Gulf producing states to share in revenue from GOMESA blocks

As part of President Obama’s all-of-the-above energy strategy to continue to expand safe and responsible domestic energy production, the Bureau of Ocean Energy Management (BOEM) has announced that it will hold Gulf of Mexico Eastern Planning Area oil and gas lease sale 225 in New Orleans on March 19, 2014, immediately following the proposed Central Planning Area (CPA) Sale 231.

Proposed Sale 225 is the first lease sale proposed for the Eastern Planning Area under the 2012 – 2017 Outer Continental Shelf Oil and Natural Gas Leasing Program, and the first sale offering acreage in that area since Sale 224, held in March of 2008.

“This proposed sale is another important step to promote responsible domestic energy production through the safe, environmentally sound exploration and development of the Nation’s offshore energy resources,” said BOEM Director Tommy Beaudreau.

The proposed sale encompasses 134 whole or partial unleased blocks covering approximately 465,200 acres in the Eastern Planning Area. The blocks are located at least 125 statute miles offshore in water depths ranging from 2,657 feet (810 meters) to 10,213 feet (3,113 meters). The area is bordered by the Central Planning Area boundary on the West and the Military Mission Line (86º 41’W) on the East. It is south of eastern Alabama and western Florida; the nearest point of land is 125 miles northwest in Louisiana.

Of the 134 blocks available in this sale, 93 are located in the same area offered in 2008’s Eastern Planning Area Sale 224 and are subject to revenue sharing under the Gulf of Mexico Energy Security Act of 2006 (GOMESA), which provides that the states of Alabama, Mississippi, Louisiana and Texas share in 37.5 percent of the bonus payments. These four Gulf producing states will also share in 37.5 percent of all future revenues generated from those leases. Additionally, 12.5 percent of revenues from those leases are allocated to the Land and Water Conservation Fund. The remaining 41 blocks, located just south of that area, are not subject to revenue sharing under GOMESA.

BOEM estimates the proposed lease sale could result in the production of 71 million barrels of oil and 162 billion cubic feet of natural gas.

The decision to move forward with plans for this lease sale follows extensive environmental analysis, public comment, and consideration of the best scientific information available. In October, BOEM published a Final Environmental Impact Statement (EIS) for proposed Eastern Planning Area Sales 225 and 226. The Final EIS updated information gathered in three previous EIS’s. EPA Sale 226, scheduled for 2016, is the only other Eastern Gulf of Mexico lease sale proposed under the current Five Year Program.

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.

All proposed terms and conditions for Lease Sale 225 will be finalized when the Final Notice of Sale is published at least 30 days prior to the Sale.

The Notice of Availability of the Proposed Notice of Sale can be viewed today in the Federal Register at: www.archives.gov/federal-register/public-inspection/index.html. Proposed terms and conditions for the sale are fully explained in a new streamlined format, available at: www.boem.gov/Sale-225/.

CD’s of the sale package as well as hard copies of the maps can be requested from the Gulf of Mexico Region’s Public Information Office at 1201 Elmwood Park Boulevard, New Orleans, LA 70123, or at 800-200-GULF (4853).

The Gulf of Mexico contributes about 25 percent of U.S. domestic oil and 11 percent of domestic gas production, providing the bulk of the $14.2 billion in mineral revenue disbursed to Federal, state and American Indian accounts from onshore and offshore energy revenue collections in Fiscal Year 2013. That was a 17 percent increase over FY 2012 disbursements of $12.15 billion, due primarily to $2.77 billion in bonus bids received for new oil and gas leases in the Gulf of Mexico

The 2012-2017 Five Year Program offers nearly 219 million acres on the U.S. Outer Continental Shelf for lease, making all areas of the OCS with the highest oil and gas resource potential available for exploration and development. The plan includes up to 15 lease sales in the Gulf of Mexico and Alaska. The first three sales under the Five Year Program offered more than 79 million acres for development and garnered $1.4 billion in high bids.

AMEC, the international engineering and project management company, has been awarded a Project Management Consultancy services contract by Abu Dhabi Marine Operating Company (ADMA OPCO) for their Umm Lulu Phase-2 full field development projects offshore United Arab Emirates (UAE).

The contract is worth $124 million (£76 million).

This five-year contract follows a previous award from ADMA OPCO in 2011 for the provision of services for the first phase of Umm Lulu and the Nasr phase 1 project.

Under this latest contract AMEC's scope of work includes project management of the engineering, procurement and construction contractors who are delivering a large offshore super complex located in the Umm Lulu Field. The complex will comprise six bridge-linked platforms including gathering, separation, gas treatment and water disposal facilities, utilities and accommodation modules. The work is being delivered from the UAE and is expected to create 100 additional jobs for AMEC in Abu Dhabi.

