A joint industry project (JIP) to standardize subsea processing systems has been kickstarted by DNV GL with industry partners Petrobras, Shell, Statoil and Woodside. Subsea development projects have been under substantial pressure due to cost inflation and the low oil price, prompting a need to simplify the industry’s approach. DNV GL is seeking additional collaborators for the project to drive standardization, beginning with subsea pumping, to ensure benefits throughout the subsea supply chain.

Subsea processing is a relatively young and undeveloped field of technology, requiring operators to tailor-make solutions to meet field-specific requirements. If that technology could be better understood and harnessed, there is considerable potential for it to deliver increased value at reduced costs.

Experience in the field has already grown significantly in recent years with subsea pumping developments from the JIP members (Petrobras, Shell, Statoil and Woodside) and other major operators.

Subsea closeup illustration screen version. Credit: DNV GL

The JIP ‘Subsea Processing – Standardization of Subsea Pumping’ seeks to deepen industry knowledge and encourage progress in this area by examining the potential for standardization in subsea processing, beginning with subsea pumping. Standardization still allows for flexibility to custom-make facilities at a system level through standard functional descriptions and specifications. However, it also increases predictability in the value chain, thus lowering transaction costs and improving the speed of implementation, while still allowing freedom to innovate and to employ new technology.

"One of the best ways to create value is by performing well in crisis situations. This JIP intends to contribute by taking the Subsea Processing and Boosting to a higher value level. Petrobras experience with VASPS, MARLIM, MOBO, and other subsea processing systems clearly demonstrates that simplicity, delivery time and competitiveness are mandatory for future applications. The standardization of parts and subsystems is one of the potential keys to achieve that. Common specifications will potentially increase the number of business cases for subsea systems and bring synergies to the surface," says André Lima Cordeiro, Executive Manager of Petrobras Research and Development Center.

“Subsea boosting systems provide the ability to increase recoverable reserves and further increase economic viability of a project by optimizing production. For complex systems such as subsea pumping to be successfully and more widely deployed, overall system costs need to be significantly reduced. Alignment of operators and system suppliers through this standardization initiative can make a significant contribution in achieving this cost reduction goal,” says Graham Henley, Vice President Projects – Upstream Operated and JV, Shell Projects & Technology.

“With today's low oil price, it is more important than ever to create cheaper, leaner and standardized subsea solutions. This challenge goes across the oil industry and collaboration is key. The industry needs to lower costs to enable more subsea developments and increase the use of subsea processing technology,” says Margareth Øvrum, Executive Vice President of Technology, Projects & Drilling at Statoil.

“The oil and gas industry needs to re-assess stand-alone host developments due to higher costs and look more closely at tie-back opportunities. Subsea processing technologies enable long distance tie-back opportunities for remote and marginal fields. Cost reduction through simplification and standardization is key to ensuring application of these technologies,” says Sean Salter, Vice President of Technology at Woodside.

Additional collaborators sought

DNV GL is currently calling for collaborators within the oil and gas supply industry to input into the JIP, to suggest additional areas which they believe could benefit from standardization and to input into the creation of this important new industry standard. The JIP will initially focus on subsea pumping in two phases: firstly, to establish a focus for the study by developing a functional description for subsea pumping and specific targets for possible standardization; and, secondly, to share industry knowledge and create best practice guidance through the creation of a recommended practice for industry-wide use.

The JIP participants will contribute their own standardization studies and initiatives previously performed as well as current and future portfolio requirements, ideas on minimal industry specification and methodology for maturing technology gaps.

“Taking the time to think long term, and consider the best way to drive progress and best practice in subsea processing, will also help us address pressing issues in the current downturn” says Kjell Eriksson, Regional Manager for Norway, DNV GL – Oil & Gas. “Industry collaboration, through JIPs such as these, drives efficiency at a collective level, raising the bar for all operators, sharing knowledge and experience, and creating trust and certainty by establishing new or consolidating existing standards and practices,” he adds.

Harris CapRock Communications, a premier global provider of managed communications services for remote and harsh environments, launched SafePass™ Pro, an advanced cyber security solution for proactive defense against cyber attacks targeting oil and gas IT infrastructures. The solution also is available for cruise, maritime and other commercial customers.

Industry experts estimate cyber attacks against the global energy industry will cost businesses up to $1.9 billion by 2018. SafePass Pro improves network resources, minimizes malware and spyware, enables centralized control across all sites, enforces acceptable use and security policies (AUP), and provides an opportunity to assess and eliminate network vulnerabilities. SafePass Pro customers also will receive Harris CapRock’s 24/7 monitoring and support, network threat detection and vulnerability scanning.

The new cyber security solution includes Alert Logic threat monitoring services. Alert Logic Threat Manager provides network intrusion monitoring and detection, as well as a vulnerability scanner, while the firewall protection supports URL filtering, application filtering and security.

Customers also will have access to Harris Corporation’s industry-leading cyber security experts to pinpoint system vulnerabilities, monitor insider threats, proactively defend the network and respond to incidents. Harris experts protect networks that move 2 million air passengers a day and manage 150 Department of Defense satellites as well as numerous government installations.

