NYC-based PIRA Energy Group reports that the oil export and revenue sharing agreement between the KRG and Baghdad has all but collapsed, but the Kurds are ramping up independent exports. In the U.S., stocks increased this past week marking a new all-time high. In Japan, crude stocks drew strongly, thus reversing the previous week’s rise. Specifically, PIRA’s analysis of the oil market fundamentals has revealed the following:

Oil Market Ignores Overall Stock Build, Focusing on Large Cushing Draw

Total commercial U.S. stocks increased this past week, marking a new all-time high. Higher crude runs drove a crude stock draw, but those higher crude runs and sharply weaker product demand drove a product stock build. Wednesday’s WTI rally was most likely driven by the largest Cushing stock draw of the year. In addition, ongoing supply outages in Canada, declining U.S. sweet production, and the pending Line 9 startup have markets less worried about October maintenance-driven containment problems, and more focused on a tightening Midcontinent sweet balance later in the year.

2Q15 Producers Bogged Down, But Year-on-Year Gains Still Being Realized

Hampered by not only the mud season but also plant maintenance and forest fires, 2Q15 Canadian production retreated from the robust volumes witnessed in 1Q15. Despite the sequential decline, PIRA Survey Group companies still managed to achieve growth compared to the same period last year. However, year-on-year growth is not expected to continue into the second half of 2015, with declines forecast to begin in 3Q and enlarging in 4Q.

Eastern Grid/ERCOT Market Forecast

On-peak prices increased from July in the Northeast and Gulf Coast markets but were mostly lower in the Midwest and Southeast. Prices were consistent with weather patterns as Midwest temperatures remained below normal. One additional factor in the Northeast was a rebound in gas prices that boosted eastern NY markets close to prior year levels ($2.40s/MMBtu).

Week-on-Week Losses Persist in Bloated Thermal Coal Market

Despite a modest midweek rally when rising oil prices pushed the market higher, coal prices yet again moved lower last week. FOB Newcastle (Australia) prices again held up relative to API#2 (Northwest Europe) and API#4 (South Africa) across the forward curve, with marginal week-on-week increases for 1Q15 and Cal-18 recorded as well. The market still remains generally oversupplied, as evidenced by the fact that any rally in pricing is generally short-lived, with ample supply chasing limited demand. PIRA believes that coal prices will continue to balances on costs, which will keep the coal market following the trail cut by the oil market. This is not expected to provide much of an uplift over the next 90 days.

European LPG Demand Improving

LPG demand in the UK and France has increased noticeably this year. First half 2015 LPG demand in the UK of 1.399 million MT was 26% stronger than a year ago. Meanwhile, first half 2015 demand in France of 2.053 million MT was 18% higher year-on-year. A combination of lower prices and higher competitiveness vs competing feedstocks is supporting increased use of LPG, particularly in the petrochemicals sector.

Flurry of Activity as Obama Regulatory Window Closing

This summer was busy, led by the final Clean Power Plan, the new/modified unit NSPS rule, and proposed model FIP. President Obama's Methane Strategy was advanced with proposed rules for fracked oil wells and landfills. The controversial Ozone NAAQS, is due Oct. 1, while Renewable Fuel Standards for 2014-16 look to be finalized by their end-November deadlines. Truck emissions standards (beyond 2018) have a planned May 2016 finalization. Information on priority rulemakings will be available with the Fall Regulatory Agenda release.

Ethanol Prices Rise

U.S. ethanol prices moved higher last week, tracking rising corn values. Ethanol is selling at a premium to gasoline in most of the country.

Demand Remains the Question

Seasonal lows are typically put in for corn and beans within the next 6 weeks, with corn doing it last year on October 1st. Our concern this year, if you haven’t figured it out already, is demand. General malaise over most commodities resulting in the single largest week of Index liquidation on record a few weeks ago, along with a strong dollar, low gas prices, and relatively poor exports do not make us over-friendly.3.75 corn or 8.75 beans.

Worries about Emerging Economies (Particularly China) Delay Fed Tightening for Now

In a press conference after this week’s policy meeting, Fed Chair Yellen was explicit about why the central bank stayed put: growth concerns about China and other major emerging economies, and the resultant volatility in global financial markets. The Fed’s stance clouds the monetary policy outlook, since worries about emerging markets will probably not dissipate quickly. In particular, concerns about China are likely to linger, as the country’s latest data releases turned out to be disappointing.

Iraq Oil Monitor, 3Q15

The oil export and revenue sharing agreement between the KRG and Baghdad has all but collapsed, but the Kurds are ramping up independent exports. Multiple attacks on the ~650 MB/D northern export pipeline stopped flows to Turkey for nine days in August, increasing the risks to 750 MB/D of combined Kurdish and NOC production. Southern exports averaged 3 MMB/D from June to August, as the installation of new infrastructure facilitated the segregation of a Basrah Heavy grade. However, capex cuts at major southern fields could endanger additional production growth.

