DNV GL has been awarded a 5 year contract to provide in-service verification work for Wintershall Noordzee B.V.’s (‘WINZ) RAVN and A6-A platforms.
The two platforms based in the North Sea are the unmanned RAVN in the Danish sector and manned A6-A in the German sector. RAVN is the first field in Denmark that Wintershall Noordzee will transition to the production phase as operator. The A6-A platform is undergoing a major overhaul, with WINZ extending it to include an oil processing plant alongside the current gas condensate facilities.
DNV GL’s scope of work will cover the Independent Verification of Management of Safety and Environmentally Critical Elements (SECE’s). This will include independent verification activities as detailed in the Written Scheme of Verification for RAVN and the A6-A installations. This involves a combination of onshore review of assurance records (i.e. certification, maintenance activities and integrity management activities), physical survey and witness of offshore/site activities. The main focus will be on the onshore review activities with a tailored offshore scope.
The work undertaken will be based on new EU Directive (2013/30/EU) on Safety of Offshore Oil and Gas Operations which aims to reduce the risk of major accidents associated with offshore oil and gas operations. The Directive requires owners and operators to prevent and mitigate the impact of major accident hazards through the implementation of a systematic and effective approach to risk management.
WINZ’s Justin Jansen and Richard Heijkoop from the Operations Engineering Department stated that “We have chosen DNV GL as supplier for the independent verification services because their approach to the project aligns very strongly with our way of working. DNV GL has also been offering these services for the offshore market for more than 30 years in Denmark so that really gave us confidence in their experience and credibility.”
Ben Oudman, Director and Country Manager Netherlands, DNV GL - Oil & Gas stated “We are very excited to have won this contract with Wintershall Noordzee and begin the work on these platforms. I believe DNV GL’s ability to deliver the combination of Danish, German and Dutch expertise will be a real benefit to the whole project.”
The AUGUST 2016 MTS Houston Section luncheon will be held on August 25, 2016 and will feature a presentation by Stephen Whitaker, Project Director for Hess’s Stampede Development. Mr. Whitaker will provide an update on the development of this deepwater field.
The Hess-operated Stampede deepwater oil and gas field is one of the largest un-developed fields in the Gulf of Mexico, with gross recover- able reserves estimated in the range of 300-350 million barrels of oil equivalent.
Discovered in 2005, the field is located in Green Canyon Blocks 468, 511 and 512 in the Gulf of Mexico in 3,500 feet of water, 115 miles south of Fourchon, Louisiana. Oil and gas reserves at Stampede are located within the Miocene reservoirs at a depth of approximately 30,000ft.
The front-end engineering and design (FEED) for the project started in the second quarter of 2013 with the final investment decision (FID) made in October 2014.
The project leverages Hess’s proven capability to safely execute deepwater development projects and top-quartile performance in offshore drilling and project delivery. It is scheduled to come onstream in 2018 and is expected to provide a significant contribution to Hess’ future growth. Production facilities will consist of subsea production and injection wells tied back to a single Tension Leg Platform. Gross topsides processing capacity for the project is approximately 80,000 barrels of oil and 100,000 barrels of water injection capacity per day. Hess, the operator, has a 25 percent working interest in the field, alongside its co-owners – Union Oil Company of California, a Chevron subsidiary, Statoil, and Nexen, which each hold a 25% interest.
At the August luncheon, Stephen Whitaker, Hess’s project director for Stampede will provide an update on the development, along with some of the challenges and accomplishments.
Stephen Whitaker is Project Director, Offshore - Stampede Deepwater Development for Hess Corporation, a global independent energy company engaged in the exploration and production of crude oil and natural gas. In this role, Whitaker is responsible for managing the development of the Stampede oil and gas field. Prior to this he was responsible for developing Hess’s subsea assets in the Gulf of Mexico and West Africa, and in expanding the role of the Subsea Development Group to Hess assets offshore Europe and in the Asia Pacific region.
Before joining Hess in 2005, Whitaker worked for J.P. Kenny, where he held a number of technical and managerial positions around the globe, culminating in his position as CEO of J.P. Kenny in Houston in 1998.
Whitaker has also held a variety of positions with BP, Technip and Atkins. He started his career in the UK with Horizon Exploration after graduating from the University of Wales Institute of Science and Technology in 1980.
September 22, 2016 – Lunch – Topic to be confirmed
October 10-12, 2016 - Dynamic Positioning Conference, Westin Memorial City, Houston
October 27, 2016 - MTS Houston Annual Barbecue Social - Seanic Ocean Systems
March 25, 2017 - Sporting Clays - American Shooting Center
PJ Valves (PJV), a specialist manufacturer and supplier of valves to the global energy industry, has been awarded more than £1 million worth of contracts to supply over 1,000 valves to Maersk Oil’s Culzean field in the UK North Sea.