“Security breaches and emerging threats to corporate networks are impacting the oil and gas market with greater cost and frequency as offshore operations rely more heavily on always-on communications networks,” said Tracey Haslam, president, Harris CapRock. “SafePass Pro offers an unparalleled approach to cyber protection with the added ability of working with Harris cyber security experts committed to securing critical government networks.”

Douglas-Westwood (DW) forecasts deepwater expenditure to total $137 billion (bn) between 2016 and 2020. This represents a 35% decline compared to DW’s previous edition of the deepwater forecast issued March 2015.

The prolonged low oil price has impacted the deepwater market, with operators considering alternative development options and delaying the sanctioning of new projects, whilst trying to protect returns on their existing investments in the sector. However, projects already under construction are unlikely to be affected. The largest proportion (38%) of the total spend will be attributed to drilling and completion. Subsea production equipment, SURF (subsea umbilicals, risers and flowlines), pipelines and trunklines will represent 34% of total expenditure combined; whilst floating production units will account for 28% of spend over the forecast period.

Expenditure will predominantly be driven by Africa and the Americas, which will account for a combined 87% of total deepwater Capex. Though all regions will be adversely affected by low oil prices, projects that were sanctioned before the oil price downturn will help sustain activity levels in these regions and in addition we expect to see the development of East African gas basins towards the end of the forecast period.

Record levels of backlog established over the 2011-2014 period have somewhat insulated subsea hardware manufacturers from the oil price downturn. However, DW expects a further decline in subsea hardware installations in 2017 and 2018 with backlog falling rapidly and new orders trickling in at very low levels. We expect that the subsea OEM’s will feel the full impact of the downturn in 2016/2017 and will face strong competition for the lower volume of projects. In total, it is forecast that the number of deepwater wells to be drilled over the next five years will decline by 3% compared to the preceding five-year period.

From a supply-chain perspective, this point in the cycle is an opportunity to bring through new approaches and technology for deepwater developments to improve efficiency and lower cost. In the long run, we remain of the view that deepwater will be a cost competitive source of world-class hydrocarbon reserves.

DW’s 14^th edition of the World Deepwater Market Forecast covers all key commercial themes relevant to players across the value chain in the deepwater sector:

Key drivers – discussion of factors affecting deepwater activity, including: sustained low oil & gas prices; deepwater production to offset declining production from onshore and shallow water basins; E&P spend of international operators; and Petrobras’ activity in Brazil.

Supply chain – detailing the financing of deepwater developments and local content issues. Includes analysis of contracting strategies (e.g. frame agreements), the deepwater drilling rig fleet and day rates, key players and capabilities of each sector within the deepwater market (drilling, FPS and subsea hardware).

Procurement – factors affecting the decisions facing FPS operators, whether to lease or own vessels and details of major leasing contractors.

Regional forecasts – forecast Capex within each region, including examples of notable projects and operators within the region and countries with most activity.

Component forecasts – drilling and completion (subsea and surface completed wells), subsea production hardware, SURF, pipelines and trunklines and floating production.

List of deepwater prospects – includes information on all identified prospects coming onstream from 2016 to 2020 by operator, location, water depth, number of trees, status category and onstream year.

Statoil has, on behalf of the Troll license, decided to use its contractual right to terminate the contract with COSL Offshore Management AS for the chartering of the mobile rig COSLInnovator.

COSL Innovator

“The conditions for terminating the contract signed with COSL Offshore Management AS have in our opinion been met, and we therefore choose to use our contractual right to terminate the contract,” says Geir Tungesvik, Statoil’s senior vice president for drilling and well.

In addition Statoil has decided to stop drilling operation with the sister rig COSLPromoter when it is safe to discontinue well operations. This is done in order to enable COSL to implement the necessary actions in order to fulfill the requirements of the contract.

The decision may have some short-term consequences for planned drilling activities, but will not have impacts on long-term production on the Troll field. The plans made by the license for gas and fluid production from the oil zone remain firm.

2H Offshore, an Acteon company, has designed and launched a new Engineering Critical Assessment (ECA) software: FlawIQ. FlawIQ is a comprehensive tool that automates both BS7910 and API 579 procedures, making it faster and simpler to perform accurate fatigue assessments for offshore components.

FlawIQ is the only commercially available tool that incorporates both BS7910 and API 579 standards; eliminating the need for multiple software tools; saving operators both time and money.

Key benefits of FlawIQ include the ability for the user to automate flaw ranges, and to run multiple cases without manual intervention. The program is highly customisable, making it simple to incorporate new solutions and to increase the accuracy for special situations such as HPHT applications. The tool is web-based and features an easy to use online help facility, and access to 2H Offshore’s expert team of ECA engineers for technical support and training.

The software has many applications within the oil and gas, nuclear and construction industries, with various types of structures including pipelines, pressure vessels and piping, tanks and buildings, in both design and in-service phases.

