Oil & Gas

Alaska and China Sign Historic Joint Development Agreement
Developing America’s Largest Energy Export Project

1Alaska China Sinopec

Senior executives from the State of Alaska, AGDC, Sinopec, Bank of China and CIC Capital Corporation, sign historic Joint Development Agreement in front of U.S. President Donald J. Trump and China President Xi Jinping, Beijing, China, November 9, 2017.

Alaska Gasline Development Corporation (AGDC), the State of Alaska, China Petrochemical Corporation (Sinopec), CIC Capital Corporation (CIC Capital), and Bank of China (BOC), announced a joint development agreement to advance Alaska LNG, Alaska’s strategic gas infrastructure project.

The agreement was signed in the presence of United States President Donald Trump and China President Xi Jinping, and expresses the common interests in the preparatory work of Alaska LNG.

Alaska LNG is designed as a 20 million tonnes per annum (MTPA) integrated LNG system comprised of a three train liquefaction plant in Southcentral Alaska at Nikiski; an approximately 800 mile, 1.1 meter diameter gas pipeline; a gas treatment plant on the North Slope of Alaska; and various interconnecting facilities to connect the Prudhoe Bay gas complex to the gas treatment plant.

Under the agreement, the parties have agreed to work cooperatively on LNG marketing, financing, investment model and China content in Alaska LNG, and get a periodic result by 2018.

“Today’s agreement brings the potential customer, lender, equity investor, and developer together with a common objective of crafting mutually beneficial agreements leading to increased LNG trade between Alaska and China,” said Keith Meyer, president, AGDC. “Sinopec is interested in the possibility of LNG purchase on a stable basis from Alaska LNG,” said Sinopec.

“This is an agreement that will provide Alaska with an economic boom comparable to the development of the Trans-Alaska Pipeline System in the 1970s,” said Governor Bill Walker, State of Alaska.

“CIC Capital is an experienced financial investor in the energy and infrastructure sectors and has long been interested in investing in American LNG infrastructure. CIC Capital is pleased to work with fellow industry and financial partners on this project,” said CIC Capital.

“As the most internationalized bank in China, Bank of China is willing to facilitate the China-U.S. energy cooperation and provide financial solutions for this transaction by taking advantage of its vast experiences and expertise in international mega-project financing,” said Bank of China.

Sinopec is a huge, state-owned, fully integrated energy and chemical company. Based in Beijing, Sinopec is the largest oil and gas company in the world by revenue with annual revenue of USD 455.49 billion.

CIC Capital is China’s direct investment arm, which is mandated to make direct investments and manage bilateral and multilateral fund investments in order to pursue long-term financial returns and promote international investment cooperation. CIC Capital is a market-oriented commercial entity with a specialized mandate and global reach. As a long-term financial investor, CIC invests on a commercial basis. Bank of China is a state-owned commercial bank. Bank of China ranks top 10 largest banks in the world by market capitalization value and provides a comprehensive range of financial services to clients in 52 countries and regions around the world.

The Alaska Gasline Development Corporation (AGDC) is an independent, public corporation of the State of Alaska, empowered to maximize the benefit of Alaska’s vast North Slope natural gas resources through the development of infrastructure necessary to move the gas into local and international markets. Visit the Alaska Gasline Development Corp.'s website for up to date information.

The State of Alaska is responsible for developing Alaska’s immense natural resources for the benefit of all Alaskans. In addition to huge, proven natural gas reserves, Alaska contains some of the world’s largest oil and mineral deposits, including gold, coal, zinc, copper and rare earth elements.

Statoil’s Valemon Platform First to be Remote-Operated from Land

2 1ValemonStatoil’s Valemon Platform. Photo credit: Statoil

On Thursday, November 9, the opening of the Valemon control room was celebrated at Sandsli in Bergen. Valemon will be the first platform in Statoil’s portfolio to be remote-controlled from land.

