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OE Press: 2016 / July

OE Press: 2016 / July (102)

Friday, 29 July 2016 03:51

Lowest greenfield investment pot since 1998

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Exploration and production companies have been hesitating to engage in greenfield projects amid the current market downturn, resulting in the lowest offshore project commitment since 1998, according to Norwegian analysts Rystad Energy.

Only US$43 billion are estimated to be committed this year, which is over 75% less than the average volumes sanctioned from 2011 to 2014, says Rystad.

In terms of the number of projects, only around 50 projects are expected to proceed, a number that historically has been threefold. Lower commitments were last seen in 1998, when oil prices plummeted by more than 40% and E&P companies committed to only $38 billion worth of projects.

Due to order intake reduction, oilfield service companies have cut almost 30% of their workforce since the beginning of the downturn, as their quarterly revenue declined by 12% on average over the last six quarters.

“The size of the workforce cut is as large as four companies similar to Schlumberger combined,” says Audun Martinsen, VP Oilfield Service Research at Rystad Energy. “E&P companies should begin to worry as there may not be enough service capacity when the market recovers and investments start to rise. The current size of the service industry is not adequate to provide deliveries on all the potential projects that E&P companies like to initiate over the next years once oil prices rise.”

Friday, 29 July 2016 03:23

Final Cat D newbuild starts work for Statoil

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Songa Offshore's fourth and final newbuild Cat D Rig, the semisubmersible Songa Enabler, has started drilling operations on 29 July offshore Norway for Norwegian oil giant Statoil.

All four rigs are semisubmersible, sixth generation Cat D drilling rigs built by Daewoo Shipbuilding & Marine Engineering in Korea.

The Songa Enabler is now on operating rate under its eight-year drilling contract with Statoil. Songa Enabler is the last rig in a series of four Category D semisubmersible drilling rigs, specifically built for and contracted to Statoil.

Read more

Fourth and final Cat D delivered

Friday, 29 July 2016 03:20

DOF bags Prelude IMR contract

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Shell Australia has awarded DOF Subsea a five-year contract with two, two-year options to provide a fulltime underwater services and multi-purpose supply vessel to the Prelude FLNG facility.

Prelude FLNG will produce, liquefy, store and transfer LNG at sea, offshore western Australia.

Under the inspection, maintenance and repair (IMR) contract, DOF Subsea will provide project management, engineering and integrated services for IMR programs as well as the dedicated vessel and options for other vessels.

In a statement CEO Mons Aase said, "This is a very important contract award for DOF Subsea, and the award further strengthens DOF Subsea's position in the global subsea IMR market. We look forward to working with Shell Australia on the world leading Prelude FLNG facility."

Friday, 29 July 2016 03:16

Saudi Aramco extends Seadrill rig contracts

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Rig operator Seadrill has received three-year contract extensions from Saudi Aramco for the jackups AOD I and AOD II expiring in June 2019 and July 2019, respectively.

The extensions are in direct continuation of the current contracts and will add approximately US$225 million in contract backlog. The units have been working for Saudi Aramco since 2013. 

AOD 1 was completed in 2013 at Keppel AmFels. It is a KFels B Class independent cantilever leg design. 

AOD 2 was also completed in 2013, at Keppel FELS Shipyard, Singapore. It is and independent leg jackup. 

Friday, 29 July 2016 03:08

Production resumes at Erskine, North Sea

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Oil and gas production from Chevron's Erskine field in the North Sea has restarted following the clearance of a pipeline blockage and the completion of scheduled maintenance works on the Lomond platform, says partner Serica Energy.

The pipeline blockage, which happened earlier this year in the Lomond to Everest condensate export line, was caused when a foam cleaning device (pig) became lodged in the pipeline due to a build-up of wax.

Successful clearance procedures included pressure pulsing using diesel from both ends of the pipeline and latterly the injection of a wax solvent. The field then remained shut-in to accommodate a planned two-month maintenance program on the Lomond platform, which started late May to coincide with the planned one-month shut down for maintenance of the CATS gas export and processing facilities through which Erskine gas is exported.