Mike Campbell, vice president, 2H Offshore, said, “2H Offshore developed this software to provide our customers with an easier, more streamlined way to perform fracture mechanics. The current programs available on the market are useful, but fail to incorporate both BS7910 and API 579 standards. The incorporation of these standards is becoming increasingly important to our clients. With FlawIQ, everything is housed within one program, no matter which industry standard is required.”

Well management firm, Exceed is pleased to announce that it has been successful in securing a contract to support Fairfield Energy Limited in its forthcoming North Sea well plugging and abandonment campaign.

Fairfield’s program includes 45 platform wells and 16 subsea wells, all of which will be plugged and permanently abandoned. The platform wells decommissioning will commence in the next few months with the operational phase of the subsea wells work due to start in 2017.

John Anderson, Exceed commercial director

John Anderson, Exceed commercial director, said: “This award demonstrates the capacity of Exceed as a multi-disciplined well management organisation capable of providing support to complex well decommissioning activities. This will be a major focus going forward, both in the UKCS and internationally, and Exceed is delighted to be supporting Fairfield in one of the largest single UKCS well abandonment campaigns of this nature to date.”

Exceed provides outsourced well engineering and project management services with its head office in Aberdeen, Scotland. Exceed works for a wide range of operators in the oil and gas business in the UKCS and internationally utilising the company’s multi discipline team of professionals.

Fairfield is a well-established UKCS operator which is now adding decommissioning expertise to its existing capabilities.

NYC-based PIRA Energy Group reports that oil market rebalancing has begun, price lows are in. In the U.S., there was a flat profile for stocks of four major oils. In Japan, crude runs declined, imports plunged and stocks drew. Specifically, PIRA’s analysis of the oil market fundamentals has revealed the following:

With Oil Market Rebalancing Begun, Price Lows Are in

Oil market rebalancing has indeed begun with the stock surplus about to level off. OPEC/non-OPEC freeze is a change in strategy and positive for prices. Expect a new price anchor of $50/Bbl to be talked about. Prices will move higher like a step ladder, as required supply creation becomes more evident. Refinery margins and runs will generally be healthy through the summer before weakening. Political risks to supply are growing.

How Important Are LNG Price Levels to NBP Price Potential

The last time that storage came out of February at this high of the level was in 2014, which led to all-time storage highs by the end of October of that year. While high storage did not automatically translate into a collapse in spot prices, it is somewhat interesting that spot prices have been on a consistent decline from November 2014 to yesterday (except for February 2015).

U.K. Spark Spreads Remain Weak in Spite of Extremely Tight Market

With the market conditions changing considerably since the Capacity Market was established, the U.K. DECC has launched this week a new consultation with the aim of reforming the Capacity Market design. The proposed changes do not come totally as a surprise, but from a trading standpoint, the proposals do not change the big picture in the electricity market until at least the winter 2017-18, basically leaving the U.K. market still extremely vulnerable, with razor-thin spare capacities through the upcoming winter.

Litigation Around CA Cap and Trade Auction

Auctions have been a key feature of the California’s cap and trade program, with the auction reserve price offering guidance for a price floor in the secondary market. The ability of the state to sell allowances via auction has been under legal attack with news on developments expected soon. PIRA believes that in the event of an adverse decision, eventual market impacts may be limited — particularly if the auction of consigned allowances is allowed to continue. We also expect the California legislature would act to explicitly authorize auctions for all allowances. Quebec’s auction would be unaffected by this court ruling and Ontario will be offering a significant part of its cap at auctions when its program is slated to start — though both have significantly lower reserve prices.

Freight Market Outlook

Coming off their best year since 2008, tanker markets in 2016 have turned sharply lower over the first two months. VLCC markets led the slide with rates in the benchmark Mideast/Asia trade plunging by 50% as China reduced crude imports substantially in January from record levels in December and market sentiment turned negative. Rates in the other vessel groups have also registered significant declines since the start of the year. Furthermore, PIRA expects the rise in global stocks will reverse and start to decline in second half 2016, putting additional pressure on tanker rates as volumes contained via slowdown and floating storage start to shrink.

Thermal Coal Market Beginning to Show Signs of Moving Back into Balance

Physical coal pricing was mixed in February, with coal prices continuing to follow the lead of oil, although coal price movements remained relatively muted compared to oil. On top of the upward momentum in oil prices, the potential for a labor strike in Colombia gave pricing some tailwinds at the front of the curve, particularly in the Atlantic Basin, while the balance of the curve shifted lower, likely due to the announcement of the additional U.K. coal-fired capacity closures. In the Pacific Basin, Chinese thermal coal imports declined only marginally in January, a notable departure from the sizeable drops that occurred in every month in 2015. PIRA has long held the belief that it will be nearly impossible for coal pricing to recover appreciably in 2016 or 2017 if China's imports continue to fall.

Ethanol Production and Stocks Decline

U.S. ethanol production declined for the first time in four weeks, dropping to 987 MB/D from 994 MB/D during the preceding week. Ethanol inventories continued to sink from the record high set earlier in February, falling by 481 thousand barrels to 22.6 million barrels.

