDCI) along with limitations on gas imports to the region. Prices at Southwest hubs spiked lifting October monthly averages well above projected levels. National gas price forecasts have been revised down, but low storage and pipeline constraints could support renewed upside volatility at the SoCal citygate under colder than normal conditions this winter. Columbia River basin precipitation has begun the new water year slightly above normal. The return of La Niña conditions this winter could result in increased heating demand and a larger, later runoff.

Winter Risks Remain at the Forefront

Seaborne coal prices were again on the rise over the past month, on low stockpiles in China and India, and underwhelming supply. PIRA continues to assert that the risks remain to the upside over the short-term, as seasonal demand has not yet reached peak levels. However, the pricing risks shift to the downside in 2Q18 and beyond as Chinese imports fade and LNG prices become more competitive with coal in the global market.

PJM REC Balances to Tighten in 2018

Prices for PJM tri-qualified (PA, MD and NJ) Tier 1 RECs continued to fall this year, reflecting oversupply. Secondary market trading volumes were strong in the first part of 2017, dropping off after the end of the compliance year; current OI represents about 1/3 of the annual RPS obligation. The REC bank will grow again in 2017, but balances narrow in 2018. Large spot REC procurement needs to satisfy the IL RPS represent a major wildcard. PA legislation limiting out-of-state solar affects supply for that market. Increases in REC requirements taper off after 2020, and a transmission line project could deliver significant renewable energy supply to the region. However, the phase-out of federal tax incentives puts upward pressure on long term REC prices, and PIRA expects extensions to state RPS targets.

Crude Rises as Global Surplus Shrinks; WTI Discount Widens

WTI prices are now over $57/Bbl, as the global oil surplus continues to shrink and geopolitical risks to supply grow. The spread between Cushing and Gulf Coast crudes widened, as PADD III crude stocks fell sharply in October, while Cushing stocks rose 1 MMB. Once local refining maintenance concludes this month, Cushing stocks will fall rapidly, with WTI moving into backwardation, as the wide spreads will incentivize shipments south out of Cushing, while new pipelines in the Permian Basin will take barrels away from Cushing and move them to the coast. Additionally, the Diamond pipeline will begin shipping Cushing crude to Memphis in a few weeks. The increasing volumes of crude reaching the Gulf Coast will both go to satisfy refinery demand and to sustain crude exports at record levels, as the export arb stays wide open through at least year-end. Midland grades have begun to strengthen with the new pipeline additions, and Midland Sweet will likely trade at a premium through the first half of 2018. New oil sands projects starting up in Alberta will cause light grades to weaken from current strong levels, while heavy differentials weaken further and move toward Gulf Coast rail parity.

Rebounding U.S. Jobs, Synchronized Grobal Growth, and Continuing Constructive Credit Conditions

Hurricanes Harvey and Irma caused great destruction during August and September, and created distortions in key U.S. economic data. Distortions remain in recent data, but the dust is starting to settle, and the emerging picture is of an economy picking up steam. Specifically, employment data for October were constructive, and confidence indicators sent encouraging signals. But an increasing tightness in the labor market is not yet resulting in sharply higher wage growth. Meanwhile, Europe, emerging Asia, and commodity-intensive emerging economies are also showing strength – indications are that the positive momentum is spreading globally through trade and other channels.

Mild Fall Weather Leads to a Boost in Propane Inventories

U.S. propane/propylene inventories increased by 726,000 bbl for the week ending October 27 according to the EIA. While propane exports remain strong, domestic res/com demand has been soft due to mild fall weather. In response, propane prices ran counter to crude and gas prices last week with propane prices falling 1.5% to 96.9 cents/gal. In contrast, ethane prices rose 4.4% to 27.25 cents/gal. Ethane is the most economical U.S. steam cracker feedstock but due to rising ethane prices coupled with an 8.6% decline in ethylene prices, ethane’s steam cracker margin fell 11.9% last week to 18.2 cents/lb of ethylene, which is the first time since 30 December 2016 that the ethane steam cracker margin has been under 20 cents/lb of ethylene. Propane exports beat expectations and topped 1.0 million b/d for the week ending October 27. Platts Analytics expects propane exports to drop to about 800,000 b/d for the week ending November 3 based on lower ship activity at Gulf Coast LPG terminals. U.S. LPG cargoes to Asia have been supported by the extension of the October propane Saudi CP of $575/mt into November pricing, which makes landed U.S. propane in Asia cheaper than landed Middle East barrels.


The November WASDE splits this trading week with its midday release on Thursday. Looking over the CFTC Commitment of Trader’s report, positioning appears to be in line with the general consensus that corn yields will be raised while much uncertainty still looms over the size of the soybean crop. The week is also expected to bring improving soil moisture conditions to the main soybean growing areas in Brazil, which should be the market driver late in the trading week after the WASDE release.

