Shell today announced an exploration discovery offshore Malaysia. The successful ‘Rosmari-1’ well is located 135 kilometers offshore in Block SK318, and was drilled to a total depth of 2,123 meters.
The well encountered more than 450 meters of gas column. With further exploration planned, the finding is a positive indicator of the gas potential in an area of strategic interest for Shell.
“Rosmari-1 is a testament to our ability to successfully drill and build understanding of new geology within our existing exploration heartlands, adding value to our existing assets in Malaysia,” said Andy Brown, Director Shell Upstream International. “We are expanding and rejuvenating heartlands across our exploration portfolio, including in Brunei, Australia and the Gulf of Mexico.”
“This adds to Shell’s sequence of recent exploration successes in Malaysia, with these discoveries expanding the company’s heartlands positions,” said Iain Lo, Chairman Shell Malaysia.
Block SK318 is Shell operated with an 85% interest, with the remaining 15% held by PETRONAS Carigali Sdn Bhd.
The cutting-edge application provides real-time data and enhances the efficiency of incident responders.
A secure, login-based GeoPortal built and hosted by the CSA Ocean Sciences Inc. (CSA) GeoSpatial Services business line has been used for tasks associated with planning, science, and operations for oil spill response. The GeoPortal serves as a tool for streamlining the planning, visualization, and coordination efforts of multiple contractors working on a cooperative damage assessment.
Specific tasks include enabling the tracking of multiple field teams on small vessels through SPOT real-time communicators; guiding operational decision-making based on observed progress of field teams; and providing an ability to assess transit times to, from, and between various study areas to improve field team efficiency, safety, and integration.
By providing a common frame of reference, the GeoPortal allows team members to store and view project-specific spatial data, including oiling observations over time, sampling designs, and sampling results. Spatial data integrated into the GeoPortal also includes GPS digital still photographs collected by field teams in airplanes, helicopters, boats, and on foot. The availability of these resources in one online location substantially improves communication and understanding among team members, regardless of location.
The GeoPortal provides intake capacity for field data and seamless migration into an enterprise database. This efficiency allows for real-time decision making to guide incident response decisions. The common operating platform is supported by ESRI's ArcGIS Server technology, which allows for "big picture" visualization and analysis. Senior Scientist Dr. Jodi Harney at CSA stated, "The GeoPortal has improved coordination, integration, and communication among teams responding to the incident and is providing a framework for subsequent data analysis and assessment." By unifying information in a common geographic context, the GeoPortal maintains diverse data in near real-time, which enables the creation of customized user-friendly reports. An example of a CSA GeoPortal can be found at https://www.csawebmap.com/geoportal.
This application is part of CSA's Marine Environmental Services for Spill Response, for which CSA assists clients in preparing for and responding to oil and gas releases and associated damage assessment. For more information on CSA's capabilities and marine environmental services associated with spill response, please visit our website at www.csaocean.com or call 772-219-3000.
CSA Ocean Sciences Inc. specializes in consulting services for Federal, State, and private industry clients in multidisciplinary projects, integrating science and technology to evaluate environmental activities throughout the world. CSA offers a wide variety of services related to environmental management and community planning to support clients working in marine, estuarine, wetland, freshwater, and terrestrial habitats throughout the United States and overseas.
ConocoPhillips (NYSE: COP) has announced that the company has donated $1 million toward building a new home for Oklahoma State University's Spears School of Business. In appreciation for this gift, OSU is naming the building's social and collaborative area the ConocoPhillips Student Lounge.
This contribution is in addition to ConocoPhillips' ongoing annual support for scholarships, programs, faculty and facilities across the OSU system.
"Oklahoma State University is grateful for the continuing support of ConocoPhillips and its employees, including many OSU graduates," OSU President Burns Hargis said. "ConocoPhillips is OSU's largest corporate donor, giving nearly $40 million through the years along with hiring countless alumni. ConocoPhillips is an Oklahoma business pioneer and leader, so we are delighted and grateful the company is helping build the new home for our business school."
The new building will serve as the eastern anchor of the university's main quad. It will significantly increase the space for Spears School of Business' 5,000 students and faculty members, becoming a magnet for attracting the region's best minds to engage in dialogue about business, entrepreneurship, economics, law and policy issues.
The ConocoPhillips Student Lounge will be a gathering place for undergraduate and graduate students, providing a central and dynamic location for collaboration, studying and relaxation between classes. The space will be filled with natural light and include ample comfortable seating, computers, study tables and entertainment options to accommodate the needs and desires of today's busy students. Students will also help in the design process to ensure it is the most inviting and visible space for their peers.
"Oklahoma State University continues to provide ConocoPhillips with top talent," said Ken Seaman, ConocoPhillips' executive sponsor for OSU and a university alum. "We're proud to continue to support the university and the Spears School of Business through this investment."
Seaman, an assistant controller with ConocoPhillips, presented the $1 million check to OSU's Dr. Ken Eastman, interim dean and associate professor of management, Spears School of Business, during a special ceremony this morning on ConocoPhillips' downtown campus in Bartlesville, Okla.
"We are proud of the relationship we have forged with ConocoPhillips and are humbled by this gift to our new business building," says Eastman. "The Student Lounge is a perfect way to honor the many Spears School graduates that ConocoPhillips has hired over the years. We look forward to continuing our partnership with ConocoPhillips so that more of our students can build great careers there."
For more information on the nationally acclaimed Spears School of Business and its progress on the state-of-the-art new facility, visit spears.okstate.edu.
As part of President Obama's all-of-the-above energy strategy to continue to expand safe and responsible domestic energy production, Bureau of Ocean Energy Management (BOEM) Director Tommy P. Beaudreau has announced that the bureau will offer more than 21 million acres offshore Texas for oil and gas exploration and development in a lease sale that will include all available unleased areas in the Western Gulf of Mexico Planning Area.
