Frank’s International N.V. (“Frank’s”) (NYSE:FI) announces that it has entered into a definitive merger agreement to acquire Blackhawk Group Holdings, Inc., the ultimate parent company of Blackhawk Specialty Tools LLC (“Blackhawk”), a leading provider of well construction and well intervention services and products. Blackhawk is being purchased from Bain Capital Private Equity, a leading global private investment firm which acquired the business together with management in 2013.
Frank’s expects that Blackhawk’s specialty cementation tools will augment its tubular running services business by providing Frank’s the opportunity to diversify its offerings and emerge as a leader in a new business line and a significantly larger addressable market. In addition to what Frank’s believes is a line of well-regarded, market leading, technically differentiated specialty cementation tools, Blackhawk also provides well intervention products through its line of brute packers and related products, and is continuing its development of products for onshore and offshore applications.
Gary Luquette, Frank’s President and Chief Executive Officer, commented, “Similar to Frank’s, Blackhawk has a reputation for combining exceptional service with an innovative portfolio of technology that delivers consistent value to customers. Together we will continue to offer the same reliable service customers expect, while furthering customer relationships with new products and services across the Frank’s global footprint. Joining Blackhawk’s cementing tool expertise with Frank’s global tubular running services franchise will allow us to offer customers worldwide a more integrated suite of best-in-class products and services to address their well construction needs across all environments from land to shelf to deepwater.”
Billy Brown, Blackhawk’s Chief Executive Officer and a founder of the company, stated, “Joining the Frank’s global family is the next step in continuing the expansion of Blackhawk’s industry leading specialty products and equipment. Our team is proud of the progress we have made in developing innovative products and strong customer relationships through quality and reliable service, and we appreciate the support we have enjoyed from our partners at Bain Capital. Combining Frank’s and Blackhawk is the right strategic move at the right time, providing customers the same exceptional service with a broader platform to accelerate future growth.”
Todd Cook, a Managing Director at Bain Capital Private Equity, said, “We have been pleased to work with and support the experienced team at Blackhawk in executing a focused and durable strategy in a demanding, sophisticated market. We look forward to participating in the significant growth we believe will flow from combining these two best in class service providers.”
The merger consideration comprises a combination of approximately $150 million of cash on hand and approximately 12.8 million shares of Frank’s common stock, on a cash-free, debt-free basis (with approximately $80 million of Blackhawk debt being repaid at closing with proceeds from the transaction), subject to adjustment. Based on the Frank’s closing price on Thursday, October 6, 2016 the transaction is valued at approximately $321 million.
Frank’s is focused on driving revenue synergies, and expects the acquired products and services to benefit from Frank’s global presence, operating excellence and strong balance sheet, significantly enhancing the growth potential of the business. Additionally, over time, Frank’s expects to realize the benefits of increased cost efficiency by providing a broader set of product offerings through its combined global infrastructure and optimizing supply chain operations to take advantage of the expanded business.
The transaction is subject to regulatory approvals and other customary closing conditions. It is anticipated that the closing of the transaction will occur during the fourth quarter of 2016.
Morgan Stanley & Co. LLC served as Frank’s exclusive financial advisor on the transaction, and legal advice was provided by Baker & McKenzie LLP. Blackhawk was advised by Simmons & Company International, the energy specialist unit of Piper Jaffray, and legal advice was provided by Ropes & Gray LLP.
The Dresser-Rand business, part of Siemens Power and Gas Division, recently delivered power generation equipment for a combined cycle power plant (CCPP) for the Shell Appomattox deep-water oil and gas floating production platform. The platform will be located 80 miles off the coast of Louisiana in the Gulf of Mexico and is slated to start production around the end of this decade. The ~150 megawatt (MW) CCPP will feature four 27 megawatt (MW) gas turbine-driven generator sets equipped with heat recovery systems and a 40 MW steam turbine generator.
Photo courtesy: Dresser-Rand
The gas turbine gen-sets are self-contained mini-modules complete with all electrical wiring, piping, tubing and controls. The gen-set, ancillary equipment and baseplate remain connected after unit testing, substantially reducing the time required to install, commission and start-up the packages.
With CCPPs, a gas turbine generator produces electricity while the waste heat from the gas turbine is used to make steam to generate additional electricity via a steam turbine. The CCPP for the Shell Appomattox platform will improve overall fuel efficiency, reduce emissions of greenhouse gases, and increase total power generation for the platform.
“This project demonstrates the Dresser-Rand business’ unique capabilities to deliver full solutions for both power generation and oil and gas applications. Combined cycle power plants built for offshore applications are rare and we’re pleased to leverage our comprehensive portfolio to produce a solution that meets all of Shell’s requirements,” said Jesus Pacheco, Executive VP New Equipment Worldwide, Dresser-Rand business. “Our team designed and manufactured a compact, lightweight solution that will operate reliably and safely under the harsh conditions inherent in offshore applications.”