"Further expansion in the Middle East is a key part of AMEC's growth strategy," said Ross Gibson, Operations Director, Gulf and North Africa. "It is good to see we are winning repeat business based on our previous performance and strength of our local capabilities."

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Southern Louisiana base to serve growing number of oil & gas vessels calling at Gulf ports

GAC has strengthened its ship agency services in the US with the opening of a new office in Galliano, Louisiana, in response to the increase of offshore oil & gas activity in the region.

The new GAC Shipping USA office near Port Fourchon, Morgan City and Amelia enables the leading provider of shipping, logistics and marine services to better serve the needs of customers with vessels calling at the ports.
Port Fourchon is the region's main port supporting offshore oil & gas activity, whilst Morgan City is considered the birthplace of the US offshore oil exploration industry and most tonnage handled at the ports is related to the oil & gas sector. The Galliano office is therefore well placed at the heart of the action to attend GAC's customers' offshore construction, cargo and supply vessels calling at either port.

Office space is available for Principals, if required for hands-on support during projects, mobilizations or demobilizations of their vessels at Fourchon. The base also has a warehouse and outside storage to cater for the staging or storage of equipment or supplies, rather than trucking the material at short notice from Houston or New Orleans.

"This is an important new addition to our network of bases serving our customers," says Darren Martin, GAC Shipping USA General Manager. "We are working closely with GAC Logistics in Houston to offer all our oil & gas customers our full range of services to support their offshore activities in the Gulf."

In addition to the new base in Galliano, GAC Shipping USA's extensive network of offices includes port agents at Houston, New Orleans, Mobile, Port Arthur, Pascagoula, Corpus Christi, Freeport TX and Tampa.

Saltire Energy, supplier of drilling tools to the offshore oil & gas industry, has posted its annual results (year end to June 30, 2013) with turnover up more than 50% from £21.5million to £32.9million.

Operating profit for the year has also risen from £14.1million to £18.5million.

Mike Loggie, Chief Executive of Saltire Energy, said: "The last 12 months has seen steady growth in our business in the UK and across our international operations.

"As a company, our focus is on delivering high quality equipment and services for our clients and we have seen a significant rise in our activities in the Middle East, Africa, Asia Pacific, the UK and North Sea. This has supported growth in our turnover across the company.

"Over the coming months, we plan to increase our footprint in Aberdeen with the expansion of our facilities in Portlethen and expand our presence in Europe with the opening of a further base.

"Developing our equipment inventory has been a strong focus and last year we invested £10million back into the business, which we have done again in 2013 to extend our suite of industry accredited drilling tools and pipe. This allows us to continue to meet the needs of our clients and fuel further growth of the business."

Since the company was established in 1986, it has developed a strong reputation for delivering high quality customer service and flexibility, increasing its global presence through strong industry networks and agent partnerships.

Mike continued: "The company would not be where it is today without the skills, expertise and commitment of our team. Earlier in the year we further strengthened our management structure with the appointment of Craig Mitchell as a director. We have bolstered our staff numbers with the addition of 10 new personnel, taking our workforce to 52, with plans to grow this further in the next 12 months."

Saltire Energy has also maintained its commitment to the community with support for local charity Befriend a Child and has financially supported the Saltire Sports for Schools initiative to date, contributing £500,000 to the project, with this figure likely to rise year on year by approximately £50,000. This has enabled approximately 2,000 children from five local primary schools, some of which are located in the city's designated regeneration areas, to develop their sporting and interpersonal skills at Aberdeen Sports Village's state-of-the-art sporting environment.

The company is also a major funder of the Aquatics Centre, one of only two Olympic standard facilities in Scotland, which is set to open in early 2014.

Saltire Energy is also a strong supporter of the university scholarship programmes and sponsorship of Open Champion and Ryder Cup hero Paul Lawrie.

Statoil has obtained 100% equity share in an exploration permit in the Reinga-Northland Offshore Release Area in the New Zealand Block Offer 2013.

The permit covers approximately 10,000 square kilometers and is located approximately 100 kilometers from shore to the west of New Zealand's North Island, in water depths ranging from 1,000 to 2,000 meters.

"We are very pleased with the award, which is in line with the sharpened exploration strategy Statoil has pursued over the last three years. Safe and secure operations are our first priority as we proceed to explore the permit's potential," says Erling Vågnes, senior vice president for Statoil's exploration activities in the Eastern hemisphere.