Making Sense of How Dutch Supply Will Be Replaced this Winter

Dutch gas production. We've always called it the invisible hand of the European gas market, but due to current circumstances it's not so invisible anymore and needs to be a focus for the emerging balances. Additional data on storage in Germany and the U.K. shows that each country will head into winter with lower-than-normal storage that will require a stronger pull on prompt supply if the weather turns colder than normal.

The Low Gas Price Effect on India Power Generation

Asian import prices overall have been on a steep downward trajectory since January, yet a corresponding uptick in demand has not been forthcoming to date. This is about to change, at least in one country. In India, a new government program to provide subsidies to power generators to import LNG for use in domestic power plants is now underway and garnering considerable interest.

China Looks to Reduce Industrial While Raising Residential Gas Prices

China’s National Development and Reform Commission (NDRC) could adjust downward non-residential gas prices by CNY0.5-0.6/cm ($2.18-2.62/MMBtu) within one to two months, sources close to the NDRC said. Meanwhile, the NDRC, the country’s top economic planner and price-setter of key commodities as oil and gas, would continue to optimize multi-tier pricing of residential natural gas, and overall prices of residential gas would go up. The adjustment of natural gas prices is based on performance of international oil prices in 2015 and would factor into environmental protection, economic stability, interests of energy companies as well as readjustment of energy structure.

Fuel Pricing Makes French Units More Competitive this Winter

Weather represents a major driver for French pricing during the upcoming months, with this year also featuring dry hydro conditions. The latest RTE monthly bulletin confirms that hydro output has plummeted to minimum levels in history, especially as a result of the July heat wave. However, other factors will be countering the likely lack of water in the upcoming months, with increasing wind capacity and plenty of cheaper fuel options likely keeping French power prices in check.

Stress Rises on Friday Selloff

On a weekly average basis, the S&P 500 gained for the third straight week, but Friday-to-Friday was little changed due to the selloff at end-week. Volatility also fell on a weekly average basis but rose on Friday’s selloff. High yield credit (HYG) and emerging market credit improved modestly for the week. Overall, commodities declined, but ex-energy was higher. The Cleveland Fed released their inflation estimates for September which were higher on all maturities.

Ethanol Inventories Fall

U.S. ethanol stocks dropped last week to the lowest level of 2015. Ethanol-blended gasoline manufacture fell to a 15-week low 8,788 MB/D as the peak driving season came to a close.

Shaky Soybeans

The soybean market feels like it’s holding on by its fingertips. Last night saw another test of the $8.65 area, a place that’s been tested a half-dozen times in the last month. If you throw out the spike lows of $8.55 on August 24th (Chinese equity collapse) and $8.5325 on September 11th (WASDE), you have what looks like a pretty good base, inferring to many that demand is strong between $8.65 and $8.75, something PIRA has commented on quite often of late.

Japanese Crude Stocks Draw Strongly, thus Reversing Previous Rise

Crude runs eased, but crude imports dropped sharply and crude stocks corrected back down following the surge of the previous week. Finished product stocks built despite modest draws on gasoline, gasoil, jet, and fuel oil. Kerosene demand eased and the stock build rate accelerated from 84 MB/D to 108 MB/D. The indicative refining margin remains good and cracks this past week again firmed.

Fast-Falling Power Loads to Accelerate Storage Builds

Thursday’s reported build served as a continuation of trends seen in recent EIA weekly releases — namely strong gas-fired electrical generation (EG) alleviating fears of storage congestion as the heating season approaches. Our projected end-October storage carry has hovered between 3.90 and 3.95 TCF for some time. While record heat in September has given weather-induced demand a healthy lift and tempered injections, wildcards in October do not take the threat of congestion completely off the table.

Global Equities Mixed

Global equities markets, on average, were modestly changed. In the U.S., the broad market declined due to the sell off on Friday. Utilities moved higher, while banking was the weakest performer. Energy largely matched the U.S. market average performance. Consumers staples and discretionary out performed. Internationally, Latin America posted a decent gain, while Europe and Japan declined, underperforming the average.

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.

Fugro has formed a strategic alliance with Coremar, a Colombian turnkey port, marine services, and logistics provider. The objective is to provide life-of-field solutions to the oil and gas industry in Colombia and the Caribbean, particularly in the delivery of geophysical, geoconsulting, geotechnical, metocean and other core Fugro services.

The alliance enables Fugro to offer unique turnkey solutions. Combining its scientific know-how, technical and geological expertise with Colombian flagged DP2 vessels, port infrastructure and the operational excellence that characterizes Coremar, creates a local integral solution for Colombia and the Latin America region. Together, Fugro and Coremar will offer the region’s first dedicated geophysical survey and geotechnical sampling Colombian flagged vessels.

The agreement was signed on August 27th 2015 at a ceremony with clients during the recent XVI Congreso Colombiano Petróleo y Gas.