“This is a vital milestone for Statoil. We have had land-based surveillance and control of offshore operations for a long time, however, the remote control of Valemon marks one important step forward on our digitalization journey,” says Gunnar Nakken, head of the operations west cluster in Statoil.

2 2StatoilProud of the new Valemon onshore control. From the left Gunnar Nakken, head of the operations west cluster in Statoil, Norwegian minister of petroleum and energy, Terje Søviknes, head of Kvitebjørn Valemon and Grane operations, Nina Birgitte Koch and control room operator Joakim Tesdal. (Photos: Christian Djupvik Brandt-Hansen)

Valemon is designed and constructed for such remote control. Statoil has currently no other platforms of this kind, but this solution will undoubtedly be considered for other small and medium-sized platforms in the future, and remote control will be a central building block.

“Most of our production will still be carried out on large, manned platforms, such as Aasta Hansteen and the Johan Sverdrup platform, but for somewhat smaller platforms and fields it will absolutely be considered. First, we must gain experience from Valemon,” says Nakken.

“Thanks to new technology and knowledge we can utilize the advantages of our smaller, standardized building blocks that are combined differently from field to field for optimal resource exploitation. We want to combine the best technology, below and above water, to find optimal solutions for every project, thereby ensuring safer operation,” says Nakken.

Onshore remote control of the Valemon platform is one example of how new ways of working and interacting offer new possibilities and advantages.

Expro Secures Well Testing Contract with INEOS Breagh in the Southern North Sea

4Expro Well TestLeading international oilfield services company, Expro, has been awarded a two-year contract to provide well testing services for INEOS, a global manufacturer of petrochemicals, speciality chemicals and oil products.

The contract will see Expro provide testing services for at least three wells, including two new drills and one re-entry, at the Breagh Alpha Platform as part of the Southern North Sea (SNS) Development Programme. The contract includes an option to extend for a further two wells.

Neil Sims, Vice President for Europe CIS region, said:

“We are excited to be working with a new operator like INEOS Breagh and this contract signifies the commitment both companies have to the SNS area. The possibility of a further three wells shows the potential still remaining in the region.

“As Expro provided testing services for other wells in the Breagh Alpha complex, we were uniquely positioned to offer specialist knowledge and insight to INEOS Breagh. With changing operators, it’s an exciting time to be a part of the SNS Development Programme, and we look forward to supporting our new client to unlock the potential of the region.”

Mervyn Williams, Supply Chain Manager at INEOS Breagh, added:

"INEOS Breagh is delighted to have partnered with Expro for well testing services. We saw in Expro a keen value proposition and a highly professional team that we are convinced will add genuine value to our Breagh Alpha drilling programme.”

Initially founded in 1973 as a well testing company, Expro is headquartered in the UK and has key operating regions in Europe CIS, North and Latin America, Sub Saharan Africa and Asia, Middle East and North Africa.

Shell, Q-LNG Transport and Harvey Gulf Sign Long-Term LNG Transport Contract

6Shell HarveyGulfHarvey Gulf International Marine’s CEO Shane Guidry announces the formation of new marine transportation company, Quality Liquefied Natural Gas Transport, LLC (“Q-LNG”), owned 70% by Shane Guidry and 30% by Harvey Gulf. Q-LNG will own and operate assets providing marine transportation of liquefied natural gas (“LNG”), a critical component of U.S. LNG infrastructure, commencing with a long-term contract with Shell Trading (U.S.) Company (“Shell”) to deliver LNG as a fuel source to various ports in Florida and the Caribbean. Mr. Guidry commented, “I’m very appreciative that Shell has the confidence in me and my team to service their LNG transport needs. Everyone is aware the eastern ports of Florida are very busy with pleasure-craft, and Q-LNG will be focused and dedicated to deliver extremely safe transit to all the ports we will service.”