Proposed Western Gulf of Mexico Lease Sale 238, scheduled to take place in New Orleans, Louisiana, in August of 2014, will be the sixth offshore sale under the Administration's Outer Continental Shelf Oil and Gas Leasing Program for 2012-2017 (Five Year Program). This sale builds on the first five sales in the current Five Year Program, which have offered more than 60 million acres and netted nearly $2.3 billion for American taxpayers.
"The nation's economy and our national security depend heavily on adequate and reliable domestic sources of energy and the Gulf of Mexico continues to be a critical component of the Nation's energy portfolio," said Beaudreau. "This proposed lease sale underscores our commitment to make millions of acres of Federal waters available for safe and responsible exploration and development."
Sale 238 will include approximately 3,992 blocks, covering roughly 21.4 million acres, located from nine to 250 miles offshore, in water depths ranging from 16 to more than 10,975 feet (5 to 3,346 meters). BOEM plans to offer blocks located, or partially located, within the three statute mile U.S. - Mexico Boundary Area subject to the terms of the U.S. - Mexico Transboundary Hydrocarbon Agreement. BOEM estimates the proposed lease sale could result in the production of 116 to 200 million barrels of oil and 538 to 938 billion cubic feet of natural gas.
"As one of the most productive basins in the world, this lease sale is another important step to promoting responsible domestic energy production through the safe, environmentally sound development of the Nation's offshore energy resources," said Beaudreau. "The decision to move forward with this lease sale follows extensive environmental analysis, public input and consideration of the best scientific information available."
The proposed terms of this sale include conditions to ensure both orderly resource development and protection of the human, marine and coastal environments. These include stipulations to protect biologically sensitive resources, mitigate potential adverse effects on protected species and avoid potential conflicts associated with oil and gas development in the region.
BOEM's proposed economic terms include the same range of incentives to encourage diligent development and ensure a fair return to taxpayers as used in previous sales.
The terms and conditions outlined for Sale 238 in the Proposed Notice of Sale are not final. Different terms and conditions may be employed in the Final Notice of Sale which will be published at least 30 days before the sale. All terms and conditions for Western Sale 238 are detailed in the Proposed Notice of Sale information package, which is available at: http://www.boem.gov/Sale-238/. CD's and copies of the maps may be requested from the Gulf of Mexico Region's Public Information Unit at 1201 Elmwood Park Boulevard, New Orleans, LA 70123, or at 800-200-GULF (4853).
The Notice of Availability of the Proposed Notice of Sale is available today for inspection in the Federal Register at: http://www.archives.gov/federal-register/public-inspection/index.html.
Technological development and knowledge sharing are crucial for conducting prudent operations and avoiding adverse environmental impacts in the northern reaches of the Norwegian Continental Shelf.
"The precautionary principle is fundamental now that petroleum activities are advancing further and further north on the Norwegian Continental Shelf", say Ellen Hambro, Director General of the Norwegian Environment Agency, and Anne Myhrvold, Director General of the Petroleum Safety Authority Norway (PSA).
Prevention and emergency preparedness were the topics of the day on Tuesday, 8 April, at "Når ulykker truer", the accident-risk seminar held by the Norwegian Environment Agency and the PSA.
Many challenges ahead
The northern waters over the Norwegian Continental Shelf pose different potential challenges than areas further south.
Low temperatures increase the risk of icing, drift ice and collisions with icebergs. It is dark for half of the year and polar low pressure systems can bring on sudden changes in the weather with driving snow and strong winds.
Distances are also long. Operations in areas without existing infrastructure present logistical difficulties for ordinary transport and for emergency response.
At the same time, the Barents Sea and northern Norwegian Sea are known to be vital feeding, spawning and nesting grounds for many species of fish and birds. The eco-system around the ice edge is especially productive, and the combination of huge biological diversity and high levels of production make these areas extremely valuable.
The responsibility rests with the companies
The role of the Petroleum Safety Authority Norway in the efforts to protect nature and the environment from harm is primarily focused on the preventive aspect – in other words, trying to stop accidents from occurring in the first place.
The Authority's position is clear: petroleum activities must be conducted as safely in the Barents Sea as on the rest of the NCS. In practice, this means that the special natural conditions in the North may require different technical solutions than further south on the Shelf.
"In areas where the current technical solutions are inadequate, the industry itself needs to produce specific recommendations for resolving the difficulties. The responsibility for operating in a prudent manner rests with the companies. The authorities monitor that the companies are properly assuming this responsibility through consents and audits", explains Anne Myhrvold of the PSA.
Is emergency preparedness good enough?
The Norwegian Environment Agency's particular interest is emergency response to acute pollution.
"We have insufficient knowledge about how emergency response measures work in the ice-filled waters in the High North. For example, how do we handle oil spills in the ice? Many experts propose burning as an effective means of removing oil between ice floes, but it is not known how effective this is for larger oil spills", says the Environment Agency's Ellen Hambro.
Another example is using dispersants to combat oil pollution. At present, these have not been sufficiently well tested in Arctic waters.
Normally, the Environment Agency requires industry to use the best available techniques (BAT) for emergency preparedness for acute pollution. But we currently know too little about how these work when oil meets ice.
"There is a need for improvements in technology and know-how for emergency preparedness in ice-filled waters. This is an urgent issue since we are already having to deal with applications for exploration drilling for oil operations on the ice edge. The oil industry has a responsibility for providing us with the basis we need to be able to regulate petroleum activities", says Hambro.
The key message to the industry from the Norwegian Environment Agency and the Petroleum Safety Authority Norway is to think cooperatively and holistically.
A number of the operators and rig companies in Norway have experience of high-latitude and Arctic petroleum activities in other countries. This knowledge now needs to be placed on the table, shared and systematised.
"For example, in exploration drilling, it will be advantageous to have several rigs in operation at the same time. This allows more resources to be on hand if something goes wrong", say Myhrvold and Hambro.