Dollar Weakness

All three grain and oilseed price reversals last week coincided with a double top formation Tuesday/Wednesday around 98.60 in the dollar index. The markets remain both starving for any new information and devoid of any spring weather risk premium. Option volatility is low and should remain that way this coming week despite a WASDE release.

Global Equities Post Another Positive Week

Global equities posted a third straight week of gains, rising 3.5%. Many of the tracking indices are now displaying significantly better looking trends. In the U.S., all the tracking indices were again higher on the week. Banking and energy outperformed, while consumer staples lagged. Internationally, the tracking indices also moved higher. The best performer was Latin America, specifically, Brazil, which posted an 18% gain in local currency and 21% gain in dollar terms.

Midcontinent Production Falls as Crude Stocks Rise

Crude prices bottomed out in early February, before recovering in the second half of the month. U.S. crude stocks continued to build, including a 2 million barrel build at Cushing. Brent and LLS both rebounded relative to WTI, and Canadian differentials rose sharply on upcoming oil sands maintenance. An open export arb for much of February should lead to record crude exports in March.

Japan EG Deregulation Looms Large Over Plummeting EG Demand

With Japan not operating a country-wide gas grid, it is the electricity grid and its future that will play a key role in determining the position of gas in a deregulated market. From the government on down, Japanese gas demand (and LNG imports) appears to be headed for a long, steady decline, one that is well under way and already applying downward pressure to spot prices in Asia.

Bearish Fundamentals, but LT Support From Program Review

RGGI pricing has recovered somewhat since the mid-February sell-off, but prices are still lower than they were going into last December’s auction. PIRA expects the March 9th auction to clear in line with the secondary market - without triggering CCR allowances available at $8/ton. We anticipate a weaker than usual coverage ratio – as a portion of demand was satisfied by sales from the price plunge. RGGI emissions fell 4% in 2015 and are expected to be down this year as well. While compliance players are not challenged by near-term allowance surrender requirements, a bank draw is required each year. PIRA expects prices will climb over the course of the year, particularly with forthcoming details from the 2016 Program Review.

Western Grid Market Forecast

Spot on-peak power prices saw significant declines at major Western hubs in February as temperatures rose well above normal and gas prices tumbled. Mid-Columbia prices averaged below $17/MWh, down $6 from January. Palo Verde fell by ~$2.50/MWh to average $19 while the California hubs averaged in the mid $20s. Above-normal temperatures also contributed to strong runoff in the Northwest despite below-normal precipitation. Continued above-normal temperatures will depress heating loads and boost runoff and hydro output in March, but we do not expect hydro generation to approach prior-year levels. Meanwhile, weak gas prices will sustain high gas-fired generation and implied heat rates. However, beginning in June several factors will converge to drive implied heat rates below prior-year levels including rising gas prices, stronger hydro and solar generation, higher imports from the Northwest, and weaker cooling loads in California.

Shortage Risks in Colombia Add Upward Pressure on Coal Pricing

Coal prices moved notable higher last week, on news that union members at the Cerrejón mine in Colombia voted overwhelmingly to strike. On top of this shortage risk, coal producers in China increased their prices this week to 10 yuan/mt ($1.54/mt) on some prompt tightness in supply. While a potential labor strike in Colombia would certainly be a phenomenon, PIRA is skeptical that the tightness in Chinese coal supply and the related rise in pricing is sustainable either. Outside of the potential shortage risk in Colombia, there is not much bullish support for pricing over the next 90 days.

U.S. Biofuels Manufacturing Margins Improve in February

U.S. ethanol prices were range-bound in February, with Chicago values varying between a ceiling of $1.42 and a floor of $1.35 per gallon. Recovering gasoline values and robust gasoline demand provided support, but record stocks kept a lid on the upside.

BRL Rally Helps Soybeans

A noticeable rally in the Brazilian real Friday was followed up by a Commitment of Traders report that saw some large additions to the already bearish positioning held by Non-Commercials. Soybeans had the largest reaction to the real move, in conjunction with a more muted peso rally, while corn and wheat failed to garner much upside enthusiasm on their own.

Belt-Tightening Continues in Latin America

The low oil price environment has continued to inflict pain to players in Latin America, triggering budget cuts and affecting oil production plans. Output from Mexico, Colombia and Venezuela remains on a downward trend while Brazil’s production is still going up thanks to ongoing projects (namely, sub-salt production). 2016 Latin America GDP is now projected to be negative 0.26%. This is impacting consumption of the four major refined products, which collectively, are expected to decrease in 2016. With expected sluggish demand, the region’s imports are also anticipated to shrink. In Brazil, higher crude runs and lower demand will reduce diesel and gasoline imports to 40 MB/D and zero, respectively. Budget cuts increase the risk of operational issues in refineries across the region.

Flat Profile for U.S. Stocks of Four Major Oils

The highest crude imports since mid-December drove a 10.4 MMBbl crude stock build. A sharp decline in reported product demand was reflected by a reduction in the rate of product draw from -8.5 MMBbls last week, to -0.5 MMBbls this week. Recent average demand growth is still strong, with the notable exception of distillate demand, whose decline is much beyond anything that warmer weather can explain.

