Eldar Sætre Continues as Statoil’s Chief Executive Officer

15Statoil EldarSaetreStatoil’s board of directors and chief executive Eldar Sætre have agreed that Sætre will continue as CEO after he turns 62 in February 2018. Eldar Sætre will thus not use his contractual right to retire at the age of 62.

“It has been a wish from the board of Statoil that Eldar Sætre continues as CEO. As CEO, Eldar has successfully implemented important changes within Statoil. He has led the company through a challenging period for the industry, making Statoil a stronger company. He is the right person to continue developing Statoil as a broad energy major, with a clear strategy for safe operations, high value creation and a low carbon future”, says the chair of Statoil’s board of directors, Jon Erik Reinhardsen.

Sætre was appointed chief executive on 4 February 2015, after being acting CEO since 2014.

“I am proud of Statoil’s achievements, and believe we are well equipped for the future. We have high project activity and are further developing the Norwegian continental shelf. We are strengthening our position as an operator in attractive areas outside Norway, and have started to build a significant portfolio in renewable energy. Statoil has delivered competitive returns, and is well positioned to create substantial shareholder value also in the future. I look forward to continuing to lead this company as we continue our journey,” says CEO Eldar Sætre.

Under his individual pension agreement Sætre had the right to retire at the age of 62, after just three years as chief executive. At that time, an element of his fixed pay was therefore excluded from his pensionable earnings. Now that there is agreement to a longer timeframe, the board has decided to revert to the original provision of pension being calculated on total fixed pay. The fixed pay element, which today represents around NOK 2.4 million, will thus be included in the pension-qualifying income. Sætre will at the latest retire when he turns 67, but he retains the right to retire at an earlier stage.

Statoil is the largest company in Norway, measured by revenues as well as market capitalization. Statoil is also the largest company in the Nordic countries measured by revenue, and the second largest measured by market capitalization. The Statoil board has for some time reviewed the CEO’s remuneration package compared to the market. Subsequently, the board has increased the CEO’s fixed annual pay to NOK 8.767 million, effective from 1 September 2017.

“Statoil should have competitive executive compensation in the markets in which we operate, but not be market leading. On this basis and after an evaluation of performance, the board has adjusted the remuneration package for the chief executive. It’s a pleasure to announce that Eldar Sætre continues as chief executive officer,” says chairman of the board of directors, Jon Erik Reinhardsen.

EnerMech Awarded Hose Supply and Services Contract for Shell Prelude Australia Project

16EnerMechlogoGlobal engineering and maintenance services provider, EnerMech, has been awarded a five-year contract for hose and hose fittings supply and services for Shell’s Prelude FLNG Facility in Western Australia.

The Prelude FLNG contract will be administered from EnerMech’s Henderson base in Perth while engineering and service support will be provided from regional facilities across Australia, including Darwin in the Northern Territory.

EnerMech’s Regional Director Allan Hart said: “We are pleased to announce the appointment of EnerMech as the Hose Integrity Management and Supply contractor on the prestigious Prelude FLNG Facility.

“This latest award strengthens EnerMech’s reputation as a leading maintenance service provider with a willingness to adapt to the changing oil and gas environment.”

The Prelude FLNG facility recently arrived at its location 475km north east of Broome where the hook-up and commissioning phase of the project is underway.

PIRA Energy Market Recap for the Week Ending October 23, 2017

17PIRALogoChina’s Refining Landscape is Changing as Independents Take on Expansion Strategy to Fight for Survival

PIRA expects crude prices to move towards $60/Bbl by year-end, but we do not believe prices that high are sustainable with shale growth and high financial net length entering 2018 which will weigh on next year’s prices. The East of Suez condensate market has been tightening since 2015, but it is expected to ease slightly next year as splitter additions take a breather in the region. China’s landscape for the refining sector is changing as state-owned refiners hold back from adding CDU capacity while independent refiners take on an expansion strategy to stay competitive amid many challenges. Australia’s oil demand growth is expected to moderate next year which could lead to some reduction in its net product imports. Asian refining margins will get some support from lower Chinese product exports and as oil demand in India improves.

Strength in Chinese Manufacturing Stands Out in Latest Data

Third-quarter Chinese GDP increased at a slightly slower pace compared to the first half of 2017 (and at a slightly faster place compared to last year). While the headline GDP figure suggested a stable condition, there were dynamic developments in other data. First, based on producer prices, ethylene production, and other data, manufacturing appears to be kicking into a higher gear. Second, a tighter credit condition is resulting in slower investment, particularly in real estate and manufacturing facilities. Third, retail sales and other information suggested healthy gains in consumer spending.

Propane Exports Remain Robust

Propane exports for the week ending October 13th totaled 982,000 b/d, which is in line with the September weekly average. For the week ending October 20th, propane exports are expected to remain in the one million b/d neighborhood based on cFlow data. U.S. propane/propylene inventories had a small draw of 93,000 barrels over the week ending October 13th, according to EIA data. Total propane inventories stand at 78.8 million barrels, which is 8% below the five-year average. The propane inventory draw occurred primarily in PADD 3 due to exports, while propane stocks built in PADD 1 and PADD 2 by 540,000 barrels and 400,000 barrels respectively, which puts stocks in both PADDs 1 and 2 at roughly the five-year average. U.S. raw mix production rebounded by 146,000 b/d last week as Louisiana offshore production was brought back online after being shut in prior to Hurricane Nate’s landfall. PADD 3 raw mix production regained 133,000 b/d or 91% of the total U.S. increase. All the above factors had a dampening effect on NGL prices with ethane, propane and butanes prices falling last week, and only natural gasoline prices increasing.

Ethanol Product Skyrockets

U.S. ethanol production soared by 52 MB/D to 1,019 MB/D the week ending October 13, representing the sharpest weekly spike since 2010 as more plants resumed normal operations following seasonal maintenance. Total inventories remained relatively flat for the third consecutive week, dropping by a mere 43 thousand barrels to 21.5 million barrels. Ethanol-blended gasoline production fell for the first time in four weeks, sinking to 9,131 MB/D, following overall gasoline output lower.

Curious Corn

The curious case of the Non-Commercial corn short is commanding some attention after last week’s Commitment of Traders showed a net short of 203K contracts, which has widened to 225K according to some estimates due to late week weakness. The addition of almost 13K net shorts for the reporting week, which ended last Tuesday the 17th and included the WASDE release, is hardly noteworthy but the cumulative position at 76.5% of “max” might be. IF the “current” 225K contract estimate is correct, that would be 84% of “max”. Also of note is the almost 330K contracts in net length held by the Indexers, also 76.5% of “max”.

