Bibby Offshore's newest international division, Houston-based Bibby Subsea, has gone from strength to strength since its launch in October last year, having trebled the team in the past four months.

The subsea installation contractor developed the base in North America as part of its continued global growth strategy and to meet the growing demand of its clients in the region. In a bid to further strengthen ties with the region, Aberdeen-based Bibby Offshore last week hosted Houston based HM Consul General, Andrew Millar, the senior official representing the government in Texas, Louisiana, Arkansas and Oklahoma.

Alongside Aberdeenshire Council Provost Jill Webster, Chief Executive of Subsea UK Neil Gordon, and senior members of Aberdeenshire Council; discussions were held regarding Aberdeenshire's extensive investment into the Subsea Industry and plans to further develop Bibby Offshore's presence in Houston and the Gulf of Mexico.

This expansion plan is already evident with Bibby Subsea having increased its initial Houston team of three to now include Barry Straughan as HSEQ Manager, Daniel Wheeler as Subsea Business Manager, and four offshore personnel. It plans to double the Bibby Subsea workforce by the end of the year.

Mr Straughan brings 37 years' health and safety experience to the team, having previously worked internationally in the subsea industry. Mr Wheeler also complements the team with several years' experience and will provide the team with a wealth of regional expertise and knowledge to develop the company's business opportunities in the Gulf of Mexico.

Andrew Duncan, President and Managing Director of Bibby Subsea, said: "We have received significant interest in the division since its launch, with Bibby Subsea being perfectly positioned to deliver enhanced capabilities and undertake subsea projects using our international fleet of subsea support vessels and remotely operated vehicles (ROVs).

"Bibby Subsea's preliminary $1million contract with Cal Dive International to mobilise a work-class remotely operated vehicle (WROV) on Cal Dive International's support vessel in Mexico, the Mystic Viking, is ongoing, with talks in place to increase our ROV presence in the region.

"Market demand for subsea services is forecast to grow by 43% over the next five years, and Bibby Subsea is positioning itself as a major player within the ROV market, with an increased level of in-house capabilities which we can offer to clients."

Bibby Subsea aims to deliver a diverse range of subsea construction projects for operators worldwide. Services include project management and engineering, innovative remotely operated vehicle support vessels (ROVSV) and survey capabilities, diverless intervention, advanced remote systems and tooling packages, in-house survey and data processing, subsea construction support services, and inspection, repair and maintenance (IRM).

The Obama administration is expected to move closer this week to allowing new exploration for oil and natural gas in the Atlantic Outer Continental Shelf (OCS).

Surging oil and natural gas production onshore has sparked an energy and manufacturing revolution in America. But offshore, 87 percent of federal waters remain closed to energy exploration. A recent report projects big economic gains if we remove self-imposed obstacles and open the Atlantic OCS to responsible energy development.

Between 2017 and 2035, oil and natural gas development in the Atlantic OCS could:

·         Create nearly 280,000 new jobs along the East Coast and across the country

·         Generate an additional $195 billion in private investment on oil and natural gas activity

·         Contribute up to $23.5 billion per year to the U.S. economy

·         Add 1.3 million barrels of oil equivalent per day to domestic energy production, which is about 70% of current output from the Gulf of Mexico

·         Raise $51 billion in new revenue for the government

Seismic surveys, an advanced exploration technique used to locate potential oil and natural gas reserves below the ocean floor, are an essential first step. The Obama administration will publish this week an environmental study that could pave the way for the first seismic surveys of the Atlantic OCS in three decades.

Existing estimates of the oil and natural gas available in the Atlantic OCS are out of date. New surveys using state-of-the-art techniques and technology would provide a better understanding of the oil and natural gas resource potential in that area. Watch this video to learn how it works.

By allowing seismic surveys in the Atlantic and including the area in its upcoming five-year offshore leasing plan, the Obama administration can open the door to significant economic growth for the U.S. and Atlantic coastal states.

Oceaneering International, Inc. (NYSE: OII) announces that Eric A. Silva has joined Oceaneering as Vice President and Chief Information Officer (CIO).

Mr. Silva's career spans over 30 years, with more than 10 years of information technology services leadership experience, in the chemical, energy, and oil and gas industries. He was most recently the CIO at El Paso Corporation and, prior to that, at LyondellBasell and Lyondell. Mr. Silva holds a Bachelor's degree in Accounting and is a Certified Public Accountant in the State of Texas.