Japanese Crude Runs Declined, Imports Plunged and Stocks Drew

Crude runs declined 113 MB/D on the week and crude imports plunged such that stocks drew 5.3 MMBbls. Finished products also drew strongly, by 3.4 MMBbls, with sizable draws on all the major products other than naphtha. Product demands were strongly higher. The indicative refining margin remains good. This week saw higher gasoline and naphtha cracks, more than offsetting weaker middle distillate and fuel oil cracks.

Awaiting Producers Response to Storage Glut/Price Collapse

Despite Thursday’s surprisingly “hefty” EIA-reported 48 BCF stock draw, fundamentals of late, weather in particular, have given gas bears lots to cheer about. Following a now “official” 12% milder-than-normal February, the latest guidance for March points to a stunning 20-25% shortfall versus the 10-year normal. Consequently, PIRA’s latest end-March storage is now projected to reach 2.42 TCF, aligning closely to the end of the 2011-12 “winter that wasn’t” heating season. If verified, post-March 2016 balances will require continued strength in gas-fired electric generation (EG) as well as weaker domestic production to keep the industry operating within system limits.

February Weather: U.S., Europe and Japan Warm

February’s heating degree days came in below the 10-year normal by 7% for the three major OECD markets with a composite net oil-heat demand loss of 347 MB/D. On a 30-year-normal basis, the markets were roughly 13% warmer than normal.

Global LPG Weekly Scorecard

April propane futures at Mt Belvieu gained 8.4% to settle at 45.2¢/gal. Butane at the market center underperformed, gaining only 2.4% week-on-week as winter gasoline blending demand diminished.

U.S. Light Product Exports Continued to Grow in 2015

U.S. exports of both distillate and gasoline increased by 8.2% (90 MB/D) and 12.6% (70 MB/D), respectively, in 2015 compared to the year earlier. Volumes of distillate shipped were about twice the size of gasoline shipments in both years. As in the past, Latin America continues to be the most common destination for both products.

Ukrainian Fertilizer Plant Signs New Gas Deals

Ukrainian Public joint-stock company Odesa Port-Side Plant has contracted gas supply in March from Slovakia. The conditions of shipment is DAP – Budince (Slovakia), 20 MMCM. Odesa Port-Side Plant will have to pay an additional charge for entering the Ukrainian gas transport system. In previous weeks the plant operators agreed a new loan facility and had gas agreements laid out with Gaz de France.

Decline in December 2015 Lower-48 Onshore Crude Production Leads Way in Falling Domestic Crude Supply

What is noteworthy in the December 2015 Petroleum Supply Monthly (PSM) is confirmation of declines in domestic crude supply seen in the weekly data. Lower 48 onshore production is leading the way, falling 154 MB/D during December, to 7.11 MMB/D, a production rate 350 MB/D lower than December 2014. The monthly decline in U.S. production was partially offset by a 110 MB/D increase in Offshore Gulf of Mexico production, which at 1.63 MMB/D stands at 180 MB/D over last year. The December 2015 crude balance item turned negative for only the second time in the last 15 months and, at -200 MB/D, stands -575 MB/D lower than December 2014. Domestic crude supply (production + balance item) for December of 9.06 MMB/D was 740 MB/D lower than December 2014, perhaps indicating that more declines are occurring, even if production data have not fully caught up.

Aramco Pricing Adjustments for April — Minor Tuning

Saudi Arabia's formula prices for April were just released. The changes made to differentials against its key regional benchmarks were all relatively small and do not suggest any change in Saudi export pricing policy, which has been to maintain competiveness with regards to volumes and pricing in key markets.

U.S. Coal Stockpile Estimates

While power sector coal stocks have fallen by as much as 20 MMst year-to-date due to falling production levels, milder shoulder season weather and cheap natural gas are limiting coal burn, thereby elevating days cover. PIRA estimates U.S. electric power sector coal stocks stand at 176 MMst as of the end of this month.

U.S. December 2015 DOE Monthly Revisions: Demand and Stocks

The primary light products of gasoline and distillate had strong upward demand revisions in the December 2015 PSM versus the preliminary weekly data, but all other products were revised down strongly. Most of the downward revision to other product demand was due to higher-than-assumed exports. While December 2015 commercial stocks were revised up 8.1 MMBbls, this was a significantly smaller upward revision than last month, and the year/year surplus commercial inventory narrowed from last month.

Global Data Are Mixed, but Key Areas Remain Supportive

In the U.S., healthy job growth during February was the latest in string of positive economic releases. But data on wages and the number of hours worked showed unexpected declines. The latest ISM manufacturing confidence index told a mixed story. China is apparently attempting to increase positive sentiments in financial markets on the heels of the successful G20 meeting in Shanghai last week. India’s 2016 government budget apparently managed to reconcile two conflicting goals. Activity data in Brazil remained weak.

