In the construction of a subsea project, one challenge is the long delivery time of large steel forgings used for key components. This is mainly due to compliance with oil companies’ individual requirements. DNV is now inviting the subsea industry to jointly obtain synergies by developing a best-practice approach. The aim is to reduce delivery time and production costs and improve material quality, thus reducing the risk throughout the supply chain.

Due to quality concerns, the end users of subsea systems are stipulating company-specific requirements for subsea forgings, such as those used for X-mas trees. “This has made the stocking of prefabricated forgings and thereby shorter lead times difficult for the vendor industry. The typical delivery time can be in excess of seven months, and has a high potential for being shortened,” says Bjørn Søgård, business development manager at DNV’s Well, Pipelines and Subsea Section.

“One pre-requisite for shortening the lead times and effective project execution is the timely availability of forgings that meet all likely end users’ quality requirements. A unified set of requirements across the industry would be a solution with a synergetic effect, make procurement easier and help reduce quality challenges,” he points out.

On this basis, and in response to requests from key stakeholders in the subsea industry, DNV has now established a Forging-material Joint Industry Project (JIP). It will run for 14 months and include valuable contributions from major oil companies, subsea contractors and manufacturers of steel forgings. In addition, DNV will contribute the advice of its own pool of subject-matter experts. The conclusions will be presented in a Recommended Practice available to the industry.

Søgård explains that the core goal for all participants is to improve the quality, cost and delivery times of forgings for the subsea industry. “A unified approach will also help limit the risk of failure during fabrication, subsea installation and operation. The outcome will not only benefit the manufacturers and sub-suppliers, but also improve the end-customers’ way of specifying their requirements regarding mechanical loads, interfaces with other materials, environmental issues, cathodic protection, cyclic loading, etc,” he concludes.

The adoption of a unified material standard with a consistent methodology to manage all steps in the supply chain processes will help ensure consistently high and repeatable quality across the industry and geographical regions and build confidence into the final product. The JIP will be run with participation from the industry based in both Houston, USA and Oslo, Norway.

Gov. Bobby Jindal and Wolverine Terminals LLC General Manager Terry Wilson has announced the company will make a $30 million capital investment to establish a crude oil terminal and blending operation on a 15-acre Mississippi River site in St. James Parish. Wolverine will create 20 new direct jobs, with an average annual salary of $62,000, plus benefits. LED estimates the project will result in 18 new indirect jobs for a total of 38 new jobs. In addition, the project will create an estimated 100 construction jobs.

Gov. Jindal said, "This project is more great news for St. James Parish and our entire state. Wolverine Terminals joins a long list of companies that recognize Louisiana as the best state in the country for a top-notch workforce, an unmatched energy infrastructure and an outstanding business climate. We're proud to welcome Wolverine Terminals and its investment partners to our state as they help us continue our tremendous economic momentum by creating great new jobs and opportunities for our people."

The Wolverine Terminals project is supported by the following energy investment companies: Gulfport Energy Corp. of Oklahoma City and Wexford Capital LP of Greenwich, Conn. The project will entail rail and dock facility improvements along with storage tank construction that will enable the company to receive crude oil shipments by rail from Canadian and U.S. locations and to ship blended oil products via barge to domestic customers.

"We look forward to working in concert with the state and parish in creating jobs for the area," Wilson said.

LED began discussions with Wolverine Terminals about the potential project in December 2012. To secure the project, the state offered the company participation in Louisiana's Quality Jobs Program. Construction will begin in the third quarter of 2013 and be completed by the end of the second quarter in 2014. Hiring will be completed as the company initiates commercial operations at the Paulina site in the second quarter of 2014. With five storage-and-blending tanks, Wolverine will provide a total capacity of 425,000 barrels of crude oil at its St. James Parish facility.

"We are pleased to welcome Wolverine Terminals LLC to our Parish," St. James Parish President Timothy Roussel said. "The decision to choose St. James Parish for this project is not a surprise, as our resources such as the Mississippi River have proven to be a major attraction for Louisiana development. Although Wolverine Terminals will receive our full support during the planning, construction, and operating phases, the community's best interest will remain our top priority. We look forward to the opportunities this project will bring as well as a long and prosperous partnership."

