Offshore201607 DL

Houston
London
Paris
Stavanger
Aberdeen
Singapore
Moscow
Baku
Perth
Rio de Janeiro
Lagos
Luanda
For continuous news & analysis

www.offshore-mag.com
July 2016
World Trends and Technology for Offshore Oil and Gas Operations
Latin America update

Brownfield
engineering
4D seismic
Managed
pressure drilling
E: ctio
D
I tru
S
s
IN con vey
r
DU su
O
M
International Edition
Volume 76, Number 7
July 2016
Celebrating 60 Years of Trends, Tools, and Technology
CONTENTS
LATIN AMERICA
BRASA shipyard completes four-year
FPSO construction, integration campaign .............................. 22
Offshore spoke to SBM Offshores Managing Director Brazil, Oliver
Kassam, and FPSO Director of Projects John Perkins, about how the
company and its partner developed the yard from scratch to undertake complex and large-scale construction and integration of topsides
modules.
Mexicos deepwater round to employ license

contract structures, production sharing................................. 26
Last year, the Mexican government published the bidding guidelines
and the contract model for deepwater contracts related to Round Ones
Fourth Call for Bids. The legal, regulatory, and economic structure of
the documents related to this call will be relevant to those that may be
interested in participating in this bid round.
Technology venture looks to prevent

flow assurance issues in Mexicos deepwater ...................... 28
The threat of hydrate formation and pipeline blockages is a technological challenge that has been considered for Mexicos deepwater fields.
A cost-effective feasible solution to mitigate and disassociate hydrate
blockages has been conceptually designed by SECC and Instituto
Mexicano del Petrleo.
Guyana emerges as major frontier market............................. 30

The United States Geological Survey ranks Guyana-Suriname as the
worlds second most prospective, underexplored offshore basin, with an
estimated 13.6 Bbbl of oil and 32 tcf of natural gas yet to be discovered.
If recent exploration success proves to be commercial, Guyana will
have even more to celebrate along with the 50th anniversary of its
independence from the UK.
INDUSTRY INTERVIEW
New downhole technologies
promise greater efficiency, lower costs ................................. 31
Recently, members of Weatherfords executive team met with Offshore
to discuss the companys drilling and completion product launches, and
the impact they expect these technologies to have on the market.
DRILLING RIG UPDATE

Market downturn slows rig construction to a crawl ............. 34
Due to lower oil prices and significant oversupply of rigs in the market,
drilling contractors have not placed any orders so far this year, and only
ordered seven last year, none of which were drillships. It is not likely
that many orders will be placed over the remainder of 2016.
2016 Worldwide MODU construction/new order survey ........ 36

Get the latest detailed and comprehensive listing of the worldwide
mobile offshore drilling units under construction.
30
DRILLING RIG UPDATE
Enclosed solids control system lowers
mud consumption, boosts drilling efficiency ......................... 40
Cubility has developed an alternative to solids control one that leads to
the efficient separation of drilled rock particles from fluids, a reduction in
the volumes of mud lost and waste generated, and improved HSE.
GEOLOGY & GEOPHYSICS

New noise level calculation unlocks
4D subsalt imaging.................................................................. 42
Time-lapse (or 4D) seismic allows for the visualization of changes in the
reservoir resulting from production-related variations in pressure and
saturation. It has been successfully applied in many fields. However, in
the Gulf of Mexico and several other regions in the world, the time-lapse
technique can be a challenging application in subsalt environments.
DRILLING & COMPLETION

Scalable MPD service helps reduce rig downtime................. 44
Weatherford has developed a comprehensive MPD support structure
within the Golden Triangle that aims to help operators quickly cross
the chasm between technology evaluation and full deployment. The
service, which combines proprietary technologies and international
footprint with local personnel, facilities, and organizational support, can
be rapidly ramped up or scaled back in response to changing market
conditions.
Real-time, flow-off pressure data service

improves drilling efficiency, safety ......................................... 46
Baker Hughes AccuFIT real-time flow-off pressure data service acquires high-resolution, downhole flow-off annular pressure profile data
in real time, at the depth of the test, and transmits the data to surface as
soon as circulation resumes following the test. The service enables well
construction teams to make quick, well-informed pressure control decisions while drilling to ensure well control and maximize efficiency.
Offshore (ISSN 0030-0608). Offshore is published 12 times a year, monthly, by PennWell Corporation, 1421 S. Sheridan, Tulsa, OK 74112. Periodicals postage paid at Tulsa, OK 74112 and at
additional mailing offices. SUBSCRIPTION PRICES: US $123.00 per year, Canada/Mexico $145.00 per year, All other countries $202.00 per year (Airmail delivery $283.00). Worldwide digital
subscriptions: $123.00 per year. POSTMASTER: Send address corrections to Offshore, P.O. Box 3264, Northbrook, IL 60065-3264. Offshore is a registered trademark. PennWell Corporation
2016. All rights reserved. Reproduction in whole or in part without permission is prohibited. Permission, however, is granted for employees of corporations licensed under the Annual Authorization Service offered by the Copyright Clearance Center Inc. (CCC), 222 Rosewood Drive, Danvers, Mass. 01923, or by calling CCCs Customer Relations Department at 978-750-8400 prior to
copying. We make portions of our subscriber list available to carefully screened companies that offer products and services that may be important for your work. If you do not want to receive
those offers and/or information via direct mail, please let us know by contacting us at List Services Offshore, 1421 S. Sheridan Rd., Tulsa, OK, 74112. Printed in the USA. GST No. 126813153.
Publications Mail Agreement no. 40612608.
The future of
water injection
FRAMO WATER INJECTION PUMPS
An effective and economical way to boost
oil recovery is to inject seawater and/or produced
water into the reservoir to maintain pressure and
produce more oil. The high pressure pump is
designed to meet changing reservoir demands.
Small footprint, compact low weight, booster
integrated, running below first critical speed.
OFFSHORE NORTHERN SEAS

STAVANGER 29 AUG 1 SEP
PLEASE VISIT US AT STAND 362
framo.com
Water Injection Pumps | Fire Water Pumps | Seawater Lift Pumps | Cooling Circulation Pumps
International Edition
Volume 76, Number 7
July 2016
COVER: Even in the midst of the market downturn, operators and developers are keeping their eyes on opportunities
on offshore markets in Latin America, and Brazil remains a
key focus. To get an update, Offshore spoke to SBM Offshore
executives about how the company and its partner developed
the BRASA shipyard from scratch to undertake complex and
large-scale construction and integration of topsides modules.
In May, the FPSO Cidade de Saquarema (cover) departed
from the yard bound for offshore Brazil, following a record
turnaround time for its module integration. (Courtesy SBM
Offshore)
ENGINEERING,
CONSTRUCTION, & INSTALLATION
Topsides modifications approach
optimizes brownfield projects ................................................ 48
Topsides brownfield projects are typically subject to a higher level of
technical constraints than greenfield projects. This is often combined
with tighter economics and considerably reduced schedule flexibility,
providing little room for maneuver in the design process and requiring
extensive project risk assessment. However, this lack of flexibility can
be turned into an opportunity for better project definition before entering the execution phase.
PRODUCTION OPERATIONS
Extended field test shows super-duplex
steel has cost-saving potential ............................................... 52
The author examines how operators are upgrading to more advanced
stainless steels. Through innovation, materials are evolving to yield superior performances, improved corrosion resistance, and better overall
production economy.
SUBSEA
Retrofitted flow access hub widens
options for deepwater intervention ........................................ 54
Enpro Subsea has developed the Enhanced Subsea Sampling & Injection system, which can be adapted to any subsea tree or manifold for
accessing hydrocarbon flow subsea to facilitate a range of applications
including well control, scale squeeze, acid stimulation, fluid sampling
and multiphase metering.
EQUIPMENT & ENGINEERING

New metering pump reduces topsides footprint, weight ...... 60
Hydratight upgrades subsea
pipeline offshore Western Australia ....................................... 60
GE Oil & Gas launches new subsea connector ....................... 61
Saipem, Total collaborate
on subsea water treatment technology .................................. 61
Materia introduces new thermoset resin line ........................ 62
Weatherford introduces deepwater
integrated completions technologies ..................................... 62
D E P A R T M E N T S
Online ......................................................................................... 6
Comment .................................................................................... 8
Data .......................................................................................... 10
Global E&P ............................................................................... 12
Offshore Europe ....................................................................... 16
Gulf of Mexico .......................................................................... 17
Subsea Systems ...................................................................... 18
Vessels, Rigs, & Surface Systems ........................................... 19
Drilling & Production ............................................................... 20

Multi-function gate valve provides
improved shear, seal capabilities ........................................... 58
Wild Well Control successfully combines
new, existing technology on GoM P&A job ............................. 59
4 Offshore July 2016 www.offshore-mag.com
Geosciences ............................................................................. 21
Business Briefs ........................................................................ 64
Advertisers Index.................................................................... 67
Beyond the Horizon ................................................................. 68
OFFSHORE COMPLETIONS
COMPLETE SOLUTIONS FOR
DEEPWATER
RELIABILITY
Modern technology with
a consultative approach
Rather than adapting older technologies for new

applications, we design our extensive portfolio of
completion technologies for todays complex, deep
wells. Our systems are manufactured to the highest
quality, tested beyond required standards, and eld
proven around the world in enhancing efciency,
minimizing costs, and reducing risks.
From start to end, we partner with clients to deliver
completion systems tailored to the unique needs of
specic wells. With Weatherford, you get a complete
and deeply reliable solution for any offshore well.
2016 Weatherford. All rights reserved.
weatherford.com/offshore
DRILLING & FORMATION EVALUATION

WELL CONSTRUCTION
COMPLETION & STIMULATION
PRODUCTION
VICE PRESIDENT and

GROUP PUBLISHER
Mark Peters markp@pennwell.com
Available at
CHIEF EDITOR/
CONFERENCES EDITORIAL DIRECTOR
David Paganie davidp@pennwell.com
MANAGING EDITOR
Offshore-mag.com
Bruce A. Beaubouef bruceb@pennwell.com
EDITOR
ASSISTANT EDITOR
Sarah Parker Musarra

smusarra@pennwell.com
Jessica Tippee
jessicat@pennwell.com
EDITOR-EUROPE
POSTER EDITOR
Jeremy Beckman
jeremyb@pennwell.com
E. Kurt Albaugh, P.E.

Kurt.albaugh@yahoo.com
ART DIRECTOR
Josh Troutman
PRODUCTION MANAGER
Kimberlee Smith ksmith@pennwell.com
MARKETING MANAGER
Myla Lowrance mylal@pennwell.com
AUDIENCE DEVELOPMENT MANAGER

Jesse Fyler jessef@pennwell.com
OFFSHORE EVENTS
David Paganie (Houston) davidp@pennwell.com
Gail Killough (Houston) gailk@pennwell.com
www.pennwell.com
EDITORIAL OFFICES
OFFSHORE
1455 West Loop South, Suite 400, Houston, TX 77027 U.S.A.

Tel: (01) 713 621-9720 Fax: (01) 713 963-6296
www.offshore-mag.com
CORPORATE OFFICERS
CHAIRMAN: Robert F. Biolchini
VICE CHAIRMAN: Frank T. Lauinger
PRESIDENT AND CHIEF EXECUTIVE OFFICER:
Mark C. Wilmoth
EXECUTIVE VICE PRESIDENT,
CORPORATE DEVELOPMENT AND STRATEGY:
Jayne A. Gilsinger
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER:
Brian Conway
SUBSCRIBER SERVICE
To start a free subscription, visit www.offshoresubscribe.com.
Contact us for subscription questions,
address changes and back issues
Tel: (847) 763-9540 Fax: (847) 763-9607
Email: os@halldata.com
CUSTOM PUBLISHING
Roy Markum roym@pennwell.com
Tel: (713) 963-6220
REPRINT SALES
Rhonda Brown rhondab@fosterprinting.com
Tel: (219) 878-6094 Fax: (219) 561-2023
Latest news
The latest news is posted daily for the offshore oil and gas industry covering
technology, companies, personnel moves, and products.
New tools and resources

Offshore Learning Center
Offshore magazine has partnered with the University of Houston to research
segments of the offshore oil and gas industry and evaluate and organize the
best available online videos into special collections. The Offshore Learning
Center currently contains six major collections, with 314 videos totaling 30
hours and 38 minutes; 63 posters; 20 featured articles.
http://www.offshore-mag.com/learning-center/learn-more.html
New video
Weatherford Executive Q&A
Weatherford International has unveiled a new suite of drilling and completion
tools that promise to help operators reduce risk, minimize cost, and increase
production. Members of Weatherfords executive team discuss these product
launches, and the impact they expect these technologies to have on the market.
http://www.offshore-mag.com/video/
custom-video-channels/weatherford-q-a.html
New maps, posters, and surveys

2016 Worldwide Survey of Stimulation Vessels
2016 Deepwater Solutions & Records For Concept Selection Poster
2016 Rotary Steerable Systems Directory
2016 Survey of Offshore Non-Chemical Flow Assurance Solutions Poster
http://www.offshore-mag.com/surveys.html
New on demand webcast

Proven Under Pressure
Driven by the demand for more reliable and accurate BOP testing results
and improved documentation and operational efficiencies, Offshore Technical
Compliance in partnership with Hecate Software Inc. developed OTC GREENLIGHT, a new digital pressure testing software and technical service.
In this webcast, Mike Bethea, CEO of Offshore Technical Compliance, and
Eric Livesay, CEO of Hecate Software Inc., discuss how OTC GREENLIGHT
improves the performance and accuracy of pressure testing and removes the
subjectivity associated with interpreting conventional circle chart recordings
the current industry standard. They will also discuss how it offers its users
an easy-to-use, predictive software which requires no benchmark for testing,
thereby streamlining the overall digital BOP testing process.
http://www.offshore-mag.com/webcasts/offshore/
2016/05/proven-under-pressure.html
Submit an article
Offshore magazine accepts editorial contributions. To submit an article,
please review the guidelines posted on our website by following this link.
www.offshore-mag.com/index/about-us/article-submission.html
COMMENT
ARTICLES FOR
DISTRIBUTION
Use published editorial content to
validate your marketing initiatives.
ELECTRONIC REPRINTS
HAND
NDOU
HIGH
HIGH
O TS
ALITY
-QUA
-Q
GLO
LOSS
SSY
SS
Y HA
GH-Q
YG
David Paganie Houston
Operators gaining confidence

Recent industry analysis suggests that a boost in upstream capex is forthcoming,
providing a signal that operators are gaining confidence in the market outlook. Evercore
ISIs global E&P mid-year spending outlook and survey finds that upstream spending
will increase next year as long as oil holds above $50/bbl for the balance of this year.
Many industry analysts predict that the price will rise well above this level into 2017
as global oil supply and demand tightens. Supporting this premise, 73% of its survey
respondents expect to increase spending in 2017, while 28% expect to keep spending flat
at 2016 levels and none plan to lower spending next year. Of those that plan to increase
spending, one-third plan to increase 2017 capex by more than 25% relative to their 2016
spending levels, while 20% plan to increase capex by up to 5%.
NG
ROSS ME
CR
MED
DIA MARK
MARKETIN
ODUCTS
PER
PERSON
ALI
ZED DIRECT
T MAIL
MAIL PRODU
PRODU
CTS
SONALI
ALIZED
PL
PLAQ
LAQ
AQUE
UES
UE
ES & FRAM
FRAMED
ED P
PR
RINT
RI
NTS
Articles are available in

electronic (pdf) format
and professional, highquality prints.
Engage visitors on website
Educate target audience
Changes in oilfield service purchases

2014-2018 by country, ranked by
change (absolute term, US $billion)
Enhance email campaigns

Instantly credible
conference materials
Trusted sales presentations
content
Add 3rd party
endorsement to social
media
Professional recruiting and
training materials
Branded content marketing
For additional information,

please contact
Foster Printing Service,

provider for Offshore.
In the meantime, it is the emerging markets that are offering a healthy dose of new and
prospective offshore opportunities for the oilfield services sector. Analytics firm Rystad Energy expects the largest growth in demand to come from Iran, which is expected to increase
its purchases by more than $6 billion from 2014 to 2018. Rystad forecasts that approximately
half of the $100 billion of investments for Irans upstream sector from 2016 to 2020 will be
allocated to its offshore market. See page 10 for more on the opportunities in Iran.
Offshore Egypt is another market that is gaining momentum. Rystad expects about
$3 billion in spending growth in Eqypt from 2014 to 2018, led by the development of
the Zohr, West Nile Delta, and Yolotan fields. The majority of this expenditure will be
allocated to the subsea sector.
Meanwhile, BP and the Egyptian Natural Gas Holding Co. (EGAS) have sanctioned
development of the Atoll Phase One project in the North Damietta Offshore concession
in the East Nile Delta. The project calls for an early production scheme involving the
recompletion of the existing exploration well as a producer, the drilling of two additional
wells, and the installation of the tie-ins and facilities required to produce from the field.
BP said at the time of sanctioning that its growing confidence in the potential of the area
led, in part, to the final investment decision. The Atoll field is estimated to hold 1.5 tcf of
gas and 31 MMbbl of condensate. First gas is expected in 2018.
BP also recently announced with partner Eni a discovery in the Baltim South Development Lease in the East Nile Delta. The discovery is a new accumulation along the same
trend of the Nooros field. BP plans to use existing facilities to expedite first production.
Meanwhile, Guyana is emerging as a major frontier market, highlighted by ExxonMobils Liza deepwater discovery. The US Geological Survey ranks the Guyana-Suriname
basin as the second most prospective, underexplored offshore basin with an estimated
13.6 Bbbl of oil and 32 tcf of natural gas yet to be discovered, writes Jessica Tippee,
Offshore magazine assistant editor. In May 2015, ExxonMobil hit more than 295 ft (90
m) of high-quality oil-bearing sandstone reservoirs with the Liza-1 exploration well. The
operator is reportedly moving the discovery into the pre-front-end engineering design
phase. See page 30 for Tippees Guyana upstream outlook report.
Call 866.879.9144 or
sales@fosterprinting.com
To respond to articles in Offshore, or to offer articles for publication,

contact the editor by email (davidp@pennwell.com).
Our strongest asset

is not our people.
Its their attitude.

We call this Norsk Integritet.
akersolutions.com
G L O B A L D ATA
Latin America subsea capex (%) by country 2011-2020
????????
5,000
0.90
4,000
3,000
0.85
Water depth (m)
6,000
0.95
2,000
0.80
1,000
0.75
2011
2013
2012
2014
Brazil
Trinidad
Uruguay
2015
2016
Mexico
Venezuela
Argentina
2017
2018
2019
Guyana
Chile
Brazils capex
2020
Falkland Islands
Puerto Rico
Source: Infield Systems Market Modeling & Forecasting Database
Worldwide offshore rig count & utilization rate (June 2014 May 2016)
1,000
100
Total util %
Iran oilfield >>>>>>>>>>>>>>

From 2016 to 2020, a total of about $50
billion of oilfield service purchases in Iran
will be directed toward the offshore market,
which is expected to be at $9 billion this
year and increase to $11 billion by 2020.
The majority of the market consists of
EPCI contracts. Five new platforms will be
commissioned in 2017 at South Pars phases
20 and 21 and more platforms are to follow
at the $4-billion South Pars Phase 11 as
well as Farzad B that was discovered by an
Indian consortium. The increased number
of active platforms combined with aging
facilities which have been underinvested
during the sanctions, will force a rise in the
maintenance and operations purchases. The
demand for drilling contractors as well as
well service and commodities picks up in
the coming years as many of the offshore
projects under development will go into
pre-drilling. Roughly 25% of investments are
well-related costs; with 22 wells to be drilled
over the next 30 months at South Pars
Phase 14 and additional infill drilling to commence at the producing field, these services
will rise going forward.
7,000
Total supply
Total contracted
Working
900
90
800
80
700
70
600
60
500
50
400
40
300
ne
Ju
14
g
Au
14
Source: IHS RigPoint
14
ct
ec
14
b
Fe
15
Ap
15
ril
n
Ju
15
g
Au
15
ct
15
O
ec
15
b
Fe
16
Ap
16
ril
Fleet utilization rate %
This month Infield takes a look at the effects of Latin Americas current turmoil on
the subsea capex market up to 2020, with
particular focus on Brazil and Mexico.
Brazil will remain the key driver of
subsea demand globally, accounting for
almost one-quarter of the global subsea
investments over the next five years. However, Brazils subsea market faces falling
demand over the next couple of years with
Infield forecasting a -13% drop in demand
between 2016 and 2017 and a further -16%
reduction between 2017 and 2018. The
reduced demand could be seen as a temporary cyclical downturn with an inevitable
rebound by 2019 driven by the Buzios oil
field development.
Mexico could see a significant increase in
subsea market share demand over the next
five years, driven entirely by state- owned
PEMEX. Although due to recent changes in
legislation, demand could be supported by
private international companies. Increasing
demand in Mexico is driven by PEMEXs
drive to tap into deepwater oil fields in order
to help reduce the countrys production decline. A noteworthy project driving demand
in 2017 includes PEMEXs Lakach oil field.
Lakach could potentially become Mexicos
first deepwater producing field, located
in water depths of around 988 m (3,241 ft)
and could account for 34% of the countrys
subsea investment over the next five years.
However, PEMEX has had to defer work on
the deepwater development as it cuts costs
and seeks international investment.
Neda Djahansouzi,
Research, Infield Systems
No. of rigs
Latin America >>>>>>>>>>>
30
Notes: Rig types included are jackups, semis, and drillships.
Oilfield services in Iran

Purchases of oilfield services
USD billion
12
10
11
Maintenance & operations
EPCI
Subsea
Drilling contractors
Well services & commodities
Seismic
10
10
2016
2017
8
6
4
2
0
2014
2015
Source: Rystad Energy DCube June 2016
2018
2019
2020
THE LEADING SCAFFOLDING

SYSTEM IN INDUSTRY.
WORLDWIDE.

Layher Allround Scaffolding. Reliable and always up to date since 1974.

