Supply Rebalancing Is Well Under Way

Supply rebalancing is well under way. Year-on-year non-OPEC output declines are accelerating, while demand growth has not disappointed. Worries of excessive Saudi, Iranian or Libyan supply growth are unwarranted. Prices will have to rise to the level where they begin to create supply. The signal will have to be there at least one year in advance for shale crude reserves to significantly contribute. The end of OPEC market management will lead to more price volatility and PIRA continues to see elevated risks of supply disruptions in the near future. Product markets are carefully balanced with strong demand growth and high refinery production/stock levels.

Too Soon

Despite growing bullish sentiment, the market deemed it too soon for $2+/MMBtu gas as per the final settlement price for the May futures contract. The related tepid May contract termination underscores concerns regarding the timing of supply rebalancing. With the June contract now in the “pole position,” traders will be more focused on weather and related demand prospects this summer. Yet, HH cash will still remain susceptible to renewed weakness due to building storage congestion — at least for the next few weeks. Such a backdrop would require supply to be pushed (or kept) out of the region, thus requiring MW basis premiums. Meanwhile, the more acute price weakness in western Canada is being “exported” into the West — especially when demand is weak — as highlighted by the depths prices at Sumas reached this month.

NP15 Rises on Firmer Gas While SP15 "Ducks"

On-peak prices rebounded at NP15 and Palo Verde assisted by a rebound in Southwest gas prices and the start of a refueling outage at Palo Verde 1. Mid-Columbia and SP15 markets continued to move lower, however. PIRA expects gas prices to move higher during the second half of the year as a tighter supply/demand balance shrinks the storage overhang. Higher gas prices will exert downward pressure on implied heat rates in most markets. The CA ISO released a preliminary assessment of summer 2016 loads and resources in late March, but it did not include possible impacts of the Aliso Canyon outage. PIRA believes that mitigation measures will be largely successful in preserving LA Basin reliability except under severe weather/outage conditions.

Coal Prices Rally; PIRA Remains Bullish for 2017

Seaborne coal prices moved up notably from the end of last month, particularly deferred prices, flattening the backwardation and bringing the market up to PIRA’s Reference Case. We have moved our pricing outlook for 2017 over the past month, on a stronger oil price forecast and some evidence that demand in Asia will strengthen next year.

Why Did Distributed PV Developers Abandon Nevada? A Comparison of Policy Drivers in Nevada and California

Nevada recently moved to address the contentious issue of cost-shifting from customers with distributed photovoltaic (PV) installations to those without via implementation of new and additional charges for distributed PV. Afterwards, three major distributed PV developers exited the state. Nevada’s experience can offer guidance for the numerous states that are considering new charges for distributed PV or revisiting Net Energy Metering policy. Nevada’s revisions immediately reduced the value proposition for distributed PV installations, but the revisions could still result in lower customer annual electricity costs relative to no solar. By comparison, California’s recent decision to address cost-shifting through broader retail rate design changes may have little practical impact on distributed PV penetration for the foreseeable future and earned solar industry support.

Global Equities Ease

Global equities generally fell back on the week. In the U.S., energy continued to outperform, up 0.7% for the week. Utilities and consumer staples also posted gains. Technology and housing were the worst performers and posted moderate declines. Internationally, many of the indices lost ground. Latin America, however posted a strong gain, while Japan posted a sharp decline as the yen strengthened.

An Impressive April Comes to a Close

After making a low of $3.5125 on April 1st, the day after the surprise 93.6 million acres in the Prospective Plantings at the end of March, July corn had quite the month, closing up 38 cents, although no fireworks were set off at the close of this impressive month of trading. July soybeans had an even more impressive month, closing up $1.13 at the end of the 21 trading days, but nothing out of the ordinary there either. As compared to the 10.7% gain in corn and 12.3% in soybeans, wheat couldn’t even return 2% for the month.

Ethanol Output and Stocks Plunge

For the week ending April 22, output plunged as many plants were shut down for maintenance. The output of ethanol-blended gasoline surged to the highest level since October.

U.S. Commercial Stocks Build

Overall stocks built 5.3 million barrels this past week, with a 2 million barrel build in crude oil, mostly in Cushing. Gasoline inventories had their largest build (1.6 million barrels) in the last nine weeks, while distillate stocks had their second consecutive weekly decline (-1.7 million barrels). Domestic crude supply continues to average 8.92 MMB/D in April, 30 MB/D below March and 770 MB/D below last year.

Ukraine’s End-Users See Gas Price Revision

Ukraine’s new government overhauled household heating prices to help restart a $17.5 billion loan from the International Monetary Fund as the U.S., another major donor, told the ex-Soviet republic it must start prosecuting corrupt officials. A cabinet meeting Wednesday in Kiev approved a new natural gas tariff to strengthen the budget, as sought by the IMF. The new gas tariff eliminates separate winter and summer prices for households, and it unifies what they pay with the cost for industrial customers.