As part of President Obama’s all-of-the-above energy strategy to continue to expand safe and responsible domestic energy production, Bureau of Ocean Energy Management (BOEM) Director Abigail Ross Hopper announced on September 11, that the bureau will offer 40 million acres offshore Louisiana, Mississippi, and Alabama for oil and gas exploration and development in sales that will include all available unleased areas in the Central and Eastern Gulf of Mexico Planning Areas.

Proposed Gulf of Mexico Central Planning Area Lease Sale 241 and Eastern Planning Area Lease Sale 226, scheduled to take place in New Orleans, Louisiana, in March of 2016, will be the ninth and tenth offshore sales under the Administration’s Outer Continental Shelf Oil and Gas Leasing Program for 2012-2017 (Five-Year Program). These sales build on the first eight sales in the current Five-Year Program, which have offered more than 60 million acres and netted nearly $3 billion for American taxpayers.

“As one of the most productive basins in the world, the Gulf of Mexico is a cornerstone of our domestic energy portfolio, offering vital oil and gas resources that further economic growth and continue to reduce our dependence on foreign oil,” said Hopper. “This lease sale is another important step in promoting responsible domestic energy production through the safe, environmentally sound development of the Nation’s offshore energy resources, while ensuring a fair return to the American people.”

Proposed CPA Sale 241 will include approximately 7,919 blocks, covering 42.1 million acres, located from three to 230 nautical miles offshore, in water depths ranging from nine to more than 11,000 feet (three to 3,400 meters). BOEM estimates the proposed lease sale could result in the production of 460 to 894 million barrels of oil and 1.9 to 3.9 trillion cubic feet of natural gas.

Proposed EPA Sale 226 will offer approximately 175 blocks, covering 595,475 acres. The blocks are located at least 125 statute miles offshore in water depths ranging from 2,657 feet to 10,213 feet (810 to 3,113 meters). The area is bordered by the Central Planning Area boundary on the West and the Military Mission Line (86º 41’W) on the East. It is south of eastern Alabama and western Florida; the nearest point of land is 125 miles northwest in Louisiana. BOEM estimates the proposed lease sale could result in the production of 71 million barrels of oil and 162 billion cubic feet of natural gas.

The sales’ fiscal terms will continue to ensure a fair return to taxpayers, and include conditions to encourage diligent development as well as ensure an appropriate balance of orderly resource development with protection of the human, marine and coastal environments.

All proposed terms and conditions for CPA Sale 241 are detailed in the Proposed Notice of Sale information package, which is available at: http://www.boem.gov/Sale-241/.

All proposed terms and conditions for EPA Sale 226 are detailed in the Proposed Notice of Sale information package, which is available at: http://www.boem.gov/Sale-226/.

In addition, BOEM has published the Final Supplemental Environmental Impact Statement (SEIS) prepared for these sales. It updates several previously published environmental reviews covering the Gulf of Mexico and incorporates the latest available scientific information. The Final SEIS Gulf of Mexico OCS Oil and Gas Lease Sales: 2013-2014 (OCS EIS/EA BOEM 2013-0118) is available to view online: http://boem.gov/nepaprocess/. It is also available through BOEM's Gulf of Mexico Region's Public Information Office, and can be requested at 800-200-GULF (4853).

The Notice of Availability of the Proposed Notices of Sale is available today for inspection in the Federal Register.

Kvaerner will sign the final contract for delivery of the drilling platform jacket to the Johan Sverdrup field. This is number 45 in a series of steel substructures from Kvaerner in the past 45 years.

On 26 June 2014 Kvaerner entered into a frame agreement for delivery of steel jacket substructures for future Statoil projects. At the same time Letter of Intent were signed for the steel jackets for the Johan Sverdrup riser platform and drilling platform.

Kvaerner is known in the business to always deliver demanding projects at the agreed time and quality. With the two contracts for delivery of steel jackets to Johan Sverdrup in order backlog, Kvaerner Verdal has a solid and predictable foundation as basis for continuous improvement and long-term planning in connection with further development of Kvaerner in Verdal, says Jan Arve Haugan, Kvaerner's President & CEO.

The new contract reinforces Kvaerner's position as the market leader for large steel jacket substructures to the North Sea region. The drilling platform jacket is scheduled to be delivered in the spring of 2018. The engineering has now started at Kvaerner's offices in Oslo. Kvaerner Verdal is the contract party, and the project management will be based at the company's specialized jacket facility in Verdal in Mid-Norway, where fabrication will be executed. Prefabrication will start in the summer of 2016, and assembly will take place from the spring of 2017.

