WHAT'S INSIDE

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WHAT’S INSIDE • The news from OTC, 1-7 • Warmth comes to UK scene, 8 • Access denied, 9 • No FEED frenzy, 11 IT’S ALL ABOUT PUMPS! vol. 31 - no. 4 15 May 2014 From OTC-2014, Houston: When the term ‘subsea processing’ first became part of the common parlance as an umbrella term, the focus was expected to be on seabed separation with the other elements - boosting, gas compression and raw water injection - trailing behind. That idea now seems well in the past. The emphasis has firmly shifted towards rotating machinery, both on the seabed and in the well. The new Subsea Production Alliance, aka Baker Hughes and Aker Solutions working together (SEN, 31/3), is talking, like their rival OneSubsea, about offering ‘reservoir development services’ - others call them ‘integrated solutions’ - to get the most oil out of the ground. The focus, at least according to what SEN heard at this show, is on improved and new boosting systems including what is now known as ‘dual boosting’, ie seabed and downhole pumping working in parallel. Live forever! BH told SEN here that it has been working for some time on improving the reliability of its Centrilift brand electric submersible pumps (esps). Its through-tubing design is aiming at a run-life of 10 years - a major advance from the 90 days of old. A big element as well will be a rigless intervention system. Statoil (30/18) is at least one operator who is keenly interested in such a concept. (NB: Last week BH reported that its seabed installed esp, supplied to Petrobras for its Cascade field in the Gulf of Mexico came into operation. This is an example of how an esp can be deployed in a way that intervention would be rigless. Petrobras has used this configuration in home waters as well.) The other half of the SPA ‘dual’ system will be a seabed multiphase pump which AkerSol has been working on for two and half years or at least as long as the original tender for Total’s Moho Nord project (31/23) in the d d Welcome to the factory oor www.akersolutions.com/subsea SIMULATING SYSTEMS www.cd-adapco.com www.apollo-oe.com Passionate about engineering SUBSEA | TOPSIDES | MARINE ONSHORE | EQUIPMENT Pore to Process Optimization. What’s it worth to you? www.onesubsea.com/optimization

Transcript of WHAT'S INSIDE

WHAT’S INSIDE

• The news from OTC, 1-7

• Warmth comes to UK scene, 8

• Access denied, 9

• No FEED frenzy, 11

IT’S ALL ABOUT PUMPS!

vol. 31 - no. 4 15 May 2014

From OTC-2014, Houston: When the term ‘subsea processing’ fi rst became part of the common parlance as an umbrella term, the focus was expected to be on seabed separation with the other elements - boosting, gas compression and raw water injection - trailing behind.

That idea now seems well in the past. The emphasis has fi rmly shifted towards rotating machinery, both on the seabed and in the well.

The new Subsea Production Alliance, aka Baker Hughes and Aker Solutions working together (SEN, 31/3), is talking, like their rival OneSubsea, about offering ‘reservoir development services’ - others call them ‘integrated solutions’ - to get the most oil out of the ground.

The focus, at least according to what SEN heard at this show, is on improved and new boosting systems including what is now known as ‘dual boosting’, ie seabed and downhole pumping working in parallel.

Live forever!

BH told SEN here that it has been working for some time on improving the reliability of its Centrilift brand electric submersible pumps (esps). Its through-tubing design is aiming at a run-life of 10 years - a major advance from the 90 days of old. A big element as well will be a rigless intervention system. Statoil (30/18) is at least one operator who is keenly interested in such a concept.

(NB: Last week BH reported that its seabed installed esp, supplied to Petrobras for its Cascade fi eld in the Gulf of Mexico came into operation. This is an example of how an esp can be deployed in a way that intervention would be rigless. Petrobras has used this confi guration in home waters as well.)

The other half of the SPA ‘dual’ system will be a seabed multiphase pump which AkerSol has been working on for two and half years or at least as long as the original tender for Total’s Moho Nord project (31/23) in the Moho Nord project (31/23) in the Moho Nord

Welcome to the factory floor

www.akersolutions.com/subsea

SIMULATING SYSTEMS

www.cd-adapco.com www.apollo-oe.com

Passionate about engineering

SUBSEA | TOPSIDES | MARINE ONSHORE | EQUIPMENT

Pore to Process™ Optimization.

What’s it worth to you?

www.onesubsea.com/optimization

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SUBSEA ENGINEERING NEWS VOL 31 NO 4 15 MAY 2014

Congo. The design is called a ‘semi-axial’

hybrid pump - to skirt around known possible

patent issues - and a JIP which has led the

development has been supported by

ConocoPhillips, ExxonMobil and Total.

SPA, though, is not the only one working on

pumps. OneSubsea, the market leader in

seabed pumping based on the Framo

Engineering legacy designs, has an R&D war

chest of $100mn with some of it destined for

work on pumps and compressors.

It also has at least one eye on the esp market

- reliability remains an issue - possib ly in

combination with a seabed mpp, but is also

looking at a design for an esp-friendly tree.

This is what a horizontal tree - originally from

the Cameron camp - was meant to be, but

obviously there remain design issues to

address.

There will also be work to increase the power

of both the Hi-Boost pump and its wet gas

compressor,

one of which is being supplied to Statoil for its

Gullfaks South enhancement. The latter unit

is 5MW and the aim is to slowly increase the

power to 6MW, then 8MW and eventually

10MW.

These are the big players, but there are

others as well. US-based Artificial Lift Co has

just deployed one of its rigless Advantage esp

systems in a platform well in the Congo for

Total. Its experience to date has not been

subsea, but it told SEN this week that it too is

looking at a rigless version for subsea wells.

LOOK IT UP: INDUSTRY IS AWASH WITH DATA

From OTC-2014: Has there ever been a better

time than now to carry out a study on subsea,

R&D or some other part of the offshore and

deepwater landscape?

Obviously not as companies and organisations

around the globe are pumping out information

faster than it can be read. It is just like the

data from subsea fields - there might be just

too much to digest.

DNV GL, that ‘pac-man’ classification society

which has been swallowing up others - Noble

Denton, Kema and Germanischer Lloyd -

getting larger by the year, has addressed a

number of burning issues in a single report on

safety, technology and trends.

It is not difficult to guess why such a study

might be of interest. The portfolio of subsea

wells and fields grows every year more than

a few with very complex, eg hpht, reservoirs,

while there are many ageing fields in need of

monitoring and maintenance. There is also a

growing number of new operators who simply

see subsea as another ‘screwdriver’ in the

development toolbox without understanding

the implications of the operations.

The report covers historical technology trends

and future ones as well, but of greater

significance is the section, albeit small, on

incidents and accidents. In many sectors of

the world, operators are required to report

various types of incidents, ie leaks, damaged

equipment, dropped objects, et al.

Such a report is often made when an event

initially takes place, but without any followup

to determine the full extent of the incident

and what were the total implications. This

has resulted in incomplete knowledge about

such incidents.