Marvin J. Migura, Executive Vice President, stated, "I am pleased to make this announcement regarding Eric's appointment at a time when Oceaneering is being challenged by our customers to deliver more technology-based services. Eric's experience has prepared him to provide us leadership to improve and expand our information technology capabilities and thereby enhance our global competitiveness. He has a record of accomplishing the strategic alignment of technology and services with corporate goals for maximizing bottom-line results."

Mr. Silva is replacing Gregg K. Farris, who will be retiring at the end of March 2014.

Oman Drydock Company (ODC), based in the Middle East's new mega city of Duqm (notes to editors 2), signaled its 'passionate and driving ambition' to catapult itself further into the region's multi billion dollar ship repair industry after completing its 200th drydocking since launching in 2011.

A ceremony was held at the shipyard, which cost $1.5bn to build, to celebrate the landmark with shipping giant Maersk whose vessel, the 4388 TEU Maersk Wisconsin, was the 200th ship to be drydocked by ODC.

ODC Chief Executive Yong Duk Park said completing 200 vessels reflected the company's growing stature as it aims to position itself as one of the best shipyards in the world.

"We are absolutely delighted to mark our 200th ship milestone with our hugely valued client Maersk," he said. "This moment is a powerful statement to the industry that ODC is now a major player in the Middle East. We have worked enormously hard to develop a robust track record working on a wide variety of ships from Very Large Crude Carriers (VLCCs) to container ships to LNG and LPG carriers to chemical carriers dredgers, RO-ROs and barges. We can now show the shipping industry we not only have world class facilities, which include our massive dry docks which can accommodate any size of vessel (see notes to editors 1), but we are developing the workforce, skills base, training and infrastructure that our customers demand. We have listened to our clients and we are offering efficient turnaround times, tremendous value, and world class workmanship. We are, of course, still seeking to grow and improve. As a result we are actively looking to recruit more sub contractors to our supply chain who can match our standards and share our vision. There are numerous tax breaks and incentives available and we encourage companies with the right background to get in touch."

Group shot of Maersk Wisconsin& ODC team

Deputy CEO Sheikh Khalil bin Ahmed Al Salmi said ODC would now redouble its worldwide campaign to raise the profile of ODC and its prime selling points.

"ODC has a passionate driving ambition to become one of the prime ship repair yards in the world and the Middle East," he said. "We know we can deliver on quality, cost and critically time. Our geographical location thrusts us into pole position for the Asia to Europe shipping route as well as the East African and Indian off shore industries. We can further slash costs and the time required for drydocking as vessels do not need to greatly deviate their course. This can save days in time, and a huge amount of money, which is such a key factor for shipping operators balancing tight budgets. Other key selling points include our unrivalled painting services and ability to deal with sludge and slops disposal (see notes to editors 1). With painting we have the perfect climate that few other yards can offer. With slops we can save up to three days sailing time as we can deal with it all here on site, there is no need to sail to another location. We intend to market all these benefits hard in the coming months and years."

Sheikh Al Salmi said the container ship market has substantial potential for ODC.

"Our focus moving forward will be to win more business from existing and new customers operating carriers, tankers and container ships," he said. "We see real potential for growth particularly in becoming a centre of excellence for the repair of container ships and LNG carriers (LNGC). As a result we will be ramping up the promotion of our services, which are among the most advanced in the world. This includes offering customers the in depth technical support we receive from our partner Daewoo Shipbuilding and Marine Engineering Company Ltd (DSME) and its subsidiary DSEC. 2014 will see DSEC forge a closer partnership with ODC to provide specialist LNGC repair technology. This will cover areas such as cargo containment systems and the supply chain of various materials such as INVAR, insulation boxes, membranes, prefabricated panels and cryogenic safety valves. Meanwhile, we are also investing in new facilities including renovating our cryogenic shop so it can cater to repairing up to four LNGCs at any one time. Our expansion into LNGC will further be strengthened by our new license to support the French engineering firm Gaztransport & Technigaz (GTT) which specialises in cargo containment systems for high-end LNG carriers. "

Elsewhere ODC is chasing down major growth opportunities in the off shore market. ODC can provide repair and conversion services to jack up drilling rigs, drill ships and FPSOs. It also offers a range of engineering, testing and trial services for offshore projects including the construction of offshore accommodation barges, offshore jackets and platforms as well as top-side modules and sub-sea pipeline manifolds.