At peak manning, around 250 Kvaerner employees will be working on the drilling platform jacket. Together with the delivery of the riser platform jacket, this will engage around 500 Kvaerner employees when the two projects are at their most hectic. Additionally, it is expected that as spin-off effects of the two deliveries work will be created for another 1 500 people in Kvaerner's sub-suppliers and from regional service providers in private and public sector. Johan

Sverdrup jackets fact sheet

For much of the period since the year 2000 – characterized by high and rising oil prices, and long-term concerns over global oil supply – decommissioning took a backseat. Asset lives were extended through improved recovery, enhanced maintenance, and, critically, successful divestment. Smaller, more agile operators found success extracting from fields that had ceased to be profitable under original ownership, and with market fundamentals pointing towards continued high prices, many agreed to the transfer of decommissioning liabilities.

But with oil at $45/bbl, the model no longer works. Buyers cannot absorb the liabilities associated with big oil fields whilst returning value for shareholders. For sellers, other options do exist: bundling of legacy assets alongside new, promising acreage has worked in the past, whilst the model of selling assets without the transfer of decommissioning liabilities has precedents and real scope to reduce the gap between buyer and seller.

DW believes, however, that the current fundamentals will lead to significant growth in decommissioning activity on the UKCS. Operators are under increasing pressure to reduce exposure to high-cost regions, and remove decommissioning liabilities from balance sheets. Without traditional sale routes, operators will increasingly make strategic decisions to push forward with asset decommissioning. Advantages for first movers are evident, with the opportunity to avoid constraints in the supply chain, and take advantage of suppressed rig rates for P&A.

Opportunities for related investment exist. Decommissioning is a nascent part of the industry, and represents a huge technical and operational challenge. The Wood Report estimates costs of up to $50bn for UKCS decommissioning. The final figure may be far higher. Companies offering solutions – products, services, or assets – that improve safety and efficiency will thrive. Companies involved in P&A will benefit, whilst maintaining an underlying level of demand associated with normal field operations.

For the North Sea, it’s not all doom and gloom: the region has extensive infrastructure in place, investment continues for the most promising fields, and the best existing assets remain profitable. But the region is mature. And producing in the North Sea remains expensive in a world awash with oil. For North Sea decommissioning, it appears that this time, it’s different.

Hoover Container Solutions (“Hoover”), a leading provider of chemical tanks, cargo carrying units and related products and services to the global energy, petrochemical and related industrial end markets, has acquired Tech Oil Products, Inc. (“Tech Oil”).

Founded in 1980 and headquartered in New Iberia, Louisiana, Tech Oil has become an integral part of the Gulf Coast business community, and a market leader for waste processing and handling equipment to the oil & gas and marine sectors globally. The company designs, manufactures, sells and rents a line of waste compacting, processing and recycling products, as well as offshore cargo equipment. Best known for their ENVIRO-PAK®, SafeSub®, Windchiller® and TOP Offshore Basket brands; the full product line includes over 60 products known worldwide for their reliable and safe operation. Recycle the Gulf® - a partnership between producers and operators, Tech Oil and the Arc of Acadiana - was launched in 2001 with the goal of reducing and recycling the volume of wasted generated offshore in the Gulf of Mexico. The program provides a valuable service and has made Tech Oil a trusted pillar of the Gulf Community and a responsible warden for the environment.

The acquisition of Tech-Oil will firmly establish Hoover as a premier supplier of waste processing and handling equipment, offshore recycling equipment, chemical, cargo and waste management tanks, baskets, containers and related accessories and services. Together they will continue to provide a diverse product range and robust services to their customers across the region and in the global energy marketplace.

Hoover’s Chief Executive Officer, Donald Young said, “Hoover is always working to introduce innovative products and services to the market and expand operations to best meet our customer needs. The combined Hoover-Tech Oil offerings are one of the largest and most diverse in the Gulf of Mexico region and makes Hoover one of the only worldwide companies to offer a full range of cargo carrying units including chemical, cargo and waste management products to the global energy market. This acquisition follows our partnership with First Reserve last January and supports our growth plan.”

“The partnership of Hoover and Tech Oil will allow us to provide a more complete product and service offering to our customers Worldwide.” said John Zimmer, President of Tech Oil Products. “We are excited to work with the Hoover because both teams share a similar commitment to high quality products and superior customer service.”

In today’s cost constrained climate, the subsea and pipeline sectors are actively looking at alternative means to drive down costs, cut complexity and reduce project overruns. DNV GL, the leading technical advisor to the oil and gas industry, is launching two joint industry projects (JIPs) to investigate affordable composite components for the subsea sector and qualify technology for more efficient linepipe production processes. It is estimated that the JIPs could deliver a combined saving of £6.75 million.

The DNV GL Affordable Composites for the oil and gas industry JIP aims to reduce the cost of qualifying composite components for subsea use by replacing large scale tests with ‘certification by simulation’. Statoil, Petrobras, Petronas, Nexans, Airborne and the Norwegian University of Science and Technology (NTNU) in Trondheim, are participating in the project. The project is partly funded by the Research Council of Norway.