Layher is the worlds leading manufacturer of scaffolding and protective systems
for the oil, gas and petrochemical industries. For more than 70 years the Layher brand
has been synonymous with proven safety, ground-breaking innovation, exceptional
quality and complete dependability. Put simply, Layher means more possibilities.
Whats more, with its global presence, Layher can make its expertise and experience
available wherever they are needed. We are committed to your business success.
Learn more on oilandgas.layher.com
GLOBAL E&P
North America
Shell has relinquished rights to offshore
exploration permits in Baffin Bay to the Nature Conservancy of Canada. The 8,625 sq
km (3,330 sq mi) of acreage will be incorporated into the new Lancaster Sound Marine Conservation Area. Shell secured the
permits before the Canadian government
imposed a moratorium on E&P activity in
the region during the late 1970s. The initiative for the new conservation area was in response to a proposed exploratory well.
Statoil proved two more oil fields during

its recent drilling campaign in the frontier
Flemish Pass basin, 500 km (310 mi) east
of Newfoundland. Bay de Verde and Baccalieu are both close to the Bay du Nord field,
where the partners are working on a hubbased development. Baccalieu is in a license
that the company only secured last fall from
the Canada Newfoundland & Labrador Offshore Petroleum Board.
Mexicos Phase 4, Round 1 auction, likely to

be staged in December, has drawn responses
from 21 companies including reportedly the
big five majors. On offer are 10 exploration
blocks in the Gulf of Mexico six in the Salinas basin and four in the Perdido belt in water depths of 500-3,000 m (1,640-9,842 ft), with
potential resources of 4 Bboe. Combined costs
of the work commitments could be $2 billion.
Jeremy Beckman London
impact study for a proposed floating regasification terminal in Talcuahano that could
supply up to 5 MMtons/yr of gas to the
south/central Chile region. Supplies could
come from Australia and from Magnolia
LNGs Lake Charles facility in Louisiana. Wison Offshore and Marine in Shanghai could
provide the floating storage and regasification unit (FSRU).
Brazils National Petroleum Agency has

agreed to extend Petrobras concession contracts for the offshore Marlim and Voador
fields until 2052. The operators field life extension proposals include installing two new
platforms, expanding water injection/processing capacity, and drilling 10 new wells.
West Africa
Endeavor Energy has awarded BMT Asia
Pacific front-end engineering and design and
optimization studies for the proposed Songon Gas-to-Power project in Cte dIvoire.
This includes an LNG FSRU that would be
connected via subsea infrastructure to gas
turbines in the Abidjan area.
Equatorial Guineas government is reportedly offering 32 offshore blocks under

its latest exploration licensing round, due to
close on Nov. 30. These are said to include
block A-12, recently relinquished by Marathon Oil.
Reel lay of flexible pipelines in the Gulf of Maracaibo. (Photo courtesy Aquatic)
South America
Europe
PDVSA, working in partnership with Roffoc and IMR Global Supply, has replaced a
series of large-diameter steel oil pipelines in
the Gulf of Maracaibo with flexible lines. According to Aquatic, which assisted deployment of the 18 flexible pipe reels supplied by
GE and Wellstream, the campaign was conducted in two phases, starting in late-2015.
Eos Investment Group subsidiary GNL

Talcuahano has submitted an environmental
Eni has contracted the ultra-deepwater

drillship Saipem 12000 for an exploratory
well this summer offshore Portugal. The
vessel can drill in water depths beyond 3,000
m (9,842 ft).
Energean, currently Greeces sole offshore oil producer, plans to submit a new
development plan to the government for the
offshore Katakolon block. The company recently brought onstream the first of 15 new
wells designed to extract 30 MMbbl from

the Prinos, Prinos North, and Epsilon fields
in the Gulf of Kavals. At Epsilon the company will install a new unmanned platform.
Russia
Gazpromneft Shelf has commissioned the
first re-injection well at the Prirazlomnoye
field in the Pechora Sea, 60 km (37 mi) from
the northern Russian coast. This will re-inject waste water and drilling mud employed
during construction of the planned 32 development wells from the ice-reinforced platform.
Gazproms new Arctic Gate (Vorota Aktiki) offshore terminal has begun loading
oil from the onshore Novorpotovskoye field.
Production heads through a 100-km (62-mi)
overland pipeline to the coast and from there
through a 3.5-km (2.2-mi) subsea pipeline to
the terminal. The 11-m (36-ft) deep nearcoast area is too shallow for ships, hence the
offshore location of the facility, which is designed to withstand ice 2 m (6.6 ft) thick and
temperatures down to -50C (-58F).
In the Sea of Okhotsk off northeast Russia, Rosneft has started production from the
Lebedinskoye oil/gas/condensate field via
a 5.3-km (3.3-mi) horizontal extended-reach
well drilled from the shore.
Mediterranean Sea
PA Resources has agreed to sell its E&P
interests offshore Tunisia to state-owned
ETAP. These include a section of the Zarat
field, which the struggling Swedish independent had sought to develop prior to the oil
price decline.
Mellitah Oil & Gas, a consortium of NOC

and Eni North Africa, has contracted Technip to engineer and install the subsea facilities for the Bahr Essalam Phase II development offshore Libya. The gas field, 110 km
(68 mi) offshore in 190 m (623 ft) of water,
will be tied back to the Sabratha platform via
pipe-in-pipe production lines and umbilicals.
Technip has additional responsibility for associated modifications to the platform. Subsea installations should start next spring.
Eni has discovered another large gas field

in the shallow-water Nooros area in the East
Nile Delta offshore Egypt. The Baltim SW-1
well, 12 km (7.5 mi) from the shore and 10
km (6.2 ft) north of the producing Nooros
field, intersected 62 m (203 ft) of net gas pay
in Messinian sandstones. The company now
assesses discovered resources in the area at
70-80 bcm.
Well operator Petrobel, Enis joint venture
with EGPC, has also commissioned Aker
Solutions to supply 180 km (112 mi) of steel
tube umbilicals to connect the deepwater
HyFleX
SUBSEA TREE SYSTEM
Based on eld-proven components and designed for

operational exibility to reduce life-of-eld costs.
The HyFleX* subsea tree system provides benets of both vertical and horizontal conventional trees without the usual compromises.
Designed so that the tubing hanger and tree can be installed and recovered independently of each other, the HyFleX subsea tree system
can provide signicant cost savings with multiple installation and recovery options.
Based on eld-proven components, the patented HyFleX subsea tree system oFers functional exibility and the ability to batch set wells,
mitigates risk, and can help deliver operators signicant cost savings in eld development over the life of the eld.
Learn more about our leading technology at
onesubsea.slb.com/HyFleX
GLOBAL E&P
Zohr gas field subsea facilities to an offshore

control platform.
Israels Petroleum Commissioner has approved Noble Energys development plan for
the 22-tcf deepwater Leviathan gas field. This
calls for subsea productions wells connected
to a platform in shallower water with a tie-in to
onshore infrastructure in northern Israel. IPM
Beer Tuvia has contracted up to 473 bcf of the
fields gas for a new Israeli power station.
Middle East
Saudi Aramco has discovered a new offshore accumulation named Faskar, close to
the Berri field, and is continuing exploration
in its shallow-water sector of the Red Sea,
the company disclosed in its annual review.
Aramco has also signed a joint development agreement with Lamprell, Hyundai,
and the National Shipping Company of Saudi Arabia (Bahri) to establish a yard in Ras
al Khair, eastern Saudi Arabia, specialized in
repair and maintenance of offshore rigs and
offshore service vessels. Aside from local
needs the yard could bid for projects internationally.
Asia/Pacific
Woodside has raised its estimate of recoverable dry gas from its recent Shwe Yee Htun
and Thalin discoveries offshore Myanmar to
almost 2.4 tcf, following analysis of subsurface data and logs from the two wells. There
is potential for tiebacks to the offshore Shwe
and Yadana production facilities. The company plans to drill a four-seven more exploration and appraisal wells in the surrounding
acreage starting early next year.
SapuraKencana Energy has discovered

gas from two recent wells in the block SK408
PSC offshore Sarawak. Jerun-1, 5 km (3.1 mi)
north of the 2014 Bakong gas find, could be a
significant discovery, with logs indicating an
800-m (2,624-ft) gas column in the primary
Late Miocene carbonate target reservoir.
Petronas first FLNG vessel PFLNG SATU
has reached the Kanowit gas field in block
SK306, 180 km (122 mi) off Sarawak. DSME
built the 365-m (1,198-ft) long ship which is
designed to operate in water depths of 70200 m (230-656 ft), with processing capacity
of 1.2 MM metric tons/yr of LNG.
the Natuna Islands.

Another report suggests the countrys Energy and Resources Ministry has transferred
the East Ambalat oil and gas block offshore
North Kalimantan relinquished by Chevron
to PT Pertamina. The location is 80 km (50
mi) east of Tarakan in the Ambalan Sea in water depths of 2,000 m (6,562 ft). Chevron took
its decision because of a border dispute with
Malaysia over the surrounding area.
INPEX is drilling for hydrocarbons offshore Japans Shimane and Yamaguchi prefectures under a program commissioned by
two government departments. The exploratory well location is 130 km (81 mi) northwest of Shimane and 140 km (87 mi) north
of Yamaguchi.
Australia
Carnarvon Petroleum has secured a new
exploration permit in the North West Shelf
off Western Australia. WA-523-P is close to
the producing Laminaria, Corallina, and Kitan fields and contains two undeveloped oil
discoveries, Bluff and Buller, and the Buffalo oil field that ceased production in 2004.
Caspian Sea
Kazakh Energy Minister Kanat Bozumbayev said the giant Kashagan oil field
should re-start operations this year, three
years after production was shut down due
to pipeline damage caused by leaks of the
fields sour gas. This follows various engineering studies and replacement of the affected pipelines.
East Africa
Aminex began commissioning last month
of the subsea pipeline and gas plant for the
Kiliwani North development on Songo Songo
Island, close to Tanzanias coast. Gas from
the first completed well has already been processed and entered the countrys grid.
China National Petroleum Corp. (CNPC)

and Mozambiques state oil company Empresa Nacional de Hidrocarburos have signed an
agreement to co-operate in E&P projects in
Mozambique and to develop a local engineering workforce. CNPC is currently a partner
in the ultra-deepwater Area 4 subsea gas/
LNG project.
India
ONGC has maintained its recent success
rate offshore India with five more liquids and
gas discoveries. Four were off the west coast
in the Mumbai offshore and Kutch offshore
basins. The other was a shallow-water oil
and gas find in the Krishna Godavari basin
offshore eastern India that has extended the
Panna play farther south in the Bassein field.
Sabah Shells Malikai TLP at the MMHE West yard. (Photo courtesy ALE)
ALE has completed load-out of the 27,500ton tension leg platform for Shells Malikai
project offshore Sabah at the Malaysia Marine and Heavy Engineering (MMHE) West
yard in Johor Darul. Skidding of the structure took 12 hours. IEV Malaysia was due to
transport and install the platform.
Indonesia is reportedly offering 15 oil

and gas blocks for tender in 2016, including
concessions offshore south and southeast
Sulawesi, West Papua, East Kalimantan, and
Carnarvon aims to apply recent advances in

imaging such as full waveform inversion to
assess the target reservoirs and may try to
re-develop Buffalo, possibly via a tieback to
nearby facilities.
Regulatory body NOPSEMA has asked

BP to modify and re-submit its environment
plan for exploration drilling in the Great
Australian Bight offshore South Australia.
Assuming BP accepted, the revised plan was
due to be submitted by mid-July.
WWW.TOPSIDESEVENT.COM
FEBRUARY 21-23, 2017
ERNEST N. MORIAL CONVENTION CENTER

NEW ORLEANS, LOUISIANA USA
HOSTED BY:
WHERE IT ALL COMES TOGETHER
DO YOU WORK FOR AN OPERATING COMPANY?

If you answered YES then your company qualifies for the Operators Partner Program!
Send an unlimited number of delegates to the Topsides, Platforms & Hull Conference & Exhibition for $2,500!
(Individual Full Conference Registration is $890)
OPERATORS PARTNER PROGRAM BENEFITS INCLUDE:

Unlimited conference registrations, including (per attendee):
All conference sessions
Exhibit floor receptions
Delegate lunches
Exhibit hall access
Networking opportunities such as coffee breaks and
continental breakfasts
As a participant of the Operators Partner Program,

your company logo will appear in/on:
Preliminary Event Guide
Show Guide
Event website
On-site signage
PREVIOUS PARTICIPANTS INCLUDED:
FOR INFORMATION ON QUALIFYING AND HOW TO REGISTER, PLEASE CONTACT:

Justus Swantner
PHONE: +1 713 963 6243
CELL: +1 713 597 1367
EMAIL: justuss@pennwell.com
OFFSHORE EUROPE
UK industry seeks more

government intervention
Britains oil and gas sector will have shed around 5,000 subsea
jobs by the end of this year, claims industry body Subsea UK, as a
consequence of the lower oil price. The association was due to meet
members of Parliament in London last month to lobby support for
new North Sea initiatives after a recent survey revealed that more
than half of UK subsea companies had suffered a serious slump in
sales more than 50% in some cases since the downturn began in
2014.
Subsea UK CEO Neil Gordon pointed out that in better times the
industry generates 9 billion ($12.8 billion) in revenues of which
more than 4 billion ($5.68 billion) are export-related. The good
news, he said, is that our subsea businesses are continuing to invest in research and the development of new technology, which is
vital to maximizing economic recovery in the North Sea, prolonging its life However, the UK subsea industry urgently needed
government support and R&D funding, he added, and greater incentives to stimulate fresh exploration off Britains shores. This, he
said, should include new models for exploiting the smaller economic
pockets of hydrocarbons.
A Price Waterhouse Cooper (PwC) survey, based on interviews
with 37 senior executives from oil and gas companies active on the
UK, Norwegian and Dutch continental shelves, called for more innovative thinking on both sides to sustain the North Seas future. A
Sea Change claimed that the right measures could extend production by several decades, but would need to be enacted quickly for
this to happen.
Alison Baker, PwCs UK and EMEA oil and gas leader, said UK
respondents to the survey called for the Department of Climate
Change and the Oil and Gas Authority to be more attuned to the
needs of the industry, from majors down to small oilfield service
companies. New approaches some put forward to re-invigorate the
basin included the formation of a super joint venture that would
consolidate smaller and fragmented offshore assets in the UK
North Sea under one sole operator. This could drive greater costefficiencies, improve bargaining power with suppliers, and lead to
more co-ordinated decommissioning of the asset pool. Another suggestion to drive more projects forward was consortium financing
with collective counterparty risk, focused on area-based rather than
asset-based outcomes.
Some Norwegian respondents voiced concerns over wage levels for
employees on the Norwegian continental shelf (NCS), in some cases
85% higher than the UK equivalent, while Dutch respondents called for
more urgent planning for decommissioning now that low gas prices are
accelerating the demise of the southern North Sea gas basin.
Pipelines attract investors

Another report from advisory firm Deloitte predicts more North
Sea infrastructure deals as established players scale back UK offshore interests to cut costs. Pipelines are among the more attractive
assets, the European Infrastructure Investors survey found, offering strong rates of returns over the past five years. Private equity
firms and specialist energy infrastructure funds are the most likely
buyers, looking to build a portfolio of pipeline interests. Antin Infrastructure Partners was one example last year, acquiring BPs stake
in the Central Area Transmission System gas pipeline system in the
UK North Sea for $469 million.
Stewardship changes could be positive for the sector as whole,
Deloitte claimed, with the investors looking to maximize potential
from these assets (i.e. through attracting third-party production)
before selling them on to another investor.
One of the UKs more active transactors, Independent Oil & Gas
(IOG), has agreed to acquire Oyster Petroleum and its 100% inter16 Offshore July 2016 www.offshore-mag.com
Jeremy Beckman London
ests in four southern North Sea blocks containing the Vulcan satellites, with combined reserves of 320 bcf. IOG is negotiating export
routes for planned hubs here and at its Blythe field development to
the west. The company may also need an offtake solution at the Skipper oil field in the northern UK sector, having gained clearance to
drill an appraisal well this month using the semisubmersible Sedco
704. Aside from Skipper, IOG hopes to prove more oil by deepening
the well into the untested lower Dornoch and Maureen formations.
Aker BPs field and exploration interests offshore Norway.

(Map courtesy Det norske oljeselskap)
BP, Det norske form super independent

BP has agreed to merge the activities of its Norwegian subsidiary, BP Norge, with Det norske oljeselskap to form what would
be Norways largest E&P independent. Assuming regulatory and
shareholder approvals, the new company will be named Aker BP,
with Aker owning 40%, and BP/Det norske each holding 30%. BP
CEO Bob Dudley said the deal demonstrated how his company was
prepared to adapt its business model in order to remain competitive.
Aker BP will have 97 licenses on the NCS, 46 as operator; an estimated 723 MMboe of P50 reserves; and projected production this
year of around 122,000 boe/d, potentially more than doubling to
250,000 boe/d in 2023. It will operate major production centers at
the Alvheim, Hod, Ivar Aasen, Tambar, Ula, and Valhall fields in the
North Sea and at Skarv in the Norwegian Sea, and will be a partner
at Johan Sverdrup in the North Sea. It will also have near-term platform decommissioning liabilities at Ekofisk and Valhall.
Karl Johnny Hersvik of Det norske, set to be named CEO, said:
We will implement simple processes across the combined entity
and build a fit-for-purpose organizational structurewe expect to
realize significant cost cuts and synergies in close co-operation
with employees and suppliers.
Bruce Beaubouef Houston
GULF OF MEXICO
Operators keep their eyes

on offshore Mexico
Despite the market downturn, international
oil companies are keeping their eyes on the
possible opportunities represented by Mexicos
evolving offshore marketplace. In early June, it
was reported that 23 oil and gas operating companies had registered to submit proposals for
Mexicos Phase 4 Round 1 deepwater auction,
scheduled for December.
Several large international oil companies are
reportedly among those registered, including
Exxon Mobil, Chevron, Shell, BP, Statoil, and
Total.
The companies have applied to bid for 10
deepwater exploration blocks six in the Salina basin of the Gulf of Mexico and four in
the Perdido belt covering a total of 8,250 sq
km (3,185 sq mi) and at depths ranging from
500 to 3,000 m (1,640 to 9,842 ft).
The areas being bid out for exploration in
Phase Four of Licensing Round 1 are estimated
to contain 4 Bboe in reserves 22% more than
in the auctions earlier stages. Technical aspects
for qualification require the parties to have
specified knowledge and experience in working in at least one deepwater exploration and
production project at a depth of 1,000 m (3,280
ft) in the preceding five years, which entails collective capital investments of a minimum $2 billion. According to the bid criteria, contracts will
have terms between 35 to 50 years.
There had been some speculation as to
whether Phase 4 of Round 1 would meet the
original timeline due to the downturn in the
market. But speaking at a conference in Houston earlier this year, Mexico President Enrique
Pea Nieto announced that the auction for the
deepwater blocks would be held at the beginning of December 2016. Commenting on the
impact of the low oil price, President Pea Nieto stated that regardless of what happens in
the international context, Mexico will move forward with the energy reform implementation.
At the same time, Mexicos state-owned oil
company Petroleos Mexicanos announced
that it would offer a farm-out arrangement to
private firms to join in the exploration of the
Trion field in the deepwater Gulf of Mexico.
It would be the first time that PEMEX has
formed an association with a private firm for
deepwater drilling. PEMEX director Jose Antonio Gonzalez, quoted in an Associated Press
report, called it a watershed moment in PEMEXs history. The Trion field, located in the
Perdido belt just 25 mi (40 km) south of the
US maritime border, is estimated to hold the
equivalent of 480 MMbbl in proved, potential,
and possible oil and gas reserves.
PEMEX officials say that the offer will be
put up for bid in coming days, and a winner
will be announced on Dec. 5. Gonzalez did
not specify what compensation the farm-out
scheme would involve.
Above: Mexicos deepwater Trion field will be

the first in a series of farm-out agreements
designed to invite greater international participation in the countrys offshore E&P activities.
(Courtesy PEMEX)
Left: The Sur de Texas-Tuxpan natural gas pipeline will include 690 km (428 mi) of 42-in. pipe
that will run offshore in the Gulf of Mexico, along
the Mexican coast. (Courtesy Sempra Energy)
Officials estimate it will take $11 billion

in investments to develop the field in waters
about 8,200 ft (2,500 m) deep.
Following on the heels of this announcement,
it was reported that Statoil may seek to partner
with PEMEX in Mexicos deepwater fields, as
the producer looks to gain a foothold in the countrys recently opened energy market.
We see opportunities to bid on deepwater
farm-out agreements with PEMEX if the terms
and conditions are right, said Tore Loseth, vice
president of Statoil Exploration in the US and
Mexico, as quoted in a Bloomberg report. But
we need to know more about how the process
will run before we can properly evaluate these.
Loseth declined to say whether Statoil plans to
bid on the Trion field, which will be the first in a
series of long-delayed farm-out agreements for
areas that PEMEX was assigned in Mexicos
so-called Round Zero auction.
Statoil, which failed to win areas in Mexicos shallow-water auctions last year, is
among the 23 companies that have registered
to pre-qualify to participate in the deepwater
oil auction on Dec. 5. The list includes deepwater operators such as Chevron, Exxon Mobil, and Total, all of whom are now in talks to
secure partnership deals with PEMEX. The

Mexican company said in May that it might
also start similar discussions with Statoil.
Blocks up for grabs in Mexicos deepwater auction are potentially attractive in spite
of low oil prices, Loseth said. The Mexican
side of the Gulf of Mexico is very attractive
because it is relatively under-explored.
Meanwhile, TransCanada says that it has
been selected to build, own, and operate the
$2.1-billion Sur de Texas-Tuxpan natural gas
pipeline in Mexico. Plans call for this system
to run 800 km (497 mi) with 42-in. pipe, with
at least 690 km (428 mi) of it to run offshore.
TransCanada expects to invest approximately $1.3 billion in the pipeline, which will
begin in the Gulf of Mexico at the border
point near Brownsville, Texas, then run offshore along the Mexican coast. The system
will have three laterals that extend onshore
to power generation markets in Matamoros
in Tamaulipas state, and Altamira and Tuxpan in the state of Veracruz.
The bid for the Sur de Texas-Tuxpan project was presented in partnership with IEnova, a subsidiary of Sempra Energy. The project will be supported by a 25-year natural
gas transportation service contract for 2.6
bcf/d with the Comisin Federal de Electricidad, Mexico state-owned power company.
The joint venture, Infraestructura Marina
del Golfo, is targeting a late 2018 in-service
date for the pipeline.
www.offshore-mag.com July 2016 Offshore 17
Sarah Parker Musarra Houston
SUBSEA SYSTEMS
DNV GL recently released an RP that facilitates

the standardization of technical documentation
required for a typical subsea field development
project. (Image courtesy DNV GL)
The bigger picture
New DNV GL RP
advances standardization
Spearheaded by DNV GL, one of the main
proponents of subsea standardization, a new
cross-industry project shows evidence that
decreasing the industrys reliance of project- or company-specific documentation can
significantly reduce engineering hours.
This two-year collaboration has resulted
in a Recommended Practice (RP) that the
organization said can reduce the amount of
subsea paperwork and enable documentation reuse in a typical project.
Among the supply chain layers in the
subsea industry, there are many unnecessary distributions and documentation exchanges. Often these documents are incomplete or not updated with the latest revisions
from the original source to every company
that keeps them on their records. Martha
Viteri, Head of Section, Subsea and Well Systems, explained to Offshore at the Offshore
Technology Conference (OTC). Through
this process, DNV GL tried to address and
define the minimum subsea documentation
requirements, [e.g.] what are these documents and the best way to share them to address efficiency and cost.
Covering documentation generated in the
engineering, procurement, and construction
phases, DNVGL-RP-O101, Technical documentation for subsea projects, details a required minimum set of documentation transferred between E&P companies, operators,
and contractors for the design, construction,
procurement, and operation of a field.
A lot of time is spent by different people
in various companies putting together large
amounts of documentation that in many occasions is unnecessary, Viteri said. If we
were to quantify the replications across the
supply chain, we could realize that many of
these activities add very little or no value
to the safety or performance of the subsea

equipment and systems.
Viteri noted that to capitalize the savings, the initiative needs to be implemented
industry-wide, across the supply chain.
A contractor in the JIP reported that subsea documentation increased by a factor of
four between 2012 and 2015, with handling
time also doubling per revision.
Previously, a contractor in a typical project delivered around 10,000 documents with
each averaging three revisions, resulting in
30,000 transactions.
Today, projects can deliver 40,000 documents with three revisions each, resulting in
120,000 transactions.
A benchmarking exercise by a JIP participant showed that adoption of the RP could
deliver a 42% reduction in engineering hours.
Another supplier estimated that the potential
cut in documentation could be as high as 7580% through increased use of standardized
documents.
In addition, project co-chairman Jan Ragnvald Torsvik, Statoils lead engineer of Life
Cycle Information, said in a statement that
the company was already seeing the benefits of implementing a draft version of the
RP in its Johan Sverdrup project last year.
We have already learned that this standards approach in utilizing package-specific
requirements has a positive impact on standardization and efficiency, Torsvik said.
JIP partners were Aker Solutions, Brightport, Centrica Energi, DEA Norge, Det norske oljeselskap, DNV GL, ENI Norge, GCE
Subsea, FMC Technologies, GDF SUEZ E&P
Norge, Kongsberg Oil & Gas Technologies,
Lundin Norway, Oceaneering, OneSubsea,
Statoil, Subsea 7, Subsea Valley and SUNCOR
Energy Norge. Observers: The Norwegian
Oil and Gas Association and Petroleum Safety
Authority Norway.
Also at OTC, Offshore had the opportunity

to speak with Remi Eriksen, Group President & CEO at DNV GL, who explained that
standardization and digitalization remained
two of the organizations main areas of focus
especially in the current market.
A driver behind DNV GLs diligent pursuit
of standardization within the offshore oil
and gas sector as it has done in some form
or another since the 19th century, he said
is because it presents multiple opportunities
for companies to trim costs while operating
in one of the worlds costliest industries.
Eriksen explained that over the past 20
years, companies built and then pursued
their own standards so aggressively that
the supply chain was challenged in meeting each organizations various needs and
criterion. Therefore, DNV GL heads many
JIPs to examine the standardization of everything from composite materials, to technology qualifications, to subsea pipelines, to
the development of global best practices in
engineering and construction phases within
South Korean shipyards, and more.
These will drive down costs over time,
he said. Innovation has never been more
important [to the industry] than now collaborative industry-wide innovation that addresses the competitiveness of the whole oil
and gas industry.
To the same end, digitalization, driven
by the massive uptick in sensor technology,
connectivity, and cloud computing over the
last few years, also provides the industry
with a virtual sandbox from which it can create spades of cost-cutting efficiencies.
Within five years time, Eriksen explained, the coin-sized sensor that has the
computing and storage [capacity] of an
iPhone will be driving down prices and allowing things to be done differently.
The two concepts go beyond organizational priorities. Eriksen said that DNV GL
considers the two themes key to helping the
industry survive this prolonged downturn.
The lower for longer scenario has companies examining new ways to cut costs, as
through standardization, digitalization, and
cross-industry collaboration.
Now that many companies have cut projects and reached a level of workforce stabilization, they are examining other ways to
save money and processes and documentation is one of them, Viteri said. Implementing the RP is a way to improve the way companies operate. She noted that this is where
DNV GL believes that its JIPs can help.
Jessica Tippee Houston
VESSELS, RIGS, & SURFACE SYSTEMS
Global FPS installation capex by vessel type 2011-2020.