For business inquiries about the Wolverine Terminals project, contact Terry Wilson at 225.394.0562 or This email address is being protected from spambots. You need JavaScript enabled to view it. with questions about operations or Glen Perry at 403.930.6437 or This email address is being protected from spambots. You need JavaScript enabled to view it. with questions about commercial opportunities.

Megan Bel has joined the staff of the National Ocean Industries Association (NOIA) as Senior Director, Government & Political Affairs. She comes to NOIA from the Office of Congressman Steve Scalise (R-LA) where she served as Legislative Director since 2008. She also recently served as Deputy Director of the Republican Study Committee.

“Megan is a great addition to the NOIA staff and its members. Her Hill and legislative experience is unparalleled. In addition, her long time association with the Gulf of Mexico and the offshore energy industry will serve the members of NOIA well. I am excited to have her aboard,” said NOIA President Randall Luthi.

Bel staffed Congressman Scalise’s House Energy and Commerce Committee work from 2009-2013 and his House Natural Resources Committee work in 2008.  She also advised the Congressman in his roles on the Gulf Coast Caucus, Western Caucus, House Energy Action Team and the Natural Gas Caucus.  During and after the 2010 Gulf of Mexico oil spill, Bel led briefings for congressional staff and assisted House Republican leadership with messaging on the harmful effects of post spill regulations, permitting delays and the deepwater drilling moratorium.  In 2008 Bel was a field director and policy advisor on the Scalise for Congress Congressional Campaign.

Earlier in her career, Bel was Legislative Assistant and Press Secretary for Congressman Richard Baker (R-LA) (2006-2008) and a policy analyst in the office of Louisiana Governor Kathleen Blanco (2004-2006). 
 
Bel earned a Master of Public Administration and a Bachelor of Science in Business Administration from Louisiana State University, Baton Rouge.

The Department of the Interior’s Bureau of Safety and Environmental Enforcement (BSEE), Noble Energy, Inc. and the Helix Well Containment Group (HWCG)  has announced the successful completion of a full-scale deployment of critical well control equipment to assess Noble Energy’s ability to respond to a potential subsea blowout in the deepwater Gulf of Mexico. BSEE Director James Watson confirmed that the HWCG capping stack deployed for the exercise met the pressurization requirements of the drill scenario, marking successful completion of the exercise.

The unannounced deployment drill, undertaken at the direction of BSEE, began April 30 to test the HWCG capping stack system – a 20-feet tall, 146,000-pound piece of equipment similar to the one that stopped the flow of oil from the Macondo well following the Deepwater Horizon explosion and oil spill in 2010. During this exercise, the capping stack was deployed in more than 5,000 feet of water in the Gulf of Mexico. Once on site, the system was lowered to a simulated well head (a pre-set parking pile) on the ocean floor, connected to the well head, and pressurized to 8,400 pounds per square inch.

“Deployment drill exercises like this one are essential to supporting President Obama’s commitment to the safe and responsible development of offshore resources,” said Director Watson. “BSEE continually works to ensure that the oil and natural gas industry is prepared and ready to respond with the most effective equipment and response systems.”

BSEE engineers, inspectors and oil spill response specialists are evaluating the deployment operations and identifying lessons learned as the bureau continues efforts to improve safety and environmental protection across the offshore oil and natural gas industry.

“The quick and effective response to a deepwater well containment incident, demonstrated during the drill, was enabled by collaborative communication and planning between the industry and regulatory agencies with a focus on solutions-based outcomes,” said John Lewis, senior vice president of Noble Energy. “BSEE, the U.S. Coast Guard, Louisiana Offshore Coordinator’s Office and Noble Energy brought unique perspectives together in a Unified Command structure to achieve a shared goal. Through excellent coordination within the Incident Command System structure that included elevating the Source Control Chief to report directly to Unified Command, the dedication of hundreds of people and activation of the HWCG rapid response system, all objectives were met.”

