The Seaway line reversal in May of 2014 marked a turning point in the North American crude oil market with the draining of record stocks at the Cushing, Oklahoma storage hub. Attention has now shifted to the U.S. Gulf Coast and its capacity to move, store, refine, and export the glut of U.S. crude oil.

The goal of Genscape's new U.S. Gulf Coast Oil Supply Chain Service is to provide a holistic view of market fundamentals in the region to help traders, analysts, hedge funds, and infrastructure owners stay ahead of the evolving supply-demand dynamic. Using a range of patented, proprietary monitoring technology and a team of market experts, the comprehensive service provides granular inventory levels, 30-minute pipeline flows, and real-time camera tracking of refinery performance to provide unmatched transparency to this crucial region.

"We used to look at the Cushing storage hub for insight into the U.S. oil supply dynamic. That's not enough anymore," said Chris Sternberg, managing director of oil at Genscape. "Now, we need to look at the Gulf Coast and understand in detail what's happening to the oil and where it's going. We're excited to be filling this information gap with granular, measured data on oil fundamentals that will help market participants manage risk and opportunities."

"The incremental barrel produced is now heading to the Gulf during periods of oversupply or high refinery demand," said Dominick Chirichella of the Energy Management Institute. "Without the economic incentive to store oil at Cushing, physical and financial players will be making moves based on activity in the Gulf."

Furthermore, "with more than eight million bpd of refining capacity, the Gulf Coast is quickly becoming the most critical location for crude spot market activity and potential benchmarks to reflect market value for North America," according to Genscape's latest white paper, The Evolving Domestic & Global Crude Oil Pricing Landscape: An Inside Look at the Gulf Coast Infrastructure & Supply Chain. The paper argues that the current fragmentation of spot markets in the Gulf is causing market participants to struggle and creates the need for "new, granular fundamental benchmarks to support market efficiency and spur price benchmark evolution."

Hercules Offshore, Inc. ("Hercules" or the "Company") (Nasdaq: HERO) announces that it has promoted ­­Troy L. Carson to Senior Vice President and Chief Financial Officer, effective November 21, 2014. Mr. Carson­ replaces Stephen M. Butz, who resigned as the Company's Executive Vice President and Chief Financial Officer effective November 21, 2014, to join Rowan Companies plc as Executive Vice President, Chief Financial Officer and Treasurer.

Mr. Carson is currently serving as Senior Vice President and Chief Accounting Officer. He joined the Company as Vice President and Corporate Controller in March 2007, was appointed to Principal Accounting Officer in July 2008, and was named Chief Accounting Officer in May 2010. At the same time, Craig M. Muirhead, currently serving as Vice President and Treasurer, has been appointed to Vice President of Investor Relations and Planning, while Son P. Vann, currently serving as Vice President of Investor Relations and Planning, will assume the role of Vice President Corporate Development and Treasurer.

John T. Rynd, Chief Executive Officer and President of the Company, stated, "Stephen has been with Hercules since just after its founding, and over the past 10 years has been instrumental in our expansion to one of the leading shallow water service providers worldwide. He has successfully navigated the Company's finances through some extremely challenging conditions and leaves our Company with a solid balance sheet and ample liquidity. While we will miss his contributions at Hercules, we wish him all the best in his new role at Rowan. The Board of Directors and I are confident that Troy is well-equipped to assume the role of Chief Financial Officer. I look forward to working with Troy and our finance team to maintain the strong financial foundation that we have developed over the past several years and position our Company to capitalize on future opportunities."

A cutting-edge communication solution developed by Kongsberg Seatex for the marine seismic sector is set to be a highlight at SEG Denver 2014 (the Society of Exploration Geophysicists Annual Meeting) on 26-31 October (Booth #2414). The KONGSBERG MBR system enables high speed, high capacity and extremely robust data, voice and video transfer between multiple vessels and other assets. The KONGSBERG MBR is set to revolutionise inter-vessel communication in the seismic industry, where the capability to quickly and reliably transfer data is a significant operational advantage.

The MBR system is a maritime radio network distribution system operating in the 5GHz band and has demonstrated stable, high capacity communication in a maritime environment, handling close by vessel operations, platform obstructions and distances in excess of 50km.