Is the Price Surge Justified?

For the moment, PIRA doesn’t see an extended contract price breach as sustainable over the course of a season. Additionally, PIRA believes that the supply and demand for forward gas is very different than for spot gas, making NBP and TTF very vulnerable to these sharp swings upward. Many natural gas producers avoid forward selling, leaving the forward curve to be filled with net buyers. This forward market imbalance can create high spike risk when strong hedging activity gets concentrated in a short amount of time, which may have easily been the case here.

S&P Eases, Key Indicators Mixed

The S&P 500 eased up this past week. It was only the second decline in 11 weeks. The key indicators were mixed with high yield debt (HYG) and the Russell 2000 improving, while volatility increased and emerging market debt eased off. The yield on the BAA-rated corporate bond has continued to decline, although the pace of decline has slowed. The U.S. dollar was mixed. The British pound strengthened, as did many of the currencies of the key commodity producers, along with the South African rand. The Polish zloty has been notably weaker. Commodities, including total, energy, and ex-energy, were again higher on the week.

Freight Rates Rally on China Optimism

Freight rates rallied in April, having been pulled up by surging steel and iron ore price in China. Bunker fuel prices have continued to climb, adding upward pressure on spot rates. We have trimmed our Cape fleet supply projections, but we have also downgraded our Cape demand forecasts, largely due to the slump in the Chinese steel market over the winter. The net effect was to leave our Cape utilization and freight rate forecasts largely unchanged. PIRA expects bunker fuel prices to increase in the coming months, boosting spot freight rates.

The Soybean Games

The length in soybeans seems to have fallen into slightly less stronger hands. The drop in open interest suggests to us that strong players have left the arena, leaving latecomers with some length. Soybeans remain a money game at this point as fundamental confirmations remain unfounded, except maybe for the Brazilian real continuing to find a bid. PIRA would not be surprised to see this week’s soybean highs hold for a while, while corn may have some room to go.

U.S. Ethanol Price Surged

Lower production and stocks drove the market. Rising corn and oil prices were supportive.

Japanese Crude Stocks Drew

Crude runs rose under the influence of the Kawasaki restart, while imports fell sharply and crude stocks drew 4.8 MMBbls. Finished product stocks built slightly. Gasoline stocks were little changed despite higher demand, while gasoil stocks drew due to a low refinery yield. Kerosene stocks reverted back to building at a rate of 33 MB/D, with higher yield. Refining margins were modestly higher on the week, but they have clearly weakened.

PEMEX Cash Infusion; Production Outlook Unchanged

U.S. gas exports to Mexico continue to ramp higher, with April exports projected to near 3.6 BCF/D, ~1 BCF/D more than the prior year. For the year as a whole, exports to Mexico look equally striking, topping the year-ago period by a similar margin. Such growth has been particularly impressive given that daily flows on Net Mexico (range-bound since January) suggest the commissioning of Los Ramones Phase II – North may have been delayed. Moreover, despite the government’s recent ~$4B capital infusion to PEMEX, reversing structurally declining production will remain difficult, particularly as financial strains within the company limit its ability to invest.

French Policy and Oil Reverse Bearish Run

While the fuel pricing complex has been rallying, driven primarily by recovering oil prices, French President Hollande's formal endorsement of a unilateral carbon floor in France has added a significant dose of risk for prices in the upcoming year. The French proposal is ironically also a gift for German coal-fired generators, as it will lead to higher German exports toward France. At the same time, reported nuclear availability is bullish for German forward prices. Downside risks for gas prices remain a concern for German margins, but we believe current 2017 power prices are already aligned with PIRA's bearish gas prices.

Stocks Mirror 2012 Levels

PIRA estimates that power sector coal stocks have seasonally risen by ~5 MMst as of end-April with demand losses in the power sector to natural gas and other renewables (hydro, wind) exceeding falling production levels. To add insult to injury, mild April weather resulted in flat load levels. PIRA estimates U.S. electric power sector coal stocks will reach 202 MMst as of the end of this month, close to its historic maximum level.

LPG Weekly Scorecard

U.S. propane prices narrowly outperformed the broader energy market last week with May Belvieu 5.2% higher. Butane was better bid, up 6.8% to just under 63¢/gal. Ethane was up only marginally, while natural gasoline prices improved by 3%.