The work program is designed to fully evaluate the prospectivity of the permit in a staged manner within the 15-year permit timeframe. Statoil is committed to collect new 2D seismic data and to undertake a multibeam seafloor survey with selected core samples within the first three years. Following an analysis and interpretation of this data, Statoil will decide on further steps.
"Health, safety and the environment (HSE) is always Statoil's first priority. We will draw on our broad global experience in seismic data collection to secure safe operations offshore New Zealand," says Vågnes.

Statoil will now enter into an extensive dialogue process with New Zealand authorities, and engage with a wide range of stakeholders in order to understand the local community, and ensure adherence with local regulations, customs and considerations.

"Statoil strongly believes in a good dialogue with the communities we operate in," Vågnes says.
"New Zealand authorities have emphasized that Block Offer 2013 is an important step towards realizing the potential of New Zealand's oil and gas resources. We are glad that our bid was accepted and look forward to being a part of New Zealand's next phase in oil and gas development."

As a result of the agreement, MOLTECH is granted rights and responsibilities as VIKING's sole agent and distributor in Japan for the sales of VIKING's marine life-saving and fire-fighting products to Japanese shipyards and owners.

Marine and fire safety equipment leader VIKING Life-Saving Equipment (VIKING) and MOL Techno-Trade Ltd. (MOLTECH) have entered a strategic alliance and sole agency agreement, establishing MOLTECH as the exclusive agent for VIKING in Japan.

MOLTECH will be offering the full range of VIKING's safety solutions including the industry leading Shipowner Agreements (SOA) - agreements that combine global product availability and servicing with financing in fixed price structures and the convenience of VIKING's management of the service schedules. The Shipowner Agreements are planned and monitored from a single point of contact and were an industry game-changer, when first introduced back in 2009.

VIKING has already enjoyed many years of representation on the Japanese market and the role of existing distributors remains unchanged, however, under the control of MOLTECH.

"The agreement is a tremendous milestone for VIKING and will ensure that our products and solutions are widely available to shipowners and shipyards in Japan", says Henrik Uhd Christensen, CEO of VIKING Life-Saving Equipment, and continues:

"MOLTECH has demonstrated a capability to drive bottom line results by bridging interests and finding solutions that satisfy both Japanese and non-Japanese interests and different cultural dimensions. Further, being part of the MOL family of companies MOLTECH has the inherent capability to execute the business level which VIKING targets in the Japanese market. This provides us with the foundation of a dynamic and enduring relationship."

The Statfjord A platform in the North Sea actually should have been shut down several years ago. Statoil, Centrica and ExxonMobil have now decided to extend production from the platform until 2020.

"Statfjord A is our oldest platform and represents the history of the company's inception. The extension means that Statfjord A will still be in operation when the new giant Johan Sverdrup comes on stream. The size of the Statfjord field is unique, making it a significant part of the history of the Norwegian shelf for 40 years. We will take the experiences from Statfjord with us in our work with Johan Sverdrup, which has a horizon of 40 years," says Atle Rettedal, director of production for the Statfjord field. 

Originally, the partnership hoped to recover 40% of the oil in the Statfjord field. The outcome so far is a record 66%. The global average for oil fields is 35%. The goal is to recover 74% of the gas from Statfjord.

"We are reaping the benefits of the efforts we have invested over many years in that we will now manage to recover even more of the resources in a manner that creates value for the owners and for society," Rettedal continues.

From bold decision to successful implementation
Statfjord has gone from its original status as an oil field to the present, where mainly gas is produced and is sent to customers on the Continent and in the UK.

The Statfjord A platform in the North Sea. (Photo: Harald Pettersen/Statoil)

The fact that the Statfjord field still has many years of production ahead of it is the result of the partnership's bold decision ten years ago to rebuild the entire field to produce gas (Statfjord late life).

Good work by Statoil's own organisation, partners and suppliers all these years - along with NOK 23 billion in investments - have also been important contributions in maintaining the production.

Each year, 2,500 full-time equivalents are invested in the Stat fjord field, including the contribution from the suppliers, to enable safe and efficient operations.

Active drilling program - an active drilling program is contributing to the continued maturation of recoverable reserves on Stat fjord. By the time 2013 draws to a close, we will have drilled 11 wells, while 10 new wells are planned for 2014.

Impressive production/track record
- The Stat fjord field has produced more than 4.7 billion barrels of oil equivalent. Stacked up on top of each other, the oil barrels would have yielded 10 towers reaching from the earth to the moon.