Operating as a maritime 'Information Highway', MBR connects crews and their vessels with a high-speed and high capacity digital communication channel with 'Fast Track' priority options. Optimised to securely carry a diverse array of operational information (from real-time video streams to system data), MBR allows remotely situated teams to work together seamlessly, co-ordinating systems and activities for optimal performance, safety and operational success.

A seismic vessel needs to communicate with its workboat for safety and operational reasons and MBR will provide a link to HD video cameras and other sources for everyday use. Large wide- and multi-azimuth operations will also benefit from the robust broadband communication channel. Unlike satellite, Wi-Fi, or mobile network platforms, MBR requires no extra infrastructure or equipment beyond the units on participating vessels/assets. This makes it a simple to use and maintain solution for enhancing overall project efficiency in seismic operations.

"All Marine Seismic Operations are in reality multi vessel operations and require reliable communication. MBR represents a quantum leap in reliability for this type of communication and we believe that users will experience a whole new performance level enabling them to benefit from safer and more efficient operations," said Gard Ueland, President of Kongsberg Seatex. "KONGSBERG is continuously developing its core technologies and the highly sophisticated MBR technology is an excellent example of this innovation process."

N-Sea Offshore Ltd has secured major contracts to the value of over £100million, since the beginning of the year.

N-Sea is known for its innovative work in the North Sea as an independent offshore subsea contractor. The company has secured a significant number of major, long-term contracts in the UK and across North-West Europe, providing IMR expertise through innovative cost-reducing operations, to a variety of major operators and operational service companies.

The announcement has come at a time of significant growth and investment for the company. Following N-Sea's recent UK expansion into larger premises, the company continues to increase its technical capabilities and staff.

N-Sea's chief operating officer, Roddy James said: "2014 has seen N-Sea's success continue to grow, with the UK side of operations expanding considerably in a short space of time. The value of contracts won this year illustrates N-Sea's game-changing technical capability, the excellent reputation we have within the oil and gas industry, and our commitment to reducing our clients' operating expenditure.

"We are delighted that our work is being recognised by some of the industry's key businesses and we look forward to continuing the expansion of our services."

N-Sea specialises in IMR services for the international oil and gas, renewable and telecom/utility industries, as well as for civil contracting communities. With particular focus on safe and efficient operations, N-Sea provides offshore and survey services to major operators and service companies alike.

NYC-based PIRA Energy Group believes that falling crude prices to slow midcontinent production growth. In the U.S., the stock excess versus last year increased and with a significant draw last year, the commercial excess should grow even more for the week of November 7. In Japan, crude runs fell, imports rose and stocks built. Specifically, PIRA's analysis of the oil market fundamentals has revealed the following:

Falling Crude Prices to Slow Midcontinent Production Growth
Crude prices plunged in October, with Brent falling nearly $10/Bbl and WTI ending the month below $80. Midcontinent differentials were little changed, except for those in the Permian Basin, where new pipeline capacity allowed prices to rebound from deep third quarter discounts. Midcontinent production is still rising, but lower prices will greatly reduce next year's growth.

Creeping Excess Storage
A look back at the most recent month of DOE weekly data shows a significantly smaller stock draw, compared to the same month last year, in spite of demand being up, year-on-year. A 630 MB/D difference in U.S. commercial stock change is a reflection of a global imbalance of supply over demand, this year compared to last year, of over 1 MMB/D. Far from being a mystery, this imbalance is apparent in stocks around the world. For winter, we expect the surplus to manifest itself in smaller draws, which will be reflected in a creeping stock excess. Come the spring, this surplus will appear as higher outright inventory levels. For this week, the stock excess versus last year increased to 15.4 million barrels, and with a significant draw last year, the commercial excess should grow even more for the week of November 7.

Japanese Crude Runs Fall, Imports Rise, Stocks Build
Crude runs eased to their lowest level since early July. Crude imports rose such that stocks built. Gasoline and gasoil demands were modestly changed and both product stocks drew, with the biggest draw being for gasoil. Kerosene demand was relatively strong and stocks posted their first seasonal draw. Refining margins are better with all the major product cracks firming.