25
FPSO
Spar
Global orders
Expenditure ($bn)
20
FPSS
TLP
15
10
2011
2012
2013
2014
2015
2016 2017
2018
2019
2020
(Courtesy Douglas-Westwood)
being de-clogged and deployment of boats to rigs optimized, generating major savings for the company. Aramco claims this is a worldfirst concept, developed after a three-year collaboration between the
companys Marine and Drilling departments.
Sultan S. Al Ghamdi is a planner responsible for preparing boats
that are loading the cargo for rigs. Some rigs need a deep boat, he
said. That means that the boat can hold position by itself without
dropping anchor. We assign the boats, depending on the weather,
depending on the location of the rigs, the deck space of the boats,
and the requirement quantities.
Things are managed better with the hub and we can also deliver
over a short time frame [within 90 minutes as opposed to the previous eight to 10 hours].
The associated new sea bus service is responsible for transportation related to more than 50% of rig crew changes at the offshore Marjan, Zuluf, and Safaniyah oil fields. Aramco operates two taxi boats to
escort crews to the station.
Analyst finds signs

of turnaround in FPS market
KCA Deutag sells

1970s-built jackup drilling rig
As a result of improving oil prices, cheaper shipyard/module fabrication costs and re-engineered projects, the FPS market should
see improvement in the second half of 2016, according to analyst
Douglas-Westwood (DW).
While no FPS units have been ordered so far this year and many projects such as the Vette FPSO have been canceled, this year DW expects
an FPSS to be ordered for Mad Dog Phase 2 in the US Gulf of Mexico
and an FPSO for the Madura MDA/MBH project offshore Indonesia.
Expenditure on installations in the sector is expected to remain
high and the analyst forecasts spend of $58 billion on FPS units between 2016 and 2020 a 32% increase over the hindcast. Much of
this capex is for units ordered before the oil price collapse with sustained high oil prices leading to the sanctioning of high capex FPS
units. The majority of spend will be in traditional high-capex regions
of Latin America and Africa which account for 33% and 22%, respectively. However, beyond these regions, the analyst says spend will be
diverse with Western Europe, North America, Asia, and Australasia
each seeing more than 8% of total capex.
FPSOs will continue to represent the largest segment of the market with 79% of capex, TLPs and FPSSs will account for 9% and 10%
of capex, respectively, and spars will account for 2%.
Despite the current lack of orders, there are still near-record backlogs to be worked through, ensuring shipyards remain active. The
speed with which new orders arrive will be important and the analyst
anticipates that the first order will likely lead to a spurt of other orders, as many operators wait for costs to bottom-out before ordering.
Consequently, the next few years represent a major opportunity
for operators to capitalize on lower costs, DW says, while also providing manufacturers with the opportunity to move toward standardization as the industry focuses on cutting costs. What will be
vital is ensuring that the lessons learned are not forgotten should
there be an unexpected increase in the oil price.
KCA Deutag has sold its jackup drilling rig Ben Rinnes to an undisclosed energy and services company. The ABS-classed Marathon Le Tourneau MLT 53-S enhanced rig was built in Clydebank,
western Scotland, in 1973 and acquired by KCA Deutag in 2005.
It had operated under contract offshore Angola until February
2016, and has since been stacked in Gabon.
Offshore logistics hub cuts Aramcos rig costs

Tanajib Port, which services offshore rigs and acts as a hub for
Saudi Aramcos drilling operations, has transformed the way it operates. It has constructed a Marine Offshore Floating Hub, a remodeled oil tanker named Rawabi Integrity, stationed 70 nautical miles
(130 km) offshore. According to Aramco, this represents a paradigm shift in the way offshore rig logistics are managed.
Functioning as a mini-Tanajib Pier, its decks are stocked with all
the supplies and equipment needed to keep the companys offshore
rigs operating as planned, saving time and costly round trips to port
for vessels. The new facility has also led to the existing onshore pier
Ben Rinnes is an ABS-classed Marathon Le Tourneau MLT 53-S enhanced

jackup drilling rig. (Photo courtesy KCA Deutag)
CEO Norrie McKay said: Whilst the sale of the Ben Rinnes is an
important milestone for KCA Deutag as it is our last asset in our mobile offshore drilling fleet, we continue to maintain the competence
and experience required to support offshore drilling unit operations.
The company is currently supporting construction and start-up of
two Category J jackups that will begin operations offshore Norway
next year.
Sembcorp completes Culzean jackup

Sembcorp Marine has delivered the jackup Maersk Highlander (formerly known as Hercules Highlander) to Maersk Highlander UK. The
newbuild rig, based on the Friede & Goldman JU 2000E design, will
drill development wells for Maersks Culzean field in the UK central
North Sea.
Maersk Highlander can operate in water depths of up to 400 ft (122
m) and drill to depths of 30,000 ft (9,144 m). Construction started in
September 2014 and was completed on schedule.
Bruce Beaubouef Houston
DRILLING & PRODUCTION
Leaner market prompts new partnerships, acquisitions

Amidst
A
id t the
th market
k d
downturn, oilfield
ilfi ld and
d
downhole service firms are looking for new
ways to reduce costs and work more efficiently. In some cases, this trend is leading to new
mergers and acquisitions; while other firms
are entering partnerships to increase their
value to operators.
One such example was announced in midJune, when Diamond Offshore Drilling, Inc.
announced a joint development agreement
with Trelleborg to develop, manufacture, and
market Helical Buoyancy riser technology
developed by Diamond Offshore. The companies say that the patented riser buoyancy design reduces riser drag and mitigates vortexinduced vibration in offshore applications, and
enables improved operational efficiency.
This solution is designed as an alternative
to adding fairings or strakes to the drilling
riser; and can reduce deployment time and
operating expense. The Helical Buoyancy design also improves safety in challenging environments by eliminating the need for personnel to work below the drill floor to attach
a separate apparatus. The helical design is
the result of several years of development by
Diamond Offshore utilizing computational
fluid dynamics and high Reynolds Number
wind tunnel testing.
Diamond Offshore says it will work with
Trelleborg on further application engineering, data acquisition, testing, and development of Helical Buoyancy applications across
the offshore drilling market.
Development of this new technology for
riser buoyancy is even more important as drilling moves into deeper waters, said Ron Woll,
senior vice president and CCO of Diamond
Offshore. We continually look for ways to
improve the economics of offshore drilling for
our customers, and this new buoyancy design
will enhance drilling efficiencies in high-current environments.
In conjunction with this agreement, Diamond Offshore has ordered Helical Buoyancy from Trelleborg for drilling risers on
the Ocean BlackRhino and Ocean BlackLion,
two of Diamond Offshores sixth-generation
drillships currently under contract in a highcurrent area in the Gulf of Mexico.
This technology advancement is the result of Diamond Offshores engineering expertise and thought leadership and should
benefit the broad offshore drilling industry
as it gets adopted, said Woll.
Elsewhere in the oilfield services market,
acquisitions are the name of the game. In early June, Schlumberger reported that it had
acquired Omron Oilfield and Marine, Inc.,
and Saltel Industries.
With the Omron deal, Schlumberger hopes
to strengthen its control systems capabilities for
Statoil says it will suspend its

contract for the semisubmersible Songa Delta after the rig
completes the current Slemmestad well in the Norwegian
North Sea. In late June, the rig
will go on 75% suspension rate
($277,000/d), likely resuming
work with Statoil in mid-August. (Photo courtesy Songa
Offshore)
integrated well construction. Omron designs,

manufactures, sells, and provides aftermarket
services for automated drive and control systems, power houses, and drillers cabins.
Ashok Belani, executive vice presidenttechnology for Schlumberger, said that the addition
of Omron Oilfield and Marine will enable us to
strengthen our industrial automation control
systems capabilities as part of our long-term
strategy to develop an integrated well construction system. Belani explained that an added
that an enhanced control system offering will
play a pivotal part in developing the software
capabilities required to realize our vision to provide our customers with a step change in drilling performance.
Robert Bost, CEO, Omron Oilfield and
Marine, commented that the transaction will
enable it to leverage its US-installed base with
Schlumbergers global reach to create new
market opportunities internationally. We will
continue to build on our existing technology
collaboration to expand control system capabilities in oilfield applications, Bost said.
With the Saltel Industries acquisition, Schlumberger hopes to strengthen its completions technology portfolio with Saltels expandable steel technology solutions. Saltel is
a France-based engineering, manufacturing,
and service company that offers expandable
patches and steel packers technology for the
oil and gas industry.
Olivier Le Peuch, president, Schlumberger
Completions, said that Saltel Industries has an
impressive track record in providing expandable
steel patch technology to the remedial services
market and has developed an innovative port-
folio of openhole steel packer technology. He

added that the acquisition strengthens our technology portfolio in the growing completions remedial services market, and the unique expandable steel packer technology has the potential to
disrupt the openhole isolation market.
Over the last few years, Saltel Industries has
developed expertise and established a commercial track record in both inflatable packers
and expandable tubulars for steel patches or
packer technology applications. The companys deployment of expandable steel patches
is recognized for its effective water shut-off applications to restore production in wells. Also,
in cementing operations, the application of
expandable open steel packer technology for
external casing packers has resulted in lowering operational risk and cost compared to traditional inflatable packers.
Jean-Louis Saltel, managing director, Saltel
Industries, said that the transaction is an important milestone for Saltel Industries as it will
leverage Schlumbergers footprint to maximize
market access for our products and, in particular, expandable steel patch technology. By
combining Saltel Industries steel expandable
technology with Schlumbergers technology
integration capability, we will offer unique well
integrity and zonal isolation applications to our
customers, Saltel observed.
Meanwhile, National Oilwell Varco, Inc. (NOV)
says it has entered into a definitive agreement to
acquire the completion tools business of Trican
Well Service Ltd. The business designs and sells
a range of patented downhole tools for multi-stage
fracturing and multi-zone completions in North
America and select international markets.
Sarah Parker Musarra Houston
PGS latest Titan-class vessel Ramform Tethys has embarked

on its maiden project, drawing what the company claims is the
worlds largest seismic spread. The record on a multi-client
survey over the Aasta Hansteen area of the Norwegian Sea, with
a configuration of 16 streamers, each 8.1 km (5 mi) long, and
streamer separation of 75 m (246 ft). Ramform Tethys, launched
in March, is recording high-density 3D broadband seismic data
from what is said to be the largest amount of streamer ever towed
behind a single vessel, comprising up to 129.6 km (80.5 mi) of
GeoStreamer equipment. The previous record was set by its
fellow Titan Ramform Titan last December when it towed around
127 km (79 mi) of GeoStreamer during the first ever 18-streamer
deployment in the Bay of Bengal. The current 4,400-sq km (1,699sq mi) 3D survey over the Aasta Hansteen area is expected to be
completed in August, with fasttrack data available four months after the final shot. Ramform Tethys is said to provide the flexibility
to encompass any acquisition design. PGS has also announced
an agreement with Rock Solid Images concerning the integration
of seismic, electromagnetic (EM), well log, and rock physics data.
The company claims its towed streamer EM system improves
acquisition efficiency and generates richer datasets that are of
OCS permits spark debate

Seismic permitting and exploration off the US Atlantic margin has
re-entered the news recently, as law-makers on the state and local
levels have been making their respective cases to officials including
President Barack Obama himself.
In June, US Representatives Mark Sanford (R-SC) and Gerry
Connolly (D-VA) joined in sending a letter signed by 53 other representatives to Obama requesting a halt to the permitting process for
potential seismic testing in the Atlantic Ocean.
The US Department of the Interior and the US Bureau of Ocean
Energy Managements (BOEM) proposed outer continental shelf
(OCS) oil and gas leasing program for 2017-2022 excluded the Atlantic coast after a portion was previously included in a draft. Despite
this, permits to acquire new seismic data within the Atlantic OCS are
still sitting with the BOEM following its July 2014 record of decision
clearing the way for G&G survey activities.
[I]t makes little sense to conduct seismic testing off the Atlantic
coast, when the Atlantic Ocean has been excluded as a possible site
for offshore drilling by the Department of Interior, Sanford said in
a statement. Sanford and Connolly were both adamant that the respective coastal communities they represent were opposed to seismic activity, which is consistent with an earlier announcement from
US Secretary of the Interior Sally Jewell.
Less than a week after the representatives letter reached 1600
Pennsylvania Ave., North Carolina Governor Pat McCrory wrote
Jewell to stump for the inclusion of the Atlantic in the final version
of the OCS lease sale. In it, he closed by urging the government to
move forward with reviewing the permits.
I urge the US Department of the Interior and other federal agencies to promptly complete the review of four pending applications
requesting approval to conduct geophysical surveys in the Atlantic,
McCrory said in the letter to Jewell.
The North Carolina lawmaker also protested the practice of basing resource decisions on outdated data data that the BOEM identified in the proposed plan as being more than 40 years old.
New exploration using modern 2D and 3D seismic techniques
will provide policy makers and industry more accurate resource
estimates from which they can make informed decisions about the
mid-Atlantic OCS. Existing estimates are based on decades-old technology and do not effectively quantify or pinpoint potential resources. New data will ensure economically and environmentally sound
GEOSCIENCES
higher density than those produced using traditional node-based

methods. The combination of the data density and richness in
both offsets and frequencies are said to make the EM data easier
to integrate with seismic, especially for reservoir characterization.
(Image courtesy PGS)
activity should future development take place, McCrory wrote.

In 2014, the BOEM estimated 4.72 Bbbl of undiscovered technically recoverable oil and a mean of 37.51 tcf of undiscovered technically recoverable natural gas in the Atlantic OCS.
NOIA, others respond

In response to the letter to Obama, president of the National
Ocean Industries Association Randall Luthi told Offshore: The letter
is not based on science or practice. The fact is that seismic surveys
have been conducted safely in the worlds oceans for many decades,
not only to search for oil and natural gas, but also to locate underwater structures, discover shipwrecks and to determine suitable sites
for offshore wind turbines.
I doubt that most of those calling for a ban on seismic surveying have ever been onboard a seismic vessel to witness first-hand
survey operations which include stringent measures to avoid and
mitigate environmental impacts, such as the required gradual ramping up of sound levels and the required presence of trained marine
mammal observers who scan the survey area so that operations can
be halted if marine mammals are seen nearby, he continued.
Seismic surveys are not new to the Atlantic OCS; they have been
conducted periodically over the past 50 years with no reported injuries or significant disturbances to marine life. Seismic research
ensures future decisions on leasing and drilling are well-informed
and not made blindly.
NOIA is not alone in its opposition. The International Association
of Geophysical Contractors, API, and others have also urged the bureau to act on the permits.
Like McCrory, IAGC COO and Executive Vice President Walt
Rosenbusch decried the age of the data: The US Atlantic OCS has
been excluded from the five-year planning process for several decades based in large part on the position that the resource potential was not significant. Had the administration moved forward
granting the authorizations to acquire new seismic data they
would have data that would better define the resource potential on
the Atlantic OCS.
Earlier this year, the API pointed to a number of US officials that
were on the record as supporting the inclusion of the Atlantic OCS.
Along with McCrory, these included Senator Marco Rubio of Florida, Senator David Perdue of Georgia, Senator Tim Scott of South
Carolina, and Senator Mark Warner of Virginia.
L AT I N A M E R I C A
December 2015: SBM Offshores twin FPSOs pass in Guanabara Bay as Cidade
de Maric departs from and Cidade de
Saquarema arrives at BRASA shipyard.
BRASA shipyard completes four-year FPSO

construction, integration campaign
Second lookalike floater sails to presalt Lula field
n May, the FPSO Cidade de Saquarema

departed the BRASA shipyard, close to
downtown Rio de Janeiro, for service
on the Lula field in the BM-S-11 block
in the presalt Santos basin offshore Brazil. This was the third of three successive
FPSOs to undergo topsides integration at
the yard within the past four years, and the
second destined for Lula following Cidade de
Maric, which sailed to the field in March.
The first vessel, Cidade de Ilhabela, started
production at the presalt Sapinho field in November 2014. It operates in 2,140 m (7,021 ft)
of water, the deepest of SBM Offshores global floater fleet, and has the largest throughput capacity of 150,000 b/d of oil. The hulls
of the two subsequent FPSOs, both based on
the blueprint for the Ilhabela, were former
VLCCs converted at the CGX yard in China.
They provide a similar oil-handling capacity
to the Ilhabela and an associated gas-handling
capability of 6 MMcm/d. Both are owned and
operated by a joint venture comprising affiliates of SBM Offshore, Mitsubishi, Nippon
Yusen Kabushiki Kaisha, and Queiroz Galvo
leo e Gs, and chartered for 20 years on behalf of the BM-S-11 partners Petrobras, BG,
and Petrogal Brasil.
Jeremy Beckman
Editor, Europe
Offshore spoke to SBM Offshores Managing Director Brazil, Oliver Kassam, and
FPSO Director of Projects John Perkins,
about how the company and its partner developed the yard from scratch to undertake
complex and large-scale construction and
integration of topsides modules.
Offshore: When did SBM decide to set up

a yard in Brazil, and how had the company
worked previously with FPSO topsides fabricators in-country?
Kassam: Prior to BRASA opening in
2012, SBM Offshore had been assembling
modules with Brazilian contractors such as
Brasfels, EBSE, and Enaval since its early
Local Content-intensive P-57 conversion
project in 2009. It also undertook the module integration at Brasfels. This modus operandi was replicated for the FPSO Cidade de
Paraty our first presalt unit.
When SBM was bidding for FPSO Cidade
de Ilhabela, the market was overheated and

Brasfels was committed to other competing
projects. In order to guarantee project delivery, on time and on budget, SBM took the
strategic decision to invest in BRASA with
its own module assembly yard, 2,000-ton
sheer-leg crane, and integration quay. The
investment was also an opportunity for sustainable development of the companys activities in-country for the long term. Under
the joint venture, Synergy GROUP runs the
BRASA yard and BSL the barge crane. SBM
is responsible for managing the projects,
whereas Synergy GROUP makes the infrastructure available.
Offshore: What were the reasons for
choosing the location in Niteroi? Is there a
history of vessel building in the area, and
did Brazils government provide a subsidy?
Kassam: Brazil was a major player in the
global naval industry in the 1970s, but the
industry collapsed in the late 80s. The only
surviving area with relevant activity was the
Guanabara Bay area comprising basically
Rio and Niteroi. The strategic decision for
choosing this area for setting up our yard
came from the readily available skilled lo-
cal manpower, including a strong welders base, and intrinsic naval

know-how in the area.
Also key was the space available to put in place our plan for a
65,000-m [213,254-ft] yard with the capacity to assemble topsides
modules and install them on the FPSOs using the yards floating
crane Pelicano-1. With the help of local partners, the yard can accommodate more than two projects at a time. There has been no
government subsidy; all investments were private and made by the
JV partners.
Offshore: Can you outline the advantages of the chosen location?
Kassam: We believe that BRASAs unique location, in the heart of
the capital of the Brazilian oil and gas industry, Rio de Janeiro, gives
SBM Offshore a competitive edge for local contracts and increases
the companys flexibility for project execution and delivery. BRASA
is a strong example of commitment to sustainability with the ethical
and ecological imprint on every step of the yards development going
beyond the legal requirements imposed by Brazilian law.
The location is on the island of Ilha do Conceio within the environmentally sensitive Guanabara Bay. SBM Offshore feels strongly
about conserving this heritage, and recently launched with BRASA
an initiative focused on the environmental education of our collaborators and partners within our area of influence.
Offshore: Did establishment of the yard lead directly to the award
of the three FPSO topsides jobs that the yard has undertaken to date?
Kassam: The establishment of BRASA was not a direct reason for
the award of any project, but was rather an enabling tool that allowed
SBM Offshore to have control of its own construction resources
and capacity, while guaranteeing project delivery on schedule and

on budget as well as contributing towards meeting our local content
commitments. Using another yard, we are not always the priority, but
at BRASA we control our own destiny.
Offshore: What facilities does the yard have for offshore module
construction and integration, and how do these compare with other
specialist sites in Brazil?
Kassam: The assembly yard provides sufficient space for the simultaneous assembly of up to 14 large-sized modules. It also includes an
integration quayside on the other side of the channel (Cais 2 of Mau).
The heavy-lift barge crane can handle up to 2,000-ton modules, allowing
for large lifting capacity and movability. BSL Servios, the company that
operates the crane, is owned by the JV partners, which provides leeway and flexibility on the lifting windows and lifting priorities.
Offshore: Can you explain a recent statement that BRASA provides
the freedom to engineer how best to build modules?
Kassam: Contractors design modules and their dimensions/loads
depend, amongst other criteria, on crane capacity, footprint and integration quay availability. Smaller modules/skids can be assembled
in smaller yards, but require more integration times, whereas larger
modules will invariably require large loading capacity. BRASA and
BLS give full flexibility to SBM Offshore engineers on defining what
are the best dimensions and loads for the designed modules.
Offshore: How did the JV/Petrobras decide how many and which
modules the yard could build for the three FPSOs, and how many to
allocate elsewhere?
If you place a premium on Safety, Reliability

and Efficiency, your choice is clear...
FLY
www.erahelicopters.com
713.369.4700
Let experience be your guide.