Stat fjord A's highest producing well, A-06, has produced 120 million barrels on its own, more than many of the field developments we see today.
The production record for a single day was set on 16 January 1987, when 850,204 barrels of oil were produced.

Licensees on the Stat fjord field: 
Statoil Petroleum AS (44.34% - operator), ExxonMobil Exploration and Production Norway AS (21.37%) Centrica Resources (Norway) AS (19.76%) and Centrica Resources Limited (14.53%).

NYC-based PIRA Energy Group reports that improving VMT and trucking trends confirm better highway fuel demand growth. On the week, U.S. product stocks declined again, while in Japan crude stocks built. Specifically, PIRA’s analysis of the oil market fundamentals has revealed the following:

 Improving VMT and Trucking Trends Confirm Better Highway Fuel Demand Growth

The Federal Highway Administration recently released vehicle miles traveled (VMT) data for August, while the American Trucking Association released its Truck Tonnage Index for September.  Both indicators showed improvements versus year-ago, and this confirms the improvement in both gasoline and estimated on-highway diesel demand growth.  PIRA's forecast through year-end, for both gasoline and diesel, suggests that both these indicators from FHA and ATA should continue their improving trend. 

Another Huge U.S. Product Inventory Decline

Overall commercial oil inventories in the United States fell almost 6 million barrels for the week ending November 8, with a product inventory decline more than offsetting a crude stock increase. Product inventories have declined for nine consecutive weeks, falling over 42 million barrels but are expected to moderate over the next few weeks. With crude runs strongly moving up, this should translate into crude stock declines, particularly at the Gulf Coast. The stock excess to last year narrowed this past week. 

In Japan, Runs Continue Rising, Crude Stocks Build

Runs continued rising post-turnaround and crude imports stayed sufficiently high to produce another large crude stock build. Gasoline and gasoil demands eased but their yields were notably lower so stocks of both were only modestly changed. Kerosene demand eased slightly but yield jumped such that stocks resumed building. Refinery margins moved slightly higher as light and heavy cracks showed modest improvement. 

Tight LPG Markets

U.S. propane markets remain quite tight as crop drying, exports, petchem feed use and meeting winter needs combine to pull stocks lower. Propane has reached its highest value relative to WTI so far this year. Various supply limitations are helping pressure international prices higher just as winter weather is approaching. LPG has been priced out of the chemical feedstock pool.

U.S. Ethanol Prices Decline

Most ethanol prices declined early the week ending November 8 before advancing thereafter due to strong domestic and export demand, as well as higher corn prices. Cash margins for ethanol manufacture fell to the lowest level in 11 weeks.

EPA Proposes Biofuel Requirements for 2014

Friday afternoon, the EPA issued a regulatory announcement that proposes to substantially reduce the 2014 biofuel requirements set forth in the Renewable Fuel Standard (RFS2). The Agency proposed specific volumes and is soliciting comments for selecting a value from specified ranges for total, advanced and cellulosic biofuels. 

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. 

Business Monitor has just released its latest findings on Indonesia's oil and gas sector in its newly-published Indonesia Oil & Gas Report.

Business Monitor believes that the outlook for Indonesia's oil and gas sector is becoming increasingly uncertain. They forecast a long-term decline in total liquids production and a stagnation of gas production. This is mainly a result of the slow pace of exploration and development, exacerbated by an increasingly uncertain regulatory environment as resource nationalism creeps into the government's policy towards the sector. Opportunities for exports will be further compromised by the domestic market's increasing energy demand. Hence, falling oil and gas exports is another key trend identified for Indonesian oil and gas.

Key Trends and Developments discussed in the report:

■ Business Monitor forecast that oil and gas reserves will most likely be on a downward trend in the coming decade: oil reserves are expected to decrease from an estimate of 4.0bn barrels (bbl) of oil at the beginning of 2013 to 3.7bn bbl in 2017, falling further still to 3.4bn bbl by 2022. For gas, they expect reserves levels to be stagnant as addition from exploration successes in East Kalimantan cancels out natural depletion from existing fields. Reserves are forecast to fall from 3.07tcm in 2013 to 2.80tcm in 2017, and fall further to 2.51tcm unless the pace of drilling activity picks up.

■ Despite this outlook, Indonesia is a country where much below-ground potential continues to exist. If the country relaxes its nationalist stance on resources, there is considerable upside potential for both oil and gas reserves - greater drilling of its unexplored deepwater areas and its unconventional resources - coalbed methane and shale gas.