Venezuelan Default Saga Evolves

On November 2, Venezuelan President Nicolas Maduro stated intentions to restructure or refinance all future debt obligations, but only after making a final $1.12 billion PDVSA principal payment on November 3. Payments on principal and interest became increasingly delinquent throughout October, indicating a notably higher risk of default in 2018 (when the government and PDVSA owe a combined ~$9 billion). A default could disrupt Venezuelan exports because of potential creditor claims on its cargoes, but with most Venezuelan oil sold FOB this risk appears limited. However, concerns on the part of Western buyers could cause even more crude to head to Asia. PIRA understands 850 MB/D of October’s export program of 1.6 MMB/D went to Chinese, Russian, and Indian buyers, with only 500 MB/D headed to the U.S. Meanwhile, CITGO’s status as an “insulated subsidiary” makes it unlikely to be dragged into PDVSA bankruptcy proceedings, and apparently has only been importing 80 MB/D of Venezuelan crude. Regardless, oil investment is likely to be squeezed, raising downside production risk to PIRA’s forecast. We currently assume 90 MB/D of crude declines between 4Q17 and 4Q18, to 1.8 MMB/D.

Storage is Well Prepared for Short-Term Cold, Less So Seasonally

Optimizing seasonal storage has not been one of the market’s most profitable jobs for some time. One of the main problems has been the low summer/winter spreads that still plague the market – even in the wake of the Rough storage closure. Seasonal spreads have been recently trading at 7.3 p/th on the NBP compared to more than double that for summer’12 /winter’12. With storage entering the month 4-BCM higher than normal and 2-BCM short of record levels, one would think that most storage facilities would be brimming and ready to withdraw. When digging into the numbers, one can see how the market is shifting towards more flexible storage with more cycling ability and away from facilities with longer emptying periods. This coincides well with gas’ future as a more flexible source of supply, as the market moves more towards a balancing role for renewables.

Has India’s Power to Move the Market Been Underestimated?

As JKM takes another giant leap forward this week despite even more bearish fundamental indicators (Wheatstone loads a first cargo for Japan just as Japan demand continues to plunge), our attention turns from China to India. The consensus among traders has been that a series of winter spot tenders for China has tightened up the spot market considerably. Yet as shortages in coal stockpiles at power plants around India register close to historic lows, it may be that India is driving this unexpected price surge, at least in part.

As Wind Blows, Coal-to-Gas Switching Remains a Limited Feature in Germany

The high price volatility observed in recent weeks in Germany is the result of large swings in wind output. Last year the hourly dispatching profiles for coal and gas tracked each other across most of the wind spectrum, suggesting that the two technologies were responding in similar fashion to variations in wind output. By contrast, this year the two profiles overlap only when wind is low, but overall the gas profile is flatter than the coal one. In particular, gas plants do not seem to ramp down as much as coal, most likely the result of already low average dispatching levels for gas.

Reports of Chinese Port Constraints Limits Coal Pricing Upside

Coal prices continued to move higher in the first half of the week, on tight market conditions heading into the winter peak season, although prices shifted lower on news of import constraints at Southern Chinese ports and lowered nuclear generation risks in France. While fundamental pricing risks remain to the upside in our view if Chinese imports are constrained by policy/quotas, FOB Newcastle prices could move closer to $90/mt than $100/mt over the next 90 days.

U.S. Another Stock Decline

Overall U.S. commercial oil inventories declined again last week by 5.8 million barrels as crude oil inventories uncharacteristically declined by 2.4 million barrels, bucking the historical trend, while product stocks drew 3.4 million barrels led by a sharp decline (-4.0 million barrels) in gasoline. Commercial U.S. inventories are now down 75 million barrels versus last year, a testament to global oil market rebalancing and the success of the OPEC/non-OPEC cuts. Demand has been especially weak, except for gasoline and jet, but is forecast to pick up in the weeks ahead. Cushing crude stocks built 0.09 million barrels this past week and probably have one more week to build with a 0.8 million barrel stock build forecast for next week’s EIA report. In sharp contrast, overall crude inventories drop 5.7 million barrels this week as runs increase and imports fall, another counter-seasonal stock decline. All three of the major light products show significant stock decline in this week’s EIA report, rounding out another week of bullish data.

Credit Indicators Perform Well, Amid More Record Highs

Credit conditions remain highly constructive, with the S&P 500 continuing to set new records. Volatility declined about -7.9%. Energy was particularly strong and this spilled over into certain credit indicators. Overall investment grade credit gained about 0.7%, while investment grade energy and high yield energy credit were up about 1%. Overall high yield (HYG), was lower by -0.6%, while emerging market debt was down -0.3%. The dollar was little changed on a DXY basis. The St. Louis financial stress indicator ticked higher on the week.

