In the past decade, the oil & gas industry has been effective in finding new resources, but much less successful in bringing new supplies onstream. That was the verdict of Eni E&P executive vice president Antonio Vella, addressing this year's Offshore Mediterranean Conference in Ravenna, Italy. Meg Chesshyre reports.
According to Antonio Vella, ‘cost increases, loss of competencies and a general difficulty in meeting the expectations of the host countries are the main causes of this slow pace of new developments'.
In his view, one of the main reasons for excessive costs was ‘the extensive outsourcing process the industry has undertaken in the past. In fact this resulted in a poorly competitive and expensive market for oil services, and in the reduction of skills within oil companies. There is no single solution to this problem, but the industry will have to reverse the trend and acquire more control over the value chain through new procurement strategies and enhanced internal competencies.'
It was important to develop relationships with host countries, he told the conference. ‘The world has changed: know-how, competencies and financial capabilities are no longer sufficient to meet the expectations of the producing countries. The industry needs a new approach to cooperation: the "dual flag" model, based on full integration and real partnerships with host countries.
‘We have to participate in the local development by investing in the country and promoting the diversification of its economy and the reduction of its dependence on oil exports. In my company, a clear example of this approach is the use of associated gas, a by-product of oil production, in power plants in Africa. I am talking about the first open cycle integrated power plants ever built in Africa which today provide 30% of total electricity produced in Nigeria and 65% in Congo. Projects like these are contributing to our leadership in Africa.'
Vella concluded with an update on Eni's view on unconventional resources. The company entered the shale gas business in 2009 in joint venture with a US company. ‘Following that deal, we have developed a portfolio of potential unconventional plays in North Africa, Pakistan, Indonesia – where we will develop a coal bed methane reservoir to supply the Botang LNG plant – and in Congo for the oil sands. More recently, we have signed a memoradum of understanding with CNPC/ Petrochina to access China's huge shale potential, and we have acquired three licences in Poland, where we plan to drill our first wells in 2011.'
Sonatrach's exploration general manager for upstream activity, Dr Djamel Bekkouche, highlighted Algeria's ‘enormous growth potential' for the energy sector. The country had 1.6 million km2 of largely unexplored sedimentarybasins and 100,000km2 of offshore exploration acreage, he said. It also had huge non-conventional resources.
In its medium-term investment programme, Sonatrach is planning to invest over $46 billion in upstream activity, enabling the country to reach a total output of over 1 billion tonnes of oil equivalent in 2011-15. Sonatrach plans to acquire 13,000km2 of 3D seismic and drill more than 120 wells/year during the next five years, an increase of 145% and 160% respectively over the annual averages in the previous five years.
In his opening address, OMC president Innocenzo Titone reminded delegates that the problems affecting the energy sector are global. ‘We need joint efforts to find common solutions,' he said, adding that the conference's 10th anniversary presented ‘a unique opportunity for all industry players to discussthe changes occurring in the upstream sector, in light of the unstable economic scenario, geopolitical tensions in North Africa and the Middle East,consequences of the accident at the Macondo field and the recent dilemma regarding the use of nuclear energy'.
Stefano Saglia, undersecretary in Italy's ministry of economic development, said the energy market uncertainties following recent developments in Libya had reopened the old question of diversifying the mix of supply sources. ‘We must reflect on the need to promote national production of oil and gas', encourage dialogue between industry, government and the public in order to adopt a long-term energy policy and invest in research and technology, he declared.
Italy, he added, ‘must play an important role as a hub of energy, due to its geographical position and also contribute to the stabilisation of the Mediterranean area'. Commenting on the Italian nuclear programme, he said the decision should not be taken ‘in the wake of suggestions but through a certainty that this technology can solve global energy problems'.
Dr Ibrahim Palaz, chief executive of Botas International – designated operator of the Turkish section of the Baku-Tbilisi- Ceyhan crude oil pipeline – stressed the need for investment in education froma nationalisation standpoint. He suggested that Turkey could provide a base for training for students from the Middle East with Western educational institutions participating in partnership with the Turkish universities, without the students having to undergo a lengthy visa application process.
Classification society RINA has used its offshore gas expertise to develop rules and guidelines for the exploitation, transport and storage of compressed natural gas (CNG). Outlining their development in an OMC 2011 presentation, Angelo Lo Nigro, RINA's oil & gas manager, noted that ‘compressed natural gas offers an alternative way to move natural gas where volumes do not support a liquefaction plant or a pipeline. A significant amount of the world's gas reserves fit these criteria, and as environmental pressure makes it more difficult to flare gas, CNG transportation is auseful alternative to expensive re-injection into the field.' Lo Nigro pointed out that Eni chief executive Paolo Scaroni had recently cited this as a way of transporting natural gas across the Caspian Sea.
‘There are a number of potential systems for CNG carriers, but to date no
solution has been implemented,' Lo Nigro explained. ‘We have worked with industrial partners and drawn on our own experience with LNG offshore to set up rules and guidance for the approval in principle of pressure vessels for use in a marine environment and for the conceptual design of various CNG carriers.'
Oil majors are more and more looking at marine CNG to develop several limited gas fields, relatively close to the end-users. Several CNG ships have been proposed and are currently being studied, but no CNG ship is sailing so far. Various technical challenges are to be faced, such as the use of fibre reinforced plastic pressurevessels, and the technology for cargo displacement, not to mention the safety issues or the unavailability of complete regulatory framework, he added.
Technology qualification, marinisation of existing technologies and risk assessment, which are already covered by RINA guidelines, are critical points for the development of marine CNG. In addition to that, RINA is developing new rules for the classification of CNG ships, which will provide technical support and guidance to the developers of this new technology.
