IMCA Issues Report on Proposed Jones Act Changes in the Gulf of Mexico

3imca logoThe International Marine Contractors Association (IMCA) issued its report on April 4th into the potential impact of the Jones Act proposals published by the US Customs and Border Protection agency (CBP) on 18 January. The report is available on IMCA’s website.

IMCA has conducted a detailed analysis of the technical requirements of conducting various operations in deepwater (>1,000m or 3,280 ft) cross-matched to the vessels active in the Gulf of Mexico in late 2016. The results confirm the practical reality that the US coastwise fleet is unable, on its own, to support activities in the deepwater market. For instance: there are no coastwise qualified deepwater pipelay vessels, and there are no coastwise approved deepwater heavy lift vessels.

The marine construction industry has relied upon long-standing CBP rulings which permit a small market for non-coastwise qualified (foreign flagged) vessels engaged in specific niche activities other than transport. The proposed revocations and modifications to the Jones Act could effectively stop deepwater developments because there would be no domestic capacity to install the facilities.

The limited number but high investment deepwater developments have been the engine of growth in the Gulf of Mexico for many years. The potential implications for the oil and gas industry in effectively stopping these investments are huge. The resulting impact on businesses and jobs would be very significant both offshore and onshore. Reference should be made to the economic impact report issued by the API **.

Statoil: Norwegian Authorities Approves PDO for Trestakk

4Statoil TrestakkNorwegian authorities have approved the Plan for Development and Operation (PDO) of the Trestakk discovery on the Halten Bank in the Norwegian Sea. Investments are calculated at NOK 5.5 billion, almost half of the original estimate.

Photo credit: Statoil

Trestakk was discovered in 1986, and expected recoverable volumes are 76 million barrels of oil equivalent, mainly oil. Tied into the Åsgard A production vessel, Trestakk is expected to come on stream in 2019.

On behalf of the license owners, Statoil submitted the PDO to the minister of petroleum and energy, on 1 November 2016. The costs of developing the Trestakk discovery have been reduced by nearly 50 percent since project start-up.

“This is a good example of what we are able to achieve in collaboration with our license partners and suppliers by innovative thinking, and spending enough time on maturing the best concept choice. Trestakk is an important contribution in maintaining activities on the Norwegian continental shelf,” says Torger Rød, head of project development in Statoil.

The first estimates for developing Trestakk were around NOK 10 billion. At the time of concept choice in January 2016, the costs had been reduced to NOK 7 billion. Based on further improvements and concept adjustments up till investment decision, the costs were reduced to NOK 5.5 billion. Furthermore, Statoil and its partners expect to recover much more oil than originally anticipated.

The field development comprises of a subsea template and a tied-in satellite well. Three production wells and two gas injection wells will be drilled.

“The Trestakk volumes are an important contributor in maintaining profitable operation of the Åsgard A vessel up to 2030. It also enables us to extract more of the original Åsgard field volumes,” says Siri Espedal Kindem, head of the operations north cluster in Statoil.

Cost reductions have been achieved by a novel approach to concept choice, simplification and optimized scope, in addition to benefitting from ongoing efficiency measures.

“This shows what the industry has achieved in just a few years. The Norwegian supplier industry has demonstrated its ability to help find high quality and cost-efficient solutions that enable us to realize projects like Trestakk, even in a low oil price environment,” Rød concludes.

FACTS

License owners: Statoil (59.1%, operator), ExxonMobil Exploration and Production Norway AS (33%), Eni Norge (7.9 %).

Location: Approximately 20 kilometers south of the Åsgard field

Water depth: Approximately 300 meters.

The reservoir is located at a depth of around 3,900 meters.

Video: New Massive LNG Storage Tanks Arrive for Crowley’s Jacksonville Bunkering Facility

5crowley tanks offload 3Two massive cryogenic storage tanks were delivered and are being installed by Eagle LNG Partners for Crowley Maritime Corp. at a new shore-side liquefied natural gas (LNG) bunkering facility being constructed at the Port of Jacksonville’s Talleyrand Marine Terminal (JAXPORT).

The accompanying new video highlights this latest development in Crowley’s Commitment Class project, which will transform the way the company delivers supply chain solutions between the U.S. Mainland and Puerto Rico.

The LNG bunkering facility is among the first of its kind in the U.S and will fuel Crowley’s two new LNG-powered, combination container/Roll-on Roll-off (ConRo) ships. Eagle LNG’s Maxville, Fla., natural gas liquefaction plant, which also is under construction, will supply LNG for the tanks.

The 260-ton tanks, which are 170 feet long – exceeding the width of an American football field – were manufactured by Chart Ferox in the Czech Republic. Crowley’s logistics group managed the transport of the tanks, first via river barge to Hamburg, Germany, and then via a specialized heavy-lift ship that sailed more than 4,000 nautical miles to arrive in Jacksonville on March 26 for offloading.

“The highly anticipated arrival of these remarkable LNG storage tanks is an important milestone in our project. It further demonstrates we are firmly in the era of LNG fueling,” said Sean Lalani, president, Eagle LNG.

With an outer diameter of 19 feet, each tank features an inner shell to hold the product and an outer shell that is insulated and kept under vacuum, to keep the LNG cold. The tanks have a rating of negative-320 degrees Fahrenheit, and each can hold 1,000 cubic meters (approximately 265,000 gallons) of LNG.

The tanks are fitted with two internal LNG pumps, each of which can deliver a flow rate of 900 gallons per minute with the ability to run multiple pumps for a maximum of 2,400 gallons per minutes at peak load rate. Each tank holds sufficient product to fuel Crowley’s two LNG-powered vessels within an eight-hour period.

The design of the Talleyrand LNG fuel depot was developed jointly by Eagle and Crowley’s LNG engineers in consultation with JAXPORT, the U.S. Coast Guard and the Jacksonville Fire and Rescue Department. The new bunkering terminal utilizes state-of-the art technology to allow safe and efficient transfer operations in a working cargo terminal while minimizing the overall terminal footprint.

Designed specifically for service between Jacksonville and Puerto Rico, the Commitment Class ConRos, El Coquí and Taíno, will use clean LNG as their primary fuel, providing significant reductions in emissions as compared to existing fossil fuels. El Coquí, which was launched March 20, is expected in service in the second half of 2017, and the Taíno is expected to begin service in the first half of 2018.

“The new bunkering facility, which we are developing with our partners, Eagle LNG and JAXPORT, demonstrates Crowley’s commitment to service innovation, particularly as it relates to utilizing a cleaner, more eco-friendly fuel for our new ConRo ships,” said Tucker Gilliam, Crowley’s vice president of special projects. “The net result of this and other major investments in our Puerto Rico service will be a faster, more efficient and environmentally-friendly supply chain solution for our customers.”

The Talleyrand LNG fuel depot is expected to be operational in late summer 2017 prior to arrival of the first Crowley ship.

The Commitment Class project by Crowley features a $550 million investment that includes the next generation ships as well as a new 900-foot pier, three new specialized cranes, and new gate and terminal operating systems at the company's Isla Grande Terminal in San Juan, Puerto Rico.