PJV will manufacture forged cast gate globe and check valves in super duplex and super alloys for the well head, living and central processing platforms. The company will also supply wafer check valves to prevent fluid backflow on these facilities. PJV was awarded the contract because of its extensive North Sea experience and specialist Italian manufacturing capabilities, which meet the project’s high standards for quality.
Spencer Linsell, Sales Director at PJV, says: “We’re delighted to be working on such a historic project. This contract is validation of our global territory model whereby we build relationships with project teams in each region. Furthermore, our European manufacturing expertise in forged steel produces the highest quality of valves for frequent use in the most demanding industry applications.”
The valve package is scheduled to be delivered in 2017. Because of the success of the front-end scope, PJV has subsequently been awarded contracts for the compressor, metering and water treatment packages.
The Culzean gas field is expected to reach a peak production rate of 400 to 500 million standard cubic feet per day, providing for around 5 per cent of the UK's total gas consumption by 2020.
Centurion Group and ATR Group are to merge to create a global player in the oil and gas rental equipment and services market. The group, which will have a combined turnover of over £100 million, will operate from bases in the UK, Netherlands, Caspian, Singapore, Australia and the U.S.
The Group will continue to be headquartered in Aberdeen with ATR’s chief executive, Keith Moorhouse, and chief financial officer, Euan Leask, becoming CEO and CFO respectively. Centurion’s acting CEO Peter Stuart will take on the role of chairman of the combined entity, while Alan MacLeod, Centurion’s CFO, will assume the role of director of integration.
Centurion Group provides specialist rental equipment and services on a global scale to both the oil and gas and the mining sectors. It comprises six business units: Conserve Oilfield Services, Jacks Winches, RentAir Offshore, Seanic Ocean Systems, Tristar Water Solutions and Mining Camps Australia.
ATR Group is a leader in the rental, sale and inspection of specialised equipment to the petrochemicals, marine, subsea and offshore oil and gas industries. Its five business units are ATR Equipment Solutions, ATR Lifting Solutions, ATR Power Solutions, Underwater Engineering Services and Safety & Technical Hydraulics.
Mr. Moorhouse said: “This is a great deal for both parties and their shareholders, all of whom remain in the business. It is also good news for the industry in general, especially at this difficult time. By combining our strengths and creating synergies, we will have a group that is significantly greater than the sum of its parts.”
“The merger puts us in a strong and stable position to deliver wider, cost-effective solutions, and on a global basis, that will appeal to our customers’ in today’s difficult market. The wider geographic footprint provided by the merger will allow us to provide our fleet management services over a number of locations, enabling us to increase operational efficiencies for our customers.”
Simmons & Company International, corporate finance advisers to the energy industry, brokered the deal. Their managing director, Nick Dalgarno, commented: “The merger brings together two groups which have a natural fit in order to deliver greater value for customers and realise opportunities which would not be available to either business on a stand-alone basis. The enlarged group will provide the scale to withstand the challenges of the current market and be very well positioned to win the recovery when it comes.”
Leading international energy logistics provider Peterson has been awarded two long term contracts with Statoil to provide logistics support for the Dudgeon offshore wind farm located in the Southern North Sea.
Map courtesy: Statoil
Peterson will work closely with the operator to deliver comprehensive logistics services including stevedoring, ship agency services, provisions delivery and transportation of personnel for walk to work security. Peterson will also be responsible for the supply of fuelling services from its facility in Great Yarmouth.
In addition to these long-term contracts Peterson recently supported the barge load-out of the 1,800Te Dudgeon offshore windfarm Substation. Peterson provided 12 of the 72 Self-Propelled Modular Transporters (SPMT) axles required for this operation which was completed successfully and safely in Lowestoft in July 2016. SPMTs are one of the most powerful heavy-duty transportation systems in the world.
The Dudgeon field is an extensive £1.5 billion project to harness offshore wind to power more than 410,000 UK homes. This 402MW offshore wind farm will be located some 20 miles off the coast of Norfolk.
Ron van der Laan, regional director, Peterson said: “To have been awarded these long term contracts for such a ground-breaking project is a huge achievement for Peterson’s Great Yarmouth team. This strongly positions Peterson as a leading provider of logistics support to windfarm assets in the Southern North Sea.
“The management of logistics services in the renewables industry presents a significant growth opportunity for us. We have the depth of experience and proven capabilities to deliver the services required to meet the needs of operators working in this sector.”