The packages feature a compact design and reduced weight to accommodate the platform’s footprint constraints. The design allows for easy accessibility to the package components for maintenance and service, along with adequate workspace.
The steam turbine generator package was manufactured in Wellsville, NY and packaged in Olean, NY. An 18.5 MW load test was performed on the steam turbine generator set using the steam-producing capability at the Olean facility. The gas turbine generator packages were designed in Kongsberg, Norway.
As announced on 23 June 2016, the Board of Directors has tasked the management of A.P. Møller - Mærsk A/S to perform a review focusing on the strategic and structural options for the Maersk Group with the objective of generating growth, increasing agilities and synergies and unlocking and maximizing shareholder value with the long-term view.
The main growth focus of A.P. Møller - Mærsk A/S going forward will be delivering best in class transportation and logistics services as an integrated Transport & Logistics company. Building on the Group's unique position within container transport and port operations, and significant position in supply chain management and freight forwarding, Transport & Logistics will leverage its leading position through new product offerings, digitalized services and individualized customer solutions.
The Board of Directors expect that the oil and oil related businesses in A.P. Møller - Mærsk A/S will require different solutions for future development including separation of entities individually or in combination from A.P. Møller - Mærsk A/S in the form of joint-ventures, mergers or listing. Depending on market development and structural opportunities, the objective is to find solutions for the oil and oil related businesses within 24 months.
To enable the new strategic direction the Board of Directors has decided to reorganize A.P. Møller - Mærsk A/S' portfolio of businesses into two independent divisions; an integrated Transport & Logistics division and an Energy division. This will ensure focus on driving synergies and developing new products and services in Transport & Logistics as well as focus on separately developing structured solutions for our oil and oil related businesses.
The Board of Directors continues to focus on ensuring a strong capital structure and defined key financial ratio targets in line with an investment grade rating.
Chairman of the Board, Michael Pram Rasmussen says:
"The industries in which we are operating are very different, and both face very different underlying fundamentals and competitive environments. Separating our transport and logistics businesses and our oil and oil related businesses into two independent divisions will enable both to focus on their respective markets. This will increase the strategic flexibility by enhancing synergies between businesses in Transport & Logistics, while ensuring the agility to pursue individual strategic solutions for the oil and oil related businesses".
Brazil’s most advanced ROV support vessel (RSV), the Fugro Aquarius, has specified acoustic positioning technology supplied by Sonardyne Brasil Ltda., to support its subsea inspection, repair and maintenance activities in the region.
Already delivered and fully commissioned, the Ranger 2 Ultra-Short BaseLine (USBL) system is being used to track the precise position of the vessel’s Work-class ROVs in water depths of up to 3,000 meters. It is also providing the vessel’s dynamic positioning (DP) system with position reference data to allow it to remain on-location whilst survey operations are underway.
Fugro Aquarius
Launched in 2015, the 83 meter long Fugro Aquarius has been designed specifically for the Brazilian market with over 60% of local content. This April, Petrobras awarded the vessel a one year contract to carry out work including subsea video and data acquisition, site investigations and asset integrity monitoring.
For their new vessel, Fugro specified that the Ranger 2 be configured with Sonardyne’s deep water optimized GyroUSBL 7000. The unique design of GyroUSBL incorporates a USBL transceiver and high survey-grade inertial sensor in the same unit. This combination increases precision by eliminating common sources of system error such as lever arm offsets, pole bending and ship flexing.
Deployed through the hull using a Sonardyne-built machine, GyroUSBL calculates the position of the vessel’s two Fugro-built 150HP ROVs by measuring the range and bearing to the Wideband Mini Transponder (WMT) fitted to each vehicle. Small and lightweight, WMTs offer reliable tracking performance in crowded offshore environments where multiple vessels frequently conduct simultaneous operations in close proximity to each other.
Speaking about Fugro’s decision to equip the Fugro Aquarius with Ranger 2, Barry Cairns, Regional Head of Sonardyne Brasil Ltda., said “it demonstrates their commitment to investing in the best available subsea technology for their IRM operations offshore Brazil”, adding, “We’re confident they will quickly see a return on that investment in the form of faster and more efficient survey operations and greater vessel utilization.”
For more information on Ranger 2, click here
Newton Labs has appointed C. A. Richards & Associate, Inc, a leader in the Gulf Coast Subsea market, as its exclusive sales representative. C.A. Richards & Assoc will represent Newton’s Underwater Laser Scanner Line in Houston, Louisiana and Mississippi.
Newton’s underwater laser scanners capture sub millimeter measurements beyond the capabilities of Ultrasound. The Newton subsea laser scanners operate at depths up to 4000 meters and capture raw as-built data to within 0.005 inches. C.A. Richards & Assoc. will include Newton's M210UW, M310UW, M1500UW, M3200UW and M4000UW in their product line.