Business Monitor expect total liquids production (excluding refinery processing gains) to rise from an estimate of 919,670b/d in 2013 to 926,180b/d in 2014 and 932,260b/d in 2015, owing to major fields finally coming on-stream or ramping up to their full production capacity. Thereafter, in the longer term Business Monitor see oil output trending downwards to 884,840b/d in 2017 and hitting a low of 808,280b/d by 2022.

Despite grand plans to expand the country's refining capacity, difficulty in financing greenfield projects on top of modernising old plants in a unfavourable policy environment will see limited change to Indonesia's downstream landscape. Business Monitor expects refining capacity to stay stagnant at around 1.12mn b/d from 2015 through to the end of their forecast period. Total refined oil product output is expected to rise initially from an estimate of 981,840b/d in 2012 to 990,600b/d in 2016 - a result of an increase in output from modernised Cilacap and Balikpapan. However, growing inefficiencies in older plants could reverse this uptrend as utilisation rate falls, thereby leading to a slide in production downwards to 973,840b/d by 2022.

Owing to production problems, Business Monitor expect total gas production to have fallen to 71.3bn cubic metres (bcm) in 2012. Major gas projects expected on-stream in the next five years should support a slight rise in production, which they forecast at 77.0bcm in 2017 as declining production rates from existing fields will be cancelled out by new gas developments. Thus Business Monitor expect production levels to stay relative stagnant at 76.7bcm by 2022. Regulatory risks remain great and policy uncertainty underpins their sombre outlook of Indonesia's gas production within their 10-year forecast period. The country's gas consumption is estimated at 39.1bcm in 2012. With an increasing amount of new gas from projects reserved for the domestic market, this allows room for domestic gas demand to grow to about 48.0bcm in 2017 and hit 55.7bcm by 2022.

Greater confidence in Indonesia could be inspired if there is a more consistent policy towards the oil and gas industry; for one, the permanent establishment of a new upstream regulator to replace BPMigas. Temporary regulator (at time of writing), SKKMigas, has yet to be made permanent. Given the corruption scandal plaguing the make-shift regulator, it is unlikely to receive full regulatory authority anytime soon in the future. Moreover, proposed plans could see SKKMigas assume the identity of a stateowned firm - renamed as the National Upstream Oil and Gas Development Company (PPMN) - which could take a participating interest in projects it jointly signs with contractors.

At the time of writing Business Monitor assumed an OPEC basket oil price for 2014 of US$101.80 per barrel (bbl), falling to US$100/bbl in 2015. Global GDP in 2014 is forecast at 3.1%, up from an assumed 2.6% in 2012. For 2015, growth is estimated at 3.3%.

Petrobras has acquired, alone or in partnership, 49 blocks, out of the 50 to which the company presented offers, in the 12th Bidding Round held today by the Brazilian National Petroleum, Natural Gas and Biofuels Agency (ANP). Among the blocks acquired, 22 were in partnership, and 16 of them will be operated by Petrobras and 6 by partners. The value of signature bonus to be paid by Petrobras is R$ 120 million, in addition to R$ 23 million to be paid by partners. The sum of these amounts, which reaches approximately R$ 143 million, corresponds to 87% of the total bonus to be collected in the round.

In addition to the signature bonus, the Minimum Exploratory Program (MEP) to be applied on the block, expressed in units of work (UWs), and the percentage of local content in the exploration and production phases were also taken into account as judgment criteria in the bidding.

The blocks offered in the 12th Bidding Round are located in new exploratory frontiers andin mature basins. The strategy adopted by Petrobras in the bidding is aligned with the goal of the company to increase its reserves and production of natural gas in the vicinity of existing production facilities, by expanding the knowledge on Brazilian sedimentary basins and diversifying its exploration investment. The participation of Petrobras in consortiums is in line with the objective of strengthening partnerships with national and foreign companies in order to foster integration of knowledge and technologies used in the exploration and production onshore.

Among the new frontier basins, located in areas with little geologic information or technological barriers to be overcome, Petrobras has invested primarily in Paraná and Acre-Madre de Dios basins, seeking to identify new producing provinces with a focus on natural gas. In these basins, the Company has acquired 10 out of 11 blocks in which the Company submitted a proposal.
In mature basins, Petrobras purchased all 39 blocks in which it submitted a proposal. The company made offers to both basins of Sergipe-Alagoas and Recôncavo, in blocks near to production areas that can have synergies with the existing infrastructure.

Unique System FZE, a Unique Maritime Group company, which is one of the world's leading integrated turnkey subsea and offshore solutions provider, engineered and supplied a monitoring system that will provide the Abu Dhabi Oil Company Ltd. (Japan) with meteorological and oceanographic data to aide operational decision-making.