Mr. Guidry added, “While the downturn in the Oil & Gas market has hurt all vessel operators, our continued partnership with Shell displays the confidence entrusted in our team, which is extremely appreciated and very rewarding. We will not let Shell or the end users down in any way. We will work diligently 24 hours a day, 7 days a week to ensure Q-LNG delivers extremely safe and reliable service. In July 2017, under Shane Guidry’s leadership, Harvey Gulf reached four years while working over 12 million man hours without a lost time accident. The strong safety culture we’ve developed at Harvey Gulf will be integrated into Q-LNG, as well as a continued commitment to build upon the “SAFETY ABOVE ALL” foundation our team has established.”

Q-LNG has contracted with VT Halter Marine, Inc. (“VT Halter”) for the construction of America’s first offshore LNG Articulated Tug and Barge (“ATB”). The ATB will be constructed to meet the requirements of the International Gas Carrier (“IGC”) code and is designed to carry 4,000 cubic meters of LNG, with the barge having dimensions of 324’ x 64’ x 32.6’ and the tug having dimensions of 128’ x 42’ x 21’. The project will rely heavily on the collaboration between VT Halter and Wärtsilä, who will be delivering a large scope of equipment to the project. Wärtsilä’s deliverables for the barge include all of the cargo handling, cargo control, and cargo containment system as well as the PMS and automation onboard. The supply for the tug includes all of the bridge navigation, communications, and dynamic positioning equipment as well as thruster, PMS and automation. Mr. Guidry commented, “We are pleased to continue our long relationship with Wärtsilä by partnering once again on another first for the North American LNG supply chain.”

At a time when companies are stacking boats and scrapping new builds, our CEO and partner Shane Guidry is contracting and building,” commented Harvey Gulf Board member W. Steve Orlando. “We are just so pleased to be able to have a CEO and partner running Harvey Gulf like Mr. Guidry does. He truly comprehends the clients’ need for Safety, Service and Operational excellence. Mr. Guidry and his team have delivered consistent margins of over 55% since the downturn started in 2014, further increasing these margins in excess of 60% throughout 2016 and 2017.” Mr. Orlando added, “In this market environment it’s amazing what Mr. Guidry and his team have done, and I truly believe they will deliver the safest, most reliable service possible. His cost management is like nothing I’ve ever seen. Compared to our public peers, it’s completely night and day. SG&A and Operating Expenses are half, and Harvey Gulf’s EBITDA is more than all the U.S. public peers combined together.”

The Commencement of Hail Oil Field Production

Abu Dhabi Oil Co., Ltd. (ADOC, Representative Director & CEO: Isao Kusakabe), a subsidiary of Cosmo Energy Exploration & Production Co., Ltd., (CEP, Representative Director & CEO: Isao Kusakabe) marks another historical milestone with the commencement of oil production from the new Hail Oil Field on November 7th.

The production from the Hail Oil Field comes in addition to ADOC's existing oil fields; Mubarraz Field, Umm Al-Anbar field, and Neewat Al-Ghalan field which have been producing oil since 1973, 1989 and 1995 respectively. The production from the Hail Oil Field is the first oil field development in the Middle East by a Japanese operator since 2011.

7 1Cosmo pht01Image credit: Cosmo Energy

Hail Oil Field was granted as an additional oil field to its existing oil fields when ADOC renewed its concession agreement on 6th December 2012 for a period of 30 years. Soon after the renewal of the concession, ADOC launched the Hail Oil Field Development activities which included analysis processes such as 3D seismic survey, drilling appraisal wells, reclamation of a new artificial island, construction of surface facilities, and drilling production wells.

Hail Oil Field production volume is estimated to be equivalent to that of the existing oil fields and being adjacent to the existing oil fields, ADOC will utilize those facilities thus keeping the additional investment to a minimum and consequently, ADOC's unit operating cost is expected to decline along with the increase in production volume.

ADOC was established in 1968, and since then has been conducting stable operations through utilization of the best production technology that fully copes with the environment protection rules and regulations. We will continue to exert strenuous efforts to be a friendly, reliable and efficient partner of the Emirates of Abu Dhabi, United Arab Emirates.