Oil extraction is important for Norway and has broad acceptance in society. But the activity entails a risk of serious harm to the environment and natural resources.
It is important to reduce this risk as much as possible. Stringent requirements from the Environment Agency and the Petroleum Safety Authority will not solve all the problems. The oil companies need to assume their share of the responsibility. This requires cooperation and a shared understanding of which are the most important challenges.
"Precaution is the main principle underpinning our administrative activities. The industry needs to be able to say the same", is the view of the two agencies.
T.D. Williamson (TDW), a leading supplier of pipeline services and equipment, has successfully completed a pipeline pressure isolation operation in the southern part of the Norwegian North Sea on behalf of a major operator.
TDW was called in to help prepare for maintenance works on an Emergency Shutdown Valve (ESDV) on a 20-inch main gas export line. To achieve this, TDW was contracted to isolate the affected portion of the line and perform a pressure test after completion of the ESDV repairs. TDW provided a wide range of services, including gauge and batch pigging, pipeline isolation and pressure testing.
TDW needed to verify the piggability of the line to ensure that its remote-controlled SmartPlug® pipeline isolation tool would be capable of negotiating the pipeline to the set location and be easily retrieved to the launcher. For this purpose, a full-scale piggability test was carried out at TDW’s onshore test facilities prior to the offshore operation.
Remote-controlled technologies keep operation on track
Working from a platform, TDW performed a gauge pig run on the affected line to further assess the likely success of the operation. Once this was completed, preparations were made to isolate the line by pigging a batch pig 40 yards (37 meters) from the platform. This was followed by launching a triple-module SmartPlug tool, which was pigged through the ESDV until it reached its set location, just before reaching a bend in the riser. TDW technicians used the remotely-operated SmartTrack™ tracking and monitoring system to continuously monitor the SmartPlug tool as it traveled to its set destination. The SmartTrack system uses two-way, through-wall, electromagnetic communication between an external transponder and the receiver in the tool to track its progress. Once the SmartPlug tool was set, the pipeline was isolated and sealed against a pressure of 60 bar (870 psi) for 10 days.
During the isolation period, maintenance works on the ESDV were safely carried out. Upon completion, TDW verified the integrity of the repaired valve by using the third module of the SmartPlug tool to perform a pressure test at 120 bar. Replacement of a double-block and bleed valve on the ESDV necessitated a second pressure test, which was readily executed by setting the third plug module of the SmartPlug tool for a second time. Satisfied with the results, the operator returned the line to full production, secure in the knowledge that the valve had been successfully repaired. The entire operation was carried out according to plan, well within the timeframe required.
“As with every operation we execute, we worked very hard with the customer to make absolutely certain that the operation went to plan,” said Bernt Andersen, Project Manager for TDW Offshore Services. “It’s heartening to know that as a result of our joint efforts and dedication to safe working practices that the line was efficiently repaired and tested, and that we contributed to that success,” he added.
Aker Solutions won a contract worth NOK 14 billion from Total to provide a subsea production system for the Kaombo Block 32 development in Angola.
Aker Solutions will deliver 20 subsea manifolds and 65 vertical subsea wellsets. The order also includes associated controls as well as work-over and tie-in systems. The first deliveries are scheduled for the second quarter of 2015.
"This is a landmark contract and further strengthens an important relationship with a key partner," said Øyvind Eriksen, executive chairman of Aker Solutions. "It's a significant commercial achievement for our subsea business as well as an important strategic development in our expansion in Angola and the broader region."
Kaombo, one of the world's largest subsea developments, is located in block 32 about 150 kilometers off the coast of Angola.
Joint Venture Aker Solutions is committed to developing local content and project execution capabilities in Angola, where it employs about 130 people. The company has set up a joint venture with Prodiaman Oil Services Lda, an Angolan company that will execute local content activities related to this and other future Aker Solutions subsea projects in Angola.
"I am delighted to be part of this significant project with Aker Solutions for Total," said Prodiaman's president Pedro Godinho. "I look forward to seeing that this project makes significant contributions to the education system through knowledge transfer and job creation in a high-tech industry, all for the benefit of Angola."
Aker Solutions has been in Angola since 1999.
EMAS, a leading global contracting group providing offshore/subsea construction, marine, production and well intervention services, has equipped 35 vessels with Inmarsat’s XpressLink service. The company took the decision to migrate its vessels from Inmarsat FleetBroadband to XpressLink to more efficiently deliver enhanced services to its customers.
XpressLink is the world’s leading, fully-integrated Ku-band and L-band solution with VSAT and FleetBroadband terminals. It is proving highly popular with ship owners across the world with its offer of unlimited data for a fixed monthly fee, while also delivering a fully-redundant and resilient service.
XpressLink also offers an easy upgrade path to Global Xpress, which is on schedule to achieve full global coverage by the end of 2014.
“EMAS has grown rapidly over the past 20 years and we take pride in providing our clients with quality service and support,” said Mr Bennett Neo, CEO of EMAS Marine (EMAS’ offshore support services division). “We always ensure that our fleet are at the forefront of innovation and our decision to migrate our vessels’ communications system to XpressLink allows us to deliver better services to our customers in a commercial environment in which service quality is an important differentiator.”
Frank Coles, President, Inmarsat Maritime said: “Inmarsat understands the complexity of offshore support operations and we are committed to provide this sector with reliable communications solutions in order to help them manage the pressure of growing customer demands.”
With a combined fleet of over 65 marine support and offshore construction vessels and over 8,000 employees located all over the world, EMAS is a leading full field contracting group providing specialised marine support services, subsea construction and offshore installation, floating production, fabrication and well services to the global offshore energy sector coupled with a 40-year track record of providing subsea engineering solutions for the offshore oil and gas industry.
Reflex Marine, a global leader in safe marine transfer solutions to the offshore, marine and renewables industries, has become the first European company to have its technology certified by the Brazilian Navy, the accredited body for offshore safety in the region.