Over at the competition, in this case Lloyd’s

Register, has come preliminary results of a

survey on R&D spending with the good news

being that it is due to rise by 10% next year.

What is of note is that even with the current

big emphasis on cost reduction, this area is

only third amongst key issues, trailing

improvements to operational efficiency and

safety which were each mentioned by around

40% of survey respondents.

The full report will be issued in June.

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SUBSEA ENGINEERING NEWS VOL 31 NO 4 15 MAY 2014

OTC SHOW BRIEFS

While cost was not seen as a priority in the LR

survey, it was at the heart of a study by US-

based project analysts IPA.

Neeraj Nandurikar told a networking event

that despite no shortage of development

opportunities operators are facing the ongoing

issue of declining margins even with oil at

$100+/bbl.

He said recent studies revealed the depth of

the project management failures. Having

looked at 150 projects, 70% suffered value

decline with the average being 40% within

two years of sanction with many facing cost

over-funs of 25%. This makes the oil and gas

upstream sector the worst of any industrial

sector studied.

There was some serious ‘consultant speak’

thrown around, but with missed schedules

and cost over-runs, Nandurikar said the

industry’s problem is that ‘it is chasing the

wrong value drivers’ and has failed to change

its business models and organisations even as

it has adopted new technology.

SEN has been coming to OTC for at least two

decades and has always been impressed with

the well-oiled machine that is the OTC

system, albeit one that does little to facilitate

the work of journalists here.

With the biggest ever turnout this year likely

to translate into a big bag of swag for the

SPE, SEN was surprised to learn that OTC

charges $2,000 per company for those

applying for one of its ‘SPOTLIGHT ON

TECHNOLOGY’ awards.

This would seem to favour bigger companies

for whom such a sum would see this as a

good way to get their name up in lights, but

not so good for smaller ones who have

already forked out considerable sums for their

stands and their staff simply to come.

When first asked, an OTC spokesperson said

that the fee ‘covers administrative costs,

including awards, banners, the display, and

other marketing-related expenditures’. It

seems rather a considertable sum considering

that those who do not make the short list do

not get their fees back.

Further probing as to why such a fee is

necessary when OTC is so profitable and gets

the benefit of the publicity from the awards,

SEN was told, ‘The Spotlight program ’s

purpose is to recognize exhibiting companies’

latest technologies and innovations. The fee is

not used to market OTC; it is used to

recognize the Spotlight winners.’ So there.

We still think it was worth asking.

There were a few downhearted voices

a m o n g s t t h e F M C c r o w d h e r e .

Disappointment was apparently over Shell’s

announcement that it would put subsea

compression for the ORMEN LANGE project

(SEN, 31/3) in Norway on the backburner.

The FMC’ers believed they had the revised

system in the bag.

On the upside was the recent big award from

BP for SHAH DENIZ 2 (31/3). As SEN

suspected, it was the requirement for a HIPPS

system on each of the more than 10

manifolds that sent the award to FMC. This

was confirmed by a BP’er ‘who knows’.

One of the good things about going to many

events here - breakfasts, lunches, et al - is

the opportunity to meet interesting people

and hear things that are not often discussed

in public.

SEN had a chat over breakfast with a

gentlemen from SOUTH KOREA who is

working with a government-led initiative to

try to expand the Koreans reach in the

offshore sector.

They are not happy that the success achieved

in shipbuilding, particularly on fpso’s, and

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SUBSEA ENGINEERING NEWS VOL 31 NO 4 15 MAY 2014

fabrication has not translated into other

areas, such as process design. As with most

players in complex markets, the ‘value added’

element should never be under-estimated.

One of the most interesting tender processes

out at the moment is for VERTICAL TREES

for Statoil. It is still in the pre-FEED stage

and tender proper is hopefully due out

towards the end of the year.

This is meant to be for a big bore (7in) tree

never really seen before. There are wells w ith

7in completions - usually for high-pressure

gas often found Down Under - but we do not

think that there have been xmas trees with

7in bores. One of the big reasons operators

want to go back to V-trees is the ability to

pull them without disturbing the completion.

So who might be favoured here? Some

possible clues: Aker Solutions has picked up

two contracts in the last year from Total - for

Moho Nord (30/23) and Kaombo (31/3) in the

Congo and Angola, respectively - based on its

new design vertical tree. Also likely to be in

the running is OneSubsea which is supplying

its 15K monobore vertical tree to Chevron for

the hpht Alder subsea tieback (30/22).

These two companies are also believed to be

in the running for the subsea hardware supply

for the next phase of Reliance/BP’s DG-6

development, offshore India.

It isn’t easy to hide an $8bn project, so Total

gets the thumb’s up for managing to keep the

size of its Angola-based brownfield PBF

initiative under wraps for so long.

It is not that all of the parts of PBF are new -

GiRi, the Girassol expansion exercise is well

known - but there are eight elements to this

plan to make use of the existing infrastructure

there. It was made clear in a presentation

that once the CLOV fpso comes onstream later

this year, Block 17 will be complete as far as

the processing facilities.

Total has had more than 200 personnel

devoted to PBF with some specialists, ie flow

assurance and subsea - which Total admitted

are in short supply - working on more than

one project at a time.

The work has run the gamut from process

debottlenecking (Dalia) to installing seabed

pumps (Rosa) to the addition of more wells

and seabed structures (Dalia/Zinnia).

According to project veep for Angola Pascal

Carrier, the use of a taskforce produced

efficiencies of 30-40% compared with

separate project teams.

There has been an ongoing question around

Houston: does Cobalt International really

want to be an offshore operator? The answer

is, apparently, yes.

SEN understands that it has contracted Doris

Engineering to handle FEED for its CAMEIA

fpso development in Angola. Doris is being

supported, according to what SEN has heard,

by a team of specialists led by inhouse subsea

veteran Gene Hall. Hall ’s subsea pedigree

goes back to his days with Amoco and later

BP which is why Hall is here. A number of

Cobalt executives are ex-BPers.

Assuredly INDONESIA would not want to

appear desperate for investment - it would

only encourage the vultures to circle - but the

numbers speak for themselves.

Oil production is down nearly half (to

0.8mb/d) from its peak with economic and

population growth pushing the demand

forecast to 2mb/d by 2020. Current activity,

onshore and offshore, is to the west of the

country, while the gas-prone areas in deep

waters where the future may lie are off the

east coast.

It may be that the country will need to alter

its regulatory regime to try to bring back the

rigs and increased production. Very tough.

Some bits of info on Brazil: Wood Group

Kenny is understood to have picked up RIGID

PIPELAY design work for Petrobras, while it

is understood that INTECSea has closed its

Brazilian office and shifted people into parent

Worley Parsons premises.