Jacksonville-based Crowley Holdings Inc., a holding company of the 125-year-old Crowley Maritime Corporation, is a privately held family and employee-owned company. The company provides project solutions, energy and logistics services in domestic and international markets by means of six operating lines of business: Puerto Rico/Caribbean Liner Services, Latin America Liner Services, Logistics Services, Petroleum Services, Marine Services and Technical Services. Offered within these operating lines of business are: liner container shipping, logistics, contract towing and transportation; ship assist and escort; energy support; salvage and emergency response through its 50 percent ownership in Ardent Global; vessel management; vessel construction and naval architecture through its Jensen Maritime subsidiary; government services, and petroleum and chemical transportation, distribution and sales. Additional information about Crowley, its subsidiaries and business units may be found here.

RGU Launches New Online Learning Portal for the Oil and Gas Industry

6Paul de Leeuw RGURobert Gordon University (RGU) has today launched a new set of online short courses to help professional development and address skills needs within the oil and gas industry.

The courses, the first of which focuses on decommissioning and is available now, have been tailored to appeal to differing competency levels and are aimed at those with little or no knowledge of the topic, to high level industry professionals looking to develop their skillset.

Each topic will come with a fundamentals course, typically taking two to three hours to complete, and an in-depth course, which will take longer - between two and four days to complete.

The first course in the new suite is ‘Planning for Decommissioning: Fundamentals’. It has been prepared by industry experts and uses a roadmap, which guides participants though the stages of work from late life, cessation of production, removal and finally to dismantling and disposal.

One of the key benefits of this initial course is a description of the legislative processes. The course has been developed in collaboration with the Oil and Gas Authority (OGA), the Department for Business, Energy and Industrial Strategy and the Health and Safety Executive.

Participants can explore the material in different ways and it includes an interactive module to demonstrate the activities that need to take place at different times through the decommissioning process as well as an assessment, which will lead to the award of an RGU Certificate on completion.

Paul de Leeuw, Director of RGU’s Oil and Gas Institute, commented: “Our goal is to provide easily accessible online short courses that will enhance the skills of an individual as well as organisations.

“We have worked very closely with industry partners to establish the key areas for additional skills training. A second ‘Planning for Decommissioning: In-depth’ course will be available in the next few months and will provide detailed insights on decommissioning activities.”

Further courses in deep-water drilling and oilfield chemistry are currently under development and will be available as short courses later in 2017.

Neil Edward, senior decommissioning engineer at the OGA, said: “Decommissioning represents a major industrial challenge which can create global competitive advantage for the UK.

“To enable a safe, environmentally sound and cost effective decommissioning sector, our current and future workforce must be equipped with the right skills, knowledge and experience.

“These courses represent a concerted effort from industry, academia and the regulatory bodies to ensure this happens.”

The courses can be found here.

NOIA Sees Trump Administration as Friend to Offshore Energy

7RegulatoryReliefGregLSpeaking at the 40th Annual Marine/Offshore Industry Outlook Conference on March 30 in Houston, Texas, Randall Luthi, president of the National Ocean Industries Association (NOIA), gave a positive preview of what he expects from the Trump Administration in the coming months as well as a preview of NOIA’s 2017 Annual Meeting to be held April 5-7, in Washington, DC, and includes an appearance by Department of Interior Secretary Ryan Zinke.

Luthi was clear that he believes the entire U.S. Outer Continental Shelf should be opened to drilling: “Other countries get it. If they have the resources, they are going to look for oil and natural gas.”

He believes that it is important that lawmakers and regulators make sure that when the market allows investment, companies are free to do so. It’s not just about the Atlantic Coast and the Gulf of Mexico either. Luthi also said the Arctic should be opened.

Referring to the election of President Trump, Luthi said, “We were promised a new attitude, something very different from Washington, DC—and I can tell you, we’ve gotten exactly that. On the energy front, it’s been fantastic change.”

While Luthi expects delays over Trump nominations, he cited new Interior Secretary Zinke as a friend to industry: “I’m very excited about what he’s going to do because he does have big plans.”

Among those big plans, Luthi says, is moving NOAA from the Department of Commerce to DOI. Luthi also said that Zinke wants to decentralize DOI, so that the Gulf region could soon be making more decisions about its own offshore resources.

“For [the] offshore industry, the two most important positions to be named will be the director of BSEE and the director of BOEM. Neither one has been named yet…but I can tell you that I haven’t heard a name that would not be a marvelous person.”

Luthi predicted that DOI would move to combine BOEM and BSEE. He said that confusion over who has jurisdiction could be reduced, but that the move would take time and cost political capital. Luthi expects changes in BOEM’s Five Year Plan soon and supports other regulatory changes by the Trump Administration, including a proposal to eliminate two regulations for every regulation introduced, saying the result would be a less-redundant comment process. He applauded repeal of DOI’s Royalty Valuation Rule, which he says would have created regulatory uncertainty for offshore industry, and Trump’s roll-back of the Clean Power Plan, saying “Our energy future relies on the ability to actually develop energy resources.”

Commenting on the recent stay on BOEM’s Financial Assurance Requirements (to help pay for removing abandoned oil and gas platforms), Luthi said he expects the stay to remain in effect until industry and regulators sit down and figure out “how to decide how much money we need to put forward with bonding.”

He added, “There are some facilities out there that need removed that do not have a financially viable owner, but the threat is pretty small. We want to make sure it never happens. And industry needs to be a leader. We need to show the federal government that we know how to prevent that from happening, rather than them telling us what to do.”

On the Air Quality Rule, Luthi said that no studies show that offshore activities are impacting onshore air quality. He made a similar brief reference to seismic regulations, citing a lack of science. As he looked around at the industry members in attendance, Luthi concluded with, “Most people actually like the energy industry. They backed candidates that were energy-friendly. Most people think offshore development is a good thing. Most people think access means more jobs, meaning the more you develop energy, the more jobs there will be. And despite some of the louder protests you may hear, I want you to know, you’ve got the American people behind you.”

By: Greg Leatherman, ONT Managing Editor

Trelleborg Awarded Contract for Catcher FPSO Project

Trelleborg’s engineered products operation recently completed a milestone project for BW Offshore for the complete in-house design and fabrication of floating production, storage and offloading (FPSO) elastomeric bearing structures. Supplied to Premier Oil's Catcher FPSO in 2016, this marks the first time the company’s Singapore facility has not only provided elastomeric bearings, but designed and manufactured the entire steel fabricated elastomer bearing system.

8Trelleborg Catcher FPSOCatcher FPSO

Located 180 kilometres east of Aberdeen in the North Sea, the Catcher project, which is scheduled to deliver its first oil in 2017, includes the development of three main oil and gas fields, Catcher, Varadero and Burgman, tied back to an FPSO vessel supplied by BW Offshore. The FPSO will have a processing capacity of 60,000 barrels of oil per day and a storage capacity of 650,000 oil barrels.

JP Chia, Engineering Manager within the engineered products operation of Trelleborg Offshore & Construction, said: “As well as supplying elastomeric bearings to Catcher, we were approached by BW Offshore to design the entire structure within which the bearings will be housed. To be trusted to provide such a complete solution to a renowned project is testament to our offshore bearings expertise and the trust our customers have in us to design such a critical part of the vessel.