Cosmo Energy Group Oil E&P Division

7 2Cosmo pht02Image credit: Cosmo Energy

Statoil Signs Letter of Intent for the Construction of the Johan Castberg Hull

Statoil is signing a letter of intent with Sembcorp Marine Rigs & Floaters Pte. Ltd in Singapore for the construction of the hull and integrated living quarters for the floating production, storage and offloading (FPSO) vessel that will be located on the Johan Castberg field in the Barents Sea.

9JohanCastbergJohan Castberg floating production vessel (Illustration: Statoil)

The contract will be signed at the final investment decision scheduled before Christmas. Covering engineering, procurement and construction the contract has a value of NOK 4 billion. The contract, which was won through international competitive bidding, marks an important milestone for the progress of the Castberg project. There were no Norwegian bids for the contract.

“We will be working closely with Sembcorp Marine to ensure safe and efficient delivery based on our requirements for HSE, quality, time and cost. The remaining procurement work will be progressed in parallel with this,” says Statoil’s chief procurement officer, Pål Eitrheim.

The construction of the hull is the most time-critical delivery for the completion of the Johan Castberg project for the scheduled start-up in 2022. The contract will have a separate cancellation clause linked to the approval of the plan for development and operation (PDO). “Johan Castberg is the next major field development on the Norwegian continental shelf and important to future infrastructure in the Barents Sea. Analyses from Agenda Kaupang show that the project will generate some 47,000 man-years of employment in Norway in the development phase from 2018-2022 given a competitive Norwegian supply industry,” says Torger Rød, Statoil’s senior vice president for project development.

FACTS
The estimate for Norwegian content is approx. 50% in the project phase and about 80% in the operations phase for Castberg.

The Johan Castberg field will generate ripple effects for all of Northern Norway. On behalf of the partnership Statoil has decided to locate the operations organization in Harstad, whereas the helicopter and supply base will be located in Hammerfest. The Castberg project is actively pursuing ways of increasing the percentage of pre-qualified suppliers from Northern Norway. The Johan Castberg development is planned to consist of a large subsea system tied in to a FPSO vessel. Recoverable resources are estimated at 450-650 million barrels of oil equivalent. The field is located in the Barents Sea, 240 kilometers north-west of Hammerfest. 30 wells are planned to be drilled on the field in the period 2019-2024.

The partnership consists of Statoil (50%), Eni (30%) and Petoro (20%).

OPITO Launches Digital Delivery of Safety-Critical Oil & Gas Training

12 1Digital delivery mobile portalA digital transformation of oil and gas safety-critical emergency response training is set to save the industry more than a million hours of training time per year, driving time and cost efficiencies across the sector, a gathering of world-wide industry leaders heard at the OSCC conference in Kuala Lumpur.

OPITO, a global, not-for-profit skills body for the energy industry, has launched the digital delivery of the Basic Offshore Safety Induction and Emergency Training (BOSIET) at its annual safety and competence conference (OSCC) in Kuala Lumpur, addressing the sector’s call for regulated online learning with world-class credibility that delivers efficiencies.

With over 150,000 people undertaking the three-day primary emergency response BOSIET training in the last year, the online option will now be offered alongside the practical element as an alternative to classroom based learning. The online modules are completed remotely at a learner’s own pace and location. With only one day required for the practical training, it offers the potential to give more than a million hours of training time each year back to industry and reduce travel and accommodation costs.

Digital delivery mobile portal

The training is widely regarded in the industry as the ‘must have’ certification to enable a worker to go offshore and includes helicopter survival, emergency first aid, sea survival, fire-fighting and lifeboat training.

Acknowledged as the best in the world, OPITO standards have been adopted by major international and national oil and gas companies in over 45 countries. The digital delivery of BOSIET is a long-term, demand led initiative to create a change in workforce training through innovation. The skills body has worked with digital partner Atlas Knowledge on behalf of industry to develop the interactive training featuring video and animations.