Since 1948.
May 2016: FPSO Cidade de Saquarema departs

from BRASA shipyard bound for offshore Brazil,
following a record turnaround time for its module
integration. Once the vessel is operating, SBM
Offshores Brazilian fleet will total seven FPSOs,
with a total capacity of 870,000 b/d of oil.
Perkins: The FPSO bids awarded were

from Brazils older ANP Rounds, which provided operators with global local content
(LC) requirements, and were not scrutinized per item. This allowed SBM Offshore
to strategize which scopes were executed
abroad, and which were executed in-country,
as long as final LC indexes were within contractual requirements.
The company has executed five high-level
LC projects, and all were delivered within
the contractual requirements. It has built
modules in Brazil through its sub-contractors and partners BRASA, EBSE and
ENAVAL, and will generally allocate scope
amongst these, and potentially further suppliers, depending on the demand and project
execution strategy. There are no fixed arrangements for working with the same subcontractors in Brazil this is decided on a
project-by-project basis but high performers are naturally prioritized.
Offshore: For Cidade de Ilhabela, the yard
built and integrated 10 topsides modules
with a total weight of 11,200 metric tons
[12.346 tons] out of the total weight of
23,000 metric tons [25,353 tons] for all the
modules. What are the comparable figures
for Cidade de Maric and Cidade de Saquarema, and which modules/how much tonnage
was BRASA responsible for?
Kassam: BRASA can accommodate the
simultaneous assembly of up to 14 modules
and SBM Offshore leveraged this full capacity for the twin vessels Maric and Saquarema, which were executed in parallel.
orities. The topside design for both vessels

is also very similar to the four-level arrangement on the Cidade de Ilhabela.
Offshore: How did the parallel conversions

of these two vessels benefit from the earlier
design, conversion and operating experience of the Cidade de Ilhabela and Cidade de
Paraty, SBMs first presalt floater?
Perkins: Cidade de Maric and Saquarema have a very similar design to Cidade de
Ilhabela. This allowed the project to have a
very fast start with respect to both the initial
engineering works and the placement of purchase orders for long-lead equipment for the
topside process facilities. For critical items
such as the power generator and gas compression the commitments to suppliers were
made days after the main contract award.
This provided clear schedule advantages.
The module installation sequence was determined by evaluating the quayside integration
schedule and ultimately commissioning pri-
Offshore: SBM has introduced work practices at BRASA based on its experience of
FPSO programs at yards in the Far East.
Can you provide details?
Kassam: The overall EPC project schedules are managed on a global level, with the
detailed requirements of each component
being defined in an integrated schedule. Each
construction yard, in turn, builds its own
schedule, in a manner that supports the overall schedule, using the planning expertise and
tools it has developed. BRASA uses professional planning, work allocation and tracking tools
to manage its work and the yard people skill
sets excel in both experience and competency, which were further developed as the three
Generation 3 FPSO projects were performed.
[Generation 3 is SBM Offshores name for its
FPSO design for presalt fields.)
Offshore: Did Petrobras alter the design

specifications during the construction phase
for any of these vessels?
Perkins: This item is covered by our Contractual Confidentiality terms and cannot be
commented upon. However, we can say that
SBM Offshore established its group technical standards (GTS) in 2003, largely based
on industry standards, and has refined these
over the past 12 years by integrating key elements of the companys accumulated project
and fleet operational experience. The company has now executed over 20 projects using
GTS as the basis, including Cidade de Maric/
Saquarema. The GTS are used in the context
of the clients functional specifications and supplementary requirements as appropriate.
Offshore: Both the latest vessels are described as carbon copies what were the
construction challenges compared with Cidade de Ilhabela, and what are the differing
production issues they are designed to deal
with at the Lula field?

Perkins: These two highly complex units are almost identical, using
the same class/manufactured hulls. The only differences are relatively
minor in the riser balcony area, required to suit our clients needs. This
allowed us to develop a project execution plan building on this. For example, engineering was generally only needed once, then copy pasted
and construction contracts were placed on a two-by-two basis.
From a topside perspective Cidade de Ilhabela is very similar to
the topside design for Cidade de Maric and Cidade de Saquarema.
The biggest single advantage from a schedule perspective was that
major critical-path equipment was ordered very quickly facilitating
an expedited topside equipment delivery and project execution. Although this put additional strain on the vessel conversion works that
were not carbon copies, it was necessary to ensure they kept up
with the topside pace. The Cidade de Ilhabela converted hull was single-hulled, while Cidade de Maric and Cidade de Saquarema hulls
were double-hulled. Technical production challenges for the presalt
fields are numerous, and SBMs track record and experience in this
area allowed us to find the ideal solutions.
Offshore: Has the process of module integration improved progressively for each vessel?
Perkins: The biggest issue we face is the massive volume of these
projects, requiring thousands upon thousands of tons of equipment
and materials to be procured and then delivered to and controlled
by the multiple yards we use throughout the world. The integration
works themselves are all about detailed planning and using the right
resources to allow the units to be commissioned to the maximum
extent possible prior to installation at the offshore location.
However, our preparation works and skill sets in this area resulted in record-breaking performance, which improved from one
project to the next. Cidade de Saquarema took just over four months
(from first lift to quayside departure), while the experience gained
on repeatability of the proven formula on twin vessel Cidade de Maric is now paying dividends with a gain in schedule. The vessel left
the quay in a very advanced state of commissioning and with very
little carry over work, demonstrating the value that the SBM and
BRASA teams bring.
Offshore: How has SBMs team in Brazil interfaced with the companys design/engineering/project management branches in Europe or elsewhere?
Kassam: In order to successfully execute such large and globally based projects using resources from multiple regional centers, a
single project team was set up led by a global project management
team. Clear communication, scope splits and project objectives were
established across the project, with the scope allocation based on
the skill sets and strengths of each individual resource center. The
Rio office and BRASA yard both significantly contributed to the project particularly in the areas of construction, Brazilian supply chain
activities, local regulations and field engineering support.
Offshore: Does the yard have any more work in prospect now that
the two latest FPSOs have departed?
Perkins: After the sailaway of Cidade de Saquarema in May, BRASA does not have any current outstanding backlog, however it is
in active discussions with operators and potential clients to acquire
new projects and to sustain high levels of Brazilian content.
The Delmar Quick Release...

the Next Generation of Mooring
In-line mooring component that allows rig to
quickly move off location
Simple and reliable
Activated by rig or support vessel
No additional special equipment required
For emergency or planned disconnect of
mooring lines
Easily reconnected on location
Safe mooring of DP rigs as well as traditional
moored rigs
Patent Pending
DELMAR SYSTEMS, INC.
DELMAR
Operations and Headquarters

Broussard, Louisiana USA
Tel: +1 337.365.0180
Technical and Engineering

Houston, Texas USA
Tel: +1 832.252.7100
www.delmarus.com sales@delmarus.com
Delmar Systems, Pty. Ltd.

Perth, Western Australia
Tel: +61 8 9288 4523
Mexicos deepwater round to employ license

contract structures, production sharing
Emma Mulders Marco Nieto
Baker & McKenzie
ate last year, the Mexican government published the bidding

guidelines and the contract model for deepwater contracts related to Round Ones fourth call for bids.
The legal, regulatory, and economic structure of the documents related to this call will be relevant to those that may be
interested in participating in this bid round.
The goal here is to set out the difference between the license contract
structure, which was used in the third call (onshore fields) and is also
used in the fourth call; and the production-sharing contract structure,
which was used in the first and second calls regarding shallow waters.
This analysis focuses on the procedure for determining the state/
contractor payment differences under the license contract and the
production-sharing contract.
License contract models

On Dec. 17, 2015, the call for bidders in document CNH-R01C04/2015 was published in Mexicos Federal Official Gazette by the
National Hydrocarbons Commission (CNH). In this call, the CNH
invited interested local and international private companies as well
as state production companies to participate in an international public tender for the award of hydrocarbon exploration and extraction
license contracts, in connection with 10 contractual areas in deepwater and ultra-deepwater.
Along with the publication of the call for bidders, the corresponding license contract models have been published as in the previous
calls: contract model (i) for individuals and (ii) for a consortium.
These license contract models differ from the previous contracts
(calls for bids in exploration and production in shallow waters) that
had been published by the CNH, more specifically in connection with
the payment mechanism. To help explain the differences, it is useful to
show the main specifics of this license contract model as compared to
the production-sharing contracts that have been used in previous calls.
In order to provide an accurate overview of the economic impact
of the license contract, it is necessary to first briefly describe the
different types of contracts allowed pursuant to the energy reform.
It should be noted that the consideration established in any of these
agreements is subject to the provisions of the Hydrocarbons Revenue Law. The types of contracts include:
Production-sharing agreement. This type of contract allows the private parties to receive as payment a percentage of the production.
Profit-sharing agreement. This type of contract allows private parties to receive payments in cash, but unlike service agreements, the
consideration will consist of a certain percentage of the net income
obtained from the sale of hydrocarbons.
License agreement. This type of contract allows private parties to
receive, in exchange for consideration, the onerous transfer of the
hydrocarbons extracted from the subsoil.
Service agreement. This type of contract allows private parties
(such as oil field services companies) to receive cash as payment for
the specific oil service contracted by the government.
A combination of the above. In accordance with the energy reform,
Ten contractual areas in the Round One fourth call. Source: CNH (2016).
a special agreement with the combination of the above mentioned

contracts is allowed.
Only licensing and production-sharing agreements allow the contractor to take ownership of all or part of the hydrocarbon production for its own marketing and to recover its investment accordingly.
Under the other agreement models, the contractor will receive payment in cash directly from the Mexican Oil Fund, but the hydrocarbons will be owned by the Mexican state, to be marketed for its
benefit by a designated marketer.
The periodical payments, fees/considerations, calculus scheme
and the settlement structure is determined for each specific tender
following the rules, terms and measurement conditions are set forth
in the Hydrocarbons Revenue Law. With this in mind, the authors
reviewed the last bidding guidelines, where the contract models for
production sharing as well as the license are included.
Contract crude oil price

In general terms, according to Annex 3 of the second call and
fourth call of the Round One by CNH, there are different assumptions to determine the contractual price of crude oil per barrel:
i. If at every period, the contractor sells at least 50% of the crude
oil volume received by the Mexican state, then the contractual
price (in which the deal has been registered) shall be equal to
the weighted average observed sale price (applicable for license
and production sharing structure).
ii. If at every period, the contractor has not marketed at least 50%
of the crude oil volume received by the Mexican state but the
deal has been registered by the marketer, then the contractual
price shall be equal to the weighted average price registered by
the marketer for the deal (only applicable for the productionsharing contract).
iii. If at the end of the period, the contractor has not reg- Income/production/profit structure for production-sharing agreements.
istered a deal of at least 50% of the crude oil volume
received by the Mexican state, the contractual price
in the specific period shall be calculated as a function
of the API gravity and sulfur content corresponding to
the crude oil extracted in the specific contract area.
The contractual price will also take into consideration
the prices for Light Louisiana Sweet and Brent, and if
such crude oil has been marketed or not (applicable
for license and production-sharing structure).
iv. If there is a case in which the crude oil is registered as
in item (iii) above, in the last one or two periods, but
Source: Baker & McKenzie analysis.
during the current period there is a deal following items
(i) for license structure or (i) and (ii) for production- Income/production/profit structure for license agreements.
sharing structure, then the contractual price will be determined as per other formulas which are a function of
the observed price in marketing of crude oil; volume of
production of crude oil registered at the measurement
point in the last available periods; the differences in the
oil value at every period, and it is weighted by the total
volume of crude oil. Another formula is considered if
the difference between the price estimated by the aforementioned formula and the observed price during the
crude oil marketing is more than 50% (applicable for
license and production-sharing structure).
There are also certain price treatments for the case of Source: Baker & McKenzie analysis.
condensates and natural gas, similar than in the crude oil
aforementioned (i), (iii) and (iv), except for case (ii) when the conProduction-sharing structure. The adjustment mechanism will be
tractor has not marketed at least 50% of the condensate or natural calculated as a percentage of the operating profit depending of the
gas volumes, received by the Mexican state but the deal has been operating result of the contractor before taxes. Additional revenues
registered (only applicable for production-sharing contract).
received by the contractor for the provision of services to third parWith the formulas of crude oil, condensates and natural gas prices, ties or derived from the sale or disposal of sub-products, shall be
the contractual hydrocarbons value can be calculated with the multi- deemed as contract revenues, thus it will be included in the meaplication of prices and volume at each period for crude oil, conden- surement of profit at every period.
sates and natural gas (applicable for license and production-sharing
License structure. The adjustment mechanism will be calculated
structure). There is a relevant difference included only in the produc- as a percentage of the contract value of hydrocarbons at every petion-sharing scheme, regarding cost recovery calculation, the formula riod depending on an initial percentage of the contract value of the
for the operating profit to be shared from the Mexican state to the hydrocarbons produced in a contract area plus and quarterly adjustcontractor, that will be briefly explained in the following section.
ment updated from the amount of the initial percentage.
Cost recovery
Pursuant to Annex 3 of the production-sharing structure, there is

a cost recovery percentage of 60% for each period to be applicable
during its state of being in force. This percentage shall be used to
obtain the recoverable cost limit by multiplying it for the hydrocarbons value for each period. In this sense, the correspondent consideration or payment regarding the reimbursement of recoverable
costs will be the smaller amount between the recoverable costs limit
and the recognized costs that are recoverable costs.
In consequence, the operating profit for the production-sharing
contract structure of Round One, second call will be the result of the
subtraction from the contractual hydrocarbons value plus other revenues to recoverable costs reimbursement and royalties effectively
paid to the Mexican state.
The contractors awarded in any contractual area shall receive the
value (in kind) from the Mexican state the remaining of the percentage of the operating profit presented in its awarded proposal.
For that reason, its operating result will be the operating profit previously explained minus the recoverable costs and other recorded
costs at each period.
Adjustment mechanisms
A different approach for the adjustment mechanism has been established for each contractual structure:
Conclusion
In order to promote the medium and long-term investment in

Mexicos E&P infrastructure, CNH has published the fourth call for
bidding under a license contract structure. The advantage is that the
process is less complex, mainly regarding the cost recovery scheme
for the production-sharing contract as mandated in the legislation. It
implies that the considerations will derivate from the hydrocarbons
value and not from the operating result.
In this regard, one important income source in the license
scheme that was established in the Hydrocarbons Revenue Law for
the Mexican state is the signing bonus. However, authorities have
decided not to apply such bonuses for the fourth call, which may be
considered from a certain legal point of view as an obligation to be
included in every bidding process.
Lastly, the federal government expects a better investment promotion through the license structure in the fourth call, but in terms
of Annex 3 for production-sharing and license structures analyzed
here there are two main differences: cost recovery schemes, and
adjustment mechanisms. In both cases, it is applied in different ways
to every structure, mainly because in the first item there is an incentive to evidence potential higher costs for production-sharing contracts; while in the second it is the opposite. In the second item there
is a different promptness to be applied to such adjustments among
these contract structures.
Technology venture looks to prevent flow

assurance issues in Mexicos deepwater
ith the number of deepwater

discoveries in the Mexican sector of the Gulf of Mexico, it has
been recognized that there is a
need for enabling technology
and solutions to be in place to prevent and
remove hydrates from future fields that are
to be developed. Failing to do so could disrupt or halt production. The need for solutions has accelerated with the enactment
of Mexicos energy reform in 2014; and the
fact that Mexico has yet to begin deepwater
production, where the threat of hydrates is
omnipresent.
To this end, Instituto Mexicano del Petrleo
(IMP) leveraged over 50 years of experience in
dealing with Mexicos offshore infrastructure,
which includes its proficiency in the support
of planned deepwater E&P activities. This, in
turn, ensures that technical and economically
feasible production options for the fields are
identified, assessed, and selected.
This experience has been paired with
SECCs global expertise in enhancing subsea production schemes in deepwater, via
bespoke rigless and subsea intervention solutions. The result of this pairing: a reliable
technical solution based on SECCs technology and IMPs collaboration for its implementation to disassociate hydrate blockages for
future fields in Mexicos deepwater frontier.
A secondary formidable threat apart from
hydrates to the production of future fields
comes from the natural decline of a wells output. Further, this international collaboration
led to an affirmation of the rigless production
concept, which enables a DP-2 vessel to carry
out flow assurance, hydrate remediation, and
well stimulation maneuvers from a single access point on a manifold. This method differs
from rigless interventions in that intervention
equipment is not employed on trees.
More importantly, this collaboration discovered a way to retrofit future subsea assets
that lack a strategic access point to carry out
the aforementioned activities. This retrofit
solution built upon work SECC undertook
in the North Sea in 2014, which required
unlocking of a manifolds full potential at the
field development stage.
Rigless production
In 2014, an operator in the North Sea required an innovative access point on a mani28 Offshore July 2016 www.offshore-mag.com
Fernando C. Hernandez
SECC Oil and Gas Ltd.

Efrain Rodriguez-Sanchez
Nicolas Fuentes-Ruiz
Faustino Perez-Guerrero
Instituto Mexicano del Petrleo

Field Planning and Development
fold that would enable them to have complete
access to the subsea infrastructure. This access would provide them with the ability to
stimulate all of the wells linked to a manifold
without intervention equipment or a rig.
To create such an access point, SECCs female rigless connector with emergency quick
disconnect capabilities was preinstalled on a
manifold at the build stage. Once the manifold was installed subsea and connected to its
respective wells, this gave the operator instantaneous access to all the wet trees linked to a
manifold. With this in place, at any point of the
fields life, the associated subsea trees can be
independently stimulated to the tune of 16 b/
min. through a 2-in. connector that is launched
from a vessel via open water Coiled Tubing
(CT). Some operators have achieved 56 b/min.
through a 4-in. connector.
Furthermore, the manifold is outfitted
with strategically installed valves that allow
for intervention on a particular well while
neighboring wells continue to produce. Once
the aforementioned well has successfully
been intervened, a neighboring well is then
stimulated, while the first stimulated well begins to produce alongside the other wells.
This field-proven methodology is highly applicable to maintaining positive levels of production in Mexicos future fields, and having
a well enhancement program in place months
and years in advance before first oil.
Flow assurance
Taking this one step further, IMP and
SECC concluded that the rigless production
approach, with the inclusion of strategic access point on a manifold, held immense benefit in regards to flow assurance and hydrate
remediation operations. Such benefits are
due to the fact that not all fields have strategic
access points for the injection of chemicals or
inhibitors for flow assurance purposes.
Above: SECCs rigless connector pre-installed

on a manifold. (All images courtesy SECC Oil
and Gas Ltd.) Below: SECCs execution of a rigless project offshore West Africa.
The rigless production method allows a

vessel to safely connect to a manifold and
inject chemicals and inhibitors at barrels
per minute through an entire field. This approach serves as a highly redundant method
of introducing chemicals and inhibitors when
a fields umbilicals have malfunctioned;
or should the umbilicals fail to deliver the
proper volumes to prevent hydrates from
forming. The reason a vessel is able to disconnect safely is due to the fact that SECCs
connectors autonomously disconnect in an
emergency, independent of any human interaction, should a vessel have a catastrophic
failure. Accumulators, acoustics, or ROV manipulation of valves is not needed.
All that is required for a disconnection
to occur is for the male connector to sense
a pull/tension from a downline attached to
the CT. Once the male is disconnected, both
Spare hubs play a key role
in the retrofit solution.
male and female ends self-seal, while holding

up to 15,000 psi at each end. This prevents
the contents within the CT to be expelled into
the ocean, while equally ensuring that the
subsea well is sealed.
Combating
hydrate formation
When a hydrate blockage has formed, a
vessel, by way of its topsides pumps, can bullhead against a blockage by pumping against
it so as to physically dislodge it; or by soaking
a blockage to disassociate it. However, such
techniques do not guarantee the removal of a
hydrate from a field or from an export line. Sequence wise, these techniques are the critical
first steps when attempting to remove hydrates.
IMP presented the following forward-thinking questions: What if a manifold installed in
Mexican waters was not outfitted with a rigless connector, so as to inject chemicals and
inhibitors at high flow rates through an entire
field? Could the technology be retrofitted without bringing it to surface, so as to also enable
a vessel to interface directly with a manifold?
Would it be possible to modify SECCs connector technology to allow for an ROV and subsea
hydrate remediation equipment to tie directly
to SECCs female connector via an intervention panel? The answer to the aforementioned
is highlighted in the ensuing sections.
Retrofit solution
IMP and SECC extensively analyzed deepwater field layouts, and it was discovered
that in various fields throughout the globe,
spare hubs were available for future subsea
tiebacks, and often went unused. These spare
hubs created the opportunity to retrofit a
manifold, allowing for the rigless production
method to be employed.
To accomplish this, SECCs female rigless
connector is landed on a mud mat, along with
a flexible jumper. The flexible jumper is then
mated with the manifold at the hub via a running tool. A flexible jumper is used, since it bypasses having to conduct any metrology oper-
ations as is the case with ridged jumpers; and

a flexible jumper also allows this configuration
to be installed in different manifolds throughout a field. Once the running tool securely
locks the jumper to the hub, and pressure and
integrity tests have been conducted, SECCs
male connector with no intervention panel
can inject chemicals and inhibitors through an
entire field and its export lines.
However, this raised an additional question: What if all the hubs on a manifold are
used how will an access point be created?
Due to the fact that no deepwater fields have
come online in Mexicos deepwater realm,
the following are recommended practices
for the future where:
A minimum of one spare hub is available for two manifolds that connect to
each other, or one spare hub if only one
manifold is brought online
The manifold has access to all the flowlines and export lines (via valve arrangements) for flow assurance operations
That said valve arrangement allows for
well interventions to be carried out on
all the wells linked to it.
It should be noted that in 2013 an operator required an intervention on a horizontal
tree offshore West Africa; and that SECCs
female rigless connectors were deployed via
a mud mat system. This project is mentioned
because it demonstrates that the configuration suggested for Mexican waters has been
executed by SECC, in terms of using female
connectors on the seabed.
Hydrate remediation
As previously stated, injecting chemicals or
inhibitors does not guarantee the removal of
hydrate blockages. For this reason, SECCs
connectors, with the guidance of IMP, are now
being designed to incorporate intervention
panels with hot stabs and paddle valves. In this
context they are no longer being used to solely
connect to a downline via CT. This allows for
an ROV to methodically connect hydrate remediation equipment directly to said panel. By
adhering to the three recommended practices