“HWCG’s ability to quickly and effectively respond to a call from Noble Energy and every operator in our consortium is made possible by a combination of the mutual aid agreement committed to by each consortium member and the contracts we have in place for equipment that is staffed and working in the Gulf each day,” said Roger Scheuermann, HWCG Commercial Director. “Mutual aid enables members to draw upon the collective technical expertise, assets and resources of the group in the event of an incident. Utilizing staffed and working vessels, drilling and production equipment helps ensure there is no down time for staffing or testing equipment readiness in a crisis situation. ”

In accordance with the plan, all 15 member companies were activated for this incident through the HWCG notification system.

For the safety of personnel and equipment, a Unified Command comprised of BSEE, the US Coast Guard, Louisiana Oil Spill Coordinators Office and Noble Energy decided to temporarily hold operations May 2 and 3, 2013 due to rough weather over the Gulf of Mexico. The safety of personnel remained a top priority throughout the exercise.

Since the Deepwater Horizon tragedy in 2010, BSEE has worked to implement the most aggressive and comprehensive offshore oil and gas regulatory reforms in the nation’s history. This deepwater containment drill tested one critical component of enhanced drilling safety requirements. For more information about the bureau’s efforts to improve safety and environmental protection, please visit: http://www.bsee.gov.

Aberdeen-based standby vessel operator Atlantic Offshore Rescue has commissioned what will be the UK’s most powerful emergency response and rescue vessel (ERRV).

The Ocean Troll – which recently completed a long term charter with Statoil – has undergone a £2million conversion and overhaul at MMS in Hull to become a UK Class A ERRV with tanker assist and firefighting capabilities. Its home port will be Aberdeen and it will become Atlantic Offshore Rescue’s principal relief vessel supporting the fleet in the North Sea.

The vessel transferred from Atlantic’s Norwegian operation is part of a £300million fleet investment programme undertaken over the last three years by the Atlantic Offshore Group and is the start of the renewal of its UK Fleet . In recent months, orders have been placed by Atlantic Offshore Rescue for two high-specification  TAV/ERRVs with one due to join the fleet in January 2014 and the other scheduled for completion in 2015.

Atlantic Offshore Rescue has been in operation since 1995. It manages a fleet currently sitting at 13 ERRVs (emergency response and rescue vessels) and four PSVs (platform supply vessels) out of Aberdeen.

It is part of the Atlantic Offshore Group which is based in Norway.  Atlantic Offshore Rescue Ltd employs 350 people (approximately 330 seamen and 20 office-based staff) and provides multi-role offshore and emergency rescue and response vessels for many of the oil majors operating in the North Sea.

The three new ERRVs will secure employment for 90 seamen between them.

The 78metre Ocean Troll is equipped with rescue craft including two Daughter Craft and two Fast Response Craft (FRCs). It is compliant with Norwegian legislation and can carry 300 survivors. With firefighting capabilities of 4x1800cum/hour, it has Bollard Pull of 150 tonnes and BHP 12560.

John Bryce, managing director of Atlantic Offshore Rescue, said: “We are committed to providing our customers with the best possible rescue and recovery service in the event of any offshore emergency and will continue to invest in our fleet and employees to continue to strengthen our service.

“The last year has seen us sign new agreements with a number of major operators we have worked with for several years as well as securing business with others on the back of the reputation built by our personnel and fleet.’’

Atlantic Offshore Group currently operates a fleet of twenty four ERRVs (emergency response and rescue vessels) and PSVs (platform supply vessels), and manages further PSVs on behalf of a third parties.

The group’s aim is to continue to expand its capabilities within both the Norwegian and British sector of the North Sea and to be able to provide cross-border solutions reflecting the needs of its clients for both ERRVs & PSVs.

FMC Technologies, Inc. (NYSE: FTI) announces that it has received a subsea equipment order from ExxonMobil Corporation (ExxonMobil) for its Julia development.

The Julia field is located in the Gulf of Mexico Walker Ridge area in approximately 7,000 feet (2,100 meter) water depth. FMC Technologies' scope of supply includes six subsea trees, a manifold and associated tie-in equipment.

"FMC Technologies is pleased to provide ExxonMobil with subsea systems for this offshore project," said Tore Halvorsen , FMC Technologies' Senior Vice President, Subsea Technologies. "We look forward to supporting ExxonMobil as they overcome the technological challenges of this ultra deepwater development."