“Our experienced engineers employ 3D modelling techniques to predict the stress versus strain characteristics and also the fatigue life of its bearings, as well as examining wave ac-tion and the resulting multi-directional loads between a vessel's hull and its topside modules. This guarantees that our bearings will guarantee continued assurance and performance when in-situ.”

In addition to designing and fabricating the entire FPSO elastomeric bearing structure in-house, Trelleborg also supplied 20 fixed type bearing systems, 20 sliding type bearing sys-tems and 20 free type bearing systems. These are specially designed to resist alternating movement in all three dimensions and large rotational movements in line with an FPSO's lon-gitudinal axis. This supports and protects processing modules on the vessel from impact, damage and deformation arising from adverse sea and weather conditions.

Trelleborg's elastomeric bearing systems provide a more efficient, cost-effective alternative to steel pot bearings as elastomers are an ideal maintenance-free material where vibration reduction combined with movement tolerance is required.

Trelleborg Engineered Products website

EIA: U.S. Gulf of Mexico Crude Oil Production, Already at Annual High, Expected to Keep Increasing

U.S. crude oil production in the Federal Gulf of Mexico (GOM) set an annual high of 1.6 million barrels per day (b/d) in 2016, surpassing the previous high set in 2009 by 44,000 b/d. In January 2017, GOM crude oil production increased for the fourth consecutive month, reaching 1.7 million b/d. On an annual basis, oil production in the GOM is expected to continue increasing through 2018, based on forecasts in EIA’s latest Short-Term Energy Outlook (STEO).

9 1EIAGom1Source: EIA

In 2016, eight projects came online in the GOM, contributing to the high production levels. Another seven projects are anticipated to come online by the end of 2018. Based on anticipated production levels at these new fields and existing fields, annual crude oil production in the GOM is expected to increase to an average of 1.7 million b/d in 2017 and 1.9 million b/d in 2018.

Because of the length of time needed to complete large offshore projects, oil production in the GOM is less sensitive to short-term oil price movements than onshore production in the Lower 48 states. Recent crude oil price increases have not had a significant impact on operations in the GOM. Rotary rig counts in the GOM—including both gas- and oil-directed rigs—have actually declined since crude oil prices increased following the November 2016 Organization for the Petroleum Exporting Countries (OPEC) announcement to cut production.

However, long-term trends also affect GOM oil production. The number of rotary rigs operating in the GOM decreased from an average of 55 in 2014, when the Brent crude oil spot price began dropping, to 22 in 2016. The number of development and exploratory wells has fallen in each year since 2012. Although the number of operating rotary rigs in the GOM increased from 2012 to 2014, falling crude oil prices in 2014, along with drilling delays caused by the 2013 discovery of faulty rig safety equipment, led to decreasing drilling activity in that period.

9 2EIAGOM2Source: EIA

Exploratory wells are favored in the current low-price environment as they allow operators to identify promising areas in the event that oil prices increase. Resources estimated from discoveries made through exploratory drilling can add to the value of oil producers’ inventory of assets. Exploratory wells are drilled to find new reservoirs (in either a new area or in a known field). Once a reservoir has been discovered, development wells are drilled to maximize production from the reservoir, based on geologic conditions, economics, and project timelines. In recent years, the number of development wells has fallen much faster than the number of exploratory wells. This reflects operators taking advantage of the lower day-rates in the current low price environment, with expectations of higher returns when crude oil prices rise and discoveries are brought into production. Uncertainties in oil markets may still affect long-term planning and operations in the GOM, and the timelines of future projects may change accordingly.

Deepwater Gulf of Mexico field starts (2016)

Field NameMajority OperatorAssociated ProjectWater Depth (ft)Discovery Year
Gunflint Noble Energy Freedom 6,138 2008
Heidelberg Anadarko Heidelberg 5,271 2009
Julia ExxonMobil Jack/St. Malo 7,087 2007
Kodiak BP Devils Tower 5,006 2008
Stones Shell Turritella 9,556 2005
Thunder Horse South Expansion* BP Thunder Horse 6,050 1999
Wide Berth Apache Baldpate 3,700 2009
Caesar/Tonga Phase II* Anadarko Casear/Tonga 5,000 2003

Anticipated Deepwater Gulf of Mexico field starts (2017-18)

Field NameMajority OperatorWater Depth (ft)Discovery YearAnticipated Production Start
Son of Bluto 2 LLOG 6,461 2012 2017
Horn Mountain Deep Freeport McMoRan 5,400 2015 2017
Amethyst Stone Energy 1,200 2014 2018
Atlantis North BP 7,128 1998 2018
Stampede-Knotty Head Hess 3,557 2005 2018
Stampede-Pony Hess 3,497 2006 2018
Otis LLOG 3,800 2014 2018

Source: U.S. Energy Information Administration, based on trade press and industry presentations
Note: Fields noted with asterisks are redevelopments or expansions. The Caesar/Tonga Phase II complex includes three fields that were discovered separately.

Principal contributors: Terry Yen, Matthew French

Ice Class SAR Tug from Nevsky Shipyard

10IceTugWith climate change affecting the polar zones, the interest in ice class vessels continues to show growth and innovation. A noteworthy example of this was recently launched at Russia’s Nevsky Shipyard. Designated a Multipurpose, Shallow=draft, tug-salvage vessel, with Arc 5 ice class, (MPSV12) the new vessel will fitted out to provide a broad range of support roles.

The 79.85 by 17.36-meter has a 6.7-meter molded depth and a minimum draft of just 3.2 meters and a loaded draft of 4.5 meters. The boat will provide support to a wide range of maritime work including rescue work to general shipping, fishing vessels or oil and gas fields. The boat is fully outfitted for search and rescue evacuation as it has accommodation for up to 12 crew, 36 berths and 87 people. It can provide first aide to the injured. The vessel is also equipped for combating fires at sea. It carries a wide range of oil spill response equipment for clean-up. As a tug, it can tow damaged vessels to shelter in open waters or ice conditions.

This is one of four built to this design. Three were launched in 2016. The final vessel is being fitted out for a delivery in the coming months. In addition to SAR and salvage towing, the boats have the ability to supply offshore oil drilling and production sites. The have tankage for 200 cubic meters of domestic water and 550 cu.mt. of cargo water, 450 cu.mt. of domestic fuel and 400 cu.mt. of cargo fuel. They also have capacity for 130 cu.mt. of drill mud and 550 cu.mt. of drilling water.

On deck the vessel carries a double-drum towing winch with braking power of approximately 100 tons as well as a 60-on towing hook with a remote quick release. There is also a pedestal mounted 24-ton crane with a 20-meter boom. There is a ROV and dive support station for work up to 60-meter depths. The 430-square meter of cargo deck can also accommodate one-tier of containers.

For propulsion and maneuvering at sea the vessel has two ice-classed controllable pitch propellers in nozzles as well as two bow thrusters and a single stern thruster. Power for this and the rest of the huge complex of equipment and pumps on this boat comes from an impressive array of engines. A pair of Wartsila 2600 kW medium speed engines provides the main propulsion. The significant electrical requirements for the extensive array of equipment derives from a pair of Cummins K38-CP800DM5 generator sets each producing 800 kW of power at 50 Hz and 400 V. There is also a Cummins 6C-CS125DMS emergency genset.