Click here: ODC documentary movie 

Niche Products Ltd is pleased to announce that the formal establishment of Niche Produtos do Brasil is now underway. The coming Niche facility will provide in.country manufacturing of subsea control fluids as well as 24 hour technical support for present and future customers.

Mike Mahaney, Vice President at Niche Products LLC stated "We are very pleased to be a player in the most active exploration & production area of the world. The establishment of Niche Produtos do Brasil signifies a major commitment and investment by Niche Products to provide Brazilian customers more choices and value through increased competition and cutting edge field proven technology."

Brad Jeter of Niche Products added "Moving forward we fully anticipate Niche Produtos do Brasil will play a key global role as we support projects both inside and outside of Brazil from this facility. In addition, we are creating skilled job opportunities for Brazilians as we staff and train our manufacturing, laboratory, and support staff personnel."

Niche Products specialize in the offshore industry and have been supplying environmental fluids since the company was founded in 2001. The Pelagic range includes environmental fluids for subsea production control systems, drilling and umbilical storage. Niche currently has manufacturing facilities in Manchester UK, Houston TX and Perth Australia and the new facility in Brazil will ensure customers receive rapid delivery worldwide.

Vessels to Supply Maritime Industry with Clean Fuel Source and Build LNG Infrastructure along U.S. Gulf Coast

Jensen Maritime, Crowley Maritime Corp.'s Seattle-based naval architecture and marine engineering company, has been awarded a contract to design some of the first liquefied natural gas (LNG) bunker barges in the U.S. for customer LNG America LLC, a Houston-based LNG fuel supply and distribution company. Currently no LNG bunkering barges are in operation in American waterways and these vessels will be among the first to be developed and built, marking a significant step in LNG America’s build-out of LNG bunkering infrastructure along the U.S. Gulf Coast and in delivering a new clean fuel to the maritime industry.

The vessels, which are expected to deliver in late 2015, have an initial planned capacity of up to 3,000 cubic meters of LNG.  Once in operation, the bunker barges will serve the dual purpose of moving LNG from LNG America’s Louisiana supply source to coastal-based storage and distribution terminals and in directly bunkering large ships.   

“Through LNG America’s LNG bunkering initiative, we plan to serve and facilitate the growing marine demand for LNG,” said Keith Meyer, CEO of LNG America. “LNG America sees the demand for marine LNG to be robust as long as LNG can be made available to the maritime industry on a reliable, dependable and cost-competitive basis. Our mission is to deliver competitively priced LNG as fuel where needed, when needed and in the quantity needed.”

“The significance of this agreement is not only incredible news for the marine industry, which struggles with whether to develop LNG infrastructure or vessels first, but also for companies along the U.S. Gulf that hope to replace their traditional vessels with cleaner, more efficient LNG-powered ones,” said Jensen’s Johan Sperling, vice president. “We are thrilled to be working with LNG America in the development of its marine infrastructure and also in providing a green fuel source to this important region. Jensen is on the leading edge when it comes to LNG vessel design and we look forward to serving LNG America and other customers with this valuable service.”

Jensen first produced prototype designs for LNG vessels in 2008. Additionally, Jensen has developed designs for a 100’ x 40’ LNG tugboat and is currently working on several other prototype designs of LNG bunker vessels, harbor tugs, ATBs, container ships and tankers, along with inland vessels for a variety of customers in the U.S.

LNG America was formed last July to develop LNG distribution infrastructure that serves not only the marine market but the burgeoning use of LNG in the oil and gas, rail, mining and heavy-duty trucking markets as well.  These markets have emerged due to the fuel’s price competitiveness resulting from the abundant U.S. natural gas reserves.

LNG facts from the Center for Liquefied Natural Gas (CLNG):


LNG, or liquefied natural gas, is natural gas that is cooled to -260° Fahrenheit until it becomes a liquid and then stored at essentially atmospheric pressure. Converting natural gas to LNG, a process that reduces its volume by about 600 times allows it to be transported. Once delivered to its destination, the LNG is warmed back into its original gaseous state so that it can be used just like existing natural gas supplies. When returned to its gaseous state, LNG is used across the residential, commercial and industrial sectors for purposes as diverse as heating and cooling homes, cooking, generating electricity and manufacturing paper, metal, glass and other materials. LNG is not stored under pressure and it is not explosive. LNG vapors (methane) mixed with air are not explosive in an unconfined environment. When exposed to the environment, LNG rapidly evaporates, leaving no residue on water or soil.