U.S. February 2016 DOE Monthly Revisions: Demand and Stocks

DOE released its final monthly February 2016 (PSM) U.S. oil supply/demand data. February 2016 demand came in at 19.68 MMB/D. Growth was particularly strong for gasoline (+6.4%, 556 MB/D), kerojet (+5.8%, 83 MB/D), and "other" (+4.8%, 218 MB/D), though the overall barrel was up 1.5%, or 284 MB/D. The performance was stronger than PIRA had been assuming in its balances, and total stock levels came in lower than assumed by 4 MMBbls. Warmer temperatures depressed distillate demand performance, but also boosted gasoline demand. End-February total commercial stocks stood at 1,349.5 MMBbls, lower than what PIRA had assumed by 4 MMBbls, but revised up 3.5 MMBbls compared to the preliminary data.

NYMEX Futures Trying to Look Beyond Storage Overhang

The supply-side rebalancing currently under way has seemingly provided the necessary encouragement for sidelined investors, with broad price gains lifting the NYMEX price curve closer to PIRA’s forecast. Moreover, the collapse in drilling and protracted capital constraints implies more headroom for recovery — not just in 2017, but also for 2H16.

April Weather: U.S. Cold, Europe and Japan Warm

April weather was warmer than normal by 2% in the three major OECD markets, bringing the month’s oil-heat demand below normal by 17 MB/D. The three-region composite was almost 11% warmer on a 30-year-normal basis.

Market Takes "Show Me" Attitude

Thursday’s EIA release marked the onset of larger and more normal injections after a final push of late season cold limited builds earlier in the month. For the next two releases, PIRA estimates point to similar week-on-week additions near 70 BCF. While that would still trail the year-ago figure, matching those 2015 levels is not an option with a storage surplus at 870 BCF and expected end-month storage near levels seen at the end of June last year.

French President Hollande Blesses the French Carbon Floor

While uncertainties exist on the timing, magnitude and form, the fact that President Hollande — the central political figure in France — blessed the introduction of a French carbon floor "unilaterally" is very notable. The impact of a carbon tax similar to the U.K. could be more significant for French winter pricing, with the summer prices less impacted. With the French market significantly interconnected, this policy move would end up lending support to the surrounding markets, primarily Germany.

The Fed Is Not Likely to Rock the Boat, but What About the BOJ?

U.S. GDP growth during the first quarter, while sluggish, was in line with the market expectation. The Fed stood pat at its policy meeting last week. Based on various signals, it is unlikely that the central bank will make a move at its next meeting in June. The Japanese currency strengthened sharply against the dollar after the Bank of Japan stood pat at its meeting this week. At this point, the monetary easing cupboard may be bare for the Japanese central bank. European GDP data for the first quarter were encouraging, while South Korean data disappointed.

Brazil Production to Remain Buoyant in Low Price Environment

Brazil has been one of the main drivers of ex-U.S. Non-OPEC crude and condensate production growth, growing 375 MB/D from 2012 to 2015 (6% CAGR). Growth is expected to continue at a much lower pace (2% CAGR) until 2020 despite low prices as projects under construction — sanctioned when crude prices were higher — come online. Longer term, Brazil represents the third largest Non-OPEC source of growth (behind U.S. and Canada), with development breakevens around $50/Bbl and a world class resource in the pre-salt formations. More robust growth (4% CAGR) is projected between 2020 and 2025, as new developments come on line.

Solving India's U.S.-Sourced Cargo Dilemma

India’s chronic shortage of gas comes from two fundamental truths: End-user prices are not necessarily high enough to support additional LNG imports for many buyers without additional subsidies, and domestic production is stymied by government limitations on what producers may charge. These structural issues often make LNG imports by India difficult to predict and this past week showed just the latest example. The same week that India was broadly swapping out its long position in U.S. LNG, it was also importing U.S. LNG cargoes for the first time. The longer-term swap arrangement highlights what PIRA sees as an emerging trend around the world: end-user buyers optimizing import costs by cutting new deals with portfolio players in a position to do the optimizing for them.

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.

Casing and completion tools specialist Deep Casing Tools has expanded into the Kazakhstan market with its reaming and unique drillable turbine technology.

The company’s 7” Turbocaser Express™ high-speed reaming system was deployed recently in the Chinarevskoye field where the client had experienced previous casing running issues. The casing reached total depth on first attempt and, following a typical cement program, the Turbocaser Express™ was successfully drilled out with a polycrystalline diamond compact bit on a rotary steerable assembly and next section drilled in one run.

Deep Casing Tools’ technologies provide significant time and cost savings. With the ability to ream while running in, the casing can be run sooner while the hole is in best condition, eliminating wiper trips and open hole exposure time.

The company’s expansion into Kazakhstan has been supported by Oil Tools Services, a Kazakh company based in Aktobe city with a wide established client base. Oil Tools Services established the demand for Deep Casing Tools products in the region by performing market research and identifying several applications where clients had suffered significant non-productive time running tubulars attributed to wellbore instability.

