Phoenix International Holdings, Inc. (Phoenix) announces that Patrick Keenan Jr., P.E. has been appointed as President, effective November 1st. In this position, Patrick will be responsible for all of the Company's operating units worldwide and will continue to expand upon Phoenix's reputation of being a premier provider of underwater solutions.
Before beginning his foray into the private sector, Keenan (CAPT USN retired) served in the United States Navy for thirty years as a diver, salvor, and engineer. He is a registered professional engineer and marine surveyor with a BA in Chemistry from the University of Pennsylvania, and an MS in Materials Engineering and Naval Engineering from the Massachusetts Institute of Technology. His research relating to waterborne ship repair was published in the Naval Engineers Journal. He holds a U.S. patent for his invention Method and Apparatus for Thermal Insulation of Wet Shielded Metal Arc Welds and was the 2000 American Society of naval Engineers Claude A. Jones Award winner for excellence in the field of Naval Engineering.
On his appointment, Phoenix CEO Mike Kutzleb stated, "Patrick is a highly accomplished leader with the qualities and experience required to lead the company as we continue to accelerate the growth of Phoenix over the next few years." He continued, "His ability for strategic thinking at a very high level coupled with his operational acumen, extensive leadership experience and global business perspective make him the perfect choice for President of Phoenix."
At sea Patrick held deck and engineering officer positions aboard ATF and ARS class salvage ships, and was the Seventh Fleet Salvage Officer based in Singapore. Shore assignments included hyperbaric maintenance superintendent at a diving research facility; dry docking and diving officer in a naval shipyard; aircraft carrier repair officer and supervisor of shipbuilding; Officer in charge of ship repair unit Bahrain; Commanding Officer of the Navy Experimental Diving Unit; and Director of the Naval Construction and Engineering program at the Massachusetts Institute of Technology. His final tour of duty was a U.S. Navy Supervisor of Salvage and Diving and Director of Ocean Engineering. Before being appointed President, Patrick served as Manager of the Commercial Underwater Ship Husbandry (CUSH) Division for Phoenix.
Exxon Mobil Corporation (NYSE:XOM) have announced a significant discovery with a potential recoverable resource of between 500 million and 1 billion barrels of oil on the Owowo field offshore Nigeria.
The Owowo-3 well, which was spud on Sept. 23, encountered about 460 feet (140 meters) of oil-bearing sandstone reservoir. Owowo-3 extends the resource discovered by the Owowo-2 well, which encountered about 515 feet (157 meters) of oil-bearing sandstone reservoir.
“We are encouraged by the results and will work with our partners and the government on future development plans,” said Stephen M. Greenlee, president of ExxonMobil Exploration Company.
Owowo-3 was safely drilled to 10,410 feet (3,173 meters) in 1,890 feet (576 meters) of water. The Owowo field spans portions of the contract areas of Oil Prospecting License 223 (OPL 223) and Oil Mining License 139 (OML 139). The well was drilled by ExxonMobil affiliate Esso Exploration and Production Nigeria (Deepwater Ventures) Limited and proved additional resource in deeper reservoirs.
ExxonMobil holds 27 percent interest and is the operator for OPL 223 and OML 139. Joint venture partners include Chevron Nigeria Deepwater G Limited (27 percent interest), Total E&P Nigeria Limited (18 percent interest), Nexen Petroleum Deepwater Nigeria Limited (18 percent interest), and the Nigeria Petroleum Development Company Limited (10 percent interest).
Oceaneering International, Inc. (“Oceaneering” or the “Company”) (NYSE:OII) announces that a unit of BP p.l.c. (“BP”) (NYSE:BP) has agreed to a two-year extension through January 2019 under the Field Support Vessel Services contract that was entered into with the Company for work offshore Angola on Blocks 18 and 31.
Ocean Intervention III. Photo courtesy: Oceaneering
Under this contract term extension, the Ocean Intervention III will remain chartered through April 2017, with five option periods for further extension of one-month each. Additional vessels and services, if any, would be provided during the remaining period of the contract, on as-needed basis.
M. Kevin McEvoy, Chief Executive Officer of Oceaneering, said, “We are pleased to have secured this contract extension with BP. In support of this contract, we are also providing a wide range of vessel-related subsea services, including remotely operated vehicles, tooling, asset integrity, and diving services. This extension strengthens our long-term commitment in Angola, which we see as a vital deepwater market for Oceaneering’s services and products.”
Hyperdynamics Corporation (OTCQX: HDYN) announces that it has signed a Letter of Award with drilling contractor Pacific Drilling to engage the Pacific Bora drillship to begin a drilling campaign offshore the Republic of Guinea in the second quarter of 2017.
"We are very pleased to be working with Pacific Drilling, which has a top-quality fleet of deepwater drilling vessels working in a variety of international basins," said Ray Leonard, Hyperdynamics President and Chief Executive Officer. "The Pacific Bora recently completed a long-term contract for a major American multinational energy company offshore Nigeria. The Pacific Bora is expected to arrive shortly before our target spud date for the Fatala 1 well, so the timing is perfect: The ship will come to us with a high-quality, experienced crew, and we will avoid a rig mobilization charge due to the close proximity of the ship's current location in West Africa. We have also negotiated a very attractive rate of $225,000 per day.
"The Pacific Bora is a 6th generation, double-hulled drillship constructed in 2010 with state-of-the art equipment that is capable of operating in 10,000 feet of water and drilling up to 35,000 feet below the mudline. The Pacific Bora has delivered an outstanding 99% revenue efficiency performance over the past 12 months in Nigeria," Leonard added.