Kirkuk Oil Fields: At Least 280 MB/D Remains At Risk

Following an October 15 assault on Kirkuk, the Iraqi military and Shia militias have gained physical control of 280 MB/D of production capacity from the Bai Hasan and Avana fields from the Kurds. The fields remain offline, and Kurdish pipeline flows to Ceyhan have fallen by an equal amount to around 200 MB/D. Reports indicate production and exports should return to normal by Sunday, October 22, pending the arrival of crucial equipment and Baghdad-affiliated engineers. However, PIRA believes the market should anticipate a longer outage. Even more notable than the unresolved technical issue is the fact that a deal must be reached between the Kurds and Baghdad, as the KRG controls the only northern export pipeline. This will take time.

U.S. Draws Keep Coming

U.S. commercial stocks declined sharply by 8.7 million barrels this past week led by a 5.7 million barrel decline in crude oil, reflecting Gulf of Mexico production losses (-1.1 MMB/D) from Hurricane Nate. The overall stock decline outpaced last year’s decline for the same week, widening the year on year stock deficit to 56 million barrels, or 4.2%. The two major light products both showed modest stock builds last week but should see significant stock declines in next week’s data with gasoline inventories drawing 2.8 million barrels and distillate, 2.2 million barrels, as demand rebounds. Cushing crude stocks built just 0.2 million barrels last week and are forecast to decline 0.6 million barrels in next week’s report. Overall crude stocks build 1.8 million barrels next week for the first build in five weeks.

October was Hot, Not Mild — and that Distinction Matters

Yesterday, the EIA reported a 51 BCF increase in inventories for the week ended October 13. While the report was within industry expectations, the November NYMEX futures contract still managed to tumble to an intra-day calendar-year low. Though the contract has since managed to convalesce closer to Monday’s opening print, the lackluster recovery suggests traders are still preoccupied by the possibility that continued warm weather will forestall the structural tightness we see ahead. Yet, despite the fact that the weather this month will likely rank as the second warmest since the 1950s (falling just shy of last year’s record), the build in inventories will fall short of year-ago levels as well as the 5-year average.

N.W. European Storage Stock Levels are Causing High Price Dislocations

Europe overall has quite healthy stocks, however the more Northwest you look, the more problematic the storage situation appears to be. Clearly, the U.K. is the focal point of storage deficits at the moment with the retirement of the Rough storage facility. If anything, Rough now moves to the supply side of the ledger, as it continues its decommissioning process with the removal of its remaining supplies. We expect these flows to be price insensitive as it dwindles – so far this Gas Year, it has been relatively stable at between 10- and 12-mcmm/d. Centrica should keep these flows relatively stable, as adding stress on the facility by ramping up and down on its production could increase the risk of physical disruption.

Déjà vu All over Again for Winter JKM

Supply shortfalls in Asia are once again supportive of winter JKM, even as Asian supply additions have surged. JKM strength also has roots in the Atlantic Basin where rising coal prices and steeper Southern European demand have offered strong competition with Asia for incremental volumes in a still supply short Asian market.

Shift in Supply Stack and Pull from France Bullish for German November Prices

After a first half of the month characterized by stronger wind output averaging more than 18 GW, a drop to a mere 2 GW pushed German hourly prices to €83/MWh during the evening of Oct. 18, the first time €80/MWh was breached since February, coupling it with France, Belgium, and the Netherlands and placing it almost €5/MWh above the Swiss price. Hourly prices also hit €80/MWh last year in October, but in combination with reported thermal dispatching of about 5 GW higher, which is to say that the supply curve has shifted by about 5 GW since then, bringing forward the steepest section of the curve. This change is supportive of German prices and is largely due to the closure of or move into the reserve portion of thermal plants.

Exports Remain in the Driver’s Seat

The pace of U.S. thermal coal exports accelerated in August, rising 2.2 MMst higher year-on-year and keeping U.S. coal prices elevated. Over the last month, virtually every prompt quarter and prompt month OTC coal contract in the U.S. markets has ticked up, despite the fact that demand has entered the shoulder season and coal burn declined in September and appears to have fallen further in October.

California Carbon Surplus to Build

California Carbon allowances traded higher in September, while October trades moved higher still. Stronger inflation indicators suggest a 2018 auction floor well below current pricing (final inflation will be released next month). The coming weeks will see Nov auction results, release of bearish CA emissions data and the partial 2016 compliance surrender. PIRA continues to believe that growing surpluses, helped by the return of large quantities of unsold state-owned allowances, will help contain pricing upside. ON sources are joining the program with some free allocations and supply from ON-only auctions and a deferred compliance requirement – limiting incremental secondary market demand. The CA/QC CP2 reconciliation in Nov 2018 will require the surrender of record quantities of compliance instruments and could affect spreads of CP2-valid vintages vs. later vintages. A Scoping Plan Update is to be completed by end-2017.

Japan Refinery Maintenance Continues, Demand Pickup Slow to Develop

Fall maintenance continues, but a pickup in seasonal demand has been slow to develop. As such, finished stocks have increased a bit. The product stock build this week was fairly broad based across all the major products. Crude imports fell back as expected and stocks drew 2 MMBbls, despite lower runs. Kerosene demand rose 71 MB/D and appeared to reflect a pickup in tertiary and secondary inventory pulling on primary inventory as pre-season fill programs finish up. The stock build rate eased back from 178 MB/D to 114 MB/D, while the 4-week build rate rose further from 60 MB/D to 77 MB/D. The deficit position vs. year-ago narrowed to 0.73 MMBbls. Refining margins again eased slightly on the week, but remain good and supportive of a high level of runs, though demand performance is lagging. The indicative marketing margin has begun to improve. For gasoline, it is above statistical norms, but remains below norms for gasoil/diesel.

Credit Conditions Remain Highly Constructive

The S&P 500 continued to set new records, though volatility gained on the week. High yield credit (HYG) moved higher, as did most other debt pricing indicators, other than emerging market debt. (EMB). The commodity space moved lower as the dollar strengthened, but energy bucked the trend and posted a gain. The St. Louis financial stress indicator resumed its downward trend.

Margins for Manufacturing U.S. Ethanol Declines

The cash margin for manufacturing ethanol in the U.S. declined the week ending October 13. RIN prices were stable. Ethanol production in Brazil’s South-Central region jumps. European ethanol prices and manufacturing margin deceases, U.S. biodiesel prices reach a two-week high but manufacturing margins fall for the fourth straight week.