The certification relates to the company’s FROG-6 device and comes off the back of rigorous testing to scrutinise its capabilities.
The standard method of transfer offshore in Brazil is by helicopter and traditional rope baskets are commonly used as a contingency. However, the country’s continuing commitment to exploring evolving methods of transfer has led to Reflex Marine being approached by a number of regional operators.
Carol Richards, Reflex Marine’s regional sales manager for South America commented: “In recent years we have been working with a number of operators in Brazil to identify improvements that could be made in safety during crew transfer operations. Gaining this accreditation is a significant milestone in our relationship with Brazil’s burgeoning energy sector.
“Brazil is an important market and the interest shown by the Navy is clear evidence of the high esteem in which the skills, knowledge and expertise of Reflex Marine are held worldwide.”
In December Reflex Marine welcomed personnel from the coastguard section of the Brazilian Navy to Aberdeen to witness the testing of the FROG-6 first hand. Representatives from the Directorate of Ports and Coasts explored Reflex Marine’s industry leading FROG capsule and witnessed immersion, load, vertical and lateral impact tests.
The national oil operator for Brazil, Petrobras is one operator currently reviewing its method of crane transfer and is looking at adopting the FROG-6 for its personnel transfer requirements.
The FROG-6 provides the perfect solution as substantially increased transfer rates coupled with MedEvac capabilities, mean the device is both versatile and robust and offers clients safety, value and cost-efficiency.
The FROG-6 provides extensive protection from the four key risks of transfer including falling, collision, heavy landings and immersion. The buoyancy panels provides self-righting and floatation which protects passengers in the unlikely event of immersion in water. These buoyancy panels are coupled with a stainless steel frame to protect passengers from side impacts.
The seats are mounted on coil springs which are combined with gas dampers to protect passengers from vertical impacts and heavy landings. The polymer foam shock absorbing landing feet also help to reduce vertical impacts.
The device utilises quick release three-point harnesses which provide passenger safety, comfort, rapid egress and provides additional protection from falling. Additionally, secondary backup lifting assembly is provided to provide lifting redundancy.
If you would like to find out more about the FROG-6 or any of Reflex Marine’s crane transfer device range please visit http://www.reflexmarine.com/what-we-do/crane-transfer-devices.
Reflex Marine has an established partner based in Macae, Brazil who offers Reflex Marine products as well as inspection, maintenance, replacement parts and training. To get in contact or find out more please visit http://www.sparrowsbsm.com.br.
Platts – The U.S. Gulf is "a major success story" four years after the Deepwater Horizon oil spill, but regulators and industry must remain vigilant there and in new Arctic and Atlantic Coast exploration areas, a top U.S. official said Sunday on Platts Energy Week.
In the U.S. Gulf, "there's new activity, there have been major new discoveries," Tommy Beaudreau, director of the U.S. Bureau of Ocean Energy Management, said in an interview on the all-energy news and talk show program.
"All the projections point to increased production coming out of the Gulf of Mexico. And it is being done more safely, more responsibly than ever before," said Beaudreau, who soon will change jobs to become the chief of staff for U.S. Interior Secretary Sally Jewell.
"The challenge is to avoid a repeat of that catastrophe, while still enabling development in a region that accounts for more than 20 percent of U.S. oil production," he said.
Beaudreau said the industry in the U.S. Gulf "is as strong as it’s ever been," with oil companies "embracing" new safety regulations such as a subsea containment requirement and investing "well over $4 billion in leases alone."
Turning to the Arctic, he said it is "a very different operating environment" than the U.S. Gulf, citing Shell's problems offshore Alaska when the Kulluk mobile offshore drilling unit was grounded in 2012.
Among the lessons learned from Shell's project, he said, were that contractors need to be experienced in working in that unique environment. In addition, a company needs to "have a handle on the entire range of the operation, not just the drilling program" and has to "have good relationships with the local communities."
"We will continue working with operators who are interested in exploring there and capable of doing it the right way," said Beaudreau.
Off the U.S. Atlantic Coast, he said regulators are "going to take a hard look at" possible lease sales under the next five-year plan (2017-2022). Beaudreau cited "a number of issues" there, including the need to get "a handle on the resource" and "conflicts" such as military uses and fishing.
Other Program Highlights
In another program segment, Tom Kiernan, CEO of the American Wind Energy Association, shared findings from the organization’s new report showing wind farm construction at record-high levels. He also gave his outlook for the U.S. wind energy sector in light of a recently expired government tax credit that had promoted industry growth.
Also Sunday, Tom Murray, vice president for corporate partnerships with the Environmental Defense Fund, discussed the non-profit’s new initiative for affordable methane monitoring technology.
During Sunday’s “Market Spotlight” segment, Alison Ciaccio, an oil futures editor with Platts, explained what Americans might expect to pay for gasoline this summer, based on a new U.S. Energy Information Administration report.
Platts Energy Week airs at 8 a.m. U.S. Eastern time Sunday mornings on WUSA9 in greater Washington, D.C., and in Houston on KUHT, a PBS affiliate, as well as on other PBS stations in cities throughout the U.S., including Anchorage, Billings, Houston, Juneau, Las Vegas, Minneapolis, San Francisco, Raleigh and Wichita. For online viewing, the program is accessible at www.plattstv.com.
The program features interviews with leading figures from government, industry, markets, think tanks and the financial community. Host Bill Loveless is an editorial director at Platts who brings 30 years of energy journalism experience to the anchor chair. The program also features veteran energy news editor and Platts Energy Week Senior Correspondent Chris Newkumet.
Platts Energy Week is produced by Platts, the world’s leading source of information and intelligence on energy and related commodities and a division of McGraw Hill Financial [NYSE: MHFI] and WUSA TV, the Washington, D.C., CBS affiliate and flagship television station of Gannett Company. [NYSE: GCI]. While the program is U.S. focused and produced in Washington, it reflects the global vantage point of Platts, whose correspondents are stationed in such major capitals as London, Dubai, Singapore, Tokyo and Moscow.