Alan Phillips, Vice President Sales of Deep Casing Tools, said: “Our entry into Kazakhstan is great news for both Deep Casing Tools and Oil Tools Services and is in line with our global expansion strategy. Despite the downturn we are well placed to succeed in this market as our technology saves clients flat time and reduces overall well costs. We look forward to further expansion into Kazakhstan and neighboring territories”

A spokesman for Oil Tools Services Management said: “We are proud to be part of this success alongside Deep Casing Tools. This is the first round of benchmark testing for running production casing with the Turbocaser Express™ versus conventional casing running methods in this region. A professional commitment from the team led to the client’s success by generating value through the application of innovative products and service”

Additional business expansion for Deep Casing Tools includes a record order book in Russia and a first Turbocaser Express™ deployment offshore Netherlands.

Decom North Sea (DNS), the representative body for the offshore decommissioning industry, which promotes and facilitates collaboration and cost reduction, has today announced the appointment of a new chief executive.

Roger Esson brings over 20 years’ highly relevant experience as DNS continues to play a critical part in the development of the UK decommissioning sector. Having held a variety of leadership positions within companies ranging from SMEs to tier 1 contactors, his previous roles have included time with Stork Technical Services and Amec Foster Wheeler’s decommissioning division.

Roger Esson, chief executive, Decom North Sea

He has played an active role in the execution of several of the UK’s most significant decommissioning projects - including the MCP01, North West Hutton and Brent Delta installations - and is widely recognised for his stewardship of the oil and gas sector, not least through his participation on a number of industry boards and forums.

Commenting on the appointment, DNS chairman Callum Falconer said: “We are exceptionally pleased to welcome Roger to this position. Decom North Sea has no doubt that his combination of knowledge and experience will prove invaluable in addressing the challenges inherent in this fledgling industry - ensuring that our members, as well as those in the wider oil and gas industry and beyond, have the ability to grasp the opportunities within decommissioning.

“On behalf of Decom North Sea, sincere thanks go to interim chief executive, Karen Seath, and the wider operational team for the work they have undertaken during the past six months. They have successfully built upon our key objective to deliver value to our members, whilst working collaboratively with our strategic partners to ensure that an effective and sustainable supply chain addresses the requirements of this emerging sector.”

Roger Esson added: “I am delighted to join Decom North Sea and look forward to applying my knowledge and experience to the role. This is a challenging time for the North Sea industry and it is vital that we focus upon helping our members understand and prepare for the opportunities that are available.

“For example, DNS has long recognised the critical effect late life asset management has upon the success of the decommissioning process - as well as the vast number of opportunities it presents. With our members’ requirements firmly at the forefront of our minds, DNS has created the Late Life Planning Portal (L2P2), a trailblazing toolkit designed to encourage the all-important sharing of knowledge and the opportunities available within this phase.”

DeepOcean AS, a subsidiary of DeepOcean Group Holding BV (DeepOcean), has announced that the company has been awarded a contract for provision of Engineering, Procurement, Removal and Disposal (EPRD) of Varg Subsea facilities by Repsol Norge AS.

The scope of work cover subsea pre-decom survey, recovery of FPSO mooring lines, anchor piles, risers, midwater-arch buoy and subsea structures as well as onshore disposal and recycling of the recovered items.

The Edda Freya 304OCV offshore construction vessel with a length of 149.8m and beam of 27m is due to join the DeepOcean fleet early in 2016.With 2 off 220HP Constructor WROV’s moon pool handling, L&R 7m Hs and accommodation for 140 people. Credit: DeepOcean

“In the current market, with tough competition for every job I am pleased that DeepOcean has been selected by Repsol for this project. DeepOcean already has an in-depth knowledge of Repsol’s assets in the North Sea, through our long term relationship on maintaining the integrity of their assets. Coupled with our significant experience for similar operations it is great to learn that our project team has been able to take advantage of this and develop a cost efficient solution for Repsol.

Further, the new construction vessel Edda Freya, arriving in our fleet in 2Q16 has been specially designed for multiple types of subsea operations, and hence prove very cost efficient for subject scope”, says Rolf Ivar Sørdal, DeepOcean’s Commercial Director for Subsea Services in the Greater North Sea.

The Johan Castberg development has faced numerous challenges since inception. If production in the Barents Sea wasn’t difficult enough, Statoil has had to contend with changes to Norwegian Tax laws as well as disappointing drilling results. In May 2014, it was confirmed that of five exploration wells drilled in the area, only two yielded oil reserves: the Skavl and Drivis fields. This initially challenged the viability of commercial development, however, it now appears Statoil may have found a solution.

