Fortifying Forties

August 9, 2010

Having repositioned itself during the 2009 downturn, Aberdeen-based consultancy Altra Energy recently joined forces with offshore contractor SLP North Sea to secure its first full-scope engineering assignment – for a new satellite production platform to be bridge-linked to Apache's existing Forties Alpha platform. Meg Chesshyre catches up with the expanding Altra Energy team.

Front-end engineering design for the new Forties field platform's topsides and bridge is being carried out in Altra Energy's Aberdeen headquarters, with SLP performing the FEED for the jacket in New Malden, Surrey. Given successful delivery – due in August – and operator sanction, this work is expected to lead straight into detailed engineering and commissioning. If all goes to plan, installation of the new satellite platform is due in August 2012.

‘The Apache contract will help position us as a recognised engineering force in the North Sea marketplace,' says Altra Energy managing director Daniel McGowan. ‘We have strengthened the management team and refocused on larger, longer-term contracts from front-end engineering through to startup field developments. This is also a significant project for the North Sea as it reinforces the sustainable opportunities despite its maturity as an oil producing province. Companies like Apache are demonstrating commitment to the UKCS.'

Subject to EPIC contract award, as the engineering nears completion the project's centre of gravity will transfer to the northeast of England, where Amec's former fabrication facility in Wallsend – the Hadrian yard, recently acquired by SLP – will handle the anticipated EPIC contract's construction phase. The 18-slot platform, with an estimated topsides weight of around 5000t, and the 500t, 100m bridge will be fabricated under cover.

Altra's Forties Alpha project team is headed by Neil MacDonald, who joined the consultancy this spring from Wood Group. There was a six-week window to build up the multi-discipline team required for the FEED. ‘I think we have been very fortunate in that we have been able to cherrypick some of the best guys in the local area,' comments MacDonald. ‘We've allowed some of the key people in the discipline lead areas a free hand to pick their own squads. I think we have a team that can compete with anybody in the industry.'

Altra Energy was first established over 20 years ago, by three ex-BP directors as a process and safety engineering consultancy. After a number of buy-outs it was bought in 2007 by the private venture capital company Hitec Vision. McGowan joined Altra Energy in 2005 when it was owned by UK independent E&P company Vienco.

‘Vienco wanted to be an equity player in oil fields [OE July 2004], but having a parent that wants to be an oil company creates a huge conflict where building a consultancy is concerned,' McGowan explains. ‘In 2007 I approached Hitec Vision and we bought Altra out for £1 million.' Post-acquisition, McGowan, previously general manager, stepped up to managing director.

‘We developed it pretty quickly into being a 30-man business, and in 2008 we peaked at about 60 odd. In 2009 we peaked again at 30 odd.' As a result of the downturn, the company went back into its shell, hugely influenced by BP, which had provided over 60% of the business and now wasn't spending money. ‘What we did in 2009 was completely reshape the business to refocus on what we wanted to do on the basis that we did not want this to happen again,' notes McGowan. The priorities were to change the client base and the service provision, and to widen it across the facilities base.

‘In time, we built up a structural group, a maintenance group,' he says. ‘We started to add instrumentation and controls, and we positioned ourselves so we could partner with construction houses to go after major projects. On that basis we were approached by SLP to partner them for Apache's Forties field satellite. That success then gave us a platform to build a 50-man project team.'

SLP Engineering went into receivership in November last year, but McGowan stresses that the Apache contract is with SLP North Sea, which is outside the receivership envelope. ‘It was probably because the engineering division was in receivership that we were approached to provide a much wider set of services than normal,' he adds. ‘I do have experience of working with SLP many years ago in Granherne, so I know the processes, I know the challenges of bringing together a consultancy and a fabricator and working together.'

Altra also has a strategic alliance with a local fabricator, Mechserv, set up by two former Total hands, Scott McGinigal and Mike Craig, whom McGowan worked with on Elgin/Franklin, to deliver minor modification packages such as small chemical injection and diesel skids. Altra provides the facilities engineering while Mechserv, which has bases in Scotland and the United Arab Emirates, handles the fabrication and offshore installation work.