“The Newton Underwater Laser Scanners capture precision metrology data and meet a growing demand from our customers in the Oil and Gas market,” said Chuck Richards, President C.A. Richards & Associates.
C.A. Richards & Associates is an award winning company that has more than 45 years experience providing technical services and integrated instrumentation solutions for the Offshore Oil and Gas Industry. The company is located in Houston’s West Side Energy Corridor and provides instrumentation and technology consultation and sales to the Offshore Diving, ROV, Drilling, Survey and Geophysical Contractors, Construction, Pipelay, Government and Academia markets.
“Newton is pleased to be working with a company that has such a distinguished longstanding reputation like C.A. Richards and Associates,” said Newton Labs President John W. Bramblet. “They have tremendous experience and are a leading representative in the Offshore Oil and Gas Industry.”
Based in the technology center of Seattle, Newton Labs is a privately held manufacturer of machine vision, robotics, laser scanning and optical automation with significant industry experience. Over its more than 20 year history, Newton Labs has deployed more than 30,000 machine vision, robotic, laser scanning and automation systems worldwide.
Ground breaking optimization and efficiency technology for offshore marine support operations has been developed for the oil and gas industry.
The innovative software, which has been developed by PlanSea Ltd., a spin out company from Robert Gordon University (RGU), has been applied by Nexen to remove significant cost from its North Sea operations.
Working with PlanSea, Nexen was able to simulate 65 weeks of its full North Sea marine operations using different schedules and combinations of its platform supply vessel (PSV) fleet. The results showed that significant reductions in fleet size and improvements in vessel utilisation could be achieved by re-organising its operations.
PSV Frigg Viking in Aberdeen Harbor. Photo credit: Jim Cargill
Nexen’s Managing Director UK and SVP Europe, Ray Riddoch, is delighted with the progress Nexen has made. He said: “In order to live at a low oil price, operators need to make a step change in eliminating waste in the supply chain and this requires a step change in thinking about new modes of operation. Through working with PlanSea, we have been able to enhance vessel utilization and so reduce our North Sea PSV fleet from four vessels to two, resulting in a 2016 saving of some £6.5M.”
Prof. John McCall of RGU whose expert team at the university developed the system, explained: “Our system uses advanced algorithms to optimize vessel utilization while still meeting all operational objectives. We have spent several years working with industry partners to model supply vessel operations so that we can be confident we have captured all of the constraints and delays that make offshore logistics such a complex task.”
PlanSea Managing Director, Jim Cargill, is optimistic about the potential for the newly proven technology. He said: “The ability to accurately identify feasible ways in which reduced fleets can operate and validate that in realistic simulation is a game changer. There is a tremendous opportunity for the industry to collaborate with shared PSV fleets, potentially taking 40% - 50% out of resource costs. In the North Sea that could mean continued viability for assets that are struggling to break even in the current environment. Looking forward to a recovery in price, the value of savings made now will increase - as activity rises the cost base will rise at a slower rate as efficient fleet sizing is maintained.”
Stephen Marcos Jones, Business Excellence Director, Oil & Gas UK, was supportive of the initiative. He added: “Oil & Gas UK launched the Efficiency Task Force in September last year to drive forward efficiency improvement across the industry, as such we are delighted to see this collaboration by PlanSea and Nexen achieving these great results. Their work together shows how taking an innovative approach and harnessing technology can drive efficiency improvements and is another small step in the transformational change required by industry to ensure the sustainability of the UK Continental Shelf.”
Margaret Copland, Senior Wells & Technology Manager, at the Oil & Gas Authority also welcomed the news. She said “As Operators and the Supply Chain work hard to reduce costs there is a recognition that harnessing new technology to help collaboration and reduce costs is essential to allow the industry to prosper. Technologies such as digital have the potential to transform the industry and this example of utilizing algorithms and machine learning to optimize vessel utilization is part of that journey. The progress that Nexen and PlanSea have made in utilizing software technology to make significant savings in offshore supply costs is therefore very encouraging.”
Leading global deck machinery specialist ACE Winches has completed a scope of work [for Technip] as part of a subsea infrastructure project in the Loyal field, west of the Shetland Islands. Quad204 is the redevelopment of the Schiehallion and Loyal fields, located 175 km west of Shetland and 15 km north of the Foinaven field.
The complete project will see an existing floating production storage and offloading (FPSO) vessel replaced with a larger, purpose-built FPSO to accommodate new field tie-ins. The development of additional wells and the installation of new subsea infrastructures in neighbouring fields are also planned.
