Statoil and its partners have made the investment decision for a joint oil export solution for the Edvard Grieg and Ivar Aasen fields.

The oil will be transported via a 43-kilometer oil pipeline from Edvard Grieg to the Grane oil pipeline, and then on to Sture.

The transport solution is a precondition for developing the Edvard Grieg (operated by Lundin) and Ivar Aasen (operated by Det norske oljeselskap) fields. Edvard Grieg is scheduled to start producing in 2015 and Ivar Aasen in 2016. The new pipeline will be called the Edvard Grieg oil pipeline.

Statoil is a partner in both fields and operator for the joint venture for oil transport.

Tor Martin Anfinnsen, senior vice president for trade with crude oil, wet gas and refined products in Statoil.

The investment decision was made by Statoil and the partners, based on a recommended solution from Gassco. A plan for installation and operation (PIO) has been submitted to the Norwegian Ministry of Petroleum and Energy.

“We are an important player in the Sleipner and Utsira area, and are therefore concerned with robust solutions that provide the possibility of expanded activities in the area in the future,” says Tor Martin Anfinnsen, senior vice president for trade with crude oil, wet gas and refined products in Statoil.

Statoil’s extensive project experience from similar projects and market position within procurements and pipeline installation constitute the framework for implementation of the project. 

Torger Rød, senior vice president for pipelines and onshore projects in Statoil. 

“Good cooperation and close coordination with other projects in Statoil, as well as close follow-up of the primary suppliers are important success criteria, where, among other things, we have achieved synergies as regards the pipeline installation job,” says Torger Rød, senior vice president for pipelines and onshore projects in Statoil.

The Utsira High is located between the two established fields Sleipner and Grane, in an established area with well-developed infrastructure. This forms the basis for new, robust and flexible export solutions on the Utsira High.


Milestones

*  The PIO is expected to be approved this autumn.

*  Pipeline production will be completed in 2013.

*  Pipeline coating will be completed in 2014.

*  Installation of new Y connection point in the Grane oil pipeline will be carried out in connection with the planned shutdown of Grane in the spring of 2014.

*  Pipeline installation in the summer of 2014 and tie-in operations in 2015, so it will be ready for the start of production in the autumn of 2015.


Facts about Edvard Grieg oil pipeline

Length and size: 43-km, 28-inch pipeline from Edvard Grieg (which also processes the wellstream from Ivar Aasen). This will be tied in to the Grane pipeline, which runs to the Sture terminal.

Partners: Lundin Norway (30%), Statoil (operator; 20%), Wintershall Norge AS (18%), Det norske oljeselskap ASA (14%), OMV Norge AS (12%) and Bayerngas Norge AS (6%). 

Lifespan: Designed for 30 years

Investments: NOK 2.1 billion (running)

Drilling activity and spend will significantly increase in global deepwater markets over the next decade according to new analysis by Wood Mackenzie. The Future of Global Deepwater Markets study indicates well spend is expected to grow from US$43 billion in 2012 to US$114 billion in 2022 challenging the industry to keep up with this unprecedented growth.  
 


Considering the deepwater sector has eclipsed that of onshore and shallow water in the last decade with respect to both discovered volumes (41 percent) and value created ($351 billion), this increase is not as surprising as previously thought. In addition, Wood Mackenzie saw a 39 percent growth in deepwater and Arctic net acreage licensed by the 20 leading deepwater players in 2012. 
 


"Deepwater has accounted for most of the discovered volumes during this time, but this has not been without increasing technical and commercial challenges," said Malcolm Forbes-Cable, Senior Management Consultant at Wood Mackenzie and author of the study. 
 


The study indicates global drilling activity returned to pre-Macondo highs in 2012 and forecasts bullish growth in deepwater, maintaining an overall compound annual growth rate of nine percent over the next decade.  Arctic drilling will also start to pick up by the end of the decade however it will only represent three percent of the wells drilled out to 2022. 
 

Wood Mackenzie believes the number of exploration, appraisal and development wells will increase by 150 percent – rising from 500 to 1,250 wells per year. 