Stone Energy Corporation (NYSE: SGY) has announced exploration discoveries at its deep water Amethyst and deep gas Tomcat prospects. Stone operates and owns a 100 percent working interest in both discoveries.

The deep water Amethyst exploration well in Mississippi Canyon block 26 encountered approximately 90 feet of net hydrocarbon pay in one interval which suggests a commercial discovery. Analysis of logging, coring and fluid data confirmed the existence of natural gas, condensate and natural gas liquids in the pay zone (an estimated yield of 60-80 barrels of liquids per million cubic foot of natural gas). The interval has been placed safely behind pipe for a future completion. A full evaluation, including seismic and subsurface data integration, is needed before hydrocarbon quantities can be estimated and a specific development plan is sanctioned. A single or multi-well tie-back to Stone's 100 percent owned Pompano platform, located less than 5 miles from the discovery, is a likely development option.

The results at the deep gas Tomcat exploration prospect at West Cameron block 76 also suggest a commercial discovery with approximately 30 feet of net hydrocarbon pay in the Camerina interval. Well log analysis, combined with offset Camerina production history, would suggest the zone should produce rich natural gas with approximately 60 barrels of condensate per million cubic feet of natural gas as well as additional natural gas liquids volumes. Initial development plans call for a tie-back to a nearby Stone operated East Cameron block 64 production platform with production estimated to commence in second half of 2014.

Chairman, President and Chief Executive Officer David H. Welch stated, "It is a great start to the year to make discoveries at Amethyst and Tomcat, our two 100 percent working interest exploratory prospects. The close proximity of both prospects to Stone platforms should provide us with attractive development options and enhance the economic value of the discoveries. The knowledge and information gained from the Amethyst well will also be helpful in evaluating our existing portfolio of prospects in the Mississippi Canyon area where we expect to be an active player for the next several years."

The rigs remain on location at both Amethyst and Tomcat to conduct operations to prepare the wells for future production.

Recently Hydrex installed Propeller Boss Cap Fins (PBCF) on several tankers during their respective stops in Rotterdam, Ghent and Antwerp. As a result of the underwater operation, the ships will not have to wait for their next drydock visit to start benefitting from the fuel savings the PBCF's will bring them.

The Propeller Boss Cap Fins (PBCF) is a device for propeller efficiency improvement developed by Mitsui O. S. K. Lines, Ltd. The PBCF can recover energy loss of a propeller hub vortex in the propeller's backward flow. This decreases fuel consumption by 5% when operating at the same speed, or boosts speed by 2% with the same fuel consumption.

The 5% energy saving effect has been verified by world research institutes including International Towing Tank Conferences (ITTC) and by owners.
 
With the current emphasis on global environment problems, the demand for the PBCF has been continually growing and this as an energy saving device and an environment-friendly product because it realizes a 5% reduction in CO2, NOx and SOx gases emission from vessels.

On-site installation prevents a long wait for fuel saving benefits
The first operation was performed on a 183-meter tanker berthed in Ghent. After the team arrived at the vessel's location with one of the Hydrex workboats, they started the operation with a full inspection of the propeller. Next the diver/technicians cleaned the area where the spinner cone (PBCF) was to be installed. They then lowered the cone into the water and positioned it on the propeller. When this was done, grease was inserted in the space underneath the propeller cone for lubrication and the bolts were put on torque and secured with wire, finishing the replacement of the PBCF. The Hydrex team worked around the clock to finish the operation as quickly as possible.

The exact same procedure was used during the operations in Antwerp and Rotterdam. The alignment of these Propeller Boss Cap Fins was monitored on an underwater video camera on the workboat.
 
In 2012 Hydrex had already replaced two PBCF's on a 110-meter tanker in Singapore. This was the first underwater installation of a PBCF, according to the manufacturer.

Summary
By performing the operation on-site and underwater, the owners of these tankers could immediately start enjoying the fuel savings the system offers. Otherwise they would have had to wait for the next scheduled drydocking before having the PBCs's installed. This would have cost them up to two years of savings. Calculations show that they will have earned back the money of the underwater installation in about eight weeks, so the savings for the customer are enormous.

MacGregor, part of Cargotec, has acquired Norwegian privately owned Deep Water Solutions AS, specialising in lifting applications utilising electric multi drive technology.

