Matt Corbin Joins Sparrows Group as Director of European Operations

14Matt Corbin 44Sparrows Group has strengthened its leadership team with the appointment of Matt Corbin as its regional operations director for the UK and Europe to support the company’s continued growth in the oil and gas, renewables and industrial sectors.

Mr. Corbin, who has more than 20 years’ experience working in the oil and gas industry, has held several leadership positions including UK managing director for the subsea division of Aker Solutions and UK regional general manger for GE Oil & Gas.

Most recently, he was supply chain consultant to the UK Government’s regulatory body, the Oil and Gas Authority (OGA) and contributed to Oil & Gas UK’s Efficiency Task Force. Mr. Corbin, who has been a board member of industry body Subsea UK since 2014, has also been supporting Scottish Enterprise’s ‘Grey Matters’ program in an advisory capacity.

Based in Aberdeen, Mr. Corbin will lead the UK and European business operations for Sparrows. He will be responsible for maintaining its leading market share position in lifting operations and maintenance in the UK Continental Shelf (UKCS), while delivering further growth in sectors outside the oil and gas industry.

Mr. Corbin first entered the oil and gas arena in 1997 after gaining a Bachelor’s degree in mechanical engineering at Brunel University. He has since held a variety of high level positions in production, project engineering, account management and concept design.

Sparrows chief executive officer, Stewart Mitchell, commented: “Matt has enjoyed a very successful career to date with an enviable track record of successes at some of the world’s biggest oil and gas service companies. His work with organizations such as the OGA and Oil & Gas UK demonstrate how highly respected he is by his peers and throughout the sector for his breadth of experience, knowledge and leadership qualities.

Cautious Optimism Returns to North Sea – Deloitte

Reacting to the latest Oil and Gas UK Economic Report, that was published on Wednesday September 6, Graham Hollis, Senior Partner for Deloitte in Aberdeen, said:

15Deloitte Graham HollisGraham Hollis, Senior Partner, Deloitte

“A cautious optimism has returned to the industry, as it weathers the storm of the past three years. The latest economic report from Oil and Gas UK demonstrates just how much progress the UKCS has made on reducing operational costs, and the encouraging level to which confidence is returning to the basin – most notably through a significant uptick in M&A activity across the sector. Assets are finding their way into the right hands and a new cohort of private equity-backed businesses is breathing new life into the basin.

“Nevertheless, challenges still remain for the North Sea and its recovery needs to be carefully fostered. The report shows there are a potential £40 billion worth of developments in companies’ business plans – it’s up to all of those involved in the industry to help these come to fruition, requiring a collaborative approach between government, the business community, the supply chain, and wider stakeholders.

“The UKCS is vitally important to our economy and still supports more than 300,000 jobs. To ensure its future, we need to set about anchoring that talent pool in Aberdeen and the surrounding areas. While it will mean keeping the skills we already have, it will also mean ensuring we continue to attract a new generation of talent, which can carve out a new path for the industry in the years ahead.”

PIRA Energy Market Recap for the Week Ending September 18, 2017

16PIRALogoRefinery Margins Remain Strong

Brent prices are effectively range-bound but are forecast to average over $50/Bbl for next few months. We see a relatively firmer near-term price for Brent, weaker for WTI. The U.S. stays in export parity. Narrow crude quality differentials to persist. Hurricane Harvey will cut U.S. crude runs by cumulative 60-70 million barrels resulting in strong refinery margins which will boost European runs. Product stocks will tighten for the next couple of months. Harvey pushed light product cracks higher similar to previous storms (e.g., Katrina) with high a sharp peak that eases in days/weeks. But some lingering strength will remain, particularly for diesel due in part to import pull by Latin America.

U.S. Data Surprise in Various Ways; Chinese Data About as Expected

In the U.S., the latest consumer price data showed a faster-than-expected increase for the first time in six months. The recent behavior of the so-called “sticky” CPI suggests a fading in the disinflationary pressure for the coming periods. Consumer spending disappointed in August. Industrial production also came in below expectations, but this was essentially due to distortions from Hurricanes Harvey and Irma. In China, manufacturing output has remained resilient, while growth in investment has increasingly become slower. Data on vehicle sales and credit were supportive of the growth outlook.

NGL Purity Product Prices Strengthen

Propane prices remain robust at 74% of the crude price. Natural gasoline, butane and ethane prices also had healthy gains last week. Propane storage volumes have grown by over eight million barrels the past two weeks to bring propane stocks in line with the five-year average. NGL raw mix production continues to rebound from the effects of Hurricane Harvey in PADD 3, and total US raw mix production set a new all-time record at 3.9 MMB/D. Gulf Coast petrochemical plants continue making progress in returning to normality, and all but two plants are expected to be back in operation by the end of this week with one of the two plants remaining down scheduled for planned maintenance.

U.S. Ethanol Values Higher the Week Ending September 8

Manufacturing margins in the U.S. rose. D6 RIN prices fell. U.S ethanol exports rose in July. Brazil remained a net exporter of ethanol in September. European ethanol prices bottomed. U.S. biodiesel prices reached a six-month high. Biodiesel manufacturing margins improve for the eight straight week.

Soybeans Remain THE Story

In addition to a strong Real, Brazilian soybean producers might be holding onto last year’s supplies as a sort of insurance policy against continuing dryness in the states of Parana, Goias, and slightly less so Mato Grosso. While both Uruguay to the south and Argentina to the southwest have more than adequate moisture, central Brazil is still waiting for “normal” mid-September rains which have failed to materialize so far and show little sign of arriving anytime during the month of September according to 2-week forecasts.

The Iranian Nuclear Deal Can Survive a Trump Decertification

The Trump administration issued oil sanctions waivers for Iran, as expected, despite President Trump’s clear displeasure with the agreement. But whether Trump will certify Iranian compliance with the JCPOA to Congress in mid-October (required by U.S. law every 90 days) remains the bigger question. Judging from his recent comments, a decertification looks likely. However, this alone would not end the nuclear deal. It would simply give Congress the option to reimpose sanctions, during which time Trump could continue to issue waivers. At this point, we do not believe either Trump or Congress will breach the JCPOA by reinstating nuclear sanctions, given IAEA verification of Iranian compliance and widespread international support for the agreement. But medium-term risks to the JCPOA (and Iranian oil sales) would rise if the U.S. attempts to renegotiate deal terms.

Robust Southeast Asian Oil Demand to Support Regional Market

The product deficits of Indonesia and the Philippines will provide a much needed outlet for surplus refined products in the Asia-Pacific region well into next year, but product imports into Vietnam should be lower in the latter half of 2018 with the start-up of the Nghi Son refinery. In Taiwan, key product exports eased in 1H17, but should increase with ramp up at CPC’s Talin refinery. Global kero/jet demand growth is forecast to remain robust in 2018, and Asia will account for half of the increase. Asia-Pacific net regional exports of gasoline, jet fuel and gasoil/diesel are expected to ease over 2017-18 after a surge last year. Regional refining margins should remain healthy through 2018.

2Q17 U.S. Producer Survey: Supply Recovery Takes Shape…Slowly

Domestic production continued to trend upwards in the second quarter, albeit at a decidedly muted pace relative to strengthening drilling activity during the period. Although production finally eclipsed the year-ago volumes in June, year-over-year comparisons remained negative for the quarter. Still, the surveyed operators grew production by ~0.6 BCF/D during the period, the largest Q/Q gain for the group since 1Q16. It appears that, for now, producers have cleared any residual hurdles to bringing their byproduct to market, as gas production essentially kept pace with oil growth during the quarter. With both Appalachian and associated gas production growth taking shape in the second quarter, further — and greater — gains may soon take hold in the latter half of 2017.

Influence of the Global Gas Revolution on Pricing: Suppliers vs. India Round 2

The revolution of LNG buyers against the historic status quo is heating up on a triumvirate of fronts this summer: commercial, regulatory and political. Nowhere is the carnage as great as on the commercial front, of which pricing is a critical component.