Medium-Term Crude and Gas Price Outlooks Revised Down
Many of the bearish guideposts for our low case have emerged in the past six months. In the absence of new supply disruptions, we are likely to see prices at or below current levels for the next several years. We still believe that demand growth will return to a trend of 1.2 MMB/D, and combined with high-cost project cuts, this will lead to strengthening prices later in the decade. In the case of North American natural gas, the extremely strong growth in supply, even at sub-$4 prices and declining rig counts, suggests that prices are likely to stay lower for longer. Those changes, coupled with a weaker outlook for global gas demand growth, have led to reductions in the European and Asian gas outlooks as well.

U.S. LPG Stocks Remain Stubbornly High
Last week, U.S. propane inventories posted their second draw this heating season. The relatively small draw was influenced by a decline in both imports and in apparent demand. Inventories ended the week at 77.7 MMB, while the surplus expanded to 18.4 million barrels as the year ago withdrawal of 2.5 MMB stood much higher than the recent one. High U.S. stocks will ultimately need to clear by export. National LPG stocks are now well poised to both supply the harshest of winters and an increasing export market. Weaker prices relative to export destinations will be necessary for exports to increase.

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.

SpeedCast International Limited (SpeedCast), a leading global satellite telecommunications service provider, has announced, following the recruitment of Keith Johnson last month, the establishment of a new Energy Division and the opening of a new office in Houston, Texas, to meet customers' growing demand for services globally. The new Energy Division will consolidate all of SpeedCast's existing business activities for the energy sector into one streamlined operational unit. The new Houston office extends SpeedCast's global operations to serve the energy market and represents its commitment to addressing the needs of oil and gas and energy customers around the world.

With established offices across Australia, Asia, the Middle East, and Europe, SpeedCast has over ten years' of experience in providing tailor-made communication solutions to many companies in the oil and gas sector. SpeedCast's solutions help companies manage their remote site requirements for real-time data, voice, video, M2M, and crew moral services.

The new Energy Division, strategically headquartered in Houston, Texas, will be headed by Keith Johnson, Senior Vice President / GM. Mr. Johnson will lead a global team to deliver solutions for energy customers who expect high reliability and uncompromising customer service. While leveraging SpeedCast resources in multiple global locations, a local team is being built in Houston to provide local sales, field service, engineering, and program management to support customers and their requirements, in the Americas and in particular in the critical Gulf of Mexico region.

"Our expansion into the North American market reinforces our commitment to deliver high-quality, reliable managed network services to our customers globally and to support them wherever they operate. With many of the largest global energy companies based in Houston, this was an obvious choice for us to open our Energy Division. This location will allow us to be closer to key decision makers and provide them with alternatives for their needs globally," said Pierre-Jean Beylier, CEO of SpeedCast. "Energy customers require exceptional uptime service and support. Our new Energy Division, led by Mr. Johnson, is being constructed to offer the best-in-class service and support to our customers," Beylier added.

"Energy customers operating in the Americas will realize tremendous benefits from our strong, focused team based in Houston, along with the support of our global teams throughout SpeedCast," said Keith Johnson, Senior Vice President / GM Energy Division, SpeedCast. "We will leverage our global strengths to deliver superior managed services to our energy customers throughout the world. This latest move by SpeedCast demonstrates our commitment to the global energy market and our customers," Johnson added.

The name of this new BOURBON vessel says it all: scheduled for delivery in early 2016 from the Vard shipyard.

This AHTS (Anchor Handling Tug Supply) was specially designed for operations in polar waters, and more specifically in arctic zones, where we know that there is a huge potential for development.

BOURBON is therefore adjusting its range of services to meet the requirements of clients and the changing offshore market.

With a length of 93.60 m, a bollard pull of 280 t and deck equipment supplied by Rolls-Royce (winches, cranes, etc.), the Bourbon Arctic will be in a position to perform anchor handling and towing operations for oil rigs located even in the remotes oil fields. With its design suited to extreme weather conditions and a reinforced hull classed Ice-1A, this vessel will be set to operate in even the most demanding situations.

http://www.bourbonoffshore.com/en/services-and-fleet/marine-services/offshore-anchor-handling-towing-and-positioning-our-expertise

Upon delivery, it will be ranked as the most powerful vessel in the BOURBON fleet. BOURBON thus adapts its services to market developments and clients' needs. "The development of our fleet has always been closely tied to our anchor handling services" explains Rodolphe Bouchet, Vice President Business Management Marine Services. "As a generalist, we need to have very large capacity vessels in our fleet, for operations of a very complex type. With its technical specifications suited to the deep offshore market, the Bourbon Arctic will allow us to complement our range of services."