The Letter of Award also enables Hyperdynamics to extend the contract to include as many as three additional follow-up wells at the same favorable terms and conditions. The agreement is subject to the two companies entering into a definitive contract to be signed no later than November 29.
Hyperdynamics is an emerging independent oil and gas exploration company that is exploring for oil and gas offshore the Republic of Guinea in West Africa.
Separator Spares & Equipment, LLC announces an authorized distributor/agency agreement with MME Group.
Effective immediately, Separator Spares & Equipment will be providing MME Impressed Current Systems, MME Antifouling Systems, MME Sacrificial Aluminum and Zinc Anodes, and MME Harbinger Boarding Equipment. This strategic alliance will provide MME Group’s customers a local representative in the United States and Canada.
“We were looking for a selling and servicing partner for our ICAF and ICCP systems, and we found that partner in Separator Spares & Equipment” said Eric Bouman, Sales Manager at MME Group. “The driving force behind the agreement is the shared commitment, of both companies, to increase the availability of MME Group products and services to North American Customers.”
Nothing is more valuable than life, both human life and that of our planet. MME Group provides inspection, (non-)destructive testing and rope access services, as well as corrosion prevention systems, anti-fouling systems and boarding equipment. These products and services enable producers, owners, and operators to safeguard the long term integrity and profitability of their assets and products, and in doing so, protect the lives of those involved with them. Our mission is “A Longer Life”.
MME Group is based in the Rotterdam area, in The Netherlands. The company was established in 1963 and has since grown to become one of the most experienced and specialized companies in its field of activity. MME Group serves customers around the globe in industries such as machine building, oil & gas, offshore renewable energy (wind and tidal), shipping and shipbuilding.
Based in Houma, Louisiana, Separator Spares & Equipment’s Marine Division is a leading supplier in complete separation and heat transfer packages. The woman owned company, has grown from a spare parts provider, to a thriving, reliable, global supplier of spare parts and equipment. Separator Spares & Equipment’s knowledgeable staff has over 50 years combined experience within the Maritime Industry.
GE (NYSE:GE) and Baker Hughes (NYSE:BHI) have announced that the companies have entered into an agreement to combine GE's oil and gas business ("GE Oil & Gas") and Baker Hughes to create a world-leading oilfield technology provider with a unique mix of service and equipment capabilities. The "New" Baker Hughes will be a leading equipment, technology and services provider in the oil and gas industry with $32 billion of combined revenue1 and operations in more than 120 countries. By drawing from GE technology expertise and Baker Hughes capabilities in oilfield services, the new company will provide best-in-class physical and digital technology solutions for customer productivity.
Under the terms of the agreement, which has been unanimously approved by the boards of directors of both companies, at the closing of the transaction Baker Hughes shareholders will receive a special one-time cash dividend of $17.50 per share and 37.5% of the new company. GE will own 62.5% of the company. The transaction is expected to close in mid 2017.
"This transaction creates an industry leader, one that is ideally positioned to grow in any market. Oil & gas customers demand more productive solutions. This can only be achieved through technical innovation and service execution, the hallmarks of GE and Baker Hughes," said Jeff Immelt, Chairman and Chief Executive Officer of GE. "As we built the GE Oil & Gas business, I have always been impressed by the respect our customers have for Baker Hughes. GE Oil & Gas is a key GE business, one that fully leverages the GE Store. As we go forward, this transaction accelerates our capability to extend the digital framework to the oil and gas industry. An oilfield service platform is essential to deliver digitally enabled offerings to our customers. We expect Predix to become an industry standard and synonymous with improved customer outcomes. GE investors will benefit through ownership of a stronger business with substantial synergies and an improved competitive position. The transaction is expected to add approximately $.04 to GE EPS in 2018, $.08 by 2020."
Martin Craighead, Chairman and Chief Executive Officer at Baker Hughes said, "This compelling combination brings together best-in-class oilfield equipment manufacturing and services, and digital technology offerings for the benefit of all customers and stakeholders. The combination of our complementary assets will create a platform capable of seamless integration while we enhance our ability to deliver optimized and integrated solutions and increase touch points with our customers. In addition, Baker Hughes shareholders will receive a special one-time cash dividend of $17.50 per share and benefit from the upside of a stronger, larger business. With employees of Baker Hughes and GE Oil & Gas coming together, the new company will be an industry leader, well-positioned to compete in the oil and gas industry while pushing the boundaries of innovation for our customers."
Lorenzo Simonelli, who is currently president and CEO of GE Oil & Gas said, "This transformative transaction will create a powerful force in the oil and gas market as we continue to drive long-term value for our customers and shareholders. This transaction is also exciting for employees of both companies. GE Oil & Gas and Baker Hughes are an exceptional cultural fit, sharing a commitment to exceeding customer expectations. Both companies' employees will benefit significantly from being part of a larger, stronger company that is positioned for long-term growth. We look forward to combining the digital solutions and technology from the GE Store with the domain expertise of Baker Hughes and its culture of innovation in the oilfield services sector."
The Board of Directors of Saipem S.p.A., chaired by Paolo Andrea Colombo approved the Saipem Group’s Interim Report at September 30, 2016 (not subject to audit) and the Strategic Plan for 2017-2020.