SEN Online Glossary of Terms - click here

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SUBSEA ENGINEERING NEWS VOL 31 NO 4 15 MAY 2014

OTC TECHNOLOGY & BUSINESS

SUBSEA PEOPLE: Always running into lots of

old friends here at this show. Angus Wing,

longtime in the cable side of the business who

has been a fixture at German supplier NSW,

has joined Prysmian’s new Houston-based

SURF division as sales director...This is not

very new, but Des Hatfield is global business

development director with SAS Offshore,

another of those Dutch-based fabricadtion

companies which supplies modules and

equipment for pipelay and offshore

construction vessels.

While OneSubsea has a keen focus on pumps

(See Front Page story), it is looking at other

technology as well. Its robust R&D

programme includes development of an HP

RISER for completion work for the Gulf of

Mexico market and an open-water wireline

WELL INTERVENTION system which likely

originated from Schlumberger.

There is also activ ity on UNIFIED

CONTROLS to more easily accommodate

both production and process equipment.

Work is already underway on a master control

station with action on the subsea control

module to follow.

Just because one hasn’t heard about a piece

of technologyh that does not make it not

interesting. Oceaneering designed and built

a SUBSEA PIG LAUNCHER for BHP Billiton’s

Macedon (SEN, 30/10) subsea-to-beach- gas

development, offshore Western Australia.

Originally developed for commissioning the

20in 90km pipeline to shore, the system is

designed for the 180m location and is

pressure balanced for 5K operations. The

launcher’s cartridge can hand le four

conventional or one ‘intelligent’ pig and is

installed vertically and then swivelled to the

horizontal using an ahc crane.

Oceaneering also supplied the umbilical for

the project which was challenging at 70km

and then had to be linked in the shallows on

the beach using specially designed connectors

and then onto the plant.

Equipment suppliers face technical challenges

all the time, but environmental ones are often

as difficult. The umbilical had to be designed

with a coating that would deter Teredo

worms, known to be fond of nibbling on both

ship’s hulls and cables.

20K PRODUCTION is a big enough story

now that it warranted its own tech session

here, but it was elsewhere that important

words were being spoken. We have heard

from BP on its 20K programme which is

needed to get its more than 10bnbbls of hpht

oil out of the ground. So it was interesting to

hear from someone else, notably Shell.

Bill Henry called 20K production ‘a system

problem’ and even pushed the boundaries of

hp production by mentioning that equipment

might have to cope with up 23Kpsi. Someone

else during the week said that going from 15K

to 20K equipment will be much more difficult

than going from 5K to 15K.

Henry was adamant about one point - ‘keep

technology off the critical path’ - which might

give some inkling of why Shell lost interest or

confidence in subsea gas compression.

And it is high temperature as well. Shell’s

Appomattox prospect (30/17) is believed to

be 400oF or 204oC. This will be an important

development for Shell with the investment

decision expected next year. Production is

expected to be 150Kb/d from reserves of

600mboe and Shell has 80%.

It will be followed later next year or maybe in

2016 by Vito (31/1) which is due to produce

100,000b/d from 300mboe. Shell has 51%.

The next big SUBSEA XMAS TREE order is

going to - drumroll, please - BOMCO. Who?

You may well ask.

Roxar - 30 Years of Innovation

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SUBSEA ENGINEERING NEWS VOL 31 NO 4 15 MAY 2014

If one had popped around the CNPC stand -

that is the Chinese National Petroleum Corp -

you might have caught site of a graphic of a

10K 5in guidelineless horizontal tree with

choke and subsea control module. It weighs

in at 50t and has access downhole for eight

hydraulic and one 4-pin electric lines.

Assuredly the lawyers and patent folks from

all the big companies will have been taking a

close look.

There were several companies here with very

big stands who mentioned ‘subsea’ in their

marketing bumpf, but who, frankly, we had

never heard of.

One was EATON. They may not be as much

as a mystery to some people. They use

Kevlar to make reinforced hose which are

then included in IWOCS umbilicals. They are

limited by their facility to no longer than 5km

which sounds like a pretty long IWOCS.

The other is ACCUDYNE. If it sounds like a

made up name, spot on. It is a mini-group

owned by venture capitalists - in fact, the

biggest one, Carlyle - and consists of a

number of companies formerly owned by

armaments group United Technology Corp.

One of the companies, Milton Roy, makes

chemical metering pumps (Primeroyal X)

which are meant for subsea wells.

Usually we don’t take much notice of awards,

but SBM Offshore’s VERY HIGH PRESSURE

SWIVEL which picked up a ‘Spotlight’ gong

caught our eye.

This turret element boosts the fluid injection

ability - water or gas - of a floater from

520bar up to 830bar in a 12in fluid path. This

will be essential in areas with hp reservoirs

such as the Lower Tertiary portion of the Gulf

of Mexico.

The VHP has already been subjected to five

years of simulated use in North Sea

conditions. A lower pressure version -

between 520 and 830bar - has already been

bid for an upcoming West Africa project.

GE Oil & Gas has a new 20KPSI BOP which

can benefit from its monitoring and

preventive maintenance software dubbed

SeaLytics...Wild Well Control is working with

training specialist Check-6 to develop a new

generation of WELL CONTROL educational

programmes...Wood Group Kenny and ITF

have launched SURF IM NETWORK to

identify failure modes and technology needs

in the areas o f mon ito r ing and

inspection...Applus RTD has brought out a

rov-deployed DEEPWATER INSPECTION

TOOL for non-piggable pipelines.

In the week before the show, offshore

contracting newcomer CEONA revealed the

pipelay system for its fleet leader, the

newbuild Ceona Amazon.

There has long been s-lay systems followed

later by j-lay and now, Vibor Paravic, veep for

technology, presented the g-lay system for

the new ship. Designed to avoid patent

issues, it makes use of pipe feeding from the

below-deck firing line over a stern wheel and

then across 120m to another wheel on the top

of the lay tower.

It was developed, Paravic told the SUT lunch

gathering, to meet 80% of the market needs,

ie to handle pipe up to 16in. It is a very large

unit (200m by 32m), based on a Noble Corp

drillship hull.

As some operators do, Ceona froze the design

at an early stage (beginning of 2013), well

before the keel was laid, to avoid the

temptation for changes. The only alterations

could be hull-strengthening if it were decided

to upgrade the main lifting capacity from two

400t to 600t cranes.

Questions were asked about fatigue on the

pipe has it free hangs across 120m. Paravic

said that studies had shown that it is not an

issue, although there is scope to support the

pipe with slings.

And watch out, because an Amazon Mark II,

with possibly bigger capacity craneage, is

being considered.

Systems EngineeringSubsea Production

contact www.clarion.org or SEN for details

14 - 17 October 2014 - Aberdeen11 - 14 November 2014, Houston

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SUBSEA ENGINEERING NEWS VOL 31 NO 4 15 MAY 2014

OTC POLICY NEWS

From OTC (BN): Brazil appears to be

responding to concern that stiff local content

rules will slow pre-salt development.