The ship manager of this new-generation AHTS will be Bourbon Offshore Norway, which is already responsible for the 2 most powerful AHTS in the group's fleet, the Bourbon Surf and the Bourbon Borgstein.

Technical Specifications:
Length: 93.60 m
Width: 24 m
Cargo deck area: 780 m2
Bollard pull: 280 t
Hybrid propulsion: 2 main engines and 3 gensets
Full speed: 17 knot
Accommodations capacity: 60 passengers

NYC-based PIRA Energy Group believes that the oversupply of crude will grow into 2015. In the U.S., seasonal low in runs leads to large U.S. product stock decline. In Japan, crude runs ease back, but crude stocks still draw. Specifically, PIRA's analysis of the oil market fundamentals has revealed the following:

Asia-Pacific Oil Market Forecast
Oil prices are likely to remain soft, even assuming a substantial cut at the November 27th OPEC meeting, though there would be a psychological bounce if cuts are enacted as PIRA assumes. The oversupply of crude will grow into 2015, with stock-building forecast for each of the first three quarters. Without an OPEC cut by year-end, the market would deteriorate further as the imbalances would be that much greater.

Seasonal Low in Runs Leads to Large U.S. Product Stock Decline
Overall inventories fell this past week, 2.7 million barrels more than the decline last year for the same week. Products led the inventory decline, the largest weekly decline this year as refinery runs hit their seasonal low and reported demand surged on the week. A large chunk of this demand increase was in distillate largely because of peaking harvest demand and in propane because of downstream movements in preparation for the winter. Compared to last year, the stock excess narrowed.

Japanese Crude Runs Ease Back, but Crude Stocks Still Draw
Crude runs eased back, while crude imports rose from the low level seen the previous week, building crude oil stocks. Gasoline demand was slightly weaker and stocks built modestly. Gasoil demand rebounded from a low level and stocks drew slightly. Refining margins remain soft but all the major product cracks improved on the week.

Refinery to Restart in U.S. Virgin Islands
The government of the U.S. Virgin Islands announced that it had reached an agreement with Atlantic Basin Refining (a U.S. firm) to restart the Hovensa refinery on St. Croix. That refinery operated on imported crude and primarily supplied the U.S. marketplace until its closure in 2011 – a time when all Atlantic Basin refining was under pressure. Those economics have since changed with the U.S. shale crude revolution because the refinery is in the United States and as such can use U.S. crude without any regulatory restrictions. Furthermore, the Virgin Islands have a blanket exemption from the Jones Act.

NGL Prices Rebound on Demand Jump
U.S. LPG prices rebounded this week on the first propane stock draw of the season. The sizable draw helped propel December NYMEX propane futures 3.4% higher on the week. Cold weather increased the need for heating fuels in the reference week with heating degree days growing by 54% week-on-week. Apparent demand jumped by 335 MB/D (28%) from the week earlier to 1.5 MB/D. Butane prices rose 4.6% to $1.12/gal, garnering strength from steadily decreasing weekly NGPL stocks in the EIA weekly data. Ethane prices bounced 1.8¢ higher with higher natural gas prices.

Ethanol Output Soars
Ethanol production spiked to a ten-week high 937 MB/D the week ending October 24, up from 896 MB/D during the preceding week. Inventories declined for the fourth consecutive week, dropping to a 5-month low 17.0 million barrels, led by a 670 thousand barrel draw in PADD I.

U.S. Cash Margins Rebound
Cash margins for ethanol manufacture in the U.S. rebounded during the end of October following eight straight weekly declines. Many mills in the South-Central region of Brazil will shut down four to six week early, lowering ethanol output for the season.

Probability of an Iranian Nuclear Deal Up to 50%, nut Iranian Politics Add Complications
Less than one month remains before the November 24th expiry of the interim nuclear deal and PIRA understands that talks are turning more creative. Discussions have reportedly shifted to the idea of disconnecting cascades of linked centrifuges that would reduce enriched uranium fuel output but avoids outright dismantling of individual centrifuges. PIRA believes the probability of reaching a final deal has moved up to 50% as U.S. President Obama and Iran President Rouhani, and Iran Foreign Minister Zarif are keen to do a deal. However, ultimately it is the Supreme Leader who approves the terms of any deal and his acceptance remains unclear.