Petronet/Exxon Deal Shows Just How Tough It is for Europe to Land Volumes

Exxon recently renegotiated its LNG supply deal with Petronet, an Indian LNG Importer. The deal not only involved a price cut, but added an extra 1 million tons per year to 2.5 million tons. The price cut seems to put India in a strong buying position relative to the rest of Asia as measured by DES LNG deliveries as a percentage of Brent oil (a common price benchmark for LNG). This is especially true as it has been released that incremental volumes will be sold at 12.5% of Brent. There is a twofold issue here for European markets – a step towards more balanced global markets and a show of how even with price cuts, Asian buyers still have a significantly higher price tolerance. Placing extra volumes in Asia through price cuts will bring regional markets ever closer together, as it represents a reaction to growing oversupply that will further compresses global spreads. Some sellers are more concerned with securing market share than protecting traditional premiums in Asia, as releasing too much unsold volume into the spot market is considered a graver threat to LNG markets in the years to come.

China to Reduce Industrial Gas Prices

China’s National Development and Reform Commission (NDRC) announced that effective September 1 non-residential gas prices will be lowered by CNY100/Mcm ($0.42/MMBtu). The price has been justified by lower pipeline transportation costs as well as a change in VAT calculations for natural gas. The price reduction is around 5% which still leaves prices high by international standards – most city prices are $8+/MMBtu.

Japan Demand Takes a Holiday, before the Holiday

Aggregate product demand plunged 244 MB/D, with sizeable declines in gasoline and gasoil demand. Runs eased modestly, while a surge in crude imports, which was expected, built crude stocks 5.8 million barrels. Finished products built 0.75 million barrels on the weaker demand. Kerosene demand surprised to the upside and yield fell sharply to only 3.8%. Stocks posted a first contra-seasonal draw of 0.2 million barrels (27 MB/D), while the 4-week build rate eased slightly to 73 MB/D. Refining margins were slightly softer, but remain good.

Financial Stresses Very Low, Credit Constructive

Credit conditions remained highly constructive on the week, with the S&P 500 moving to a new record at the 2,500 level. Volatility (VIX) declined and high yield credit prices rose. High yield energy credit did particularly well and driven by a solid gain in the energy commodity space. The dollar generally strengthened. The St Louis financial stress indicator again moved lower after four straight minor weekly increases.

China and Vietnam’s Ambitious Plans for Ethanol Use are Likely to Fall Short of Targets

The Chinese government plans to expand the use of biofuels, requiring that all gasoline contain 10% ethanol (E10) by 2020, though it has yet to announce a formal policy. China’s neighbor Vietnam previously announced its intent to replace RON 92 gasoline with E5 next year and with E10 in 2019. If achieved, these goals would displace billions of liters of hydrocarbon fuel. PIRA believes, however, that these attempts to adopt E10 by 2019 (Vietnam) and 2020 (China) will fall short of their targets. Nevertheless, ethanol consumption will increase in these countries, but not as rapidly as desired.

Spanish Market Bullish on Increased Volatility in French Prices

Despite a relatively wet August and normal rainfall month-to-date, Spanish hydro reservoir levels continue to decline, adding further upside risks ahead for Spanish prices. With Spanish nuclear set to move down in October, Spain will need to import from France in the next month. While we have France still pricing below Spain in October, risks of a further deterioration in French nuclear availability cannot be ruled out.

EDF press release of Sep. 14 is bearish for prices. Despite a large number of new irregularities, EDF has confirmed that all the affected components can be used safely, a statement that will have to be confirmed by ASN, before receiving official clearance. This is the only unclear factor at this point, or to what extent, the operation of the plants could be affected by these additional anomalies.

Loads Washed Out!

Spot on-peak energy prices in Eastern-Grid and ERCOT were unanimously lower year-over-year. Eastern Interconnect average raw loads declined 8.1% year-over-year in August as cooling demand fell from the warmer than normal prior year. Despite declines in raw loads during the last few days in August due to Hurricane Harvey, total ERCOT raw loads in August were about flat year-over-year. The earlier than expected transition into the shoulder season has helped color deteriorating cash prices – with suppressed seasonal demand keeping Henry Hub pricing below the $3.0/MMBtu mark. The return to normal weather during the fourth quarter this year would likely usher in dramatically tighter fuel supply/demand balances. PIRA’s power price forecast though mostly lower than last month, is still above market, driven by higher (than market) gas price forecasts.

Domestic Demand Falls on August Weather, But Exports Remain High

Domestic U.S. coal demand fell on August weather and mild September temperatures signal another fall in coal burn, but elevated exports are keeping prices supported for now. However, slipping seaborne coal prices will hit Appalachian and ILB markets by year end.

EUA Prices Soar Amid Nuke Outages, Trialogue, and Brexit

European carbon (EUA) prices soared in early September on French nuclear uncertainty (impacting the wider European energy complex as well) and progress with post-2020 market reform talks. However, these drivers may not continue to sustain EUA price gains. With no immediate safety concerns, a new regulatory consultation may not lead to new delays/outages to French nuclear gen. Recent substantive developments in market reform talks may limit the upside potential of a final agreement, expected later this year. Parliament’s proposal to protect the EU ETS from Brexit has introduced new market uncertainty. Ultimately, EUA prices may have recalibrated above €6, but with lower potential for gains later this year.

U.S. Industry on the Road to Recovery

Crude runs fell almost 400 MB/D this past week to 14.1 MMB/D which should be the low from Hurricane Harvey as refiners come back online. Next week, runs are set to increase, reducing the extent of light product draws and the crude inventory build. This past week both gasoline and distillate inventories fell sharply for a combined 11.6 million barrel stock decline. Crude stocks built 5.9 million barrels and Cushing crude stocks built 1.0 million barrels this past week. Both are forecast to increase again in next week’s EIA data as flows continue to back up, waiting on the full return of Gulf Coast refining.

NYMEX Weathers Storms, but U.S. Balances Still Hit

The breakout this week might signal a willingness on behalf of the market to put the injection season in the rear-view mirror and focus once again on emerging structural tightness ahead. At a minimum, net increases in price this week appear at odds with the gas demand destruction that has unfolded in September — first, driven by Hurricane Harvey losses in Texas and Louisiana and more recently in Florida, with power outages related to Hurricane Irma. Overall, the storm-related losses have inflated our end-season projection to 3.751 TCF, a notable increase from last month’s 3.695 TCF guidance. For now, our October balances, which assumes 10-year normal temperatures return this year, support upwards of 2.5 BCF/D in year-over-year demand gains in the R/C and industrial sectors. The higher inventory levels likely to be in hand by end-September, however, leave less room for October to underperform, particularly with respect to heating loads next month. With this in mind, we have tempered our Reference Case price forecast for the heating season from ~$3.75 to $3.65/MMBtu.

Coal Market Continues to Ride High

The bullish run in the coal market that has prevailed since early July continued this week, with Atlantic Basin forward prices rising by the largest extent. The demand side continues to support coal balances and pricing, with colder temperatures in Europe and ongoing concerns regarding nuclear and hydro generation pushing CIF ARA higher. Low stockpiles in both China and India have kept Asian coal buying activity relatively strong of late. Despite the fact that coal demand has faded from the summer peak, concerns regarding supply adequacy in the upcoming winter are no doubt at the forefront of buyers’ minds. Forecasts of a colder European winter than last year, following such a strong summer for global coal demand, will prevent sizeable price declines over the very short-term. However, PIRA continues to assume that China’s thermal coal import demand will contract notably over the balance of the year, which should set the table for considerable price weakness throughout 2018.

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 closed right at 2,500 for the first time. The best performers were banking, retail, and energy (+2.3%), while utilities was the lone decliner. Internationally, the best performing tracking indices were China, Latin America, and emerging Asia.