The Board of Directors of Saipem S.p.A. has approved the Strategic Plan, which identifies a series of measures that will allow the Company to face more challenging market conditions, with the recovery expected to take longer than previously estimated. Refocusing the business portfolio, de-risking operations, optimizing costs, making processes more efficient, and emphasizing technology and innovation, are all reaffirmed as the basis of the Group's strategy. To achieve these objectives, it has been decided to adopt a new, leaner, more effective and more efficient organizational model, aimed at entrusting individual businesses with greater responsibility for project outcomes and performance. This will allow for increased decision-making agility, greater consistency between responsibility for results and attribution of decision making levers, complete autonomy in the identification of priorities, and greater focus on project execution.
Offshore Construction; Onshore Construction; Offshore Drilling; Onshore Drilling, and a new entity dedicated to high added value engineering activities and services, aimed at improving the offer in a structured way and bring the Company ever closer to its Clients’ needs. As well as generating greater efficiency in its European based facilities (reduction in headcount of around 800), thanks to the new and leaner operating processes the new organization will lead to a better deployment of human resources competences within the Group. This in turn will enable a process of professional growth - vital for ensuring the retention of key resources - which the economic downturn in the sector has impeded, at least in part. Moreover it will permit maximum flexibility in the evaluation of strategic options for each individual business sector. The Strategic Plan also includes rationalization of the asset base, mainly concerning a number of vessels and rigs in the Drilling and Offshore E&C sectors, in addition to several yards in the Offshore and Onshore E&C sectors.
“In the first nine months of 2016, we achieved results that are both encouraging and in line with expectations, thanks to solid performances by both the Offshore E&C and Drilling sectors, the latter still benefiting from long-term contracts. In the third quarter, alongside our commitment to continuing our already planned efficiency measures, we saw a positive downtrend in net debt, the completion of the inaugural bond issue and a strong performance in terms of new contract awards. This has enabled us to confirm the guidance previously provided for 2016. The downturn in our sector, which is lasting longer than initially expected, has affected market prospects and requires reduction in the value of the Company’s asset base. The Strategic Plan that we have just approved aims to respond to these challenges through the adoption of a new organizational model. This provides for the creation of five divisions/companies dedicated to the following sectors: Offshore Construction; Onshore Construction; Offshore Drilling; Onshore Drilling, and a new entity providing high added value engineering activities and services which will allow Saipem to improve its offer in a structured way and satisfy Client needs even more effectively. This industrial strategy follows on from and completes the extraordinary measures carried out this year, such as the change in shareholding structure, the capital increase and the refinancing of the debt, all of which have enabled the Company to achieve solid financial stability”.
In the event, the Ministry of Mines and Energy also advocated lower payments of royalties for small and medium-sized onshore companiesA faster, simpler and standardized environmental licensing process, with electronic processes, is among the objectives of Ibama’s, Brazilian federal environmental regulator, Licensing Board. The new director, Rose Hofmann, said in a plenary session at Rio Oil & Gas, that the body will adopt terms of reference for similar situations, which eases and standardizes the licenses. There will also be investment in personnel qualification and adoption of control and management mechanisms.
"We will have an annual licensing plan [with projects planned for the period] and goals to pursue efficiency and agility," she said. IBP’s executive secretary of Exploration and Production, Antonio Guimaraes, cited the industry's efforts to help speed up the licensing processes, such as the cooperation agreement with Ibama for the preparation of terms of reference and the mapping of the Brazilian coastline and islands. For Guimarães, the slowness of the licenses jeopardizes the industry. He exemplified saying that no drilling license of the 13th Round, in 2015, has been granted yet.
In another panel, the Secretary of Oil, Natural Gas and Renewable Fuels of the Ministry of Mines and Energy (MME), Márcio Felix argued that small and medium-sized oil companies operating in the onshore segment should pay less royalties to the states, municipalities and to the Union. Currently, the transfer amounts to 10%, but Felix believes that 5% or a progressive percentage would be a better solution so that low-production projects are not negatively affected or rendered impossible due to the price drop in the international market.
Felix spoke to an audience of executives and experts of the oil industry during the Onshore Forum, a parallel event that was held during Rio Oil & Gas, in Rio de Janeiro. "We are in the threshold of economic feasibility in some areas and for that reason we need to think of a number of measures to help us open a new range of opportunities. We want to provide all the required support so the country may find in the onshore segment another source of development", the secretary explained.
Congressman Beto Rosado presented the draft bill 4663, which is being processed in the Lower House, which provides for a new regulatory framework for the onshore segment. The project provides for new rules regarding infrastructure, logistics, environment and credit policies for small and medium-sized companies of the onshore segment. "With the approval of the draft bill and the resumption of onshore exploration, we will have a new scenario that will generate more jobs and income for the country", he argued.
Currently, there are 329 exploration blocks in Brazil, according to the National Agency of Petroleum (ANP). Of these, 209 blocks belong to the onshore segment, which counts on 33 operators. Of the 403 fields under development or production in Brazil, 286 are onshore fields, operated by 23 companies. The onshore produces today 146 thousand oil barrels per day, about 6% of the 2.6 million barrels of oil produced daily in the country.
For the president of IBP, Jorge Camargo, the onshore segment can be an important vector of economic growth in Brazil. "Those are extremely rich areas with excellent development potential. Besides, they also drive the local market and diversify the oil industry", he said.
Another highlight today in Rio Oil & Gas was the Secretary of the Investment Partnership Program, Moreira Franco, saying that he hopes to see soon the approval of two points of the draft bill on the end of the single operator, which is being processed in the House of Representatives, with sanctions. According to him, one of the government's goals is to strengthen the oil and gas industry. "With the strengthening of the oil industry, Petrobras will revive", he said.