Bean Yields

From 80 bpa in Mississippi to 25 bpa in Pratt County, Kansas, harvest reports this week continue to be variable, but the trend is definitely down after the initial filings as expected. Whether it’s 3,000 acres in northern Illinois at 55 bpa vs. 73 bpa last year, yields that are half of last year in SE Iowa, or southern Minnesota reports with a 4 handle in areas that produced 65-75 bpa beans last year, as harvest moves north at a fast pace in front of this weekend’s rains relative disappointment is starting to set in. To be fair, PIRA has seen some 80+ numbers out of select counties in Indiana, but also numbers in the mid 40’s for other parts of the Hoosier state, confirming the variability. While some are still at/near their APH (Actual Production History) yields, those willing to share a year over year comparison numbered 7:1 lower than last year in this week’s reports. These numbers seemingly confirm Crop Tour findings of lower year over year pod counts in states that we surveyed.

U.S. and Nigeria Lead Flourishing Asian Trade that is Not Sustainable

The long-term sustainability of LNG flows from the Atlantic Basin into Asia will come down to a matter of how much buyers value diversity and how much sellers are willing to discount in order to place the volumes. In the short term, however, Atlantic Basin flows to Asia have thrived due to the wider JKM/Henry Hub spread. Overall volumes are up by 56% this year to 16.2-BCM through September.

Prompt Coal Prices Gain Again, Deferred Market Weaker

Coal pricing was mixed this week, with prompt CIF ARA and FOB Newcastle prices rising modestly while deferred prices moved lower, widening already considerable backwardation in the forward markets. The bullish momentum on the front of the curve was not much of a surprise in light of the announcement of the Pacific National railroad strike and risks to the upside for winter demand. However, the market has seemingly become more pessimistic for deferred pricing, perhaps on weaker than expected thermal generation out of China.

EUA Prices Move to Mid-€7 Range, But Where To Now?

European Carbon (EUA) prices have moved to a mid-€7/tonne range following gains in September and early October arising from French nuclear uncertainty and the expectation of a final agreement in negotiations over post-2020 EU ETS market reforms. Although a final agreement in negotiations between the EU Council and Parliament was not reached at an Oct 12th meeting, one is still expected by year-end and possibly as soon as early Nov. However, there may be limited potential for continued price gains this year, as further reductions in French nuclear generation may prove challenging, and given that a positive outcome over a reform package may already be built into the market. Looking ahead to 2018, EUA prices could average slightly higher year-on-year. While continued high auction supply volumes provide downward price pressure to EUAs ahead of Market Stability Reserve implementation in 2019, the ongoing proposal to secure the EU ETS from Brexit may also add some upward EUA price risk.

Asian Oil Demand: Growth Falls Back Again, as Expected, with Further Slowing Likely in 4Q

Our snapshot of Asian oil demand growth continues to show further slowing, as expected. Further easing is likely in 4Q, but then accelerating growth will take shape in 1Q18. Growth in our October snapshot was 852 MB/D, an incremental fallback of -104 MB/D from last month. The key drivers were again slower growth in China and Korea, while India’s growth improved almost 150 MB/D, and Australia/New Zealand growth improved 22 MB/D. Performance generally came in along PIRA’s expectation. At this point, there will be further deceleration in growth in 4Q to about 635 MB/D. Then, improvement is expected in 1Q18 with growth rising to 975 MB/D. Data actuals cover the three month period July-September for China and India, while Japan, Taiwan, and Korea cover data June-August.

Global Equities Setting More Record Highs

Global equity markets continue to set more broad based records in a host of countries and across a host of market indices. In the U.S., the S&P 500 gained almost 1%, with the growth indicator outperforming a largely neutral defensive indicator. Banking and housing were the best performers, while consumer staples was the weakest, and energy fell back -0.5%. Internationally, there appears to have been rotation out of many of those tracking indices and into the U.S. The biggest fallback was in Latin America, -1.4%, though many of the other tracking indices also posted declines.

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.

Wärtsilä Makes Viking Princess the World's First Offshore Vessel with a Hybrid Energy Storage Solution

1Waêrtsilaê Princess Hybrid 8905The technology group Wärtsilä reached a new milestone in the battery technology development as the company completed the installation of a hybrid energy system on board Viking Princess. The Norwegian vessel is now the first ever offshore supply vessel in which batteries reduce the number of generators aboard the ship. The new energy storage solution will improve engine efficiency, generate fuel savings and reduce greenhouse gas emissions. Viking Princess completed sea trials and the system was handed over to customer Eidesvik Offshore on 9 October 2017.

There is significant potential to save fuel through improved engine efficiency, as the operating profile of supply vessels is highly variable. When using the Wärtsilä installed energy storage system on board Viking Princess, the fuel saving potential can be up to 30 percent in various operations and the CO2 emissions can be reduced by up to approximately 13-18 percent per year, depending on operational conditions and requirements.

Furthermore, the hybrid solution will provide a more optimal load on the engines, while the intervals between engine maintenance can be extended.

Viking Princess now runs on a combination of a battery pack for energy storage and three LNG-fuelled Wärtsilä engines. The new energy storage solution provides balancing energy to cover the demand peaks, resulting in a more stable load on the engines. The technology is similar to that used in hybrid vehicles: it prevents the engine load from dipping, and uses the surplus to re-energise the battery, which can be charged as needed. Wärtsilä's remote monitoring and operational advisory services support the daily operation of the vessel ensuring efficient and optimised operations.

The contract to replace one of the four engines on Viking Princess with battery power was signed in May.

Impact in the future of the entire shipping industry

"Eidesvik and Wärtsilä's partnership dates back to 2003 when our ship, the 'Viking Energy' became the first offshore supply vessel powered by LNG fuel. Now, together, we are again introducing a world's first, with the 'Viking Princess' becoming the first offshore vessel in which batteries reduce the number of generators aboard the ship. We are grateful to Wärtsilä for providing the technology to make this possible," says Vermund Hjelland, President Technical Department, Eidesvik Offshore.

"This is a truly forward-looking solution, and we congratulate Eidesvik Offshore for having the vision to appreciate the benefits that hybrid energy system offers. In addition to the fuel consumption and environmental advantages, the conversion also reduces maintenance costs and contributes to more efficient operations. The success of this project will impact the future of the entire shipping industry," says Sindre Utne, Manager Projects and Operations, Wärtsilä Norway. "Wärtsilä's advantage lies at the most advanced level of integration related to hybrid technology for marine applications. It is a combination of expertise in both engines and electrical and automation systems, as well as digital solutions."

BP Strengthens LNG Shipping Capacity

2bp logoBP is taking delivery of six new, state-of-the-art liquefied natural gas (LNG) tankers to support its expanding global LNG portfolio, and to respond to growing demand for lower-carbon energy sources around the world.