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.

While the specific terms of Mexico's new contractual frameworks for its oil and gas industry are yet to be announced, the regime appears an attractive one and should be conducive to active bidding, according to an analyst with research and consulting firm, GlobalData.

Mexico's first licensing round is rapidly approaching, with bids for shallow water areas formally scheduled for the first half of this month. Round 1 is being staggered, with areas offered in the following order: shallow water, extra-heavy oil, Chicontepec and unconventional, onshore, and deepwater.

Will Scargill, GlobalData's Upstream Fiscal Analyst, states that much will depend on the specific contracts and terms allocated to the blocks and fields on offer, as Mexico looks to counter the significant production declines that its energy sector has experienced in recent years.
However, Scargill explains: "Analysis of the details released so far for the royalty and tax license framework shows positive signs.

"In addition to royalties, income tax and a predetermined signature bonus, contractors under this regime will pay a biddable additional royalty, which will be adjusted according to profitability. This mechanism is expected to be similar to that which will be applied for profit oil split under both production and profit-sharing contracts."

Based on the information provided by the Mexican government to date, GlobalData's assessment assumes an industry standard R-factor mechanism. No additional royalty is applied until cumulative net revenue equals cumulative investment, and the percentage of the bid that is applied increases linearly to 100% when cumulative net revenue reaches 2.5 times cumulative investment.

Scargill continues: "The fact that both the basic royalties and additional royalty are adjusted according to the commodity price and profitability, respectively, means that developments should remain commercially viable, even at low prices. This is particularly significant given the many heavy-oil areas on offer in Round 1 and recent falls in the world oil price.

"In comparison to the fiscal regime applicable to shallow water fields in the US Gulf of Mexico, the basic Mexican royalty and tax regime before the additional royalty offers much higher investor returns. This leaves space for significant competition in the bidding round," the analyst concludes.

FMC Technologies, Inc. (NYSE: FTI) announced the appointment of a new member to its Board of Directors.

The new director is Peter Oosterveer, Chief Operating Officer of Fluor Corporation. Fluor Corporation is a FORTUNE 500 company that delivers engineering, procurement, construction, maintenance, and project management to governments and clients in diverse industries around the world.

A 25-year Fluor veteran, Mr. Oosterveer previously served as the group president of the company's Energy & Chemicals Business Segment, and senior vice president of its global chemicals and petrochemicals business.

Mr. Oosterveer has deep international client and project expertise in the energy and chemicals industries with previous executive stints managing Fluor's chemicals operations for Europe, Africa, and the Middle East. His duties included business development and sales as well as direct profit-loss responsibility. Prior to that, he was managing director of the Dutch operations of Fluor, including the Haarlem office. He also previously managed Fluor's operations center in Bergen op Zoom, The Netherlands.

He has a bachelor of science degree in Electronics from HTS Leeuwarden, The Netherlands, and is a graduate of the Thunderbird University International Management Program, Stanford's Executive Business School, and the Fluor Management Institute.

Rolls-Royce is proud to announce that BG Group has selected the Trent 60 DLE industrial gas turbine as the driver for the main refrigeration compressors in the proposed Lake Charles LNG Export project in Louisiana, USA.

BG Group and Rolls-Royce have also agreed the terms of a Long Term Service Agreement covering the support and maintenance of the equipment for up to 25 years that will help deliver high levels of availability for this important LNG plant. Both the equipment and service contracts are expected to be activated in the first half of 2015, subject to the US LNG plant permitting process and final investment decisions by BG Group and Energy Transfer, the developers of the project.

Each of the three LNG trains will utilise four Trent 60 DLE gas turbines as part of the Air Products C3MR refrigeration process. Each train will employ two Trent 60 DLE gas turbines driving propane compressors and two Trent 60 DLE gas turbines driving mixed refrigerant compressors for a total of twelve Trent 60 DLE gas turbines in the plant.

With an ISO rating of 54.2 MW and 43.6% thermal efficiency, the Trent 60 DLE, which is based on the aero Trent 800 with over 20 million operating hours, is the most powerful and fuel efficient aero-derivative gas turbine available. With over 300,000 hours of experience in mechanical drive, a compact plot plan and field proven extremely high levels of availability and reliability, the Trent 60 is ideal for both onshore and offshore LNG facilities.