Moreira Franco also advocated the balance of revenues and expenditures in Brazil, which, according to him, has to maintain a budget surplus to pay debts, reduce the interest rate that is currently at 14% to control the inflation, stabilize public accounts and ensure legal safety in contracts, to become a competitive country. "The focus is on the economy and on the fiscal target. Without it, we will not balance the national accounts. Yesterday we approved in the second round in the Lower House a constitutional amendment that will help us to balance revenues and expenditure with the actual budget", he said.
Penspen, a leading global provider of engineering, asset management and integrity services to the energy industry, is pleased to announce the launch of its Pipeline Defect Assessment Manual (PDAM), second edition. This 456-page best-practice guide is a collaborative industry venture, involving a number of leading oil and gas companies, which collates expert advice and guidance for pipeline engineers.
The PDAM project commenced in 1999 and was originally developed to address the industry need to have a single document that contained definitive advice to assist pipeline engineers in maintaining pipeline integrity. Since its creation, the manual has become widely recognised as leading reference material in the pipeline industry and as a result the content has been embedded into the standard procedures of many of its sponsors.
The manual contains the detailed methods needed to assess a variety of defects commonly found in pipelines. The best available methods are presented in a simple and easy to reference manner. The pipeline defect assessment literature reviews are written and peer reviewed by internationally recognised experts within the pipeline integrity industry to provide a sound technical basis for the recommended methods contained within PDAM.
The updates in this second edition include the following:
A new chapter on fatigue assessment guidance.
A new literature review of mechanical damage, fatigue, weld defects, cracking, fracture propagation and subsea integrity issues and associated assessment methods.
A general update of the manual to improve guidance clarity and additional worked examples.
Nigel Curson, EVP Technical Excellence, Penspen, said: “We have put a lot of work into ensuring that this guide contains the go-to reference material for assessing pipeline defects. Many of our sponsors have saved a considerable amount of time, effort and money by referencing PDAM, which has in many instances enabled them to avoid unnecessary and costly damage repairs.
“It’s a collaboration which works and which benefits everyone involved.”
PDAM membership currently stands at 33 international sponsors comprising operators, regulatory bodies, consultancies and inspection companies. The project continues to be updated and developed as more sponsors join. Sponsors are able to dictate the direction of the manual in order to address their current pipeline integrity topics and concerns.
Current sponsors include: ADMA-OPCO, Atteris, BG Group, BP plc, Canadian Natural Resources International, Centro Sviluppo Materiali SpA, Chevron Energy Technology Company, China Petroleum Pipeline Engineering Corporation, China Petroleum Pipeline Inspection Technologies, Compania Operadora de Gas del Amazonas, DNV GL, Equity Engineering, ExxonMobil, Engie, HSE, MACAW, Mero, FGSZ Ltd, National Grid, Open Grid Europe, Petrobras, PII Pipeline Solutions, PGN, Promigas, Saipem UK, Samarco, SASOL, Shell, SNAM Rete Gas SpA, Statoil ASA, Toho Gas Company Ltd, Total and Woodside Energy Ltd.
The Integrated Monopile Installer – developed by Royal IHC’s subsidiary, IHC IQIP – has won the Maritime Innovation Award at the 11th Maritime Awards Gala, held on Monday 31 October. The award is presented annually for a Dutch innovation from the maritime sector that meets the requirements for widespread potential application, excellent marketing prospects and sufficient export possibilities.
The chair of the judging panel, Ir. Hans Huisman, presented the award to IHC IQIP’s Executive Director Jan Albert Westerbeek. The judges singled out the Integrated Monopile Installer for the award due to the distinctive combination of innovations within a single system and its promotion of corporate social responsibility. The system allows monopile foundations to be installed efficiently and safely, and mitigates noise during pile-driving. In addition, it effectively reduces costs while offering environmental protection.
The system is an optimal combination of both knowledge and equipment that enhances the process of installing monopile wind turbine foundations. By seamlessly integrating technologies, the Integrated Monopile Installer reduces operation times, creates a safer working environment and increases the level of precision during offshore installations.
The Noise Mitigation System component creates a sealed-off environment, separate from external currents and waves, and mitigates the noise released during pile-driving. Both the optimisation of the installation process and the environmental protection will extend the use of monopiles as wind turbine foundations.
Royal IHC’s subsidiary, IHC IQIP, is a global market leader in innovative equipment and smart solutions for foundations, installation and decommissioning activities in the oil and gas, offshore wind, and coastal and civil engineering markets. IHC IQIP was established in 2015 following the merger of four renowned Royal IHC business units: IHC Hydrohammer, IHC Fundex Equipment, IHC Handling Systems and IHC Seasteel. These units have more than 200 years of combined experience, expertise and passion for innovation.
Aker Solutions secured two five-year framework agreements for potential future deliveries of subsea production systems and lifecycle services at BP-operated oil and gas fields globally.
The first five-year contract covers engineering, procurement and construction of subsea production systems for new and maturing developments worldwide. Aker Solutions would bid for work under the contract, which sets out the terms and conditions that would need to be met. The companies also agreed on a five-year servicing agreement, coinciding with the first contract, for any equipment delivered under the first contract and to support previously installed subsea hardware. Both contracts started in August 2016.
"This further expands our long-standing relationship with BP, which spans more than twenty years," said Luis Araujo, chief executive officer of Aker Solutions. "We look forward to working together to find sustainable solutions for securing needed energy resources from BP's subsea fields around the world." The contracts allow Aker Solutions to bid for work as one of four preferred suppliers for BP's development portfolio across the world.