Peterson has been operating in Great Yarmouth since 1997 and employs 30 people at its facility providing quayside and logistics services. Earlier this year Peterson, in partnership with Veolia the UK’s leading environmental solutions provider, opened a new, purpose built decommissioning facility in the western terminal of the recently developed Outer Harbour at Great Yarmouth.
North American Crude Prices Fall as Canadian Production ReturnsCrude prices fell in July, as Western Canadian oil sands production recovered from recent wildfires. Stocks rebuilt in Canada, weakening differentials for Bakken and Rockies, as well as Canadian grades. Cushing stocks were unchanged in July, but a small draw is likely for August, as overall U.S. crude stocks decline sharply.
Attempts to support spot price will be on two fronts: lower production ramp ups and finding new non-European pockets of demand (i.e. India), even if it means lower netbacks. Among the larger producers and portfolio marketers, the logic goes that it's better to make less money off a few cargoes than demonstrably damage the benchmark for all cargoes. As such, PIRA adjusted the LNG volumes we’ve projected would land on European shores.
The U.K. supply picture for the upcoming winter remains very fluid, with Eggborough Power Ltd announcing this week that its unit 4 coal plant (495 MW) will be available again in the wholesale market over the winter 2016/17, starting from September 16. This announcement comes a few months after the signature of a Supplemental Balancing Reserve (SBR) contract with National Grid for the provision of 681 MW of de-rated capacity from units 1 and 2 during the coming winter. The additional capacity that we potentially see coming back for winter 2016/17 is only the remaining unit at Eggborough. As for the other coal plants currently closed, we see the decision to come back online technically much more difficult to implement.
The coal market lost significant ground this week, with the three major forward curves shedding between $4.00/mt-$6.00/mt along the curve. The headline development of the week was the announcement that Turkey will be adding a $15/mt tax on imported thermal coal for power generation. Before this announcement, Turkey's imports had been one of the sole remaining sources of potential growth on the demand side in the Atlantic. The process of rebalancing for the coal market will continue, particularly as the outlook for Chinese import demand remains bullish. However, limitations on import demand such as what was announced in Turkey this week limit the upside for pricing, although our bullish expectations on oil pricing will drag the market higher as production costs escalate.
Mt. Belvieu LPG prices followed broader energy markets by changing little. September propane at the market center eased by 0.1% despite a very weak inventory build, which pushed stocks back into deficit vs. the year prior. Meanwhile, butane futures gained 1.3% to the settle above 61¢/gal as markets anticipate higher blending demand next season. Prompt August ethane prices plunged as the EIA reported another huge increase in production in June and a substantial inventory increase.
Manufacturing margins also declined. RIN prices decreased after soaring 30% since May.
The August WASDE could very well put in the high for corn yields as the euphoria around the 2016 crop peaks due to crop conditions. The December 2016/December 2017 corn spread traded down to -40 Thursday suggesting the market may even be looking at a 172 yield come next Friday, while PIRA is looking for a 170-171 number for the report.
This week’s U.S. July activity data (such as nonfarm payrolls and the ISM manufacturing index) suggested that the pace of economic growth will pick up in the second half of 2016. While wage growth has accelerated, it is not expected to impact the Fed policy outlook. The Bank of England delivered an easing package that went far beyond market expectations. Japan delivered a one-two punch of fiscal and monetary easing, but the Bank of Japan muddled its message about the upcoming policy action. A directional correlation between China’s manufacturing confidence and Brazil’s industrial production has continued to hold.
Overall stocks built 2.1 million barrels this past week with crude inventories building 1.4 million barrels but gasoline stocks declining 3.3 million barrels. This should be the last of the crude stock builds with offshore floating inventories relatively depleted thereby resulting in lower imports and a forecast 3.6 million-barrel stock decline in next week’s data. Cushing crude stocks fell 1.1 million barrels this past week and should decline another 0.5 million barrels in next week’s EIA report. Another gasoline stock decline is forecast for next week, albeit more moderate than this past week, while distillate stocks build just slightly.
Thursday’s 6 BCF U.S. storage pull was extremely rare — the last such cooling season event occurred a decade ago — driven by record-breaking gas power burn. Yet, barring a few transient spikes, NYMEX Henry Hub (HH) futures trading was relatively ambivalent. Part of this trepidation stems from looming shoulder season fundamentals that will weigh on gas burn for electric generation (EG). However, renewed production resiliency — until recently masked by transitory disruptions — may be even more influential in threatening balances in the weeks ahead.
The S&P 500 moved to another record high, though the Russell 2000 remained well short of its record high. Volatility moved lower, while high yield debt and emerging market debt indices generally moved higher in price. The UK long bond yield moved lower as the Bank of England lowered their overnight policy rate 25 basis points.