"Customer requirements for environmentally friendly solutions are increasing in offshore load handling applications, such as subsea cranes, module handling and LARS (launch and recovery) systems and having Deep Water Solutions' experts in the MacGregor family we enhance and strengthen our multi-drive (electric) technology know-how to be able better to serve and support our customers", says Tom Harald Svennevig, Vice President for MacGregor Advanced Load Handling business. "The owners and operators are looking for vessels designed for worldwide service with a 'clean design' and Green Passport. Clean Design requires minimum fuel consumption, requires no spill philosophy and makes electrical multi drive technology a preferred choice", Mr Svennevig continues.

NYC-based PIRA Energy Group believes that ongoing growth of shale continues to dominate both the oil and gas outlooks. On the week, the U.S. product stock draw resumes, while Japanese commercial stocks drew sharply. Specifically, PIRA’s analysis of the oil market fundamentals has revealed the following:

Shale Growth Continues To Dominate

The ongoing growth of shale continues to dominate both the oil and gas outlooks. Even with a slowdown in growth from the recent pace, shale will remain a major contributor to global liquids growth and the US will still face a steady decline in import requirements. However, we continue to face increasing violence in Iraq, significant outages in Libya coupled with political turmoil, sanctions and extremely uncertain negotiations with Iran, growing unrest in Venezuela, and an unending war in Syria that could spread violence anywhere in the Middle East. The bounceback of global demand growth in 2013, even during a subpar economic growth year, confirms our view that reports of the death of demand growth are premature.

U.S. Stock Draw Resumes

Overall commercial oil inventories drew this past week with product stocks falling and crude building. This was the sixth consecutive weekly product stock decline and fifth consecutive crude inventory build. The entire product inventory decline was outside of the three major light products, for they built a combined 0.6 million barrels. A similar major light product inventory profile is forecast for next week. In contrast, crude inventories are forecast to decline, for the Gulf Coast faced extended weather related delivery delays which will keep imports low.

Japanese Commercial Stocks Draw Sharply

Total commercial stocks were sharply lower by 8.6 MMBbls due to a sharp drop in crude stocks and a much lower draw in finished products, which was mostly kerosene. Runs eased slightly and crude imports plunged. Gasoline and gasoil demands fell back slightly, and gasoline stocks build modestly, while gasoil stocks still were able to post a small draw on much lower yield and higher incremental exports. Kerosene demand perked up and the draw rate came in at its highest rate of the year

U.S. Refiners Have Significantly Reduced Yield of Fuel Oil + Asphalt

U. S. refiners have typically had the lowest yield of residual fuel products (residual fuel oil plus asphalt) compared to other refiners worldwide. However, beginning in 2008, U.S. refiners have reduced their yield of fuel oil/ asphalt at a faster rate than can be accounted for by facilities additions alone, from over 7% to less than 5%. With continued substitution of light shale crudes, PIRA estimates that the yield of fuel oil plus asphalt for U.S. refiners will continue to decline to around 4%.

U.S. Propane Stocks Will Continue Lower

Export cancellations and fog delayed shipping from the USGC led to a relatively low stock draw last week. The pace of inventory decline should pick up as new record low positions will continue to be set. The March trading arb is open. Winter is not yet over but sentiment shifted as it is close to winding down, but not before some late season cold blasts.

Ethanol Manufacturing Margins Rise

U.S. ethanol production margins improved significantly the week ending February 14 due to higher ethanol values, stable corn costs, and lower natural gas prices. Rising DDG and RIN values also provided support

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.

Noble Energy, Inc. (NYSE: NBL) has announced the signing of a gas sales agreement between NBL Eastern Mediterranean Marketing Ltd., the Arab Potash Company ("Arab Potash"), and the Jordan Bromine Company ("Jordan Bromine"), both of which are located in Amman,

Jordan. Under terms of the agreement, Noble Energy will supply natural gas from the Tamar field, offshore Israel, to Arab Potash and Jordan Bromine for use in their facilities near the Dead Sea. Natural gas sales are anticipated to commence in 2016, once minimal required pipeline infrastructure has been completed. The agreement is for an initial term of 15 years and a total gross contract quantity of approximately 66 billion cubic feet of natural gas. The price for the natural gas sold will be based on a floor price of at least $6.50 per thousand cubic feet of natural gas with upside linked to Brent crude oil prices. Gross revenues are estimated at $500 million, with actual sales dependent on final purchased quantities and oil prices at the time of sale.