U.S. Ethanol Output Increases again the Week Ending October 27

U.S. ethanol production rose sharply for the third consecutive week, increasing from 967 MB/D to a near-record 1,056 MB/D over that time. Total inventories built by 440 thousand barrels last week to 21.5 million barrels, nearly erasing the 446 thousand barrel draw during the preceding week. Ethanol-blended gasoline production rose for the fifth time in six weeks, increasing by 3 MB/D to 9,185 MB/D.

The Blame Game

Too often the blame for low grain prices gets set squarely on the shoulders of the Non-Commercials. Fund traders are always wrong when they’re heavily short, like now, but rarely mentioned when they’re long. Too often we hear, “the shorts will get squeezed soon” or “they’ll have to get out at some point” by those dissatisfied with price, which is obviously the farming community that we monitor quite closely. U.S. producers are on the record as saying they will not sell at current prices, in essence trying to squeeze the Non-Commercial shorts in corn, but will a time come when they don’t have a choice?

U.S. Gas Weekly Report

Thus far this week, Henry Hub cash prices have averaged ~$2.75/MMBtu — a slight decline from the prior week’s average of ~$2.85/MMBtu. From the standpoint of total U.S. supply and demand, such declines conflict with balances tightening W/W by ~7 Bcf/d. Yet, beyond ongoing worries about subpar heating demand, bearish sentiment is also being stoked by robust U.S. production. In particular, onshore production averaged a record ~72 Bcf/d, ~0.5 Bcf/d more than the prior week.

Japan Runs Ready to Rise, with Higher Demands Absorbing Supply

The key takeaway in the data last week was a solid demand performance, which drew finished product stocks. If demand continues to perform well, it will readily absorb the increasing refinery output resulting from reduced maintenance. Runs were unchanged, with lower crude imports, which drew crude stocks 2.35 MMBbls. Gasoline demand rose again, last week by 47 MB/D, and beat expectations. Stocks drew on lower refinery output and slightly higher exports. Gasoil demand also rose again and stocks drew 0.44 MMBbls (63 MB/D), similar to the previous week and close to yearly lows. Kerosene demand also again rose, last week by a strong 108 MB/D. Stocks saw an accelerating draw rate of 85 MB/D, with the 4-week build rate easing to 37 MB/D. The deficit position vs. year-ago remained about 1 MMBbls. Refining margins remain strong and supportive of the run rise that will be forthcoming. The indicative marketing margin has again been easing as refining margins have held firm. Both gasoline and gasoil/diesel are below statistical norms, with gasoil/diesel showing the larger variance.

Global Equities Setting More Record Highs, but Some Rotation Noted

Global equity markets continue to set more broad based records in a host of countries and across a host of market indices, but some sectorial rotation was noted. In the U.S., the S&P 500 was again modestly higher on the week, but set new records. The best performing sectors were energy (+1.9%), and technology (+1.65), while housing (-1.9%) and banking (-1.1%) were the laggards. Internationally, tracking indices generally performed better than those in the U.S. Japan was higher by +1.3%, emerging Asia higher by +1.1%, while world, ex-U.S., gained +0.8%. Latin America fell -3.6% and driven by weakness in Brazil and Mexican markets.

U.S. August 2017 DOE Monthly Revisions: Demand and Stocks

EIA just released their monthly August 2017 (PSM) U.S. oil supply/demand data. August 2017 demand came in at 20.161 MMB/D, which is 33 MB/D lower than PIRA had assumed, and 772 MB/D lower than the weeklies had indicated. Total product demand growth slowed and turned modestly negative, -114 MB/D or -0.6% versus year-ago. Even so, the negative performance was concentrated in “other” product demand, a decline of 373 MB/D or -8%. All the major products showed demand gains and outperformed. Middle of the barrel demands continued to post strong growth, with distillate demand higher by 112 MB/D or 2.9%, and kero-jet higher by 47 MB/D or 2.7%. End-August total commercial stocks stood at 1,307.4 MMBbls, which were 6.6 MMBbls lower than PIRA had assumed. Crude came in 5.6 MMBbls lower and products were 1.0 MMBbls lower. Compared to the preliminary weeklies, total commercial stocks were revised down 2.0 MMBbls, with crude lowered 2.4 MMBbls, and product raised modestly. Compared to August 2016 PSA data, total commercial stocks are now lower than year-ago by 63.9 MMBbls vs. 52.4 MMBbls at end-July.