Inventories built to 20.6 million barrels the week ending July 29. About 10.6 million gallons of ethanol were imported. The production of ethanol blended gasoline increased to 9,439 MB/D the third highest on record.
Heading into the August WASDE this week there seems to be an inordinate amount of discussion around setting the lows “earlier than normal” this year. A lot of the discussion seems to center on reports from scouting farmers that this year’s corn crop is “good, but not great” and that it’s not as good as it looks from the road. More and more crop tours seemed to confirm these concerns last week, but the markets are “stuck” as the methodology employed by NASS for their August yield estimate solely counts stalks, which should not be an issue in any area with the exception of southern Minnesota and possibly far northern Iowa due to frost.
Crude runs rose 146 MB/D on the week, reflecting the restart of capacity previously in maintenance. Crude imports stayed sufficiently high to build crude stocks 0.77 MMBbls. Finished product stocks drew 0.57 MMBbls. Refining margins are poor and getting worse, which will prompt further discretionary run cuts that will ultimately tighten the market.
It’s probably safe to say that there really isn’t anything else left to delay this year with the exception of Australia Pacific LNG train 2, which PIRA has in its short term balance for October. The question then becomes should we should expect a similar number of delays in start-ups among the 12-odd trains on the books for 2017? The answer at this point is a firm maybe, as we have some evidence to suggest that this year’s flawed timing will be duplicated. One area where delays are mounting are on future projects. The rate of announcements delaying FIDs for the next generation of liquefaction is gathering force, as it becomes abundantly clear to even the most optimistic of project backers that lower oil prices are set to be a longer term feature of the market.
Global equities were broadly higher on the week. In the U.S., the growth indicator outperformed the defensive indicator as many of the growth sensitive sectors posted good gains. Banking and technology led the way higher, while utilities declined and underperformed. The international sectors performed even better than the U.S., and were led by Latin America, China, and emerging Asia. Europe fell back.
Over 70% of the gains in the rig count since May lows has been driven by private operators. Of these private rig additions, nearly 90% has come from operators that had been recently inactive. Many operators dropped to 0 rigs in the first quarter as WTI prices averaged $33/Bbl. As prices recovered, these operators have returned from 0 to 1 rig programs and they have been the primary driver of higher rigs. Now that a significant number of private operators have returned, PIRA thinks it is likely that gains in the rig count will slow.
The federal government has decided against raising the tariffs of petroleum related products despite Oil and Gas Regulatory Authority’s (OGRA) recommendation to raise prices, Finance Minister Ishaq Dar has said. Speaking to reporters in Islamabad, Finance Minister Ishaq Dar said that OGRA's summary was rejected after Prime Minister Nawaz Sharif directed not to raise the prices. He said that the current petroleum prices would remain unchanged until at least August 31, 2016.
EIA recently released their May oil balances. Domestic crude supply, which is domestic crude production plus the balancing item, was unchanged month-on-month and the year-on-year decline rate slowed from about 900 MB/D to 550 MB/D. Looking to June, based on PIRA's adjusted weekly data through July 22nd, domestic crude supply for June is estimated to have declined by 155 MB/D, month-on-month and the year-on-year decline rate has reaccelerated back to 735 MB/D.
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.
AISUS Offshore has strengthened its team in Aberdeen as it continues to grow its UKCS position and gears up for significant overseas expansion.
The company, which provides remotely deployed visual and ultrasonic inspection solutions to the global oil and gas industry is looking to double its turnover over the next three years through expansion both at home and abroad.
Andrew Mitchell has been appointed as business development manager to support the company’s plans for future growth, as it looks to enhance its products and services to meet industry demand.
With an in-depth knowledge of global markets and over 20 years’ experience in the oil and gas industry, Mr. Mitchell will focus on expanding AISUS Offshore’s range of inspection solutions, whilst developing and maintaining strong relationships with its existing and future clients. Originally from Stonehaven, Aberdeenshire, Mr. Mitchell’s career has seen him travel around the world, working in the US, the Middle East, across Europe and also West Africa.
Prior to joining AISUS, Mr. Mitchell was business development manager for etpm Ltd and also held the position of operations manager for Forum Energy’s UKPS division. His appointment follows a period of high activity for the company as it continues to build its UK client base and recently completed projects in the Norwegian sector.
Stuart Lawson, managing director of AISUS Offshore said: “Andrew’s appointment underlines our confidence in the company’s future growth, both in the UK and overseas where we see real potential for our wide range of bespoke inspection services. As we continue to grow our business in the UK, we have made significant in-roads into overseas markets and our continued investment in our people and our technology puts us in an ideal position to capitalize on opportunities across Europe and further afield.