Keith Elliott, Noble Energy's Senior Vice President, Eastern Mediterranean, commented, "The execution of this agreement evidences the growing regional opportunities for our natural gas and brings forward value for the Tamar asset. We have now signed the first regional export agreements for both Tamar and Leviathan, and we are in a number of additional negotiations to sell significant quantities of natural gas from both fields to multiple customers."
Finalization of the purchase and sales agreement is subject to necessary and customary conditions and regulatory approvals.

Noble Energy operates Tamar with a 36 percent working interest. Other interest owners are Isramco Negev 2 with 28.75 percent, Delek Drilling with 15.625 percent, Avner Oil Exploration with 15.625 percent, and Dor Gas Exploration with the remaining four percent. The Tamar field has an estimated 10 trillion cubic feet of discovered natural gas resources.

NYC-based PIRA Energy Group Reports that Asian oil fundamentals remained largely positive. On the week, U.S. commercial oil stocks increased and Japanese crude stocks built, but finished products drew. Specifically, PIRA’s analysis of the oil market fundamentals has revealed the following:

Asian Oil Fundamentals Remain Largely Positive

Oil prices will come under the increasing influence of global crude stock building as refinery maintenance takes hold. Asian gasoline cracks should improve seasonally and some further minor gains are forecast. Naphtha cracks have begun to ease and should decline further. Gasoil cracks have held relatively firm, but lower demand should allow room for some easing, though turnarounds will limit erosion. Fuel oil cracks have improved with lower Asian stock levels being seen in January.

U.S. Commercial Stocks Increase

Overall U.S. oil commercial inventories increased the week ending February 7^th as crude stocks built and product inventories drew. The product inventory declined week-on-week and the decline was smaller than the prior week, largely due to a fall off in reported demand, while higher product output was offset by lower product imports.

Japanese Crude Stocks Build, but Finished Products Draw

In Japan, total commercial oil stocks were modestly higher with a build in crude outpacing a draw in finished products. Runs moved modestly higher as did the implied crude import rate, which led to the crude stock build. Gasoline demand was higher, perhaps influenced by the holiday, but exports fell back and stocks built slightly. Gasoil demand was lower, but held up rather well considering the holiday

EPA Issues Guidance for Fracking Using Diesel, With Little Likely Impact on Production

Final Permitting Guidance for Oil and Gas Hydraulic Fracturing Activities Using Diesel Fuels, was released on February 11th — more than a year later than initially expected. While PIRA believes implementation of the guidance will have limited direct impact on operations, their issuance provides additional insight into the Administration's approach to fracking — confirming their desire to have EPA engaged in the regulatory process while not imposing any serious obstacles to growth in production.

Crude Tanker Markets to Start 2014 Strong

Crude tanker markets are off to a strong start in 2014 with the Baltic Dirty Tanker Index doubling in mid-January from the end of November 2013 to its highest level since 2008. The improvement was driven by an exceptionally strong winter rally in Atlantic Basin Aframax trades. Clean tanker trades however, did not participate in the rally.

U.S. Market Moves Closer to Equilibrium

The extraordinary efforts undertaken to move propane from the USGC to the Midwest and East Coast have had the desired effect of easing the spread between Mt. Belvieu and Conway prices. The warming for the next week will certainly further help ease conditions as has price induced demand losses. Nevertheless, propane stocks will end the heating season at a quite low level.

Ethanol Production Rises W/W

U.S. ethanol output rose to a three-week high of 902 MB/D the week ending February 7^th from 895 MB/D during the preceding week despite soaring natural gas prices and rail car shortages. Inventories increased by 323 thousand barrels to 17.1 million barrels, the highest since July.

The information above is part of PIRA Energy Group's weekly Energy Market Recap, which alerts readers to PIRA’s current analysis of energy markets around the world as well as the key economic and political factors driving those markets.

The project for joint seismic acquisition in the southeastern Barents Sea has been joined by 16 new companies. A total of 33 companies are now part of this project, which will secure good data quality and low acquisition costs.

Illustration of seismic acquisition. (Photo: Ole Jørgen Bratland)

A joint acquisition of data will also limit any possible negative consequences for the fishing industry.
The recently opened southeastern Barents Sea is part of the 23rd licensing round on the Norwegian continental shelf in 2014. At the request of the Norwegian Ministry of Petroleum and Energy (OED), the Norwegian Oil and Gas Association launched an initiative for a joint project relating to acquiring 3D seismic data from blocks in this area. Statoil took on the operator role for the acquisition.