BP’s finance partners KMarin and ICBC Leasing are investing over $1 billion in the tankers, which will join existing tankers in BP Shipping’s fleet in 2018 and 2019. The vessels will help service a 20-year liquefaction contract with the Freeport LNG facility in Texas, as well as other international LNG projects in BP’s global portfolio.

“These vessels will significantly increase BP’s ability to safely transport LNG to anywhere in the world, directly supporting BP’s global natural gas strategy,” said BP Shipping CEO Susan Dio. “They also will be among the most fuel-efficient and technically advanced LNG tankers ever built.”

Equipped with next-generation engine technology, the new ships are designed to be about 25 percent more fuel efficient than their predecessors. They also will be fitted with a reliquefaction plant, meaning evaporated natural gas in the cargo tanks can be returned to the tanks as LNG, allowing the ships to deliver more LNG to the market.

BP has a long-term contract for 230 Trillion BTUs per year of LNG capacity in the Freeport LNG facility. The Freeport LNG liquefaction facility is under construction, and the first train is expected to be operational by the end of 2018.

BP also participates in LNG projects in Australia, UAE, Indonesia, Trinidad and Angola. This portfolio includes a mix of long-term, mid-term and short-term supply to enable BP to best meet the ever-changing needs of its global portfolio of customers.

“BP has built a diverse LNG portfolio spanning both established and emerging markets,” said Alan Haywood, CEO of BP’s global supply and trading business. “Freeport is the latest example of how BP continues to expand the reach of our LNG business and serve our customers with flexible solutions through leveraging our scale, connectivity and relationships - and another sign of our commitment to remaining at the forefront of this rapidly growing and important global business.”

The 2017 BP Energy Outlook forecasts that global LNG trade will grow seven times faster than pipeline gas trade, such that by 2035 it accounts for around half of all globally traded gas. The newly expanded BP Shipping fleet will deliver LNG volumes to a range of BP customers around the world.

James Fisher Subsea Excavation Embarks on Hurricane Salvage Works

3 1T40003 2JFSEGlobal subsea excavation specialist James Fisher Subsea Excavation (JFSE) is embarking on its 80th decommissioning/salvage job in the Gulf of Mexico.

The platform was destroyed during Hurricane Ike in 2008. The region has been hard-hit by hurricanes in the past decade and the recent extreme weather saw this project delayed for a number of weeks.

JFSE, the world’s most experienced, trusted and innovative provider of M/CFE services, has deployed its T4000 spread which will clear the platform jacket to give access for rigging and removal before excavating around the rig’s legs to 18ft below the mud line to allow for the safe access of a diamond wire saw.

The T4000 has a small deck footprint, an output of 4000 litres per second and can easily manoeuvre around subsea structures. JFSE’s tools also create a ‘3 to 1’ slope for safe diver access. It is a powerful solution in a compact package.

This email address is being protected from spambots. You need JavaScript enabled to view it., business development manager Americas at JFSE, said:

“The US Gulf of Mexico is an important marketplace, both in terms of generating energy and for decommissioning due to ageing infrastructure, old fields or the effects of extreme weather. “There is an immediate impact felt by the energy industry of hurricane season. There are also ongoing challenges. This project shows what our clients continue to face many years after a storm wreaks its havoc and how we can ease the burden.

“This is our expert team’s 80th decommissioning/salvage project in the region. This is a key milestone in our extremely strong track record of delivering bespoke solutions for clients who are facing taxing demands to deliver time and cost-efficient decommissioning solutions.” JFSE recently designed, developed and implemented a patented internal jetting system which means its tools can now cut through soils up to 280+kPa which were previously considered too hard for M/CFE. This technology will benefit additional projects in the decommissioning/salvage sector.

JFSE’s non-contact M/CFE systems can perform deburial of pipelines and cables for inspection and repair, locate and uncover pipelines which have moved, correct free-spanning and lower existing pipelines to limit stress.

As well as 80 decommissioning/salvage projects, its market-leading fleet of tools has also performed numerous pipeline trenching and IRM projects in the US Gulf of Mexico.

Its versatile spreads can work in water depths of between 1.5m and 3000m and the company’s innovative approach means clients are presented with bespoke solutions to their requirements. Contact us for more information on how we can support your next project.

Global Marine to Acquire Fugro’s Trenching & Cable Laying Business

4GMG Fugro symphonyGlobal Marine Group (“GMG”), a leading provider of offshore engineering services to the telecommunications, oil & gas, and renewables industries, announces that Global Marine Systems Limited (“GMSL”) has entered into an agreement with Fugro N.V. (“Fugro”) (AMS: “FUR”) under which GMG will acquire Fugro’s trenching and cable lay services business.

The purchase consideration, valued at approximately US$73 million, consists of the issuance to a subsidiary of Fugro of a 23.6% equity interest in Global Marine Holdings LLC (the parent company of GMSL), valued at US$65 million, and an obligation of GMSL to pay Fugro US$7.5 million within one year pursuant to a secured vendor. The acquisition of Fugro’s trenching and cable lay services business involves the transfer to GMG of 23 Fugro employees located in Aberdeen, as well as one vessel (M/V Symphony), two powerful Q1400 trenchers, and two work class remotely operated vehicles. Built in 2011, the M/V Symphony, a multi-purpose vessel with an extensive 1,400m² deck space, will join GMG’s cable installation and maintenance fleet. In addition, as part of this transaction, Fugro will become the preferred provider of marine site characterisation and asset integrity services to GMG.

The acquisition will significantly enhance GMG’s portfolio of service offerings to the market, with a comprehensive range of integrated services, with the immediate capacity to complete additional packages of work in direct response to market demands. This transaction will provide GMG with highly capable, proven assets with a history of delivering complex engineering projects to customers around the world.

Fugro is the world’s leading, independent provider of geo-intelligence and asset integrity solutions. Fugro acquires and analyses data on topography and the subsurface, soil composition, meteorological and environmental conditions, and provides related advice. With its geo-intelligence and asset integrity solutions, Fugro supports the safe, efficient and sustainable development and operation of buildings, industrial facilities and infrastructure and the exploration and development of natural resources.

Since the founding of Fugro’s trenching and cable lay services business in 2012, Fugro has established a strong presence in the renewables market, working with offshore wind farms including Lincs Wind Farm, Humber Gateway, Gwynt y Môr and Rampion. The business has also conducted multiple operations in oil & gas for major oil companies such as Shell and BP.