Tug Fairmount Sherpa has towed rig Sevan Louisiana safely from Singapore to Curaçao. During the 11,500 miles voyage via Cape of Good Hope, stops were made in Port Louis (Mauritius), Walvis Bay (Namibia) and Port of Spain (Trinidad) to take bunkers and for crew changes.
The Sevan Louisiana is a so called Ultra Deep Water rig (UDW), built in 2013 at the Cosco shipyard in Nantong, China, for UK-based Seadrill Ltd. The self-propelled rig, equipped with eight thrusters, can accommodate up to 150 crew members.
After arrival in Curaçao the Fairmount Sherpa performed multiple cargo runs for the Sevan Louisiana. The rig will leave Curaçao on her own thrusters for her next job in the Gulf of Mexico.
Fairmount Marine is a marine contractor for ocean towage and heavy lift transportation, headquartered in Rotterdam, the Netherlands.
Fairmount's fleet of tugs consists of five modern super tugs of 205 tons bollard pull each. Fairmount Marine is part of Royal Boskalis Westminster.
Boskalis is a leading global marine and dredging contractor. With a versatile fleet of 1,000 units Boskalis operates in around 75 countries across six continents with 11,000 employees.
An Excerpt from 'Musings from the Oil Patch'
By Allen Brooks, Managing Director, PPHB
As the major oil companies struggle with how best to boost their profitability in an era of rising oilfield costs, business models are being adjusted. The changes are a reflection of managements' attempts to change the culture of their organizations. The most popular theme is to split a company's business into separate units with different investment and operational characterizations. For example, a popular way to split an integrated oil company is to put the most capital-intensive businesses – refining, petrochemicals, transportation and marketing – all in one basket, while the exploration and development business sits in another. That approach was popularized a few years ago by Marathon Oil (MRO- NYSE) and ConocoPhillips (COP-NYSE). The strategy was recently criticized by Archie Dunham, former CEO of Conoco at the time of its merger with Phillips Petroleum. His reasoning for disagreeing with this structure was that the capital-intensive businesses generated large cash flows that helped fund the capital needs of the E&P business.
Lately, a new business model is being promoted. That model involves splitting off the shale resource portion of a company's E&P operations into a separate unit in an attempt to mimic the structure, and presumably the operations, and hopefully the profitability, of an independent oil and gas company. The thinking behind this move is that the philosophy driving successful shale exploiters is quite different from that needed to exploit conventional oil and gas plays. For the major international integrated oil companies, this rationale may prove successful. What it takes to be successful in hunting for and developing elephant-type fields in deepwater and remoter egions of the world is considerably different from success in the domestic shale basins where the emphasis is on finding the optimal drilling and completion techniques and then repeating them over and over and over again with a goal of driving costs down. The strategy is the equivalent of buying bespoke goods versus mass produced items.
The two major oil companies who have recently embraced this new business model include Royal Dutch Shell (RDS.A-NYSE) and BP Ltd. (BP-NYSE). It remains to be seen how long it takes for each company to establish these new business units. In the back of the minds of many observers is the question of whether these moves are initial steps toward completely severing ties, i.e., selling or spinning off the entities. Our question with this business model structure is whether a corporate culture can be redesigned to achieve a different goal?
Exxon Mobil Corp. (XOM-NYSE) attempted a culture shift when it purchased XTO Energy a few years ago. At the time the deal was announced, observers questioned how ExxonMobil would be able to retain the key XTO managers who were used to a high degree of freedom to experiment, which is often found in smaller, independent oil and gas companies, as opposed to the monolithic and highly structured enterprise of its new parent. ExxonMobil's approach was to retain XTO's offices and management and to move ExxonMobil's shale staff in. So far this shale investment has yet to financially pay off as envisioned by ExxonMobil's management. Fortunately, the company has avoided the embarrassment of having to write down the value of its shale investment despite continued low natural gas prices and CEO Rex Tillerson's lament in 2012 that the company was "losing its shirt" in shale gas. The fact ExxonMobil has not taken an asset impairment charge as many of its peers have caused the Securities and Exchange Commission (SEC) to question the company about how it was able to avoid that fate.
According to a Wall Street Journal blog in early February, the company responded to the SEC inquiry stating that placing a value on wells that pump oil and gas for decades requires considering many factors, including future events. For example, the company has had approved a liquefied natural gas (LNG) export terminal that once in operation could lift the value of its domestic natural gas resources above the current price and, importantly, future prices as suggested by quotations in the futures market. Whether that reflects true conviction or significant leverage over the company's auditors is difficult to know.
Another way in which producers are addressing their reduced profitability is to attack their cost structures. Royal Dutch Shell says it plans to begin using cheaper Chinese oilfield equipment in order to lower operating costs. This would be a significant cultural adjustment as oil company purchasing departments are mandated to find the lowest cost equipment as long as it meets industry and company specifications. If the company has not been using Chinese equipment, the question is why?
This Chinese equipment strategy reminds us of Shell's "Drilling in the Nineties" program designed to cut E&P costs. The approach was that oilfield service companies needed to bundle all its drilling and completion offerings into a single package and then price the entire package cheaply. The problem was that Shell's drilling engineers, responsible for the success of wells and fields, wanted to make sure they could get the best equipment and services to ensure their success. If the service company that won the contract only had, for example, the number three ranked drilling fluids needed, the Shell engineer would arrange to purchase the number one product from a different service provider.