Songa Offshore SE (OSE: SONG) has appointed Bjørnar Iversen as new CEO of Songa Offshore SE, effective as of June 1st. Iversen will relocate to Limassol and take up the position only weeks after he joined the company as president of Songa Rig AS.

Sometimes you are simply lucky enough to find gold in your own pocket. After a long search process and assessment of numerous candidates, we increasingly realised that we already had the ideal candidate within our own company. Bjørnar understands the industry after 17 years with Odfjell Drilling; he has extensive international and operational management experience and, importantly, a unique knowledge of the Category D project. My key task as interim CEO was to steer the company through a few critical short-term challenges and find a permanent successor. I am happy to now step down, knowing that both tasks have been successfully accomplished, says interim CEO and chairman of the board, Jens A Wilhelmsen.

Before signing with Songa in February this year, Bjørnar Iversen held a number of senior management positions and been member of the executive leadership team at Odfjell Drilling AS for the last 12 years. His latest position was President and CEO of Odfjell Galvao Ltda in Brazil. During his 17 year's tenure at Odfjell Drilling, he has been executive vice president for Corporate Business Development, Odfjell Drilling Technology and Odfjell Well Services.

Iversen holds a Master of Science in Business (siviløkonom) from the Norwegian School of Business and Economics (NHH), and various management courses from Harvard Business School.

Statoil and operator ExxonMobil have decided to sanction the Julia field development in the Gulf of Mexico.

The field, located approximately 200 miles south of New Orleans, Louisiana, was discovered in 2007 and is estimated to have nearly six billion barrels of resource in place.

Jason Nye, senior vice president, Statoil U.S. Offshore

 The announcement confirms the agreement between operator Exxon Mobil Corporation and Statoil to proceed with field development, estimated to take approximately three years. The partners each own 50 percent of the field.

 Julia will be a subsea tieback to the Jack and St. Malo floating production platform, located approximately 15 miles away, which is operated by Chevron U.S.A. Inc.

Statoil also is a co-owner in the Jack and St. Malo developments, sanctioned in 2010.

"We are very pleased to move ahead with the first phase of this important development," said Jason Nye, senior vice president, Statoil U.S. Offshore. "The Julia field is a strong addition to our growing portfolio in the Gulf of Mexico. Julia has a substantial long-term production potential which is expected to be fully realized through the application of technology to unlock its full potential."

Drilling operations are planned to start in 2014, and production start-up is planned for 2016. The lifetime of the Julia field is estimated to be up to 40 years, with an initial production rate of up to 34,000 barrels of oil per day.

Facts about the Julia field

Discovered in 2007.

The total reservoir is estimated to contain nearly six billion barrels of resource in place.

Investment decision in April 2013, production start-up in 2016.

MacGregor's new simulation platform enables customers to access realistic information relating to complex interactions so that better decisions can be made and skills can be attained long before risk becomes a factor

MacGregor, part of Cargotec, has introduced C-HOW,a simulation platform that allows customers to run particular equipment through various simulated conditions and operations. "The C-HOW software is extremely flexible," says Frode Grøvan, Sales and Marketing Director for MacGregor Advanced Load Handling. "Simulation detail can be varied depending on the level of functionality required: C-HOW is modular and scalable, so modules can be added or removed as requirements change. Furthermore, its use is not limited to MacGregor equipment; it can be tailored for products from other manufacturers installed on our customers' vessels."

Although MacGregor has only just introduced C-HOW to the market, customers are already expressing serious interest. At a basic level, C-HOW can be used as an interactive calculation tool, while at the other end of the scale it can be incorporated in immersive training hardware, such as in the advanced crane simulator that MacGregor built at Kristiansand in Norway.

"Simulation can help at every stage of a newbuilding project, from concept studies and layout plans to training, operational planning and, later on in its life, modifications and upgrades," adds Mr Grøvan. "It is all about getting access to realistic information relating to complex interactions so that better decisions can be made and skills can be attained long before risk becomes a factor.

"Our customers can also use C-HOW in discussions with their own clients; demonstrating aspects such as increased availability, contingency planning, calculation and presentation tools, control options, flexible and immersive training, 'black-box' analysis and much more."MacGregor's simulation products and services can be modified, together with the physical system, all the way to the end of their useful working life. "This way, your investment never becomes obsolete and it always performs in the best way possible, even under changing commercial and operational circumstances. We use simulation technology to help design your product, why not use the same tools to test, train and plan for its future use?"