The rescue tugs are being built for the Russian Rescue Agency. The vessels will operate in four different areas: theBahtemir in the Caspian Sea under the Astrakhan Rescue Branch, the Kalas in the Black Sea under the Novorossiysk Rescue Branch, the Beysug in the White Sea under the Archangelsk Rescue Branch, and the Piltun in the Japanese Sea under the Nakhodka Rescue Branch.

The Nevsky Shipyard specializes in both new-build vessels and repair. Located on the Volga-Baltic Waterway it has excellent access to Russia’s inland waterways and, via the Port of St. Petersburg, to the Baltic Sea. The shipyard carries certification from leading class societies including the Russian Maritime Register of Shipping, Russian River Register, Lloyds Register of Shipping, Bureau Veritas, Germanischer Lloyd and Det Norske Veritas.

Drawing and detailed specs available

MTS Houston Section Presentation – April 27, 2017 – Jack/St. Malo

11MTSHouston april2017MaloOn April 27, 2017, Travis Flowers Asset Manager for Chevron North America Exploration and Production Company Gulf of Mexico Business Unit, will make a presentation to the MTS Houston Section on Jack / St. Malo: The First Two Years of Performance and the Journey that Still Lies Ahead.

The Jack and St. Malo fields are among the largest in the Gulf of Mexico. Discovered in 2004 and 2003 respectively, they are expected to recover over 500 million oil-equivalent barrels over the next 30 years.

At the lunch, Travis Flowers will discuss early performance learnings on what is one of the newest deepwater projects in the Gulf of Mexico. The Jack and St. Malo fields are examples of deepwater low permeability Wilcox developments that have overcome technology challenges to unlock significant in-place oil volumes. Located 270 miles south of New Orleans, at 30,000 feet total depth beneath 7,000 feet of water lies more than 1,000 feet of high pressure, low permeability oil pay across two sizable structures. The technologies and innovation deployed across all disciplines has established strong early life performance. There is still a long journey and learning curve ahead with a 30-year asset life planned.

As part of his talk Travis Flowers will discuss the background and design basis of the project, including subsurface, facilities, D&C and production operations. He will also cover details of the early life performance of the assets, upcoming milestones, best practices and lessons learned across multiple disciplines. His presentation will also touch on some of the technologies, including well completions, subsea multiphase flow meters, subsea sampling capability, subsea boost pumps, flow assurance, topsides reliability, and reservoir surveillance & analysis techniques.

About the Speaker

Travis Flowers is the Jack / St. Malo Asset Manager for Chevron North America Exploration and Production Company Gulf of Mexico Business Unit located in Covington, Louisiana.

Travis graduated with a Bachelor's of Science in Mechanical Engineering from the Colorado School of Mines in 1998 beginning his career with ARCO Alaska on the North Slope as a Facility Engineer in the Prudhoe Bay Field. Following the BP-ARCO takeover in 2000, he moved to Midland, TX where he was converted to a production engineer working Chevron's Delaware Basin assets. In 2005 he began a rotational assignment to Malongo, Angola as Production Engineering Team Lead for Chevron operated offshore Angola assets. After five years in Malongo, he moved with his family to Sumatra, Indonesia as Asset Team Leader for light oil fields of Central Sumatra and later the Duri Heavy Oil Steamflood.

In 2014 he was appointed to lead the newly formed Jack/St. Malo Asset Team, located in Covington and to help steward the early life of these new assets.

UPCOMING MTS HOUSTON PRESENTATIONS AND EVENTS

May 25, 2017 - Lunch – Platform Hub Upgrades – Mark Cizek, Williams
June 22, 2017 - Lunch – Decommissioning of Subsea Infrastructure for Independence Hub – Carly Fisher, Anadarko
July 27, 2017 – Golf TournamentBlack Horse Golf Course, Cypress
August 24, 2017 – Lunch – Rio Grande LNG – Chad Nielson, Project Manager, Rio Grande LNG
September 28, 2017 – Lunch – Turning FPUs into Hubs – Thunderhawk and Big Bend-Danzler SSTP – Cobie Loper, SBM and Rocky Robbins, Noble Energy.
October 9-11, 2017 - Dynamic Positioning Conference, Westin Memorial City, Houston

Alcad Batteries Provide Reliable Backup Power for Unmanned Offshore Well Head Platform in Vietnam’s Su Tu Den Oil Field

12AlcadCLJOCAlcad Vantex nickel technology batteries are delivering reliable backup power for UPS (uninterruptible power supply) systems that support critical control and safety functions on the Well Head Platform A (WHP-A) unmanned offshore oil platform operated by Cuu Long Joint Operating Company (CLJOC) in Vietnam’s Su Tu Den oil field. Previously, CLJOC had only used VRLA batteries with its UPS systems, but made the switch to Alcad after being convinced of the reliability, maintenance-free and long-life benefits of nickel technology.

Vietnam is the third-largest oil producer in Southeast Asia and is a net exporter of crude oil. The Su Tu Den (Northeast Black Lion) oil field is located within offshore Block 15-1, approximately 150 km offshore from Vietnam, which has an estimated recoverable volume of 621 million barrels of crude oil.

CLJOC is a partnership between state-owned PetroVietnam, the main shareholder, ConocoPhillips, Korea National Oil Corp, SK Corp and Geopetrol. PetroVietnam has been producing Su Tu Den crude from the Cuu Basin since 2003.

Alcad has provided CLJOC with 100 Vantex VTX1 M 270 nickel-based cells, with a rated capacity of 270 Ah – enough to support 90 minutes of autonomous backup power for the offshore platform’s control and safety systems – along with design, commissioning and testing services.

Alcad’s latest generation Vantex batteries are designed to achieve the total reliability and optimized Total Cost of Ownership (TCO) essential for equipment deployed in remote locations. Compared with lead‐acid batteries, the Vantex nickel‐based battery chemistry offers an exceptionally long and predictable service life of up to 20 years, even in the demanding environment experienced in oil and gas operations, with no risk of ‘sudden‐death’ failure. The Vantex cells are completely maintenance‐free, with no requirement for routine topping‐up with water. They are also easy to handle and install while their capability for fast charging further reduces potential downtime.

Arena Offshore Wins 2017 NOIA Safety in Seas Culture of Safety Award

13 1NOIATagline 2 color RGB13 2Arena Offshore Operatorship FThe National Ocean Industries Association (NOIA) presented Arena Offshore with the 2017 NOIA Safety in Seas (SIS) Culture of Safety Award during the association’s annual meeting in Washington, DC. Arena Offshore won the Culture of Safety Award in recognition of its remarkable safety culture transformation since 2011.

Mike McCauley, Operations General Manager for Arena Offshore accepted the award saying, “Arena Offshore is honored that our accomplishments in achieving transformational change to our organization’s safety culture has been recognized by NOIA with this prestigious award.

We remain passionately committed to our key operating principles and to the practices which have enabled us to achieve our results. Enhanced safety focused partnerships with our key contractor partners continues to drive improvement in our safety and environmental performance through effective pre-job planning, recognition and mitigation of potential hazards, and control of critical work activities. In the end, our greatest satisfaction comes from knowing that our efforts have resulted in a safer workplace for our employees and our many contractor partners offshore.”