“Andrew is well respected in the industry and brings with him a strong network of contacts and a good understanding of our client base, both here in the North Sea and internationally.”
Launched in 2013, AISUS specializes in the inspection of caissons and risers, and deploys remote inspection solutions across all stages of the asset lifecycle, from commissioning, through operations, to decommissioning. The company has developed market leading technology, utilizing a diverse range of visual and ultrasonic scanning systems, and has grown to become an independent and trusted supplier to the global oil and gas industry.
Mr. Mitchell commented: “AISUS is extremely well placed to meet the challenges ahead, as it looks to become one of the industry’s leading inspection specialists.
“It is a great time to become part of this highly skilled team and I look forward to applying my experience to help fuel continued growth.”
Statoil ASA (OSE:STL, NYSE:STO) and Petróleo Brasileiro S.A. - Petrobras (“Petrobras”) (BVMF: PETR4, NYSE:PBR) have agreed that Statoil will acquire Petrobras’ 66% operated interest of the BM-S-8 offshore license in Brazil’s highly prolific Santos basin. The acquisition includes a substantial part of the Carcará oil discovery, one of the largest discoveries in the world in recent years.
Carcará was discovered in 2012, on the geological trend of the nearby Lula field and Libra area. It is a world-class discovery of high-quality oil of around 30° API and with associated gas in a thick reservoir with excellent properties. It straddles both BM-S-8 and open acreage to the north, which is expected to be part of a license round in 2017. Statoil is well positioned for operatorship of a unitized Carcará field following this transaction and the license round will provide an opportunity to scale up the position in the field. Statoil estimates the recoverable volumes within the BM-S-8 license to be in the range of 700 to 1,300 million boe.
In addition to the Carcará discovery, BM-S-8 holds exploration upside that may significantly increase its resource base. The license is in its final exploration phase with one remaining exploration commitment well to be drilled by 2018.
“Through this acquisition we are accessing a world class asset, and we strengthen our position in Brazil, one of Statoil’s core areas due to its large resource base and excellent fit with our technology and capabilities. The Carcará field will significantly enhance our international production volumes in the 2020s and beyond. We are developing a strong Brazilian business with a broad portfolio, material production, high impact exploration opportunities and excellent potential for long term value creation and cash flow,” says Eldar Sætre, president and chief executive officer of Statoil.
The total consideration for the acquisition is USD 2.5 billion. Half of it will be paid upon closing of the transaction, with the remainder being paid when certain milestones have been met. These are partly related to the license award, but mainly to the future unitization of Carcará. The effective date for the transaction is 1 July 2016. Closing is subject to customary conditions, including partners’ and government approval.
Statoil and Petrobras are also in discussions regarding a long-term strategic cooperation. The focus will be in the Campos and Espírito Santo basins, as well as new cooperation within gas and technology projects in the Santos basin.
| Location | Interest | Status | |
|---|---|---|---|
| Peregrino | Campos basin | 60% (operator) | Production at 100,000 barrels a day Reserves of 300-600 million barrels of oil |
| Peregrino Phase II | Campos basin | 60% (operator) | Construction Production from 2020 at c. 60,000 barrels a day Reserves ~255 million barrels of oil |
| License BM-C-33 comprising the Pão de Açúcar, Gavea and Seat discoveries | Campos basin | 35% | Evaluation/development gas Approximately 1bn boe in recoverable reserves. |
| Eight exploration blocks | Espírito Santo basin | Four operated by Statoil, four by Petrobras | Exploration |
| License BM-S-8 comprising the Carcará discovery and exploration prospects | Santos basin | 66% and operator after transaction |
Statoil has been in Brazil since 2001. This year marks five years of production at the Statoil-operated Peregrino field. Peregrino Phase II is due to commence production in 2020, and in the third quarter of 2016 Statoil expects to assume operatorship of license BM-C-33 in the Campos basin which includes the Pão de Açúcar discovery. Statoil also has interests in eight licenses in the Espirito Santo basin, working in partnership with Petrobras, and expects to spud its first exploration wells during 2017. It has developed a strong local organization with nearly 90% of its workforce from Brazil and its operations have so far created 1,000 direct jobs. The addition of BM-S-8 to Statoil’s Brazil portfolio will help deliver profitable growth through greater operational flexibility and efficiencies.
Whittaker Engineering, an independent Engineering, Procurement and Construction (EPC) company, has developed a unique water-backed welding procedure for vessels which can save companies millions of pounds from the prevention of dry docking and resultant loss of production.