mentioned above, depressurization activities
can be executed throughout an entire field,
and respective export lines.
Although manifolds may include hot stabs
for remediation activities, analysis of global infrastructure shows that they may not always be
fit for purpose, as highlighted by attempting to
remove hydrates through an API 17h hot stab.
However, due to their porting size, this severely
restricts the removal of a pipelines content at
high flowrates during depressurization activities, especially when removing several kilometers of gas, water, and other fluids.
For this reason, the intervention panel that
sits atop of the connector is outfitted with
SECCs Max Flow hot stab that has a through
bore of 1.5 in., which is conducive to removing a
pipelines content at high flowrates. Moreover,
the panel is outfitted with an additional hot stab
dedicated for treating the hydrates that are being removed with methanol during depressurization activities. Integral paddle valves allow
for the incoming methanol to be intelligently
routed to the Max Flow stab, to ensure the hydrates are inhibited (during dosing operations,
methanol does not enter the pipeline).
Importance of dosing
The dosing technique is key in reducing
downtime while increasing the effectiveness
of any hydrate remediation campaign. Dosing allays the hydrate formation phenomenon in which hydrates shift, migrate, and
reform dynamically when removed from the
pipeline, without being treated. Because of
this, removing hydrates through a hot stab
on a subsea asset is not recommended, as
these hydrates cannot be dosed.
Further, should a blockage re-form, this
will affect all of the subsea equipment being
used to remove the blockages.
After a hydrate has been successfully removed, the intervention panel is detached,
and the male connector is attached to the CT,
and mated with the female connector so as
to inject inhibitors. This action is designed
to prevent hydrates from reforming once the
producing wells are brought back online.
Conclusion
The threat of hydrate formation and pipeline blockages is a technological challenge that
has been considered for Mexicos deepwater
fields. As illustrated herein, a most cost-effective feasible solution to mitigate and disassociate hydrate blockages has been conceptually
designed by SECC and IMP. This solution is
all encompassing, since it can be implemented
at the build stage, or should subsea manifolds
need to be retrofitted. Moreover, the rigless
production method equally provides a method
to increase production from wells where output has decreased.
Guyana emerges
as major frontier market
Jessica Tippee
Assistant Editor
he United States Geological Survey ranks Guyana-Suriname as

the worlds second-most prospective, underexplored offshore
basin, with an estimated 13.6 Bbbl of oil and 32 tcf of natural gas
yet to be discovered. While current commercial production in the
region stems from onshore Suriname fields, the rationale for offshore exploration was fueled by the theory that the basin was formed
due to continental drift of the Equatorial Atlantic region. If recent exploration success proves to be commercial, Guyana will have even more to celebrate along with the 50th anniversary of its independence from the UK.
In May 2015, ExxonMobil announced it made a significant oil discovery with the Liza-1 exploration well on the Stabroek block about 120 mi
(193 km) offshore in the Guyana-Suriname basin. It encountered more
than 295 ft (90 m) of high-quality oil-bearing sandstone reservoirs. The
drillship Deepwater Champion drilled the well to an Upper Cretaceous
fan play at 17,825 ft (5,433 m) in 5,719 ft (1,743 m) of water.
Operator Esso Exploration & Production Guyana Ltd., an ExxonMobil affiliate, holds 45% interest. Its partners are Hess Guyana
Exploration Ltd. with 30% interest and CNOOC Nexen Petroleum
Guyana Ltd. with 25% interest.
Liza was the first well drilled on the 6.6-million acre (26,800-sq
km) Stabroek block. Since the 1970s, 22 wells drilled on the coastal
shelf outside the southern boundaries of the block had all proved
noncommercial. In 2012, CGX Energys Eagle-1 well drilled on the
Corentyne petroleum prospecting license failed to find commercial
hydrocarbons. That same year Repsol Exploracion terminated operations on the high-pressure/high-temperature Jaguar-1 well on the
Georgetown petroleum prospecting license. According to partner
CGX Energy, the well was due to be plugged at a depth of 15,997 ft
(4,876 m) without reaching the primary objective in the Late Cretaceous geologic zone. The decision was taken after the well reached
a point where pressure design limits for safe operations prevented
further drilling. Despite not reaching the main target, light oil was
recovered from two Late Cretaceous turbidite sands.
Until Liza-1, the only material discovery in the basin was Shells
Zaedyus oil find off French Guiana in 2011. The Zaedyus discovery
well intersected 236 ft (72 m) of net oil pay in two turbidite fans;
however, two appraisal wells had disappointing, noncommercial results. According to analyst Wood Mackenzie, the Zaedyus appraisal
demonstrates the risks around discovery volumes in the basin, specifically regarding seal integrity and hydrocarbon migration.
ExxonMobil is reportedly moving Liza into the pre-front-end engineering and design phase. Despite low oil prices, analysts such
as Douglas-Westwood agree a fasttrack development, while capitalintensive, could provide large potential returns on investment. Analysis from research and consulting firm GlobalData suggests that an
FPSO-based development at the field would return above 19.8% in a
flat-oil-price scenario of $61.68/bbl. Anna Belova, GlobalDatas senior
upstream analyst, said: While there is risk around the assumed initial
production rates of 20,000/d per development well, there is upside in
additional cost efficiencies as low oil prices have been accompanied
with decreases in FPSO leasing terms and drillship day rates.
Additionally, the 201 MMbbl recoverable reserves estimate falls on
the lower end of 700 MMbbl of oil reserve suggestions from Guyanas
minister of governance. Higher reserve scenarios, recovering upward
of 600 MMbbl, have an internal rate of return of over 35% while captur30 Offshore July 2016 www.offshore-mag.com
The Orinduik block lies in shallow waters of the Guyana-Suriname basin.

(Map courtesy Eco Atlantic)
ing the economies of scale realized with FPSO developments.

Although cost metrics for the Liza scenarios are consistent with
other projects featuring a leased FPSO, economic metrics are more
favorable than global averages, the analyst claims, due to the competitiveness of the Guyanese production-sharing agreement regime.
Matthew Jurecky, GlobalDatas head of Oil & Gas Research and
Consulting, added: The Liza project will also be well-placed to benefit
from any uplift in oil prices post-development. Its commercial success
could redefine the basin as a global deepwater production player.
Earlier this year the partners completed a 6,654-sq mi (17,000-sq km)
3D seismic survey to evaluate the full resource potential of the acreage.
In addition, the operator has contracted Fugro to acquire, process, and
analyze high-quality AUV multibeam bathymetry, side scan sonar and
sub-bottom profiler data, as well as environmental and geological/geotechnical samples, providing seabed and shallow sub-seabed information to support the initial field development. The survey will cover an
area of approximately 247 sq mi (640 sq km) in depths reaching 9,187 ft
(2,800 m). In February, ExxonMobil began a multi-well exploration and
appraisal campaign with the Liza #2 appraisal well.
Other operators are increasing their exploration activities offshore
Guyana. In January, the Minister of Natural Resources Raphael Trotman signed a petroleum prospecting license and production-sharing
agreement with the joint venture team of Tullow Guyana BV and Eco
(Atlantic) Guyana Inc. The license covers the Orinduik block, a concession of 695 sq mi (1,801 sq km) in the Guyana-Suriname basin. The
agreement calls for a work program involving a geological and geophysical evaluation which will include a 3D seismic acquisition, all within the
initial 10-year period of the license. Tullow will hold the operatorship
and 60% working interest, with Eco Atlantic holding the remaining 40%.
Tullow also is assessing prospectivity in the Repsol-operated Kanuku
license, and the partners have requested an 18-month extension to
facilitate acquisition of a new 3D seismic survey.
INDUSTRY INTERVIEW
The new SwageHammer integrated

liner-hanger system
has been designed
to address several
challenges related
to wellbore integrity,
Weatherford says.
New downhole technologies

promise greater efficiency,
lower costs
Advanced suite of D&C products to
help operators drill more effectively
Bruce Beaubouef
Managing Editor
n the midst of one of the most severe and prolonged

downturns in offshore E&P, some downhole service
providers are increasing their offerings with new technologies and systems that are designed to help operators save money and work more efficiently.
Recognizing that tough times call for leaner and more
efficient operations, Weatherford International has unveiled a new suite of drilling and completion tools that
promise to help operators reduce risk, minimize cost,
and increase production.
Recently, four members of Weatherfords executive
team met with Offshore to discuss these product launches,
and the impact they expect these technologies to have on
the market. The officials included Mark E. Hopmann, Vice
President, Well Completion Technologies; Brent Emerson,
Vice President, Well ConBrent Emerson,
struction Products; Bill Lane,
Vice President, Well
Vice President, Emerging
Construction Products,
Technologies, Artificial Lift
Weatherford International
Systems; and Iain Cook, Vice
President of Secure Drilling
Services.
Together, they offered their thoughts on reducing the cost
of deepwater development; dealing with high temperature/
high-pressure formations; maintaining wellbore integrity;
and the impact of the new well control rule issued by the US
Bureau of Safety and Environmental Enforcement (BSEE).
Offshore: What are some of the key technologies that

will help reduce the cost of deepwater projects?
Hopmann: One of the key things that were trying to do
is to eliminate the total length of time it takes the operators
to complete the well without sacrificing functionality. Lets
say, for example, that an operator needs to case and cement
a wellbore across the reservoir to achieve zonal isolation.
We have created new techIain Cook,
nologies to solve this problem,
Vice President, Secure
such as the TerraForm packer.
Drilling Services,
The TerraForm packer allows
drill crews to remove the cas-
ing string, and cement from the well design and still maintain zone-to-zone isolation across the reservoir. This saves
the operator a massive amount of money by reducing the
amount of equipment needed and also reducing rig time.
If you look at full-field development costs, going from a
cased-hole, full-field developMark E. Hopmann,
ment on multiple wells to an
Vice President, Well
openhole development that
Completion Technologies,
gives you the same functionWeatherford International
ality can save $100 to $200
million. Thats quite a large
magnitude of savings achieved by changing your completion philosophy.
What weve found is that operators are willing to explore new options, and that helps bring new technology
to the forefront. When the savings that result from the
new technology are so dramatic, it tends to shorten the
development cycle and the field-trial cycle because theres
incentive to bring the technology to market, especially in
todays price environment.
Offshore: What kind of technologies and materials are
necessary to deal with temperature and pressure in ultradeep formations?
Emerson: There are a lot more high-pressure, hightemperature wells in the marBill Lane, Vice President,
ket today than in years past.
Emerging Technologies,
This has driven us to develop
Artificial Lift Systems,
materials with very high yield
strengths.
In the last five years alone,
composite technologies have changed dramatically. Different blends of materials, as well as nitrile technologies,
have allowed us to push into much higher temperatures
and higher pressures.
The future of metallurgy is going to be all about strength
and the ability to work in corrosive environments. I see a
shift away from elastomers toward composites, thermoplastics, and new blends with different fibers, or even applying some nanotechnologies.
INDUSTRY INTERVIEW
Lane: In the not-too-distant past, nanotechnologies were considered new and exotic. Now, they are becoming somewhat routine.
We are also seeing more carbon-fiber technology, which gives you
much greater strength with a good weight advantage.
Finally, a lot of new equipment designs are using metal-to-metal
sealing technology. There is a wide range in elastomer products in
terms of sealing and dynamic applications. Many tools can seal at
400 or even 500 but in a dynamic situation as part of a system
that moves, typically the maximum is around 350. That needs to
increase to enhance pumping technology, for example.
Offshore: How are advances in visualization expected to improve
drilling capabilities in the future?
Cook: Downhole data visualization has been a key part of the drilling process for a long time from the first introduction of electronic
drilling recorders through to today, when its common to use timebased and depth-based plots for more enhanced data interpretation.
The ability to better visualize what is happening in the wellbore allows
us to make better decisions with more confidence. Equally important
to data visualization is data aggregation. By tying systems together to
produce better visualizations and analytical data, the operator is able
to make even more informed decisions, bringing us one step closer to
an automated and standardized drilling process.
Offshore: What new technology do you anticipate or project for
wellbore integrity?
Emerson: Wellbore integrity is one of the most important aspects
of the well-construction business. One of the newest technologies at
Weatherford is our SwageHammer integrated liner-hanger system,
which addresses several challenges related to wellbore integrity: How
do you eliminate leak paths? How do you eliminate holes or ports?
How do you eliminate threaded connections? How do you make sure
that the elastomers are paired with the right backups? How do you
make sure that the products are properly in place downhole?
You also cant talk about well integrity without talking about cementing. Using the right type of centralization is critical. But of course
you also have to be able to get the casing to the right depth. Thats
where you need reamer shoes, the ability to rotate, drilling with casing or liner, and the right running tools that allow for high torque.
Offshore: How is real-time data affecting your capabilities and performance downhole?
Lane: Real-time continuous production monitoring is really
changing the game of how we manage our wells. Thirty years ago,
you would be lucky to find a downhole gauge in 10% of wells worldwide. Today, Weatherford alone has not only installed gauges, but
also has installed production software on 480,000 wells.
The data that you produce through monitoring has to be managed; otherwise it just gets in your way. With a management system,
you receive signals that tell you if something is starting to go out of
specification. If something is getting too hot or if youve pumped
off a well, the system will alert the engineer and tell him where his
priorities need to be that day.
Well conditions are always changing, and without monitoring, you
are assuming that the well will be just as you left it. Real-time monitoring and data can save you a lot of money by enabling you to stop
operations or make repairs before too much damage is done.
Offshore: How do you see the new BSEE well control rule affecting deepwater activity in the Gulf of Mexico?
Cook: The new rule is a positive step forward in the industry. I
believe it will make for more efficient operations in the long term,
and it will also make operations safer. BSEE took a collaborative approach, and involved the right subject matter experts. We appreciate
(Above) Weatherford says that its TerraForm packer provides an alternative

openhole option that can generate meaningful cost savings in complex
wells needing isolation. (Below) RFID downhole technology is another
area Weatherford is addressing to reduce costs, in this case by lowering the
amount of rig time that it takes to deploy tools downhole.
BSEEs efforts, and are keen to work within the guidelines that the
well-control rule sets out.
I think the guidelines are more than workable especially the
part that talks about maintaining the drilling windows below 0.5 lb/
gal. Previously, the BSEE rule mentioned static bottomhole pressures within 0.5 lb/gal; it is now equivalent mud weights on bottom
which certainly helps because it allows us to better manage the
drilling window with pressures.
Hopmann: One of the things that will impact us on the completions side is that with the new BSEE rule, they are going to require a
lot more products to meet API and ISO standards and in some cases
third-party verification testing. Virtually every new Weatherford
completion tool is qualified to the latest API standards, whether its
V1 for safety valves and ball valves or V0 for production equipment,
packers and annular safety systems.
We are applying our engineering background and know-how to
ensure that we meet or surpass the latest round of standards. This
applies even to decades-old technologies such as a cast-iron bridge
plugs and cement retainers. Operators are now asking us to develop
a V3- or V0-rated products to meet BSEE ratings and demonstrate to
regulators that the technology is suitable for offshore use.
Lane: The same principle applies across all components, including
lift systems. There have always been customer-producer standards
that have not been consistent between producers. In recent years,
Weatherford has typically picked out the most difficult one and tried
to comply with that and then we know that we can comply with the
market in general. Thats still our position. As new standards come
out, we will shoot for being able to qualify our equipment to the most
difficult standard, and that will open the market in other areas as well.
Offshore: What will be the impact of this downturn on safety, efficiency, and personnel when things pick up? Will it be difficult to
ramp back up?
Hopmann: One of the programs that were starting this year is
a graduate recruitment program called NextGen. Its a two-year development program that brings new graduates up to speed on all of
the technical and management skills they will need to operate in this
industry. Our global plan is to hire 250 new graduates over the next 12
months and start preparing them to work in the field as we come out
of the downturn.
Emerson: I think safety is always of the utmost importance to our
organization and to the oil and gas industry. One beautiful thing that
occurred for Weatherford during this particular downturn is that our
safety record actually improved throughout 2015, and is still improving throughout 2016.
In terms of efficiency which directly impacts service quality, and
the ability to provide things that our clients desire we measure our
performance in various areas through a system called the Weatherford Performance Tracking System (WPTS). This system helps us
take a closer look at where were excelling and what we may need to
change and improve.
We recognize that when the upturn comes, we will be bringing a
lot of people back into the industry, along with new hires, so there
will be a certain amount of on-boarding that will need to take place.
Offshore: How is Weatherford positioning itself to remain competitive during this downturn?
Hopmann: Were trying to offer products that have demonstrated
ways to reduce costs. One example is our portfolio of products that
use RFID downhole technology, which can lower the amount of rig
time that it takes to deploy tools downhole. If we can reduce the total
amount of time it takes to deploy the tools and complete the operation
whether thats drilling, cementing, or completion thats a good way
for us remain competitive in this environment. We can demonstrate
to our clients that we can deliver the same type of completion at a
substantially lower cost.
Lane: A lot of the focus today is on improving production on existing, mature wells. Production optimization systems help operators
monitor and then manage production to make sure that theyre getting the most out of the systems they already have. Quite often this
is the best thing you can do in terms of leveraging your resources to
get the greatest possible production at the lowest possible cost. The
downturn has forced people to sort of hunker down and try to be the
most efficient and most productive they can be.
Emerson: Two further areas for reduction are nonproductive
time and flat time. Flat time is planned for at the outset of an operation; its understood that there will be some time during which no
drilling takes place. If we can shorten that flat-time duration using
different technologies, then we can add massive value to the client
that is much greater than the cost of deploying the technologies.
Nonproductive time is a key metric for Weatherford in terms of
comparing ourselves to our competitors. Weve heard from our clients that our nonproductive time is significantly lower than a lot of
our competitors in the marketplace. And were able to prove it, using
data from the WPTS. Its not just about the cost of the product or
service, its about the value that it brings.
Hopmann: If you look at the brownfield market in general, a lot
of clients are experiencing problems with aging wellbores. Theyre
watering out, they need to deepen a gas-lift injection point, they have
damaged seal bores or damaged equipment inside of the well.
One of the ways that Weatherford is addressing this problem is
through our Renaissance system. Renaissance is a complete suite of
technologies that brings new life to old wellbores. We can go in and
repair these problems, and restore production to brownfield wells.
Editors note: A video of this Q&A session can be found at http://www.offshoremag.com/video/custom-video-channels/weatherford-q-a.html. Further information
on the referenced downhole technologies can be found on page 62.

for a complete offshore solution

Alimak Hek has been a leading provider of elevator
solutions to the offshore industry since 1974. Improve
productivity, reduce operations and maintenance costs
during offshore lifting and materials handling with a
rack and pinion or traction elevator from Alimak Hek.
Built to perform in the worlds harshest environments

Reduced costs, improved efficiency, superior HSE performance
Proven record in reliability, safety and durability
Extensive experience in explosion protection
Comprehensive project management, design and
installation services
Global service and support network
1,000 + elevators delivered to the oil and gas industry
www.alimakhek.com
D R I L L I N G R I G U P D AT E
Market downturn slows

rig construction to a crawl
Oversupply will continue to vex even if oil prices increase
Justin Smith
IHS Petrodata
o say that offshore rig construction

has entered a lull of late would be
something of an understatement, as
the bottom has completely fallen out
of the market. Due to lower oil prices
and significant oversupply of rigs, drilling
contractors have not placed any orders so
far this year, and only ordered seven last
year, none of which were drillships. It is not
likely that many orders will be placed over
the remainder of 2016.
At the moment, a total of 177 rigs are at
various stages of construction. Jackups
make up the vast majority of this set, with
118 units currently under construction. This
is almost exactly double the combined number of drillships, semis, and tenders currently being built, of which there are 33, 18, and
8 under construction, respectively. Out of all
of these rigs, only 37 were ordered with contracts in hand or by operators themselves.
Of the remaining 140 speculative units, a
mere four have since locked in charters.
Chinese shipyards lead the way by a significant margin, with a total of 85 rigs under
construction, 69 of which are jackups. Meanwhile, 30 of the 36 units being built in Singapore right now are jackups. South Korea
continues to be at the forefront of building
semis and drillships, which are collectively
known as floaters. At the moment, 19 floaters are under construction in the country,
and of those, 15 are drillships.
Deferred delivery
Considering the current massive oversupply of rigs, coupled with lower demand the
world over, many contractors are seeking to
defer the delivery of their newbuild units,
or attempting to cancel those construction
contracts outright. Thus far, 26 rigs have
had their construction ostensibly completed, but not been delivered just yet. Of those
26 units, 17 are jackups, four are drillships,
three are semis, and two are tenders.
As with the overall number of rigs being
Rig orders by year

120
Drillship
Jackup
Semisubmersible
Tender
100
80
60
40
20
2011
Source: IHS Petrodata
2012
2013
2014
2015
2016*
Notes: *YTD May 2016
built, a great many of these have been built

in China, half to be specific, and are currently
on standby awaiting their official delivery at a
later date. For example, a CNPC subsidiary
is responsible for four of these as-yet undelivered jackups. These 91-m/300-ft IC (independent leg cantilever) units are also some of the
oldest rigs that have been pushed back, with
three of the four originally scheduled for delivery in 2013, and the fourth in 2014. It is unclear when, or even if, these rigs will be put to
use, but both yards previously said they have
been nearly fully compensated for these rigs.
Those 26 rigs are only part of the story
when it comes to rigs being delivered later
than anticipated. While those units are essentially finished, there are many more that are
still under construction or on order, but are
continually having their expected delivery
dates pushed back. Thus far, approximately
100 jackups, 23 drillships, and 13 semis have
had their delivery dates extended by at least
three months, but most are well over that,
with some being pushed out several years.
Transocean has delayed five high-specifica-
tion jackups being built at Keppel FELS until 2020, as well as four newbuild drillships
two from Jurong Shipyard and two from
Daewoo Shipbuilding & Marine Engineering
(DSME). Speaking of DSME, the yard has
agreed to defer the delivery of two drillships
each for Atwood and Seadrill. Meanwhile,
Seadrill has also delayed the delivery of eight
jackups under construction at Dalian Shipbuilding Industry Co. shipyard in China.
Compounding these issues, some contractors have opted to cancel the construction
contracts with shipyards that have already
started working on or, in some cases, nearly
finished building rigs under those contracts,
primarily ultra-deepwater floaters. Last August, Vantage canceled its contract with
DSME for drillship Cobalt Explorer, while
Samsung Heavy Industries is going to arbitration with Pacific Drilling for the latter
firms decision to rescind the contract on
drillship Pacific Zonda. Following Dolphin
Drillings decision to walk away from semi
Bollsta Dolphin, Hyundai Heavy Industries
(HHI) is wrapping up the final work on the
rig in hopes of selling it. Its worth noting that

that unit actually had a five-year job lined up
with Chevron in the UK when it chose to not
take delivery of the rig. HHI also had Seadrill
cancel its contract for the semi West Mira last
year. Furthermore, North Atlantic Drilling
reached an agreement with Jurong to attempt
to jointly sell the semi West Rigel while still
marketing the unit for work in the meantime.
Brazil update
While many of those rigs are having their
deliveries pushed back, at least a number of
them are likely to finish being built, particularly for the better established contractors, but
the same cannot be said for all of the rigs in
Sete Brasils fleet. In the beginning, the newly
formed, presalt-focused contractor was to build
29 ultra-deepwater rigs in total, with 28 of them
contracted to Petrobras for terms between 10
and 20 years, and one on spec. Since November
2014, Sete has had trouble paying the five shipyards contracted to build these rigs, and the
company has now been enveloped into the widening Petrobras scandals, including testimony
from former Sete director Pedro Barusco that
his company took bribes from all of the yards.
Following those developments, Sete is now
fighting for its very existence. In April, the be-
Despite a plethora of units scheduled

for delivery over the remainder of the
year, IHS expects there will be
additional delays and cancellations.
leaguered Brazilian rig builder filed for bankruptcy protection. Petrobras, which also owns a
share of Sete Brasil, did not vote on the protection measure, but now might be put in position
by the courts to have to come to an agreement
with the contractor finalizing just how many
rigs it will charter and at what rates.
The company has cut steel on 17 units so
far, but some have had only a small amount
of work done. Last year, the contractor was
still pushing the idea of delivering a total of
15 rigs to potential investors, with those rigs
primarily being the ones that were supposed
to be built at the two most well-established
yards in the country, Keppel BrasFELS and
Jurong Aracruz, even though construction
had not even started yet on all of them. The
question arises as to what the contractor will
do with the drillships that are well into being
built in Asia, but are supposed to be com-
pleted at the three Brazilian yards that are

in the most trouble. These include Ondina,
Cassino, and Copacabana, which are more
than half finished; as well as Grumari, Pituba,
and Ipanema, each of which is at least a quarter complete. The common consensus now
is that the company is more likely to finish
closer to 10 units, although the makeup of
that fleet is very much up in the air.
With all of this in mind, 2016 is shaping up
to be an incredibly slow year in the rig construction market. Despite a plethora of units
scheduled for delivery over the remainder of
the year, IHS expects there will be additional
delays and cancellations. Even if the price of
oil were to steadily improve over the next few
months, it is unlikely that many contractors
will be eager to get back to building, as the
oversupply of rigs in the global fleet is still immense.
OFFSHORE SURVIVAL
& FIRE TRAINING
At NASAs Astronaut
Training Facility
in Houston, Texas
OPITO-Certified
Training Courses:
BOSIET
Basic Offshore Safety Induction
and Emergency Training
Phone: (888) 216-2131