Condensate flow from the Lomond field then started in mid-July in order to flush the export line, with higher volume Erskine production re-started from late on 27 July.

Following a short period for final clean-up during the first week of August, production from Erskine is projected to build-up rapidly to the fully unconstrained levels achieved prior to the shut-down.

As part of the ongoing operations designed to improve production efficiencies and ensure continuous export availability, an increased program of regular pigging and wax inhibitor injection is to be implemented in order to prevent a re-occurrence of wax build-up once full production has been re-established.

The scheduled pigging operations will also enable a full integrity survey of export infrastructure to be completed to determine the potential to extend infrastructure operating life.

Tony Craven Walker, Serica’s Chairman commented: “Since Serica acquired its interest in the Erskine field in June 2015, it has made a significant contribution to cashflow and profits. This has equipped us to withstand issues such as this shutdown. Now that production has resumed we expect this strong performance to continue as we seek to add further interests to increase shareholder value at a time of low oil and gas prices.”The Erskine gas condensate field lies approximately 241km (150mi) east of Aberdeen, Scotland, in the Central North Sea, in 90m (296ft) water depth. 

The field includes a normally unattended installation and is remotely controlled from BG's Lomond platform. A 30km (18.6mi) pipeline links the two facilities, Chevron said.

Discovered in 1981 in Block 23/26, Erskine was the first high-pressure, high-temperature field to be developed in the UK Continental Shelf. First production was achieved in December 1997.

Read more

Blockage causes Erskine hiccup

 

Thursday, 28 July 2016 04:09

Norwegian OSV suppliers merge

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Norwegian offshore support vessel firms Solstad Offshore and REM Offshore are to merge, creating a company with 62 vessels.

Solstad will offer new shares to fund the deal, with REM's shareholders due to receive a share of them. 

"The offshore service vessel (OSV) industry is undergoing a period of great uncertainty," says Lars Peder Solstad, CEO of Solstad. "Reduced spending across the upstream value chain has contributed to the current overcapacity, adversely impacting dayrates and utilization.

"The OSV industry's fragmented structure is further compounding these negative effects. Solstad and REM both see the need to create larger entities with financial and operational strength to weather the downturn. The combination of Solstad and REM is one step in the right direction, but there remains a strong rationale for further consolidation." 

After the Merger, Solstad will retain its Skudeneshavn head office, from which the combined fleet of CSV vessels will be operated.

The combined fleet of PSV vessels will be operated from the current REM head office in Fosnavåg. 

"The merger is a necessary structural measure in today's offshore service vessel (OSV) market, which will enable the combined company to achieve significant synergies through more efficient operations and a lower cost base. 

"The combination of Solstad's, REM's and Aker's industrial expertise, M&A capabilities and financial strength will provide a strong platform through Solstad for further development of the OSV industry," says Øyvind Eriksen, President and CEO of Aker. 

Thursday, 28 July 2016 03:59

Cygnus first gas delayed

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First gas on one of the largest recent discoveries in the North Sea has been delayed, according to partner Centrica Energy.

The firm said that first gas on the four-platform Cygnus development project in the southern North Sea is now expected in Q4 this year, later than originally anticipated. Back in 2014, the targeted date for first gas was late 2015. 

The Cygnus field, some 150km off the coast of Lincolnshire, has gross 2P reserves of approximately 18 Bcm. 

By 2016, it will be the second largest individual gas producer in the UK, operator GDF Suez, now Engie, said in 2014.

The Cygnus field consists of two drilling centers, the Alpha and Bravo. Heerema Hartlepool received the frame agreement from operator GDF Suez E&P UK (part of ENGIE Group) in August 2012 for the construction of three topsides, a compression module, with two bridges to connect the three Alpha platforms and a flare tower for the Cygnus field. 

The APU platform receives the gas from the Alpha and Bravo wellhead platform and optimizes the gas to prepare for transportation through a pipeline to the Bacton gas terminal onshore. 

The BWHP, an unmanned Satellite platform, is 42x25x13m in size and weighs approximately 3200-tonne and is situated circa 7km from the main hub. The BWHP will be operated remotely from the APU platform. Maintenance and other personnel can reach the platform by helicopter. 