Traditional welding specifications used for the design and manufacture of FPUs (Floating Production Units) and oil rigs do not take into account the cooling effects of seawater. Whittaker Engineering’s procedure uses high-powered induction heating coils to maintain a preheat temperature whilst welding water-backed plate, mitigating the heat loss through a ship’s hull into the cold temperature of the sea. It was successfully deployed by EnQuest on the Northern Producer FPU during routine work.
Photo courtesy: Whittaker Engineering
Greig Ritchie, Operations Manager for the Northern Producer, said: “This is a truly noteworthy welding development that has helped EnQuest carry out work in the most efficient way. The procedure enables in-situ modifications and repairs and avoids unnecessary and inefficient dry dock periods. It has significant potential for operators of vessels both in the North Sea and elsewhere.”
The resultant weld with the induction heater is ductile, low in hardness and has proved as high in quality as if it was performed without water around it. The same technique can be applied to corrosion and pitting in the hull. Whittaker believes it is the only company in the world currently offering this procedure with full Lloyd’s Register classification.
Induction heating involves huge currents surging backwards and forwards through induction coils to generate high temperatures. Cooling water and electricity flows through the coils from the power supply on deck and routed to where the welding is carried out. The power supply for the inductors has a maximum range of 75 metres from the power source on deck to the welding repair area.
The presence of seawater on the outside of a hull structure greatly increases the rate of cooling of weld metal. Fast cooling rates can produce hard martensitic structures in basic carbon steels which in turn can lead to cracking. Furthermore, the cold seawater encourages condensation at the weld site, which further increases the risk of hydrogen cracking. Conventional ceramic electric heating pads do not supply sufficient heat (typically a maximum of 30°C is reached) to combat the cooling effect of the seawater.
However, with a sufficiently powerful induction heater, Whittaker can achieve a constant preheat of 75°C to 100°C with seawater at 5°C (typical North Sea temperature).
Ken Whittaker of Whittaker Engineering said: “Many oil and gas vessels are expected to be at sea for 15 years or more. By carrying out the work offshore, we can potentially save companies millions of pounds by avoiding dry docking and loss of production through downtime. This is our fourth deployment and each one has been successful. Independent testing has also proved that our water-backed weld with induction heating is at least as strong and reliable as those carried out in a shipyard in the dry.”
There is a general consensus amongst industry analysts that the oil oversupply creating the current market downturn will narrow by the end of 2016. Douglas-Westwood (DW) data support this view, with our World Drilling & Production Market Forecast showing the first oil production decline in 2016 since 2009 – when OPEC strategically cut output in order to support prices. This is largely due to considerable reductions in oil production from the US shale plays as well as widespread outages in Nigeria as a result of militant attacks in the Niger Delta. Therefore, the oversupply will be eroded from the supply side with the demand side stuttering as a result of slowing Chinese economic growth and uncertainty surrounding the future of European markets.
DW’s 2017 view is less positive for the oversupply. The implementation of a host of offshore developments sanctioned before the oil price crash will lead to a 1.8 million barrels per day (mmbbl/d) increase in offshore oil output and a 2.1 mmbbl/d increase overall. Such projects include the ill-fated Kashagan project in the Kazakh Caspian. Kashagan alone is expected to contribute nearly 300 thousand barrels per day (kbbl/d) in 2017. Significant additions are also expected from the Middle East in the form of condensate output from the 24-phase South Pars development and around 300 kbbl/d Khafji field – previously shut-in due to environmental infringements and disagreements between joint operators Kuwait and Saudi Arabia. This pattern is expected to be seen globally, even mature plays in the North Sea and south-east Asia seeing increased output in 2017 as a result of the lag effect of offshore developments (the time between project sanctioning and first oil can be many years).
Demand outlooks from BP, EIA and IEA suggest 2017 demand growth around 1.2 mmbbl/d to 1.5 mmbbl/d, therefore it is highly likely the oversupply will increase once again next year. Whilst this is not certain to push oil prices down once more, it is likely to dampen the recovery until later this decade when a lack of project sanctioning in the last two years leads to a significant drop in offshore oil output additions towards to the end of the decade. This will cause offshore oil production to peak at 29.1 mmbbl/d in 2019 before declining slowly into the 2020s. Onshore oil production is unlikely to sufficiently offset this trend to keep pace with demand growth later this decade, therefore, this may be the point the market reaches equilibrium.
Matt Cook, Douglas-Westwood London
LQT Industries, LLC, a full-service provider of high quality accommodation facilities, design-build construction services, and support services to the energy and industrial markets, has been awarded contracts from three customers to build aluminum and steel MCC, blast resistant, and specialty petrochemical buildings.
“We are pleased that we are expanding our petrochemical/industrial footprint with these orders,” said Axel Vasquez of LQT Industries. “LQT produces high quality buildings and has significant experience in aluminum construction.”