At an OTC breakfast focused on the LIBRA

development (30/22), the head of PPSA, the

new agency overseeing national interest in

pre-salt acreage promised ‘flexibility’.

CEO Oswaldo Pedrosa sa id ultimate

percentages required for locally-supplied

equipment and services will not change - 37%

during exploration, 55% during development

up to 2021 and 59% after 2021.

But he said that operators will be allowed to

fall short early in the process and catch up

later. The issue is the inability, for now, of

Brazilian companies to fulfill demand for

equipment and services.

‘It’s a different vision of flexibility,’ Pedrosa

told attendees. ‘It’s the flexibility to make

proper adjustments in local content... to avoid

stopping fast-track development.’

(From the Editor: PPSA, yet another agency

headed by a former Petrobras employee, is

facing significant organisational challenges.

It is currently overseeing one project, albeit a

large one with reserves of up to 12bnbbls. It

knows that it needs experienced personnel to

oversee projects, both economically and

technically, but where will they come from?

And what happens when the projects

multiply? Libra alone could have up to 15

production units at its peak in 2022.)

From OTC (BN): While skeptics abound,

MEXICAN ENERGY REFORM appears to be

moving forward. Secondary legislation has

been filed to flesh out constitutional reforms

adopted in December.

Pemex and Mexican officials were all over OTC

courting foreign investors and international oil

companies. At breakfasts, receptions and

other presentations, OTC attendees were

encouraged to see Mexico as a major

deepwater opportunity.

At one event, Guillermo Garcia Alcocer,

director of E&P for the energy secretariat

(Sener), said a way had been found around a

key sticking point: companies’ need to book

reserves versus Mexico’s constitutional

requirement that the state owns all oil and

gas. The solution: Let companies book

‘expected benefits’ from E&P.

Pemex’s new chief procurement officer said

the state company’s purchasing system is

being modernised, while acknowledging he is

struggling to centralise an extremely

decentralised system.

George Baker, a Mexico watcher, said it

appeared that Pemex was trying to position

itself as a middle man, with tacit government

approval. That goes against the perceived

ideal scenario: IOCs leasing directly from the

government, independent of Pemex.

But just a few days after OTC, Chevron said it

was willing to partner Pemex to develop

onshore and offshore tracts. The word came

from Ali Moshiri, head of Africa and Latin

America at a conference in Mexico City.

From Houston (BN): NEWFOUNDLAND-

LABRADOR officials here basked in the glory

of Statoil’s Flemish Pass find repeatedly

touted as ‘largest in the world last year.’

They released a new environmental

assessment of potential in the Gulf of St

Lawrence. The document warned of possible

operational restrictions due to fish, birds and

unexploded ordinance from World War II.

This list of concerns was not enough for the

Sierra Club, which blasted provincial officials

as ‘irresponsible’ and ‘not capable of being a

truly arms-length independent regulator.’

Not to be outdone by N-L’s recent success,

the Nova Scotia offshore board called for bids

on four parcels on the Scotian Slope in depths

down to 4,100m.

The news follows a recent underwhelming

estimate of potential gas on the Scotian Shelf.

The report estimated 14% less gas than the

last update in 2000. BP and Shell have each

committed to spend $1bn by 2018 to w in

exploration rights off Nova Scotia. Both

companies are now doing seismic in the area.

SEN Online Glossary of Terms - click here

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SUBSEA ENGINEERING NEWS VOL 31 NO 4 15 MAY 2014

PROJECT UPDATES

UK DEVELOPMENT ACTION BEGINS TO WARM UP

From the North Sea (NT): After more than

four months in which no new field

developments emerged from the UK,

environmental statements have recently been

issued for three projects, of which the most

interesting is Antrim’s Fyne (SEN, 30/23).

A year after abandoning the plan based on

Teekay’s Hummingbird Spirit circular fpso due

to rapidly escalating costs, Antrim now aims

to produce the heavy-oil field (21/28a) with a

self-installing floating tower ( SIFT).

The SIFT will have a hull consisting of eight

circular cells which will provide 100,000bbl

storage. This is an untried concept in the

North Sea. According to the environmental

statement, only one such facility exists, on

BPZ’s Corvina field off Peru.

But although the SIFT is floated into position,

once there it is attached to a foundation

template on the seabed and becomes a fixed

platform, which means that the wells can be

completed on the topsides.

Better solution

The hull will be 100m long, providing ample

clearance above the sea surface at Fyne’s

88m location. Working with its new partners

Enegi Oil and ABTechnology, Antrim first

looked at a production buoy, but found the

SIFT better suited to the field requirements.

The topsides will have production capacity of

15,000b/d and, despite having processing

capacity, will be normally unmanned. Antrim

plans one maintenance visit a month.

There will be two esp-supported producers

and one water injector to be drilled by a

jackup. The Fyne crude is rated 25ºAPI. All

parts of the platform – topsides, hull and

foundation structure – will be built in a North

Sea yard, the ES says.

A development plan is due for submission by

the end of August – the previous deadline was

last January – and start-up is set for late

2015 to early 2016, making this a pretty

‘fast-track’ development. Production is

expected to continue for seven years.

The plan must be accompanied by satisfactory

evidence of project financing, Antrim says.

Not surprising as the Canadian company

remains in a parlous financial state. Its latest

financial report acknowledges questions about

its ability to continue as a going concern.

However, part of its deal with Enegi and ABT

is that they will carry it for all costs incurred

up to DECC approval, at which point the

partners will gain a 50% stake in the project.

Gas to burn

Apache has detailed plans for the Aviat gas

find (30/16) in 22/7a, which it will use as fuel

at Forties. At a time when Forties’ associated

gas production is in decline, this will help to

minim ise the use of diesel until 2020.

Two subsea production wells will be drilled in

91m by jackup Rowan Gorilla VII and tied into

a manifold. Gas will be delivered to Forties

Alpha by a 23km 8in pipeline.

Drilling will start in Q3 2015, subsea

construction and pipelay are scheduled for

late 2015 and early 2016 and first gas is due

in Q2 2016. Production is expected to

continue until 2031. Detailed design is in the

hands OF JP Kenny on the subsea side and

Petrofac for the topsides modifications.

Finally EnQuest is planning to develop Ythan,

a 1982 oil discovery in 211/18a lying

southeast of the Don fields in the northern

North Sea.

Due to uncertainties over the volume of oil, it

plans a phased approach, starting with one

subsea producer, to be followed by one water

injector, and if all goes well, a second

producer and injector.

The wells will be drilled from the location of

the Don SW production and injection drill

centres and tied into the existing manifolds

with jumpers. The producer(s) will be gas-

lifted. The manifolds are tied back to the

Northern Producer semi.