On 10 December last year, 17 companies joined the project as early participants. A further 16 companies followed suit after the OED on 14 February circulated a proposal regarding block announcements for public consultation.

A doubling of the number of companies in the project shows that the initiative enjoys solid industry support. It is a project that will further reduce costs while ensuring good quality data by utilising the companies' concerted competencies.

In March the project will announce the awarding of contracts and present further plans for the acquisition.

List of companies participating in the project:

Early participants:
BP , Chevron, 
ConocoPhillips, 
Det Norske Oljeselskap, 
ENI ,
GDF Suez, 
Idemitsu, 
Lukoil,
Lundin, 
A/S Norske Shell, PGNiG, 
Repsol , Spike, 
Statoil , Suncor, 
VNG , 
Wintershall

New participants:
Bayern Gas,
BG, Dong , Edison, 
E.ON, 
Explora Petroleum, ExxonMobil, Faroe Petroleum, Inpex, 
KUFPEC,
MOECO, 
OMW, 
RN Nordic Oil, 
RWE Dea, 
Total, 
Tullow Oil

Net income was 11% up on 2012 due to diesel (20%) and gasoline (11%) price increases in 2013, increased production of oil products, cost optimization, gains from the sale of assets, lower write-offs for dry wells and lower foreign exchange impact due to hedge accounting. Adjusted EBITDA totaled R$ 62.967 billion, up 18% on 2012.

Fourth quarter net income was R$ 6.281 billion, up 85% on the third quarter. This result reflects higher oil export volumes, lower dry well write-offs, gains from sale of the interest in block BC-10 and tax benefits stemming from provision of interest on own capital.

2013 oil and natural gas production totaled 2.539 million barrels of oil equivalent per day (boed), down 2% on 2012, primarily due to delays in starting up new systems, natural decline of fields and sale of assets abroad. Fourth quarter domestic output was up 1% on the third quarter.

In 2013, five new platforms came on stream and another four systems were deployed at their permanent locations. A pre-salt daily output record of 371,000 bpd was set on December 24th.

Proven reserves in Brazil reached 16 billion barrels of oil equivalent, up 1.6% on 2012. The Reserve Replacement Ratio has been higher than 100% for 22 years in a row.

Average production of oil products in Brazil totaled 2.124 million bpd in 2013, up 6% on 2012, cutting back diesel and gasoline imports.
 PROEF (Campos Basin operational efficiency improvement program) contributed with additional oil output of 63,000 bpd. Operational efficiency reached 75% for the Campos Basin Operational Unit (UO-BC) and 92% for Rio (UO-RIO).

PRODESIN (divestment program) contributed R$ 8.5 billion to cash flow in 2013 .

PROCOP (operating costs optimization program) achieved savings of R$ 6.6 billion in 2013, exceeding the R$ 3.9 billion target set for the year.

Statoil and the partners in the Johan Sverdrup field have decided on a concept for the first development phase. The partners have agreed on a field center consisting of four installations and power from shore.

Johan Sverdrup is among the largest oil fields on the Norwegian shelf, and will at peak contribute with 25% of the production from the Norwegian shelf. The giant field is expected to start production in late 2019. The field lifetime will be 50 years, with an anticipated plateau production of 550,000-650,000 barrels of oil equivalent/day (boe/d) field capacity (Statoil share ~40%).
The partners have decided on power from shore for the Johan Sverdrup field in the first phase, which will reduce total CO2 emissions from the Utsira High area by 60-70%.

"This is historic. We have not made a concept selection for a field this size since the 1980s," says Arne Sigve Nylund, executive vice president for development and production in Norway.

Establishing a field center 
The field will be developed in multiple phases. The design capacity of the first phase is 315,000 barrels of oil equivalents per day field capacity (Statoil share ~40%) with an expected production between 315,000 and 380,000 boe/d in the early phase. Pre-drilling of wells will contribute to a rapid production ramp-up.
"The ambition is a recovery rate of 70% for the full field," says Øivind Reinertsen, senior vice president of the Johan Sverdrup field.

Investments in the first phase are estimated at between NOK 100-120 billion. These include the field center, wells, export solutions for oil and gas, and power supply. The estimates also include contingencies and provisions for market adjustments. In addition, the first phase will facilitate measures for improved oil recovery.