NOIA President Randall Luthi congratulated Arena Offshore saying, “Safety culture is not static and must constantly by evaluated and adapted to meet changing safety challenges and requirements. Arena Offshore exemplifies the transformative nature of safety culture offshore.”

Arena Offshore’s award-winning entry was selected by an independent panel of judges from the U.S. Coast Guard, the Bureau of Safety and Environmental Enforcement, the National Academy of Sciences Transportation Review Board, and an industry safety consultant. Murphy Exploration and Production and Gulf Island Fabrication were also nominated for the 2017 culture of safety award.

Since 1978, NOIA has held the SIS awards competition to recognize those who have contributed to improving the safety of life in the offshore energy industry. The Culture of Safety Award was added to the competition in 2014 to honor overall organizational immersion in and commitment to safety, which has resulted in remarkable, measurable, and sustained safety performance over a prolonged period of time.

Samoco Oil Tools to Accept Meritorious Award for Engineering Innovation

14 1samoco logoSamoco Oil Tools, a leading developer of tools for the oil and gas industry, is proud to announce it will receive a 2017 E&P Special Meritorious Award for Engineering Innovation. The company is receiving the award for its OneTrip® BOP Universal Test Tool. Representatives from the company will accept the award during the Offshore Technology Conference in Houston, Texas, May 1-4.

As one of 22 oilfield solutions to be recognized, Samoco was chosen based on evaluation of such criteria as innovation in concept, suitability as a practical solution to a real oilfield problem, potential for improving efficiency and safety, and potential for improving profitability.

14 2Samoco LADD0231OneTrip’s proprietary design cuts BOP testing time in half by performing all three federally-mandated, downhole tests in a single trip.

“This award is a source of great pride for our company,” said MJ Hellail, CEO of Samoco Oil Tools. “The OneTrip tool is changing the way that offshore drillers complete required BOP testing and provides significant cost and time savings to energy producers.”

For more information on the award, click here.

About Samoco Oil Tools

Samoco Oil Tools is a smart, sophisticated R&D company that engineers and manufactures technologically-advanced tools for the oil and gas industry. Working in collaboration with oil and gas majors and leading research universities, Samoco designs innovative, application-specific tools that are proven to enhance both offshore and onshore drilling operations by providing solutions to challenging problems and saving operators significant time and money. By re-imagining conventional design and employing state-of-the-art materials originally engineered for the aerospace industry, Samoco is building tools for the oil and gas sector that are stronger, faster, lighter and easier for crews to manage.

M² Subsea Appoints US GM and Senior VP of Commercial

15Paddy Hardey copyThe US operation of M² Subsea has announced the appointment of a new general manager and senior vice president of commercial as the firm embarks on the next stage of its growth strategy.

Based in Houston, Paddy Hardey will be responsible for implementing the firm’s global commercial and contracting principals to ensure the strategic development and continued growth of the fledging subsea company.

Overseeing the Woodlands, Texas, based US business and all commercial, tendering activity and contract negotiations across M² Subsea’s core business functions, Hardey will focus on the successful delivery of work for the firm’s key clients across the globe.

His appointment follows a series of major developments within the business including the opening of a UK base in Aberdeen and the firm’s plans to create over 50 onshore and 100 offshore jobs by the end of the year.

“This is a crucial time for our company,” said Mike Arnold, CEO of M² Subsea. “We have invested significantly in building a robust management team in recent months and this latest appointment forms an important part of our business strategy as we look to capitalize on opportunities going forward.

“We are committed to growing and maintaining our reputation for providing high quality ROV services to our clients across the globe, delivering OPEX cost-savings without compromising on safety or quality. Paddy’s expertise and knowledge will be invaluable towards achieving our plans for continued growth in the coming years.”

Hardey brings with him a wealth of experience in business management having held a number of senior level roles in the oil and gas industry. Most recently, he was commercial manager of Bibby Offshore’s North American subsea division, where he played an integral role in growing the company’s global footprint, establishing business links in a number of emerging regions. Prior to this, he was commercial manager for Halliburton’s Pipeline and Precommissioning business in Aberdeen.

Commenting on his appointment, Mr. Hardey said: “M² Subsea is a company with enormous potential in today’s market. This is a fantastic new challenge for me and I am delighted to be joining such a high caliber senior team with a clear determination to succeed.”

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

Delmar Announces Engineering Group Promotions

16delmarDelmar Systems, Inc. is pleased to announce two promotions within the Engineering group based in Delmar’s office in Houston, Texas.

John Shelton, P.E. will assume the role of Vice President of Engineering. John has been with Delmar for 12 years and has led the overall advancement of Delmar’s technical services. John attributes Delmar’s past successes to the entire Delmar team’s commitment to providing superior service and solutions, which comes as a result of close coordination between Delmar’s engineering, operations, and sales teams. John will continue to lead Delmar’s global technical effort while also focusing on the development of new tools and procedures to ensure the achievement of greater efficiencies in offshore mooring operations.

Robert Garrity, P.E. will become the Engineering Manager/Chief Engineer for the company. Robert has been with Delmar for 11 years and has played a key role in ensuring that Delmar remains at the technical forefront of mooring for the offshore industry.

“These advancements are testimony to our continued commitment as the world leader in offshore mooring,” said Delmar Systems President, Sherman Scott. “I congratulate John and Robert for their promotions with the Company and look forward to supporting them in their new and expanded roles.”

PIRA Energy Market Recap for the Week Ending April 10, 2017

17PIRALogoSyncrude Fire Lifts Canadian Prices; Midland Diffs Weaken

Syncrude’s 350 MB/D Mildred Lake upgrading site suffered an explosion and fire on March 14, squeezing light crude supplies and sending Canadian and Bakken differentials sharply higher. Midland differentials fell sharply on rising Permian Basin production and local refinery maintenance, as the region awaits several pipeline capacity expansions later this year. The crude import arb remained closed, and the export arb remained open in the wake of this week’s Census report showing exports surpassing 1 million barrels per day in February.

Production Recovery Remains Muted – Supports Rising Prices

With the May contract adding eight cents W/W, price formation remains cemented in a bullish trending pattern – with former key resistance levels now providing strong technical support. Yet, the momentum behind this recent rally appears squarely rooted in fundamentals. To be sure, while U.S. gas production is no longer declining M/M, recent gains — ~0.2 BCF/D over the past two months — have been tepid to say the least. As such, slower than anticipated production growth is giving rise to increased inventory concerns.

Recent Loss of an ex-VLCC Ore Carrier Conversion Could Have Implications for Future Freight Rates

The tragic loss of a VLCC that was converted into an iron ore carrier last week raises questions regarding the safety and longevity of such vessels. Former VLCCs are on the older end of the spectrum of dry bulk vessels, but represent a meaningful percentage of the overall fleet. While scrapping of these older vessels has already been underway, a potential acceleration of scrapping rates could provide significant upside for dry bulk freight rates.

Counter-Seasonal Buyers Pulling Back on LNG Demand, Weakening Global Balance in 2Q

Growth in domestic gas production is a fundamental issue rocking the foundations of three of the world’s pillars of counter seasonal LNG buying: Argentina, Brazil, and Egypt. The South American buyers are the pioneers of counter-seasonal FSRU buying, while Egypt posted the second largest growth rate in the world last year next to China. Advancements in domestic production in all three of these countries are reducing the need for incremental LNG in the second and third quarters and have all but eliminated imports in the off months in Argentina and Brazil this past year.