QUAD204 – Schiehallion. Photo courtesy: BP
The bespoke solution from ACE Winches includes a hydraulic drum winch, overboard system and spooling gear, designed and manufactured at the company’s facilities in Aberdeenshire and developed in collaboration with the end client, in line with its requirements for riser installation on board the FPSO. The system was designed by ACE Winches’ skilled engineering division, which has previous experience of working on large-scale subsea projects.
Challenged by limited deck space, the company developed a package that houses the hydraulic drum winch, with a safe working load of 150te across all layers, an overboard system and spooling gear into the winch base frame. The winch package includes closed loop hydraulic power units, located nearby.
A custom-made compact winch was designed to accommodate the limited space and meet the required performance characteristics for riser installation, while the overboard system provides access to the tower, with ladders and walkways included.
All the equipment was fully tested at ACE Winches’ test bed facility, with testing simulating full operational mode at full performance and brake load holds. All tests were carried out to DNV specifications for lifting appliances. The equipment will shortly be mobilised to the client.
Richard Wilson, Chief Operations Officer, ACE Winches said: “The limited deck space presented us with a challenge, but we overcame it with an innovative design which delivers a high quality solution that obtains maximum use and efficiency from the area available."
Following the accident involving COSLInnovator on 30 December 2015, some 100 semi-submersible rigs approved by DNV GL will be reviewed. Preliminary assessments indicate that a limited number of rigs will be subjected to modifications or operational limitations.
The semi-submersible rig COSLInnovator was drilling for Statoil in the Troll field when it was hit by a large, steep wave. Several windows on the rig's two lower decks were shattered. One person was killed. “Since the incident, we have made great efforts to identify what happened, understand how this could happen and, most importantly, implement actions to prevent similar incidents from occurring again,” says Ernst Meyer, DNV GL Director for Offshore Classification. “We have been working with rig owners, designers, operators and authorities towards a common goal; to ensure the safety of all those working on board the rigs.
COSLInnovator
The incident investigation report presented by the Norwegian Petroleum Safety Authority in April 2016 concluded that the incident involving COSLInnovator has provided new knowledge that must be utilized in order to prevent similar incidents in the future. DNV GL therefore published a new technical guideline (OTG-13 – Prediction of air gap for column-stabilized units) as early as in June 2016. This gives a consistent and updated approach for calculating the air gap - the clearance between the highest wave crest and the bottom of the deck box in all relevant sea conditions.
Last week, DNV GL asked all owners of DNV GL-classed semi-submersible rigs to provide updated documentation of each rig's air gap.
Rigs that, based on the new technical guideline (OTG-13), can confirm a positive air gap, will be able to operate as before without reinforcement or operational limitations. This is expected to apply to most of the semi-submersible rigs operating on the Norwegian shelf.
“I can't indicate how many rigs have negative or positive air gaps before each rig's calculations have been performed,” says Ernst Meyer.
“A limited number of rigs may not have a positive air gap, but most of these will be able to avoid changes. The prerequisite is that they are able to document a positive air gap for a specific location, or that they simply do not have windows that may be exposed to waves.”
He elaborates on the consequences for the other rigs – those that are unable to prove a positive air gap in all sea conditions – including the hundred-year wave:
“Initially (for the next winter), these rigs will be required to remove windows in exposed zones. If the strength calculations show that further structural modifications are necessary, such modifications will be required as part of the permanent solution.
“The most important thing is that the windows are removed before the coming winter. This action eliminates the largest risk elements if a similar incident occurs,” Meyer explains. He emphasizes once again that operational limitations and limitations with regard to areas of operation may solve the air gap issue in the short term.
Rigs that are certified for worldwide operation must be documented according to North Atlantic wave data. Most rigs operate in milder areas, such as the North Sea, and can postpone modifications that may be necessary in the Norwegian Sea or Barents Sea.
DNV GL is the classification body that certifies the largest number of semi-submersible rigs, and these rigs operate under the most extreme weather conditions globally. The company works continuously to improve the class regulations used in certification work through future-oriented research and the thorough examination of and learning from incidents and accidents.
“The work behind the new guideline includes the use of updated statistical weather data and knowledge acquired from several independent model tests conducted in light of the COSLInnovator incident. We have also learned from previously conducted model tests and from operational experience after 40 years classing hundreds of similar rig types,” Ernst Meyer concludes.
U.S. Crude Stocks Decline on Favorable Import/Export ArbUS crude stocks fell in September, as prices between domestic and foreign grades incentivized crude exports while discouraging imports. Cushing stocks fell only about 1 million barrels, as a continuing narrow LLS-WTI differential limited flows from Cushing to the Gulf Coast.
The fundamental basis for the recently sustained run up in NBP prices to the high side is tied to U.K. gas consumption in power, weak French nuclear output, and Norwegian gas exports that remained well below last year until this week. Throw in an early colder than normal forecast for the upcoming week and what you are left with is limited downside risk for the moment, but considerably more later on this winter if weather normalizes. High storage levels on the Continent will not yet deter the prices from remaining strong. The stocks are there, but not the will to use them. It is well known that storage holders are exceedingly reluctant to use storage early in withdrawal season and prefer to hoard storage until the first quarter.