U.S. Ethanol Production Lower the Week Ending September 8

U.S. ethanol output declined by 13 MB/D to 1,047 MB/D last week as some manufacturers reduced production during the extended Labor Day weekend. Total inventories increased by 16 thousand barrels to 21.1 million barrels despite a large decline on the Gulf Coast. The West Coast received approximately 10.6 million gallons of imports. Ethanol-blended gasoline production plummeted for the second consecutive week, dropping to a 27-week low 8,932 MB/D from 9,132 MB/D in the preceding week.

U.S. Refinery Turnarounds: September 2017 – June 2018

Hurricane Harvey brought a number of refinery operations to a standstill, much as occurred in years past such as due to Hurricanes Katrina and Rita. The overall extent of the drop in crude runs ranks with previous events in 2005 and 2008 when overall U.S. downtime exceeded 3 MMB/D during September of those years – average outage of 3.35 MMB/D for the U.S. Hurricane Harvey is expected to lead to a similar average adverse impact on overall U.S refinery operations of around 3.37 MMB/D, with 2.33 MB/D of that in PADD III.

Asian Oil Demand: Growth Falling Back as Expected, with Further Slowing Likely

Our snapshot of Asian oil demand growth has begun to slow as expected, with further easing likely through year-end. Growth in our September snapshot was 956 MB/D, an incremental fallback of -257 MB/D from last month. The key drivers were slower growth in China and India, though better performance was noted in Korea, Taiwan, and Australia/New Zealand, along with a lesser decline in Japan. At this point, we expect further deceleration in the October snapshot.

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.

Consortium to Tackle Major North Sea NDT Challenge

1Consortium TRAC 2A consortium of organisations has set out to tackle one of the most enduring challenges in the North Sea: the non-destructive testing (NDT) of corroded pipes under insulation and engineered temporary pipe wraps.

The group – which includes TRAC Oil & Gas; the University of Strathclyde; and CENSIS, the Scottish Innovation Centre for Sensor and Imaging Systems – will methodically audit the tools, capabilities, and approaches currently used by industry to look at the steel surfaces of assets; often obstructed by layers of material.

While there are a number of NDT technologies on the market, many are ineffective when used on pipes that are protected by insulation. They tend to average out wall thickness where corrosion “scabs” have formed, failing to pinpoint specific areas of vulnerability.

Taking and interpreting these readings is further complicated by the varying dimensions, materials, locations, and accessibility of different oil and gas assets. While insulation can be removed, it requires significantly more time in challenging conditions, making the task more dangerous to the technician undertaking the inspection, and ultimately more expensive to the company.

After assessing the limits of what is available, the consortium will then explore how improvements can be made, including the development of new techniques for accurately identifying and measuring areas of corrosion. The first phase of the project is a feasibility study, the results of which will be shared with wider industry and its stakeholders, including the Health and Safety Executive.

Bill Brown, Technical Manager at TRAC Oil & Gas, said: “Inspection is becoming more important as the UKCS continues to mature – estimates suggest that a high proportion of assets are approaching or, indeed, have exceeded their original design life. We’re at the point now where, against the backdrop of a sustained low oil price, if a platform has to shut down for maintenance, it may never start producing again. We, therefore, need as much accurate data as possible to make informed decisions.

“By taking regular readings on an asset’s condition, we can determine whether they are fit for purpose and operations can keep oil flowing, all within as safe an environment as possible. To do this effectively, we need to take stock of all the technology available, verifying its capabilities and limitations. From there, we’ll be able to look at potential new methods for inspecting the integrity of assets, using non-destructive techniques.”

Dr Gordon Dobie from the University of Strathclyde’s Department of Electronic & Electrical Engineering added: “Decades of oil, gas, water, and chemicals passing through pipes has taken its toll on a range of assets, requiring regular inspection and increasing the importance of the data we get back from tests. Despite a greater need than ever before for accurate inspection and condition monitoring technologies, minimal funding is available for maintenance of infrastructure.

“Working with TRAC’s team, we’re examining what companies currently do to measure wall thickness, repeating it in the lab on specimens, and trying to develop a standardised approach to getting more accurate information from NDT. We’re validating what the instrumentation is saying about the thickness of walls with a view to filling a real and significant gap in the technology already available.”

CENSIS brokered the relationship between TRAC and the University of Strathclyde, and will provide project management support as the initiative progresses.

Rachael Wakefield, Business Development Manager at CENSIS, commented: “Being able to accurately analyse corrosion under insulation is the holy grail of NDT. We’ve already learned a great deal from working with TRAC about the technical and economic challenges facing the industry. This project demonstrates that there’s a real opportunity for oil and gas companies to enhance their offering and tackle some of the biggest problems facing the industry – not only in the North Sea, but across the globe.”

ExxonMobil Says Baytown Restart Activities Continue, Pipelines Beginning to Transport Fuels

2ExxonMobilExxonMobil said on Tuesday, September 5, 2017, that facility assessments and restart activities continue at its Baytown refinery, and that it has made significant progress in restarting chemical production, pipelines and other logistical infrastructure in the Houston area. The company’s fuel terminals in Houston are open and supplying gasoline and diesel to customers. Offshore production platforms in the Gulf of Mexico are beginning to return to normal operations. Production units at the Beaumont refinery remain shut down due to flooding in the lower level of the refinery.

Safety remains the company’s first priority as facility assessments continue and operations begin to resume.

Efforts are underway to transport refined products from unaffected regions to communities and customers in the most severely impacted areas. The company is also delaying scheduled maintenance at other ExxonMobil refineries to continue producing gasoline and diesel to relieve the supply situation. Personnel from the Baton Rouge, Billings and Joliet refineries are being deployed to Baytown and Beaumont to help restore operations.

The company has allocated supplies of fuel for use by emergency responders, and has thus far provided nearly 650,000 gallons to responders working in areas impacted by the storm, including Beaumont, Baytown and the greater Houston area, as well as Dallas and Baton Rouge. In Beaumont, ExxonMobil engineers continue to assist the city with restoring the municipal water system, which was impacted by flooding. The company has distributed 30,000 bottles of water and about 400 pounds of toiletries in Beaumont. About 4,500 gallons of bleach have also been provided to Jefferson County for distribution to residents and businesses in impacted areas.

“Our teams have been working around the clock to restore operations as quickly and safely as possible so we can supply fuels to our customers,” said Darren W. Woods, chairman and chief executive officer. “The incredible efforts our employees have put behind maintaining critical operations under challenging conditions has been remarkable.”

ExxonMobil has also been assessing impacts on its onshore and offshore oil and gas production assets. Galveston 209 offshore platform systems are safe and operational, and startup operations are underway. The Hadrian South subsea production system in the Gulf of Mexico has been deemed safe and operational, and production has resumed. Crews from ExxonMobil subsidiary, XTO Energy, have begun assessments and are bringing onshore wells on line when safe to do so.

ExxonMobil employees are also contributing their time toward assisting area residents in need. For example, the company’s U.S. Production unit is initiating a volunteer program to continue assisting fellow employees, ExxonMobil annuitants, and the greater community. Employees have also volunteered at several area shelters, including the George R. Brown Convention Center in Houston, the Fort Worth Convention Center, and others in the region.

Employees can take advantage of the ExxonMobil Foundation’s volunteer involvement program. In the United States, the program provides qualified organizations a $500 donation on the employee’s behalf for every 20 hours volunteered, up to four times per volunteer per year.

“Volunteerism has been a core value for the company since its earliest days,” Woods said. “Our employees are committed to assisting residents in their communities also impacted by effects of the storm. Our thoughts remain with all area residents during this challenging time, and we hope our efforts in working with disaster relief agencies and local first responders have provided comfort to families and individuals in need.”