Low Unemployment and Subdued Wage Growth in Key Economies

The monthly report on the U.S. labor market conditions is typically the best source of information about how the economy is performing. March data release contained several major surprises, both positive and negative. But the assessment on the economy remained the same: it continues to expand at a solid pace, but is not yet exhibiting signs of overheating. In Germany and Japan, recent data on unemployment pointed to solid economic growth. However, as in the U.S., wage growth was subdued in both countries.

California Carbon Boosted by Auction Verdict

California carbon prices surged right after the Appellate Court decision validating the auctions - a final decision could come next year from the CA Supreme Court. The full compliance reconciliation next year requires significant additional allowance purchases (at auction) and only three auctions remain where the supply will be focused on V-17s. The price premium for V-17 vs. later vintage allowances grew in Mar and may see further upside. Inflation, which will determine the 2018 Auction Reserve Price, continues to creep up this year. The favorable auction decision and CP2 allowance demand should boost coverage ratios for upcoming auctions and may pave the way for unsold allowances to begin to be re-offered.

U.S. Ethanol Prices Advance Last Week

The U.S. price rally continued the week ending March 31 as the market prepares for the peak driving period which will boost ethanol consumption, coupled with the maintenance season that will limit output. Manufacturing margins improved, while RIN values fell. The 2017/2018 sugarcane harvest in South-Central Brazil officially began April 1, though almost 100 mills were operating in March. European ethanol prices edged lower.

Chinese LPG Imports Remain High

Chinese propane imports remain strong due to PDH demand. February imports were 1.45 MT (million tonnes), up by 372 from last year. Imports have remained strong due to PDH and gasoline blending demand. Growing petrochemical demand is the main reason for growth, however, the rollouts of “National VI” and “National V” policies are calling for increased gasoline/diesel quality in order to decrease emissions in metropolitan and rural areas, which is increasing demand for gasoline blending components such as butane.

More LNG and a Looser Atlantic Basin Proves Key to Stock

Thanks to extreme warmth, Europe averted a potentially disastrous storage situation on the books as recently as mid-February. However, the task of refilling over 60 BCM of gas will be a tall one, and PIRA is only forecasting around 91% of this volume to be reinjected into European storage facilities. LNG will play a major role in whether the final figures deviate from this forecast. Global LNG balances are loosening this quarter, which is providing Europe with ample opportunities to get an important head start for next winter. Asia has much less need for Mideast and Atlantic Basin LNG due to higher Australian output, and U.S. production is climbing rapidly.

U.S. Drought Improvements

While it is wet in many areas, and we do not want to downplay that factor as more bushels are lost to too much rain rather than too little, the weekly drought report showed that the percentage of acres currently affected by drought is down to 4% in corn and 3% in soybeans after being in the low teens just a few weeks ago. Affected winter wheat acreage has also seen a dramatic drop to “just” 10% after being as high as the low 20’s recently.

As German Clean Spark Spreads Widen, Gas-Fired Dispatch Slowly Picks Up

After having reached a bottom for the year, German peak Clean Spark Spreads (CSS) for May and June are slowly recovering. We looked closely at reported gas dispatching in Germany during on peak hours in the 15-month period between January 2016 and March 2017 and noticed a relative flatness of the gas dispatching, especially in the second quarter, where an increase in spark spread by €30/MWh (from €20/MWh to €10/MWh) raises gas dispatch by only 1.8 GW on average at on-peak hours.

U.S. Light Products Continue to See Narrowing Deficit

Overall commercial stocks were up just around one million barrels this past week, with crude inventory gaining nearly 1.6 million barrels, as products declined by 0.53 million barrels. Both gasoline and distillate experienced small declines of 0.6 and 0.5 million barrels respectively. Cushing crude inventory added over 1.4 million barrels for the past week. Crude runs increased by 200 MB/D for the week, as margins remain favorable and downtime continues to diminish.

Canada Oil Prices Strengthen on Mildred Lake Outage

The March 14 explosion and fire at Syncrude’s 350 MB/D Mildred Lake facility has resulted in a complete halt in synthetic crude production at the plant. PIRA does not expect full production to resume until early to mid-June, after repairs and planned maintenance have been completed. The loss of synthetic crude production has had the effect of also curtailing bitumen production at ConocoPhillips’s Surmont facility and Nexen’s Long Lake facility due to the loss of synthetic crude for blending into synbit. PIRA sees a potential 30 million barrel combined loss of synthetic and heavy crude production from the outage and planned maintenance.

Indian Gas Price Reduction Giving Producers a Headache

The new natural gas prices for producers in India are well below the average cost of production, rating agency Icra said on Monday. The government last week marginally cut the natural gas price paid to producers effective for six months from April 1. "With the latest marginal fall for the second half of 2016-17, the domestic price is now well below the average cost of production for many producers for a sustained period, leading to losses, which has forced the industry to seek a floor price," Icra said in a report.

Restoring the Historical Ratio of S&P to E&P Share Prices

The shares of exploration and development have failed to keep pace with the broader stock averages. The reason for this breakdown is clearly related to the collapse in oil prices in mid-2014. This paper explores which set of nearby and deferred (five year out) WTI prices can restore the S&P 500/XOP to its historical average.

Higher Energy Prices Improve Energy Credit

Firmer oil prices on the week helped support improved energy credit pricing for a host of tracked benchmarks. Financial equity performance has continued to consolidate as the yield curve has tended to flatten, particularly in U.S., Japan, and the U.K. Implied inflation trends have been consolidating the reflation trade of late, though in the UK, implied inflation has continued to edge higher. China liquidity as indicated by the Shanghai interbank offer rate has eased slightly after a period of increase. Overall financial stresses are still assessed as low.

Limbo Dancing…How Low Can Japanese Finished Stocks Go?

Japanese crude runs continued to ease on the week in line with our maintenance schedules, while crude imports remained exceedingly low. Crude stocks drew 2.1 million barrels, while finished product stocks also drew by 1.0 million barrels. Finished products stocks moved to yet another new low, with draws on all the major products, other than naphtha. Kerosene demand fell back, and stocks drew at a rate of 65 MB/D on lower yield, as end-of-season tank purging continues.

Supply Disruption from Cyclone Debbie Causes Coal Pricing Surge

The coal market was dominated by the impact of Cyclone Debbie on Australian supply, with the market surging by several dollars in response to the disruption of mostly coking coal production and exports. FOB Newcastle prices initially surged by over $6.00/mt this week, before giving back $2.00/mt. With several MMmt of high quality coking coal expected to be pulled off the market in April and May, there is a greater likelihood that more thermal coal will be used to replace PCI and semi soft coking coals.

U.S. Crude Oil Exports Surpass January 2017 Record

The latest U.S. Census data was released earlier this week and U.S. crude oil exporters did it again, exporting at a new all-time high of 1,116 MB/D in February 2017.