The size of the framework agreements depend on the amount of work necessary and orders will be booked as they come in.
Trelleborg announces that it will be developing the next generation of buckling mitigation buoyancy technology. Chevron awarded Trelleborg’s offshore operation a license agreement to develop the patented technology, which includes the design and qualification of this new buoyancy product.
In certain offshore conditions, lateral movement of traditional fixed buoyancy modules can cause soil compaction, increased lateral soil resistance and the formation of berms. This condition can cause secondary regions of high stress, increasing the risk of lateral pipeline buckling.
After years of research and testing, Chevron identified a solution and has partnered with Trelleborg to develop and qualify, a new product. The new solution offers an alternative lateral buckling mitigation strategy using a rotating mechanism compared to standard fixed buoyancy - enhancing reliability and effectiveness of thermal expansion mitigation on subsea pipelines.
“By partnering with Trelleborg offshore, we’re using a new approach to accelerate the deployment of this technology,” stated Antonio Critsinelis, Subsea Pipeline Team Lead with Chevron Energy Technology Company. “This is an important partnership to bridge the gap from technology conception to production.”
John Drury, Managing Director at Trelleborg’s offshore operation in Skelmersdale states: “We are excited to work with Chevron on this joint-development project and are honored they chose Trelleborg as the sole manufacturer and distributor. We believe our knowledge and application expertise will support Chevron’s team to conclude a successful project.”
Using advanced polymer material technology, Trelleborg’s offshore operation provides high integrity solutions for the harshest and most demanding offshore environments. As part of the Trelleborg Offshore & Construction Business Area of Trelleborg Group, Trelleborg’s offshore operation specializes in the development and production of polymer and syntactic foam based seismic, marine, buoyancy, cable protection and thermal insulation products, as well as rubber-based passive and active fire protection solutions for the offshore industry. Within its portfolio are some long established and respected brands including, CRP, OCP, Viking and Emerson & Cuming. Trelleborg’s offshore operation has been providing innovative solutions to the industry for over 30 years.
The UK’s Automated Ships Ltd (an M Subs Ltd subsidiary) and Norway’s Kongsberg Maritime have signed a Memorandum of Understanding to build the world’s first unmanned and fully-automated vessel for offshore operations. In January 2017, Automated Ships Ltd will contract the ‘Hrönn’, which will be designed and built in Norway in cooperation with KONGSBERG. Sea trials will take place in Norway’s newly designated automated vessel test bed in the Trondheim fjord and will be conducted under the auspices of DNV GL and the Norwegian Maritime Authority (NMA). The Hrönn will ultimately be classed and flagged, respectively.
Artists impression of the ‘Hrönn’
Currently, only small unmanned boats are being utilized for near shore operations but there are no technical limitations to constructing large, unmanned and automated systems. The only impediments are regulatory, but with the participation of DNV GL and the NMA, and Norwegian and UK companies and institutions, it will be possible to rapidly and at low-cost be the first to market with a full-size unmanned ship.
Hrönn is a light-duty, offshore utility ship servicing the offshore energy, scientific/hydrographic and offshore fish-farming industries. Its intended uses include but are not limited to: Survey, ROV (Remotely Operated Vehicle) and AUV (Autonomous Underwater Vehicle) Launch & Recovery, light intermodal cargo delivery and delivery to offshore installations, and open-water fish farm support. The vessel can also be utilized as a standby vessel, able to provide firefighting support to an offshore platform working in cooperation with manned vessels. Automated Ships Ltd is currently in discussion with several end-users that will act as early-adopters and to establish a base-rate for operations and secure contracts for Hrönn offshore, in the near future.
Hrönn will initially operate and function primarily as a remotely piloted ship, in Man-in-the-Loop Control mode, but will transition to fully automated, and ultimately autonomous operations as the control algorithms are developed concurrently during remotely piloted operations.
Automated Ships Ltd will be the primary integrator, project manager and ship-owner of this world’s first fully automated and unmanned ship for commercial use. The project will leverage existing technology to develop a robust, flexible and low-cost ship to become the market leader and offer not only a capable work-boat but provide an unparalleled R&D asset for the furtherance of this emerging industry sector. KONGSBERG’s role in the project is to deliver all major marine equipment necessary for the design, construction and operation of Hrönn. The leading global maritime technology manufacturer will deliver all systems for dynamic positioning and navigation, satellite and position reference, marine automation and communication. All vessel control systems including K-Pos dynamic positioning, K-Chief automation and K-Bridge ECDIS will be replicated at an Onshore Control Centre, allowing full remote operations of the Hrönn.
“The advantages of unmanned ships are manifold, but primarily center on the safe guarding of life and reduction in the cost of production and operations; removing people from the hazardous environment of at-sea operations and re-employing them on-shore to monitor and operate robotic vessels remotely, along with the significantly decreased cost in constructing ships, will revolutionize the marine industry. Automated Ships Ltd will be at the forefront of that revolution, along with its many Norwegian partners,” said Managing Director Brett A. Phaneuf of Automated Ships Ltd.
“Research, innovation and technology development are at the core of DNV GL's business-development philosophy. In general, we are widely involved in the qualification of new shipping technology. Increased automation combined with remote monitoring and control is an inevitable trend and has the potential to create safer and more efficient transport and operations at sea. This may lead to unmanned ships, as in this case, and the technologies involved also have the potential to improve the safety and efficiency of manned ships in the form of increased decision support and operational assistance. The contract that has been announced today is a brave initiative and a major step towards the realization of these technologies, and we look forward to moving technology frontiers together with all those involved,” said Bjørn Johan Vartdal, Head of DNV GL Maritime Research.