Negative Cash Flows for U.S. Shale and Canadian Oil Sands in 2016

Globally, oil remains cash flow positive, with low cost regions like OPEC and non-OPEC conventional offsetting the cash burn in U.S. shale and Canadian oil sands. In 2016, shale and oil sands are expected to be cash flow negative despite significant capex reductions. Shale would be cash flow positive on further reduced capex, but oil sands cannot even cover operating expenses at PIRA's projected 2016 prices. Based on current spending plans, $50 Brent would be needed for shale to be cash flow neutral and $55 is required by Canadian oil sands.

Financial Stresses Continue to Ease

For the third straight week, the S&P 500 rose Friday to Friday and on a weekly average basis. All of the other indicators such as volatility, high yield debt and emerging market debt posted solid gains. The U.S. dollar has been increasingly mixed. It has strengthened against the euro and eastern European currencies, but has weakened against some of the commodity and precious metals producers. Commodities ex-energy are looking significantly better the past several weeks (a seven-week uptrend). Energy has also moved modestly higher the last few weeks.

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. To read PIRA’s Market Recap first, subscribe to PIRA Perspectives here.

Click here for additional information on PIRA’s global energy commodity market research services.

LQT Industries, LLC, a full-service provider of high quality accommodation facilities, design-build construction services, and support services to the oil and gas industry, has been awarded projects from five (5) exploration and production companies in the Gulf of Mexico.

LQT’s scope of work includes on-site assessments, work scope development, material procurement, project management, and the provision of skilled labor to clean and repair HVAC systems and refurbish/upgrade the interior and exterior of living quarters of the fixed platforms and drill ships. The projects are scheduled to be completed in the second quarter of 2016.

LQT’s Refurbishment Division, headquartered in Abbeville, LA, specializes in full facility upgrades, asset maintenance, and 24/7 customer support for oil and gas operations.

Chevron Corporation (NYSE: CVX) hosted its annual security analyst meeting in New York where executives reiterated priorities, expressed confidence in the company’s near term outlook and emphasized an advantaged position when markets rebound.

“We’re completing major projects that have been under construction for several years. This enables us to grow production and reduce spending at the same time, which should improve our net cash flow significantly,” said John Watson, Chevron’s chairman and chief executive officer. Watson reiterated the importance of dividend growth and maintaining a strong balance sheet in the company’s financial priorities, noting the company’s record of 28 consecutive years of dividend increases, and plans to limit debt increases beyond 2016.

“Industry conditions are tough right now, with low oil and natural gas prices. We believe markets will improve, and we’ll be well positioned when they do,” Watson continued. “We have an excellent upstream and downstream portfolio, and we are driving operating and administrative efficiencies across the company.”

Jay Johnson, executive vice president, upstream, highlighted key plans. “We’re focused on safe, reliable operations and effective project start-ups and ramp-ups. At Gorgon, we’re producing LNG and the first cargo is expected to ship next week. With an advantaged position in the Permian and a deep portfolio of operating assets, we’re transitioning our spending to more short-cycle, higher-return activity that utilizes existing infrastructure. We have a portfolio of assets that should allow production growth through the end of the decade, even at moderate prices.”

Presentations and a full transcript of the meeting are available on the Investor Relations website at www.chevron.com.

Pulse Structural Monitoring, an Acteon company, has launched a third generation INTEGRIpod™ platform as a new addition to its INTEGRI™ range of structural monitoring sensor systems.

The INTEGRIpod NXT platform has been specifically developed to meet the needs of the offshore oil and gas industry in the current market; offering industry-leading features in a standard, modular format. Along with a range of new features, the new INTEGRIpod platform will support INTEGRIpod’s impressive track record of reliability and robust performance, proved in millions of hours of successful ultra-deepwater subsea operations since the product range launched in 1998.

Typical applications for the INTEGRIpod™ range include linear displacement and static and dynamic inclination of subsea structures such as BOPs, wellheads, conductor systems, mooring lines, and jumpers. With industry-leading on-board processing capabilities, measured data is processed in real-time and transmitted wirelessly or hardwired enabling instantaneous operational decision-making. The new platform also allows for deployments in excess of one year between battery change-outs due to new features such as ‘Smart Logging,’ which enables the device to deploy and only record phenomena over client-defined thresholds; significantly reducing campaign costs and the need for offshore interventions.

Sandip Ukani, technical director, Pulse, said, “At the core of the new platform is a 32-bit ARM™ processor, which offers low power consumption with significant on-board processing capability; delivering best-in-class battery life. The on-board MEMS gyroscopic sensors deliver unrivalled precision and accuracy. The platform allows communication over various connectivity options, including hardwired and acoustic, and can communicate over various industry standard open communication standards, such as RS232/485. Additionally, a multitude of connectors allows direct integration of Pulse’s proven sensor family, including the INTEGRIstick™ (Curvature Sensor), INTEGRIstrain™ (Custom Bonded Strain Gauge Packages) in addition to any third party sensor package.”

The third generation INTEGRIpod™ platform underwent extensive sea trials in the harsh weather of the North Sea, and in deepwater offshore Brazil. It is now ready for deployment as part of Pulse’s extensive fleet of structural monitoring systems.