With colder weather approaching and so much uncertainty surrounding nuclear availability, French power prices keep climbing. A signpost of improving availability for the upcoming winter months would be the restarts in the upcoming week. Among those, Chinon 1, affected by the channel head anomaly, should be reconnected on October 10. Such restart might impact market psychology, bringing an end to the upward trend for French prices.
The rally in seaborne coal prices that has been going on essentially since the beginning of 2016 has been accelerating over the past two weeks, with additional bullish developments exacerbating an already tight prompt market. For near term pricing, API#2 prices moved up by the greatest extent this week, rising by over $4.00/mt, and pushing over $75/mt for the first time since 3Q14. The force majeure declaration in Colombia and a further reduction in the European nuclear outlook was likely behind this rise in pricing. FOB Newcastle prices rose sharply as well, increasing by $3.35/mt, despite China's buying activity being subdued due to Golden Week. The most important factor for short-term pricing is how much supply can come into the market to tamp down this pricing run. After several years of extreme amounts of excess tonnage in the market, the move to rationalize supply (or at least minimize new supply), and an uptick in demand from China and elsewhere have strained the market.
The pace of U.S. job growth in September was about as expected. A continuing rising trend in the labor force participation rate, however, was something of a surprise. This is an important development, since it has the potential to reshape the Fed’s view of the labor market. In developed markets, fiscal policy options to stimulate economic activity are in the spotlight. In fact, Canada and Japan recently adopted the policy of larger government spending. Political winds in other areas suggest that more countries may join this trend.
U.S. total propane stocks increased by 736 thousand barrels to 104 MMB. The annual stock surplus narrowed by 865 MB to 3.7 MMB. This surplus has been declining since the week ending September 18th. On the other hand, other NGLs have been registering small builds or draws as of late. The latest 2.6 MMB draw is the largest draw of the past five years for this particular week.
U.S. ethanol prices peaked the week ending September 30, but ended the week to the downside. Manufacturing margins improved supported by higher corn and oil prices. RIN values increased.
Total commercial stocks experienced a huge stock draw of over 11.2 million barrels for the latest week, one of the largest of the year. Stocks were pulled lower by both products, down over 8.2 million barrels, and crude, which was almost 3 million barrels lower. Stronger product demand at about 20.6 MMB/D, up 1.3 MMB/D from the prior week, contributed to the draw. Crude runs fell by around 300 MB/D for the week to 16.03 MMB/D, the lowest weekly level in months. It is anticipated that runs will fall further to about 15.6 MMB/D as turnarounds increase sharply for the next week. For the next week crude stocks are expected to build by almost 2.7 million barrels as key light product inventory declines by over 3 million barrels.
Slowly rising tanker rates over the past 6 months are offering an early warning mechanism for the bearish turn in the market's future. A steady increase in LNG tonnage on the water is underway – most of it is running ahead of the new trains to which it is dedicated. The tonnage represents the natural manifestation of two essential problems facing the LNG industry over the next five years; finding enough demand growth for new LNG supply and selling the LNG at a price that offers a reasonable netback. PIRA sees two distinct methods emerging to alleviate these problems, although by no means will they solve them completely. How well they will work will be a matter of waiting and seeing, but the process is already underway and offers some support to prices in the near term.
Global equities were modestly mixed on the week. In the U.S., the broad index fell back 0.6%, but banking and retail indices posted solid gains. Energy was neutral, while utilities was the weakest performer. Internationally, Latin America was the strongest performer, while Asia also had a good week, with China and emerging Asia posting gains.
The week ending September 30, production dropped to a three-month low as plants outside the Midwest went through scheduled maintenance. There was a large drop in inventories to the second lowest level of the year. Ethanol blended gasoline rose after falling in seven of the prior eight weeks.
On the week, total commercial stocks drew 6 MMBbls and have become increasingly tight, relative to seasonal trends. This has supported the recovery in Japanese refining margins over the last month. Runs dropped 186 MB/D as maintenance continues. Crude imports stayed sufficiently low to induce another crude stock draw. Finished product stocks also drew, with gasoline hitting its low for 2016. Aggregate demand improved by 161 MB/D and the current pattern looks improved. Margins were little changed on the week and remain acceptable.
The S&P 500 moved lower on the week, with volatility slightly higher, and high yield debt and emerging market debt moving a bit lower in price. The dollar was generally stronger, particularly against the Japanese yen and British pound. There was noted strengthening in the currencies of Russia, Mexico, and Indonesia, against the U.S. dollar. For commodities, a strong performance in energy and oil helped carry the overall index higher, but ex-energy moved definitively lower. Precious metals, including gold, silver, platinum, and palladium weighed on the ex-energy complex. Among industrial metals, aluminum moved higher.