‘Since winning the Forties Alpha contract we have been approached about a whole load of opportunities for alliances, but we need to focus on what is in front of us just now,' explains McGowan. ‘We'll look at those possibilities in the future and see what is the best bet.'

‘We've reshaped the business into projects and consultancy,' he adds. ‘The main focus of projects is to bring in anything around £3 million and over, and the consultancy will handle the smaller packages of work. Our differentiator is that having the consultancy background gives us access to high end, high value consultancy engineers, whom we can lift in and drop out of projects at different phases.

‘Our final objective is to offer a valid alternative for the smaller oil company to be able to deliver and execute a project, without having it within a big corporate machine, where you have no influence and ultimately no control.'

According to McGowan, Altra has to be selective in its bidding. ‘They have got to be projects where we can make a difference, be of value to the operator. It is for people that want to do things differently. The 2009 environment has driven all these companies.' He adds: ‘We're not solely focussed on the UK North Sea. We work in North Africa, Norway, Asia Pacific, Papua New Guinea.' The company is looking to develop in London, and develop further in Norway, where it currently has a fourman team based in Stavanger. At present, Asia Pacific work is performed remotely.

Altra Energy is currently carrying out project-based work for a number of companies including British Gas, Bluewater, BP, Halliburton, Hess, Talisman and Eaglewood Energy. So far this year the company has secured more than £1 million of business in North Sea brownfield activity. Some of the live project work for land-based production in remote locations to platform, FPSO and tiebacks includes: conceptual studies for modifications to assess modification impacts; owner's engineer; turnkey modifications from conceptual design to fabrication and offshore installation, equipment sizing, capacity trials and debottlenecking; safety management – cost, risk and gap analysis; and optimisation of risk based maintenance regimes with strategies, procedures and performance standards.

The company has set its sights on growing turnover from £5 million to £25 million over the next three years, in the process creating 200 new jobs. The 50 people hired for the Apache FEED has already brought staffing close to 100. ‘Our goal is to build a sustainable energy engineering business, blending expertise and experience with youth, enthusiasm and creativity,' stresses McGowan. ‘The company has really turned around. We are now a facilities support and design business with a focus on delivering engineering through three service areas – project work, minor modifications work and consultancy.' OE

SLP the survivor
SLP North Sea is a separate company from SLP Holdings and its subsidiaries, which called in the receivers in November 2009. In May this year, administrators PricewaterhouseCoopers announced the sale of the business and assets of Sea & Land Power & Energy, a subsidiary of Lowestoft-based SLP Engineering, to Zefier UK II, a subsidiary of Smulders Group which is active in the renewables industry.

The sale secured 17 jobs and Smulders has confirmed it will continue to operate this business from Lowestoft. The deal also includes agreeing an exclusivity period for Smulders to complete due diligence on SLP Engineering with a view to purchasing that business as well.

Forties future

Apache Corporation took over the mature Forties field from BP in 2003 and has since carried out extensive drilling and maintenance operations. RBG was recently awarded a contract to replace two risers on Forties Bravo and Charlie. As well as the planned Forties Alpha satellite, the company is considering a further satellite platform bridge-linked to Forties Delta later on.

Apache began production from the Maule field in June this year by extended reach drilling from Forties Alpha, at a rate of about 11,750b/d. The new field has been brought onstream around eight months after discovery last October. Apache, which holds a 100% interest in the field, is also planning a second well at Maule.

‘The Maule discovery, which is an Eocene-age reservoir located above the main Forties Paleocene reservoir, was identified by Apache's North Sea geoscience team. We were able to develop the field quickly via our existing infrastructure within the Forties field,' says James L House, region VP and MD of Apache North Sea. ‘The viability of the project was enhanced by the UK government's incentives aimed at encouraging development of smaller fields in the North Sea.'

The company also has approval to proceed with development of the Bacchus field, four miles northeast of the Forties Alpha platform. Apache is planning three horizontal subsea wells tied back to Forties Alpha via a pipeline bundle.

First oil is expected mid-2011.

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