Douglas-Westwood (DW) held their inaugural Business Breakfast event in London last week at Southwark Cathedral. The purpose of the event was to showcase DW’s latest research and to offer a network opportunity for their financial sector and energy industry clients.

DW founder John Westwood chaired the proceedings and also gave an introductory talk focusing on macro challenges and opportunities in the current cycle including skills transfer, geographic and sector diversity and cost-effective technical innovation. John also highlighted the significant drive towards the use of natural gas and the potential for the supply/demand gap for oil to narrow later this year.

Research Director Steve Robertson provided a summary of trends in a number of key offshore sectors including floating production, LNG, subsea, offshore logistics and compared the outlook for the onshore and offshore production, noting that we should expect significant extra oil production from long-lead time projects that were committed to prior to the downturn. A comparison was also made between the previous outlook for Deepwater expenditure one year ago and the current view now, with some 92 projects having been delayed/deferred or cancelled. It was also suggested that 2016 and 2017 could be very difficult years for subsea equipment providers that to-date have been partially-insulated from the downturn by significant backlogs – these backlogs are now rapidly declining and order levels remain low.

Ben Wilby provided an in-depth review of DW’s North Sea Decommissioning report, explaining the underlying data, methodology and outputs by country. Ben illustrated how the UK will provide the bulk of decommissioning opportunity overall and the vast majority of North Sea removal work that will occur in the next decade, as Norway (a less-mature producing province with significantly less installed infrastructure) sees most of its respective activity post-2030. The various approaches to decommissioning (including offshore and onshore ‘deconstruction’ and single-lift & transport to shore) were discussed along with potential cost savings from single-lift operations – providing they become commonplace.

Katy Smith finished the session by sharing DW’s latest views on Iran, including an update on sanctions, the outlook for oil and gas production, specific projects that are known to be moving ahead and the expectations for rig requirements, both offshore and onshore. It was explained how DW has taken a conservative view of the potential activity, given a number of evident challenges in working in Iran not least the bilateral US sanctions that remain in place, the caution amongst foreign banks regarding the processing of Iranian payments and the uncertainty surrounding the structure of the Iranian Petroleum Contract.

DW would like to thank everyone that attended – this will be the first of a series of such events throughout the year. If you are interested in attending, please register your interest with Ellie Pickering.

Steve Robertson, Douglas-Westwood Faversham

With just under two weeks until the 2016 Offshore Achievement Awards (OAA) take place, the trophy which will be presented to winners on the night has been revealed.

Last year saw Gray’s School of Art student, Irina Viskanta, win a competition set by the organisers of the awards, the Society of Petroleum Engineers (SPE) Aberdeen Section, to design the 2016 trophy.

Ian Phillips, SPE Aberdeen Chairman with trophy designer Irina Viskanta

Alan Dick of SPE Aberdeen, who is set to host the awards ceremony on March 17, said: “Irina has done a fantastic job of designing and producing this year’s trophy, which reflects the themes of the 30th Offshore Achievement Awards – innovation, collaboration and creativity. I would like to thank Irina for all of her hard work, and I have no doubt that the winners will be thrilled to receive a trophy which has been so carefully thought out.”

Sian Mutch, senior corporate communications advisor at principal sponsor TAQA, said: “The trophy design competition has once again been a great way to involve students and the local community in the awards. TAQA is pleased to have been involved in the competition, and I would like to congratulate Irina on a creating such a stand-out trophy.”

The black tie event will take place on Thursday March 17, 2016 at the Aberdeen Exhibition and Conference Centre. For more information or to book a table at this year’s Offshore Achievement Awards please visit www.spe-oaa.org.

Offshore accommodation and workspace specialist HB Rentals has been awarded a contract with Prosafe worth in excess of £1million.

The project will see the company provide an end-to-end solution for the design, engineering, manufacture, supply, installation, commissioning and routine maintenance of a customized temporary living quarter (TLQ) complex on board Prosafe’s semi-submersible accommodation vessel, Safe Boreas, currently located off the coast of Orkney, Scotland.

Prosafe is the world’s leading owner and operator of semi-submersible accommodation vessels. The company currently operates a fleet of 14 vessels globally, with capacity for 306-812 people. Prosafe continues to strengthen its market leading position by adding high specification, technically advanced new build vessels to the existing fleet. The Safe Boreas was constructed in 2015 at Jurong shipyard, Singapore and is considered one of the most technologically advanced and efficient harsh environment accommodation vessels in the world.

The scope of work entails a fully customized accommodation complex for 40 persons on board (POB) based on double occupancy cabins with en-suite wet rooms. The package includes a local equipment room (LER), locker/changing room facilities, A60 stair tower and link corridor connecting the temporary living quarters with the existing permanent living quarters.

Upgrade work will also be carried out including data cabling and installation of Hydrogen Sulphide (H₂S) gas detectors, which is not a common requirement in the North Sea where Methane (CH₄) gas tends to be more prevalent.

The modules will be linked and stacked over three levels to form an enclosed living quarter complex, providing increased safety and comfort for offshore workers by reducing time spent on the main deck and offering protection from the elements.