Since Abu Dhabi Oil Co. (ADOC), started its oil production in May 1973, ADOC has been developing its oil fields and producing oil with special consideration to the environment, safety and stability issues. Through such efforts, ADOC has been contributing to the energy supply to Japan and to the development of Abu Dhabi.

The system is installed at a Single Point Mooring (SPM) buoy, a large buoy at sea for mooring and filling oil tankers over the course of several days. A common feature of single point systems is that their upper sections are above the surface and that they have a single terminal offloading point around which the off take tanker can normally weathervane. The loading hose and where relevant, the mooring hawser are connected to the bow section of the off take tanker.

The objective of the system is to provide real-time data about conditions around the buoy. Both weather parameters and sea conditions are measured and relayed to the Operations Centre on the nearby Mubarraz Island. These include wave height, wave direction, current strength, current direction, water depth, wind speed, wind direction, gusts, temperature, air pressure and visibility. The information is intended to allow for better informed decision-making concerning operations and vessel movements in particular. This in turn better will enable ADOC to safeguard the natural environment by preventing any mishaps or spillages.

The meteorological sensors are installed in a new mast which is bolted to the deck of the buoy. The mast is sufficiently high to avoid any interference in the wind-readings by other obstacles. Accurate wave and current information is gathered by an acoustic Doppler current profiler (ADCP). This unit is mounted in a ballasted stainless steel frame and will be placed on the sea bed near to the buoy. The data from weather sensors and ADCP is collected by a data logger located in the central compartment of the SPM buoy. From there the data is transmitted to Mubarraz Island through GPRS telemetry. The entire system will have its own, independent power supply system. To this end, a solar panel will also be mounted on the deck, near the mast, while an extra battery will be placed in the buoy's dedicated battery room. Cabling between the locations will pass through existing cable transits that still have spare capacity.

On this occasion, Ian Huggins, General Manager @ Unique System FZE commented, "We are pleased to be working on this project with ADOC. Despite the several system design and implementation challenges, the monitoring system will be one of the finest engineering systems that can most accurately analyze meteorological and oceanographic data. We are confident that our expertise with environmental monitoring solutions, both above and beneath the water surface, will help us achieve the desired results. The unique and challenging nature of this project is sure to add to our already impressive portfolio of accomplishments."

Adding to this, Captain Keiji Harada from Abu Dhabi Oil Company Ltd.(Japan) stated, "We are pleased to be working with Unique System FZE on this project. We are confident that their technical expertise and after-sales support service will be key assets in this project. We will carefully monitor the system's performance over an initial period after which we will think about further extension of the data collection to other offshore installations as well."

ABB, the leading power and automation technology group, has won two orders in the third quarter to provide the waste heat recovery systems, each powered by a power turbine generator (PTG), for fourteen new 8,800 TEU (twenty-foot equivalent unit) container vessels.

The first seven post-panamax vessels will be built at Dalian Shipbuilding Industry Co. Ltd., (DSIC) and the other seven vessels at New Times Shipbuilding Co. Ltd., for China International Marine Containers Group Co. and Mediterranean Shipping Co. S.A (MSC). When delivered, in 2015 and 2016, the ships will serve under a long-term charter agreement to MSC, one of the world's largest container ship owners.

The employment of a waste heat recovery system (WHRS) to increase energy output onboard ships is becoming an increasingly viable means of reducing fuel costs. In marine propulsion plants, around 50 percent or more of the energy from fuel is lost to heat when converted to mechanical work by the main engine. By supplementing a ship's main propulsion plant with a waste heat recovery solution, up to 4 percent of the lost fuel energy can be recovered and converted into electricity. More efficient energy use also reduces CO2 emissions in relation to the engine's mechanical power output.

ABB's scope of supply in the waste heat recovery system with a PTG consists of a PTL 3200 exhaust power turbine with control valves, alternator, reduction gear and dynamic compensator consisting of an ACS800 drive with a (step down) feed transformer and a breaking resistor bank. The package also includes two A185-L turbochargers. The electrical output of the system is 1.65 megawatt (MW).

"The high efficiency of ABB's turbochargers gives customers not only the option of a waste heat recovery system in the first place, but also the possibility of using this system at lower loads," said Oliver Riemenschneider, who heads up ABB's turbocharging business.

"We are delighted to see that our customers have chosen ABB's innovative solution for their container fleet," said Heikki Soljama, head of ABB business unit Marine and Cranes. "This demonstrates a commitment by both ABB and its customers to help vessels run more efficiently and economically, and at the same time improve their environmental performance."