U.S. Production in August Declines on Hurricane Harvey

U.S. crude and condensate actuals for August 2017 came in at 9,220 MB/D, down 32 MB/D month-on-month, up 440 MB/D year-on-year. The drop is concentrated in Texas and the Gulf of Mexico due to Hurricane Harvey. PIRA’s Reference Case outlook calls for U.S. crude and condensate production to grow 420 MB/D in 2017 and 730 MB/D in 2018.

October Weather: U.S. and Europe Warm, Japan Cold

October weather for the three major OECD markets turned out to be 4% warmer than the 10-year normal and the resulting oil-heat demand impacts were 222 MB/D below normal. On a 30-year-normal basis, the markets were 15% warmer.

Aramco Pricing Adjustments: Fundamentally Justified Tightening of Terms

Saudi Arabia's formula prices for December were just released. Prices were tightened on most crudes in the key refining centers. The adjustments were justified by changes in the market drivers that Saudi focuses on when setting prices. Volume is clearly not being pushed, while refiner demand remains high and increasing. Global runs rise 1.8 MMB/D in November vs. October, and then an additional 1.4 MMB/D in December. The adjustments to Asia were in keeping with the change in Dubai market structure, while European pricing was tightened in line with a reduced discount on Urals vs. Dated Brent.

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.

Shell and Partners to Expand Operating Fields Offshore Brazil

1shell winning bids expand pre salt growth in deep water brazilRoyal Dutch Shell plc (“Shell”) and its partners won three, 35-year production sharing contracts for pre-salt blocks located in the Santos Basin, offshore Brazil. Shell will pay its share of the total signing bonuses, equating for all bids, of to approximately USD $100-million [R$ 332.5-million].

The winning bids for Shell include a block adjacent to Shell’s Gato do Mato field (Shell 80% operating, Total 20%), a now unitized area to the Sapinhoá field (Petrobras 45% operating, Shell 30%, Repsol 25%), and the new Alto de Cabo Frio – West block (Shell 55% operating, Qatar Petroleum 25%, CNOOC Limited 20%).

“We are very pleased to expand our number of operated fields in Brazil,” said Andy Brown, Upstream Director, Shell. “These winning bids were submitted after our thorough evaluation and add strategic acreage to our already leading set of global deep-water growth options. We will determine our next steps with a focus on continued value to Shell and our shareholders. Our deep-water expertise is well-suited for the opportunities that lie ahead.”

Prior to these bidding results, Shell had previously stated plans for $10-billion investment into the early 2020s for its existing offshore developments in Brazil to support deep water as its Upstream growth priority. Shell first began working under a production sharing contract in Brazil in 2013 when it entered the Libra consortium, led by Petrobras. Shell’s history in Brazil covers more than 100-years with businesses in Upstream and Downstream.

Shell pioneered deep-water exploration and production 40-years ago in the U.S. Gulf of Mexico, and together with its partners in Brazil, the company will combine that expertise to grow its offshore production. World-wide last quarter, Shell produced more than 710-thousand barrels of oil equivalent per day (boe/d) from its deep-water business, with approximately 330-thousand boe/d production in Brazil. Other deep-water projects for Shell are in the Gulf of Mexico, offshore Nigeria, and offshore Malaysia.

Statoil Strengthens Its Position in Carcará Oil Discovery in Brazil

2Statoil BrazilStatoil Brasil Oleo e Gas Ltd., a subsidiary of Statoil ASA (OSE:STL, NYSE:STO), ExxonMobil Exploracao Brasil Ltda., a subsidiary of Exxon Mobil Corporation (NYSE:XOM), and PETROGAL BRASIL, S.A., a subsidiary of Galp (NYSE: GALP.LS), were the high bidders for a production sharing contract for the Carcará North block in Brazil’s second pre-salt offshore licensing round held on 27 October.

The consortium comprising Statoil (operator, 40%), ExxonMobil (40%) and Galp (20%) presented the winning bid (67.12% of profit oil) for the Carcará North block in the Santos basin. The pre-determined signature bonus to be paid by the consortium is BRL 3.0 billion, approximately USD 910* million. Statoil’s share is USD 364* million.

Statoil, ExxonMobil and Galp have also agreed a number of subsequent transactions in the adjacent BM-S-8 block to align equity interests across the two blocks that together comprise the Carcará oil discovery. The aggregate total potential consideration to be received by Statoil in these transactions is around USD 1.55 billion and, following the licensing round, the potential net cash inflow to Statoil is around USD 1.19* billion.

First, Statoil has agreed to divest 33% out of its current 66% interest in BM-S-8 to ExxonMobil for a total potential consideration of around USD 1.3 billion, comprising an upfront cash payment of around USD 800 million and a contingent cash payment of around USD 500 million.