Low oil prices have pushed back Johan Castberg’s onstream year considerably. In the current climate, development of such a technically challenging field – in the hostile waters of the Barents Sea – might seem an impossible proposition. However, against the odds, it appears the project could go ahead with first oil in 2022. Statoil’s Chief Executive recently stated production costs at the field have been nearly halved since the oil slump, which raised the question - how?

Construction costs have dropped considerably since the downturn, with EPC providers bidding aggressively on the few contracts available. Yet with oil prices remaining low, reduced contractor rates are not enough to ensure the viability of complex projects. Put simply, a pragmatic approach to developments is needed. Costs at Johan Castberg have been cut by reducing the number of planned production wells and choosing a single FPSO rather than an FPSS and pipeline – reducing the break-even price for the field from ~$80 a barrel to ~$45.

The story is remarkably similar to that of Mad Dog Phase 2 – another field that has arguably suffered from over-engineering and has endured numerous development plans: A spar, TLP and an FPSS were all considered by BP, before committing to an FPSS – later cancelled due to inflated costs. With lower supplier costs and a company focus on re-engineering BP have managed to make the project commercial, bringing the break-even price down from ~$110 a barrel to ~$50.

Both fields demonstrate that even in a low oil price environment, complex fields can still be developed by utilising a pragmatic approach. Keeping costs at a manageable level over the next cycle will be the challenge - when the oil price recovers will the industry revert to its old ways?

Mike Green, Douglas-Westwood London

On Thursday, April 28, at a special reception for clients and business partners, Next Generation Marine announced the opening of its global headquarters in the New Orleans Metropolitan area in May. The new headquarters will serve as a central hub for Next Generation's thriving marine operations. In addition, the marine start-up celebrated the christening of two of its newest vessels at the Port of New Orleans Thursday night. 



"The marine industry is booming in the metro area and we are confident that our business will thrive here," said Captain Eddie Compass, IV, CEO of Next Generation Marine. "Contributing to the marine industry here in New Orleans is something I've always dreamed about, and now we have the opportunity to do it." 

Next Generation Marine is one of only two African-American owned marine transportation companies in the country to own and operate its fleet of vessels. Next Generation Marine was founded in 2015 by Eddie Compass, IV, and Julien Chouest, II.

"The marine and maritime industry is such a vital part of Louisiana's economy, and like most industries, it has been vastly under represented by people of color," said Congressman Cedric Richmond. 

Compass, a New Orleans Native, has more than 10 years working in the marine and maritime industry. He has traveled around the world logging time in Chile, Lima Peru, Ireland Angola, and Trinidad to name a few.

Compass earned his Bachelor of Science in Marine Transportation from the Maritime Academy Texas A&M University. 

The company expects to hire an additional 60 employees by May 2017. This will bring the total employees from 40 to nearly 100. Salaries range from $60,000 for deckhands to six figure salaries for captains. 



On April 18, 2016, Goliat was the first oil field to come on stream in the Barents Sea. The field applies several ground-breaking technologies, which will also benefit the industry in future developments. The Goliat project development execution has contributed to substantial ripple effects, positively impacting the supplier industry in all of Norway, and Northern Norway in particular. Goliat operations will deliver considerable income both to the state and the partnership in the years to come.

Photo credit: © Eni Norge

“This is a proud moment for everyone in Eni Norge. It is the culmination of years of hard work by many dedicated people. We are now entering into a new phase as operator on the Norwegian continental shelf. The start-up of production from Goliat is an important milestone in Eni’s growth strategy”, says Andreas Wulff, External Communication Manager.

Production at Goliat started safely in the evening of March 12, 2016, and was followed by a rapid production ramp-up of all wells. Full re-injection of associated gas into the reservoir has started and re-injection of produced water in order to minimize environmental impact will soon commence.

Eni, operating through its subsidiary Eni Norge AS, has been present in Norway since 1965. The company has interests in exploration licenses and producing fields such as Ekofisk, Norne, Åsgard, Heidrun, Kristin, Mikkel and Urd, with a total production in 2015 of 106,000 boed. With Goliat, eni Norge production will grow above 160,000 boed net to Eni.

Eni Goliat illustration overview. Credit: © Eni Norge.

The platform has a production capacity of 100,000 barrels of oil per day and storage capacity of 950.000 barrels. Its estimated recoverable reserves are ca 180 million barrels of oil. Field life is currently estimated to 20 years, with significant upside already identified.

Subsea IMR provider, N-Sea, has been awarded a new contract with Galloper Offshore Wind Farm Ltd (GWFL).

The contract for pre-construction unexploded ordnance (UXO) clearance works commenced in April 2016 and includes UXO risk management, target investigations and clearance on the Galloper Wind Farm, off the coast of Suffolk.

Expected to run for between 3-6 months, the project sees the Siem N-Sea multi-support vessel utilize a WROV to investigate potential UXO targets within the array areas and export cable corridor. N-Sea’s dive support vessel, Neptunus, will also undertake similar tasks in shallow water areas.