Andrew Heath, President of Rolls-Royce Energy, said: "We're delighted with BG Group's vote of confidence in the Trent 60 DLE. We believe our aero-derivative technology will become the leader in the LNG sector, due to its superior economics. We are looking forward to a long and productive relationship with BG."

Exploring deep and ultra-deepwater areas could boost Trinidad and Tobago's (T&T) oil and gas industry, which has $6.2 billion of investment planned over the next two years, helping to offset the government's apparent move away from an energy-dependent economy, says an analyst with research and consulting firm GlobalData.

According to Effuah Alleyne, Senior Analyst for GlobalData, T&T's Budget Statement for the fiscal year 2015 revealed that the energy industry accounted for a 35% share of the country's anticipated revenue. This represents a significant decline since 2006, when the sector represented almost 53% of the budget.

While this move may imply trouble for T&T's oil and gas industry, Alleyne states that the emerging trend of deepwater exploration could help to revive the sector in a country where the majority of exploration and production (E&P) activity occurs in shallow waters of up to 250 meters (m) deep.

The analyst says: "T&T's competitive deepwater bidding round ended in March this year, with two of six blocks awarded to a consortium consisting of BHP Billiton and BG Group. These blocks are located in water deeper than 1,500m.

"As deep and ultra-deepwater is yet to be fully explored in T&T, these areas could represent vast potential, especially as there are over 15 open blocks. These lie in the Columbus Basin, an extension of the prolific Eastern Venezuelan Basin, where one of the world's largest reserves of 1 trillion barrels of heavy oil-in-place is located."

In addition to deepwater exploration, Alleyne notes that reassessing mature assets is another developing trend in T&T, with numerous recent discoveries being made in some of its established reserves.

The analyst explains: "Repsol's continued exploration activities in the mature Teak field revealed new oil accumulations this year through discovery well TB 14.

"Furthermore, this area, which has been producing since 1972, also has unexplored acreage onshore and offshore, similar to other mature assets in the country."

Alleyne concludes that T&T's planned oil and gas sector investment of $6.2 billion over the next two years reflects the confidence that untapped potential, both in existing fields and in under-explored deepwater and ultra-deepwater areas, could significantly boost the country's capital expenditure.

The Middle East will be one of the key markets for oilfield services companies for decades to come as countries across the region seek to maximize recovery from maturing assets and bring new fields into production, according to leading energy specialist corporate advisory firm Simmons & Company International Ltd. 

Speaking at ADIPEC in Abu Dhabi, Nick Dalgarno, co-head of eastern hemisphere corporate finance at Simmons, said there is an increasing willingness amongst governments and the national oil companies to build relationships with foreign companies to bring know how and technology into the region.

The oil and gas and wider energy factors driving this include the accelerating need for enhanced oil recovery, sour gas, heavy oil, tight gas, LNG, GTL, "clean fuels" refineries, carbon capture and storage, nuclear and solar technologies.

Just over half of the world's proven conventional oil reserves and 42 percent of the world's proven conventional gas reserves are located in the Middle East and North Africa (MENA). The region has 13 of the world's 20 giant oilfields as well as the largest gas field in the world. There is an estimated US$3 trillion of projects underway or planned in the six Gulf Cooperation Council countries (Saudi Arabia, United Arab Emirates, Kuwait, Oman, Bahrain and Qatar) plus Iraq and Iran. The majority of these relate to upstream oil and gas, downstream (including refineries, LNG and GTL), petrochemicals and related infrastructure projects.

Projects with values in excess of US $10 billion include the Jubail, Yanbu and Petrorabigh refineries and petrochemicals schemes in Saudi Arabia; the Rumaila, West Qurna and Majnoon field development in Iraq; Zadco Upper Zakum artificial islands field development, ADCO onshore field development programmes, ADMA-OPCO offshore field developments and Shah/Bab sour gas field developments in Abu Dhabi; Khazzan deep/tight gas project in Oman; and the Barzan gas development in Qatar.

The need for nuclear power and renewables, especially solar, waste to energy, desalination, and IT and communications security and asset protection technologies is also increasing.