Furthermore, upon the future closing of its acquisition of the 10% interest in BM-S-8 held by Queiroz Galvão Exploração e Produção (QGEP), Statoil has agreed to divest a further 3.5% to ExxonMobil and 3% to Galp for a total consideration of around USD 250 million, comprising an upfront cash payment of around USD 155 million and a contingent cash payment of around USD 95 million.

As a result, both Statoil and ExxonMobil will have a 36.5% interest in BM-S-8 and a 40% interest in Carcará North. Galp will have 17% in BM-S-8 and 20% in Carcará North. The partners in Carcará North have also agreed that Statoil will be operator for the unitized field development, subject to government approval.

“This further strengthens Statoil’s presence in the prolific Brazilian pre-salt area and these transactions help build a strong and aligned partnership across the two Carcará blocks. Together they significantly advance our strategy in Brazil, a core area for Statoil. Developing a world-class asset like Carcará as operator is a good match with our competence and capacity,” said Statoil CEO Eldar Sætre.

“We look forward to working with our partners, the Brazilian authorities and Pré-Sal Petróleo S.A. on a timely unitization process in support of our plan for first oil production from Carcará in the mid-2020s. This plan will create jobs, economic growth and revenues to the state,” said Statoil’s country manager for Brazil, Anders Opedal.

The closing of the transactions with ExxonMobil and Galp is subject to customary conditions, including partner and government approvals.

Statoil 66% (operator) 33% (operator) 43% (operator) 36.5% (operator) 40% (operator)
ExxonMobil - 33% 33% 36.5% 40%
Galp 14% 14% 14% 17% 20%
QGEP 10% 10% - - -
Barra Energia 10% 10% 10% 10% -

*Based on exchange rate from Bloomberg 27 October 2017 for BRL/USD = 0.30327

Hess Sells Interests in Norway; Commences Process to Sell Interests in Denmark

Hess Corporation (NYSE: HES) has announced several additional steps in the continued execution of its strategic plan to further focus the company’s portfolio and allocate capital to higher return assets:

  • An agreement to sell its oil and gas interests in Norway for total proceeds of $2 billion
  • Commencement of a process to sell its interests in Denmark
  • Implementation of a cost reduction program expected to deliver annual cost savings of more than $150 million starting in 2019

3Hess offshore denmarkHess: offshore Denmark. Photo credit: Hess

“With the continued success of our asset sale program, we are focusing our portfolio on higher return assets and reducing our breakeven oil price,” CEO John Hess said. “Proceeds from these asset sales, along with cash on the balance sheet, will prefund development of our world class investment opportunity in offshore Guyana, where we have participated in one of the world’s largest oil discoveries of the past decade – positioning our company to deliver more than a decade of cash generative growth and significant value for our shareholders.”

The sale of its interests in Norway combined with the company’s previously announced divestitures of its enhanced oil recovery assets in the Permian Basin and interests in Equatorial Guinea have captured approximately $3.25 billion in cash proceeds year to date. These reshaping moves including the planned sale of interests in Denmark will also extinguish approximately $3.2 billion in future abandonment liabilities. In addition, with a portion of these cash proceeds, we expect to reduce Hess Corporation debt (excluding midstream) by $500 million in 2018. Together with the planned $150 million annual cost reduction program, these actions are expected to reduce cash unit production costs by approximately 30 percent – to less than $10 per BOE – by 2020.

Sale of Interests in Norway, Sales Process in Denmark

Hess has entered into an agreement to sell its subsidiary Hess Norge, which owns interests in the Valhall and Hod fields in Norway, to Aker BP ASA for total proceeds of $2 billion, effective January 1, 2017. The Valhall and Hod fields produced an average of 26,000 barrels of oil equivalent per day net to Hess over the first six months of 2017. Hess holds a 64.05 percent interest in Valhall and a 62.5 percent interest in Hod. The sale is subject to customary conditions for completion, including approval by the Ministry of Oil and Energy, Ministry of Finance and relevant competition clearance and is expected to be completed by year end 2017.

In addition, Hess will commence a process to sell its interests in Denmark, where it holds a 61.5 percent interest in the South Arne Field. This sales process is expected to be completed in 2018. The South Arne Field produced an average of 11,000 barrels of oil equivalent per day net to Hess in the first six months of 2017.

Lower Cash Unit Costs from Portfolio Reshaping and Associated Cost Reduction Program

Starting in 2020, cash unit costs are expected to be reduced by approximately 30 percent from 2017 levels. This reduction results from investment in higher return growth assets, the sale of higher cost assets and a cost reduction program that is expected to deliver annual cost savings of more than $150 million starting in 2019.