"To meet the forecasted well demand the fleet will require 95 additional deepwater rigs to be constructed between 2016 and 2022, representing US$65 billion of investment," explained Forbes–Cable. "This will require the longest period of deepwater rig construction to date, representing a change for the deepwater sector from cyclical to sustained growth." 
 


Existing rig orders and new-builds required to meet demand suggest that the rig contractors will need an additional 37,000 workers over the next decade to operate the fleet. According to Wood Mackenzie, this simply cannot be met with existing personnel and the historical rate of recruitment.
 


This tightness in the deepwater rig market has been driven by an accelerated shift to newbuild rigs by operators in the wake of Macondo, which has set in motion increased regulation and heightened the focus on risk mitigation by the operators. 
 


Corporate Landscape 

Aker Solutions' subsidiary Managed Pressure Operations will deliver managed pressure drilling (MPD) systems and riser gas handling services to Repsol Sinopec Brazil. The parties agreed not to disclose the value of the order.

The three-year contract comes with an option for an additional two years of services. Repsol will use the equipment at an ultra-deepwater operation in the Campos Basin.

"This contract will demonstrate the unique capabilities of our riser gas handling safety system and introduce the first deep-water application of our riser drilling device into an offshore MPD system below the tensioner on a rig," says Charles Orbell, head of Managed Pressured Operations (MPO), which is part of Aker Solutions' drilling technologies business.

The riser gas handling system helps control wellbore fluids during offshore oil and gas drilling. It detects an influx of gas into a drilling riser and diverts the gas to prevent a blowout.

MPD technology improves drilling performance and safety. The riser drilling device seals the area around the drill pipe during drilling operations. Integrating a riser drilling device with a riser gas handling system enables MPD drilling operations.

Aker Solutions in February 2013 acquired Managed Pressure Operations International, which provides knowledge and technologies within the emerging managed pressure drilling segment. MPD is used to improve safety and efficiency during drilling operations, enable access to new fields with challenging drilling conditions and enhance the life of mature fields.

The contract has been booked as order intake in the second quarter of 2013.

A new fiber-optic monitoring system developed through a Space Act Agreement between NASA and Astro Technology Inc. of Houston is helping to increase safety for workers and reduce the risk of leaks and spills on two oil platforms off the coast of West Africa. The technology also has potential future space exploration applications.

Aker Solutions won a contract from Caspian Drilling Company Ltd (CDC) to provide a complete topside equipment package for a new semi-submersible drilling rig in Baku, Azerbaijan. The parties agreed not to disclose the value of the order.

Aker Solutions has previously delivered drilling equipment to eight drilling rigs operating in the Caspian Sea. Two of the rigs are semi submersible and operated by CDC.

"The contract confirms our strong position in the Caspian market and our long-lasting relationship with CDC," said Roy Dyrseth, head of Aker Solutions' drilling technologies business. "We are pleased to secure more work in Azerbaijan after making significant investments in our infrastructure in the region."

Aker Solutions last year opened a new facility in Baku to improve its offering of services in the region.

The equipment will mainly be constructed and assembled at Aker Solutions' facilities in Kristiansand and Asker in Norway as well as in Erkelenz in Germany.

Installation and commissioning services will be performed by the Caspian Shipyard Company Ltd., where Keppel Fels is the major shareholder. Delivery is scheduled for the fourth quarter of 2016.

 James Fisher and Sons plc has announced that its Strainstall subsidiary has been awarded a contract to provide international oil and gas company Total with an Integrated Marine Management System (IMMS) for the Moho Nord tension leg platform which destined for installation off the Congolese coast in West Africa.



Strainstall's integrated monitoring and management systems (IMMS) are designed to provide an integrated monitoring and control system for both fixed and floating offshore structures. Customized to the individual requirements of each installation, the IMMS provides the operator with data and reporting from a number of parameters on the hull. Features include tendon data that incorporates load and bending moments, reports on the height of the deck above the sea surface and wave condition, permanent and temporary ballast tank levels and reporting on a number of meteorological conditions including wind speed direction, air temperature and pressure. This approach allows full visibility and control during installation and simplified topside connection to provide an integrated solution.