Simmons' international practice spans offices in Dubai, London and its eastern hemisphere headquarters in Aberdeen. Earlier this year, it advised on one of the biggest oilfield services deals in the Middle East, playing a key role in the acquisition of National Petroleum Services (NPS) by a consortium of investors led by sovereign-backed investment firm Fajr Capital. The deal, which completed in June, was valued in excess of $500 million and is believed to be the biggest oil services M&A transaction in the region to date.

The involvement of the Simmons' Dubai and Aberdeen teams on this high profile deal marked their growing presence in the region, where they have now been involved in several notable transactions including the sale of Lamprell subsidiary Inspec to Intertek, the disposal of Al Mansoori's Thailand business and the sale of Clough's marine construction business to Sapura.

Nick Dalgarno said: "The Middle East is becoming an increasingly important region for international oilfield services businesses and the expertise of our Aberdeen and Houston teams combined with our local presence in Dubai make a compelling proposition for companies in the sector looking to buy, sell or secure investment.

"Involving our UK and US teams in Middle East transactions brings a wider international perspective and insight to our local presence in Dubai which, when combined with our network and market knowledge, is of real added value to industry in the region.

"No oilfield services company can afford to ignore the market in the Middle East due to its sheer scale and variety. The region is increasingly receptive to bringing in skills and technology from outside to support its E&P activity and EOR requirements and indigenous businesses are also seeking opportunities to grow internationally. The new relationships resulting from this are creating opportunities for mergers and acquisitions.

"Iran is also an enormous untapped market which, when it is eventually rehabilitated into the international community, will have to address decades of underinvestment in its oil and gas industry," said Mr Dalgarno.

The gigantic Johan Sverdrup field, one of the most profitable industrial projects in Norway over coming decades, will provide enormous value.

Construction of the first phase may lead to 51,000 man-years related to Norwegian deliveries, and the field may produce revenues amounting to NOK 1350 billion. The project will provide new knowledge, new solutions and new opportunities.

"Johan Sverdrup represents all we stand for as an industry and our faith in the future. This will be a gigantic project that will secure energy supply and jobs and result in substantial spin-offs and value for Norwegian society, the industry and the partnership behind the development," says Nylund.

Johan Sverdrup is one of the biggest discoveries on the Norwegian continental shelf since the mid-1980s and ranks among the biggest developments in the years ahead.

The consultation period concerning the environmental impact assessment for the field and the power proposal will now commence.

Large Norwegian component
It is estimated that the first-phase development of the Johan Sverdrup field will create around 51,000 man-years nationally, of which as many as 22,000 are expected to be performed by suppliers in Norway and approx. 12,000 by their subcontractors.

Calculations show that 2,700 man-years will be created in an average year in the production phase, with 3,400 man-years expected to be created at peak field development.

Based on estimates from Agenda Kaupang it is possible for the Norwegian supplier industry to be awarded more than 50% of the assignments in the construction phase and around 90% in the operating phase.

"It is very important for the Johan Sverdrup development that the Norwegian supplier industry positions itself well for the opportunities lying ahead," says Nylund.

A new chapter
According to a provisional estimate, total production revenues over 50 years may amount to as much as NOK 1350 billion (1). Of this amount, corporation tax alone will give the Norwegian state NOK 670 billion in direct revenue. Total investments for the first development phase are NOK 100-120 billion (2), while production will be in the range of 315,000-380,000 barrels per day.

Looked at from the perspective of 50 years, Johan Sverdrup will be a long-term project that several generations will bring to maturity and operate. The 200 sq.km. large field will be developed in stages. The partners are currently working on various development scenarios for the various phases in order to ensure that the first construction phase forms the basis for an overall, integrated development.

"We are planning for a stepwise field development with various installations tied back to a joint field center. This will ensure continuity and comprehensive resource utilization and also generate the greatest possible added value for our owners," adds Nylund.

Depending on the future choice of capacities and technical solutions, an early estimate for full development indicates NOK 170-220 billion with daily production put at 550,000-650,000 barrels per day.

Johan Sverdrup is situated in mature acreage that has been thoroughly studied and where the most central environmental aspects are that the development receives its power from land; that produced water will be purified and re-injected into the reservoir; and that cuttings drilled with oil-based liquid will either be brought ashore, or purified and discharged offshore. This is in accordance with regulations and a permit will be applied for.

The environmental impact assessment forms part of the plan for development and operation that is expected to be handled by the Storting next year and expected to be prepared and agreed by the partners in the beginning of February 2015.