‘CNG ships appear to be a promising means of transporting natural gas in contexts where the process of liquefaction, transportation and subsequent regassification is too onerous or impractical. However, the technology is still under development, therefore no single CNG ship design solution stands out for the time being,' Lo Nigro pointed out.
Irrespective of thetechnology selected for the containment, it was deemed necessary to provide a framework for the ships that can be expected to carry CNG in pressure vessels, to be included in the next issue of the RINA Rules for the Classification of Ships as a dedicated service notation, he said. These rules are based on a minimum set of safety prescriptions, to be integrated by means of risk control options resulting from designspecific risk analysis that will necessarily be class approved.
However, safety is not the only significant issue in such innovative ships to be profitable; it is likely that criteria of functionality, safety, reliability, availability and maintainability will be set by the client, which designers will be asked to fulfil to demonstrate that
the novel design is fit for its intended service. This demonstration can be achieved by the technology qualification (TQ) process, which makes use of a systematic approach including risk analysis, engineering studies and test programmes.
Such engineering studies, in particular the risk analysis, will be mandatory in the framework of the permitting process by the authorities (in particular, the ships' flag states, but possibly the authorities of the ports the ship will be expected to call at). Conversely, Lo Nigro concluded, the TQ certificate is likely to be required by investors evaluating stakes in the enterprise.
Adriatic crossing: The Trans Adriatic Pipeline (TAP) owners have identified a 190km long, 2km wide optimum route for the pipeline across Greece from Nea Mesimvria near Thessaloniki to the Greek-Albanian border
north of the town of Dipotamia. More than 50 national and international experts conducted comprehensive and detailed studies of a 50km wide corridor this spring. TAP has now completed its route refinement process in all three transit countr
ies (Albania, Greece and Italy).
The 520km long TAP pipeline will transport gas from the Caspian region via Greece and Albania and across the Adriatic Sea to Italy's southern Puglia region and further to western Europe. The project is aimed at enhancing security of supply as well as diversification of gas supplies for the European markets. TAP will open a new southern gas corridor to Europe and market outlet for natural gas from the Caspian Sea. The plan is for the pipeline to be ready to transport natural gas from the Caspian region when phase two of the Shah Deniz field offshore Azerbaijan starts production.
The project is designed to expand transportation capacity by 10bcm to 20bcm per year, depending on throughput. The TAP project also envisages physical reverse flow of up to 8bcm and the development of natural gas storage facilities in Albania to further ensure security of supply during operational interruptions of gas deliveries.
TAP's shareholders are Switzerland's EGL (42.5%), Norway's Statoil (42.5%) and Germany's E.ON Ruhrgas (15%).
Conversion complete: Croatia's Viktor Lenac shipyard has recently completed the conversion and repair of Micoperi's self-propelled crane/pipelay vessel Seminole, which is able to work in very shallow waters. The shipyard built and outfitted a complete new superstructure weighing some 450t, including accommodations for 250. The vessel (pictured) has also been made DP ready. It was alongside in Ravenna for OMC 2011. T he conversion has included over 1300t of steel renewal in the hull, new deck plating to increase deck strength, and hull longitudinal strengthening for future mid body lengthening of around 25m. There is also a new pipelay central firing line for pipes ranging from 6-60in with up to 200t (2x100t) pipe tension capacity and double piggyback capabilities. T he mooring winches have been refurbished and upgraded with the addition of two extra mooring winches on the bow giving 10-point mooring. All vessel machinery has been fully overhauled and upgraded to comply with the latest international standards. According to Microperi, there has been full crane overhauling testing and certification for a maximum 715t lifting capacity and the vessel is in full compliance with all latest SOLAS and IMO standards, including compliance with SPS (Special Purpose Ship) regulations. Micoperi VP and commercial manager Claudio Bartolotti told OE that the newly refurbished vessel was being actively offered worldwide and was generating interest.
"PIPE-HANDLING PLUS: The latest orders for pipe handling and tensioning equipment specialist REMACUT include one from Heerema for a complete multi-joint pipe handling system for its new deepwater construction vessel Aegir. Also on the Italian manufacturer's order books is a contract from Allseas to engineer and construct a pipe handling system for its giant newbuild Pieter Schelte, while for clients further afield the company's Rivoli plant will supply three pipe tensioners to Hyundai Heavy Industries in Korea and a complete tensioning system and a pipe handling system for a Brazilian company."
Cranes in de mand : Three pedestal offshore cranes with 45t @20m outreach (pictured) were delivered by ITALGRU to the Petrovietnam Marine Shipyard at the end of January, following a purchase order signed in April 2010. The three cranes are due for commissioning this month on jackup drilling rig LT 116 currently under construction at the yard. During OMC, the Italian crane manufacturer, based at Ambivere near Bergamo, was awarded a contract by Eni for two 30t pedestal cranes for the DP2 and DP3 platforms in the Loango field, offshore Congo. The cranes are due for delivery end September 2011. T he company is currently completing a 25t @15m knuckle boom crane for Saipem's new DP pipelay vessel Castorone, for delivery in May, having already delivered a 35t @30m crane for the vessel last year. Saipem has also ordered a pedestal offshore crane of 20t @10m to be installed in June on the company's drilling platform AZ 5820 in the Libyan Sea. T his month it is due to deliver two pedestal cranes, one lattice boom 50t and one knuckle boom 25t at 17m, to SBM Gusto for installation on the FPS0 Ciudad de Paradis, destined for Petrobras' Tupi North East field offshore Brazil. ITALGRU chief executive Fabrizio Bonfanti commented that business was going well at the moment, and that he saw plenty of opportunities for the company over the next two or three years.