Kosmos Energy Expands Strategic Position in Gulf of Guinea

4KosmosKosmos Energy (NYSE: KOS) (LSE: KOS) announces that in partnership with Trident Energy (Trident), it has agreed to acquire an interest in three exploration licenses, as well as Hess Corporation’s interest in the adjacent Ceiba Field and Okume Complex assets offshore Equatorial Guinea on a 50-50 basis. Under the terms of the agreements, Kosmos will be primarily responsible for exploration and subsurface evaluation while Trident, a newly formed international oil and gas company supported by Warburg Pincus, will be primarily responsible for production operations and optimization. The transactions capture a material position in proven but under-explored oil basin originally discovered and operated by members of the Kosmos management team.

Highlights of the Transactions:

  • Increases Kosmos’ total gross acreage in the Gulf of Guinea by approximately 6,000 square kilometers, adding to its existing 25,000 square kilometer position offshore Sao Tome in the same petroleum system
  • Provides exploration opportunities for large frontier prospects, as well as near-field, short-cycle tie-backs through existing infrastructure with good fiscal terms
  • Adds approximately 13,500 barrels of oil per day (bopd) of net1production (gross: ~45,000 bopd), with identified opportunities for resource and value upside
  • Includes approximately 45 million barrels (mmbbl) of net1 identified 2P/2C remaining recoverable resource (gross: ~155 million barrels) based on Kosmos/Trident company estimates
  • Expected to generate approximately $120 million of operating cash flow per year at $50 Brent over the next several years, net to Kosmos

“This transaction expands our significant position in a proven, but under-explored oil basin,” said Andrew G. Inglis, chairman and chief executive officer. “The Ceiba and Okume fields, which our team originally discovered and managed, provide low-cost, high-margin production with several identified opportunities for resource and value upside. These discoveries de-risked the key play elements in the basin, but limited exploration in subsequent years means we have the chance to fully unlock the exploration potential of the Rio Muni basin. Our differential knowledge of the basin and access to under-utilized infrastructure, creates a unique opportunity for the company. Furthermore, our partnership allows us to add value through our core expertise while leveraging the proven management team at Trident to deliver the upside from the Ceiba and Okume fields. In addition, the attractive purchase price means the acquisition is immediately accretive from both a value and leverage perspective, and enhances our already strong financial position.”

Financial Terms

The gross acquisition price of $650 million is effective as of January 1, 2017. Kosmos is expected to pay net cash consideration of approximately $240 million at close, subject to post-closing adjustments. The company plans to fund the acquisition using cash on hand and availability from its reserves based lending (RBL) facility. As a result of the transaction, Kosmos expects the RBL to increase, resulting in Kosmos maintaining its current liquidity of approximately $1.2 billion. The transaction is expected to close by year end, subject to customary closing conditions.

Effective Participating Interests 2

 Ceiba Field and Okume ComplexBlocks EG-21, W, S
Kosmos Energy 40.375 % 40.0%
Trident Energy 40.375 % 40.0%
Tullow Oil 14.25% NA
GE Petrol 3 5.0 % 20.0%

1. Based on Kosmos net entitlement at $50 per barrel. Net of royalty
2. Net effective participating interests upon transaction closing
3. GE Petrol manages the interest in the Ceiba and Okume fields on behalf of the Republic of Equatorial Guinea

McDermott Receives Letter of Award for KG-D6 Subsea Installation Contract from Reliance Industries

5mcdermott squarelogoMcDermott International, Inc. (NYSE:MDR) announces a letter of award for a significant* contract from Reliance Industries Ltd. for the KG-D6 subsea field development in the Krishna Godavari Basin, located off the east coast of India.

McDermott will provide engineering, procurement, installation and pre-commissioning of subsea flowlines, vent lines, and a pipeline-end manifold for connection with six subsea wells in the R-cluster field at a water depth of up to 6,890 feet (2,100 meters), including in-field pipelines, Monoethylene Glycol (MEG) line, pipeline-end terminals, jumpers, risers, umbilicals system and the modification of the control riser platform to interface with the new facilities.

“We look forward to working with Reliance on this important and challenging project and building on our recent experience and expertise in deepwater projects across the region,” said Hugh Cuthbertson, McDermott’s Vice President for Asia. “McDermott’s selection underscores the confidence and trust we’ve built with our customers to deliver challenging projects within budget and on schedule, like our recent success on ONGC’s Vashishta project.”

In addition to the R-Cluster of six subsea wells, the option for five to seven more subsea wells can be exercised by the client for an optional S-cluster package. The optional scope also consists of two additional subsea structures and flowlines at a water depth between 4,593 feet (1,400 meters) and 5,905 feet (1,800 meters).