We will never forget a discussion we witnessed dealing with Shell's program that occurred at an early 1990s annual meeting of the International Association of Contract Drillers (IADC). At the end of the back and forth among the drillers about the pros and cons of Shell's program, one elderly gentleman, the president of a long-time West Texas contract driller, stood up and said, he didn't understand what all the fuss was about since this approach had been going on for decades – it was called turnkey drilling! Everyone laughed and as if a light bulb went on, the discussion ended. Drilling in the Nineties eventually disappeared only to be replaced by "Best in Class" in which the producer or driller selected the best vendor in each supply category.
The battle over price versus quality of drilling and completion equipment and services has always gone on and the winner depends on the relative tightness of the market. The tighter the market, the better it is for service companies. Likewise, the looser the market, the better it is for producers. The common thread of all the various drilling and service contracting initiatives tried in the industry was how they fostered consolidation within the oilfield service industry. That may be the same outcome this time, too.
NYC-based PIRA Energy Group believes that Asian oil markets remain supported. In the U.S., stocks built. In Japan, consumption tax increase depresses product demands. Specifically, PIRA’s analysis of the oil market fundamentals has revealed the following:
Asian Oil Markets Remain Supported
Oil prices should find increasing support moving forward as the worst of the spring crude stock building is almost behind us. Asian gasoline cracks should improve seasonally. Gasoil cracks should hold up with ongoing turnarounds and then higher demand, especially into 3Q.
Consumption Tax Increase Depresses Japanese Product Demands
Total commercial stocks rose 4.6 MMBbls due to a 4.9 MMBbl build in crude. Finished product stocks were modestly lower. Gasoil stocks drew for the eleventh straight week. All the major product demands fell back, as an increase in the consumption tax went into effect April 1st. That increase is likely to keep demands abnormally soft for the next couple of weeks and produce adverse demand comparisons to last April.
A Closer Look at Canadian Shale Liquids Potential
It is becoming increasingly likely that the next location of significant shale liquids growth will be Western Canada. A closer look at resource potential suggests that production volumes will substantially grow. There will be obstacles including cost pressures, water management, takeaway infrastructure limits and environmental concerns that will slow progress but none of these appear to be showstoppers.
Propane Stock Building Has Commenced
U.S. stock building occurred at a faster pace than last season, but propane inventory comparisons will remain far lower year-on-year. Propane exports will grow during the course of the year as new terminal capacity is added. Near term ethane usage is affected by a relatively high level of cracker downtime. The key development is the sharp escalation in spot international freight costs which is adversely impacting trade economics.
Ethanol Prices Plummet
U.S. ethanol prices tumbled the week ending April 4 as plant output increased sharply, enabling stocks to build for the second consecutive week. At the same time, prices had reached a high enough premium over gasoline that companies reduced the percentage of ethanol-blended fuel to the lowest level in about eight weeks.
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.
Noble Energy, Inc. (NYSE: NBL) has announced that Charles D. Davidson, Chairman and Chief Executive Officer, plans to retire May 1, 2015, and that he will leave the Board of Directors at that time. Mr. Davidson, age 64, has served as Chief Executive Officer and Director since joining the Company in 2000. The Board announced that it will propose the election of David L. Stover as a Director at its April 22, 2014 organizational meeting following the Annual Meeting, and that it intends to appoint Mr. Stover as Chief Executive Officer in October 2014. Mr. Davidson will serve as the Company's Chairman until the 2015 Annual Meeting. Mr. Stover, age 56, currently serves as the Company's President and Chief Operating Officer.
"Noble Energy has an exciting future that has been created over many years by an incredibly deep and talented organization," said Davidson. "I am announcing my plans to retire next year with full confidence that the team led by Dave Stover will successfully deliver our exceptionally strong growth plan over the coming years. Dave has played a key role in Noble Energy's success in recent years and has all the necessary skills to lead the Company to even greater performance in the future. While it will be extremely difficult for me to leave my fellow employees at Noble Energy, I will leave knowing that the time is right and that the Board has thoroughly planned for this leadership transition and succession."
"Under Chuck's leadership Noble Energy has been transformed into a highly successful global exploration and production company," said Michael Cawley, Noble Energy's Lead Independent Director. "He will be greatly missed when he retires, but executive succession planning has been a focus of Noble Energy's Board of Directors for many years. Today's announcement that Dave Stover will become Noble Energy's next CEO reflects the Board's extensive planning and confidence that Dave is the right leader for the future Noble Energy. With implementation of the succession plan stretching over 12 months, we anticipate this to be a smooth and seamless transition."
Mr. Stover was elected President and Chief Operating Officer of Noble Energy in April 2009. Prior to that, he served in several other executive positions following his joining the Company in 2002. Before joining Noble Energy, he was employed by BP America, Inc., Vastar Resources and Atlantic Richfield. He holds a bachelor's degree in petroleum and natural gas engineering from Pennsylvania State University and has approximately 35 years of industry experience.
Noble Energy is a leading independent energy company engaged in worldwide oil and gas exploration and production. The Company has core operations onshore in the U.S., primarily in the DJ Basin and Marcellus Shale, in the deepwater Gulf of Mexico, offshore Eastern Mediterranean, and offshore West Africa. Noble Energy is listed on the New York Stock Exchange and is traded under the ticker symbol NBL.
Wood Group has acquired Cape Software ("Cape"), a Texas provider of simulation software and services for operator training and logic validation for SCADA and DCS industrial control systems used by the oil & gas and other process-based industries. Cape will become part of the MSi Kenny Products business within Wood Group Kenny. Cape's revenue for the year to December 31, 2013 was around $5 million.
Cape's VP Link® software product, used to simulate process responses on control networks and for interactive operator training, complements MSi Kenny's more comprehensive Virtuoso® simulation modeling technology, which is used for pipelines and processes. The companies' previous collaborations have resulted in the development and implementation of integrated operator training systems for upstream offshore oil & gas facilities, enabling critical unit operations to be rigorously modeled.