First oil is expected in late 2015 and

production could continue for nine years.

SEN Online Glossary of Terms - click here

9/

SUBSEA ENGINEERING NEWS VOL 31 NO 4 15 MAY 2014

SMALLCO’S BATTLE GIANTS FOR INFRASTRUCTURE ACCESS

From the North Sea (NT): The call in the

Wood report (SEN, 30/17) for easier access to

infrastructure has been endorsed by Serica

Energy as it continues to try to reach a deal

with BG on tying in the Columbus gas-

condensate field (30/5) in the Central North

Sea back to the Lomond platform.

When BG informed Serica early last year that

it had cancelled plans to install a bridge-

linked platform at Lomond, which had been

intended to receive production from both

Columbus and Dana’s Arran field (30/2),

Serica was optimistic that it could instead

negotiate a direct tieback to the existing

Lomond A platform, maintaining its schedule

of starting production in mid-to-late 2015.

More than a year later, it is still trying to

negotiate terms.

‘The fact…that we have still not been able to

reach agreement with the...companies who

operate the platform and...pipeline...has sent

a strong message to the UK government that

regulatory and oversight processes have got

to be strengthened if the North Sea's potential

is going to be fully exploited,’ said chairman

Tony Craven Walker in the annual report.

‘We welcome and fully support the findings of

the Wood Report…preventing [smaller]

co mpan ies from a ccessin g exist in g

infrastructure damages investor confidence,

prevents new, emerging companies from

flourishing, holds back entrepreneurial and

technical expertise and, ultimately, results in

a loss to the nation of the long term value of

its reserves...’

Ironically BG is also a partner (27.5%) in the

hpht field’s 1.9bcm and 4.5mmbbl of

condensate. A direct tieback to Lomond A,

less than 8km away, is the preferred technical

solution, feasibility has been established and

the capital expenditure is appropriate for this

size of development, Serica says.

However, the company has begun work on

alternative offtake routes. By grabbing pole

position for a direct tieback to Lomond, Serica

appeared to have left Arran out in the cold,

and indeed there has been no indication from

Dana of alternative plans for its field.

Meanwhile DECC has extended for two years

the Serica-operated licence covering the

major part of Columbus in 23/16f. Serica also

hopes before long to see drilling on two hpht

prospects in nearby 22/19c, following a deal

for Eni to farm in and become operator.

Ithaca’s decision to offload liquids from the

Greater Stella Area (31/2) also in the Central

North Sea, similarly came in the wake of a

failure to agree terms for using existing third-

party infrastructure.

In this case, it was the Graben Area Export

Line (GAEL) which feeds into the Forties

trunkline, both operated by BP. According to

the environmental statement, Ithaca planned

to access GAEL through a 31km pipeline.

Instead Teekay will now lift the oil.

STATOIL TIDIES UP AT THE END OF BARENTS CAMPAIGN

From the North Sea (NT): Statoil has finished

its exploration campaign in the Johan

Castberg (SEN, 31/2) area of the Barents Sea

with a discovery at the Drivis prospect.

The wildcat (7220/7-3S), drilled by the semi

West Hercules in 345m, found separate oil

and gas columns, but reserves are mostly oil

– 42-54mmbbl versus 1.4bcm.

‘We are certainly glad to have an oil discovery

in Drivis,’ said Irene Rummelhoff, SVP for

exploration on the Norwegian continental

shelf. ‘However, the...programme as a whole

has not delivered on volume expectations.

Out of the five wells drilled only two have

resulted in oil discoveries.’

The other find was Skavl (20-50mmbbls).

While small in the context of a frontier area,

both will presumably be satellites worth tying

back to Castberg, which contains a reserves

base of 400-600mboe. Having spent a year

working on this campaign, West Hercules now

goes off to drill for Statoil in the Faroes.

A subsea tieback could be a possibility for

Statoil’s Valemon North find, where reserves

are estimated at 19-76mboe, comprising oil,

condensate, gas and, in one area, unidentified

SEN Online Glossary of Terms - click here

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SUBSEA ENGINEERING NEWS VOL 31 NO 4 15 MAY 2014

PROJECT BRIEFS

hydrocarbons. The well (34/10-54S) and a

sidetrack, were drilled by the semi Transocean

Leader in 140m.

A 10km tieback to the hpht Valemon platform,

due to onstream later this year, will be

evaluated. Valemon North consists of a

complex and fragmented reservoir with

varying pressures and high temperature.

Statoil has also made a small discovery in the

Fram area of the North Sea, where F-West

exploration well (35/11-17) found 6-19mboe.

The well, drilled by the semi Songa Trym in

357m, lies about 1km south of the Fram field,

and is a candidate for tieback to the Fram

subsea facilities.

In the Norwegian Sea, Wintershall has

discovered 6-25mboe with Solberg well

6407/1-7, drilled by the semi Borgland

Dolphin in 280m.

The well was appraising the Rodriguez

discovery (29/22), 5km to the southwest,

where reserves are estimated at 20-125mboe.

They may be developed through Maria, some

11km away, where Wintershall is preparing to

seek development approval.

Elsewhere in the Norwegian Sea, VNG’s Pil

discovery has turned out to be better even

than Rocksource expected when it broke early

news in March (31/1).

Well 6406/12-3S, drilled by the semi

Transocean Arctic in 324m, flowed 6,700b/d

in a production test and reserves are

estimated at 50-170mmboe.

An appraisal sidetrack is already under way

and a further sidetrack will be drilled into the

neighbouring Bue prospect.

This is VNG’s first major discovery as an

operator in Norway, but development could

pose some headaches as Pil lies in a remote

area some 35km southwest of Njord (30/17)

where decisions have yet to be made about

modified or facilities.

From Australia (RW): The $19bn ExxonMobil

PNG-LNG project (29/10) in Papua New

Guinea has come onstream ahead of time.

Production from the first train will increase

over coming weeks and the first cargo is

expected to be shipped from the Port Moresby

plant to Asian markets before mid-year. Work

on the second LNG train is progressing and

will be brought on towards the end of May.

The project, supplied by gas from fields in the

PNG Southern Highlands, is expected to

handle 250bcm of gas during its estimated

30-year operating life. The gas is being piped

from fields to the coast near Kerema and sent

on via a subsea pipeline in the Gulf of Papua

to the LNG plant near Port Moresby.

Saipem has secured over $2bn in contracts

related to two major gas developments that

will feed Europe. It has secured the $1.8bn

offshore construction and SURF work for BP’s

SHAH DENIZ 2 project (31/3). The major

portion is the installation of 360km of

pipelines and the jackets and topsides plus all

of the subsea production system and

associated structures.

The scope includes upgrades to three Caspian

Sea construction vessels which will be used

for the work programme - the pipelay barge

Israfil Huseinov, the dsv Tofiq Ismailov the

and derrick barge Azerbaijan.