The project, which could potentially deliver a 40 to 50% cost saving for certification and qualification of subsea composite components, will seek to validate new advanced material models by experimentation, with the main focus on predicting chemical ageing.

“Composite components require full-scale testing to document long-term properties to achieve certification,” said Jan Weitzenböck, Principal Engineer, DNV GL - Oil & Gas. “A typical qualification campaign for a subsea composite component can cost in the region of ten to 100 million NOK. The results of this JIP could potentially save up to 16 million NOK for re-certificaiton of existing components.”

DNV GL will also develop processes to accept mathematical material models in the certification process. This will be documented in a revised edition of the DNV GL offshore standard for composite components (DNV OS-C501).

The driver for the New Material Solutions for Flowlines JIP is to explore cost savings by use of HFW/SAW (high frequency welded/submerged arc welded) pipes. Within the envelope of production parameters, these may be a very attractive alternative to the traditional seamless pipes, due to their lower cost and shorter delivery time.

The JIP has drawn the interest from pipe manufacturers, installation contractors and operators such as: Corinth PipeWorks, EMAS, JFE-Steel, Sumitomo, Tata steel, Tenaris/Tamsa and Woodside. The JIP is still open to additional partners.

“Though there is a considerable amount of research and full-scale reeling trials for the use of HFW or SAW linepipe, as well as a good track record in terms of executed projects, a joint systematic approach to optimize the design of these linepipe for reeling is lacking2. There is much to be gained through this project - we estimate that it could deliver a 20-30% reduction in pipeline material cost, corresponding to £4—5.5 million saving potential for a 30 km flowline,” said Leif Collberg, Vice President - Pipeline Technology, DNV GL Oil & Gas.

The JIP will be run as a Technology Qualification (TQ) project and is expected to result in a qualification plan that will require qualification testing by the manufacturers.

Jotachar JF750, the industry’s first mesh-free Passive Fire Protection (PFP) epoxy coating system for structural steel, is rapidly setting new standards in the oil and gas sector – in terms of both its benefits and sales volumes. Launched just two years ago by Jotun, the ground breaking performance coating has already attracted substantial orders from some of the biggest names in the industry.

Jotun is happy to confirm that “many millions of kilograms” of Jotachar JF750 have already been installed since launch, now protecting key assets. One recent project award will consume over half a million kilograms for a major Middle-East operator choosing Jotachar to protect two large offshore units against a broad range of fire scenarios, including jet fires.

“These significant volumes are an indication of the interest Jotachar JF750 has generated in the market,” states Global PFP Sales Director Performance Coatings, Andy Czainski. “Third party data and customer experience has shown that Jotachar reduces risk, time and cost during installation and increases safety during operation. Major Oil & Gas companies are approaching us to protect their high-value assets.”

Adding to a long list of third party approvals and certifications, Statoil, known to posses one of the industry’s most stringent safety standards, recently approved Jotachar JF750 in their governing document TR 0042.

“Although Jotachar was already a tested, proven and certified technology, winning the confidence of the most conservative and safety conscious operators, endorsements of this importance open up new opportunities with some of the industry’s best-known companies,” states Czainski, pointing out that Jotachar’s capacity to withstand the highest heat flux jet fires exceeding 350 kW/m2 – the only mesh-free PFP epoxy to be successfully tested to this extreme requirement – has been critical in gaining such third party assurance.

“There is a drive in the industry to provide protection for higher risk assets against the most intense high heat flux jet fire scenarios. Jotachar has proven that it is more than capable exceeding these extreme requirements through rigorous independent tests, actually outlasting the high heat flux test facility during a recent witnessed test,” he adds.

While increased safety and reduced risk continue to be the primary objectives among operators, the current cost focus in the oil industry underlines the appeal of technologies that are proven to help meet project budgets and schedules. Recent project wins confirm this, says Czainski.

“With oil hovering around the USD 50 mark, reducing downtime is more critical than ever. This is especially the case on maintenance projects, where operators are seeking every opportunity to fast track their assets back to production. In this climate, a fire protection system that is proven to cut application time by up to 60%, while improving safety, is very attractive to asset owners and installers alike.”

“We are excited about the opportunities in the near future,” declares Czainski, “as Jotun look to solidify its position as a leader in mesh-free PFP epoxy coatings”.

Deep Down, Inc. (OTCQX: DPDW) ("Deep Down"), an oilfield services company specializing in complex deepwater and ultra-deepwater oil production distribution system support services announces it has received a large order for patented flying leads and unique UTA (Umbilical Termination Assembly), valued at approximately $2.5 million directly from an independent operator.

The flying leads and UTA will be delivered and deployed in the Gulf of Mexico in the first quarter of 2016.

Ron Smith, Chief Executive Officer of Deep Down, Inc. stated, "Despite the current environment of lower oil prices, this order from a new customer reinforces our strategy and ability to work directly for operators."