ExxonMobil has also established an employee and retiree donation match program to support relief and recovery. Employee and retiree contributions to the American Red Cross and Salvation Army will be matched on a one-to-one basis up to $25,000 per donor and up to $3 million in total, which will generate up to $6 million for the disaster relief organizations. The company has donated $2.3 million in advertising time to the Red Cross that has been dedicated to high-profile televised public service announcements. These commitments, along with $1 million in initial contributions to the American Red Cross and United Way of Greater Houston and about $1 million worth of in-kind contributions in South Texas, total about $10.3 million.

Employee safety and well-being remains a top priority, and those who need to work remotely are being encouraged to do so. Health and counseling services are available on request for employees. Hotlines have been established to provide updated information to employees across different geographical locations. Constant contacts between managers and employees, as well as the company’s automated employee tracking system, have been instrumental in ensuring employee safety.

CGG Signs Agreement with Mozambique Ministry for Vast Offshore Multi-Client Program

3 1Mozambique 3D3 2CGGlogoCGG announces that it has signed a multi-client data agreement with Mozambique’s Instituto Nacional de Petroleo (INP) following a competitive tender process held by INP in 2016. As a result of this agreement, CGG will shortly commence acquisition of a new multi-client survey of up to 40,000 km2 of 3D data over the Beira High in the Zambezi Delta, covering blocks Z5-C and Z5-D and surrounding open acreage.

Deliverables will include fast-track PreSTM, Final PreSTM and PreSDM. The seismic data will be imaged with the latest 3D broadband deghosting and advanced demultiple, velocity modeling and imaging techniques, including Full-Waveform Inversion.

This survey will form part of a comprehensive, fully integrated JumpStart™ geoscience program that will deliver a better overall understanding of the prospectivity of the region. Marine gravity and magnetic data will be acquired simultaneously with the seismic to accelerate regional interpretation.

Jean-Georges Malcor, CEO, CGG, said: “This agreement marks the beginning of a fruitful partnership with the INP to promote the potential of the Zambezi basin and other regions of Mozambique. Our advanced 3D seismic and integrated geoscience program will enable oil companies to confidently de-risk this exciting new exploration area and accelerate development of the country’s resources.”

Expro Secures Multi-Million Dollar Well Services Contract with Repsol Sinopec Resources UK Limited

4Expro wireline unit Leading international oilfield services company, Expro, has secured a five-year master services agreement with Repsol Sinopec Resources UK Limited, for well services across its UK North Sea assets.

The contract is valued at $8million/£5million for the first calendar year, which will be reviewed on an annual basis - including options to extend beyond the initial term.

Expro’s award includes well intervention services across all of Repsol Sinopec’s UK North Sea assets for production assurance and enhancement, well integrity, subsea, reservoir and decommissioning and abandonment applications.

The wireline and cased hole logging services include personnel to supervise all offshore intervention activity, including slickline and electric line conveyance, memory and real time cased hole logging (including production logging and calliper services), explosive and perforating services, downhole cameras, gauges and sampling.

Expro is committed to improving well performance through an experienced team of engineers, supervisors and integrity specialists, providing solutions for every stage of the well life cycle.

The company’s services cover all aspects of well servicing activity from office-based planning and co-ordination, through to well site execution and supervision. Expro’s worldwide experience extends across different well conditions, from shallow land gas storage wells to highly complex deepwater HPHT environments.

Expro’s UK Area Manager Gary Sims said:

“Securing this significant agreement gives a major boost to our UK well intervention business, as we work hard to maintain contracts with valued, long term customers. It continues our excellent relationship with Repsol Sinopec (formerly Talisman), which goes back to the company’s arrival in the North Sea two decades ago.

“The experience of our personnel, our strong safety culture and our commitment to service quality were critical in securing this contract - we look forward to further strengthening this relationship with Repsol Sinopec in the future.”

Ampelmann Celebrates Ten Years of Safe Offshore Transfers

5Ampelmann A typeThe global leader in offshore access solutions, Ampelmann, is celebrating its ten year anniversary. In just a decade, this company grew from a team of just four people to a 350 staff member organization that services customers across the globe from offices in eight different countries.

SPE Offshore Europe 2017 is one of the events where the company will reflect on its success with all attendees, while jointly looking forward towards a new decade of innovation, risk mitigation, cost control and efficiency.

With an impressive track record of over 3.6 million people transfers and 2.6 million kg of cargo transferred from ships to offshore structures in 200 individual projects, the industry leader with its Dutch headquarters has truly revolutionized offshore access. Jan van der Tempel, the founder and CEO of Ampelmann, says ‘It is a thrilling and humbling experience to celebrate ten successful years with our customers and stakeholders at various events this year, including SPE Offshore Europe 2017. Our innovative approach has consistently been rewarded with the trust of our customers around the globe. We look forward to engaging with all kinds of stakeholders and to continue to innovate together.’

Ampelmann currently maintains a fleet of 60 operational systems used for transferring crews and cargo to offshore structures. These solutions are tailored to the needs of different market segments, sea states, cargo and crew loads, and are used by the key players in the global industry.

CEO Van der Tempel explains, ‘In the current offshore climate, being able to transfer staff members to offshore structures safely, affordably and efficiently is more important than ever. We help our customers limit downtime and reduce their project costs. Our unique ‘plug and play’ system enables our gangways to be mobilized in less than eight hours. This helps our customers tremendously.’

Since its founding in 2007, Ampelmann experienced a rapid growth and invested in new production facilities in Rotterdam, the Netherlands, to keep up with demand. By 2011, the company’s innovative gangways were structurally used on a global scale, while the first international branch office was opened in Singapore in 2014.

To commemorate the ten year anniversary, Ampelmann published a whitepaper with a brief company history and more. It explains the ‘how and why’, and informs about existing and new developments in crew and cargo transfer solutions such as the A400, the L-type, the ‘Icemann’ N-Type system created for Arctic operations and the AEP (A-type Enhanced Performance). This whitepaper also informs about the Ampelmann S-type currently under development, which is being designed for use on medium and lightweight crew vessels with hull lengths of 50 meters and larger.

Should you be interested in reading this informative whitepaper, then please download it here.

CEO Van der Tempel concludes: ‘In our short history, we became the global industry leader and invented solutions that unburdened our customers in ways thought to be impossible before. In the coming decade, we will continue to focus on innovation and answering the specific needs of market segments and individual customers. We very much look forward to engaging with various stakeholders at SPE Offshore Europe 2017 and jointly head towards the next decade and beyond.”

Gas to Become World’s Primary Energy Source By 2035

6 1Oil and gas forecast 2050 Energy Transition Outlook 2017 coverOil and gas will be crucial components of the world’s energy future, according to DNV GL’s forecast of the energy transition. While renewable energy will grow its share of the energy mix, oil and gas will account for 44% of world energy supply in 2050, compared to 53% today. Gas will become the largest single source of energy from 2034.

DNV GL’s Energy Transition Outlook (ETO), a forecast that spans the global energy mix to 2050, predicts that global demand for energy will flatten in 2030, then steadily decline over the next two decades, thanks to step-changes in energy efficiency. The fossil fuel share of the world’s primary energy mix will reduce from 81% currently to 52% in 2050.

Demand for oil will peak in 2022, driven by expectations for a surge in prominence of light electric vehicles, accounting for 50% of new car sales globally by 2035. However, the stage is set for gas to become the largest single source of energy towards 2050, and the last of the fossil fuels to experience peak demand, which DNV GL expects will occur in 2035.

Gas will continue to play a key role alongside renewables in helping to meet future, lower-carbon, energy requirements. Major oil companies intend to increase the share of gas in their reserves, and DNV GL expect an accelerated shift by 2022 as they decarbonize business portfolios.

While demand for hydrocarbons will peak over the next two decades, significant investment will be needed to add new oil and gas production capacity and operate existing assets safely and sustainably. However, the results of DNV GL’s model reinforce the need to maintain strict cost efficiency in order to achieve the margins necessary for future capital and operational expenditure.