Email: Training@BastionTechnologies.com
www.HiConTraining.com
www.BastionTechnologies.com
T-BOSIET
Tropical BOSIET
FOET
Further Offshore Emergency Training
T-FOET
Tropical FOET
HUET
Helicopter Underwater Escape Training
T-HUET
Tropical HUET
MIST
Minimum Industry Standard Training
Visit our website to view our short video
on the NASA Training Facility.
2016 Worldwide MODU construction/new order survey

Owner or manager/
Rig name
as of May 26, 2016.
Rig type
Rig
water
depth (ft)
Construction
status
Delivery
date
Jackup
Jackup
Jackup
400
400
400
Under Construction
Under Construction
Under Construction
2Q 2016
4Q 2017
2Q 2018
CSSC Huangpu Wenchong Shipyard

China
China
China
Jackup
400
Under Construction
2Q 2018
Dalian Shipbuilding Industry Co.
China
Drillship
Drillship
10000
10000
Under Construction
Under Construction
3Q 2017
2Q 2018
Daewoo
Daewoo
South Korea
South Korea
Jackup
Jackup
Jackup
Jackup
Jackup
Jackup
350
350
350
350
350
350
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
3Q 2016
4Q 2016
1Q 2017
2Q 2017
3Q 2017
4Q 2017
China Merchants Heavy Industry

China
China
China
China
China
China
Semisubmersible
2625
Under Construction
4Q 2016
Baku Shipyard LLC
Azerbaijan
Jackup
Jackup
300
300
Under Construction
Under Construction
3Q 2017
4Q 2017
Yantai CIMC Raffles

Yantai CIMC Raffles
China
China
Jackup
400
Under Construction
4Q 2016
Yantai CIMC Raffles
China
Semisubmersible
5000
Under Construction
3Q 2016
China
Jackup
Jackup
300
400
Under Construction
Under Construction
1Q 2017
3Q 2017
CPLEC
CPLEC
China
China
Jackup
Jackup
Jackup
Jackup
300
300
300
300
Under Construction
Under Construction
Under Construction
Under Construction
3Q 2016
3Q 2016
3Q 2016
3Q 2016

CPLEC
CPLEC
China
China
China
China
Jackup
Jackup
400
400
Under Construction
Under Construction
4Q 2016
1Q 2017
Yantai CIMC Raffles

Yantai CIMC Raffles
China
China
Jackup
Jackup
400
400
Under Construction
Under Construction
3Q 2016
3Q 2017
Shanghai Waigaoqiao Shipbuilding

China
China
Drillship
10000
Under Construction
3Q 2016
Daewoo
South Korea
Semisubmersible
10000
Under Construction
4Q 2016
Hyundai Heavy Industries
South Korea
Tender
656
Under Construction
3Q 2016
China
Tender
1148
Under Construction
2Q 2016
COSCO Guangdong
China
Jackup
Jackup
Jackup
Drillship
400
340
340
10000
Under Construction
Under Construction
Under Construction
Under Construction
1Q 2018
2Q 2016
3Q 2016
1Q 2017
Keppel FELS
Lamprell
Lamprell
Samsung Heavy Industries
Singapore
UAE
UAE
South Korea
Jackup
350
Under Construction
3Q 2017
Qingdao Wuchan Heavy Industry CO.
China
Jackup
Jackup
350
350
Under Construction
Under Construction
3Q 2017
1Q 2018
ABG Shipyard
ABG Shipyard
India
India
Jackup
Jackup
375
375
Under Construction
Under Construction
4Q 2016
3Q 2016

China
China
Drillship
Drillship
10000
10000
Under Construction
Under Construction
4Q 2019
1Q 2017
Ecovix-Engevix
Ecovix-Engevix
Brazil
Brazil
Build yard
Build
country
Alliance Offshore
Alliance Offshore JU Tbn1
Apexindo
Ayu
Atwood
Atwood Admiral
Atwood Archer
Bestford Capital
Bestford JU Tbn1
Bestford JU Tbn2
Bestford JU Tbn3
Bestford JU Tbn4
Bestford JU Tbn5
Bestford JU Tbn6
Caspian Drilling
Caspian Drilling Semi Tbn1
CIMC Raffles Offshore

CIMC Raffles JU Tbn5
CIMC Raffles JU Tbn6
Coastal Contracts
Coastal Contracts JU Tbn2
COSL
HAIYANGSHIYOU 982
CPLEC
CP300-3
CP400
CPTDC
DSJ-300 JU Tbn3
DSJ-300 JU Tbn4
DSJ-300 L1
DSJ-300 L2
CSM
Cerberus
Phoenix
CSSC Leasing
CSSC JU Tbn1
CSSC JU Tbn2
Daewoo (DSME)
Cobalt Explorer
Diamond Offshore
Ocean GreatWhite
DSIC
Atlantica Gamma
Energy Drilling Pte Ltd

EDrill-3
Ensco
ENSCO 123
ENSCO 140
ENSCO 141
ENSCO DS-10
ES Holding
ES Holding JU Tbn1
Essar Oilfields Services

Varada 1
Varada 2
ESSM
ESSM JU Tbn2
ESSM1
Etesco/OAS
Cassino
Curumim

Owner or manager/
Rig name
as of May 26, 2016.
Rig type
Rig
water
depth (ft)
Construction
status
Delivery
date
Jackup
Jackup
Jackup
400
400
400
Under Construction
Under Construction
Under Construction
2Q 2017
3Q 2017
4Q 2017
Keppel FELS
Keppel FELS
Keppel FELS
Singapore
Singapore
Singapore
Jackup
Jackup
Jackup
350
350
350
Under Construction
Under Construction
Under Construction
2Q 2016
2Q 2016
3Q 2016
COSCO Dalian
COSCO Dalian
COSCO Dalian
China
China
China
Semisubmersible
Semisubmersible
12000
12000
Under Construction
Under Construction
2Q 2017
4Q 2016
Yantai CIMC Raffles

Yantai CIMC Raffles
China
China
Jackup
Jackup
Jackup
Jackup
Jackup
400
400
400
400
400
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
1Q 2017
1Q 2017
2Q 2017
4Q 2016
2Q 2016
Shanhaiguan Shipbuilding Industry Co., Ltd.

Keppel FELS
China
China
China
China
Singapore
Jackup
350
Under Construction
2Q 2016
Bharati Shipyard
India
Jackup
Jackup
Jackup
Jackup
400
400
400
400
Under Construction
Under Construction
Under Construction
Under Construction
3Q 2016
3Q 2016
3Q 2016
3Q 2016
Keppel FELS
Keppel FELS
Keppel FELS
Keppel FELS
Singapore
Singapore
Singapore
Singapore
Jackup
Jackup
400
400
Under Construction
Under Construction
2Q 2016
4Q 2016
Jurong Shipyard Pte Ltd

PPL Shipyard
Singapore
Singapore
Jackup
Jackup
375
375
Under Construction
Under Construction
3Q 2016
1Q 2017

China
China
Semisubmersible
Semisubmersible
7500
10000
Under Construction
Under Construction
1Q 2017
1Q 2017

South Korea
South Korea
Jackup
Jackup
400
400
Under Construction
Under Construction
1Q 2017
1Q 2017
PPL Shipyard
Keppel FELS
Singapore
Singapore
Jackup
Jackup
460
460
Under Construction
Under Construction
4Q 2016
1Q 2017

South Korea
South Korea
Drillship
Jackup
12000
350
Under Construction
Under Construction
4Q 2017
1Q 2017
Keppel FELS
Keppel FELS
Singapore
Singapore
Jackup
Jackup
350
400
Under Construction
Under Construction
4Q 2016
4Q 2017
Shanghai Zhenhua Heavy Industries

COSCO Qidong
China
China
Jackup
400
Under Construction
2Q 2017
China
Jackup
400
Under Construction
4Q 2017
China
Jackup
492
Under Construction
4Q 2016
Daewoo
South Korea
Tender
Tender
800
800
Under Construction
Under Construction
2Q 2016
3Q 2016

China
China
Jackup
350
Under Construction
2Q 2016
COSCO Dalian
China
Jackup
Jackup
Jackup
200
200
200
Under Construction
Under Construction
Under Construction
4Q 2016
1Q 2017
2Q 2017
Lamprell
Lamprell
Lamprell
UAE
UAE
UAE
Jackup
492
Under Construction
3Q 2016
Singapore
Semisubmersible
10000
Under Construction
2Q 2016
Singapore
Build yard
Build
country
Fecon
Fecon JU Tbn1
Fecon JU Tbn2
Fecon JU Tbn3
Foresight Drilling
Vivekanand 1
Vivekanand 2
Vivekanand 3
Frigstad Offshore
Frigstad Kristiansand
Frigstad Shekou
FTS Derricks
TS Coral
TS Emerald
TS Jade
TS Opal
TS Topaz
GOL Offshore
Somnath
Grupo R
Cantarell III
Cantarell IV
Cantarell V
Paraiso II
Hercules Offshore
Hercules Highlander
Perisai Pacific 102
Hongmao Shipping
Haiheng 6
Haiheng 7

Bollsta Dolphin
West Mira
Japan Drilling
Hakuryu-14
Hakuryu-15
KCA Deutag
Askeladden
Askepott
Keppel FELS
Keppel FELS Drsh Tbn1
Keppel FELS JU Tbn1
KS Drilling
KS JU Tbn3
KS Orient Star 2
Lovanda Offshore
Lovanda JU Tbn1
Lovansing Offshore
Lovansing JU Tbn1
Maersk Drilling
Maersk XL Enhanced 4
Mermaid Drilling
MTR-3
MTR-4
Momentum Drilling
Dynamic Momentum
National Drilling
Al Gharbia
Al Hudairiyat
Al Lulu
Noble
Noble Lloyd Noble
North Atlantic Drilling

West Rigel

Owner or manager/
Rig name
as of May 26, 2016.
Rig type
Rig
water
depth (ft)
Construction
status
Delivery
date
Semisubmersible
Semisubmersible
Semisubmersible
1650
1640
1650
Under Construction
Under Construction
Under Construction
4Q 2016
4Q 2017
2Q 2016
Yantai CIMC Raffles

Yantai CIMC Raffles
Yantai CIMC Raffles
China
China
China
Jackup
Jackup
Jackup
Jackup
Jackup
Jackup
400
375
375
350
350
400
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
4Q 2017
1Q 2017
4Q 2016
2Q 2017
4Q 2016
1Q 2018

COSCO Dalian
COSCO Dalian
China
China
China
China
China
China
Jackup
Jackup
400
400
Under Construction
Under Construction
4Q 2016
3Q 2017

Keppel FELS
China
Singapore
Drillship
12000
Under Construction
2Q 2017
South Korea
Drillship
Drillship
10000
10000
Under Construction
Under Construction
1Q 2017
2Q 2017
Estaleiro Enseada do Paraguacu

Estaleiro Enseada do Paraguacu
Brazil
Brazil
Drillship
Drillship
10000
10000
Under Construction
Under Construction
1Q 2017
4Q 2016
Estaleiro Jurong Aracruz

Brazil
Brazil
Jackup
350
Under Construction
2Q 2016
Yangzijiang Shipbuilding
China
Drillship
Drillship
Drillship
5000
5000
5000
Under Construction
Under Construction
Under Construction
3Q 2016
4Q 2016
4Q 2017
Shanghai Shipyard
Shanghai Shipyard
Shanghai Shipyard
China
China
China
Jackup
Jackup
Jackup
400
400
400
Under Construction
Under Construction
Under Construction
4Q 2016
4Q 2016
4Q 2016
PPL Shipyard
PPL Shipyard
PPL Shipyard
Singapore
Singapore
Singapore
Jackup
400
Under Construction
3Q 2016
Keppel AmFELS
USA
Jackup
400
Under Construction
4Q 2016
PPL Shipyard
Singapore
Drillship
Drillship
Drillship
Drillship
Drillship
10000
10000
10000
10000
10000
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
3Q 2016
1Q 2017
2Q 2017
1Q 2017
4Q 2017

Estaleiro Atlantico Sul
Brazil
Brazil
Brazil
Brazil
Brazil
Jackup
Jackup
375
375
Under Construction
Under Construction
2Q 2016
2Q 2016
Drydocks World Graha

Drydocks World Graha
Indonesia
Indonesia
Semisubmersible
Semisubmersible
10000
10000
Under Construction
Under Construction
4Q 2016
2Q 2018
BrasFELS
BrasFELS
Brazil
Brazil
Jackup
400
Under Construction
2Q 2017
China
Jackup
Jackup
Jackup
Jackup
400
400
400
400
Under Construction
Under Construction
Under Construction
Under Construction
2Q 2017
2Q 2017
3Q 2017
4Q 2017
PPL Shipyard
PPL Shipyard
PPL Shipyard
PPL Shipyard
Singapore
Singapore
Singapore
Singapore
Semisubmersible
Semisubmersible
Semisubmersible
10000
10000
10000
Under Construction
Under Construction
Under Construction
3Q 2017
4Q 2018
3Q 2016
BrasFELS
BrasFELS
BrasFELS
Brazil
Brazil
Brazil
Jackup
Jackup
400
400
Under Construction
Under Construction
3Q 2016
3Q 2016

China
China
Drillship
10000
Under Construction
2Q 2017
South Korea
Build yard
Build
country
North Sea Rigs

Beacon Atlantic
Beacon Pacific
North Dragon
Northern Offshore
Energy Edge
Energy Embracer
Energy Emerger
Energy Encounter
Energy Engager
Energy Enticer
Not known
China Merchants Capital JU Tbn2
Clearwater JU Tbn4
Ocean Rig
Ocean Rig Santorini
Odebrecht
Ondina
Pituba
Odfjell Galvao
Deepsea Guarapari
Deepsea Itaoca
Offshore Logistics
Explorer I
Opus Offshore
Opus Tiger 2
Opus Tiger 3
Opus Tiger 4
Oro Negro
Animus
Supremus
Vastus
Perforadora Central
Uxpanapa
Perisai
Perisai Pacific 103
Petrobras
Arpoador
Copacabana
Grumari
Ipanema
Leblon
Petrolor Oilfield Services

Jing Hang
Jing Xuan
Petroserv
Frade
Portogalo
PolyNor Drilling
Polynor JU Tbn1
PPL Shipyard
P2053
PPL JU Tbn5
PPL JU Tbn6
PPL JU Tbn8
Queiroz Galvao
Bracuhy
Mangaratiba
Urca
Saga Drilling
Oriental Dragon
Oriental Phoenix
Samsung
Pacific Zonda
as of May 26, 2016.
Rig type
Rig
water
depth (ft)
Construction
status
Delivery
date
Tender
Tender
6000
6500
Under Construction
Under Construction
3Q 2019
2Q 2020
Keppel FELS
Keppel FELS
Singapore
Singapore
Drillship
Semisubmersible
Drillship
Jackup
Drillship
Drillship
Jackup
Drillship
Jackup
Jackup
Jackup
Jackup
Jackup
Jackup
10000
10000
12000
400
12000
12000
400
12000
400
400
400
400
400
400
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
1Q 2017
4Q 2016
2Q 2018
3Q 2018
1Q 2017
1Q 2017
4Q 2017
1Q 2019
4Q 2018
1Q 2017
2Q 2017
3Q 2017
1Q 2017
1Q 2018

COSCO Qidong
Daewoo
Daewoo
Brazil
China
South Korea
China
South Korea
South Korea
China
South Korea
China
China
China
China
China
China
Jackup
Jackup
Jackup
400
400
400
Under Construction
Under Construction
Under Construction
2Q 2017
1Q 2017
4Q 2017

China
China
China
Jackup
Jackup
350
350
Under Construction
Under Construction
4Q 2016
2Q 2017
Lamprell
Lamprell
UAE
UAE
Jackup
300
Under Construction
1Q 2017
Yantai CIMC Raffles
China
Semisubmersible
6562
Under Construction
1Q 2017
South Korea
Jackup
400
Under Construction
2Q 2017
Tai Zhong Bin Hai
China
Jackup
262
Under Construction
2Q 2016
Keppel Kazakhstan
Kazakhstan
Jackup
Jackup
375
375
Under Construction
Under Construction
2Q 2016
3Q 2016

China
China
Drillship
Drillship
Drillship
Jackup
Jackup
Jackup
Jackup
Jackup
Drillship
Drillship
10000
10000
10000
400
400
400
400
400
10000
10000
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
Under Construction
2Q 2016
3Q 2017
4Q 2017
1Q 2020
1Q 2020
2Q 2020
3Q 2020
4Q 2020
1Q 2020
3Q 2020
Daewoo
Daewoo
Daewoo
Keppel FELS
Keppel FELS
Keppel FELS
Keppel FELS
Keppel FELS
South Korea
South Korea
South Korea
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
Jackup
500
Under Construction
4Q 2017
Keppel FELS
Singapore
Tender
Tender
800
800
Under Construction
Under Construction
4Q 2016
3Q 2017
Shanghai Shipyard
Shanghai Shipyard
China
China
Jackup
400
Under Construction
3Q 2018
China
Drillship
Drillship
12000
12000
Under Construction
Under Construction
2Q 2016
2Q 2016
Daewoo
Daewoo
South Korea
South Korea
Jackup
Jackup
375
375
Under Construction
Under Construction
3Q 2018
1Q 2019
ABG Shipyard
ABG Shipyard
India
India
Jackup
350
Under Construction
3Q 2016
PV Shipyard
Vietnam
Jackup
400
Under Construction
3Q 2016
China
Owner or manager/
Rig name
Build yard
Build
country
SapuraKencana
SKD Kinabalu
SKD Raiqa
Seadrill
Camburi
Sevan Developer
West Aquila
West Dione
West Dorado
West Draco
West Hyperion
West Libra
West Mimas
West Proteus
West Rhea
West Tethys
West Titan
West Umbriel

PROSPECTOR 6
PROSPECTOR 7
PROSPECTOR 8
Shelf Drilling
Shelf Drilling Chaophraya
Shelf Drilling Krathong
Sinopec
Sinopec JU Tbn1
Stena
Stena MidMax
Tai Zhong Binhai

TZ400-1
Teniz Burgylau
Satti
Tianjin Haiheng
HAIHENG CJ50-1
HAIHENG CJ50-2
Transocean
Deepwater Conqueror
Deepwater Pontus
Deepwater Poseidon
Transocean Cassiopeia
Transocean Centaurus
Transocean Cepheus
Transocean Cetus
Transocean Circinus
Transocean Drsh Tbn1
Transocean Drsh Tbn2
TS Drilling
TS Jasper
Upstream Drilling
Compact TAD1
Compact TAD2
Vanda Offshore
Vanda Offshore JU Tbn1
Vantage Drilling
Sonangol Libongos
Sonangol Quenguela
Varada Petroleum
Varada 3
Varada 4
Vietsovpetro
Tam Dao 05
ZPMC
Jap Driller 1
Source: IHS Petrodata (info as of May 26, 2016)

Enclosed solids control

system lowers mud
consumption, boosts
drilling efficiency
Brandon Buzarde
Cubility AS
n a time of low oil prices, the quality of drilling fluids and the accompanying amounts
of drilling waste generated represent important cost and efficiency issues.
With the global drilling fluids market
expected to reach nearly $15 billion by 2020 (according to analyst Grand View Research), improving the quality of drilling fluids and reducing
waste can have a major influence on costs.
Such waste consists of the solid cuttings
that must be separated from the liquid drilling mud and often ends up in pits or landfills
onshore, or if it meets environmental regulations is disposed into the ocean.
Yet, how can drilling fluids be optimized to
ensure maximum drilling efficiencies on offshore wells and how can there subsequently
be a reduction in drilling waste?
Solids control
Theres no doubt that drilling fluids (or
muds) play a crucial role in drilling activity
and efficiencies today cooling and lubricating drill bits, carrying drill cuttings to the
surface, controlling pressure at the bottom
of the well, and ensuring that the formation
retains the properties defined for that well.
In North America, the drilling fluids market on its own was valued at $4.3 billion in
2012 by industry analyst Transparency Market Research and is expected to reach $7.2
billion by the end of 2019.
Yet, the effectiveness of drilling fluids and
its integrity is highly dependent on the solids control solutions that surround them and
their ability to separate the mud from rock
particles. Are todays solid control technologies delivering when it comes to fluid quality
and reduced waste?
For many years, the maintaining of drilling
fluids and the separation of rock particles was
The Mudcube system, shown here being installed offshore, offers efficient separation
of drilled rock particles from fluids and a reduction in the volumes of mud lost and
waste generated. (All images courtesy Cubility AS)
down to shale shakers. Through vibration

and high G-forces, solids were filtered out for
overboard discharge or for treatment on the
rig or onshore. The cleaned mud was then incorporated back into the active fluid system
and reused to drill the well.
However, there are limitations to such technologies.
Firstly, the high G-forces used by shale shakers often break the drilled solids down into finer
particles, effectively making them more difficult to remove. In turn, a higher solids content
affects the drilling fluids efficiency by negatively impacting penetration rates and equivalent
circulating density.
Secondly, despite the amount of solids content in the mud, vibrating-type shale shakers
still often result in high volumes of mud being lost, large amounts of drilling waste generated, and less mud able to be reused within
the system.
With the cost of the average oil-based mud
used on the Norwegian continental shelf approximately $1,300/cu m ($45,909/cu ft), and the
treatment and disposal of drilling waste conservatively estimated to cost $1,580-1,750/ton, this
can have a significant effect on the bottom line.
Thirdly, another downside to shale shaker
technology is its negative effect on HSE with
rig personnel often exposed to high noise levels and vibrations as well as the emission of oil
and other vapors.
An alternate approach
It is against this backdrop that Norwegianbased Cubility has developed an alternative
to solids control one that leads to the efficient separation of drilled rock particles from
fluids, a reduction in the volumes of mud lost
and waste generated, and improved HSE.
The Mudcube system is an enclosed, vac-
uum-based filtration system. Rather than relying on high G-forces, drilling fluids are vacuumed through a rotating filter belt using high
airflow at 20,000 l (5,283 gal) per minute to
separate the cuttings from the fluid.
The cleaned drilling fluids are then returned
to the active mud system. The drilled solids carried forward on the filter belt are then discharged either directly overboard (if they meet
environmental discharge regulations) or to a
cuttings handling system.
The system also has one air-knife installed on
the inside of the vertical part of the filter-belt to
remove any cuttings that may have stuck to the
belt and includes water-knives that are designed
to clean the filter belt and improve filtration.
It is these improved levels of solids removal
efficiency and two-phase separation of liquids
and solids that reduces the volume of drilling
fluids lost, minimizes the tonnage of waste
generated, and raises drilling fluid integrity performance. The better quality of the fluid also
results in enhanced rates of penetration (ROP),
reduced stuck pipe incidents, and improved
wellbore stability.
In addition, as well as reducing the amount
of waste, the reduced percentage of mud on
the cuttings can lead to significant costs savings and greater flexibility over disposal.
Finally, the remote, automated operations of
the Mudcube and its enclosed system, which
features reduced vibration and noise levels
and the elimination of oil vapor, improves HSE
in drilling operations.
North Sea installations