Under the contract announced today, Strainstall will provide Total – through a contract placed by Hyundai Heavy Industries – with a comprehensive mooring monitoring solution for the Moho Nord tension leg platform that is critical to production and safety. This multi-million dollar contract, to be completed over the next year, further reinforces Strainstall's market leading position in the tension leg platform mooring monitoring market.


Wison Offshore & Marine Ltd. (Wison), a subsidiary of the Wison Group, announced today the award of a contract from China Oilfield Services Limited (COSL) to supply one modular drilling rig for use on a platform in the Mexican sector of the Gulf of Mexico operated by Petróleos Mexicanos (PEMEX). 



Under the contract, Wison will perform the project management, procurement, production engineering, fabrication, load out, offshore installation and commissioning support of one 3000hp modular drilling rig that will be installed on the Tsimin-C drilling and production platform in the Mexican Bay of Campeche. The drilling facility is based on an innovative self-installing design which will consist of some 97 smaller units that will require significant integration work to strict tolerances during module construction. Wison will fabricate the approximately 2500-ton module at its Nantong facility in China with the delivery planned for the second quarter of 2014.



The project marks Wison’s second contract from COSL for the delivery of modular drilling units to PEMEX. In 2007, Wison delivered modules for four platform rigs that are currently operating offshore Mexico. Wison also delivered two modular platform rigs to COSL in 2010 for operation on CNOOC facilities offshore China.



“Wison has established a strong track-record in delivering drilling modules for COSL and we are extremely pleased to expand this relationship and provide more high-quality facilities for PEMEX,” said Wison Offshore & Marine Executive Vice President, Dr. L. Dwayne Breaux. 
 

On Tuesday, Bureau of Safety and Environmental Enforcement (BSEE) Director James Watson and U.S. Coast Guard Rear Admiral Joseph Servidio signed a Memorandum of Agreement (MOA) for regulating mobile offshore drilling units (MODU) on the Outer Continental Shelf (OCS). Through this agreement, both BSEE and the U.S. Coast Guard will work together to identify and coordinate responsibilities for the inspection and oversight of MODUs.

Milbank has advised the lenders and hedge counterparties on a further US$500 million term loan financing for Isramco Negev 2 LP (Isramco) in support of its share of the development of the Tamargas field located of the coast of Israel.  The Loan proceeds partially refinance the US$750 million bridge and term loans extended to Isramco in 2011 and also support future development and expansion of the field which became operational in March 2013.

The Tamar gas field is located off the coast of Israel and commenced operations in March 2013 after a 3 year development.  Isramco is the largest local partner in the Project and owns a 28.5% stake in the Tamar gas field.  The other investors are Noble Energy, Delek Drilling, Avner Oil and Gas and Alon Gas Exploration.  The gross resource estimate of Tamar gas field is ten trillion cubic feet (Tcf).

This financing was arranged by Deutsche Bank, who also led the 2011 financings, and Natixis and was successfully syndicated to a large number of onshore and offshore financial institutions.  Deutsche Bank has now arranged US$1.25 billion in debt financing for Isramco's share of the development of the Tamar offshore gas field since 2011.  John Dewar, a partner in Milbank's London project finance team, said, "The successful syndication of this prestigious and high-profile financing demonstrates the high level of investor confidence in the future prospects of the geopolitically important Tamar gas field."

The team was led by John Dewar and included Oliver Irwin, Vicky Cox, Matthew Mortimer, John Goldfinch and Claire Hall in Milbank’s London Project Finance, Tax and Alternative Investment practices.

McDermott International, Inc. (NYSE: MDR) (“McDermott”) has announced  that one of its subsidiaries has been awarded an engineering, procurement and construction (EPC) contract by Exxon Mobil Corporation for its Julia development. The value of the contract is included in McDermott's second quarter 2013 backlog.

The Julia field is located approximately 265 miles southwest of New Orleans in the Gulf of Mexico Walker Ridge area in water depths of approximately 7,000 feet. The Julia Phase I project is a subsea tie-back to a semi-submersible floating production unit and the scope includes six subsea wells, one six-slot manifold, two umbilicals, six jumpers, two flowlines with two steel catenary risers, two subsea pump modules and topsides support equipment. Production will flow through two 10-inch production flowlines with subsea single-phase boost pumps. Exxon Mobil Corporation, the operator, and Statoil each hold a 50 percent interest in the Julia field development.