12 2Digital delivery sea survival training filmingDigital delivery sea survival training filming

John McDonald, CEO of OPITO said: “We recognize that as an industry we must adapt and be more flexible for today’s workforce and cost constrained industry. It requires an overhaul of the way we think about training people and assessing competence. The classroom has been the standard model for learning for hundreds of years, but it’s time to do things differently if we are to keep up with technology and attract the next generation to our industry.

“The practical and knowledge verification day will always be crucial before giving someone the certification to work offshore, however the transition to more flexible online training delivers far reaching benefits, giving significant time back to employers and participants.”

The initiative has been backed by global operators and training organisations alike, who have championed the digital initiative. The online training includes the three standards in the suite, Emergency Breathing System (EBS), Compressed Air Emergency Breathing System (CA-EBS) and Tropical BOSIET. It is available on all devices including smart phones, desktops, laptops and tablets.

It is available to learners anytime and anywhere in the world where they can access the internet. It enhances safety-critical knowledge through online assessment before progressing to the final verification and practical day at an OPITO approved training centre.

More than 400 delegates gathered in Kuala Lumpur for the eighth annual OSCC and exhibition, which this year had the theme, New Generation, New Thinking.

Speakers included Ryan Jenkins, a world-renowned expert and published author on the topic of millennials and Andy Fawkes, former NATO and Royal Navy strategist who spoke about cross-over technologies.

UK and Norway Join Forces to Optimize Late Life Field Assets and Field Abandonment

13ITF Ben Foreman 3

Ben Foreman, ITF Technology Manager

The Industry Technology Facilitator (ITF) and Norwegian Energy Partners (NORWEP) are hosting joint technology hackathon events later this month to collectively tackle operator late life and decommissioning challenges.

Supported by the UK Oil & Gas Authority (OGA) and the Norwegian Ministry of Petroleum and Energy, the Hackathon events are part of a major North Sea effort to harness new cost saving ideas and technologies to directly address the key production enhancement and cost reduction challenges laid out by operators. They will also look at ways to enhance safety, minimize impact on the environment and create additional value for companies and governments.

The UK/Norway Joint Technology Hackathon events will take place in both Aberdeen and Stavanger, and will feature presentations from AkerBP, ConocoPhillips, Point Resources, Repsol Sinopec Resources UK Limited, Shell and Statoil. Each operator will share their current challenges in the area, followed by interactive group sessions to discuss potential solutions. Challenges include balancing late life production with decommissioning and optimising safe, reliable and cost-efficient production from mature fields with significantly extended lifetime.

Bill Cattanach, Manager of Supply Chain at the OGA said: “The OGA is delighted to support the hackathon events and the opportunity to work in partnership with Norway. The successful implementation of innovative solutions can extend the life of mature fields and reduce their eventual decommissioning costs. It is accepted many enabling solutions lie within the supply chain and combining forces across the North Sea makes this an even more powerful approach.”

Ben Foreman, ITF Technology Manager added: “Optimising late life field assets and field abandonment represents a major challenge in the North Sea. By directly engaging with influential operator specialists, and collaborating with our peers in Norway, we have the opportunity to provide a platform to highlight innovative approaches, processes and technologies. The output report, which will be shared after the event, will be used to develop an actionable forward plan and we look forward to working with both the OGA and the Norwegian Ministry of Petroleum and Energy in facilitating this vital work.”

The first event takes place at Aker Solutions in Aberdeen on Wednesday, November 22nd, 2017. The cost to attend the event is £50 (inc VAT) per person. To view the event agenda, the operator challenges and to register to attend the UK event please visit the ITF website.

For further details and to register to attend the event held in Norway on November 30th, please visit the NORWEP website.

Statoil: New Gas Module at Troll C

The partners in the Fram license have decided to invest in a new project to increase production from the Fram field in the North Sea. The decision is taken in agreement with the partners in the Troll license.

This means that the Fram license is investing NOK one billion in a new gas module on the Troll C platform. This will help to increase oil production and gas exports from the Fram field and provide conditions for further development in the area.