HB Rentals’ responsibility also extends to the delivery of the full package to Safe Boreas at Scapa Flow following trial assembly and customer acceptance onshore at its facility in Sauchen, Aberdeenshire. This will mitigate any potential issues prior to final installation, hook-up and commissioning on the vessel.

Norman Porter, managing director, HB Rentals Limited said: “This year will mark HB Rentals’ 40^th anniversary so we are thrilled to be celebrating with the announcement of this project and look forward to working closely with Prosafe over the coming months. We pride ourselves in our ability to offer tailored solutions for our clients to ensure their requirements are met, and this project is just one example of this.”

HB Rentals was awarded the contract following a detailed technical commercial evaluation, which took place over several months. The HB Rentals TLQ is contracted on the Safe Boreas for work through 2017.

Karl Dickinson, senior manager Client Accounts, Prosafe said: “We would like to thank HB Rentals for responding to the TLQ project in a very timely and professional manner. Working closely with HB Rentals, we were able to provide a technical solution that demonstrates our ongoing commitment to find innovative and cost efficient solutions to our end-client.”

Kongsberg Maritime has expanded its established satellite position reference system portfolio with the introduction of a new system that integrates all available Global Navigation Satellite Systems (GNSS) and all possible correction services. The new DPS 432 combines full decimeter accuracy with high integrity and availability of GNSS data, supporting the safety and efficiency of offshore operations that rely on advanced Dynamic Positioning (DP) systems.

DPS 432 integrates signals from GPS, GLONASS, BeiDou and Galileo, and regional correction signals including SBAS (e.g. WAAS, EGNOS, MSAS, GAGAN), in addition to the new G4 services from Fugro, to ensure high flexibility for DP operations globally. Because DPS 432 exploits available combinations of GNSS signals, it is ideally suited to complex operations in challenging environments. The system increases satellite availability, improves integrity monitoring and enables more precision under challenging signal tracking conditions.

The new DPS 432 will be a part of the well-established KONGSBERG DPS range of solutions, a portfolio of products that meets all requirements for operations in any geographical region.

“DPS 432 expands our established and field-proven portfolio of position reference systems for DP operations, ensuring that we can offer a highly reliable solution for any DP vessel or operating region,” said Vidar Bjørkedal, VP Sales & Customer Support, Kongsberg Seatex. “The system is based on the same architecture as other DPS products, which means it features a highly intuitive HMI, while the ability to integrate all available GNSS and corrections provides integrity and availability of the position data needed for safe operations.”

The DPS 432 features the sophisticated DPS NAV Engine^® used in all DPS solutions, which runs critical computations independent from the DPS HMI (operator interface) to ensure continuous and reliable operation. The DPS NAV Engine^® runs in a safe mode, protected from unintended user operations, while several DPS HMIs can be connected to the same DPS NAV Engine® in a networked architecture.

Straightforward operation to enhance DP operations safety further, was a key design goal during development of DPS 432. The system can integrate multiple layers of information, giving the DP operator unmatched opportunities for a customized visual presentation, including i.e., electronic chart, seabed maps, well head positions, static targets and AIS target information.

Deep Down, Inc. (OTCQX: DPDW) ("Deep Down"), an oilfield services company specializing in deepwater and ultra-deepwater oil production distribution system support services, announces it has received an order from Shell for an umbilical and distribution system to support a production platform mooring line control system.

In addition to supporting platform positioning, the system will provide real time data collection during high seas and platform operations. Due to increasing safety standards for wave zone equipment, it will be designed to survive extreme wave loading conditions and extended design life.

Ron Smith, Chief Executive Officer of Deep Down, Inc. stated, "This order represents another milestone in the relationship between Shell and Deep Down."

Since 2008, the National Marine Representatives Association (NMRA) has contributed to the future of the marine industry with scholarships to individuals pursuing education and a career in the maritime trades. This year, two $1,500 scholarships will be awarded to outstanding students.

High school seniors, and college and vocational students can request an application from NMRA at This email address is being protected from spambots. You need JavaScript enabled to view it.. Schools are encouraged to promote this to their students. Applications are due on July 1, 2016. Winners will be announced this summer.

"NMRA Scholarships hold a special place in the life of our organization," said Rob Gueterman, NMRA president. "We're always heartened to read the applications, and know that the future of the marine industry will be in such talented and capable hands."

Several NMRA rep groups generously donated to increase the 2016 scholarships. GSW & Associates and Midwest Outdoor Marketing reached the Captain level of giving, while Atlantic Marketing Company, Coatney Sales, Gulf Atlantic Marketing, Macaroni Marketing, The Merifield Company, Silverlake West Company, West Coast Sales and William F. Miller and Associates donated to the Ship's Crew level. NMMA president Thom Dammrich helped kick off the fundraising with a contribution at NMRA's annual Rep Night.

Contact National Marine Representatives Association, PO Box 360, Gurnee, IL 60031. 847-662-3167; Fax: 847-336-7126; This email address is being protected from spambots. You need JavaScript enabled to view it.