“McDermott offered a very competitive solution for the Julia project with the right people, assets and technology, based on our experience with a similar deepwater Gulf of Mexico subsea tie-back project that we were awarded in 2011,” said Stephen M. Johnson, Chairman, President and Chief Executive Officer of McDermott. “The Julia subsea infrastructure requires a high level of engineering design and construction work, a key component of which is high-specification welding to help ensure long-term integrity and reliability of the subsea facilities. The installation solution we offer provides a high degree of reliability and precision using key vessels in our fleet for deepwater lowering and flexible lay, and further demonstrates our commitment to the subsea market.”

McDermott will undertake engineering, procurement and construction of the jumpers, four suction piles associated with the manifold, subsea pump, pump transformer and Subsea Distribution Unit /Umbilical Termination Assembly, as well as the transportation and installation of the manifold, suction piles, flying leads, subsea pump system, the power and control umbilicals and SDU/UTAs. McDermott will also carry out testing of the tie-back system and mechanical completion before hand over to the customer.

McDermott expects to successfully execute this high‐profile project employing its in‐house expertise and capabilities for subsea engineering, high‐spec fabrication and subsea installation. Work will commence with immediate effect in our Houston office.

McDermott deepwater installation vessel Derrick Barge 50 is expected to undertake the installation of suction piles and subsea equipment, including the manifold, pump station and transformer. The vessel’s new deepwater lowering system has the capability to lower loads of up to 480 tons to depths of up to 11,500 feet.

The Board of Royal Dutch Shell plc has announced that Ben van Beurden will succeed Peter Voser as Chief Executive Officer, effective 1 January 2014.

Peter Voser will leave Shell at the end of March 2014, marking the end of 29 years with the Company.

Van Beurden, 55, has been Downstream Director since January 2013.

“I am delighted to announce Ben van Beurden as the next Chief Executive Officer of Royal Dutch Shell,” said Chairman Jorma Ollila. “Ben has deep knowledge of the industry and proven executive experience across a range of Shell businesses. Ben will continue to drive and further develop the strategic agenda that we have set out, to generate competitive returns for our shareholders.” 

“Van Beurden’s selection came after a comprehensive assessment and review of internal and external candidates led by the Board Nomination and Succession Committee,” Ollila added.

Van Beurden joined the Royal Dutch/Shell Group of Companies in 1983 and has held a number of technical and commercial roles in both the Upstream and Downstream businesses. He has worked in The Netherlands, Africa, Malaysia, USA and, most recently, the UK.

Van Beurden, a Dutch national, graduated with a Master’s Degree in Chemical Engineering from Delft University of Technology, the Netherlands. He is married and has four children.

The license partners of Gullfaks and Oseberg Area Unit have acquired two new category J jack-up rigs. The rigs will be owned by the licenses and will contribute to increased recovery and extended field life.

Image: Cat J rig illustration.

Samsung Heavy Industries Co. Ltd. and operator KCA Deutag Drilling Norway AS have been awarded the contracts for construction and operation of two category J rigs. Operation start is expected in 2016-2017.

Maersk Drilling has been awarded a contract from DONG Energy for the jack-up Maersk Resolve for drilling operations in the Danish North Sea. The contract is expected to commence in August 2013 in direct continuation of its current contract in the UK. The duration of the new contract with DONG Energy is expected to be nine months until June 2014, where the rig after a planned yard stay will commence another five well firm contract with DONG Energy awarded in March 2012 expected to last approximately two years. The estimated value of the new nine month contract is USD 58 million.

"We are very pleased to enter this contract with DONG Energy, one of our key customers in the North Sea area," says Claus V. Hemmingsen, CEO of Maersk Drilling and member of the Executive Board of the A.P. Moller - Maersk Group.