Subsea 7 S.A. (Oslo Børs: SUBC) announces a contract award by Pemex to its Mexican joint venture valued at approximately $90 million.

The contract comprises the engineering, fabrication and installation of an 8km pipeline, related risers, two slug catchers¹ and two cantilever structures for the Line 67 Project in the Bay of Campeche. This is the second contract awarded to the joint venture.

Project management and engineering will be handled from the joint venture’s offices in Ciudad del Carmen and Houston. Offshore operations are due to commence in the third quarter 2013, with pipelay activities being conducted in the fourth quarter 2013 with Seven Borealis.

Ian Cobban, Subsea 7´s Vice President Gulf of Mexico, said “Subsea 7 Mexico is pleased to be awarded its second contract in Mexico. We look forward to delivering the project in a safe and timely manner, and in so doing, strengthening our relationship with Pemex.”

¹ a slug catcher is a storage vessel used to separate oil, water and gases and regulate flow within a pipeline

UTEC has announced the appointment of Ian Pownall as the General Manager of UTEC Survey JLT, based in Dubai, UAE.

The responsibilities of this role include development and delivery of the UTEC brand and business model in the Middle East region.

Ian, who was formerly with Corrintec in the UK and Unique Maritime Group in the UAE, brings a wealth of IMR experience to UTEC Survey JLT.

Commenting on his appointment, Ian said: “I am delighted to be joining UTEC at an exciting and busy time and I look forward to the opportunities and challenges which my new role will present.”

UTEC CEO Martin O’Carroll added: “UTEC is continually looking to add strength to our team through the addition of experienced managers, such as Ian. We feel Ian’s addition to the team reflects the success we are achieving globally.”

Market-leading energy services company Proserv has won a multi-million dollar contract in Angola, underpinning the company’s fast-evolving subsea status and increasing demand for its sampling system innovations.

Proserv is to design and manufacture a subsea sampling system for BP’s PSVM field development which, with a water depth of 2,000 meters, is believed to be the deepest offshore project in Africa.

The system, which is being designed, manufactured and tested by Proserv’s dedicated teams in Aberdeen and Aberdeenshire, can go to a maximum water depth of 2,500 metres as well as interface with two and four-slot subsea manifolds. It is also fully compliant with corrosion society, NACE International, and meets the high engineering standards set by the American Petroleum Institute.

David Lamont, chief executive officer at Proserv which has won a contract to design and manufacture a subseasampling system for BP’s PSVM field in Angola.

Chief executive officer at Proserv, David Lamont, said: “This contract win represents another significant achievement for Proserv. It underpins the strong track record we are continuing to build around the world by consistently delivering robust technology systems and services for customers on time and to the highest standards including overall compliance with very stringent technical specifications.

“With an established track record spanning over 35 years in the sampling services sector, we have strengthened our capabilities and expertise through organic growth and strategic acquisitions. This has resulted in us capturing a large share of the subsea market and with the increasing demand for flow assurance and reservoir analysis, we fully intend to set the pace as the leading global player in the subsea sampling field.”

Proserv’s sampling system will interface with the subsea production system to support the monitoring of PVT properties in the production fluid as various levels of these elements can cause flow assurance issues such as scale build up.

The cylinders for the sampling system will be designed at Proserv’s specialist manufacturing center in Greenbank, Tullos, with the whole sampling system to be manufactured and assembled at the company’s Birchmoss facility in Aberdeenshire.

The contract is the second one that Proserv has undertaken for BP Angola on the PSVM development. The company previously provided two similar subsea sampling systems for Block 18 through FMC Technologies.

Proserv, which is headquartered in Westhill, Aberdeenshire, has fast emerged as a leading industry specialist in exploration & production, drilling, and infrastructure technical solutions and services to the global energy industry.

The company has experienced exceptional growth over the past 12 months particularly in the subsea services sector.

Applus RTD, a global leader in the provision of integrity technology services, has unveiled its most sophisticated ultrasonic 3D inspection technology to date – the latest addition to its revolutionary NDT3D technology range.