“We are proud and excited to be part of the first project to actually realize the potential of unmanned vessels by supporting the construction of the first full size, fully operational example,” added Stene Førsund, EVP Global Sales & Marketing, Kongsberg Maritime. “The Hrönn is an incredible ship and a great example of KONGSBERG’s commitment to developing autonomous and unmanned vessels. We are involved in several major projects in this field including AUTOSEA, which focuses on integrated sensor technology and fusion, and automated collision avoidance systems. KONGSBERG is also a key stakeholder in the world’s first official autonomous vehicles test bed, which opened this September in the Trondheimsfjord.”
Hrönn is expected to be built by Fjellstrand AS, a Norwegian shipyard with a long history of building state-of-the-art aluminum fast ferries in addition to a number of steel offshore vessels and aluminum work boats. As the builder of the world’s first battery driven car ferry, ‘Ampere’, Fjellstrand AS is well known for taking the lead in maritime innovation and green technology.
“Fjellstrand AS has for years worked within the high-end development of new vessels. To design and build future ships with autonomic technology will be an exciting challenge, and follows the path laid from the recent building of Ampere where technology is pushed forward in good cooperation with partners,” said Morten Berhovde, Technical Director, Fjellstrand AS.
Global offshore oil production (including lease condensate and hydrocarbon gas liquids) from deepwater projects reached 9.3 million barrels per day (b/d) in 2015. Deepwater production, or production in water of depths greater than 125 meters, has increased 25% from nearly 7 million b/d a decade ago. Shallow water has been relatively less expensive and less technically challenging for operators to explore and drill, but changing economics and the exhaustion of some shallow offshore resources has helped to push producers to deepwater or, in some areas, ultra deepwater (at depths of 1,500 meters or more) resources. The share of offshore production from shallow water in 2015 was 64%, the lowest on record.
Globally, offshore oil production accounted for about 30% of total oil production over the past decade. In 2015, offshore production was 29% of total global production, a moderate decrease from 32% in 2005.
Advancements in drilling technology, dynamic positioning equipment, and floating production and drilling units have made prospects viable that were previously unreachable. Although technological advancements have made new areas accessible, deepwater projects require more investment and time compared to shallow waters or onshore developments. As a result, most nations with offshore assets operate only in shallow water.
In areas with deepwater operations, production has grown significantly, and in many cases overtaken shallow-water production. The majority of deepwater or ultra deepwater production occurs in four countries: Brazil, the United States, Angola, and Norway. Each of these countries has realized an increasing share of crude oil production from deepwater or ultra deepwater projects over the previous decade. The United States and Brazil together account for more than 90% of global ultra deepwater production, with ultra deepwater production expected to increase in 2016 and 2017 in both countries.
Brazil leads the world in the development of deepwater and ultra deepwater projects. Brazil has increased deep and or ultra deepwater production from 1.3 million b/d in 2005 to 2.2 million b/d in 2015. An increasing amount of Brazil’s production comes from presalt resources found under thick layers of salt at extreme depths. The coast of Angola shares similar geologic features with the coast of Brazil because of the separation of the African and South American tectonic plates during the Early Cretaceous period, around 150 million years ago. These geological similarities have led producers in Angola to target several major basins for presalt exploration.
Principal contributor: Matthew Manning
BP Trinidad and Tobago LLC (bpTT) has announced that the Joe Douglas 240C jack up rig, owned and operated by Rowan Companies, has joined the bpTT rig fleet and has begun drilling at the bpTT Amherstia facility.
BPTT Regional President Norman Christie commented: “The Joe Douglas rig is a welcome addition to the bpTT rig fleet. It represents an opportunity to access more hydrocarbons from our existing acreage in the Columbus Basin, and is a demonstration of our continued commitment to Trinidad and Tobago.”
Photo courtesy: BP
The Joe Douglas rig previously worked for another operator in Trinidad and was moored in Chaguaramas for approximately 45 days where it underwent maintenance. After completion of the maintenance work, the rig was moved to the offshore location alongside the Amherstia platform located off the south east coast of Trinidad, where it commenced drilling operations in October.
This is the first time a jack-up rig will work alongside the Amherstia facility and will drill three new wells, with the potential for a fourth. The expected gas output from these three wells is approximately 235 million standard cubic feet a day (mmscfd).
The Rowan Joe Douglas rig joins the bpTT rig fleet of Rowan EXL II (currently alongside the Mango platform) and Diamond Ocean Victory (currently completing the Juniper wells).
About Rowan Joe Douglas rig
BPTT operates in 904,000 acres off Trinidad’s east coast. BPTT has 13 offshore platforms and two onshore processing facilities.
Likely OPEC Output Cut to Accelerate RebalancingReflationary wind is positive for the global economy. A flow deficit between global oil supply and demand already exists, reducing surplus stocks by an average of 0.7 MMB/D the last two quarters. This decline will accelerate in 4Q. Disruptions to supply have waned, but political risks are on the rise. Refinery margins should stay healthy for the season with gasoline helped by strong demand and increased pull, especially from Mexico, while normal winter weather supports distillate.
A warm start to the 2016-17 heating season has caused the market to reconsider earlier expectations of evolving winter tightness. Yet, given the relatively low bar for achieving year-on-year demand growth, the developing pessimism on the balance of the season is probably unwarranted. Given the demand fallout in October and rising bearish risks for November, PIRA has marked down its price forecast for the remainder of the year. But tighter U.S. balances should enable prices to reach new highs — maybe before year end — assuming weather conditions revert towards normal in December.