6 2Elisabeth Trstad 3Elisabeth Tørstad, CEO, DNV GL – Oil & Gas

“We have seen impressive and important innovative efforts across the energy industry, resulting in cost saving and efficiency gains. The oil and gas industry must continue on a path of strict cost control to stay relevant. Coming from a tradition of technological achievements, and having the advantage of existing infrastructure and value chains, this industry has the potential to continue to contribute to energy security and shape our energy future,” said Elisabeth Tørstad, CEO, DNV GL – Oil & Gas.

“Increased digitalization, standardization and remote or autonomous operations will play a central role in achieving long-term cost savings and improving the oil and gas industry’s carbon footprint. We also expect the industry to turn to innovations in facility design, operating models and contracting strategies,” Tørstad added.

DNV GL has published a suite of reports on the Energy Transition Outlook, which are available to download free of charge. The main ETO report covers the transition of the entire energy mix to 2050. Three sector-specific supplements will accompany this: an oil and gas supplement and a renewable, power and energy supplement are both available this week. A maritime supplement will be available later this year. DNV GL’s oil and gas supplement considers some of the key trends identified by the company’s model across the sector’s value chain, and explores their implications.

Download a complimentary copy.

Bibby Offshore Bolsters North Sea Presence with Multiple Contract Wins

Bibby Offshore, a leading subsea services provider to the oil and gas industry, continues to strengthen its North Sea presence through successful completion of two further contracts with oil and gas majors, Perenco and Endeavour Energy UK.

7BibbyOffshoreBarry Macleod, UKCS managing director at Bibby Offshore

Perenco appointed Bibby Offshore to perform subsea integrity inspections and maintenance works on the Inde Joint pipeline, which runs to the Bacton Gas Terminal in the Southern North Sea. Completed in early July, the 15-day workscope saw Bibby Offshore install a total of 94 concrete mattresses over the pipeline to assist in preserving the remaining rock dump mounds.

The second workscope, completed in late July, saw Endeavour Energy UK contract Bibby Offshore to carry out subsea tree inspections in the Renee and Rubie fields located in blocks 15/27 and 15/28 of the Central North Sea.

Both contracts utilized the company’s inspection, repair and maintenance vessel Olympic Bibby and were the latest in a series awarded by these clients.

Commenting on the contract awards, Barry Macleod, UKCS managing director at Bibby Offshore, said: “The successful completion of both workscopes further consolidates our exceptional ability to deliver projects in a short period of time and with a quick, successful turnaround.

“We place a huge emphasis upon client satisfaction and confidence, and once again, Bibby Offshore has demonstrated our clients’ continued belief in our ability to efficiently deliver a wide range of consecutive projects. We look forward to the continuation of both excellent working relationships.”

Bluestream and Skeye Partners in Offshore Inspection Services

Bluestream, one of the leading providers of innovative inspection services to the oil, gas and wind industry, and Skeye BV from Alphen aan den Rijn, one of the most successful UAV operators in the Netherlands and UK, have announced a partnership providing visual inspection services and geographic data acquisition for offshore assets using unmanned aerial vehicles (UAV).

According to a statement by both companies, this move is a good example of embracing innovations in the inspection market.

8bluestreamLeft Anton Janssens (Bluestream) and right Jan van Liebergen (Skeye).

Thanks to this extension of Bluestream’s own topside inspection capabilities, the Den Helder-based company can now provide clients with a total inspection solution utilizing Skeye’s advanced small unmanned drones, capable to reach places that are difficult, expensive, dangerous, or even impossible to approach by manned inspection teams. The drones are particularly suitable for live flare & vent stack, topside, splash zone and under deck inspections.

“Our professional rope access, diving and ROV inspection, repair and maintenance services combined with the Skeye UAV-based inspection services will provide a unique advantage for customer’s maintenance campaigns and projects. We are now tailored to meet the most challenging of customer needs,” commercial manager Anton Janssens of Bluestream said. “Not only does this high-grade inspection service allow a fast and efficient collection of extensive footage in a short amount of time, whilst the asset is still in production, it also improves the targeted delivery of Rope Access work. This cooperation enables both subsea and topside inspections to be done by a single party, resulting in integrated reports of inspections done, creating added value to the customer.”

Operations Director Jan van Liebergen of Skeye added: “Through this partnership we are able to offer full UAV inspections, complete with report, and including recommendations if requested. This new service will position both companies as more complete and efficient service providers within the offshore industry.”

Both Bluestream and Skeye are well introduced in the offshore and windfarm work practices, ensuring a suitable and safe concept of operations for any mission. The inspections are performed by highly competent personnel, that will ensure compliance with (local) legislation regarding UAV operations as well as inspection requirements.

In the meantime the new business partners have already successfully executed various inspection scopes together, including a comprehensive inspection program for a client in the North Sea wind sector.

Decom Heavy-Weight Joins Well-Safe’s Growing Senior Team as the Company Secures HQ Offices

9Well Safe Office 1Well-Safe Solutions, a new entrant to the decommissioning market, has further strengthened its senior team with the appointment of Jim Christie as director of programs.

The specialist well abandonment company, launched in July this year, has already assembled a senior team of eight well-known industry experts and now employs 20 people.

Well-Safe has just signed a five-year lease for 4,400 square feet to accommodate over 60 people at Hill of Rubislaw in Aberdeen and will be moving in this week. The prestigious, newly refurbished offices have flexible open-plan and office space which can be increased as the company grows.

Aiming to become a major tier 1 well abandonment service company, Well-Safe will provide a fully integrated package using its own bespoke marine assets to help oil and gas operators to meet the challenges of safe and cost-efficient decommissioning of subsea wells.

The appointment of Mr. Christie follows hot on the heels of the company’s first acquisition and recruitment of the chief executive officer, a chief technical officer and commercial director.

Formerly head of decommissioning with the OGA, Mr. Christie has 35 years’ experience in oil and gas, civil engineering, construction, refining, power, transportation and ship-building with extensive expertise in offshore decommissioning in the US and the UK, working with owners, regulators and the supply chain.

Speaking one the eve of Offshore Europe, where Well-Safe has a high-profile presence in the Decom Zone, founder and executive director, Mark Patterson, said: “Jim’s appointment is highly significant and a major boost in our ambition to become a leader in plug and abandonment in the decommissioning sector.

“Retaining and sharing lessons learned, we will deliver safe, efficient well P&A operations in collaboration with our clients and stakeholders which result in significant cost reductions.

“The response from industry since our launch has been incredible and we are gaining huge support for our complete package offering.”

As head of decommissioning for the OGA, Jim was responsible for the development of the UK’s decommissioning strategy, working in collaboration with the industry and government.

“As we seek to work hand-in-hand with the regulator to support operators in navigating the complex regulatory process, with a view to driving change and transparency while ensuring tax efficiency, Jim’s experience will be invaluable to our team,” added Mr. Patterson.

Prior to his role at the OGA, Mr. Christie was global decommissioning projects manager with Marathon Oil in Houston. He joined Marathon in 1984 and has held various project management and project assurance roles for the operator, including working on decommissioning of the Brae Field.

Well-Safe has also announced the appointment of a director of finance. Alan Cormack joins the company with immediate effect. A qualified accountant with ten years’ experience in senior finance roles in the oil and gas industry, Mr. Cormack joins from Raeburn Recruitment where he was head of finance. Before that, he worked with Mr. Patterson as director of finance at Nautronix for almost a decade.

Mr. Patterson said: “Having Alan on board to take care of all our financial affairs is ideal. Having worked closely with him in the past, I have the utmost respect for and trust in his ability. He is a great addition to the team and will be instrumental in developing our back office support.”