Dive Support Vessel, Neptunus. Image credit: N-Sea

To complete the clearance works, N-Sea has sub-contracted Ordtek Ltd (provider of unexploded ordnance risk management for land and marine developments), Modus Seabed Intervention (work class ROV and crew hire) and Ramora UK (Explosive Ordnance Disposal services).

Chief operating officer at N-Sea, Roddy James, said: “We are delighted to have the opportunity to contribute to the development of the Galloper project, which is a key part of the UK’s renewable energy portfolio.

“N-Sea has an impressive track record of unexploded ordnance campaigns in harsh conditions, which was key to our success in securing this contract. Our personnel and equipment resources are at the leading edge of UXO services, and our efficient, robust systems ensure we complete every project safely, on-time and within budget. This is a clear reflection of our ability to always provide safe, sound and swift solutions for our clients.”

N-Sea is known for its innovative work as an independent offshore subsea contractor, specializing in IMR services for the oil and gas, renewable and telecom/utility industries, as well as for civil contracting communities. N-Sea provides near shore, offshore and survey services to major operators and service companies alike.

Ordtek Ltd recently launched a Mine Map sharing information regarding UXO around the UK coastline. The map illustrates that the Galloper area, was heavily mined in the First and Second World Wars, and has been an active British military training area.

Ordtek director Lee Gooderham: “We are delighted to be working on this important renewable energy project off our local Suffolk shoreline. This is significant and complex project for us, with considerable ordnance has previously been found at the neighbouring Greater Gabbard site.”

International energy logistics provider Peterson has secured a long term logistics contract with oil and gas operator TAQA. The five year contract is for integrated supply base and logistics operations supporting TAQA’s offshore assets in the UK North Sea - Harding, Tern, Eider, North Cormorant and Cormorant Alpha.

The contract scope includes the provision of quayside services, warehouse management, cargo carrying units, transport, fuel and marine services and includes an option for two additional, one year extensions.

Peterson will be responsible for managing 55,000 deck tonnes and supplying 50,000 tonnes of fuel annually and will support TAQA from quayside and warehouse facilities in Aberdeen and Kintore.

Chris Coull, Regional Director Peterson said: “This long term contract enables us to deliver sustainable cost saving concepts and systems, whilst ensuring a focus on safe and efficient operations. Peterson is an industry leader in vessel pooling and marine sharing and we look forward to sharing our knowledge and experience in this area with TAQA.

“Peterson will work closely with TAQA to understand their needs and bring new ways of working supported by our proprietary suite of multi-user digital applications including our industry leading cargo management system eCargo and real time inventory and asset tracking through VOR.”

Peterson is working closely with customers to drive efficiencies and generate maximum value across their logistics operations. Last month the company was recognised for its unparalleled record in collaborative vessel sharing arrangements at the SPE Offshore Achievement Awards, winning the award for collaboration.

An ambition to provide even better service to MacArtney’s customers in the Asian Pacific market has resulted in a relocation of MacArtney Singapore to bigger and more spacious environments and in the set-up of a new local office in China.

Following a successful presence during the past couple of years in the maritime Southeast Asia, MacArtney Singapore have via their new premises put themselves in a more favourable position to deal with more jobs at a time and to carry out higher-quality service to their customers in the Asian Pacific markets.

New premises MacArtney Singapore, Asia Pacific Operations

Office, workshop and warehouse facilities

The new premises of MacArtney Singapore include in addition to their dedicated sales office various warehouse and workshop facilities, viz. a fibre optic workshop as well as a dedicated slip-ring repair workshop and a moulding workshop.

As part of the MacArtney Underwater Technology Group, MacArtney Singapore provides direct local access to the entire MacArtney portfolio of products and system solutions - backed by global service, support and know-how for any underwater technology requirement from individual connectors to complete launch and recovery systems. This resulting in efficient service and prompt delivery to underwater technology customers in Singapore, Malaysia, Thailand, Cambodia, Vietnam, Brunei, Indonesia, the Philippines and China.

Local office in China

More and more countries in Asia are investigating into ocean science, especially China. With more research vessels being built, there is an increased demand in oceanographic equipment and launch and recovery systems.

Provision of superior service to MacArtney’s customers in the Chinese market is the paramount incentive behind setting up a new MacArtney office conveniently located in ZhuHai and allowing for easy access to most customers in Guangzhou, the capital and largest city of the Guangdong province in South China.

We see a need for MacArtney to be physically present in such a competitive region. Our presence in China will enable us to be closer to our customers, and we will be able to support both customers and distributors, says Steen Frejo, Managing Director of MacArtney’s Asia Pacific Operations.