Wood Group has acquired Automated Technology Group (ATG), one of the UK’s largest independent suppliers of control and power solutions for industrial automation.

Established in 1996 and headquartered in Bedfordshire, ATG operates primarily in the UK automotive, food and beverage and airport sectors employing approximately 250 personnel. ATG generated sales of approximately £36 million in the year to March 2015. Andy Robinson, CEO and founder of ATG, will continue to lead the existing management team.

ATG will perform within Wood Group Mustang’s Automation and Control business unit, providing Wood Group Mustang the opportunity to enter into the manufacturing automation market, complementing its current process automation capabilities.

“ATG provides many opportunities for Wood Group Mustang, including growing our automation business to include manufacturing and expanding into the food and beverage and airport markets. With a culture focused on people and innovation, ATG is the right fit for Wood Group Mustang,” said Michele McNichol, Wood Group Mustang CEO.

“Wood Group Mustang’s global resources and diversified project experience will enable ATG to undertake larger projects and access key growth opportunities outside the UK, building upon our custom solutions for our clients,” commented Andy Robinson. “This will benefit ATG both as a systems integrator for automation projects (our Autotech brand) and as a supplier of low- and medium-voltage electrical switchgear and motor controls centers (our Igranic brand).”

The past three decades have seen several major offshore disasters in the oil and gas sector. The EU Directive 2013/30/EU, which was introduced into national regulations in EU member states, aims to minimize the risk of such accidents and limit their consequences, whilst tackling the problem of fragmented regulation throughout the EU.

At Offshore Europe 2015, experts from Lloyd’s Register Energy were on hand to help organizations understand the requirements and the pathways to compliance. Ian Mackay, Technical Manager of Compliance Operations, was giving an overview of the risks and opportunities associated with the implementation - and what help is available.

“The main aim of SCR is to reduce the risks from major accident hazards to the health and safety of those employed on offshore installations. It also aims to increase the protection of the marine environment against pollution and ensure the correct mechanisms are in place if such an event were to happen,” described Mackay.

“Lloyd’s Register were involved with the UK Government technical committee which formulated the UK Safety Case Regulations in the early 90s. We have remained one of the major providers of safety case verification services in the North Sea,” explained Mackay, “We want to share our knowledge and experience with ministries and newly formed competent authorities, not just in the UK but in all affected states.”

Ian Thomas, Department Manager of Consulting Operations in Aberdeen, presented on the required verification schemes for Safety and Environmentally Critical Elements (SECEs), which in the UK are addressed via SCR.

Thomas said: “The requirement to include environmentally critical elements within the verification scheme is already promoting much debate and is seen to be driving innovation. For example, environmental practitioners are now starting to apply techniques common to safety specialists such as Bow Tie studies to achieve a more systematic and objective method for the identification and management of the ‘environmental component’ of Safety and Environmentally Critical Elements and Performance Standards.”

“At Offshore Europe, Lloyd’s Register shared some of the knowledge gained around the Directive whilst working with independent verifiers and certifiers of environmental management systems and specialist consultants developing SECEs assurance schemes Lloyd’s Register will offer guidance on how to interpret the requirements and share their considerations for the identification, classification and management of SECEs” stated Thomas.

The Directive is a goal setting regime largely based on the UK Safety Case model. For some, this regime will be unfamiliar but even UK operators will be required to modify existing arrangements and provide additional documentation.

Fugro has secured a contract for the installation and burial of array cables at the Rampion Offshore Wind Farm being built in the English Channel, 13 kilometers off the Sussex coast, by E.ON alongside partners, the UK Green Investment Bank plc.

The engineering and planning will start immediately with installation being carried out in two phases in 2016 and 2017. Fugro will lay and bury the cables with its construction and installation vessels Fugro Symphony and Fugro Saltire using one of its two Q1400 trenching systems to bury the cables. The array cables will be pulled in and laid between the wind turbines and the offshore substation, where the power is then transmitted onshore.

“The award of this contract has strengthened Fugro’s successful working relationship with E.ON and comes soon after finishing cable-lay and burial on E.ON’s recently completed Humber Gateway Wind Farm,” said Derek Cruickshank, Managing Director, Fugro Subsea Services Ltd. “Subsea installation and trenching systems are amongst Fugro Subsea’s specialist services and our focus on offshore energy is supported by a team of highly experienced onshore and offshore personnel.”

The Rampion Offshore Wind Farm will consist of 116 turbines, each with a generating capacity of 3.45 MW. Construction is expected to be completed in 2018.

Ashtead Technology’s Houston office has secured an industry seal of approval from ISNetworld (ISN) for maintaining the highest oil and gas safety and quality standards within the Gulf of Mexico.

ISNetworld is a global resource for connecting companies with safe, reliable contractors and suppliers. It measures key performance indicators among contractors in meeting industry needs and regulations.

Ashtead Technology is now a verified and compliant member of ISN following a rigorous six month due diligence and audit process.