PIRA Energy Market Recap for the Week Ending September 5, 2017

10PIRALogoU.S. Stock Deficit Widens Again

Hurricane Harvey has certainly disrupted the lives of millions and led to the shutdown of refiners, steam crackers and other industrial operations. The deluge has created significant problems for refiners from the Houston area east, with Corpus Christi operations being largely spared the worst impact of the tropical storm. For the latest reporting week, which does not show the effects of Harvey, refinery runs increased to a new high of 17.7 MMB/D, driven by strong margins as well as firm demand and exports. Hurricane Harvey has led to a steep reversal in operations with runs expected to fall back to 14.7 MMB/D for the next week. Overall commercial stocks fell by 1.1 million barrels for the latest week, widening the deficit to last year to 70.7 million barrels. Major light products were little changed, with total product stocks up by 4.3 million barrels. This was offset by a 5.4 million barrel drop in crude stocks.

U.S. Manufacturing Margins Improved in August

D6 RIN values were lower. Brazil imposed a 20% tariff on U.S. ethanol imports above 600 million liters per year. Mills in Brazil’s South-Center region produced a higher percentage of ethanol in August. European ethanol prices continued to decline.

Early-Bird Outlook for 2018

A clear path for seasonal price recovery looms considering the positively skewed Y/Y heating demand risks — on top of ongoing structural expansion being driven by the “Big Three” that has been buoying the call on supply for more than a year now. The return to normal weather during the fourth quarter would dramatically tighten supply/demand balances, suggesting that prices will “lift off” well in advance of the official start to the 2017-18 heating season. While a more normal turnover in inventories during the 2017-18 heating season will largely be viewed as constructive for prices, the same cannot be said of the 2018 injection season. Indeed, when coupled with what appears to be an impending new record level of supply growth take root in 2017, the total supply picture is likely to be viewed as too top-heavy.

September RGGI Carbon Auction to Rebound vs. June

The August WCI current and future vintage auctions returned to full subscription, clearing at historic high prices. Auction pricing failed to reach highs seen in July, but is above the expected 2018 reserve price. Coverage ratios were strong and the number of registered bidders increased significantly. Compliance entities secured most of the winnings. Secondary market reaction to the results has been decidedly bullish. With August the second consecutive auction to clear above the reserve price, unsold allowances can start to be re-offered beginning with the November auction. This will increase supply and allow for the surplus/bank to build.

Nuclear Winter

The outlook remains generally constructive for Continental power prices, given the poor status of water reserves in major markets, while more surprises could still surface in the Creusot-Forge saga. The opaque ASN consultation document of Aug. 16 is clouding the French nuclear outlook, but our take is that the review of these irregularities was already underway and so far neither ASN nor EDF have made public specific safety concerns that would prevent plants from operating normally. At this point, with French prices already moving significantly higher, the upside for the winter contracts seems quite limited under normal weather. Our model shows the price impact of extended delays of plants restarts could be more significant in 4Q – in a range of € 6-7/MWh, but the market has already factored in more than half of it. Additionally, 1Q 2018 seems to be already trading at levels compatible with lower nuclear availability. Oddly, 2Q and 3Q 2018 do not appear to be factoring any major nuclear losses.

Disrupted Supplies and Undisrupted Injections Support Pricing

Summer is ending, and Sept. HDDs across Europe come quickly in percentage terms (316% M/M) followed by October in absolute terms (+4,900 HDDs M/M). This will sneak up quickly and will initially be balanced with lower injections. While gas demand has been hurt by a normalization of nuclear supplies, hydro continues to be supportive. This support is particularly true in the next several months, being the traditional seasonal low for hydro production – generally down 17% M/M in September and a further 10% M/M in October. Storage injections outturned 30% higher than forecasted in August at 13-BCM. German injections have been the second highest injection month ever. In addition, Austria, Denmark, Hungary, Poland, and Slovakia each had their top or second highest injection month. Up to this point in injection season, over 26.5 BCM of gas has been injected into storage in Northwest Europe, with another 5.1 BCM forecasted by PIRA on the way - contracting forward spreads. Additionally, as gas continues to price itself against coal, it becomes increasingly sensitive to developments in Asian coal restocking in the coming months that may continue to be quite supportive.

Temperatures and Prices Reach Triple Digits

Heat waves bookended August weather with temperatures reaching triple digits in California and Northwest load centers. CA ISO on-peak block prices breached the $100 mark on several days with DA LMPs for early evening hours in the CA ISO markets clearing in the $300-500 range. WECC US loads rose by 3 aGW from the prior year while hydro gains dwindled to just over 1 aGW. Solar output rose by nearly 1 aGW but nuclear generation declined due to an outage at the Columbia Station. As a result, coal-fired output was up and gas nearly matched its prior year level on average, far exceeding it on peak days. Bullish weather patterns are forecast to continue into September. The extended outlook for 2019 is for market implied heat rates to remain stable as neither gas prices nor resource mix are expected to change significantly.

U.S. Coal Stockpiles Continue Downward Trajectory

June 2017 electric power sector stockpiles came in at 160.5 MMst according to the EIA’s August 24 data release, down 4.4 MMst M/M. That was less than the five-year average M/M stock draw of 6.3 MMst for June, but put stockpiles 6% below the five-year average for the month. PIRA has estimated a July stock draw of 12 MMst, which exceeds the five-year average but falls short of last year’s nearly 14 MMst decline (a bullish draw that stoked 2016’s rally in coal prices). The M/M decline in stockpiles in July is typically the largest of the year and has averaged ~11 MMst over the most recent five-year period.

Japan Coming off the Holiday, Gasoline Demand Still Soft, Gasoil Rebounds

This week’s data takes us further from the mid-August holiday period. Total commercial stocks drew 2.35 million barrels, with both lower crude and product stocks, and a rebound in major product demand, in part due to much higher gasoil demand. Crude runs dropped 77 MB/D from peak levels. Gasoline demand fell back a modest 8 MB/D, but is still seen as soft. Gasoil demand rebounded sharply from its holiday induced low. Refining margins have continued to perform well and remain supportive of the high level of runs. Higher levels of maintenance and a tempering in runs should support margins, while demand softens a bit.

Familiar Sight in U.S. – Solid GDP / Job Growth, and Wage Riddle

The U.S. economy has appeared to be in good shape for a while – and after this week’s data releases, the picture looks even better. GDP growth for the second quarter was revised up, and growth for the third quarter is shaping up to be solid. As for the August labor market report, private-sector job growth was healthy, the unemployment rate stayed low, and wage pressure was absent. Going forward, Hurricane Harvey will create noise for a short period for some data. Outside the U.S., Chinese business confidence surprised positively in August. Canada and Brazil reported positive GDP data, but India disappointed.

Hurricane Harvey Shutters 50% of U.S. Steam Cracker Capacity

Hurricane Harvey’s historic rainfall caused the shutdown of 70% of Texas Gulf Coast steam cracker plant capacity, which represent 50% of total U.S. steam cracker capacity. The corresponding decrease in ethane demand was 550 MB/D. The duration of cracker outages will depend on any damage sustained at the plants and other infrastructure such as pipelines and terminals returning to service. Mont Belvieu ethane prices were down due to slack demand, while each of the other NGL purity products prices strengthened. Shipping terminal outages reduced Gulf Coast exports last week and also will reduce exports this week. However, global demand for U.S. LPG remains seasonally firm even in the face of challenging arbs.

Hurricane Harvey Offers Glimpse into Global Gas Loss Potential

In the wake of Hurricane Harvey, which swept through one of the world’s main energy producing hubs, much of the focus has been on the oil front in terms of US refining capacity outages owing to the seasonal impact of potential gasoline shortages in the final weeks of US summer driving season. And on the US domestic gas front, the concerns are heightened by the fact that compared with previous storms, much more US domestic gas production is in the South Texas/ Houston area and subject, for now, to force majeure.

Cape Freight Rates Ride a Wave of Chinese Speculation

Capesize dry bulk freight rates surged over the past month due to a variety of factors. Another bout of commodity speculation, and shift if steelmaking process in China certainly were major factors in lifting rates. On the supply side the expansion of the fleet has at least temporarily halted, driving up prompt rates and FFAs PIRA expects Cape rates to stay high over the next two months and to then fall back.