In consequence of having established a branch office in Zhuhai, MacArtney Singapore have engaged a new System Sales Manager, Mr. Steven Yang, who has many years of experience in the ocean science industry. Mr. Yang’s primary job is to attend to the comprehensive task of servicing the Chinese market.

Xodus Group’s Intelligent Monitoring service is being used by Australian oil and gas company Woodside to create surveillance tools for its North West Shelf assets.

Accurate monitoring of oil and gas production is an increasingly valuable tool for operators and surveillance engineers but, until now, visibility of data has been almost exclusively available to on-site operators. For those involved in remote surveillance and decision support, the ability to visualize data and interpret an asset’s performance in real-time has been a significant hurdle.

The Woodside–operated North Rankin Complex, W.A. Image credit: Woodside Energy Ltd.

Xodus is forging a path in Intelligent Monitoring which makes information from the asset’s data historian available to engineering and management teams by creating interactive visualization tools. Information from the asset is not only displayed in real-time, it can also be used to calculate new data not recorded in the historian.

This can then be visualized even where no physical instrumentation exists, for instance via the creation of virtual meters for a process stream without instrumentation, or where a meter already exists but requires a metric for drift in calibration.

Michael Putrino, Intelligent Monitoring Lead at Xodus in Perth, explains: " Woodside’s North West Shelf offshore assets, the North Rankin Complex and Goodwyn Alpha, now employ a start-up sequence visualization tool created by our team of experts. It monitors systems coming online during a restart and displays key start-up status indicators from around the process and utilities systems. Crucially, it allows the surveillance team to monitor the asset start-up sequences proactively. Information can also be calculated from the monitoring sequence that determines how much downtime is associated with a particular activity, enabling it to be logged for further investigation."

Xodus has also created powerful compressor and other process parameter monitoring dashboards for Woodside’s North Rankin Complex. The customized dashboards consolidate average operating values across a 24 and 48 hour period to indicate how the asset’s equipment has been operating relative to the integrity envelope. This provides surveillance engineers with a means to assess any excursions towards alarm limits and take preventative action for future excursions. With access to the asset's data historian and the facility's production and design documentation, Xodus creates a raft of intelligent calculations to monitor critical equipment. This includes: triethylene glycol (TEG) column performance, pump performance, operating and integrity envelopes, alarm and trip history, and heat exchanger performance and fouling.

Xodus’ engineering expertise is the result of extensive design and operations support in the oil and gas industry. This in-depth experience has enabled the company to extend its know-how into intelligent solutions for monitoring facility performance.

DOF Subsea has been awarded several IMR and subsea installation contracts the past months, with a total contract value in excess of NOK 500 million. The contracts will secure utilization of the subsea project fleet in the regions.

In the Asia Pacific region DOF Subsea has been awarded an LOI from a key client for a EPCI project with the offshore phase during first half 2017. The scope of work includes supply chain management services for the fabrication and supply of mooring chains, replacement of eight mooring legs and PM&E.

Image credit: DOF Subsea

In the Atlantic region, DOF Subsea has been awarded several contracts the past months. A highlight was the award of an FPSO mooring installation and hook-up contract by Yinson Production offshore Ghana, on the Eni operated OCTP field. The contract will secure utilization of the Atlantic organization and regional subsea vessels in Q4 2016 and Q1 2017, and the project will increase DOF Subsea's presence in West Africa. Other highlights were the award of a 5-year pipeline inspection frame agreement for Maersk, and survey work for Nexans relating to the NordLink cable, connecting the Norwegian and German electricity markets. DOF Subsea also won repeat subsea work for Statoil, Maersk and other clients in the region.

In the North America region, DOF Subsea has been awarded several contracts with key clients in the Gulf of Mexico and offshore Canada. The scope of work includes survey, IMR and light construction. To service the contracts offshore Canada, DOF Subsea will charter the DOF-vessel Skandi Chieftain for a 100-day job, in addition to increasing the number of ROV systems deployed in the region.

Mons S. Aase, CEO, stated, "I am pleased with the contract awards, securing utilization of people and assets. The FPSO mooring award offshore Ghana, as well as allocating an additional vessel to the Canadian market, increases the Group's global presence and improves our market access. This in combination with securing repeat business for our key clients will be important going forward."

TIW UK Limited recently signed a three-year contract extension with Total E&P UK. This three-year agreement is focused on the supply and rental of Liner Hanger products and services for their upcoming drilling projects within the North Sea.

“TIW has had a long-standing relationship with Total and is delighted to secure this contract extension,” said Matthew Gray, TIW UK district manager. “We are looking forward to continue building on our long relationship with Total and to continue delivering quality equipment, support and solutions to their operations over the next three years.”