(Also on SD2, Siemens will provide the power

heating package for the direct electric heating

system for the pipeline network.)

The Italian contractor also picked up the

i400mn contract for the second line of the

SOUTH STREAM pipeline system (31/3)

across the Black Sea. The contract covers all

elements of the job including 930km of

pipelay, cable crossing, onshore pull-ins and

equipment logistics.

Providing thevital connection

Custom EngineeredSubsea Umbilicalsand Power Cables

www.jdrcables.com

SEN Online Glossary of Terms - click here

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SUBSEA ENGINEERING NEWS VOL 31 NO 4 15 MAY 2014

FLOATER NEWS

Technip will handle subsea construction for

Marathon Norge’s ALVHEIM field extension

project (29/16)...Subsea 7 has secured a

three-year $160mn extension of its light

construction and IRM deal with BP in the

GULF OF MEXICO including the provision of

two vessels...SERIMAX has secured a frame

agreement with EMAS AMC to provide welding

services for the installation contractors

worldwide spoolbase network...Airborne Oil &

Gas has won its first ever HIGH PRESSURE

JUMPER contract from a North Sea major for

an upcoming hpht development.

From Houston (BN): Stone Energy announced

finding 84m net oil pay in three strata at its

CARDONA SOUTH well in Mississippi Canyon

29 in the Gulf of Mexico.

The find extends the productive zone of the

discovery well to an adjacent fault block. The

company plans to flow Cardona (30/24) to the

S tone -oper a t ed P o m p a no pla t form .

Production is due to start early next year.

With the Amethyst and Tomcat discoveries in

February, the company said 2014 is off to a

‘great start.’ Stone holds 65.4% and Hunt

owns the rest.

From Houston (BN): Fresh off stealing the

show at Central Gulf of Mexico Lease Sale 231

in March, FREEPORT-MCMORAN paid

$1.4bn for Apache’s interest in the Anadarko-

led Lucius (30/18) and Heidelberg (30/16)

spar developments along with 11 other

Apache GoM leases.

F-M is focusing on the deepwater GoM, having

acquired Plains Exploration last year. It will

finance the Apache deal with proceeds from

sale of its Eagle Ford assets to Encana.

Apache, meanwhile, appeared to be taking a

page from the F-M playbook, saying it would

concentrate on subsa l t and other

opportunities in water depths less than 305m

which Apache called ‘relatively untested.’

F-M is famous for testing an ultradeep

prospect in shallow GoM waters - Davy Jones

at South Marsh Island 230, a $1bn effort that

has yet to produce.

Lucius (Keathley Canyon 874-5, 918-9) is set

to start production later this year with

Heidelberg (Green Canyon 859, 903-4 and

948) in 2016. F-M’s share of Lucius - part

from Plains and part from Apache - rises to

35% plus 12.5% of Heidelberg .

BONAPARTE FEED-ING FRENZY REMAINS ON HOLD

From Australia (RW): The GDF Suez-operated

Bonaparte (SEN, 30/5) floating LNG project

has missed another of its deadlines set earlier

in the development planning.

When the Timor Sea FLNG project received

Australian government environm enta l

approval in 2012, GDF Suez said that FEED

studies would begin in 2013. In September

last year GDF Suez advised that FEED would

start during the first quarter of 2014. That

date is now ‘in 2014’. No reason has been

given for the delay, but the project remains in

pre-FEED phase at the moment.

Bonaparte FLNG general manager Jean-

Francois Letellier says the final investment

decision is still scheduled for 2015 enabling

the project to be brought onstream in 2019.

Previously GDF Suez has said that the FEED

contract is a contest between the

KBR/Hyundai Heavy Industries consortium

and a group made up of Technip and Daewoo

Shipbuilding & Marine Engineering.

Wood Group Kenny won the pre-FEED subsea

concept definition study. Tenders for

geo techn i ca l and g eoph ys ica l s i t e

investigation closed this month.

The Bonaparte FLNG project will be supplied

with gas from the Petrel-Tern-Frigate fields

that lie in the central Bonaparte Gulf

straddling the offshore boundary between

Western Australia and the Northern Territory

about 250km west of Darwin.

The FLNG proposal is for a vessel 400m long

and 70m wide capable of producing 2.4mt/a

of LNG.

GDF Suez has 60% interest in the project with

Santos holding the balance.

SEN Online Glossary of Terms - click here

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SUBSEA ENGINEERING NEWS VOL 31 NO 4 15 MAY 2014

FLOATER BRIEFS

INPEX READIES RIG FOR ICHTHYS DEVELOPMENT DRILLING

From Australia (RW): Inpex is upgrading the

the semi Ensco 5006 in readiness for its

development drilling programme at the

Ichthys (SEN, 30/24) gas-condensate

development due to begin in December.

The rig was built in 1998-99 and has been

taken to the Keppel FELS shipyard in

Singapore for the work that includes an

overhaul and enlargement of the existing

accommodation facilities originally designed

for up to 120 people.

In addition there will be modifications to the

deck and increased capacity in the lifting

equipment to enable safe and efficient

handling of the project’s vertical xmas trees.

The increased accommodation means

upgrades to lifeboats and changes to the

helideck and aircraft refuelling facilities to

handle the larger helicopters that will be used

for transportation.

The rig is likely to be on station at the field for

several years drilling the first 20 development

wells. It is envisaged that eventually there

will be 50 wells drilled during the expected

40-year life of the field which lies 200km off

the coast of Western Australia.

Also, the Nextgen group of Australia has won

a A$100mn contract to provide and operate a

subsea optical fibre cable system to be used

by both Ichthys and Shell’s Prelude (30/18)

floating LNG project in the Browse Basin.

The fibre optic network, to be built by telecom

company Alcatel-Lucent, will stretch 2,000km

from Darwin in the Northern Territory to Port

Hedland on the Pilbara coast of Western

Australia. It will provide each project with

high-speed data and voice communication

services for the life of the operations.

Ichthys and Prelude projects will connect to

Nextgen’s infrastructure in WA including the

Shenton Park data centre in Perth, which was

opened in March this year. Nextgen says

Shell and Inpex will contribute to the

construction of the cable system.

From the North Sea (NT): If Eni is to achieve

start-up on the GOLIAT field (SEN, 31/1) in

the Norwegian Barents Sea by the end of this

year, which remains its official position, it will

have to take delivery of the Sevan circular

fpso - under construction by Hyundai in Korea

- very soon.

According to comments made by the company

during the recent presentation of its Q1

results and reported in the Norwegian press,

it has sailing windows arranged in either June

or next January.

If it sails in June – the fpso is due to be

transported to the Barents by the newbuild

Dockwise Vanguard heavy-lift vessel – it will

arrive in October with some commissioning

work still outstanding which will require flotel

support. If it sails in January, it will be in a

properly commissioned state, but will have

missed the start-up schedule.