Global Equities Post a Positive Week

Global equity markets generally posted another positive week. In the U.S., among the tracking indices, housing, technology and materials did the best and outperformed. Energy posted a gain of 0.9%, but underperformed. The international tracking indices also generally gained on the week, but underperformed the U.S. Emerging Asia did the best, but underperformed the U.S. market.

Production and Supply Decreases

U.S. ethanol production declined the week ending August 25 (before the impact of Hurricane Harvey), falling 10 MB/D to 1,042 MB/D. The largest drop occurred in PADD III as some biofuel manufacturers near the coast prepared for the arrival of hurricane. Total inventories fell by 206 thousand barrels to 21.3 million barrels. Ethanol-blended gasoline production jumped to a nine-week high 9,447 MB/D from 9,392 MB/D during the preceding week.

Coal Pricing Remains Elevated, Downside Risks Gather

Coal pricing was mixed in August, with surging dry bulk freight rates pushing CIF ARA prices substantially higher, while the end of the Asian heat wave saw Pacific Basin price strength ease. While upside price risks remain, and should be respected for the prompt market, rising supply and easing demand fundamentals should see prices over 4Q17 into 2018 fall below market forwards.

U.S. Shale Oil Breakevens Down Despite Higher Costs

PIRA expects costs to increase by an average 11% between 2016 and 2017 driven primarily by tightness in fracking equipment (pressure pumping and proppants). However, continued improvement in well productivity appears to more than offset cost inflation. PIRA forecasts U.S. shale oil breakevens to be slightly lower in 2017 versus 2016. PIRA also forecasts U.S. shale oil production to continue to rise despite the recent flattening in oil rig growth.

Credit Conditions Remain Constructive & Stresses Low

It was generally another constructive week for financial stress with the S&P 500 gaining week-on-week, along with lower volatility (VIX), positive performance on credit pricing and commodities. The St Louis financial stress indicator posted a fourth straight weekly rise, but stress indicators remain very low.

U.S. Production in June Falls on Alaska and Gulf of Mexico Maintenance; Growth Slows in Texas

U.S. crude and condensate actuals for June 2017 came in at 9,112 MMB/D, down 72 MB/D month-on-month, up 164 MB/D year-on-year, and 73 MB/D below PIRA’s forecast. The miss relative to PIRA’s Reference Case was primarily due to Texas and the Gulf of Mexico.

Refined Product Implications/Outlook After Hurricane Harvey

Hurricane Harvey has finally moved on, but it has left record flooding in its wake. The impact has come as a wave starting in South Texas near Corpus Christi where it made landfall. Then, it moved on to horrific flooding near Houston and finally in the Beaumont/Port Arthur area in eastern Texas. PIRA has tracked the refinery outages and based on what information is currently available made an estimate for the likely recovery refinery-by-refinery. This is of course a preliminary estimate based on what we know now and it assumes that no major long-term damage will be found.

Tighter to Asia, but Reflective of Market

Saudi Arabia's formula prices for October were just released. Pricing offsets to Asia, vs. the Oman-Dubai benchmark, were raised for the second straight month, but generally reflective of less contango in the Dubai pricing structure. Pricing into the U.S. was raised on the lighter and heaviest grades, but left unchanged on Arab medium, which is key competing grade vs. the domestic barrel (Mars). There appears no consideration in setting prices with regards to hurricane Harvey. European pricing on Arab light was reduced $0.10/Bbl, but a widening in the Urals discount vs. Dated Brent would have suggested a slightly larger reduction.

High Utilization Rates Required in Swing Refining Capacity

Refinery utilization rates since 2015 are holding near “Golden Age” levels in swing refinery capacity. Utilization rates outside of these areas are lower, depressing global averages, but that has limited impact on market pricing since much of it cannot be brought to bear. This is a key factor supporting refinery margins.

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 Contributes $1 Million to Immediate Texas Hurricane Harvey Relief Efforts

1Chevron logoChevron Corporation (NYSE:CVX) announces that it is making a $1 million contribution to the American Red Cross for the immediate relief efforts under way to assist victims of Hurricane Harvey that struck Texas over the weekend.

"Our thoughts are with all the people who have suffered tremendous losses and disruption from this catastrophic hurricane and related flooding," said Jeff Shellebarger, president, Chevron North America Exploration and Production Company. "As a business with deep ties to Texas and Houston, this donation will assist with the initial critical relief process. We will continue to work with responding organizations to support ongoing recovery efforts, which we hope can begin soon."

The donation will support relief efforts throughout the affected regions, including both Corpus Christi and the greater Houston metropolitan area. In addition, the company will match donations made to the relief efforts by its employees and retirees, many of whom have seen the tragedy unfold first-hand. One of Chevron's top priorities is protecting its employees, families and communities when they may need assistance in times of emergency.

The American Red Cross is a key partner in delivering that assistance. "The Red Cross is working around the clock in extremely challenging conditions in Texas to help people impacted by Hurricane Harvey," said Gail McGovern, president and CEO of the American Red Cross. "We couldn't do it without the generosity of our donors - like Chevron. With their support, the Red Cross can be there when disaster strikes to respond with shelter, food and the necessary supplies to ensure people are cared for, and to help during the recovery process. We're extremely grateful for their support."

Houston represents the single-largest concentration of Chevron employees globally, and the company has important business interests throughout Texas, including the Permian Basin and Corpus Christi. A number of Chevron's businesses are headquartered in Houston, including our exploration and production companies for North America, Africa and Latin America; our technology companies; pipeline, power and global procurement businesses; and the supply and trading function. In addition, many of Chevron's major capital projects are planned and developed from Houston.

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.

CSA Ocean Sciences and Okeanus Stage Emergency Response Survey Resources

2USV Photo 6CSA Ocean Sciences Inc. (CSA) and Okeanus Science & Technology announces they are working together to stage a full-range of specialized survey and monitoring equipment in Louisiana to deploy in the immediate aftermath of Hurricane Harvey to help evaluate the storm’s impact on coast lines, waterways, bayous, ship channels and terminals, marine infrastructure, and oil and gas related facilities located on or near the water.

“Hurricanes often dramatically impact coastlines and waterways in affected areas, deposit debris into lakes, harbors and ship channels creating hazards to navigation that can leave waterways and adjoining infrastructure out of commission for an extended period,” said Gordon Stevens, Vice President and General Manager of CSA. “With Okeanus, we have emergency response personnel and equipment standing by in Houston and Louisiana to assist local companies and organizations with geophysical surveys and environmental impact assessments in the aftermath of the storm.”

CSA is staging the following types of equipment for deployment as required:

  • Small survey vessels
  • Side scan, multibeam and single beam sonars
  • Sub-bottom profilers
  • Magnetometers
  • Observation remotely operated vehicles (ROVs)
  • Unmanned surface vessels (USVs)

For more information contact, Gordon Stevens, 772-219-3087, This email address is being protected from spambots. You need JavaScript enabled to view it., or Benton LeBlanc at 985-709-1023, This email address is being protected from spambots. You need JavaScript enabled to view it..

ExxonMobil Increase Support from $500,000 to $1Million for Gulf Coast Hurricane Relief

3ExxonMobilExxon Mobil Corporation (NYSE:XOM) announces that it is has increased its support from $500,000 to $1 million for relief and recovery efforts in Houston and other Gulf Coast communities impacted by Hurricane Harvey.

A contribution of $500,000 will be provided to the United Way of Greater Houston and follows an initial allocation of $500,000 for the American Red Cross which was made on Friday.

"Our thoughts remain with our families, friends and neighbors in Houston and other communities impacted by flooding and other effects of Hurricane Harvey," said Darren W. Woods, ExxonMobil chairman and chief executive officer. “We will continue to assess needs and to assist government authorities and disaster relief agencies in providing critical goods and services to those in need.”