France will need at least 4.0 to 5.2 GW of imports to balance during the time of maximum load in December and January, with this number growing significantly under extreme weather (five-year max as in Feb. 2012). We think that 4.7 GW could flow easily before resorting to imports from the U.K. With the U.K. market already tight, any reduction of flows from France increases the likelihood of utilization of the Contingency Balancing Reserve (CBR), starting from November. Beyond the short-term price risks, which now appear fully factored into current forward winter prices, the longer-term pricing picture does not appear to be mirroring any of the uncertainties over the need for replacement of anomalous components, and if there is such a need to replace the components, what’s the availability of the parts (or how long it may need to manufacture them). Finally, the presence of other anomalies could still extend the outage period of specific units.
The 180,000 DWT Cape tripcharter average weakened last week to close at just under $9,700/day. Meanwhile, Panamax tripcharter rates hit their highest level this year and Supramax rates strengthened slightly late last week. Soaring coking coal prices are encouraging steel mills to increase their use of higher grade iron ore and electric arc furnaces (using steel scrap), both of which could adversely impact Cape demand. Despite the potential downside in iron ore trade, Cape utilization is set to tighten in 2H17 and into 2018. This tightening underpins PIRA's view that monthly average Cape freight rates are expected to push over $20,000/day in late 2017.
The once-a-year release of annual cap-and-trade emissions data can be a market-moving event, though previous California data releases did not have a major short-term impact on CCA prices. In the past three years the release occurred on November 4th, and PIRA understands that it will take place in “early November.” 2015 emissions data will again include both narrow-scope and broad-scope sectors (facing compliance obligations for the first time in 2015). PIRA expects overall California 2015 emissions to be flat vs. 2014 levels. WCI partners Quebec and Ontario (joining in 2017) will likely release emissions data soon, which have a more substantial impact on CCA prices by offering first-time data and a chance to recalibrate emissions starting points.
The U.S., the U.K., South Korea, and Taiwan reported third quarter GDP this week, and results were all better than expected. In the euro area, the latest business confidence surveys pointed to stronger activity in the coming months. Reflation in producer prices was a reason for better data globally. Even though a Fed rate hike is very likely in December, there are no major signs of financial market distress in emerging economies. Developments in China, India, and Brazil have been key.
Total U.S. inventories declined by 2.1 MMB to 100.6 MMB. All PADDs are in deficits to a year ago with the exception of PADD I.
For the week ending October 21, ethanol prices rose, supported by higher corn prices. Manufacturing margins remained strong. September RIN generation fell, and, as a result, prices increased.
As the calendar turns to November tomorrow, North American farmers who have had some reported difficulty in getting crops to dry down in their fields will start to feel a bit more anxious about their standing crops. Transitional fall weather can be difficult at best to predict, but the near-term forecast for this week looks ideal for many to catch up on slowed harvests and relieve a sense of urgency.
Total commercial stocks drew 8.7 million barrels this past week, most of which was in products, though crude managed to decline a surprising 0.6 million barrels because of exceptionally low imports. Month-to-date U.S. domestic crude supply is down 840 MB/D year on year while four-week-average adjusted demand is up 800 MB/D, clearly a major contributor to global rebalancing. Both gasoline and distillate had healthy stock declines this past week and this should continue in this week’s data. Cushing crude stocks continued to draw last week, falling by 1.3 million barrels, but this week should see a 0.7 million barrel inventory build because of the Seaway outage. Crude imports should rebound sharply next week, but with higher runs, crude inventories are forecast to build just 290 MB/D, once again narrowing the crude stock excess to last year, which will fall below 20 million barrels.
The gas market has put much of its focus squarely on power demand, but this is obscuring plentiful gas supply. Demand from the power sector will stabilize at close to current levels and has broadly spread across much of Europe. Of particular note is France and its neighbors, who will need to handle the nuclear shortfall that has stood at around 8 GW this month. But with 34% more than normal injected this year, the European storage fleet is well positioned to handle nearly any winter, which is providing an early test this year. However, seasonal forecasts are pointing to a return to warmer temperature anomalies further down the road. Between healthy storage stocks, increased competitiveness of pipeline supplies, and changes in Qatari LNG pricing around the world, there are growing hints at downward price pressure for Europe.
Mid-Columbia on-peak prices fell by $5/MWh in October as Pacific Intertie maintenance and strong hydro production displaced thermal generation. Southwest markets were flat (SP15 and PV) to slightly lower (NP15) as maintenance outages and reduced flows from the Northwest offset declining cooling loads. Implied heat rates fell year-on-year at all hubs, led by a 16% drop at Mid-Columbia. Heat rate declines continue through much of the forecast as higher gas prices revive coal-fired generation while renewables extend gains. Weaker gas prices and above-normal runoff present credible downside price risks.
EIA data estimates for electric power sector stockpiles as of end-August came in higher than expected at 162.6 MMst, likely as a result of a greater draw from producer/distributer stocks than expected. However, this was the largest M/M draw for August since 2010, and stocks were only 6.0 MMst below prior-year levels as production cutbacks and marginally higher gas prices have drawn stocks from their peak of over 197 MMst in December. PIRA projects that U.S. coal stocks drew further since August and will have fallen 11.3 MMmt below prior-year levels by the end of October. This mirrors 86 days of forward demand based on our forecast of Nov./Dec. 2016 average coal burn (versus 109 days cover one year ago). By region, stocks range from a low of 57 days cover in the ERCOT/SPP region to a high of 286 days in the NPCC region. With U.S. power sector coal burn projected to rise year-on-year consistently through June 2017, further draws are a certainty.