The RTD IWEX (Inverse Wave Field Extrapolation) is an emerging Non Destructive Testing (NDT) technique that allows detailed inspection and mapping of defects within critical pieces of pipework.

The system increases the probability of detection of defects within welds, as well as more accurately detailing the size, position and characterization of faults. It has the potential to save operators millions of dollars by reducing the number of welds being rejected in new construction pipelines both onshore and offshore.

Rienk de Vries, technical director at Applus RTD, said: “RTD IWEX provides users with a reconstructed image of the inspected object, giving a clearer insight into the scale and nature of any existing defects than is currently possible.

“By utilizing this technology more accurate results in relation to the size and position of the defect can be gained throughout the inspection process.”

The product has been designed to tackle a number of known client issues during processes such as pipeline construction and strain-based pipeline designs and can be utilized during operations for the oil and gas and renewables sectors.

Mr de Vries added: “We are committed to a program of technological research and development aimed at delivering new techniques that maximize the effectiveness and value of our services.

“Ensuring the integrity of the infrastructure being used in the global energy industry is critical to the success of E&P activity and it is of paramount importance to Applus RTD that we not only contribute to improved standards, but set the bar within the ultrasonic NDT arena.

The RTD IWEX is the product of six years of research and development and has already been validated by several oil majors.

Cargotec's MacGregor has received EUR 37 million order from Hornbeck Offshore Services Inc. to deliver four 250-ton active heave-compensated (AHC) subsea cranes for four multi-purpose supply vessels (MPSV). The cranes will be delivered between fourth quarter 2014 and third quarter 2015. The order is booked in the second quarter 2013 order intake.

"MPSVs are specialized vessels that are principally used to support complex deepwater subsea construction, installation, maintenance, repair and other sophisticated operations," says Frode Grøvan, Sales and Marketing Director for MacGregor Advanced Load Handling.  "We are pleased  that Hornbeck Offshore opted MacGregor's advanced 250-ton AHC subsea cranes with operational capability at depths of 3700m suitable for ultra-deepwater operations.

Petrobras will double in size by 2020. The statement was made by the Company's CEO, Maria das Graças Silva Foster, during the Offshore Technology Conference (OTC), in Houston (USA). The CEO presented the lecture "The Future of Energy in Brazil: the role of Petrobras", during the panel called "Global Energy Outlook - Shaping the Future!", with more than 250 attendees.

The CEO highlighted that production in Brazil, which was 2.2 million barrels of oil equivalent (oil and natural gas) per day in 2012, will reach 5.7 million in 2020. And the pre-salt will be largely responsible for this increase. "We (Petrobras) have made 53 discoveries in Brazil during the last 14 months. In the pre-salt alone there were 15 discoveries", she emphasized. "Petrobras' reserves have the potential to double in size and reach 31.5 billion barrels of oil equivalent in the coming years," she added. For her, there is no doubt that the results are due to the Company's investments, which have increased at a rate of 21.5% per year since 2000 and reached US$ 42.9 billion in 2012.

Investments in Research and Development during the period were also significant and important in achieving the goals: over the last twelve years, investments in this area have grown 18.3% per year, and in 2012 they reached US$ 1.1 billion. Petrobras' investment plan for the 2013-2017 period amount to US$ 236.7 billion.

Graça Foster also highlighted the Brazilian market's growing demand, which has been well above the world average. Between 2000 and 2012, the demand for gasoline in Brazil increased by 73%, compared to 17% globally. In the same period, the demand for diesel in Brazil rose 52%, compared to 31% globally. "And when comparing aviation kerosene it is even more impressive: while demand in Brazil increased 58%, it decreased 3% globally", the CEO said.

The CEO also noted that the Company's investments, together with the local content valuation policy, encouraged foreign shipyards to go to Brazil and become technological partners of the shipyards that are being implemented in the country. Some of them include partners from Japan, China and Korea.

Also taking part in the panel was Angolan Oil Minister, José de Vasconcelos, Canadian Minister of Industry, Tourism and Investment, David Ramsey, and Pemex's Director of Exploration and Production, Carlos Morales-Gil. The panel was mediated by Gamal Hassan, the person responsible for OTC's schedule.