Following the implementation of the modified Rangarajan committee formula, the price of Indian domestic gas has been reduced around 18% for the six month period from Oct 1, 2016 to Mar 31, 2017. For the Fertilizer sector, the lowering of the domestic gas prices is expected to reduce the pooled prices during H2 FY2017 which should lead to subsidy savings of ~Rs.7-8 billion ($100-120-million) for the Government for H2 FY2017 (assuming the currency to remain stable).
Saudi Arabia's formula prices for November were just released. While cuts were made to most crudes in the key markets, they were less than the market expected. Saudi had additional barrels to sell in November due to lower crude burn and the Yasref refinery being down for maintenance. The price cuts were not aggressive enough to push those extra avails into the market. In Asia, the cuts were consistent with a modestly wider contango in Dubai structure, and in Europe they were consistent with a wider discount on Urals-Brent.
EIA recently released their July oil balances. Domestic crude supply, which is domestic crude production plus the balancing item, again declined to a new cyclical low of 8.77 MMB/D. This is the lowest figure seen since March 2014. From the April 2015 peak, domestic crude supply has declined 1.19 MMB/D, or an annualized decline rate of -9.7%.
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.
The official signing of the Cat Propulsion Dealer Agreement with Louisiana Cat commenced on August 22, 2016. Louisiana Cat is the first Caterpillar Dealership in the Americas to reach all requirements for training and technical sales and support to become a Gold level dealer for the full line of Cat Propulsion equipment.
Erika Hamrick, Cat Marine Regional Sales Manager Americas officially recognizes Robert “Bobby” Webb, CEO at Louisiana Cat as the first Cat Propulsion Dealer in the Americas (left) Official document signing at the Reserve, La headquarters by Erika Hamrick and Bobby Webb. Also pictured is Mike Jennings, General Manager (right)
“This is truly a milestone for Louisiana Cat! By having a fully integrated Caterpillar propulsion solution available to our customers with the same promise of reliability is a real differentiator in the marketplace. We can now leverage our decades of experience with marine engines and raw horsepower with a very natural extension of our expertise through the shaft and to the propeller. We are excited to be the first dealer in the Americas to achieve this goal through qualification in a rigorous technical sales and support training over the last year and a half,” said Mike Jennings, Louisiana Cat Power Systems Division General Manager.
Louisiana Cat is very excited to add these products to our line of propulsion offerings to more completely meet the customer’s need for a single source for complete propulsion systems. This expansion of the marine product line from the engine and generator to the entire marine propulsion system package will help maximize uptime, while reducing operating costs for offshore platform service and towing vessels, inland river cargo & transportation vessels, fishing & governmental vessels.
Specialist offshore asset manager Attollo Offshore has supported Teras Offshore in the redeployment of its first service rig to work in the European offshore wind farm industry for one of the leading energy groups in northern Europe.
The world’s first subsea gas compression system has now been in operation for one year on the Åsgard field. The system has been running like a Swiss clock with practically no stops or interruptions.
lllustration of Åsgard subsea gas compression. Image credit: Statoil
It was in September 2015 Statoil and its partners started up the world’s first subsea gas compression system on the Åsgard field in the Norwegian Sea.
“Quality in all sections of the project and also during operation has contributed to maintain a system regularity of close to 100% through its first year of operation,” says Halvor Engebretsen, vice president for Åsgard operations.
“Before start-up we carried out extensive testing, commissioning and verification of the technology, and thereby we could remove errors and weaknesses before the installation was placed on the seabed. We have already benefitted from this effort by stable and good operation,” he continues.
With this new and ground-breaking technology, the recovery from the Mikkel and Midgard reservoirs has been increased by as much as 306 million barrels of oil equivalent (boe), corresponding to a medium-sized field on the Norwegian continental shelf (NCS) and extending the fields’ life to 2032.
“During the first year of operation we have raised production by an excess of 16 million boe. Based on today’s prices the value added amounts to more than NOK 5 billion,” says Engebretsen. The recovery rate from the Midgard and Mikkel reservoirs on Åsgard has been raised from 67% to 87% and from 59% to 84% respectively.
“Åsgard subsea gas compression is one of Statoil’s most radical innovation projects. The technology represents a quantum leap that may contribute to considerable improvements in both recovery rate and lifetime for a number of gas fields.
The technology that has been in operation for a year was matured through many years by strong in-house expertise. In close collaboration with suppliers such as Aker Solutions, MAN and Technip, Statoil has qualified more than 40 new technologies.
“We have built test facilities at K-lab, storage and maintenance capacity at Vestbase, and we have access to ships that are capable of handling installation of large subsea modules. By reusing this technology, we have great opportunities for simplification and efficiency improvements, and for reducing carbon footprints of future gas compression systems,” explains Engebretsen.