The Petroleum Safety Authority Norway has

made it clear that it prefers commissioning to

be done at the quayside. The authority

recently completed an inspection which

identified 10 areas where improved work is

required to comply with regulations.

From Aberdeen (IF): Dana Petroleum

continues to move ahead with its WESTERN

ISLES fpso project (30/20) in the northern

North Sea, which is expected to come on

stream late next year.

The operator said the first production well has

now been successfully completed and flow

tested and a further three wells have been

drilled and cased to surface casing depth. All

four subsea xmas trees have also been

installed. The work is being undertaken by

Diamond Offshore’s semi Ocean Nomad.

Follow us beyond the horizon...Follow us beyond the horizon...

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SEN Online Glossary of Terms - click here

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SUBSEA ENGINEERING NEWS VOL 31 NO 4 15 MAY 2014

Western Isles is a £1bn investment and peak

production is expected to be 40,000boe/d.

The fields have reserves put at 100mboe with

45mboe economically recoverable.

The scheme (Dana 77% and Cieco 23%) will

develop the Harris and Barra fields 160km

east of Shetland. It involves a subsea

development of at least five producers and

four water injectors tied back to a newbuild

fpso with oil export via shuttle tankers.

From Houston (BN): Petrobras says it has

finished the last of the exploratory wells it

committed to drill under the TRANSFER OF

RIGHT agreement governing Santos Basin

pre-salt reserves.

The well found ‘good quality oil (27oAPI) in

carbonate reservoirs of excellent quality, just

below the salt layer.’ Petrobras drilled 16

wells in six assiognment areas and all were

deemed to be successes.

Petrobras says rservoir data confirms at least

5bnboe in place in the Santos pre-salt.

Elswehere, the fpso P-62 has begun

operations on the RONCADOR field (30/12).

The floater in 1,600m is a part of Module 4 at

Roncador and will eventually have 14

producers and 8 water injectors. P-62 has a

processing capacity of 180,000b/d and

6mcm/d. Three other fpso’s are already

installed on the field.

Also Saipem picked up an EPCI SURF contract

for the LULA field (30/17). The deal covers

three gas export pipelines with plets and

freeestanding hybrid risers. The installation

wil l be in 2,200m.

The work will be carried out off Saipem’s

FDS2 deepwater installaiton vessel in the first

half of 2016. Saipem plans to use the new

yard it is building at Guaruja to fabricate the

risers and associated subsea equipment. Final

delivery is scheduled for 3Q 2016.

From Australia (RW): Air Products has signed

a deal with JGC Cor to provide its proprietary

LNG technology and equipment for Petronas’

second FLOATING LNG project (31/3).

PFLNG-2 will produce 1.5mt/a of LNG from

2018, supplied by gas from the Rotan field,

offshore Sabah, Malaysia.

Air Products will supply equipment, including

coil-wound heat exchangers and compressor

expanders from its US facilities. Economiser

cold boxes will be made in Malaysia.

It is the same technology being installed in

PFLNG-1 project now under construction in

South Korea. Air Products’ exchangers were

also chosen by Shell for the Prelude FLNG

project (30/18) off Western Australia.

The floater delay jinx has bitten Ithaca

Energy’s GREATER STELLA AREA (31/2)

development. According to main contractor

Petrofac, sailaway of the upgraded semi

production unit FPF-1 will now not take plaqce

for about a year with first oil scheduled for the

middle of 2015.

The estimated cost of the delay, ie additional

works to be carried out at the Remontowa

shipyard in Poland related to the topside,

have been put at $5-10mn.

BW Offshore has now confirmed its contract

with Premier Oil to provide an fpso for its UK

CATCHER development (31/2). The initial

contract period is seven years with options for

another 11. BW has put a value on the

award, based on a 10-year charter plus opex,

at $2.3bn.

Cott Oil & Gas is looking at a floating LNG

solution for its PANDORA prospect, offshore

Papual New Guinea. The field has estimated

reserves of 23bcm which would support a

1mt/a production. China-based Wison

Offshore & Marine has carried out early stage

conceptual work.

JX Nippon Oil & Gas is to deploy an fpso for

the LAYANG development, offshore Malaysia.

This field will be linked with the nearby

Helang gas field with liquids from Helang

moving by flexible pipe to Layang and gas

transported to the Helang platform. Additonal

gas production is estimated at 3mcm/d and

total liquids from both fields at 7,000b/d.

DOF Subsea has picked up several floater

related contracts in the North Sea. The

Nowegian contractor It will install the

replacement flexible from the DUMBARTON

drill centre to the fpso Global Producer III for

Maersk Oil UK plus installing the turret

mooring system and risers for the fso for

Statoil’s GINA KROGH project.

SEN Online Glossary of Terms - click here

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SUBSEA ENGINEERING NEWS VOL 31 NO 4 15 MAY 2014

POLICY

CHINA AND VIETNAM BARE TEETH OVER DISPUTED RIG LOCATION

From Australia (RW): China and Vietnam are

at daggers drawn in a dispute over territorial

waters in the South China Sea.

This follows a move by the China National

Offshore Oil Corp to send its $1bn HD-981

semi drilling rig into waters which both sides

have laid claim to as sovereign territory.

The two countries have each lodged a claim

over the region around the Paracel Islands,

called the Xisha Islands by the Chinese.

Vietnamese officials have demanded that

CNOOC remove the rig from the area. The

Vietnamese also claim that China responded

to this demand with brute force reportedly

deploying up to 80 vessels including seven

military ships and aircraft to the region.

Vietnam says that Chinese ships have

deliberately rammed and caused damage to

Vietnamese Military Police vessels and the

country’s fisheries surveillance force.

The Vietnamese objections to what they

regard as an intrusion into its exclusive

economic zone have been reinforced with a

letter from the state oil company

PetroVietnam to the president and CEO of

CNOOC demanding the Chinese immediately

cease the illegal actions and move the rig

from its current location.

China, on the other hand, says the islands are

part of its inherent territory and hence no

dispute exists.

In recent years, China has exacerbated

tensions in the region with other disputed

claims in the South China Sea with the

Philippines, Taiwan, Malaysia and Brunei.

There is also an ongoing separate maritime

dispute with Japan.

DRILLING IS DOWN - AND SO IS INTEREST - IN THE UK SECTOR

From Aberdeen (I): The UK continues to lag

behind Norway in exploration and appraisal

(E&A) wells being drilled. New figures out

from Deloitte show that Norway had 50%

more E&A wells than Britain in Q1 2014.

In the UK, a total of 12 wells were spudded,

down slightly on the first quarter of 2013

when 13 wells were drilled, but a 71%

increase on the final quarter in 2013, during

which there were just seven wells.

Meanwhile, 18 wells were spudded on the

Norwegian Continental Shelf, an increase of

50% compared to the 12 drilled during the

same period in 2013 and a 39% increase

compared to the final quarter of 2013.