Chris Echols, (photo) Vice President of Ashtead Technology in Houston said: “With increasing scrutiny on service and costs across our industry, this certification now independently verifies and certifies our commitment to the highest safety and quality standards within the sector.

“We offer customers more than just equipment rental; we supply technology that is specific to their needs as well as provide invaluable expertise through the global provision of qualified, highly-skilled personnel for both on and offshore operational project integration and support.”

ISNetworld provides companies with the tools required to measure their health and safety performance, identify strengths and weakness and assess how they can drive improvement across the business. It serves as a forum for sharing industry best practices and benchmarking resources, leading efforts to improve the efficiency and effectiveness of contractor management systems.

Mr. Echols added: “This is great recognition of the outstanding work carried out by our team who are committed to delivering a first class service to our customers. It allows us to track our performance and validates our position as a market leader in providing integrated subsea technology solutions across the globe.”

Through the delivery of enhanced technical support services, Ashtead Technology is committed to delivering a range of value-added services which now include the supply of offshore personnel, equipment sales, complete asset management, calibration, repair and maintenance, custom engineering, cable moulding and training.

Formed in 1985, Ashtead Technology employs 84 people in Aberdeen, London, Houston and Singapore with agents in Abu Dhabi, Perth (Australia) and Stavanger.

Anadarko Petroleum Corporation (NYSE: APC) has announced the election of Dr. Sean Gourley to serve as an independent director of the company, effective Sept. 15, 2015.

"Our industry and company will increasingly use big data and artificial intelligence to improve exploration, development and production success, and to do it more safely and efficiently," said Anadarko Chairman, President and CEO Al Walker. "As a highly successful executive and entrepreneur in the tech sector, Sean brings a unique and valuable perspective to Anadarko's Board of Directors. Our company is continuously expanding its use of leading-edge technology to develop oil and natural gas resources, and having a Board member with Sean's expertise will complement and enhance our ability to leverage technology as a competitive advantage."

Additionally, Anadarko announced Amanda M. McMillian, formerly Vice President, Deputy General Counsel, Corporate Secretary and Chief Compliance Officer, has been promoted to Senior Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer. Anadarko's Robert K. (Bobby) Reeves, formerly Executive Vice President, General Counsel and Chief Administrative Officer, will assume the new title of Executive Vice President, Law and Chief Administrative Officer, and will continue to serve as a member of the company's executive committee.

"Amanda has been an outstanding contributor to the success of Anadarko," said Walker. "Since joining Anadarko in 2004, she has been a trusted voice advancing the company's legal and compliance requirements, while demonstrating tremendous leadership throughout our organization. This move also will enable Bobby to devote more time to the management of Anadarko globally and, in particular, to enhancing our approach to domestic and international government relations. Bobby is uniquely capable of further strengthening the positive relationships we've developed with various governments and NGOs, as energy policy in all countries continues to evolve."

DR. SEAN GOURLEY

Dr. Gourley, 36, is the founder and CEO of Primer, an early-stage, venture-backed company building software to power artificial intelligence applications. Prior to founding Primer, he was the founder and Chief Technology Officer of Quid, a San Francisco-based augmented intelligence company building software for strategic decision-making. Quid was a finalist for Innovative Company in Big Data by Fast Company magazine in 2013. Born in New Zealand, Dr. Gourley studied at Oxford as a Rhodes Scholar where he received a Ph.D. in physics, and he received both his Bachelor of Science and Master of Science in physics from the University of Canterbury in Christchurch, New Zealand. He was additionally a Post-Doctoral Research Fellow at the Said Business School at Oxford University and is currently an Equity Partner with Data Collective Venture Capital Fund, investing in key data and algorithmic technologies.

AMANDA M. McMILLIAN

During McMillian's tenure at Anadarko, she also served as Vice President, General Counsel and Corporate Secretary of Western Gas Holdings, LLC, a subsidiary of Anadarko and general partner of Western Gas Partners, LP (NYSE: WES) from January 2008 to August 2012. McMillian, 42, began her career at the law firm of Akin Gump Strauss Hauer & Feld LLP, where she represented a variety of clients in a wide range of transactional, corporate governance and securities matters. She holds a Bachelor of Arts from Southwestern University and received both a Master of Arts and a Juris Doctor from Duke University.

Bibby Offshore, a leading subsea services provider to the oil and gas industry, has this year delivered two multimillion pound decommissioning contracts to the UK Continental Shelf.

Endeavour Energy appointed Bibby Offshore to perform operations in the Renee and Rubie fields located in blocks 15/27 and 15/28 of the Central North Sea, approximately 115km east of Aberdeen.

The 60 day agreement, which was completed in Q3 of this year, involved Bibby Offshore’s dive support vessel (DSV) Bibby Sapphire and construction support vessel Olympic Ares, completing the recovery of subsea equipment including cross-over structures, umbilicals and protection mattresses.