The Cygnus Alpha wellhead topsides sailed from Heerema’s Hartlepool yard in May 2014, be followed by the remaining topsides infrastructure in 2015. 

Thursday, 28 July 2016 03:40

Successful results from Shenandoah, GOM

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Gulf of Mexico-focused Deepwater oil exploration and production company Venari Resources has acquired an additional 7% stake in the Shenandoah field on Walker Ridge Blocks 51, 52 and 53. The company has also reported successful results from the Shenandoah #5 appraisal well.

The Shenandoah #5 well was drilled on Walker Ridge Block 51 in about 5900ft water depth to a total depth of 31,100ft. The well was drilled up-dip of the Shenandoah #2 appraisal well and was designed to confirm and extend reservoir boundaries.  

The well encountered over 1000 net feet of high-quality oil pay in the Lower Tertiary Wilcox sands and extended the field further east.

The next appraisal well, Shenandoah #6, is expected to spud later this year to further quantify the full resource potential of the field. Earlier this year, Venari increased its working interest in the Shenandoah Unit to 17% from 10%.

“With a high-quality reservoir and substantial net oil pay, the well results confirm Shenandoah to be a significant oil accumulation,” said Brian Reinsborough, President and CEO of Venari. “We are excited that we were able to increase our ownership in the field and continue building our relationship with Anadarko across this strategically important region.”

In partnership with Anadarko Petroleum Corporation, the operator of Shenandoah, Venari owns significant working interests in several exploration prospects proximate to the Shenandoah discovery.

Venari holds a 17% working interest in Shenandoah. Other co-owners are Anadarko, as operator (33%), ConocoPhillips (30%), and Cobalt International (20%).

Thursday, 28 July 2016 03:23

Det norske lines up Langfjellet prospect

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The Norwegian Petroleum Directorate (NPD) has granted Det norske a drilling permit for well 25/2-18 S on PL 442 in the central North Sea. 

The well, targeting the Langfjellet prospect, will be drilled using the Maersk Interceptor jack up drilling rig. Pre-drill estimates for the prospect are 13-62 MMboe, according to Det norske's 1H presentation.

Production license 442 was awarded on 15 June 2007 (APA 2006). This is the second exploration well to be drilled in the license, but the fourth within the area where the license is situated, says the NPD.

The permit is conditional on the operator securing all other permits and consents required by other authorities prior to commencing the drilling activity.

Wednesday, 27 July 2016 09:45

OpenHydro supply tidal turbine to Japan

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TIdal turbine maker OpenHydro, a DCNS company, is part of a consortium which has been selected by the Japanese Ministry of the Environment to supply a tidal turbine system for installation at Naru Strait, Goto City, Nagasaki Prefecture.

The consortium includes Kyuden Mirai Energy Co., Nippon Steel & Sumikin Engineering Co., and NPO Nagasaki Marine Industry Cluster Promotion Association.

Site surveys will start later this year, with procurement activities, fabrication and cable laying due to start in 2017. OpenHydro's 2MW co-called Open-Centre Turbine unit will be built in France and shipped to Japan. The subsea base will be manufactured locally by Nippon Steel & Sumikin Engineering Co. who will also be responsible for all mobilization and deployment activities.

The turbine is planned for deployment in 2018 and will be subsequently connected to the grid. During the first year of operation, intensive tests will be conducted, the results of which will provide a reference for the build-out of commercial scale tidal arrays in Japan.

OpenHydro has incorporated OpenHydro Technology Japan, to manage and oversee the delivery of this demonstration project. It will also lead development activities in relation to future commercial scale schemes.

James Ives, OpenHydro, CEO, said: “This 16m [diameter] turbine will be the first commercial-scale tidal device to be deployed in Japanese waters. Through this demonstration project we will work with our Consortium partners to foster local skills and expertise. In future, we will manufacture devices for commercial scale arrays in Japan, underlining again the potential of the industry to create jobs and economic benefit where significant tidal resource is available. As such, this test device is an essential step in the development of a tidal industry in Japan.”

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