The projects are located in Port Fourchon, Lake Charles, and Baton Rouge. The structures of two of the three projects will be built using aluminum, including the blast resistant building.
Venari Resources LLC (“Venari”), a deepwater oil exploration and production company in the Gulf of Mexico, announced today that it has acquired an additional seven percent working interest in the Shenandoah field on Walker Ridge Blocks 51, 52 and 53. The company also reported successful results from the Shenandoah #5 appraisal well.
Map courtesy: Venari Resources
The Shenandoah #5 well was drilled on Walker Ridge Block 51 in approximately 5,900 feet of water to a total depth of 31,100 feet. The well was drilled up-dip of the Shenandoah #2 appraisal well and was designed to confirm and extend reservoir boundaries. The well encountered over 1,000 net feet of high-quality oil pay in the Lower Tertiary Wilcox sands and extended the field further east. The next appraisal well, Shenandoah #6, is expected to spud later this year to further quantify the full resource potential of the field. Earlier this year, Venari increased its working interest in the Shenandoah Unit to 17% from 10%.
“With a high-quality reservoir and substantial net oil pay, the well results confirm Shenandoah to be a significant oil accumulation,” said Brian Reinsborough, President and Chief Executive Officer of Venari. “We are excited that we were able to increase our ownership in the field and continue building our relationship with Anadarko across this strategically important region.”
In partnership with Anadarko Petroleum Corporation, the operator of Shenandoah, Venari owns significant working interests in several exploration prospects proximate to the Shenandoah discovery.
Venari holds a 17% working interest in Shenandoah. Other co-owners are Anadarko Petroleum Corporation (NYSE: APC), as operator (33%), ConocoPhillips Company (NYSE: COP) (30%), and Cobalt International Energy, L.P. (NYSE: CIE) (20%).
Venari Resources, a privately held offshore exploration and production company founded in 2012 by deepwater E&P expert Brian Reinsborough, is focused on the prolific oil-prone subsalt region in the Gulf of Mexico’s deep waters. Since its formation, preeminent global investment firms led by Warburg Pincus, Kelso & Company, Temasek, and The Jordan Company have committed $2.4 billion of capital to Venari’s exploration program and development projects. Venari has built a large inventory of drillable prospects and leases in the Gulf of Mexico including the Shenandoah discovery in the Walker Ridge area, the Anchor discovery in Green Canyon and the Guadalupe discovery in Keathley Canyon. The Company is headquartered in Dallas and has an additional office location in Houston.
Damen Shipbuilding Group is establishing a permanent presence in Houston, Texas. The office opened on 1st August and will be headed by senior managers Jan van Hogerwou (New Construction) and Ruud Haneveer (Ship Repair & Conversion). This move is part of Damen’s policy of expanding its local footprint around the world, bringing it closer to current and prospective clients and enabling it to deliver a more responsive and personal service.
The first order to be handled by the new entity is for four new Damen 3711 Stan Tugs by Young Brothers, Limited, Hawaii’s largest inter-island cargo service provider. Young Brothers is a Saltchuk company operated by Foss Maritime. The tugs will be built at Conrad Shipyard, Louisiana, under a license and materials agreement with Damen. The first vessel will be delivered in the first quarter of 2018 and the last twelve months later. Together the 37-meter, 6,000 hp tugs will service Young Brothers’ fleet of modern, high-capacity tugs & barges.
“Opening a permanent Damen presence in North America is a significant milestone for the group,” said Jan van Hogerwou. “With over 200 Damen design vessels built and delivered in the US, this has been an important market for our vessels for many years via our flexible licensing agreements, and we have enjoyed excellent cooperation with shipyards across the country. This latest initiative will enable us to strengthen our relationships further with both builders and operators, and serve the North American market with the innovative, cost-effective and dependable vessels that it seeks.”
The choice of Houston as the location of the new office is also intended to send a message to the offshore oil & gas sector in North America. That is, that Damen is committed to supporting and working with vessel owners and operators to maximise efficiencies and minimise costs, despite the current downturn. It will support Damen’s work with shipyards and owners right across the maritime sector and Damen’s product range.
Bollinger Shipyards, LLC announces that the Bollinger Lockport New Construction facility has worked 6,000,000 man-hours without a lost time accident and the Bollinger Fourchon facility has worked fifteen (15) years without a lost time accident.
Bollinger Lockport New Construction, Lockport, Louisiana
Bollinger Shipyards strives for zero accidents while building on a philosophy that starts at the top by empowering all employees to demand safe production. Workforce, contractor, and customer safety is priority and an evident core component of facility operations. Through the dedication of our management team, a proactive workforce, and a comprehensive safety program, Bollinger Shipyards continues to achieve high safety objectives.