Michael Mai, a member of the Wood Group Kenny leadership team and president of MSi Kenny, said: "The acquisition of Cape expands our product and service portfolio for customers worldwide and is an important part of our technology-led growth strategy. VP Link broadens our existing operator training simulator to include a full-featured, hardware-based solution, so operators can train on the same type of equipment they will operate in the control room.
"Cape also provides us with an avenue to bring our simulation technology to other industries for cost-efficient process optimization and monitoring. As process safety continues to be a core concern across industries we intend to expand on Cape's proven track record in the SCADA/DCS and safety systems verification market through Wood Group's global footprint. Cape's technology and culture are well aligned with MSi Kenny's as demonstrated by our innovative technology collaboration on previous simulator projects for major oil & gas operators."
- Relocates its Norwegian oil & gas HQ to Stavanger, led by Marianne Hauso -
DNV GL, the leading technical adviser to the oil & gas industry, is relocating its oil & gas head office in Norway from Høvik to Stavanger in order to be even closer to its customers. Local delivery capacity will be expanded in Stavanger and Bergen and operations will continue in Høvik, Sandefjord, Trondheim and Harstad. DNV GL's operations in Norway are led by Regional Manager Marianne Hauso.
"The oil and gas industry is facing rapid changes, increasing costs and growing public scrutiny on its safety and environmental performance. Since the merger of DNV and GL, we have even more experts holding broad insight in all technical areas, which is critical in helping our customers have safe, reliable and efficient projects and operations. So it's very timely to expand our footprint in the West Coast of Norway," said Marianne Hauso, DNV GL Regional Manager, Norway.
"As the industry moves into increasingly challenging environments and the lifespan of mature assets is being extended, technological innovation is increasingly important to grow performance. Technology is clearly a huge enabler for the industry, but the price of getting new technology wrong can be huge. That's why we spend 5% of our revenue on innovation, running joint industry projects, providing technology qualification services and developing the world's most recognised standards."
The office in Stavanger delivers a broad range of services related to all development phases including exploration, development, operation and decommissioning. In these phases DNV GL delivers services and competences within the areas of Inspection and Maintenance management, Asset integrity, Structure integrity, Offshore crane integrity, Safety and Environmental Risk Management, Technology Qualification, Working Environment, Material selection and Pipeline installation.
"We welcome DNV GL's expansion in Stavanger. The company's global presence and technical expertise makes the Stavanger region an ideal location. Stavanger is a great technology city with abundant talent, knowledge and experience and our growth ambitions for the energy capital of Norway and those of DNV GL are well matched," said the Mayor of Stavanger, Christine Sagen Helgø
DNV GL Oil & Gas, Norway in a nutshell:
• Will be headquartered in Stavanger, Western Norway
• Over 800 oil & gas employees in Norway: Stavanger (100), Bergen (90), Trondheim (50), Harstad (10), Sandefjord (20), Høvik (530)
• Plan to increase staff in Western Norway by 10% in 2014
• Deep industry expertise, particularly in challenging operating environments gained from experience working in North Sea and Arctic projects.
• Provides integrated services in technical and marine assurance and advisory, risk management advisory and offshore classification.
• Maintains and further develops its technology edge through launching new Joint Industry Projects (JIPs) in strategic areas
Marianne Hauso took on the role of regional manager in mid-September last year, prior to which she was regional manager for the oil & gas risk management services. Her area of responsibility includes all services provided by DNV GL to the Norwegian oil and gas industry, with the only exception of classification services for mobile offshore units.
Marianne has been with legacy DNV for 18 years; since she graduated from NTH in Trondheim as a Naval architect in 1995. Since then she has held several different positions, starting out as a safety risk management engineer and -consultant, and moved later into different manager positions in Norway.
Hoover Container Solutions ("Hoover" or the "Company"), a subsidiary of Hoover Group, Inc., has acquired Dolphin Energy Equipment LLC ("Dolphin"), a leading provider of cargo and waste management rental equipment and related consumables in the Gulf of Mexico region.
Headquartered in New Iberia, La., with a distribution and service center in Port Fourchon, La., Dolphin's assets include a diversified fleet of cargo carrying units ("CCUs") certified to the highest standards including DNV and API regulations. Dolphin is best known for its offshore baskets, trash compactors, food disposal units, pipe slings and related consumables and services.
The combined company will be a premier supplier of chemical, cargo and waste management tanks, baskets, containers and related accessories and services in the global energy marketplace. The acquisition of Dolphin complements the acquisition of Consult Supply A/S which was completed in 2012. Based in Stavanger, Norway, Consult Supply (soon to be Hoover Norway) provides an extensive range of products in the North Sea market including chemical tanks, cutting boxes, baskets and specialized workshops and containers all certified to DNV 2.7-1 standards.
As leaders in the Gulf of Mexico, the combined Hoover-Dolphin team will continue to provide a diverse product range and robust customer services to its customers across the region. Hoover will now provide its customer base with a full range of products including tote tanks (IBCs), offshore chemical tanks, transport frames and bottle racks, ISO Tanks, standard and specialized baskets, cutting boxes and waste skips, dry goods containers, slings, trash compactors, food disposal units and various other related products and services including tank cleaning, technology and transportation.
Hoover's Chief Executive Officer, Donald Young said, "With operations in Louisiana, Houston, Norway, Australia, Brazil, Malaysia and Abu Dhabi the Hoover footprint now covers nearly all the major oil and gas regions around the world. The combined Hoover-Dolphin fleet is one of the largest in the Gulf of Mexico region and makes Hoover one of the only worldwide companies to offer a full range of cargo carrying units including chemical, cargo and waste management products to the Gulf of Mexico market. This acquisition puts us in a stronger position to leverage the upturn in the offshore industry."
"The combination of Hoover and Dolphin will allow us to provide a more complete product and service offering to our customers." said Chad Vidrine, President of Dolphin Energy Equipment. "We are excited to work with the Hoover team because both teams share a similar commitment to high quality products and superior customer service."