1Statoil FramThe Troll C platform in the North Sea. (Photo: Øyvind Hagen)

This will help increase oil production and gas exports from the Fram field.

“Statoil is pleased that we, together with the partners, have made an investment decision for this strategically important project,” says Siv Irene Skadsem, vice president, tie-back and brownfield projects. “By using standardized solutions and equipment, in addition to focusing on making this a maximum lean project, and working closely with Statoil’s operations and suppliers, we have come up with a very cost-efficient and profitable gas module,” Skadsem says.

The investments are key to further developing Troll C as a hub for the Troll C and Fram area. The module will help boost production from the Fram license, and as well as improving the profitability of the Troll C installation by increasing and accelerating production by means of the enhanced gas capacity.

"The new gas module at Troll C will accelerate production from Fram by considerable and profitable volumes,” says Gunnar Nakken, Statoil’s senior vice president for Operations West. Consequently, we will be able to mature more wells and explore for new resources in the Fram Area, which all together will make it possible to extend the economic life time for the field," Nakken adds.

EPCI contract awarded to Aibel
On behalf of the partnership Statoil has awarded the EPCI contract (Engineering, Procurement, Construction, Installation) for the Troll C gas module to Aibel. The contract has an estimated value of 600 MNOK.

Aibel in Bergen will be responsible for engineering, and the module will be fabricated at Aibel’s Haugesund yard. The work has started, and the project aims at start-up at the end of 2019.

FACTS – FRAM

Fram is an oil and gas field in the northern part of the North Sea, some 20 kilometers north of Troll. The water depth in the area is approximately 350 meters.

The field includes a number of reservoirs and is developed with Fram West and Fram East both with two 4 slots templates each. Both are developed by two subsea templates tied back to Troll C.

The Fram H-Nord and Byrding fields are developed with a third template daisy chained to the Fram Vest. The Fram field came on stream in 2003.

The Fram well stream is transported by pipeline to Troll C for processing, and the oil is piped from there through the Troll II pipeline to Mongstad. The gas is exported through Troll A to Kollsnes.

Licensees: Statoil Petroleum AS (45%), ExxonMobil Exploration and Production Norway (25%), ENGIE E&P Norge AS (15%), Idemitsu Petroleum Norge AS (15%).

Ocean Installer Awarded Contract for the Cambo Field NW of the Shetland Islands

Ocean Installer has been awarded an agreement with Siccar Point Energy and Baker Hughes, a GE Company to support the appraisal and early production phases of the Cambo Project, with the ability to extend into the future developments.

Ocean Installer will execute the job as part of an innovative alliance with Baker Hughes, one of the world’s largest oil field services companies, which targets projects where Ocean Installer and Baker Hughes, a GE Company (BHGE) benefits each other.

3cambo area map2Image credit: Siccar Point Energy

“An alliance like this enables us to improve execution efficiency and risk mitigation through the creation of shared project objectives, and minimize tendering costs, with the ultimate objective of creating more efficient subsea solutions,” says Steinar Riise, CEO of Ocean Installer.

This is Ocean Installer’s first contract with Siccar Point, which has established itself as a key operator after acquiring OMV UK earlier this year. The field is located North-West of the Shetland Islands in the UK at a water depth of 1,100m, one of the deepest fields in Northern Europe yet to be developed. Over 100 million barrels of recoverable resources have already been discovered.

“We are delighted that Siccar Point has chosen to work with us. With several other upcoming projects in the pipeline, we hope this will be the first of many jobs we win with Siccar Point. We also look forward to working together on this project as part of a long-term collaboration with BHGE,” says Steinar Riise, CEO of Ocean Installer.

Phase 1 of the Cambo Field Development will be an early production system (EPS), followed by a Phase 2 full-field development. The project is scheduled to commence in 2018 and will be managed from the Ocean Installer Aberdeen office. The Construction Support Vessels Normand Vision and Normand Reach will be utilised for the offshore execution.