NYC-based PIRA Energy Group reports that the global economy continues to improve. On the week, the U.S. stock decline moderated. In Japan, runs continue rising, key product demands are stronger. Specifically, PIRA’s analysis of the oil market fundamentals has revealed the following:

Global Economy Continues to Improve

The global economy continues to improve, setting the stage for relatively strong oil demand growth next year. Fourth quarter global balances are tight and support ongoing price strength. Bearish supply darkens the 2014 price outlook, but PIRA reckons the downside will be limited with Saudi Arabia able to balance the market. The weakness will be felt mostly in the first half 2014 because of seasonal demand weakness and crude inventory builds.

U.S. Stock Decline Moderates

Overall commercial inventories fell slightly this past week, after four prior weeks of declines averaging 8.0 million barrels per week. Crude stocks built as crude imports stayed stubbornly high, especially from the Middle East. Product stocks drew as higher product supply and lower reported demand reduced the week-on-week product inventory decline. The year-on-year inventory excess remained modest, with the excess mostly in crude, largely related to new infrastructure associated with rapidly expanding North American production. 

Japanese Runs Continue Rising Post Turnaround, Key Product Demands Stronger

Runs continued rising post-turnaround but crude imports moved strongly higher and stocks built 3.1 MMBbls. Both gasoline and gasoil demand displayed decent gains and inventories of both drew. Kerosene demand remained strong and stocks continued drawing. Refinery margins, again, moved slightly higher. 

Scramble for LPG Supply Continues

U.S. propane stocks continue to draw at a rapid pace and are expected to end the year well behind last year's level.  International LPG prices are reaching record levels amidst significant supply disruptions. 

Ethanol Output Matches Yearly High

U.S. ethanol production rebounded the week ending November 22, equaling its annual high of 927 MB/D, which had been reached two weeks earlier.  Inventories declined by 61 thousand barrels to 15.02 million barrels, only slightly higher than the three-year low of 14.96 million barrels reported near the end of October. 

Ethanol Prices and Margins Spike in November

In November, U.S. ethanol prices and manufacturing margins skyrocketed to the highest level in two years, but gave back some of the gains last week. Very low inventories and a shortage of railcars to take ethanol to the blenders drove the market up. Companies are reluctant to hold stocks with the market in severe backwardation.

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. 

DOF Subsea, a leading provider of subsea services to the oil and gas industry, has appointed Colin Ferguson (photo) as country manager for Angola.

Colin, who started his career as a commercial diver, has more than 20 years' experience working on large scale engineering projects in the upstream oil and gas industry. He joins DOF Subsea from Superior Energy Services/Hallin Marine Services, where he was country manager for Angola.

Colin brings a wealth of experience to DOF Subsea, having worked in many countries in West Africa as well as in South Africa, the Persian Gulf, India and Thailand. His previous positions have been with oil and gas companies including Mermaid Offshore Services, Global Industries Limited and Stolt Comex Seaway.

Talking about his appointment, Colin said: "I am extremely excited to join DOF Subsea and support the company as it grows business in West Africa. Having been based in the sub-Saharan region for most of my career, I have a great deal of experience working in the area which I look forward to using in this role as we develop DOF Subsea Angola Lda."

As part of his position as General Manager at DOF Subsea Angola, Colin will focus on enhancing the company's profile and business potential in Angola. Training and development for personnel and monitoring the financial and health and safety performance will also be key aspects of Colin's role.

Colin continued: "DOF Subsea operates to an exceptionally high standard across each of its global projects and I will be working to ensure that this remains the case in Angola, with all personnel working to company policies and procedures whilst receiving appropriate training and development opportunities."

Jan–Kristian Haukeland, Executive Vice President for the Atlantic Region, said: "Colin's appointment is an important move for us as we expand operations in the West African region and we are delighted to welcome him to the company.

"Building upon our existing business relationships in the area will be one of Colin's main focuses, as well as seeking out new prospects. He will also be identifying opportunities for DOF Subsea to raise its profile in West Africa through increased involvement in CSR activities and projects in the community."

In its capacity as Focal - MOOG Components Group representative in Scandinavia and Holland, the MacArtney Group has recently passed a momentous system delivery milestone. Since the partnership was initiated, MacArtney has facilitated the sale and delivery of more than 40 Focal swivel solutions to offshore Floating Production Storage and Offloading (FPSO) vessels operating across the world.

FPSOs
FPSOs are offshore production facilities that house both processing equipment and storage for produced hydrocarbons. The basic design of most FPSOs encompasses a vessel shaped platform, with processing equipment aboard the vessel deck and hydrocarbon storage below in the hull. After processing, an FPSO stores oil and gas before periodically offloading to shuttle tankers or transmitting it onshore via pipelines.