Bibby Sapphire in port during mobilization

Barry Macleod, Managing Director of Bibby Offshore UKCS said: “Decommissioning work has been a key area of focus for Bibby Offshore for many years and as a result, we have built up a strong track record. Production from the Renee and Rubie fields ceased in 2009 and, following a site survey we completed last October, we were contracted to be part of this extensive project.

"UKCS decommissioning costs are forecast to reach in excess of £50billion over the next 35 years. Decommissioning operations in particular are specialist by nature in order to ensure that all materials and often complex infrastructure are removed and disposed of safely and responsibly, with minimal environmental impact.”

Derek Neilson, Managing Director of Endeavour Energy UK said “When we tendered this work we were pleased to see that Bibby had a clear understanding of our requirements. We established a strong working relationship with Bibby which enhanced the effectiveness and efficiency throughout the programme and resulted in the safe and successful completion of the subsea facilities decommissioning work this year”.

Bibby Offshore also successfully completed work for Tullow Oil SK (TOSK) throughout April and May 2015, utilising DSV Bibby Topaz to perform decommissioning operations at the Orwell and Wissey subsea installations, including the tie-ins at the Thames and Horne and Wren platforms, in block 49/28 of the Southern North Sea.

“Both scopes of work have been a cross-business effort, drawing on the skills and expertise of the entire Bibby Offshore team to deliver safe and competitive services. These contracts not only demonstrate the breadth of our capabilities, but they also help solidify our position as leaders in subsea services,” concluded Barry Macleod.

Craig International, the new name for Craig International Supplies (CIS), has evolved from an oilfield supply company to a provider of out-sourced procurement services. These services are resulting in major savings for oil companies in time and resources, combined with considerable savings on spend on oilfield products.

Out-sourced procurement management now accounts for almost 90% of Craig International’s revenues and this is anticipated to grow dramatically in the next 12 months. By providing a complete procurement service, from raising the requisition, obtaining quotes for best price and issuing the purchase order to organizing receipt and delivery of the goods, Craig International guarantees major savings on administrative time as well as the best price for the service or product.

Craig International’s research has revealed that typically oil company buyers spend 85% of their time on managing only 15% of their spend. This small percentage of overall spend is largely related to oilfield consumables including chemicals, oils and paints, pipe and fittings, tools, electrical and welfare items and services such as travel and accommodation, project management, data management and processing, hospitality, facilities management and general repair and maintenance.

Out-sourcing the procurement of these goods and services results in major cost-savings, reducing expensive overheads and freeing up personnel to focus on the company’s core business.

Jill MacDonald (photo), joint managing director of Craig International explained: “Historically we have been seen as simply a supplier of oilfield consumable products, but we now have a recognized track-record in delivering a much wider procurement service which allows companies to out-source their entire procurement function.

“With the current, pressing need to make savings across the oil and gas supply chain, we felt the time was right to re-brand and demonstrate how we can act as a full trading house for the industry globally. By being part of our customer’s business, not just a supplier, we can better serve that business and guarantee savings. Our people and processes are driven by efficiency and in passing this on to our customers.”

In addition, Craig International’s consolidated global buying power allows them to pass on further savings to customers. They also operate a gain share model with several key clients where the cost savings of their combined spend are shared across them all equally. Further efficiencies are delivered through smart use of cutting edge e-procurement, reducing administration resources. Craig International’s electronic, on-line processes integrate fully with internal systems used by their customers.

Steve Johnson, director of Simply Joined Consulting Limited, Fellow of the Chartered Institute of Procurement & Supply and formerly a steering committee member of FPAL said: “I have been very impressed with Craig International and, as a former customer, have seen how they effectively combine smart processes with smart buyers who are motivated to source the best products and services at the best price for their customers, resulting in reduced costs and real value creation.”

Craig International has a global network of pre-qualified suppliers, over 70 experienced and qualified buyers in six countries covering every continent, proven out-sourcing experience, recognized international accreditations and on-line procurement tools and processes.

“With access to a wide variety of market sources for goods and services, we can satisfy the full range of sourcing strategies from low cost country sourcing initiatives through to specific local content demands,” added Ms. MacDonald.

“We can streamline a client’s vendor list and take care of the pre-qualification of second tier vendors. We are able to benchmark vendor pricing to make sure our customers get the product or service for the best price and then provide detailed reports on-line and in real-time. Our processes integrate seamlessly with our customer’s procurement systems.”

With bases in Houston, Calgary, Cape Town, Warsaw and Hamburg, Craig International saw its turnover rise from over £48million in 2013 to almost £66million in 2014. It is a division of Aberdeen head-quartered global shipping and energy service firm, Craig Group.

Craig Group remains one of Scotland’s top 100 companies, is in the Sunday Times TopTrack 250 list of UK private mid-market companies and the top 20 of offshore service companies in the North Sea.