Donald Young, Chairman and Chief Executive Officer and Paul Lewis, President and Chief Operating Officer, of Hoover will continue in their roles in the combined entity. Chad Vidrine, President of Dolphin, will become General Manager of Hoover's new subsidiary, Hoover Offshore, LLC. Robbie Monlezun will continue in his role as Regional Operations Manager of Hoover's new distribution and service center in Scott, Louisiana. As part of the transaction, Cornelius Dupre II, Chairman of Dolphin, will become a shareholder of Hoover Group, Inc. and join the Company's board of directors.
The corporate headquarters of the combined companies will be located in Houston, Texas, with distribution and service centers in Scott, New Iberia and Port Fourchon, La.
Driven by a major strategic expansion of its operations in Singapore, the MacArtney Group is significantly growing its presence and activities in all Asian markets for underwater technology.
Over the next few months, MacArtney Singapore is securing several new staff members, implementing a major expansion of stock and workshop facilities and opening a dedicated slip ring repair and service center. What is more, the MacArtney Singapore operations will be streamlined to provide direct local access to global MacArtney support for all Asian and Asia Pacific markets.
MacArtney in Asia
With experienced and long standing MacArtney sales professional, Steen Frejo, at the helm as Managing Director, the MacArtney Singapore area of operation has expanded to encompass the entire Asian and Asia Pacific region including major markets such China, Japan, South Korea, Taiwan and support for MacArtney's Australia based office.
In addition, MacArtney Singapore will actively manage the coordination of the entire Asian representative network. Empowered by local market expertise and access to clients, these MacArtney representatives comprise an invaluable asset to the regional success of MacArtney products and systems.
With the expanded MacArtney Singapore operations, MacArtney is able work even closer with its regional representative network which will also benefit from direct access to the Singapore based stock of MacArtney and SubConn® products.
Demand for local supply with global support
To local offshore oil and gas, marine renewable energy, oceanographic and defence industries, the expansion of MacArtney Singapore will mean shorter lead times and better local service for underwater technology systems and products. Further adding to the list of the advantages, direct MacArtney technical support is enabled through the limitation of time zone differences - and with local language proficient sales and technical staff in place at the Singapore office, MacArtney clients and representatives alike will have access to Asian as well as English language support. "The expansion of MacArtney Singapore will definitely bring us much closer to our Asian customers than what has been possible so far", says Steen Frejo and continues: "What started as a one-man regional sales outpost, has now become a fully fledged MacArtney location with local access to global support".
A good start
Since the official opening one year ago, MacArtney has received a warm welcome by all Asia Pacific marine technology markets and segments. Spearheaded by a surging interest in integrated MacArtney system solutions, this development is present across the entire MacArtney portfolio. A good example is the Asia based demand for MacArtney winch and handling solutions which has recently seen a MERMAC S winch system delivered to a defence client in Taiwan, a powerful Active Heave Compensation MERMAC R winch ordered by a Chinese scientific institute and a complete MERMAC research vessel winch solution ordered by a Japanese oceanographic institute.
In partnership with Teledyne ODI, MacArtney France will provide the underwater mateable connectors needed to realize the Mediterranean Eurocentre for Underwater Sciences and Technologies (MEUST) neutrino observatory project.
The MEUST project is a second generation deep-sea neutrino observatory infrastructure project integrated in the European network of neutrino telescope KM3NeT and deep sea observatory EMSO. This new infrastructure is the km3 scale successor of the revolutionary ANTARES underwater neutrino telescope for which MacArtney supplied all the cables and connectors. The MEUST infrastructure will be installed in the Mediterranean Sea approximately 45 kilometers off Toulon, France, at 2500 meters water depth.
Detecting the undetectable
The neutrino is the most elusive of the elementary particles and as they travel almost unimpeded through all matter, observable collisions with atoms are rare. However, because trillions of neutrinos pass through the earth every second, there are sufficient impact flashes to be detected by an array of sensors. These flashes can only be detected if all light sources are filtered out and therefore, the absolute darkness at 2500 metres depth is the best place to observe them.
Scaling up the successful approach deployed by ANTARES, the MEUST project will utilise a vast array of underwater photomultiplier sensors to detect and study neutrino collisions. Compared to ANTARES, MEUST will ultimately increase the sensitivity of neutrino detection by more than a factor twenty (20x).
The MEUST underwater infrastructure is mainly composed of several instrumented neutrino astronomy mooring lines called DU (Detection Units), which are connected to a seabed infrastructure of nodes and cables. One DU is comprised of neutrino detecting DOM (Digital Optical Modules) on an 800 metre flexible line.
The present phase of the project is bound for installation in 2014 and includes the main cable and one node onto which the first lines will be connected soon after.
The seafloor connectivity infrastructure needs to provide power and transmit data between instrumented mooring lines and shore. This is achieved by means of a telecommunication cable connected to an offshore node, onto which user ports allow the connection of lines using interconnection cables equipped with wet mateable connectors. MacArtney France will supply Teledyne ODI wet mateable connectors to equip the node and the interlink cables between detection units and between detection units and nodes.
MacArtney and Teledyne ODI
Teledyne ODI wet mate interconnect technology is installed on many subsea observatory projects around the globe and a strong foothold of service, support and reliability was established with the ANTARES and other neutrino observatory projects. "A significant contribution to the success of these programmes lie with the technical expertise, local engineering, business development and capability of the MacArtney France team" says Teledyne ODI and continues: "This open collaboration has been very successful for over ten years and has set the template for continued success with the expanded MEUST observatory. There is a need for local technical expertise to assist in qualifying and defining configuration enhancements and on-site engineering support as well as leading the commercial negotiations and achieving the awards. The MacArtney France team fills this role with unequalled dedication and finesse to our mutual benefit. The entire Teledyne ODI team is proud of the relationship and cooperative business development successes that have been realised through working closely with MacArtney France and we look forward to continuing this successful model".