Ethanol Stocks Reach an All-time High

U.S. ethanol inventories increased by 448 thousand barrels the week ending March 31 to a record 23.7 million barrels. Domestic ethanol production fell 35 MB/D to an 18-week low 1,019 MB/D as some plants shut down for spring maintenance. Ethanol-blended gasoline manufacture increased to a 14-week high 9,105 MB/D, up 82 MB/D from 9,023 MB/D in preceding week.

Myanmar/China Crude Oil Pipeline is Ready to Start Operations

China’s access to crude through an alternate route via the China/Myanmar pipeline may soon become a reality as China’s CNPC and the new Myanmar government are now closer to a deal. An agreement would allow CNPC to pump oil through the pipeline to supply its new Anning 260 MB/D refinery in the land-locked province of Yunnan. Apart from revenue-sharing arrangements for the pipeline, Myanmar has the right to take up to 50 MB/D from the pipeline when it is operating at full capacity of 440 MB/D. This will help ease domestic supply constraints as the country's three refineries have been running at only about a third of their combined capacity of ~50 MB/D partly due to feedstock shortages.

April WASDE

Grain and oilseed markets will take a break from watching both North and South American weather Tuesday with the April WASDE release. With half the Marketing Year behind us for corn and soybeans, the larger than expected midyear Quarterly Stocks report should be reflected in the April WASDE. The other key in April will be the World Board’s reaction to the monster Brazilian production estimates put forth by local firms.

How Profitable is Russian Shale Oil?

Russian shale resources are one of the largest in the world and its main shale play (Bazhenov) is almost twice as large as the Permian. It also offers tax incentives for shale production. However, development is still primarily in the appraisal stage. Also, current sanctions on transfer of technology and ample lower-cost conventional resources are an obstacle to faster development. We forecast gradual improvement in breakeven costs as more horizontal wells get drilled and sanctions are eventually lifted. The potential to produce at high rates and in a short time period is there but hampered by the political uncertainties regarding fiscal terms, sanctions, and the fact that most oil concessions are controlled by state oil companies.

Global Equities Shifting Momentum, Energy Picks Up

The overall U.S. market was only modestly changed, but energy was the strongest performing domestic sector on the week, rising 0.7%. Retail, banking, and housing were the worst performers, each down about 1.5%. Internationally, China and emerging Asia posted solid gains. Global year-to-date performance is tightening up among the regions, with Asia and Europe easing slightly, but still outperforming, while America’s are still underperforming.

Aramco Pricing Adjustments: Discouraging U.S. Liftings, Asia and Europe Cuts Reflect Weak Structure

Saudi Arabia's formula prices for May were just released. Pricing for the U.S. was raised for all grades as Saudi discourages liftings, while choosing to remain competitive with market drivers in Asia and Europe. The cuts are not out of line with a wider Dubai contango that has been seen, or a wider discount in Urals pricing vs. Dated Brent.

Japanese Refiners Meeting March 31 METI Target

The Japanese regulatory authority (METI) established a 50% cracking ratio target for Japanese refiners as of March 31, 2017. This target is being met on a country-wide basis. With the impending merger of JX Nippon with Tonen General and the potential merger of Idemitsu Kosan with Showa Shell, METI is likely to await full implementation of these mergers before deciding upon whether to require further rationalization.

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

March weather for the three major OECD markets turned out 1% warmer than the 10-year normal, bringing the month’s oil-heat demand in these markets to a negative 118 MB/D versus normal. They were warmer than the 30-year normal by 8%.

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

Statoil Awards Transocean Two Rig Contracts

Statoil and license partners have decided to use the semisubmersible rig Transocean Spitsbergen on three exploration wells in the UK, and then on a six-well production drilling campaign on the Aasta Hansteen license in Norway.

The exploration drilling campaign in the UK will be conducted for the Mariner, Jock Scott and Verbier licenses, and is planned to start in the summer.

The contract value for the three fixed wells is estimated at around 18 million USD, which includes integrated drilling services such as fuel, casing running, ROV, slop treatment and cuttings handling.

1 1Statoil TransoceanThe Transocean Spitsbergen drilling rig. (Photo: Kenneth Engelsvold)

“We believe that the UK Continental Shelf (UKCS) still presents exciting opportunities. Securing this rig will enable us to fulfil our exploration ambitions of testing potential along the underexplored margins and more mature areas of the basin, in addition to near-field potential at Mariner. This year will see our most active exploration campaign for Statoil in the UK since repositioning in 2011 and we look forward to testing our three diverse prospects,” says Jenny Morris, vice president Exploration UK.

Mariner is one of the largest projects currently under development in the UKCS. Recoverable reserves from the initial development are estimated at 250 million barrels of oil excluding near field exploration potential. The topsides modules will be installed in the Mariner field this summer. First oil is expected in 2018.

1 2Statoil TransoceanSigningFrom left: Ian Paterson (Transocean Drilling UK Ltd), Rannfrid Skjervold (Statoil ASA) and Karl-Erik Johannessen (Transocean Norway Operations AS). (Photo: Kjetil Eide)

The drilling campaign on Aasta Hansteen is planned to start towards the end of 2017 or the beginning of 2018. The contract value for six fixed wells is estimated at around 95 million USD, which includes integrated drilling services such as fuel, casing running, ROV, slop treatment and cuttings handling, plus mobilization-, demobilization and modification costs.

“We have had good experiences with Transocean Spitsbergen, which has delivered safe and efficient operations for us on the Norwegian Continental Shelf earlier. It is an all-round rig, which is winterized, can drill on deep water and can both be anchored or on dynamic positioning. It has a dual derrick, which is a positive contribution to efficient operations, says Geir Tungesvik, senior vice president Drilling & Well.

The Aasta Hansteen discovery was made in 1997 and comprises 3 separate discoveries; Luva, Haklang and Snefrid South with recoverable reserves estimated at 47 billion standard cubic meters (Sm3) of gas. The gas field will be developed with a Spar FPSO platform, as the first on the Norwegian Continental Shelf and the largest in the world. Spar is a floating installation consisting of a vertical cylindrical hull moored to the seabed.

The hull and platform deck will be assembled in Stord this year, and the platform will be towed to the Norwegian Sea next year.

There are more than 200 offshore positions associated with the rig. There is additional staffing associated with service companies, various onshore positions, base services and more.

LICENSE PARTNERS

  • Mariner: Statoil: (65.1%) JX Nippon (20%) Siccar Point Energy (8,9%) Dyas: (6%)
  • Jock Scott: Statoil (75%) BP (25%)
  • Verbier: Statoil (70%) Jersey Oil and Gas PLC (18%) CIECO Exploration and Production (UK) Limited (12%)
  • Aasta Hansteen: Statoil (51%) Wintershall Norge AS (24%) OMV Norge AS (15%) ConocoPhillips Skandinavia AS (10%)

2H Offshore Completes Installation of the First Production Top Tension Riser on Moho Nord

2H Offshore, an Acteon company, has successfully completed the installation of the first of 17 production top tension risers (TTRs) for Total E&P Congo’s Moho Nord field.

2H has installed and tensioned up the first production TTR and performed pressure tests prior to the completion drilling phase through the TTR. The installation was conducted on the tension leg platform (TLP) in a water depth of approximately 800 metres.

2Moho Nord Installation Trip2The TLP has been designed to allow simultaneous operations between drilling, production, completion and coiled tubing intervention. The TTRs have been designed for 25 years of service life and can be fitted on any of the 27 well slots in the field. The first 17 are to be installed in the next four to five years. Total will then decide if future TTRs are to be added.