“This acquisition is another deliberate step in our strategic plan, adding extensive capabilities of the Fugro trenching and cable lay team to the Global Marine Group and further equipping us with proven assets to support our growth plans,” said Ian Douglas, CEO of Global Marine Group. “I am delighted that Fugro identified us as the right partner to advance their trenching and cable lay business and I am looking forward to welcoming the Aberdeen based trenching team to our corporate family. We are committed to our vision of engineering a clean and connected future and we will continue to build, align and adapt our business in order to meet the evolving needs of our customers.”

“As we continue to carefully build and develop our business in support of our long-term strategic view, we are delighted to partner with Fugro,” added Dick Fagerstal, Executive Chairman of Global Marine Group. “Fugro’s long standing world-wide expertise in many segments of the offshore services markets will greatly benefit the Global Marine Group as we work towards our goal of delivering attractive risk adjusted returns for all our constituents.”

“A key objective of Fugro’s ‘Building on Strength’ strategy is to seek a partnership or divest our construction and installation related marine activities,” said Paul van Riel, CEO of Fugro. “We have taken a major step forward in delivering on this strategic objective by contributing our trenching and cable lay services business towards a promising partnership with Global Marine Group. Fugro will participate in a profitable and diversified business with solid growth potential. This step will also support Fugro’s growth in the nautical market segment.”

The transaction is subject to customary closing conditions, and is expected to close in the fourth quarter 2017.

Ampelmann Provides Increased Operational Efficiencies with E1000 Development

Ampelmann, a global leader in offshore access solutions, has enhanced its existing E1000 gangway transfer system to speed up conversion of its gangway from personnel to cargo mode from at least ten minutes to less than one minute, providing greater operational efficiencies.

The innovative and adaptable E1000 motion compensated access system can transform from a gangway into a crane boom. It is 30 meters in length and is capable of safely transferring people and up to 1,000 kilograms of cargo in rough sea states in wave heights up to 4.5 meters.

5Ampelmann E1000Four E1000 systems are currently being deployed globally

The enhanced, automated system now employs remote-controlled hydraulic pin pushers to fixate the gangway booms in less than one minute with a single button. To switch from cargo to personnel transfer mode, the crane hoisting cable is placed in a freewheel mode to allow the booms to telescope, significantly increasing the available working time. Pins were previously manually deployed and the entire conversion process took at least ten minutes to complete.

Diederick Nierstrasz, Ampelmann’s offshore wind product development manager said: “Building on the success of the existing E1000, we recognized an opportunity to enhance the current system to reduce the time and physical effort taken to change the gangway work mode from personnel to cargo. With this safe and efficient innovation it now takes less than one minute. This is a huge time saving for our clients, resulting in a more efficent use of their valuable assets and increase of the overall project performance.”

“Due to the E1000’s versatility, the system is already the preferred choice in the offshore wind sector. This improvement will provide even greater operational efficiencies for our customers not only in offshore wind but also in the oil and gas industry where compensated lifting capacity is required.”

A total of four E1000 systems are currently being deployed, of which one by Siem Offshore Contractors on its vessels for inspection, maintenance and repair works on Germany’s first commercial offshore windfarm. Earlier this year, the gangway safely performed more than 12,000 people transfers and 7,000 cargo lifts between an offshore support vessel and the wind turbines over a ten-month period, leading to an extension of the original contract.

Future development of the E1000 will focus on increasing its lifting capacity.

Anadarko Signs Agreement for Exploration Offshore Peru

6anadarko logoOn Oct. 9, 2017, Anadarko signed an exploration agreement with the Government of Peru to explore 4.7 million acres located on three deepwater blocks in the Trujillo Basin offshore Peru.

The exploration phase of the agreement is a typical multi-year, multi-phase agreement for 7 years with attractive fiscal terms. During the first phase (2 years), Anadarko expects to invest approximately $5 million to conduct evaluation activities primarily consisting of reprocessing existing seismic data and collecting piston cores from the sea floor to evaluate the potential. The terms include multiple decision points to continue into additional exploration phases.

Ocean Rig UDW Inc. Announces New Drilling Contract and Increased Contract Backlog

Ocean Rig UDW Inc. (NASDAQ: ORIG) ("Ocean Rig"or "UDW" or the "Company") an international contractor of offshore deepwater drilling services, has announced that it has signed a new drilling contract with Statoil, for a one-well drilling program offshore Tanzania. The contract is expected to commence in Q1 2018, to be performed by the Ocean Rig Poseidon.

7OceanRigPoseidonOcean Rig Poseidon: Photo credit: Ocean Rig

In addition, Lundin Norway AS (“Lundin”) has declared their fifth option to extend the existing contract of the Leiv Eiriksson, which is now expected to have firm employment secured until March 2018. Ocean Rig has granted Lundin two (2) additional options to drill further wells in the future. Should Lundin exercise its remaining seven one-well options, the rig could be employed until the middle of 2019.

As a result, the Company has increased its estimated contract backlog by approximately $20 million.

Mr. George Economou, Chairman and CEO commented:

"We are excited that following the successful completion of our restructuring we have secured additional work for our rigs. Our strong balance sheet has increased our eligibility to participate in tendering activities for our clients and allows us to offer competitive solutions to selectively pursue the opportunities that make the most business sense."

Subsea 7 Agrees to Acquire Normand Oceanic

8NormandOceanicSubsea 7 S.A. (Oslo Børs: SUBC, ADR: SUBCY) (the Group) has announced an agreement to acquire the remaining 50% shareholdings in its equity accounted joint ventures, Normand Oceanic AS and Normand Oceanic Chartering AS, from Solstad Farstad ASA for a nominal cash consideration.

Effective from the date of the transaction, the Group will become the sole owner of Normand Oceanic, a flex-lay and heavy construction vessel that is being managed by Solstad Farstand while under long-term charter to a third party. The Group will assume all obligations related to an outstanding loan of approximately $100 million. Normand Oceanic AS and Normand Oceanic Chartering AS will become wholly-owned subsidiaries of the Group.

Jean Cahuzac, CEO, said "Our agreement to acquire Normand Oceanic reflects our strategy to own high-specification vessels that differentiate our market leading engineering and construction services to the offshore energy industry. We are focused on actively managing our fleet composition to meet our clients' requirements and market conditions."

Transocean Ltd. Announces Two-Year Contract for Ultra-Deepwater Drillship Deepwater Invictus

9InvictusTransocean Ltd. (NYSE:RIG) announces that the ultra-deepwater drillship Deepwater Invictus was awarded a two-year contract plus three one-year priced options with a subsidiary of BHP Billiton. The backlog associated with the firm contract is approximately $106 million. The contract is expected to commence in the second quarter of 2018.

“We are extremely pleased to continue working with BHP,” said President and Chief Executive Officer Jeremy Thigpen. “Since we welcomed the Invictus into our fleet in 2014, the combination of BHP, Transocean and the Invictus has delivered industry-leading performance; and, we look forward to extending our productive relationship through this multi-year contract.”