The week ending October 21 there was a large build in inventories, which increased in four of the five PADDs. Production fell slightly. Ethanol breached the 10% blend wall making up 10.07% of the gasoline pool.
Global equities generally eased on the week. In the U.S, both the growth and defensive indicator were lower. Consumer staples and utilities did the best of any sector and posted good gains. Housing, retail, and energy were down and underperformed, with energy lower by 1.2%. Internationally, all the indices, other than Japan, moved lower on the week.
Crude runs eased slightly, but crude imports surged, such that crude stocks ballooned 9.2 MMBbls. Finished products drew by 1.8 MMBbls and have clearly become increasingly tight as maintenance continues. There were moderate draws in naphtha, fuel oil, and the jet-kero complex. Gasoline stocks drew to their lowest level since before 2003. Margins and cracks again improved on the week, with all the major product cracks improving. The net gain in margin for the week was about $0.75/Bbl. Levels remain good and supportive of rising runs as we move out of turnaround.
Despite the rollercoaster ride NYMEX futures took in October, cash prices were mostly unchanged month-on-month. In the northeast, upstream and downstream prices alike were decidedly lower despite the relative weakness already in effect during September. On the positive side of the ledger, the real standout performers were Houston Ship Channel and south Texas prices. Western Canadian prices likewise moved higher in October; however, the monthly gains merely allowed NOVA/AECO-C and west coast basis to “normalize” following a long stretch of weakness.
FOB Newcastle prices have surpassed $100/mt for the first time since April 2012, driven by strength in China's import demand and the continued pull of the even stronger coking coal market on thermal supplies. Despite prices being at such high levels, there is additional upside if there is any disruption to supply. Beyond the short-term, there is little doubt that prices will fall from current levels. However, we believe that the backwardation in the market is overstated, and we remain bullish relative to the forward curve.
The S&P 500 moved lower on the week, with the corresponding indicators moving appropriately. Volatility was higher, while high yield debt and emerging market debt moved lower. The dollar was mixed, and commodities were little changed. There continues to be a trend rate rise in longer-term yields for many key countries, with a lesser rise also noticeable on the short end.
The IMO has decided to tighten global marine bunker fuel specifications to a maximum of 0.5% sulfur beginning in 2020. While the decision provides clarity so that stakeholders can plan for this changeover, PIRA’s analysis indicates that this early implementation date will be disruptive for bunker suppliers, refiners and shippers. In particular, refiners will have difficulty disposing of all of the high sulfur residual fuel previously used as bunker fuel, which will drive product spreads sharply wider (distillate up, HS fuel oil down). Shipping costs will increase for all trades as bunker prices increase. Atlantic Arbitrage Closes In as U.S. Volumes Open Back Up Sabine Pass is ramping back up after a five-week maintenance outage on both operating trains. The ramp up coincides with a noticeable downtrend in what buyers of marginal LNG in the Atlantic Basin are willing to pay and could exacerbate the pricing trend. The big premiums to U.S. Henry Hub have faded, even as Henry Hub itself has risen.
There has been cautious optimism surrounding the future of Brazilian oil production since the discovery of massive fields Sapinhoa, Lula, Lapa, and Libra. The finds in the “pre-salt polygon” are world class in terms of resource size and well productivity, but economic troubles, scandal, and stringent nationalist regulations imposed in 2010 have limited foreign investment and hindered development. In recent weeks, regulatory moves have been lifting the prospects for Brazil’s pre-salt. Brazil is removing the sole operatorship mandate for Petrobras in the pre-salt. There are plans to relax local content requirements. Both changes make the pre-salt more accessible and attractive to foreign players. Combined with the quality of the resources and expected improvement in Petrobras’s financial position and operational efficiency, these developments are positive for medium-term production. Doubts remain, however, as Brazilian oil has a history of not living up to high expectations. PIRA maintains our view that Brazil crude and condensate production will grow from 2.5 MMB/D in 2016 to 3.2 MMB/D in 2025.
Toward the end of the injection season, weekly EIA inventory releases begin to hold less sway on the direction of futures prices. In large part, this disregard naturally occurs because the net inventory builds are often simply too slight to matter. Moreover, fine-tuning of overall stock levels conveys very little about the heating season ahead. Consequently, after taking a brief hiatus during the fall, short-term weather forecasts begin to make a comeback, moving to center stage in setting the direction for prices.
Permian production has defied the collapse in prices and continues to grow. Permian shale crude and condensate production has nearly doubled since mid-2014 to 1.1 MMB/D today. The substantial increase in Permian production is the result of a prolific resource, efficiency gains, and costs savings, which together have reduced breakevens by 42% since 2014 to a current average of $41/Bbl. The Permian is the most economic shale play in the U.S. and not surprisingly has been the primary beneficiary of incremental rig activity since May lows. Operators and investors are especially bullish on the play and this is reflected in recent transactions, with deals year-to-date averaging $28,000/acre. PIRA is optimistic about future Permian shale growth and expects crude and condensate production to almost triple by 2025 to 3.2 MMB/D (12% CAGR).
NJSC Naftogaz Ukrainy from November 1 will raise the price of gas for industrial customers on a prepayment basis by 16.3%. According to a company press release, the price is relevant for consumers buying gas in the amount of more than 50,000 cubic meters per month and who have no debts to the holding. The price for other industrial consumers will increase by 15.3%. 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
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