The installation took place in February 2017 and marks a major milestone on the project. 2H started working on the project in 2011 on the conceptual study and initial engineering for Doris, then for Total on the detailed design, execution and delivery of one high pressure drilling riser and 17 production top tension risers (TTRs).

“The successful collaboration between 2H and Total on the Moho Nord project demonstrates how 2H’s holistic delivery management approach offers significant cost savings and flexibility,” comments Yann Helle, managing director at 2H Offshore. “Our independence and in depth understanding of risers allow us to work with a range of suppliers to source the best components at the best prices for the benefit of our customers.”

EnerMech Builds on Caspian Pedigree with £40 Million of Contracts Wins

Mechanical services group EnerMech has strengthened its market positon in the Caspian region by securing contracts with major operators valued at more than £40 million.

The contracts involve a number of EnerMech service lines including cranes and lifting, process, pipelines & umbilicals, valves, training and industrial services.

Aberdeen-headquartered EnerMech has been awarded a three-year contract with BP Exploration (Caspian Sea) Ltd to manage all of the Operator’s crane operation, maintenance and inspection requirements in Azerbaijan.

3EnerMech Caspian 1The contract covers assets spread over seven platforms, includes 12 offshore pedestal cranes, and will see EnerMech increase its Azerbaijani workforce from its current level of 80% to 100% within a three-month period.

The ATA consortium in Azerbaijan have commissioned EnerMech to provide a full range of hydrotesting, flange management, camera inspection and enhanced water blasting services on two platforms which are part of the giant Shah Deniz 2 gas condensate field. A separate project will see EnerMech for the first time provide ultra-high pressure tubing installation, pressure testing and flushing of tubing, with experienced supervisors from the UK and Asia training assisting local pipe fitters on the project.

Also at the ATA site, EnerMech have been awarded their first direct contract with BP for the provision of nitrogen/helium leak detection and pre-engineering is ongoing in London.

More than £1.5 million has been invested by EnerMech in new equipment to service a first award at the Sangachal Terminal south of Baku, where they have been commissioned by Turkish contractor Tekfen to provide enhanced high-pressure water jetting and flange management over a two-year period.

EnerMech has also been commissioned by BOS Shelf to provide all jacket riser testing, subsea safety isolation valves and subsea spool testing at its Baku Deepwater Jackets Factory and will also carry out hydro testing, riser pigging and bolt tensioning work.

John Guy, EnerMech’s regional director for the Middle East, Asia and Caspian, said: “This has by far been our most successful period in the Caspian region and the groundwork we have put in over the last five years is now paying dividends. The extension of the BP cranes and lifting contract is an important development and our commitment to Azerbaijan has been underlined by our move towards a 100% Azeri project team.

“We have recently made senior Azerbaijan national appointments within our management team as part of our commitment to the development and nationalisation of our 300 strong employees in Azerbaijan.

“The breadth and depth of these various workscopes demonstrates EnerMech’s ability to offer a genuine integrated service to clients with specific requirements. We will continue to invest in facilities, equipment and training to ensure we can offer a flexible, responsive services backed up with the most modern equipment fleet and best trained personnel.”

Aker Solutions to Acquire Norwegian Oil-Services Provider Reinertsen

Aker Solutions has agreed to buy oil-services provider Reinertsen to build on its position as a leading maintenance and modifications supplier offshore Norway.

The asset deal is set to be concluded in the second quarter, giving Aker Solutions ownership of Reinertsen's Norwegian oil and gas services business. The agreement excludes Reinertsen's liabilities as of December 19, 2016, when the company went into debt negotiation proceedings. The purchase price is NOK 212.5 million.

Reinertsen, the third-largest maintenance and modifications supplier offshore Norway with about 700 employees, has its main offices in Trondheim and Bergen, where Aker Solutions also has a solid presence. The company's order backlog contains key maintenance and modifications contracts with Statoil, including a minimum six-year framework agreement awarded in December 2015. It also has some smaller subsea services and engineering contracts.

4Aker Reinertsen teamwork 1920x1080"Combining our capabilities will boost our presence in the Norwegian maintenance and modifications market, helping to safeguard core competencies at key locations and positioning us for a market recovery," said Luis Araujo, chief executive officer of Aker Solutions. "Our companies also have a history of collaborating offshore Norway that we will build on to the benefit of our customers."

The companies worked together from 2002 to 2010 on projects offshore Norway through the Aker Reinertsen joint venture. Reinertsen employees in Trondheim and Bergen will be moved to local Aker Solutions offices as part of synergies to be generated.

"We're glad to have found a new home for our oil and gas business after a very difficult time for our company," said Thomas Reinertsen, deputy CEO of Reinertsen. "Short term we still face some challenges, but in the longer term this move will secure jobs in central Norway and enable us to continue our strong tradition of delivering high-quality services."

Reinertsen had revenue of about NOK 800 million in 2016 and is expected to contribute positively to Aker Solutions' earnings from 2018.

"We welcome the Reinertsen employees to Aker Solutions and expect the integration of our two businesses to further strengthen our leading project execution," said Araujo. "While the global oil-services market remains challenging, we are seeing some signs of improvement, particularly in the brownfield segment."

The acquisition is subject to approval by the Norwegian competition authorities.

Exceed Secures £5.5million of North Sea Contracts

Aberdeen-headquartered Exceed, a well management and performance improvement specialist, has secured four new North Sea contracts in the first quarter of 2017 with a combined revenue of approximately £5.5 million.

The work includes a new contract for Exceed’s Performance Improvement division, a well management project and two engineering studies. This will result in a minimum of 14 people being hired across the four projects, including two re-hires and 12 new personnel.

The well management work will see Exceed assume the role of well operator, providing an integrated project management solution including full supply chain management.

The two engineering studies will be managed by Exceed’s in-house team. Despite the oil and gas downturn of the last two years, Exceed is one of few companies which has invested internally in order to expand its expertise and continue strengthening its engineering capabilities.

Recruitment efforts will remain focused on attracting staff of the former well management group Applied Drilling Technology International (ADTI). Operated by Transocean, ADTI ceased trading in May 2015, soon followed by a merger between Exceed and a team of eight key players from the former ADTI organisation.

5Ian MillsExceed managing director, Ian Mills

Founder and director of Exceed, Ian Mills, said: “These contract wins mark an extremely strong start to 2017 for Exceed, and denote a clear indication of strong optimism and resilience in the North Sea.

“Our team is delighted to have secured these projects, which are testament to the expertise and capabilities of our people, and our highly-regarded track record. Whilst we are a truly internationally operating business, we are deeply rooted within the North Sea and are pleased to see prospects in the region begin to improve.

“Over the past two years, we have invested heavily in our management systems and strengthened our supply chain capability. Because of this, our global expansion efforts, and several strategic alliances formed during 2016, we expect unprecedented growth for Exceed this year with anticipated turnover significantly higher than levels prior to 2015. “It has been encouraging that we can continue to recruit and offer work to those who have been affected by the downturn. With a number of international opportunities in the pipeline over the coming months, our team is feeling very positive about what 2017 will bring.”