Damen Shipyards Group has announced the opening of a new branch office in Houston, Texas. This expansion, under the name of Damen North America, meets the increasing demand for Damen’s unique shipbuilding concepts and repair and conversion services.

The branch office – representing the Damen Shipyards Newbuild, and Damen Shiprepair & Conversion businesses across North America and Canada – has decided to open offices in the heart of the Energy Corridor of Houston, to ensure it can accommodate customers in the best possible way.

Arnout Damen, Chief Commercial Officer, said: “In this difficult economical climate, we are of the opinion that it is important to support the oil and gas market and are thrilled to expand our business to customers across North America and Canada. I am therefore pleased that we are expanding office locations to North America and improving service and product offerings to these markets.

“We seek to provide our customers the best quality, proven designs, short delivery times, low maintenance and excellent resale value and trustworthy repair & conversion solutions, combined with our commitment that we will deliver an unrivaled service to the highest safety and reliability standards.”

“Establishing an office out of Houston demonstrates the power of the Damen global presence for mutually beneficial and cost effective solutions,” said Jan van Hogerwou, Manager USA & Canada for New Buildings. “I look forward to working closely together with both ship operators as well as shipyards to maximize the value of having a local presence with the use of proven designs, high quality craftsmanship and low Total Cost of Ownership.

“We expect a lot from our new License to Build program in which we offer our ship designs and our construction expertise to any shipyard in the US. Our standardized shipbuilding approach, known as The Damen Standard, has become one of our fundamental core values. It gives us the ability to offer our customers well-proven, innovative vessels and/or designs for competitive prices.”

“We’re incredibly excited about the potential of this new office,” said Ruud Haneveer, Market Development Executive for Damen Shiprepair & Conversion. “We are proud to work for Damen, to operate as one family and teamwork is key to our success.

“The new office demonstrates our ever-expanding focus on customers’ needs. Through this local office, we are closer to our customers in the region. We value our customers’ feedback and the contribution it makes to advancing our ambition to improve our performance continuously and to set new standards in the repair and conversion of ships. The repair & conversion services represented by us are related to the group’s Shiprepair and Conversion shipyards located outside the United States of America.”

Wood Group has recently won four subsea contracts with Statoil on the Norwegian continental shelf (NCS). The latest award is a study to deliver subsea field concept engineering for the Snorre expansion project.

This project will focus on cost efficient enhanced recovery from the Snorre reservoir, with tieback to the existing Snorre A tension leg platform and gas import from Gullfaks A. There are also options for front end engineering design (FEED), detailed design and fabrication on this contract award.

On the Oseberg field development Wood Group Kenny has been awarded detailed design for two pipelines with corresponding spools and an umbilical, which will form part of the tieback from the future unmanned wellhead (UWP) platform to the Oseberg field centre.

Wood Group Kenny also provided FEED support on the Utgard field development to support engineering on the pipeline system that will tieback the planned subsea template to the Sleipner T platform and performed lifetime extension studies to the pipeline system in the Gullfaks field.

Bob MacDonald, CEO of Wood Group Kenny said: “Norway remains a key market for Wood Group Kenny and winning this work with Statoil underlines our position there. Our independent solutions strengthen the appeal of Wood Group Kenny to clients in this challenging environment and we are focused on improved efficiency. The four latest contracts awards cover the whole project lifecycle in pipeline engineering from concept, FEED, detailed design and life time extension, utilizing our broad expertise in this area.”

Trond Grytten, operations director of Wood Group Kenny in Norway added: “Winning these four Statoil contracts is testament to our hard work and adaptability; underlining Wood Group Kenny’s capacity and capability to take on larger subsea projects in the Norwegian Continental Shelf. We look forward to continuing our good relationship with Statoil and working with them to bring the cost down for these important projects.”

Subsea 7 S.A. (Oslo Børs: SUBC, ADR: SUBCY) has announced the award of a sizeable(1) engineering, procurement, installation and commissioning (EPIC) contract by Apache North Sea, as part of the Callater field development, located 335km north east of Aberdeen.

The contract work scope covers the project management, engineering, procurement, construction and installation of a 4km, 45" Pipeline Bundle system consisting of production lines, and power and supply services. It also includes the installation of a 13km electro-control umbilical, associated structures, field testing and pre-commissioning works.

Project management and engineering work will commence immediately from Subsea 7's offices in Aberdeen, with offshore activities planned for the first quarter 2017.

Phil Simons, Subsea 7 Vice President UK and Canada, said: "This award demonstrates our ability to collaborate with our clients to produce cost-effective technical solutions. It further recognizes the 35-year proven track record of our Pipeline Bundle technology for extending subsea infrastructure lifespans, whilst offering clients considerable cost savings from having all service lines integrated in a single product."

(1) Contract term: Subsea 7 defines a sizeable contract as being between USD 50 million and USD 150 million.