Deloitte suggests that drilling in UK waters

will remain low for at least the next year. The

business advisory firm is concerned that tax

changes confirmed in the recent UK budget

could lead to additional costs for operators.

The changes to the way the bareboat

chartering of vessels is taxed will affect

companies operating in British waters who are

leasing rigs and offshore accommodation.

Derek Henderson, senior partner for Deloitte

in Aberdeen, said the tax was a blow for

industry, especially as there had been some

evidence of a slight decline in rig rates during

the first quarter of 2014.

‘The (bareboat) tax...has caused some real

concerns, however. While it doesn’t affect

operators directly, many expect that the cost

wil l be passed on to them and could

discourage drilling.’

He said while there are ‘sound measures’

being brought in to encourage activity, a

concerted effort is needed from government

and industry to restore confidence in the short

term and ensure maximum recovery from the

UK continental shelf in the long term.

Also, the latest UK North Sea licensing round

has seen a drop in both the number of

applications and blocks being sought.

SEN Online Glossary of Terms - click here

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SUBSEA ENGINEERING NEWS VOL 31 NO 4 15 MAY 2014

BUSINESS

The Department of Energy & Climate Change

said there had been a ‘strong response’ to the

28th round, with 173 requests from industry

for around 370 blocks.

This is well short of the record-breaking 27th

round in 2012, when 224 applications were

submitted for 418 blocks. That was the

largest number of requests since offshore

licensing began in 1964. DECC aims to start

awarding acreage in the autumn.

Fears that the UK's North Sea workforce is

ageing - a situation which could lead to even

more severe skills shortages in the future -

have been dispelled by a new report.

Industry body Oil & Gas UK said the average

age last year was 40.8 years, down from

41.1 in 2012.

Offshore workers in the 24-29 age group

recorded the highest percentage growth of

those travelling offshore at almost 14.7%. It

also emerged that there were nearly 62,000

workers in the North Sea in 2013 - up 8.6%

on the previous year.

There has been, though, a fall in female

employees in the offshore population,

a c cord ing to A li x T h om , O G UK 's

employment/skills issues manager. Thom

said, ‘Women now comprise 3.6% of the total

offshore population, representing a decrease

of almost 0.2% since 2012. ‘

WGPSN TO CUT CONTRACTOR RATES

From Aberdeen (IF): Offshore contractor

Wood Group is to tackle escalating pay rates

in a move expected to be followed by rivals.

The PSN production services division last

week confirmed plans to reduce by 10% rates

paid to onshore contract workers, introducing

the cut from 1 June in response to cost and

resourcing challenges here. More than 1,600

onshore contract workers will be impacted.

Dave Stewart, WGPSN's UK MD said, ‘Over

the last five years, contractors' rates have

risen three times more than staff rates. We

need to control costs for our clients and focus

on increasing our staff ratio.

‘Escalating contractors' rates are driving

industry costs up, which inhibits investment,

growth and long-term sustainability. The

UK...sector's operating costs rose 15.5% last

year to a record $14.8bn.’

Stewart said costs needed to be controlled to

help maximise economic recovery from the

North Sea and safeguard the basin’s future.

‘Companies have an increasing focus on

capital efficiency, and we must seek

opportunities to work more innovatively to

assist our clients with this,’ Stewart said.

WGPSN added it was keen to retain people

and increase its staff ratio in the UK, so there

will be opportunities for contractors to

transfer to WGPSN staff positions.

The business employs around 12,000 people

onshore and offshore in the UK. It has offices

in Aberdeen, Glasgow, Runcorn and Hull.

ROC AND HORIZON PLAN PAN-ASIAN MERGER

From Australia (RW): Roc Oil and Horizon Oil,

both based in Sydney, have proposed the

creation of a significant Asian E&P company.

Calling it an ‘all scrip merger of equals’, the

companies have entered an implementation

deed and will link via a ‘scheme of

arrangement’. Horizon shareholders will

receive 0.724 Roc shares for each Horizon

share held. The ratio is based on the pricing

during a 10-day period ending on 24 April the

last day of trading prior to the announcement.

Following completion of the merger Roc

shareholders will own about 42% of the

merged entity while Horizon shareholders will

have 58%.

This deal will create a company of significant

value with potential for growth. It will have a

16/

BUSINESS BRIEFS

market capitalisation of about $A800mn, net

2P reserves of 37mboe (95% liquids) and net

2C contingent resources of 121mbloe.

The portfolio of the proposed merged entiry

includes assets across Asia, including holdins

in China, Papua New Guinea, Malaysia,

Myanmar, Australia and New Zealand along

with a strong cashflow position and growth

options through appraisal and exploration

prospects in a number of the countries.

The timetable for the merger begins in June

with implementation expected to take place

by the end of August.

The merger proposal has the support of both

boards, although there is some shareholder

disquiet. One fund manager with a 20%

interest in Roc, is seeking an extraordinary

general meeting to change the company’s

constitution so that a shareholder vote can

take place on the merger proposal.

In the week before OTC, AKER SOLUTIONS

which over the years has undergone any

number of structural transformations and

realignments announced that it would split

into two entities.

The ‘new’ AkerSol will consist of two divisons

- Subsea (subsea hardware and umbilicals)

plus Field Designh (engineering and the MMO

businesses). It will be headed up by Brazilian

Luis Araujo which must be the first time that

a major Norwegian company has been led by

a foreigner.

Araujo is currently head of Brazil who took

over that operation in 2011 after a previous

operational problem which saw AkerSol take

a big writeoff on work for Petrobras. He had

previously been with Wellstream, Coflexip,

ABB and FMC in a 30-year oilfield career.

The remaining parts of AkerSol - including

oilfield services, drilling technology and

process- will be shifted into a new entity,

Akastor. It will be led Frank Ove Reite who

has a financial services background which

suggests that a strategy that wil l see th is part

of the business sold off.

The raison d’etre is apparent from the most

recent results, reported the same day as the

reorganisation, with increased revenue,

EBITIDA and margins being led by subsea,

although there was a loss on umbilicals.

Two of the leading offshore drilling

contractors - TransOcean and Noble Corp -

have announced plans to split off parts of

their fleets into new companies.

The former has said it will put eight of its

midwater North Sea semis into a new

operation to be called CALEDONIA

OFFSHORE DRILLLING CO. This is part of

its strategy to divest non-core assets.

The latter is to form PARAGON OFFSHORE

which take control of the majority of its fleet

of standard spec units including 34 jackups,

five drillships, three semis and the former BP

production test ship Seillean which it acquired

in its takeover of Frontier Drilling.

Editor: Steve Sasanow. Correspondents: Ian Forsyth (Aberdeen); Rick Wilkinson (Australia); Bruce Nichols (Houston);

Nick Terdre, John Sheehan (UK ).

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