The partners are working continuously to lower the investment level for the first phase.

The field center in the first phase comprises a process platform, drilling platform, riser platform and living quarter, and has been designed so as to facilitate future development. The installations have steel jackets that are linked by bridges. The water depth is approximately 120 meters in the area.

Power from shore 
Johan Sverdrup phase 1 will be supplied with power from shore with a transformer on Kårstø delivering direct current to the riser platform, ensuring an estimated 80 MW.

As part of the plan for development and operations, scheduled to be delivered in early 2015, alternative power solutions for the future phases will be described. One of the alternatives will be power from shore to the whole Utsira High area based on updated power requirements.

"This alternative, if selected, has the potential to capture more than 90% of the total CO2 emissions from this area," says Reinertsen.
Export solutions 
The export solution for oil and gas from Johan Sverdrup is based on transport to shore through dedicated pipelines. The oil will be transported to the Mongstad terminal in Hordaland county.

The gas will be transported via Statpipe to Kårstø in Rogaland county for processing and transport onward.

"Johan Sverdrup is the result of 40 years of development and activities on the Norwegian shelf. This is the opportunity to advance history several steps," summarizes Nylund.
Facts about the Johan Sverdrup field (PL 265, PL 501 and PL502)

• Johan Sverdrup is an oil field.
• Johan Sverdrup consists of a combined discovery which makes up one field.
• Location: Utsira High in the North Sea, 140 kilometers west from Stavanger.
• The water depth is 120 meters, and the reservoir depth is 1,900 meters.
• We expect approval of the plan for development and operation (PDO) during the Norwegian Parliament's (Stortinget) spring session in 2015.
• Production start is expected at the end of 2019.
• The field has a production horizon beyond 2050.
• The first phase is the establishment of a field center consisting of four platforms.
• Oil transport via pipeline to the Mongstad terminal in Hordaland, and gas transport to Statpipe, and then further to the Kårstø processing plant in northern Rogaland.
• The field will receive power from land.

Partners:

PL 501: Lundin Norway (operator - 40%), Statoil (40%), Maersk Oil (20%)
PL 265: Statoil (operator - 40%), Petoro (30%), Det norske oljeselskap (20%), Lundin Norway (10%)
PL 502: Statoil (operator – 44.44%), Petoro (33.33%), Det norske oljeselskap (22.22%)

Oceaneering International, Inc. (NYSE: OII) has reported record fourth quarter and annual earnings for the periods ended December 31, 2013.

For the fourth quarter of 2013, Oceaneering earned net income of $93.4 million, or $0.86 per share, on revenue of $894.8 million. During the corresponding period in 2012, net income was $80.6 million, or $0.74 per share, on revenue of $780.9 million. For the year 2013, Oceaneering reported net income of $371.5 million, or $3.42 per share, on revenue of $3.3 billion. For the year 2012, net income was $289.0 million, or $2.66 per share, on revenue of $2.8 billion.

Fourth quarter 2013 results included a $3.3 million charge to establish an allowance for doubtful accounts related to Remotely Operated Vehicles (ROV) receivables from OGX Petróleo e Gás S.A., which initiated a court-supervised restructuring under Brazilian bankruptcy law during the period. This charge was recorded as an ROV selling, general and administrative expense.

Quarterly EPS increased year over year due to profit improvements by all oilfield business operations, led by ROV and Subsea Products. Subsea Products achieved record quarterly operating income.

Annual EPS increased as all operating segments attained higher income. Four of five segments achieved record operating income. Although not a record, Subsea Projects operating income increased by 48%. Overall operating margin was the second highest in Oceaneering's history.

M. Kevin McEvoy, President and Chief Executive Officer, stated, "Results for the fourth quarter and the year were exemplary as we achieved record EPS in each period. Our ability to produce these exceptional results is largely attributable to our global focus on deepwater and subsea completion activity, the business expansion strategy we have in place, and our solid operational execution.

"We achieved record ROV operating income for the tenth consecutive year on higher global demand to provide drill support and vessel-based services and the expansion of our fleet. We increased our days on hire by more than 9,000, to over 91,000 days for the year. Our fleet utilization rose to 85% from 80% in 2012. During 2013 we put 26 new ROVs into service, retired 10, and transferred 1 system to Advanced Technologies for non-oilfield use. At year end, we had 304 vehicles in our ROV fleet.