Bollinger’s President and CEO Ben Bordelon said, “Our management and employees have once again demonstrated their dedication in making our safety program successful. Bollinger continues to be one of the safest shipyards in America. Congratulations to our family of employees for their efforts in keeping safety a top priority.
Shell announced on July 28, a new exploration discovery in the deep water U.S. Gulf of Mexico. The initial estimated recoverable resources for the Fort Sumter well are more than 125 million barrels of oil equivalent (boe). Further appraisal drilling and planned wells in adjacent structures could considerably increase recoverable potential in the vicinity of the Fort Sumter well.
Fort Sumter map: Courtesy: Shell
“The Fort Sumter discovery builds upon Shell’s global deep-water leadership. Its proximity to our nearby discoveries in the area, and to highly prospective acreage to the southeast, makes Fort Sumter particularly significant,” said Ceri Powell, Executive Vice President Exploration. “These successes demonstrate there is still running room in the producing basins of our heartlands where large, high-value discoveries have the potential to further strengthen our deep-water competitiveness.”
Fort Sumter was safely drilled in the Mississippi Canyon Block 566, located approximately 73 miles (117 kilometers) offshore southeast of New Orleans, in a water depth of 7,062 feet (2,152 meters) to a total vertical drilling depth of 28,016 feet (8,539 meters) measured depth. The block is nine square miles (23 square kilometers) in size and is operated by Shell (100%). An appraisal sidetrack well was later drilled to a depth of 29,200 feet (8,900 meters) measured depth.
Shell’s material discovery in this heartland builds upon recent Norphlet exploration success at the Appomattox (2010), Vicksburg (2013), and Rydberg (2014) discoveries, bringing the total resources added by exploration in the Gulf of Mexico for Shell since 2010 to around 1.3 billion boe.
Shell global deep water, which is a growth priority for the company, currently produces around 600 thousand boe per day, and production is expected to increase to about 900 thousand boe per day by the early 2020s from already discovered, established reservoirs.
Damen Shipyards Group has announced its latest concept design: the Damen Decommissioning Series. The vessel will specialise in three core areas of the oil and gas decommissioning sector: topside decommissioning offshore platform removal, and subsea cleaning and removal. The design is based on in-house research carried out at Damen by one of its undergraduate interns.
By inviting a considerable number of internships at its yards, Damen Shipyards Group contributes significantly to the maritime education system. One recent position was offered to Justin Rietveld, studying Maritime Technology at the Rotterdam Mainport University of Applied Sciences. His brief was to investigate the potential niche markets for new vessel designs in the oil and gas decommissioning sector.
“This research started off with the idea of developing a decommissioning vessel based on Damen’s existing portfolio,” informs Mr Rietveld. “However, we soon found out that this market needs more.
“For example, there are many different activities within the decommissioning sector. This vessel can support a vast number of those. We have developed a concept to cover the bigger part of this new and exciting market.”
The vessel’s monohull design has a split stern; a characteristic that will come into play during platform removal operations, explains Mr Rietveld: “This ship will be able to reverse up to a jacket, where it will be ballasted to sink below the platform. Upon deballasting, the vessel will rise up to pick up the platform.”
The preliminary estimations of the vessel’s capabilities show that it will be able to perform decommissioning of fixed platforms of up to 1,600 tons in weight. This figure signifies a significant amount of global fixed platforms, and over half of those located in the North Sea.
In order to deliver maximum flexibility to clients, the concept design includes modular add-ons. This will address the possibility that such a vessel will not be solely active in the decommissioning market. This versatility will ensure that owners can optimise productivity: bridging the potential gap between decommissioning contracts with other roles.
These modular additions to the existing design include the (temporary) installation of a crane or a helideck. Functionality can be further boosted with the addition of accommodation modules to increase personnel capacity. Another option will be the addition of a temporary platform to create a solid stern. The subsequent increase in deck capacity could be used for transporting and installing monopiles and foundations for the offshore wind industry.
Speaking about the results of the research, Damen Manager Design & Proposal Offshore & Transport Lucas Zaat comments: “We initiated this project because we felt that we can make a difference in this sector – and it has certainly generated some significant ideas. The decommissioning market is close to our current activities. We are therefore planning to continue with this project and assign specialised personnel to implement it.”
Damen Shipyards has broad market focus on the decommissioning market. Next to current assets such as pontoons also the state of the art Walk-2-Work vessel currently being built for Bibby Marine could play a role in the decommissioning market. In the light of these developments, Damen has recently joined DECOM UK to further expand its market knowledge and validate developments with key stakeholders in the European decommissioning market
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