McDermott plans to leverage its significant experience and presence within India including its Engineering Center of Excellence office in Chennai providing engineering and project management oversight for the project. The Company also plans to use its successful One McDermott Way approach with support from its office in Kuala Lumpur, Malaysia and key vessels from its global marine fleet.

The significant lump sum contract award is expected to be reflected in McDermott’s fourth quarter 2017 backlog. The contract is scheduled for completion by the second quarter of 2020 for the base scope, and the first quarter of 2021 for the optional scope.

Reliance is developing deepwater gas and oil fields in the KG-D6 block (more commonly called KG-D6) in the Krishna Godavari Basin offshore on the east coast of India. The north-western boundary of the block is about 24 to 37 miles (40-60 kilometers) southeast of Kakinada in water depth of between 1,312 feet (400 meters) and 7,545 feet (2,300 meters). R-Cluster and Satellite-Cluster discoveries are in the KG-D6 block. Reliance is planning to develop these discoveries in phases.

* - McDermott defines a significant contract as between USD $250 million and USD $500 million.

TechnipFMC and PETRONAS Research and Technology Ventures Sign Heads of Agreement for Technological Collaboration

6technipfmc and petronas tripartite hoaTechnipFMC together with PETRONAS Research Sdn Bhd (PRSB) and PETRONAS Technology Ventures Sdn Bhd (PTVSB), both subsidiaries of Petroliam Nasional Berhad (PETRONAS), signed a Tripartite Heads of Agreement recently.

This collaboration will leverage all parties' best technology, expertise, personnel, assets and facilities in areas such as Gas Separation Technology, Desanding and Sand Disposal, Enhanced Oil Recovery Solutions, Unmanned Equipment and Operations.

Rune Thoresen, President Subsea Projects Asia Pacific, TechnipFMC stated in his speech at the signing ceremony “Even before today’s event which formalizes the collaboration between the two parties, we have been working closely with PETRONAS since the early 80s in Malaysia, delivering many groundbreaking solutions, and recently, the world’s first Floating LNG- PETRONAS FLNG SATU.”

He added “I’m confident that the synergies forged from our strong presence, delivery and relationship with PETRONAS would give us a head start in the first Front End Engineering Design (FEED) execution under this agreement.”

The Tripartite Heads of Agreement is a technological collaboration between TechnipFMC, PRSB and PTVSB. TechnipFMC, as a strategic partner in the collaboration, will have joint ownership of potential foreground intellectual properties arising from the collaboration.

AISUS Launches New Tool for Enhanced Offshore Inspection

Aberdeen-based AISUS has invested a six-figure sum in upgrading and developing cutting edge inspection technology as it looks to further broaden its range of services and increase its geographical reach to provide its customers with the most efficient, cost-effective technological solutions.

7 1AISUS SIRIUS X IN CAISSON minAISUS internal gravity deployed ultrasonic scanning tool, SIRIUS-X.

AISUS has launched an improved internal gravity deployed ultrasonic scanning tool, SIRIUS-X, for completing ultrasonic corrosion mapping within offshore caissons, risers and conductors.

Following successful field trials, it recently completed its first caisson inspection program for a major UK oil and gas operator. The projects were completed in 14 days and included internal inspection of the largest diameter caisson AISUS has delivered to date.

The SIRIUS-X is controlled from the topside, allowing inspection data to be captured above, within and below a variety of obstacles and diameter variations commonly encountered within caissons, without removing the tool.

It has been developed to maximize data accuracy and minimize the duration of inspections to meet the increasing demands of the offshore industry. Featuring a high torque rotary drive and a scanning speed of up to five metres per hour, its small cross-sectional footprint with minimal hydro-dynamic drag also allows it to perform during elevated sea states.

The SIRIUS-X’s simplified and lightweight design means it can be easily configured and adapted in-field where required, further limiting the duration of offshore inspections and reducing costs. It can be deployed to depths of up to 200 metres and adjusted for a range of caisson sizes, from 14” to 60”, at the touch of a button.

7 2AISUS Stuart LawsonStuart Lawson, managing director of AISUS

Stuart Lawson, managing director of AISUS, commented: “This investment demonstrates our ongoing commitment to the global oil and gas market by offering the latest, most efficient technologies to support even the most complex inspection projects worldwide.

“SIRIUS-X, and other inspection application tools which we are currently developing, will bring real benefits to operators with a range of challenging requirements. Our technology is capable of transmitting data in real-time and can be deployed and recovered easily by smaller, highly-skilled teams, offering increased efficiency over traditional inspection approaches. This allows us to provide our clients with the data they need, when they need it.”