ExxonMobil has also made provisions to ensure that emergency responders and other essential service providers requesting fuel are given priority.

The Red Cross is mobilizing relief workers to support response efforts, and has pre-positioned shelter and relief supplies in certain areas. To assist with volunteer efforts, click here.

Kosmos Energy Successfully Completes Tortue Drill Stem Test

4 2KosmosEnergy copyKosmos Energy (NYSE: KOS) announces that it has successfully completed the drill stem test (DST) of the Tortue-1 well, demonstrating that the Tortue field is a world-class resource and confirming key development parameters including well deliverability, reservoir connectivity, and fluid composition.

4 1GreaterTortueMap testThe Tortue-1 well flowed at a sustained, equipment-constrained rate of approximately 60 million cubic feet per day (MMcf/d) during the main, extended flow period, with minimal pressure drawdown, providing confidence in well designs that are each capable of producing approximately 200 MMcf/d. The DST results confirmed a connected volume per well consistent with the current development scheme, which together with the high well rate is expected to result in a low number of development wells compared to equivalent schemes. Initial analysis of fluid samples collected during the test indicate Tortue gas is well suited for liquefaction given low levels of liquids and minimal impurities. Data acquired from the DST will be used to further optimize field development and to refine process design parameters critical to the front-end engineering and design (FEED) process anticipated to begin later this year.

“The positive results from the DST confirm that the Tortue field is a world-class resource and validates the assumptions that underpin our development concept,” said Andrew G. Inglis, chairman and chief executive officer. “The combination of high well rates, large connected volume per well together with a gas well-suited for liquefaction is why we believe Tortue is one of the lowest cost pre-FID greenfield LNG projects. The Kosmos BP partnership remains aligned on delivering a final investment decision for the project in 2018 and first gas in 2021.”

The Tortue-1 well is located in water depths of approximately 2,700 meters offshore Mauritania. The DST was conducted by the Atwood Achiever drillship, which has now mobilized to the Hippocampe prospect in Block C-8 offshore Mauritania to begin exploration drilling operations. Kosmos is exploration operator of Block C-8 with a 28% participating interest. BP is named operator with a 62% participating interest, and Societe Mauritanienne des Hydrocarbures et de Patrimoine Minier (“SMHPM”) has a 10% participating interest.

John Crane Asset Management Solutions Wins North Sea Maintenance Build Contract with Maersk Oil

5John Crane Maersk contractJohn Crane Asset Management Solutions has secured a contract to supply Maersk Oil with data services to support the planned maintenance strategy at one of the largest new developments in the UK North Sea.

At the Culzean field, John Crane Asset Management Solutions will provide data build services as well as establishing a maintenance plan for all topside equipment. A Detailed Criticality Analysis and Maintenance Definition (DCAMD) strategy will be developed to cover high-criticality equipment with generic procedures being used for non-critical appliances.

The Culzean gas condensate field has resources estimated at 250-300 million barrels of oil equivalent. Located in the Central North Sea, the high pressure, high temperature field is expected to commence production in 2019 and supply enough gas to meet 5% of total UK demand at its peak in 2020/21.

James Reid, Project Manager at John Crane Asset Management Services, said: “We are pleased to deliver a smooth planned maintenance programme for Maersk Oil that combines both preventative and condition based maintenance.”

In June, John Crane Asset Management Solutions announced it had been awarded a five-year contract to provide condition based maintenance services with another major operator in the UK North Sea.

In October 2015, John Crane Group announced it had acquired Aberdeen independent Asset Management business, XPD8 Solutions Ltd. Both contracts will enable the strengthened John Crane Asset Management Solutions team to use their expertise to fully meet the customer needs and further increase their asset performance.

John Morrison, Managing Director at John Crane Asset Management Solutions, said: “To be involved in supporting the maintenance strategy on one of the most significant projects on the UK Continental Shelf in recent years is fantastic news for the company. Having an effective strategy will stand the development in good stead for years to come, giving those in charge the confidence that their topside equipment will perform reliably and efficiently.”

John Crane Asset Management Solutions is a trading name of XPD8 Solutions Limited, which is part of John Crane, itself a division of the global technology company Smiths Group Plc.

N-Sea Announces Inaugural Cameroonian Contract

Subsea IMR provider, N-Sea, has begun work in the Cameroonian offshore market, via a contract win with Dutch offshore lifting and transportation company, Jumbo Offshore.

With phase one completed in mid-July, the project takes place off the shores of Cameroon’s South Province, as a part of the Hilli Episeyo Subsea Soft Yoke Installation. N-Sea’s workscope comprises diving and ROV support, performing all subsea installation of the soft yoke system.

The activity N-Sea will perform on the floating liquified natural gas (FLNG) mooring and loading facility includes seabed measuring, mattress placement, anchor base and pile positioning support and pile sleeve sediment removal. Final connection between the yoke and FLNG will be undertaken by N-Sea later in 2017.

6N Sea team working on Jumbo FairplayerN-Sea team on Jumbo Fairplayer

Commenting on the contract win, N-Sea Group Commercial Director, Gary Thirkettle said: “We are delighted to be supporting Jumbo Offshore with the expertise of N-Sea’s dive team, who will be utilising our ROVs on this FLNG project.

“Whilst N-Sea has been active in Nigeria since early 2016, this contract award represents not only our first partnership with Jumbo, but also our first project offshore in Cameroon. As such, the contract reflects our continued strategy to actively target potential clients throughout West Africa.”

Hilli Project Manager for Jumbo Offshore, Tim Klieverik says: “Good cooperation with the Jumbo Offshore and N-Sea teams helped to bring the first phase of this significant project to a successful completion. The skilled N-Sea team will again assist us in bringing phase two of this project together at the end of the year and we look forward to working with them again.”

N-Sea is known for its innovative work as an independent offshore subsea contractor, specialising in IMR services for the oil and gas, renewable and telecom/utility industries, as well as for civil contracting communities. N-Sea provides near shore, offshore and survey services to major operators and service companies alike.

Jumbo Offshore is a leading and reputable heavy lift, transport and installation contractor for the offshore industry. Jumbo’s offshore scope includes the installation of subsea structures and moorings, jackets, topsides and wind turbine foundations.

OSM Officially On Board Statoil’s Peregrino

Efforts in Brazil are reinforced for OSM with more than 90 specialized offshore positions officially on board the Peregrino.

“OSM Brazil have successfully mobilized our crew on board the FPSO Peregrino,” says Tommy Olofsen, Managing Director of OSM Crew Management.

OSM Maritime Group (OSM) began its journey with Statoil’s Floating Production Storage Unit (FPSO) Peregrino back in early 2016. However, increased efforts and investments in Brazil have been ongoing since 2013 – with multiple office locations, and an EBN Certification that marks the company as a registered Brazilian Shipping Company, OSM have positioned themselves strategically for growth and support within the area.

7OSM bluec 44021808551From right to left – OSM crew members Giliard Damasceno Miranda (Deck Operator), Wilton Pereira Gomes (Deck Operator) and Alex Fabiano de Figueiredo Oliveira paying attention to the instructions that Bruno Araujo (back) is going through

“Creating new opportunities for professionals in the area has been a natural result of this project – we have secured more than 90 specialized offshore positions on board the Peregrino” says Walker Lima, OSM Brazil General Manager.

With all hands on deck, Olofsen stresses the importance of communication between teams to ensure a favorable result:

“Key to the success of this project is our commitment to continuous improvement. We will maintain close communication between both our on- and offshore teams in the hopes of predicting change and creating solutions to challenges before they arise.”

About OSM:

OSM is a leading third party management provider in the maritime industry with 11,000 employees delivering services to more than 500 vessels. The company has offices in 30 countries and is the largest provider of third party management services to the offshore supply industry.