The technology also represents a significant reduction in energy consumption and carbon emissions in a lifecycle perspective on Åsgard, compared to a compression platform. This technology represents a potential for further carbon reductions through use in future subsea solutions.
Åsgard Subsea Gas Compression video: Watch here
Last week we covered the OPEC announcement on production cuts, a strategy to reduce over-supply in the market and give a much needed boost to oil prices. Without higher oil prices, many new projects are thought to be uneconomic. Or are they? Douglas-Westwood has recently reviewed over 250 upstream capital projects sanctioned in the last four years to assess how industry costs are moving. The results are remarkable.
Oil & Gas Exploration & Production (E&P) companies have been under pressure in the downturn. Faced with much lower free cash flow from producing fields, the focus for many has been on managing costs so that dividends can be maintained through the downturn.
The sanctioning of many new projects has been deferred during this period as E&P firms instead focus on becoming leaner. However, three specific trends are driving a remarkable reduction in upstream capital costs, and bringing some uneconomic fields over the threshold of viability.
• The immediate impact of the downturn was a squeeze on the supply chain by the E&P companies. Demands of 10-15% price reductions to service and equipment companies were common. This trend was more or less immediate at the start of the downturn, and will most likely be eroded as soon as the market recovers.
• With reduced activity levels came massive over-supply of some asset classes. Rig utilization, vessel utilization, (amongst many other asset classes) has plummeted and day-rates have fallen in some cases over 60%. Over-supply will take some time to work its way out of the system as older units are scrapped.
• Re-engineering of existing projects, returning to conceptual or FEED studies to re-work the development scheme has also yielded substantial cost savings. Further gains are yet to be had from standardization of engineering approaches, equipment, and even people. These savings should be far more permanent in nature.
Our analysis of global upstream projects (onshore and offshore, including unconventional) shows that on average the spend per barrel recovered for newly-sanctioned projects has fallen an incredible 40% over the 2012 to 2016 period. In some locations, the cost reductions have been much greater than this average. The DW upstream capital projects study covering the 250 project previously mentioned will detail key drivers and initiatives that have led to this outcome. You can register your interest for updates on this study here.
Steve Robertson, Douglas-Westwood London
As human beings, we are creatures of habit. We quickly adapt to routines and like things a certain way, ordering our favourite dish off the menu to avoid disappointment for example. The same can perhaps be said of the oil and gas industry. We know this is a cyclical industry with peaks and troughs. For the past two years, we have been stuck in the trough part of the cycle, as oil prices have gone through a period of volatility. Still, at every level of an organization, we all need to focus on what we can control. Only then can we navigate through this challenging time and emerge stronger. As an industry, we need to increase efficiency while maintaining safety and keeping costs under control.
Great steps have been made through advances in technology and the introduction of digital industrial solutions, however the potential to improve productivity further remains vast. One challenge that equipment manufacturers face in the oil and gas industry is the differing engineering standards and product specifications of end users. Each operator on the market has its own customized standards by which it works.
Embracing manufacturing standardization, particularly during a down-cycle period—such as the one we’re in now—would lead to higher-quality products, better productivity, increased reliability, shorter delivery time and most importantly, lower costs.
A lack of industry-wide standardization means that a large amount of time and money is spent tailoring solutions to each customer’s specific requirements. For example, the aviation industry has benefited heavily from industry-wide standardization—it is regulated in such a way that all manufacturers must comply with centralized FAA standards. This means that when an aircraft manufacturer purchases an engine, they know they’re getting a product that meets industry-wide regulations.
Operators, OEMs and partners are looking at new ways to achieve a unified goal—keeping costs under control, mitigating risks and injecting speed and efficiency in the industry for the long term. From innovative commercial models to closer partnerships and new collaborative frameworks from the early stages of a project life cycle, there is a lot going on in this sector. Designing and implementing manufacturing standards would further benefit both end users and providers alike, bringing a number of advantages, such as:
The low oil price environment has put pressure on the industry to drive down cost. Now is the time for the industry to come together, agree on standards and simplify the way we work. If that were to happen, we could all benefit during a future upturn in the oil price. If you wish to continue this conversation, please visit the online community Tech Talks.
By Luca Passaleva, Oil & Gas Commercial Director, GE’s Marine Solutions
Claxton, an Acteon company, has successfully introduced the latest modular versions of its conductor recovery tower and SABRE™ abrasive cutting system to increase efficiency and flexibility in decommissioning and late life projects.
First developed in 1999, SABRE™ has proven to be an invaluable industry tool and has been successfully used in some of the world’s most significant abandonment campaigns. Its abrasive jet exits the tool at transonic speeds – making light work of even composite materials such as cemented casings.