New research reveals the impact of post-Macondo reform

US oil and gas professionals are losing their appetite for risk and are worried about rising operating costs, as they grapple with the consequences of a tougher, post-Macondo regulatory regime, according to new research published by GL Noble Denton.
Despite the new regulations, the vast majority believe that the US will continue to be a leading investment destination, and that the changes are necessary to improve the safety and reputation of the industry, according to the report.

The findings come from a study, Reinventing Regulation: The impact of US reform on the oil and gas industry, which was undertaken on behalf of GL Noble Denton, the independent technical advisor to the oil and gas industry.
The research provides a snapshot of industry sentiment towards the issue of new regulation being introduced in the US. It is based on a survey of more than 100 senior oil and gas professionals with operations in the US, and in-depth interviews with 10 industry executives, analysts and academics.

Headline findings:

·

More than eight in 10 (85%) expect the US regulatory regime to get a lot tougher over the next two years, but only 17% disagree that the US will remain a leading investment destination 
·

More than six in 10 (61%) believe the changing regime will have ‘somewhat’ negative or ‘highly’ negative effects on their business over the next two years 
·

Almost eight in 10 (78%) believe regulatory changes will lead to greater administrative workload
·

More than eight in 10 (82%) believe compliance costs will increase and nearly six in 10 (57%) believe the changes will affect their appetite for risk taking
·

Almost half (47%) believe the new regime will increase safety in the industry 
·

Only one in 10 believe the US authorities are doing a good job of preparing the industry for the new measures
·

Almost eight in 10 (76%) said they favoured a performance or goal-orientated approach to compliance, where safety and environmental targets are clearly defined, over a more prescriptive stance. The latter is more typical in the US regulatory environment.

-

Business impact

The US government is implementing a raft of regulatory measures in the wake of the Macondo incident in 2010, with the aim of transforming the industry’s safety culture. Oil and gas operators are now required, for example, to demonstrate that they are prepared to deal with a blowout and worst-case discharge, while revising their approaches to everything from well design and workplace safety to corporate accountability.


According to GL Noble Denton’s research, operators believe the US regulatory regime will get tougher over the next two years, as new rules continue to be implemented.

One likely consequence of the changes will be a rise in mergers and acquisitions (M&A) among oil and gas operators, as growing compliance costs accelerates consolidation. Almost six in 10 (57%) US-based oil and gas professionals surveyed for the research believe that M&A will increase as only larger players will be able to afford to compete for business under the new regulatory regime.

Positive change

Despite the impact of the new regulation, many oil and gas professionals operating in the US believe the changes will help to restore confidence in the industry. Almost half (47%) of those polled said the measures will improve overall safety compared with 35% who did not (a further 18% were undecided). Some operators are already adopting these tougher rules globally, in order to gain a competitive advantage over their rivals.

While some fears remain for a slowdown in investment as a result of the reforms, this is a relatively minor concern. Exactly half of the research participants believe investment in the US is set to remain constant or increase – far greater than the 25% who think that investment will decrease.

Arthur Stoddart, GL Noble Denton’s Executive Vice President for the Americas, said: “It is inevitable that the devastating Macondo oil spill would incur a strong regulatory reaction. No government could fail to act in the wake of such an incident. The regulations being implemented in the US present new challenges for oil and gas operators in terms of rising costs and workloads, but these changes are absolutely necessary to improve safety and prevent a future oil spill.

“As the new rules continue to come into force over the next two years, the sector will need to adapt to survive in a new climate. Increasing compliance costs, burgeoning legal risks and a greater administrative workload are just some of the effects that industry professionals expect to encounter. Our research shows that smaller oil and gas companies operating in the US are most likely to feel the impact of these burdens.

“Despite these challenges, there are clear opportunities for business growth in the US, and the country remains a leading operating destination for oil and gas companies. Evidence of this is seen in the strong rise in the number of on and offshore drilling permits issued to operators over the past year, suggesting a continued and healthy appetite for investment.”

Download a complimentary copy of Reinventing Regulation from: www.gl-nobledenton.com <http://www.gl-nobledenton.com>