"Maersk Resolve will now work for DONG Energy through to the end of third quarter of 2016 and we look forward to co-create value with DONG Energy on their many interesting prospects including the high profile Hejre field development which requires the drilling of a number of deep and complicated High-Pressure-High-Temperature wells. With its high tech equipment the Maersk Resolve is ideally suited to meet these demands."

Maersk Resolve is the third in a series of four High Efficiency 350 ft jack-up rigs in Maersk Drilling's fleet. Since its delivery in 2009 the rig has been employed in the Danish and UK North Sea.

Coastal Energy Company (the "Company" or "Coastal Energy") (TSX:CEN) (AIM:CEO), an independent exploration and production company with assets in Southeast Asia, today announces an operations update.

Malaysia

Following completion of the current drilling program at Bua Ban North, expected in late July, the Manta drilling rig will mobilize to Malaysia to begin the development program at the Kapal field. All requisite permits to commence the Kapal field development have been received. The mobile offshore production unit ("MOPU") refurbishment is expected to be complete by September. Therefore, Coastal is well placed to commence development in Malaysia once the current program in Thailand is complete.

Bua Ban North

As announced previously, the two horizontal wells which were drilled and completed with the new swelling packer technology encountered production issues during the second quarter. Consequently, the Company elected to recomplete and reperforate these two wells using more conventional completion techniques.

The Company has recompleted the first of the two wellbores and the well is now producing approximately 1,500 bopd. The Company will drill one additional development well at Bua Ban North and recomplete the other horizontal swelling packer well before mobilizing the rig to Malaysia. 

Production Update 

Europort 2013 will showcase the innovative technology available that is designed to meet shipping’s critical challenge posed by environmental restrictions under ‘Tier III’ legislation.

Radical tightening of permissible nitrogen oxide and sulphur emissions from ships will change shipping profoundly after January 1, 2016, particularly within Emissions Control Areas.  Staged just over a year before the new regime comes into force, November’s Europort 2013 will offer the maritime and offshore sectors the chance to find out how technology innovators have risen to regulatory challenges, and consider their actions before new restrictions bite.

The International Maritime Organization’s Tier III restrictions require the approximate 74% reduction in NOx emissions when compared to Tier II-type engines. Permissible NOx emissions under Tier III are restricted to between 3.4g/kWh and 2.0g/kWh, depending on an engine’s rated speed.

Shipowners also need to address tightening sulphur dioxide emissions restrictions from 2015, particularly in ECAs. Under the currently agreed schedule, the amount of sulphur permitted in marine fuels will fall in ECAs from a current 1% to 0.1% in 2015, and globally in 2020 from 3.5% to 0.5%.

In short, it will simply no longer be permissible to burn heavy fuel oil (HFO) as freely as before. To meet the regulatory demands, owners will either have to operate on lower sulphur fuel or distillates, burn gas, fit an exhaust gas scrubber, or change their operating profile. 

Understandably, both future fuel selection and the energy efficiency of ships already built and in service are key themes in both the ‘Advanced Technology’ and ‘Mare Forum’ conference programmes that are integral to Europort 2013.

Real progress on one of the industry’s future fuel options will be highlighted in the ‘Pioneering with LNG’ session at the Advanced Technology Conferences, where Dutch expertise in inland operations, shipbuilding and marine equipment design has come into its own. Mare Forum will address the wider strategic issues on future trends in fuels, as part of a wider debate on ‘eco ships’, using the stimulating, free-flowing and informal approach to discussions that is the hallmark of the Mare Forum formula.

As ever, new vessel designs are also a feature of this year’s Europort, and here too environmental imperatives are central to the innovations on show. Typical is the new PSV 3300 offshore vessel from Damen Shipyards, the starting point for its new portfolio of offshore vessels.

Recent state tax reform also spurs Prudhoe Bay working interest owners to evaluate additional $3 billion of development projects

BP has announced it is planning to add $1 billion in new investment and two drilling rigs to its Alaska North Slope fields over the next five years due to changes in the state’s oil tax policy signed into law this month by Gov. Sean Parnell.

These plans call for an increase in drilling and well-work activity, the upgrading of existing facilities and the addition of up to 200 new jobs in the state, giving a boost to both the company’s operations and the state’s economy.