Exmar FSRU Locks in for Longevity with Ecolock Protection

Subsea Industries has applied its hard-type Ecolock protective coating to the hull of a 26,320m³ floating storage and regasification (FSRU) unit nearing completion at the Wison Offshore & Marine shipyard in Nantong, China.

It is the second major coatings project Subsea Industries has completed in China for Exmar.

Following the company’s approach to applying hard coating technology to its barge-type floating assets, in combination with the success of the 2013 Ecospeed application to the 16,100m³ Caribbean FLNG unit, the decision was made to specify Ecolock for the entire hull of the newbuild FSRU.

10Exmar caribbean flng 0Exmar has opted for Subsea Industries’ hard coating technology for its barge-type floating assets (photograph courtesy of Exmar)

The experience of the shipyard gained from the Caribbean FLNG application – the first time it had applied a Subsea Industries’ product – resulted in the hard coating being applied more quickly.

Like the first project, the FSRU was built in blocks which were coated prior to assembly. Weld seams and inaccessible areas were coated after the unit was assembled.

Manuel Hof, Subsea Industries’ production executive added: “The Wison shipyard was very satisfied with the coating, due to the ease and speed of application as well as the quality of the coating. I am told that had the hull been coated with a traditional coating system it would have taken at least seven days from surface preparation to the final coat. The yard was able to apply two coats in a single day, which minimized the risks associated with multi-layer applications. It also saved the yard time and labor costs.”

Ecolock is single, homogenous protective covering for static steel structures that provides asset owners with a tough, durable coating designed to remain intact throughout the vessel’s life without drydocking, repair or replacement.

“The glass-flake reinforced coating is ideally suited to this kind of application,” says Hof. “Combined with long-term protection, the coating can be cleaned underwater without any damage to the coating. As long as correctly applied and maintained, Ecolock can be guaranteed for up to 20 years for this type of application. This puts it in a league of its own.”

Prior to application, preparation work has to be carried out to ensure a structural profile of at least 75µm (SA2.5 or better). Ecolock is then applied but requires no primer or other type of coating. Typically, just two 500µm coats are applied with minimum curing time of three hours between each application.

Exmar believes “Ecolock is a strong contender for being the best choice of protection of offshore vessels and structures that need to be kept on site in production for extended periods of time without drydocking. The guarantee and the environmental safety of the coating make it even more attractive for companies like Exmar.”

Shortly after the Ecolock application, the FSRU was floated out of the Wison shipyard for completion of the topsides installation and pre-commissioning of the unit.

Saipem Introducing XSIGHT by Saipem Division

11SaipemThe High Value Services division, established with the company reorganization launched in May of this year, has taken on its definitive name: XSIGHT by Saipem.

This new name and logo marks the conclusion of the organizational work-in-progress of the new Saipem division dedicated to high added value engineering services. It also kicks off the beginning of an innovative journey for Saipem in the Oil & Gas industry in particular, and in the Energy industry in general.

Indeed, XSIGHT aims to be an efficiency accelerator for the industry. By listening to Clients and implementing their needs, it will meet expectations with innovative solutions. The new name underscores the characteristics of the division: going beyond, thoroughly examining all the multifaceted aspects of every project and standardizing transformation models.

The XSIGHT division enters the market with an independent, streamlined and flexible organizational structure, and a distinct commercial approach for products drawing on Saipem’s vast experience acquired during the execution of turnkey contracts. This also includes the conceptual and initial definition phases of projects in technical/economic terms as well as regards operability and sustainability.

XSIGHT has embraced the technological and digitalization challenges of Industry 4.0 by focusing on the development of new collaborative design methodologies, such as the XDim® platform and data analysis with Captix™, and by setting itself the target of changing the traditional sequential development of projects by offering the GoBuild™ accelerated development package.

XSIGHT by Saipem is ready to face global challenges head on.

Wärtsilä Strengthens Its Expertise In Vessel Positioning Technology by Acquiring Guidance Marine

12Waêrtsilaê GuidanceThe technology group Wärtsilä has acquired Guidance Marine Limited, a privately owned company with offices in the UK, Singapore and the USA. Guidance Marine is recognised as a technology leader in the marine industry for sensor solutions relating to dynamic positioning and other vessel control systems, such as collision avoidance and remote control operations.

Wärtsilä is deeply committed to providing technologies needed to enhance 'intelligent' shipping, whereby digital solutions will greatly improve the efficiency, safety and profit earning capabilities of its maritime customers. The acquisition of Guidance Marine will enhance Wärtsilä's capabilities in the area of situational awareness and near-field measurement, both essential for more intelligent vessel navigation.

"Guidance Marine's core competences are wide ranging and include the development of sophisticated positional measurement sensors and systems for high accuracy control applications. These competences complement our own activities in the field of radar technology, navigation and dynamic positioning, by joining forces we can certainly further accelerate the introduction of solutions that will take shipping into a new era of efficiency," says Maik Stoevhase, Director, Automation, Navigation & Communication, Wärtsilä Marine Solutions.

"Joining forces with the Wärtsilä Corporation presents an exciting opportunity for Guidance Marine to work alongside a major player in the marine industry. We are committed to continue serving all our customers, whilst at the same time looking forward to bringing them faster access to new products and technologies. This partnership provides a significant step change in developing the future of maritime positioning and navigation where the integration of multi-modal sensor technologies is a key factor in the delivery of 'intelligent' vessels," says Jan Grothusen, CEO at Guidance Marine.

Founded in 1991, Guidance Marine has developed critical in-house capabilities, including a dozen patents for various technologies and a ready portfolio of closely related products. In its research and development activities, the company has also established strong connections with a number of leading UK universities. In 2016, Guidance Marine's turnover was GBP 6.3m (EUR 7.0m). Guidance Marine employs over 50 people worldwide and is an internationally successful award winning company. It has a strong track record in delivering significant safety and cost benefits by bringing disruptive position measurement technologies to marine markets across several continents.

Add Energy Wins New Contracts with Tailor-Made QHSE Technology

13nems accounterAdd Energy, an international energy consultancy and software provider has recently secured work with three operators in the North Sea for the provision of Environmental Management and Reporting Software (NEMS Accounter).

The three software as a service contracts, which each run for one year with options for renewal, will provide the operators with an efficient and bespoke online environmental accounting and management system.

NEMS Accounter has been developed to help ensure environmental compliance in regions with the strictest environmental regulations and will provide the three operators with a cost efficient, and improved method for managing environmental effects that adhere to environmental legislation.