Establishing itself as leaders in the inspection of caissons, conductors, J-Tubes and risers, the firm has made significant progress in solidifying its reputation in its initial markets and is now growing its international footprint by exporting its custom engineered technology and expertise to exploit global opportunities. The firm’s long-term commitment to research and development activities will see AISUS launch new technology offerings to the market every year in a bid to address both the current and future challenges facing the energy sector.

“We have listened to our customers and adapted our approach to ensure everything we do is in line with exactly what they need to achieve their operational goals. Innovation and continuous improvement is what sets us apart in this increasingly challenging market. The process of providing innovative inspections solutions for gathering accurate and reliable inspection data from challenging and difficult to access areas is what AISUS is becoming world renowned for,” added Mr. Lawson.

“This investment will enable us to harness and expand our expertise to broaden our product range and geographical reach as we look to fulfil our ambition of becoming a world leader in advanced inspection solutions.”

Fugro Applies Market-Leading Seeps Expertise to Canada’s Growing Offshore Industry

Fugro has teamed up with Amplified Geochemical Imaging (AGI) to acquire offshore hydrocarbon seep data in advance of Canada’s 2018 east coast bid round. Bathymetry, backscatter and water column anomaly data will be collected to pull together a comprehensive picture of surficial geological features.

These data will be used to identify and precisely target the best locations for geochemical sampling, enabling clients to improve and de-risk their exploration programmes. The information may also be used in a variety of further investigations such as establishing environmental baselines, evaluating seafloor geohazards and preliminary planning for field development.

8Fugro Discovery 640x427Fugro Discovery

The seafloor mapping will be performed by Fugro using its geophysical vessel, Fugro Discovery, and includes acquisition of 10,500 square kilometres of multibeam echo sounder data and sub-bottom profiler data. This will be followed by coring up to 150 geochemical targets and 20 heat flow measurements, complete with shipboard geochemical screening testing, further shore-based geochemical analyses (carried out by AGI) and an integrated, interpreted data package. AGI’s geochemical analyses will determine the hydrocarbon signature of the samples.

“We are excited to be part of Canada’s growing offshore industry and Newfoundland and Labrador’s 2018 licensing round,” said Keith Kneale, Fugro’s Business Development Manager for the Americas. “Investment by Nalcor Energy is supporting this project which will showcase Fugro’s market-leading expertise – earned from conducting dozens of similar surveys including the world’s four largest to date – enabling clients to improve and de-risk their exploration programmes.” He explained how AGI has been involved in offshore microseepage and macroseepage programmes for over 20 years adding, “Together with AGI, Fugro brings a wealth of top tier technical expertise to this project.”

The comprehensive data package will be available in early 2018 and is being licensed from both Fugro and AGI.

World’s First Proven Wireless Transmission of Reservoir Pressure Data

9Supporting image FINAL PRESS 1Leading international oilfield services company, Expro, has successfully accomplished the world’s first proven wireless transmission of reservoir pressure data to surface, from a recently abandoned subsea appraisal well which incorporated a rock-to-rock cement plug.

The system was installed in the North Sea and will be used to improve understanding of the reservoir and to optimize future development planning of the field, while ensuring full compliance with local well abandonment regulations.

This achievement provides operators with a more cost-effective option for well abandonment design and consideration of wider well barrier techniques, while maintaining the ability to monitor the reservoir or plug integrity.

Expro’s cableless telemetry system (CaTSTM) wireless gauges, using electromagnetic (EM) technology, were installed in the reservoir of the main bore and casings were cut below the side-track kickoff point to install the cap rock cement plug.

CaTS repeaters placed in the side-track enabled data transmission across the open-hole section and to the seabed transceiver for storage and transmission to an overhead vessel.

The system provided continuous reservoir data, which began immediately after the drill stem test (DST), allowing extended pressure build-up analysis without rig support.

Expro’s Executive Vice President, Alistair Geddes, commented:

“This latest achievement demonstrates our leading position in understanding the physics behind downhole EM telemetry. It allows us to instrument more wells with casing breaks or longer open-hole sections, partnering with customers to develop the most effective plug and abandonment strategies.

“For nearly two decades, Expro has pioneered the use of EM for long-term reservoir monitoring, delivering advancements in 3D analysis models for open-hole communication - without the need for a continuous metallic path for data transmission.

“We recognize the value that technology brings to our industry, which is why we continue to expand our capability and deliver maximum value through innovative new applications.”

CaTS gauges can deliver substantial cost savings in side-tracked wells with appropriate well barriers, as this permits long term interference testing to be completed from the main bore to side-track, without the need to drill a separate appraisal well.

Expro has the most extensive track record of instrumenting subsea abandoned wells and has successfully deployed CaTS gauges for its Advance Reservoir TestingTM (ART) application.