Photo courtesy: Claxton
Using a jet of naturally occurring cutting components (garnet, water and air), SABRE™ has a low environmental impact. The system can be deployed from various vessel types or platforms, allowing the simultaneous abrasive cutting of multiple well casings without impacting adjacent infrastructure.
The latest version is fully NORSOK Z-015 compliant, has a reduced system footprint and is modular in design, making it be adaptable to a wider range of applications and deck layouts and thus minimizing complexity. Its cutting manipulators suit all standard casing sizes down to 6-5/8”; it can operate at pressures of up to 20,000 psi and includes a packer system to improve cutting performance.
The modular approach and philosophy for SABRE™ also influenced new developments for the Claxton conductor recovery tower. The tower can handle and recover tubulars from production tubing to 30” casing during well abandonment. Designed for operational speed and reduced rig-up complexity, the system increases efficiency offshore. By having a small, lightweight yet powerful system, Claxton can also extend the operational window of the unit and move from well to well quickly and effectively.
Matt Marcantonio, R&D Manager, Claxton, said: “The concept for both the new SABRE™ deck spread and conductor recovery tower was to improve efficiency and flexibility. “The systems are now fully modular and can be adapted to a wide variety of deck layouts and locations. The latest version of SABRE™ was first used in July on an 8m x 8m weather deck footprint on the Horne and Wren Platform in the Southern North Sea - where the abrasive cutting system successfully severed two multi-string wells.
“The developments are the result of a great deal of work and innovation across the organization. We are extremely proud to have raised the bar including making the SABRE™ system fully NORSOK compliant to Z-015. This enables us to use SABRE™ on installations on the Norwegian Continental Shelf. It is also already booked out for a number of campaigns through 2016 and 2017.”
Claxton has grown significantly over the years in order to respond to clients’ operating needs. The company’s integration strategy means it can offer comprehensive decommissioning packages for the following applications: platform wells (rigless, rig-based or combined simultaneous operations), subsea wells, and casing recovery (drilling support operations).
For a case study on the Horne and Wren project, click here.
NAVTOR is to spend the next three years helping the EU chart a route towards autonomous vessels. The Norwegian firm, a global leader in e-Navigation technology and services, has been selected to represent the maritime industry in the ENABLE project - conceived to prove, verify and validate the safety of autonomous vehicles in Europe. NAVTOR has now received funding to investigate the concept of ‘shore-based bridges’, a crucial steppingstone on the path to autonomy.
ENABLE was originally proposed by the car industry, before the EU widened its scope to take in the full spectrum of transport, including ships. NAVTOR was chosen to represent the maritime sector’s efforts due to its expertise and innovation in the field of navigation, planning and monitoring. The firm’s technology currently connects vessels and shore-based facilities worldwide to optimize routes, safety, efficiency and overall fleet management.
“It’s an honor to be selected as the sole representative for our industry,” comments NAVTOR e-Navigation Project Manager Bjørn Åge Hjøllo. “The opportunity to work alongside established leaders in analogous transport sectors – learning from them, sharing knowledge and collaborating for new technical solutions – really is ‘once in a lifetime’.
“The shared goal is important for Europe, while the expertise we accrue will obviously be of huge benefit to our customers – all of whom can take advantage of key elements of shore-based bridges.”
NAVTOR’s role in ENABLE, which runs through to October 2019, will focus on testing the validity of the software element of a remote bridge concept. This will be built upon continuous data sharing between vessels and land, with key navigation functions migrating from the crew to office-based teams. Shore-based bridges will not be central to the day-to-day operation of autonomous vessels, but will be a vital part of their support infrastructure, allowing those onshore to take charge of individual ships when necessary.
“We believe autonomous vessels will be a reality within the next 10 to 15 years,” Hjøllo states. “Shore-based bridges will be a vital part of realizing that vision.
“However, before that point there is work to be done. We can use our expertise with software, monitoring, planning, and the secure transfer of data between vessels as a platform to build upon. Together with actors from sectors such as research institutes and the car industry, which has already made huge leaps steps forward in autonomy, we can accelerate the development of safe, reliable and innovative solutions for maritime.
“This is a long-term project with huge potential. We’re delighted to be taking the maritime lead.” NAVTOR launched the initiative with a pre-project meeting for 16 European experts, representing some of Europe’s leading research and development institutions, in its hometown Egersund last month. Other ENABLE participants include IBM, Philips Medical Systems, Renault, Tieto and Siemens.
NAVTOR was established in 2011 and has since grown into a global e-Navigation leader, with a network of offices in Norway, Russia, Japan, Sweden and Singapore. Its product portfolio includes advanced ENC services, publications, weather services, routing, and NavStation, the world’s first digital chart table, integrating all necessary navigation information onto one digital platform, with easy vessel to shore information exchange.
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