The innovative system has been built by a team of industry experts with over 25 years of knowledge in managing and quantifying emissions, discharges and waste from the upstream oil and gas industry.

Using cloud based technology, the software is readily available on demand with no installation or set up costs required, allowing the software to be fully operational from day one with the ability to be scaled up for growing operations. This is further supported with continuous development and investment from Add Energy that enables operators to subscribe to a solution that is always compliant with ever-changing demands and requirements of the fast-paced industry.

Tom Dagstad, Senior Vice President of Environmental Solutions at Add Energy said: “We are proud to have been awarded these contracts on the UK continental shelf. With these contracts, we strengthen our position as the preferred supplier of environmental software solutions for oil and gas operators.

“Having these new clients onboard means that we will enhance our software development efforts for the UK market. This will result in innovative updates and valuable capabilities being implemented into the software for both new and existing clients in the UK, and ultimately an even more optimized solution.”

These latest contract wins and the subsequent increase in the number of clients in the UK, means that Add Energy is now looking to grow its team in Aberdeen and Norway.

BiSN Announces North Sea Commitment with £2m Facility

14 1BiSN logo 1BiSN, a global leader in innovative metal-to-metal downhole sealing solutions, continues to expand its services to North Sea clients, by announcing the expansion of its corporate headquarters.

Based in Warrington, the £2million premises will see BiSN expand into a 2,000 sq/m, site, which brings its research and development activity under the same roof as a newly-acquired machine shop.

14 2Paul Carragher2BiSN’s innovative Wel-LOK M2M technology range has attracted investment from some of the world’s major oil and gas operators, and the company is now growing its UK operations in order to specifically service the completions, interventions and abandonment markets.

Paul Carragher, BiSN Chief Executive

Chief executive officer, Paul Carragher explains: “The international demand for BiSN’s unique downhole technology has increased exponentially. The purpose of our most recent UK investment is two-fold; firstly, it allows us to continue our ground-breaking alloy development, whilst dramatically improving product availability to those operating across the Eastern Hemisphere.

“Secondly, our technology - which utilizes a bismuth-based alloy and modified thermite heaters - is turning traditional downhole sealing methodology on its head; we are opening up a range of applications previously thought impossible. With that in mind, our improved headquarters provide the ideal setting in which our clients can witness the technology for themselves.

“This has already proved highly effective at our Houston assembly facility, and we look forward to welcoming our clients to Warrington.”

In tandem with the launch of its new manufacturing facility, BiSN aims to increase its UK workforce by 100%. Whilst two key appointments - including UK Workshop Manager - have already been made - the company is currently recruiting for a total of 10 senior engineer and technician roles.

MacGregor Establishes its Head office in Singapore

15MacGregorMacGregor, part of Cargotec, has established its Head office in Singapore. This ends a period of more than three years where MacGregor has operated with a virtual head office. In line with MacGregor's strategy execution the company wants to strengthen its local presence in Asia and Michel van Roozendaal, President, MacGregor will relocate to Singapore as of 1 October 2017. In addition, Finance and Sourcing operations will be led from Singapore. Consequently, Jani Oksanen, Vice President, Finance, MacGregor, will as of 1 October be based in Singapore.

With a global customer base and large geographic span of operations, MacGregor continues to have a strong leadership presence in Europe, where a majority of the company's competence centers are located. "As a global market leader in cargo and load handling serving our customers globally, a Head office in Singapore is a natural fit for MacGregor as the majority of shipbuilding takes place in Asia. Furthermore, close to 70% of MacGregor's Sourcing volume is purchased from Asian vendors," states Michel van Roozendaal, President, MacGregor.

PIRA Energy Market Recap for the Week Ending October 16, 2017

16PIRALogoJapan More Refinery Maintenance, While Gasoline Demand Improves

Japanese fall maintenance continues to gear up and will reach a peak over the next two weeks. Crude imports rose an incremental 286 MB/D, which combined with the lower runs, built crude stocks 4.3 million barrels. Finished products built 1.6 million barrels, largely from higher jet-kero stocks. Gasoline demand kicked up 169 MB/D, as the Health-Sports Day holiday provided uplift. Gasoil demand was surprisingly strong, despite the holiday. Exports, however, plunged from record levels and stocks built. Kerosene demand fell back sharply and was more in keeping with underlying demand. Refining margins eased slightly on the week, but remain good.

U.S. Inflation Remains Benign, and Fed Is Trying to Understand Why

U.S. inflation has stayed benign, as consumer inflation data for September came in on the soft side of expectations. For now, U.S. central bankers appear wedded to the established historical method of conducting monetary policy, so another rate hike in December remains the base case. But the minutes for the September Fed meeting, released this week, showed policymakers stepping outside of traditional economic theories in search of answers for the low inflation puzzle. Meanwhile, activity data released by major economies were encouraging. Specifically, U.S. retail sales rose solidly, European industrial production expanded at its best pace in years, and growth in Chinese trade continued.

Propane Inventories Build on Warm Fall Weather

After three weeks of propane stock draws, inventories rose 925,000 barrels last week. The propane stock level is 78.9 million barrels, which is 8% below the five-year average. Propane exports dropped to 886,000 b/d for the week ending October 6th but are expected to return to the one million barrel level for the week ending October 13th based on heavy ship activity at USGC ports. US raw mix production dipped to just under 3.8 million b/d as Hurricane Nate forced a brief shut-in of all US Gulf Coast production facilities, which caused a 140,000 b/d or 4% reduction in raw mix production. NGL prices rose last week but did not keep pace with the increase in WTI/Brent crude prices. The combination of increasing inventories and reduced exports suppressed NGL prices last week, but NGL fundamentals remain strong and are price supportive going forward.

Ethanol Prices Nosedive in the U.S. and Europe

Margins for manufacturing ethanol in the U.S. and Europe worsened the week ending October 6. The EPA noted that it is considering reducing mandates for advanced biofuels and biomass-based diesel in 2018 and 2019. After declining temporarily, RIN values gained as fears over lower mandates subsided due to strong opposition. U.S. biodiesel prices and manufacturing margins declined for the third straight week. In Brazil a greater percentage of the sugarcane is being devoted to ethanol manufacture. In Western Europe the expiration of sugar quotas will mean more ethanol on the market.

Fuel Subsidy Reform Slowed by Higher Oil Prices

Momentum for fuel pricing reform slowed over the past twelve months, as higher oil prices reduced the urgency for the world’s largest oil exporters to lower their subsidy bills. The trend supports PIRA’s view that the threat to future oil demand from subsidy removal is overstated. The vast majority of oil consumption is concentrated in countries that price fuel at or above market levels, while political constraints and stronger oil markets will cause oil exporters to implement subsidy reforms at a deliberate pace. Separately, currency appreciation versus the U.S. dollar had a marginally supportive impact on oil demand in the past year, but not nearly enough to offset the headwinds from widespread depreciation when oil prices collapsed between summer 2014 and January 2016.