1) 2014
2) 2013

Environmental impact assessment

An important milestone for the first planning phase of the comprehensive field development has been reached: The environmental impact assessments of: the field; the power solution; and the export solutions, are ready for consultation.

This is the first part of the plan for development and operation (PDO), the plan for installation and operation (PIO) of the power transmission facilities and the plan for installation and operation (PIO) for the export solutions respectively.

They will be submitted to the Ministry of Petroleum and Energy (MPE) in the beginning of 2015 to be discussed by the Norwegian parliament (the Storting). An investment decision will also be made at that time.

Partners

Production license 501: Lundin Norway (operator - 40%), Statoil (40%), Maersk Oil (20%)

Production license 265: Statoil (operator - 40%), Petoro (30%), Det norske oljeselskap (20%), Lundin Norway (10%)

Production license 502: Statoil (operator - 44,44%), Petoro (33,33%), Det norske oljeselskap (22,22%)

CAN Group, has been awarded a £4 million contract to provide asset integrity services in the North Sea as the firm also announces international growth. The Aberdeen-headquartered company has secured work with Fairfield Energy aboard the Dunlin platform, UK Continental Shelf (UKCS).

Image: CAN Group’s latest contract win will see them providing ultrasonic inspections as part of structural survey work.

The three year contract with Fairfield Energy will be led by ENGTEQ, the group's integrity engineering business stream, that will provide services such as inspection management and data analysis with CAN's operations division providing inspection execution and ancillary services on the pressure systems and structures in support of the asset integrity program.

In addition to domestic success, CAN has also been successful in securing scopes in North Africa. The work covers the provision of specialist inspection services and integrity engineering support and will see CAN carry out a variety of structural inspection services including flare and jacket structure inspections and a comprehensive range of advanced NDT inspection techniques at pressure plants on and offshore.

Adam Byrne, operations director at CAN Group, said: "These latest contract awards are a great boost to the company and underline the need for asset integrity services worldwide.

"We have enjoyed a sustained period of demand in the North Sea and, as part of our strategic growth plans, we are increasingly rolling out our services across other geographic markets. The internationalisation of our business has seen CAN move into West Africa, Asia Pacific and North America and we are well placed to make the most of these opportunities."

The latest contract awards come shortly after CAN Group announced it had secured two major contract renewals safe-guarding 150 plus jobs.

Formed in 1986, when it pioneered industrial rope access techniques offshore, CAN Group is now a diversified market leader with four distinct business streams: ENGTEQ, VENTEQ and their inspection and trades businesses which trade under the CAN name. Together these businesses provide a comprehensive asset integrity service, with ENGTEQ providing the integrity engineering services, and the quality assurance and quality control services from VENTEQ.

We all need to remember, but often choose to forget, that oil is a highly cyclical sector. There have been seven significant price cycles since 1970 and also a few minor ones between times, so yet another should come as no surprise. The reasons for the fall in Brent crude prices from $115.19 in June to below $85 last week are well documented, as is the realization that OPEC is now defending market share, rather than a minimum price. That said, the nature of the oil business is very different now compared to after the 2008 crash.

It should be noted that 70% of the additional production that has come onstream since 2005 is unconventional. Much of this, of course, is from US shales - this is not cheap oil (mostly needing prices of $60-80 to be commercially viable) and decline rates are rapid - without ongoing drilling the current production capacity will be quickly eroded.

As in the past, the present downturn could be a great buying opportunity. In global E&P the NOCs rule and they will continue to invest; China has been the high spender and India's ONGC now plans a huge $180 billion foreign production acquisition spree. Likewise in oilfield services - acquisition opportunities are likely to present themselves for strategic and PE buyers, as was the case in the last downturn. Even without oil demand growth, vast numbers of new wells will need drilling worldwide each year to counter natural decline rates, probably some 80,000 in 2014 and more as demand grows again, boosting the demand for oilfield services.

Recent history suggests that oil price downturns tend to be short and measured in months, not years. There is plenty to suggest that, this time, it could be even shorter: rapid supply erosion is likely along with a healthy boost to GDP for net importers. Both high and low oil prices present opportunities for well-managed, well-financed companies that have a long-term view, as the oil & gas industry is not a short-term game. But the window of opportunity may well be very short before the next cycle begins.

www.douglas-westwood.com