FPSOs are viable development solutions for a number of different deepwater or ultra deepwater offshore field situations. Because an FPSO can be disconnected from its moorings, this type of offshore production vessel is optimal for areas that experience adverse weather conditions, such as cyclones and hurricanes. Additionally, they pose an excellent economical solutions for more marginal fields, in that the vessel can be moved and redeployed once the original field has been depleted. Adding to the economical advantages, existing tanker vessels can often be converted into FPSOs.

FPSO swivels
Moored to the seafloor and usually tied to multiple subsea wells, the FPSO gathers hydrocarbons from subsea production wells through a series of subsea structures and pipelines. Once tapped, hydrocarbons are transmitted through flowlines to risers, which transport the oil and gas to the FPSO on the surface.

At the heart of the FPSO, the vital transfer of hydrocarbons, along with power, hydraulics and fibre optical signals between surface and seafloor is facilitated by an FPSO swivel. Typically comprised of electrical passes, hydraulic utility swivels and fiber optic rotary joints, swivels are used in a variety of FPSO configurations including buoy, turret mooring and offshore loading towers. Once installed, FPSO swivels permit the continuous flow of fluids, power and communication with unlimited freedom of the vessel to weathervane about its mooring point.

Focal and MacArtney FPSO track record
Focal - MOOG Components Group is a world leading supplier of swivels, slip rings, multiplexers and fluid rotary unions which are designed and tested to operate effectively in the harshest maritime environments. Since 1990, Focal has delivered several FPSO swivel solutions, spanning from Hydraulic Utility Swivels, Low Voltage Swivels to large High Power Swivels (35kV, 2000A).

Through its participation in several projects, MacArtney has gained an extensive track record as a Focal FPSO swivel supplier and provider of specialist engineering support to FPSO operators and FPSO swivel stack, mooring and turret manufacturers across the entire offshore industry. Notable MacArtney FPSO projects include the delivery of swivel solutions to APL/National Oilwell Varco, Framo Engineering and Bluewater. Beyond Focal swivels, the MacArtney scope of FPSO supply includes junction boxes, cables and connectors.

"MacArtney Sales Manager, Jens Henrik Gadeberg, says that "MacArtney is fully committed to its partnership with Focal and dedicated to deliver state-of-the-art swivel solutions to the FPSOs of tomorrow. According MacArtney Business Development Manager Anders Andersen; "one of the next exciting steps within FPSO swivel development and supply will comprise massive 145 kV swivels for facilitating the transfer of high power from land based sources.

Acteon is pleased to announce the opening of its new Acteon Singapore Operations Center (ASOC) at the Offshore Marine Center in Singapore's Tuas industrial area. The Center is the first purpose-built Acteon facility and has been designed to accommodate multiple Acteon operating companies and support their offshore operations throughout South East Asia.

The 10,000 m2 port side facility offers Acteon companies both high grade office space and engineering capability in South East Asia. The ASOC provides Acteon operating companies with easy and unrestricted port mobilization and demobilization options for heavy equipment, which will be supported by a 128 te workshop crane capacity. Acteon's South East Asia customer base will now benefit from quicker response times on equipment supply and rapid turnaround rates.

Several Acteon companies, including Team Energy Resources, Menck, Claxton, Aquatic and LM Handling will utilize the ASOC for the following activities:
- Project Design and Engineering
- Equipment maintenance and servicing
- Equipment availability for rental and sales

Progressively, additional operating companies will be able to utilise the facility, as Acteon Group's position in South East Asia strengthens.

"There was a strong demand for Acteon companies having a dedicated facility from which to utilize and service the South East Asia region," said Acteon Group Ltd executive vice president Paul Alcock. "We are very committed to continuing our growth in South East Asia, and by investing heavily in establishing a dedicated local presence in Singapore, we have both secured easy and unrestricted port mobilization and demobilization options for heavy equipment in Teas, while vastly improving our access to customers in the region. They, in turn, will benefit from our enhanced and expedited service capabilities. This new center we hope will add significant value to our capabilities throughout South East Asia, and will add positively to the relationships we establish and develop in the region."

"We are delighted that Acteon has chosen to establish its regional service center at the Offshore Marine Centre to serve its customers in Asia better. The Offshore Marine Center, with its common waterfront area, is a strong testament to the collaboration between the government and industry to develop innovative solutions that optimize the use of resources," said Lim Kok Kiang, executive director, transport engineering, Singapore Economic Development Board.