France: Low R&C Demand is Hiding Serious Looming Risks

French nuclear output has been dominating energy headlines this year - most recently with an EDF announcement of “significant” earthquake risk at 29 reactors just as winter is set to begin. Certainly this is not an ideal time to bring up this issue in France adding to balancing risks in not only the power sector, but with real knock on effects to gas markets. Major looming risks in France at the moment include low storage heading into winter, higher power demand, and LNG supplies that are average-to-low. For gas and power, France is very important for balancing its Mediterranean neighbors, which have also been the cornerstone for higher LNG imports in 2017. Any regional spikes tied to global LNG levels will be a significant risk across the whole winter.

Panama Canal Transits Tally Up, Adding to Concerns about Access

With an average of some 20 LNG transits per month to date this year according the Panama Canal Authority data, the complaints, concerns and downright fears on the part of some LNG buyers, sellers, shippers and traders vis a vis Panama Canal access is mounting.

Credit Conditions Remain Highly Constructive

Credit conditions again remained highly constructive, with the S&P 500 continuing to set new records and volatility falling back on the week. High yield credit (HYG) was fractionally lower, but investment grade debt, emerging market debt, and the energy debt indictors all posted gains of 0.36-0.63%. The commodity space was strongly higher while the dollar weakened -0.8%. The St. Louis financial stress indicator was fractionally changed after five straight weeks of lessening stress.

U.S. Ethanol Production and Stocks Increase

U.S. ethanol production rebounded the week ending October 6, increasing by 14 MB/D to 1,010 MB/D as some plants resumed normal operations following scheduled maintenance. Total inventories rose by 805 thousand barrels to 21.5 million barrels, with East Coast stocks experiencing the largest weekly build ever reported, 933 thousand barrels. Ethanol-blended gasoline production continued to rebound from a six-month low, rising 177 MB/D to 9,231 MB/D as overall gasoline output increased.

Kirkuk Developments Highlight Northern Iraqi Production Risks

On October 15, the Iraqi military launched an assault on disputed Kirkuk, which Kurdish Peshmerga forces have effectively controlled since dislodging ISIS in 2014. In addition to taking control of the city with little Kurdish resistance, the Iraqi army also claimed to take over the Baba Gurgur oil field (from which current production of ~100 MB/D is already allocated to NOC). A larger concern is the fate of ~280 MB/D from the disputed Bai Hasan and Avana fields, of which the Kurds gained physical control in 2014. At the time of writing, reports indicate the Kurdish government shut operations at the two fields, amid threats from Iraqi forces to target them next. The Kurds also refine up to 60 MB/D of NOC oil under recent agreements, raising PIRA’s estimated near-term disruption risk to at least 340 MB/D. The situation is fluid, but PIRA expects imminent negotiations and any near-term outage to be short-lived. But longer term, deep-rooted tensions over the status of Kirkuk will persist.

First Signs of Tightness Emerging in France but Greater Risks for the Italian System

First signs of tightness have been emerging in the French market. Although RTE data shows that temperatures were in line with those typical for the period at the beginning of the week, spot prices reached an hourly peak of €75/MWh on Oct. 9, the highest value since mid-February, at a time when demand was only 55.8 GW, or 0.7 GW below the average demand during October on-peak periods since 2012. Poor nuclear output is the main driver of these high settlements, with the average month-to-date being 37.9 GW, lower than the 40.1 GW average of September and even below the level recorded in the same period of October 2016, when the steam generator probe was being implemented.

Seaborne Coal Pricing Continues to Rise on Heightened Chinese Imports

Seaborne coal prices largely moved higher this week, with CIF ARA and FOB Richards Bay forward prices leading the way, rising between $2.00-$5.00/mt W/W. Additionally, the back of the forward curves moved higher than prompt pricing, flattening out the prevailing backwardation in market forwards. The prevailing tightness in the coal market is looking like it will persist well into 2018, particularly if market bulls’ expectation of a colder-than-normal winter in Asia comes to fruition.

Global Equities Setting More Record Highs

Global equity markets continue to set broad based record highs in a host of countries and across a host of market indices. In the U.S., the S&P 500 gained a modest 0.2%, but pushed further into record territory. The best performers were consumer staples +1.4%, utilities +1.4%, the defensive indicator +1.1%. Retail and banking were the weakest performers and lost ground. Internationally, all the tracking indices outperformed the U.S, with emerging markets, emerging Asia, and Japan doing the best.

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.

Chevron Announces First LNG Production at Wheatstone

Chevron Corporation (NYSE:CVX) has announced it has started producing liquefied natural gas (LNG) at the Wheatstone Project in Western Australia. The first cargo is on track to be shipped in the coming weeks.

"First LNG production is a significant milestone and is a credit to our partners, contractors and the many thousands of people who collaborated to deliver this legacy asset," said Chevron Chairman and CEO John Watson. "Wheatstone adds to our legacy gas position in Australia that will be a significant cash generator for decades to come."

1wheatstone hook up and commissioning activities continue C17BThe Wheatstone platform is the largest offshore gas-processing platform ever installed in Australia, with a topside weight of about 37,000 metric tons, and the largest float-over installation Chevron has ever delivered globally. Photo credit: Chevron

At full capacity, the Wheatstone Project's two train LNG facility will supply 8.9 million metric tons per year of LNG for export to customers in Asia. The LNG facility is located 7.5 miles (12 kilometers) west of Onslow and processes natural gas from the Chevron-operated Wheatstone and Iago fields.

The Chevron-operated Wheatstone LNG facility is a joint venture between Australian subsidiaries of Chevron (64.14 percent), Kuwait Foreign Petroleum Exploration Company (KUFPEC) (13.4 percent), Woodside Petroleum Limited (13 percent), and Kyushu Electric Power Company (1.46 percent), together with PE Wheatstone Pty Ltd, part owned by JERA (8 percent). Chevron holds an 80.2 percent interest in the offshore licenses containing the Wheatstone and Iago fields.

Chevron Corporation is one of the world's leading integrated energy companies. Through its subsidiaries that conduct business worldwide, the company is involved in virtually every facet of the energy industry. Chevron explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and lubricants; manufactures and sells petrochemicals and additives; generates power; and develops and deploys technologies that enhance business value in every aspect of the company's operations. Chevron is based in San Ramon, Calif. More information about Chevron is available here.