The technologys first permanent offshore
installation was in 2012, on a drilling rig working off Norway. To date, it has been used to
drill more than 40 wells (on- and offshore) in
eight countries by 11 operators.
One such offshore installation is the Maersk

Giant jackup drilling rig, where three Mudcubes replaced four traditional shale shakers.
Since then, Maersk Giant has embarked on
several drilling programs in the North Sea,
with the system used in the drilling of 13 wells
to date.
Operators Talisman Energy Norge AS and
DONG E&P Norge AS have seen benefits
such as enhanced working conditions and no
costly HVAC upgrades to the shaker room;
improved drilling efficiencies with less drilling fluid being lost and more returned to the
mud tanks for reuse; and a lower mud content in the cuttings, resulting in easier and
cheaper disposal. In one selected well, where
only 27 metric tons (nearly 30 tons) of drilling
fluid waste was generated, the estimated oil
on cuttings was just 1 to 5% by weight.
In 2015, Cubility also signed a multi-million dollar deal on the Johan Sverdrup field,
one of the most important industrial projects
in Norway over the next 50 years.
Production start-up is scheduled for the end
of 2019 and will consist of four platforms, on
which the Mudcubes will be based. In this case,
the system will provide operator Statoil with
drilling efficiencies, lower mud consumption,
reduced waste volumes, and improved HSE.
The Mudcubes enclosed system features

reduced vibration and noise levels and
eliminates oil vapor, enhancing working
conditions and improving HSE.
While many new technologies must go

through incremental stages of adoption, this
system is operational today, impacting drilling efficiencies and protecting non-productive time (NPT) in challenging offshore environments, such as the North Sea. Gulf of
Mexico installations are also expected soon.
Managing NPT
One of the key measurements when it

comes to managing drilling programs and
costs is that of NPT. In any drilling program,
the operators goal is to minimize flat times
and maximize drilling time, as it is a huge
cost to the industry.
Two such examples where the Mudcube
has incurred zero NPT are installations on
the Maersk Gallant jackup and the Scarabeo

5 semisubmersible rig.
Maersk Gallant is one of Maersk Drillings
ultra-harsh environment jackup drilling rigs
and is designed for year-round operation in
the North Sea. Recent operators that have
used Maersk Gallant include Statoil and Total E&P Norge, the latter of which embarked
on a new contract in February 2016.
Three of the devices were installed on the
rig in 2014, replacing four shale shakers. As
of February 2016, the Mudcube has reached
cumulative running hours of 14,644. NPT
registered due to the new devices was zero.
On the Scarabeo 5 semisubmersible rig,
owned by Saipem, four of these systems
were installed in 2013, replacing five shale
shakers. The total running-hours of all four
is 13,329 hours, with NPT again zero.
To date, no NPT on a rig has ever been reported due to the failure of one of these systems.
IPLOCA Supporting the

global pipeline
construction
industry
th
50 years providing value to members through a forum for sharing ideas,

engaging the industry and its stakeholders, facilitating business opportunities
and promoting the highest standards in the pipeline industry.
Unique Networking Opportunities

HSE Promotion & Awards
Construction Innovation & Awards

Industry-specic Workshops
Find out more on www.iploca.com
Anniversary
International Pipe Line & Offshore
Contractors Association
Geneva - Switzerland
New noise level calculation unlocks

4D subsalt imaging
ime-lapse (or 4D) seismic allows for

the visualization of changes in the
reservoir resulting from productionrelated variations in pressure and
saturation. It has been successfully
applied in many fields. However, in the Gulf
of Mexico (GoM) and several other regions
in the world, the time-lapse technique is very
challenging subsalt. In this situation, the 4D
repeatability becomes much worse and it is
difficult to separate signal from noise.
A large portion of the future GoM production is subsalt, and it would benefit from
quality 4D seismic data. The observations
presented here may help to resolve the subsalt 4D problem.
Noise levels
For our purposes here, noise levels or data
quality levels will first be defined. There are
several methods used to extract 3D noise levels from seismic data quality. The goal of the
3D noise map is not only to show where the
noise level is high within a field, but to be able
to compare one processing flow to another
and ideally present a quantitative measure
that can be compared from one field in one
region to any other field in any other region.
Several 3D noise level measurements are
compared in this study: signal-to-noise ratio
(SNR), coherency, and average amplitude
extractions. The SNR maps are calculated
Jean-Paul van Gestel
BP
by dividing the cross-correlation by the

autocorrelation.
A new 3D noise level calculation called
3DNRMS is introduced. This calculation
is based on the 4D noise level calculation NRMS. Normalized RMS (root mean
square) is a standard measure for 4D seismic repeatability (noise).
Instead of comparing one dataset to another in NRMS, to calculate 3DNRMS, a dataset is compared to a smoothed version of
itself. This smoothed version is created by
flattening the data along a horizon and applying a 3D average smoothing function. If
the reflectors are parallel to the horizon and
there is no noise in the data, the resulting
3DNRMS is zero. If there is additional noise
in the data, the 3DNRMS goes up.
The 3DNRMS maps and SNR maps are
very comparable.Unfortunately, real geological events with a high spatial frequency,
such as faulting or stratigraphy, show up
as 3D noise. On the other hand, coherent
noise events can show up as low 3D noise.
Examples are multiples or coherent subsalt
events such as shear wave modes. These
events are an issue with which all 3D noise
levels measurements struggle, so the 3D
noise map has to be carefully constructed

and checked.
Of the 3D noise measures studied, 3DNRMS is preferred because it is independent of
amplitude strength. Therefore, it not only provides a good 3D noise map within a field, but
can also be used to compare different processing flows and different fields to each other.
The other advantage is that when 3D and 4D
noise are compared, the exact identical horizons and zones of interest can be used.
Noise comparison
Both 3D and 4D noise are affected by a
large number of variables. All of the following parameters affect the amount of noise in
the final dataset:
Geology
Reflection strength
Illumination
Processing
Post-processing analysis
Frequency content
Overburden characteristics
Acquisition style
Fold
Velocity model.
Note that all of these parameters affect
both the 3D and 4D noise in a similar manner. For example, an incorrect velocity model results in both a lower quality 3D and a
lower quality 4D image.
Shown here is the 3D noise map (A) and 4D noise map (B) for Field 1 in the deepwater GoM. The white dotted line indicates the field outline, while the
black line indicates salt canopy edge, where the northern part is subsalt. The contours highlight steep dips and faults. (All images courtesy BP)
This value is the expected NRMS

value in 4D data in an extra salt
area acquired with nodes.
Predicted NRMS levels for Field

2 are depicted in this image. The
black line indicates the edge of the
salt canopy, where the northern part
is subsalt.
Of course, there are more factors impacting the 4D noise than

the 3D noise. For example: sourcereceiver repeatability, source signature, water velocity or other statics, and consistent 4D processing.
The observations presented
here are valid for any given acquisition and processing style, and
qualitatively, the forward predictions are valid. However, to make
quantitative forward predictions based on
these comparisons, the time-lapse data of the
fields must have similar acquisition and processing styles.
Correlations between 3D and 4D noise have
historically been made by others. All show a
clear relationship between SNR and NRMS.
This relationship was tested on data obtained from a field in the deepwater GoM,
then used in a forward prediction mode for
4D feasibility studies and future time-lapse
acquisition.
Field observations
The deepwater GoM time-lapse data was

acquired using deepwater nodes with excellent source-receiver repeatability characteristics. Then, the data set was processed using the most recent processing technology.
Shown here are 3D (labeled A) and 4D
(labeled B) noise maps over Field 1, just
above the main reservoir level. The northern part of this field is subsalt. Both maps
are generated using the same horizon and
the same interval. A strong correlation between the two maps can be observed. Both
images show a strong impact of the structure, the illumination and the salt on the data
quality. To the north, where the reservoir
goes subsalt, the noise increases for both
the 3D and 4D cases. The steep dips on the
south flank of the reservoir are poorly imaged, resulting in high noise levels for both
maps. These two maps of 3D and 4D noise
have a high correlation with a coefficient of
determination (R2) of 0.74.
Predictive mode
Next, the observations were used in a

predictive mode to estimate noise levels
in other subsalt fields that do not yet have
4D seismic data. In previous 4D feasibility
workflows, one 4D noise level is used to estimate if the 4D signal is strong enough to
get above the background noise level. This
works well in extra salt areas and regions
where enough calibration points of 4D noise
Conclusion
levels from other time lapse surveys are

available. However, it is much harder to estimate expected noise levels in the subsalt, especially since some areas have much worse
data quality than others. Choosing one 4D
noise level for both subsalt and extra salt
seems to be too simplistic of an approach.
The following methodology is proposed for
generating spatially varying 4D noise maps.
A 3D noise level map is generated from the
existing 3D dataset. The correlation between
3D and 4D noise levels is then used to make
a prediction of the expected 4D noise level.
This workflow has been applied to Field 2.
Here, predicted 4D noise levels are shown
for both the extra salt and subsalt portions
of this field, indicating where in the field issues are expected to allow a good 4D signal.
The prediction is especially helpful in the
area at the edge of salt, where it would not
make sense to have a sharp jump in 4D data
quality at this exact point. This new map
shows a more gradual transition of 4D noise
levels from extra salt to subsalt and not a discrete boundary.
Degrading of the 4D noise levels is visible
beyond the salt edge, which continues even
further beneath the salt body.
This first step is a qualitative method that
describes which parts of field are the most
likely to have good 4D data quality. The
next step is to predict the 4D noise level in
a quantitative method by establishing a ratio
between 3D and 4D noise from other fields
with similar acquisition and processing, and
then using this ratio to convert the 3D noise
map into a predicted 4D noise map.
For the quantitative workflow, a good
range of datasets with equal acquisition and
processing characteristics is needed, which
might not be available. A simpler method to
get a more quantitative comparison is to calibrate the predicted 4D noise map in an extra salt area to the expected 4D noise ratios
from regional experience. For example, in
the figure above, the extra salt NRMS value
could be calibrated to a value around 6%.
Both 3D and 4D noise were

defined, and 3DNRMS was introduced as a new tool to show
3D noise levels. For fields in the
deepwater GoM, a good correlation between 3D and 4D noise
levels was shown.
The correlation between 3D
and 4D noise levels can be used
to predict where low 4D noise
levels can be expected in other
subsalt fields, where the 3D seismic data quality within a field varies strongly
due to the subsalt imaging issues.
An important conclusion that can be drawn
from the correlation between 3D and 4D
noise is that 4D noise levels could be reduced
similarly to 3D noise level reduction. By acquiring more offsets and azimuths; improving the velocity model; and improving the
imaging and all other methods that result in
better 3D images, 4D noise levels would also
be reduced. This is easier said than done,
since 3D imaging is already pushed as much
as possible. In addition, these methods must
be applied in a 4D-consistent manner, which
might be difficult for some of the complicated
acquisition styles.
As more datasets are tested with the observations that were made in this paper, the 4D
subsalt problem will hopefully be solved.
The author
Jean-Paul van Gestel is the lead

seismic analyst of BPs Gulf of
Mexico Production Team in Houston, focusing on time-lapse analysis
and attribute analysis, specifically for
subsalt fields. He has worked for BP
for 15 years, in Upstream Technology, Brazil Exploration, and on the
Life of Field Seismic (LoFS) Project for BP Norway. A
member of the Society of Exploration Geophysicists and
the European Association of Geoscientists and Engineers,
Van Gestel was the first author of a publication on the
integration of LoFS data that won SEGs The Leading
Edge best paper award in 2008. He also served on the
EAGE distinguished lecture program in 2010. He and
his colleagues won the Bonarelli award for best oral
presentation at the 2009 EAGE meeting. van Gestel
received his M. Sc. degree in Geophysics from the Delft
University of Technology in 1996 and his Ph. D. in Geophysics from The University of Texas at Austin in 2000.
Acknowledgments
The author wishes to thank BP colleagues for discussion and feedback, as well as BP, BHP Billiton, and
ExxonMobil for permission to show the data. Based on
a paper presented at the SEG annual meeting held in
New Orleans, Oct. 18-23, 2015.
Scalable MPD service

helps reduce rig downtime
Julmar Shaun Toralde

Renato Borges
Lance Hopper
Roy Callison
Standardized equipment addresses drilling, well control issues
he massive hydrocarbon reserves of

deepwater presalt reservoirs in oils
Golden Triangle the area between
Brazil, West Africa, and the Gulf of
Mexico promise operators an economic windfall, provided they overcome
some daunting drilling challenges first.
The thick salt domes obscure the underlying reservoirs, which introduce significant
uncertainty while drilling. In addition, the
complex deviated entrances of most presalt
reservoirs have narrow pore-pressure windows that raise the risk of kicks and losses
when drilling with conventional methods.
Managed pressure drilling (MPD) techniques promise a solution to many of these
drilling challenges. An adaptive drilling process used to precisely control the wellbores
annular pressure profile, MPD employs an
automated control system that detects minute pressure and flow changes and quickly
adjusts surface backpressure to minimize
the size of kicks or fluid losses. As a result,
MPD brings an additional level of safety, efficiency, and productivity to the drilling operation, allowing the driller to reach target
depth (TD) at reduced cost and risk.
But like many drilling advances before it,
MPD is climbing a steep technology adoption curve in many deepwater markets
around the world. However, the drilling challenges in the Golden Triangles expansive
presalt formations are compelling operators,
drilling contractors, and service providers to
quicken the pace of MPD technology integration on deepwater rigs working in pockets across this highly coveted real estate.
Structured for success

Weatherford has developed a comprehensive MPD support structure within the
Golden Triangle that aims to help operators
quickly cross the chasm between technology evaluation and full deployment. The service, which combines proprietary Weatherford technologies and international footprint
with local personnel, facilities, and organizational support, can be rapidly ramped up or
scaled back in response to changing market
conditions.
Weatherford is working to implement a
Exploitation of presalt formations, which are

inherent throughout the Golden Triangle and
estimated to hold large quantities of hydrocarbon resources, has spurred development
in recent years. (Courtesy Weatherford)
standardized set of MPD equipment that will

allow a rig to quickly address any number of
drilling and well control issues kicks, lost
circulation events or riser gas whenever
they might arise. Typical equipment include
a rotating control device (RCD) to keep the
well closed while diverting annular fluids out
of the well; Microflux, an MPD control system used to detect and control minute downhole influxes and losses; a Coriolis mass-flow
meter to capture mass and volume flow, mud
weight/fluid density and temperature from
returning annular fluids; hydraulic power
units; and associated valves and hoses. An
intelligent control unit and data acquisition
system ties everything together by analyzing the system data, pinpointing the source
and cause of a fluid influx or loss and transmitting the information to operation centers
on location and onshore.
A standardized equipment offering avoids
the need for building out a customized MPD
system for each new well scenario, which

would take the rig out of commission for
many months for a retrofit. A flexible, fully
integrated MPD system that is always ready
on the rig gives the drilling contractor a
competitive advantage when bidding on new
drilling contracts.
Standardized MPD equipment also provides benefits in terms of consistent operating procedures, qualification testing,
and troubleshooting. MPD equipment that
is rigged up in essentially the same way
on multiple rigs allows MPD specialists to
transition to new rigs with ease and quickly
gets to work on systems with which they are
already familiar. Equipment servicing and
maintenance can often be done right on the
rig itself to minimize downtime. Some of the
key points are discussed below.
Real-time collaboration. A major component
of Weatherfords comprehensive deepwater
MPD service is the decision support center
(DSC). This state-of-the-art facility contains an

operations room for DSC support personnel,
a conference room with video and teleconferencing capabilities, and a control room that
houses multiple monitoring stations and displays streaming MPD data on as many as 24
individual drilling rigs. This MPD data, which
is generated on site by the automated MPD
control system, is then populated through the
OneSync software platform, delivering seamless connectivity on the rig, in the office and
across technologies, to effectively reduce risk
and complexity while improving visibility and
control.
Data accessible through the DSC enables
onshore MPD teams consisting of global
technical support, project engineers, drilling advisors, local support personnel, and
the client to monitor and consult on many
drilling programs, remotely and in real time.
This is especially important during periods
of high drilling activity when multiple rigs
are working simultaneously.
In-country support. The MPD service employs nationals across the Golden Triangle
in roles ranging from equipment logistics
and installation to offshore maintenance and
operational support and management. Each
employee receives comprehensive training,
both in the classroom and on the job, from
experienced MPD support specialists who
have successfully executed projects in other
parts of the world.
To avoid the logistical delays associated
with consistently bringing long lead-time
equipment into and out of the different countries, the company has built massive repair
and maintenance centers that are capable
of providing all the servicing requirements
of large deepwater MPD equipment in strategic locations in the Golden Triangle. The
centers warehouse many of the parts used
on MPD equipment, as well as critical backup and spare parts, enabling maintenance
and repair work to be completed quickly and
with minimal downtime.
Proving its potential

The integrated MPD service has quickly
paid dividends in several deepwater presalt
wells. One operator deployed the service to
explore the production potential of a P&Ad
exploratory well that had been deemed undrillable by conventional practices. The previous drilling program recorded fluid losses
of 60 b/hr (9.5 cu m/hr) upon encountering
high-pressure loss zones. The MPD solution
would enable drilling the well to TD while
maintaining a constant bottomhole pressure
(BHP) to effectively minimize the risk of
losses and influxes.
Weatherfords local MPD experts performed dynamic pore-pressure and formation-integrity tests to determine that the drill-
ing window was 0.89 lb/gal (106.64 kg/cu

m) through the loss zones. A drilling rig retrofitted with a suite of MPD equipment was
deployed to reenter the well and drill to TD.
The equipment included a Microflux control
system and SeaShield Model 7875 belowtension-ring, slim RCD. These technologies
worked in harmony to provide early kick and
loss detection and then apply surface backpressure to enable precise control of BHP
within the narrow drilling window.
Once a loss zone was detected, the crossfunctional team comprising MPD technicians
on the rig and engineering consultants at the
onshore DSC worked together to adjust the
wellbore pressure profile through commands
sent to the control system. Even with a reduction in mud weight returns of 0.08 lb/gal
(9.59 kg/cu m), the system maintained constant BHP and enabled drilling to continue
without incurring nonproductive time.
The integrated MPD system helped land
the well to its TD of approximately 21,325 ft
(6,500 m), while transforming a previously
abandoned well into a valuable asset with
long-term production potential. The well accessed a 1,043-ft (318-m) reservoir containing API 31 oil.
TAKE
THE
PLUNGE!
Best-Selling
2nd Edition!
372 Pages/Hardcover/2011
ISBN 978-1-59370-253-3 / $85.00 US
Other deepwater regions

Since rolling out its integrated deepwater
MPD service, Weatherford has successfully
retrofitted more than a dozen drilling rigs for
MPD operations in the Golden Triangle and
is actively integrating MPD equipment into
the construction process for new deepwater
rigs. In order to accelerate rig integration of
deepwater MPD systems, the company has
also changed its business model from traditional rental to capital sales, transferring full
ownership of the deepwater MPD equipment
packages to the drilling contractor so that the
equipment becomes part and parcel of their
rig systems. The existing global footprint
and support infrastructure of Weatherford
for MPD systems allows it to continuously
and consistently provide support services to
these MPD-ready rigs, even if they are later
deployed outside of the Golden Triangle.
The combined contribution of field-proven
MPD equipment, in-country logistics and
supply, highly trained nationals and access
to real-time support specialists has trimmed
rig retrofits down to a six-to-12-month timeframe, a significant improvement from the 12plus months required for previous retrofits.
The integrated deepwater MPD service
that Weatherford has deployed and continues
to expand in the Golden Triangle serves as a
model that can be easily replicated in other
deepwater regions bringing the industry
closer to full adoption of a new drilling convention within which MPD is a standard option on every deepwater drilling rig.
Deepwater Petroleum Exploration

& Production is the most
comprehensive and authoritative
text available on the business,
engineering, science, and technology
of this multibillion-dollar industry.
NEW TO THE SECOND EDITION:

New chapters on geology and
geophysics, rigs, and service vehicles
Greater coverage of engineering and
scientifc schemes used in deepwater
Final chapter presents the latest
technology used in the third wave
of industry evolution
ORDER TODAY!
VISIT WWW.PENNWELLBOOKS.COM
OR CALL 800-752-9764!
FIND US:
Real-time, flow-off pressure data service

improves drilling efficiency, safety
rilling safely and efficiently from one

section of an offshore well to the next
depends on establishing accurate and
clearly quantifiable pressure limits
related to formation and cement integrity around the casing shoe. This is especially
true in deepwater environments where young,
fragile formations exhibit low fracture-gradient to pore-pressure-gradient differentials.
Typically, a formation integrity test (FIT)
or leak-off test (LOT) is executed immediately after drilling out the casing shoe to
establish pressure limits by verifying that
the formation and cement around the casing shoe are capable of withstanding the
planned hydraulic pressure exerted by the
mud column in the section to be drilled. A
new, real-time measurement-while-drilling
(MWD) service provides a faster, more accurate means of establishing FIT/LOT values using downhole flow-off annular pressure data to establish and work within these
crucial maximum allowable pressure limits.
The AccuFIT real-time flow-off pressure
data service acquires high-resolution, downhole flow-off annular pressure profile data in
real time at the depth of the FIT or LOT, and
reliably transmits the data to surface as soon
as circulation resumes following the test.
The service enables well construction teams
to make quick, well-informed pressure con-
Jon Rhodes
Ray Lamborn
Baker Hughes
trol decisions while drilling to ensure well

control and maximize efficiency.
Testing integrity, strength
Knowing the maximum hydraulic pressure that a newly entered zone can tolerate
is critical to safe, high-performance offshore
drilling operations. Exceeding this level in a
particular zone may result in mud circulation
losses or other hazards, which could lead to
costly and potentially dangerous well control
scenarios. On the other hand, maximizing tripping speeds to increase well construction efficiency often depends on operating as close as
possible to the maximum allowable pressure.
Surface-based formation integrity and
leak-off tests are performed to ensure the
quality of the cement around the casing shoe;
to evaluate the maximum pressure an openhole section can tolerate; and to estimate the
maximum allowable annular pressure for
well control purposes. The FIT or LOT is executed after drilling a few feet through the casing shoe and bottoms-up circulation samples
indicate that additional formation has been
Formation integrity and leak-off tests

are carried out when drilling into
a new zone to establish maximum
allowable annular pressure limits.
(All images courtesy Baker Hughes)
drilled. In each case, the accuracy of the data

impacts the ability of the well construction
team to make the right decisions to optimize
drilling safety and efficiency.
FITs and LOTs, although often juxtaposed or
used interchangeably, have two different objectives. A FIT is a pressure test up to a set limit,
similar to testing a system to its rated operating
pressure. During a FIT, the annular pressure
is increased to a prescribed maximum value.
It is not intended to fracture the formation,
but to confirm that the formation and cement
integrity at the casing shoe is strong enough
to withstand the drilling-induced pressure
expected while drilling the next hole section.
However, this does not give any information
as to how much additional pressure the formation will withstand and gives no geomechanical
information. A LOT is intended to fracture the
formation so as to determine the actual formation strength to losses. It is also useful to the
geomechanical engineer for calculating the
minimum in-situ stress.
Although performed in only a small percentage of cases, LOT results provide vital
information for the following:
Formation fracture pressure gradient
necessary to optimize mud programs
and compute kick tolerances.
Wellbore stability issues and geomechanical applications used to estimate the
minimum horizontal principal stress,
which is a critical component for wellbore stability analysis. Geomechanics
applications use LOT data for fracture
propagation prediction, as well as for
calibration and tuning of fracture and
closure pressure estimation.
Pore pressure estimation a vital measurement in any drilling operation, as
the mud hydrostatic pressure must be
kept within the safe allowable window
to withstand pore or formation pressures, but stay below the fracture gradient. An accurate pore pressure estimation helps reduce non-productive time
(NPT) by ensuring that wells are drilled
safely and without incidents.
The FIT or LOT is typically carried out using the cementing pump, with the pressure-vs.time data required for strength interpretation
continuously recorded using pressure gauges
located at the cementing unit. Other measurements, such as pumping rate and pumped
volume, and detailed chronological events are

also recorded for quality control purposes.
The measured pressures are routinely used in
conjunction with the static mud weight to calculate the bottomhole casing shoe strength.
The simplicity of surface-based testing is
the main advantage of FIT/LOT; however, the
surface-converted downhole pressure generally lacks the required quality and accuracy to
maximize either well control or well construction efficiency. The problems lie mainly in the
inadequacy of describing the mud column
characteristics, which can be complicated by
several factors such as mud compressibility,
thermal expansion, and barite sag effects on
fluid density, particularly in oil- or syntheticbased muds. Gel strength effects can cause
pressure transmission delays and pressure
losses in the mud column due to the thixotropic behaviors of the mud. Mud temperature
influence on induced stresses around the wellbore can result in noticeable changes of the
FIT- or LOT-derived equivalent mud weights.
In addition to mud system effects, the data
accuracy of surface-based FIT/LOT is dependent upon the accuracy of the cement pumping unit pressure gauge, and the gauges
location relative to the reference datum. All
of these factors negatively impact the quality of the final obtained value. Additional cost
and NPT can build up from the significant rig
time that is often spent circulating the mud
system prior to FIT/LOT in an effort to reduce the known mud system effects.
A real-time view
The new Baker Hughes real-time flow-off
pressure data service leverages the annular
pressure sensors already present in the existing downhole bottomhole assembly (BHA) to
record and transmit high-resolution flow-off
pressure time-series data in real time. Using
advanced downhole data compression and
software automation logic, the service efficiently transmits the pressure profile uphole
immediately after normal flow resumes following a connection or FIT/LOT. Downhole
intelligence and proprietary data compression reduce rig time for data transmission
since data starts at pressure ramp-up and is
highly compressed. No downlink is necessary to begin transmitting a pressure profile.
An initial 60-point dataset of the flow-off
annular pressure profile event is automatically delivered for immediate interpretation
at the well site, or remotely over the Internet
or an intranet using a web-enabled remote visualization and analysis service such as the
Baker Hughes WellLink RT service. After
the initial configuration, subsequent 60-point
datasets are available at each connection for
continuous trend monitoring. If more detail
is required for a particular time interval of
interest, it is possible to zoom in to that time
Using the AccuFit service enabled an operator in the deepwater Gulf of Mexico to increase tripping
speed by 60% while safely drilling through a challenging formation with a narrow ECD pressure window.
interval by sending an additional downlink at

any time for 60 data points over that shorter
time interval. For ease-of-use and immediate
interpretation, each measured pressure point
provides actual time, depth, and annular pressure information, including calculated true
vertical depth, and equivalent static density
information.
Improved, more accurate and reliable downhole measurements help enable critical drilling decisions in real time, leading not only to
improved FIT/LOT pressure measurements
but also to in-situ equivalent static density
(ESD) measurements while tripping to optimize tripping speeds, and during connections
to determine if a well is breathing or kicking.
A smart flowback monitoring enhancement
adjusts alarm criteria as conditions change to
enhance safety, eliminate non-representative
flowbacks, and detect flowback anomalies.
The data collected and transmitted by the
service provides detailed LOT/FIT information to determine the maximum allowable annular pressure for well control purposes and
to verify downhole pressure variations for
optimizing drilling mud programs. Data from
the service can also be used to evaluate swaband-surge downhole pressure variations for
equivalent circulating density (ECD) management, as well as to calibrate and verify
the downhole pressure balance for managed
pressure drilling (MPD) operations. In MPD
operations, the downhole overbalance is verified at every connection by comparing the
flow-off ESD to the pre-connection ECD.
Tripping speed increase

A major operator working in the deepwater Gulf of Mexico needed to drill a deep, deviated well through a challenging formation
with a narrow ECD pressure window. The
main objective was to safely drill the hole
section after the FIT within the known ECD
pressure window. An accurate downhole

flow-off annular pressure profile was needed
in real-time to avoid misinterpretation of the
surface-based measurements during the
FIT. In addition, the operator wanted to use
the flow-off annular pressure data to confirm the hydraulic model and optimize the
tripping speed for the BHA in the open hole
without swabbing the well.
Before using the downhole-enhanced pressure service at the depth interval of interest,
a casing test used the service to obtain the
measured pressure data in real time. The results of this test validated that the real-time
data provided the expected pressure profile
values. After a successful casing test, a FIT
was performed and the real-time data from
the downhole pressure service was compared to the memory data. This comparison
confirmed that the real-time data values were
within 1% of the memory data values, deeming these measurements satisfactory for continued use.
While the first BHA run was tripped out,
the downhole pressure service recorded
data under flow-off conditions and was used
to optimize the tripping speed for the second BHA run. The adjusted ESD hydraulic
model, calculated by the service providers
drilling engineering software, indicated an
original average tripping speed of 2,250 ft/
hr (686 m/hr) for the first BHA run. The
tripping speed was increased by 60% to 3,600
ft/hr (1,097 m/hr) for the second BHA run.
The case study presented above is one of
several that illustrate how time-series measurements from a new downhole pressure service provide accurate, real-time insights of the
annular pressure environment during FIT/
LOT events and during connections. These
insights help to improve the pressure-related
safety factor and operating efficiency of drilling operations.
E N G I N E E R I N G , C O N S T R U C T I O N , & I N S T A L L AT I O N
Topsides modifications approach

optimizes brownfield projects
everal major deepwater fields have

been developed over the past 20 years
in the Gulf of Mexico, West Africa,
and Brazil. Many of these projects are
now maturing, and tapping into satellite fields to extend the plateau or mitigate
production decline has become the focus
of an increasing number of initiatives. This
approach maximizes the use of the giant infrastructures built to process and offload the
million barrels of hydrocarbons recovered in
the initial phase of the developments.
Because of the high capex associated with
drilling and subsea facilities, deepwater tiebacks are often categorized as major capital
projects. In this context, topsides brownfield
modifications are seldom viewed as a major
contributor to the overall project costs. However, the economics of a subsea tieback are
generally sensitive. The various constraints
and challenges that come with the integration of new facilities on an operating platform can lead to a significant growth of the
development cost and jeopardize its feasibility if they are not kept to a strict minimum.
Compared to a typical drilling cost of $80
to $100 million/well or an average pipelay
Vincent Fort
Stphane Taxy
DORIS Engineering
vessel rate of $500,000 to $800,000/day, the
cost of installing a few pieces of topsides
equipment would appear to be several orders of magnitude lower than the capital
investment required to drill the wells and
develop the subsea part of the tieback. The
same holds true considering the amount
and weight of materials to be installed topside compared to the kilometers of subsea
flowlines, umbilicals, and wellbore necessary to bring the effluent back to the surface. It is however important to note that the
potential loss of production generated by the
tieback connection is not taken into account
in the project costs, based on the assumption that most tie-ins will be performed during a maintenance shutdown.
Brownfield economics
Yet, and however unimportant topsides
modifications appear in the overall framework of a deepwater subsea tieback, they
Capex distribution for typical brownfield topsides modifications.
still represent a cost that should not be overlooked for two main reasons. The first reason
is that the economics of a brownfield project
are usually on the borderline of profitability.
Topsides modifications on a fully functioning
platform are costly, because of loss of production during potential shutdowns, and because
of the lower efficiency associated with performing the work offshore, on a live facility. In
other words, the facilities installed offshore
for brownfield projects come at a higher cost
than for greenfield projects. The leverage effect on the capex of the constrained environment under which construction activities are
performed (offshore, on operating facilities)
makes it necessary to define and quantify the
scope of work to a level detailed enough to
avoid unforeseen budget slippages during
the execution phase. The second reason is
related to uncertainties in the surrounding
environment. These include the availability of an up-to-date as-built dossier, including
modifications made after start-up; feedback
from field operations on how the equipment
performs and/or is actually run; and actual
platform condition (asset integrity). Finding
a pertinent design for the brownfield modi-
(Images courtesy DORIS Engineering)
6%
Procurement
20%
43%
Onshore fabrication
36%
Onshore pre-commissioning,
load-out, and seafastening
54%
1%
13%
20%
3%
43%
Accommodations barge rental
56%
Catering
Labor - installation of pre-fabricated equipment
6%
Labor - construction of field-installed items

Labor - supervision and indirect costs
Engineering and project & construction management
Materials, fabrication, and load out
Marine vessels mobilization
Transportation, offshore installation,

and hook-up & commissioning
Emphasizing select
technical disciplines
The disciplines and subjects that are
worth exploring in details during front-end
engineering and design (FEED) can be determined by analyzing how the projects capex will be allocated during the EPIC phase.
Cost cutting exercises are generally associated with weight reduction exercises, based on
the general wisdom that the cost of a project
is directly related to the weight of the equipment to be added on the platform. However,
procurement of equipment packages and bulk
materials typically only accounts for less than
10% of the overall topsides cost. This suggests
that weight considerations cannot be used as
the sole indicator to estimate the future cost
of a project. Even though some correlation
between weight and as-installed cost can be
found, the specificities of each project make it
difficult to define a ratio that can be generalized to a variety of cases. The design, installation, and operational constraints particular
to a given development are likely to introduce
enough bias to perturb cost predictions by a
significant amount.
Installation-related costs account for more
than half of the overall topsides cost. In other
words, the benefits of a cost reduction exercise are likely to remain limited if they focus
on weight reduction without challenging
the overall design concept. The focus and
optimization of the design effort shall be on
constructability, with a view of minimizing
the amount of offshore manhours. This will
impact labor costs, logistics costs, as well as
accommodations cost.
In the early stages of a FEED, and in the
absence of a consolidated cost estimate, the
subject then becomes the determination of
a set of indicators that will best help select
between various alternate scenarios. This
usually happens at the start of the second
stage of a FEED, which can be broadly decomposed in three phases: verification on
existing facilities, design optimization, and
engineering development.
Verifications,
design optimization
The first weeks of the subsea tieback
project FEED provide a good opportunity
to optimize the scope of the topsides brownfield works and streamline the facilities to be
added to the platform. The objective here is
not so much to reduce procurement costs,
but to minimize offshore integration works.
Pre-FEED works are usually more focused on the subsea end of the tiebacks
Cost increases that can typically occur between pre-FEED and FEED phases.
250
FEED
Topsides brownfield cost, MUSD
fications is hence very often a challenging

task, with the increased complexity that the
proposed design shall be constructible at
minimum cost.
Pre-FEED
200
150
100
50
EPCM
Material,
fabrication,
and load-out
Transportation,
installation,
and HUC
development and only tend to outline a base

case architecture for the topsides. With the
increase of manpower that comes with the
start of the next phase, and the mobilization
of the contractors engineering team, the
beginning of the FEED provides a good opportunity for optimization. This is achieved
by using actual site measurements/surveys
and feedback from field operations to fine
tune the bases of design and possibly eliminate equipment that may have been deemed
required as a first approach, but can be removed upon further review of the actual operating data provided by the platform. Vast
amounts of information are routinely collected by thousands of sensors connected to
the platforms control system. This data can
be used to calibrate process simulations and
to assess the overall condition of the existing facilities with a view to guarantee their
ability to produce the new fluids and possibly extend their design life. However, these
data are not always readily available, and the
beginning of the FEED tends to be oriented
toward adding more definition to the preFEED, without taking a step back and challenging each piece of new equipment.
These first weeks shall also be used to collect and analyze as-built data. This will require
early involvement of some disciplines that do
not typically start their work until the design
has significantly progressed. In addition to
the various documents and drawings part of
the as-built dossier, every effort should be
made to obtain the 3D model of the existing
facilities. Knowing that such a 3D model is
seldom available or up-to-date, it is expected
that a 3D laser scan of the platform shall be
carried out anyway, if justified by the extent
of the projects scope and/or the accuracy of
the model. The availability of this information
at the start of FEED will be a first step toward
meeting the overall FEED schedule. Ideally,
data collection will have been performed dur-
Mobilization
Topsides total
ing the pre-FEED phase.

These early works will be carried out with
the objective of preparing for the first milestone of the FEED, which is the site survey.
Its timing is a compromise between progressing the design enough for the survey to be
meaningful, but leaving enough options open
to minimize potential re-do as a results of site
survey findings.
FEED planning
Although a sharp increase is observed in
all of the main line items that constitute the
overall budget, installation costs are found to
exhibit the most noticeable rise. These are
not only the main component of the overall
budget; they also represent the most volatile
fraction of the estimate. One of the reasons
is that there is no middle ground when estimating offshore manhours. Pre-FEED studies are very seldom carried-out up to a level
of details that would allow the use of precise
estimating tools.
However, the accurate evaluation of the offshore integration costs is indeed the challenge
of the early phases of a brownfield project.
In a greenfield project, procurement, fabrication and load-out account for about 75%
of the total EPIC cost. Moreover, a satisfactory level of precision can easily be obtained
when estimating these costs, i.e. the uncertainties associated to most of the main driving
variables can be reduced with a minimum of
effort. Procurement costs may be validated
though quotations from suppliers, while construction costs can be quite accurately estimated using ratios applied to material quantities. The value of these ratios will vary from
one yard to another, but as the works are performed on a facility which primary purpose it
to create a favorable setting for construction
activities, providing reliable ratios from past
experience is achievable.
On the other hand, procurement, fabriwww.offshore-mag.com July 2016 Offshore 49
Typical EPIC capex distributions of topsides greenfield and brownfield projects.

Greenfield
1%
Brownfield
16%
5%
20%
54%
20%
Engineering and project &
construction management
78%
Engineering and project &

construction management
Materials, fabrication,
and load out
Materials, fabrication,
and load out

and hook-up and commissioning

and hook-up and commissioning
cation and load-out only account for less

than 25% of the cost of a typical brownfield
project. Instead, more than 50% of the capex
comes from installation and offshore integration. Except for the installation of large
pre-fabricated modules that may require a
full production shutdown, these activities
are performed on a live facility which primary purpose is to safely maximize oil production rather than provide an optimized
environment for construction activities.
To summarize, roughly 75% of the cost of
a greenfield project can be assessed with a
reasonable good precision, while 50% of the
cost of a brownfield project is highly dependent on variables that are much more difficult to accurately quantify.
A first step in reducing the uncertainties related to the offshore execution is to
provide enough granularities in the input
data to the planning studies. This means
extracting material take-offs for most of the
disciplines that will be used as a basis for offshore construction works durations, as well
as preparing a detailed list of the tasks to be
performed offshore, including decommissioning activities and modifications required
for the proper integration of the new equipment to be installed on the platform. Such
modifications of the host platform are often
overlooked at FEED stage, although they
typically represent a significant part of the
offshore manhours. Indeed, planning studies often focus on confirming the duration
of the platform shutdown required for heavy
lifting and tie-in activities. Other activities
that do not occur during this critical phase
of the works should nevertheless be anticipated as early as possible, as they represent
a significant amount of work.
Removing the uncertainties associated
with estimating the installation costs thus
requires to take the studies one step further
than the typical scope intended at a given
6%
project phase. In other words, for a brownfield development, the outcome of the FEED
phase should more or less correspond to
what is expected from a detailed engineering in a greenfield.
This objective will reflect in the relative
importance of each discipline budget in the
overall project budget.
The main objectives of a greenfield project are to develop specifications and datasheets for the various pieces of equipment to
be purchased, as well as to provide drawings
and material take-offs for the main bulks, i.e.
piping and structure. This yields a rather uneven distribution for the expenditures, with
the process, piping/layout, and structural
engineering disciplines combining for more
about 75% of the total expenditures.
In the case of a brownfield, these three
disciplines only combine for slightly more
than 50% of the total cost. Overall, the cost
distribution is more evenly balanced across
the various disciplines, which is mainly explained by the need to have better definition
throughout the various areas of the project,
including such disciplines as E&I which
may not be progressed in as many details in
a greenfield project.
Integrating FEED
into project phasing
The need to take FEED studies to a higher
level of maturity, both in terms of details as
well as in terms of scheduling, blurs the lines
between FEED and detailed engineering.
Under the classical framework of an offshore field development, the completion of
the FEED phase is followed by the launch of a
call for tender for an EPIC contract. Except for
some long lead items, the EPIC contractor is
expected to be in charge of procuring most of
the equipment and bulk for the new facilities.
Because of their comparatively reduced
size, brownfield projects may be less likely
to attract the main international EPIC contractors. The list of potential bidders is
expected to be made of smaller size local
contractors with limited engineering capabilities and a core business oriented toward
fabrication and offshore installation.
A way forward in terms of brownfield
project phasing would thus be to carry out
detailed engineering studies as a direct continuation of the FEED works. This approach
is only valid if the design has been frozen
enough at the end of the FEED phase. In
that framework, the same engineering contractor would carry out both front-end and
detailed engineering, but would also be responsible for the procurement of most of
the equipment and bulk. The engineering
activities performed by the EPIC contractor
would then be mainly limited to construction and installation engineering.
This approach calls for the early integration of construction, installation and precommissioning specialists into the design
team. This approach also requires a change
of perspective from the FEED contractor,
from a design-oriented mindset focused on
outlining the key characteristics of the field
development, to a construction-oriented approach aiming at optimizing the offshore integration phase, while taking the design to a
higher level of definition.
The skillset of the engineering team shall
therefore combine a good understanding of
a projects key drivers that will allow defining the main orientations of the design, together with enough technical expertise to
be able to develop the design to the required
level of details.
Acknowledgment
This article is based on a paper presented at the

Offshore West Africa Conference & Exhibition held in
Lagos, Nigeria, Jan. 26-28, 2016.
ANNUAL NNOV.
OV. 8 110,
0, 2016
2016
1144 THTH ANNUAL
SUSTAINABILITY THROUGH THE CYCLE

A LV E S TO N , TTXX
MOODY
O O DY GARDENS
G A R D E N S HHOTEL
OT E L & CCONVENTION
O N V E N T I O N CCENTER
E N T E R GGALVESTON,
M
Deepwater
Operations
Conference
Exhibition
will
continue
hi
biti
The
The De
Deep
epwa
terr Op
er
at
io
ns C
Con
onfe
on
fe
ncee an
nc
andd Ex
Exhi
bi
tion w
ililll co
cont
ntin
nt
inue
in
ue
ep
wate
wa
te
Oper
erat
atio
ions
fere
renc
re
hibi
tion
wil
tradition
excellence
operational
challenges
alle
thee tr
th
trad
adit
ad
itio
it
ionn of eexc
io
xcel
xc
elle
el
le
lenc
ncee in aaddressing
nc
ddre
dd
re
ssin
ss
ingg op
in
erat
er
atio
at
iona
io
nall ch
na
chal
al
leng
leng
nges
es
ress
oper
involved
developing
ping
deepwater
resources.
will
return
o th
pi
invo
in
volv
volv
lved
ed iin
n de
deve
velo
ve
lopi
lo
eepw
ee
atter rres
esou
es
ourc
ou
rc
es.. We w
es
wil
ill re
ill
retu
rn tto
thee
ng ddee
pwat
pw
rces
turn
tu
Moody
Gardens
Hotel
Convention
Center
November
810,
Hote
enti
2016
Mood
Mo
ody
ody Ga
rden
rd
en
tell and
te
and Co
nven
nv
Cen
en
terr on N
te
Nov
ov
em
be
810
10
Gard
enss Ho
Conv
en
tion
ti
on C
ente
ovem
embe
berr 8
10,, 20
16
Gal
on,, Te
alve
ston
st
on
Texa
xas.
s.
in G
Galveston,
alve
vest
Texas.
xa
Challenges
deepwater
production
complex
plex
command
Chal
alle
al
leng
le
ng
es iinn de
deep
ep
wa
oduc
ucti
on aare
re ccom
om
ompl
pl
ex aand
nd ccom
omma
om
ma
nd oour
Ch
nges
epwa
wate
terr pr
te
rod
uc
tion
ti
mand
ur
attention
develop
solutions
that
economical
at
atte
tent
nt
ion
ev
op ssol
olut
ol
ut
ha
econ
onom
on
om
omic
ical
al aand
nd llong-term.
ongon
g-te
rm
The
te
ntio
ion to ddev
e el
elop
utio
io
ons ttha
hatt ar
aree ec
ic
g-te
term
rm. Th
e
Deep
De
wa
atio
ions
Con
onfe
on
fere
fe
re
nc
e an
andd Ex
Exhi
hi
bi
biti
tion
ti
on pro
ro
vi
dess a un
de
uniq
ique
ue
epwa
wate
terr Op
te
Oper
erat
er
at
ions C
renc
rovi
vide
nce
hibi
ep
pprovides
iq
Deepwater
Operations
Conference
Exhibition
unique
expe
expe
peri
ri
en
ence
ce ffor
or aatt
tten
tt
en
ende
dees
de
ibit
it
itor
orss to ssha
or
ha
re,, le
re
lear
ar
conn
nn
ectt
ec
rien
es aand
xhib
hare
arnn an
nnec
ib
andd co
experience
attendees
nd eexh
exhibitors
xh
share,
learn
connect
in a ffor
or
um dded
ed
edic
icat
ic
ated
ed tto
o ad
addr
dr
es
sing
si
ng tthe
he
se ccha
halll en
enge
ges.
ges.
orum
at
dres
essi
hese
hall
forum
dedicated
addressing
these
challenges.
www.deepwateroperations.com
ww.deepwateroperations.com
w
Photo Courtes
rtesyy of Hess Corp
Corpoorat
ration
io
ionn
HOSTED
HOST
HO
STED
ED BBY:
Y:
OWNED
OWN
ED &
PRODUCED
PRODUC
PRO
DUCED
ED BY:
PRESEN
PRE
SENTED
TED BY:
BY:
PRESENTED
SUPPOR
SUP
PORTED
TED BY:
BY:
SUPPORTED
P R O D U C T I O N O P E R AT I O N S
Extended field test shows super-duplex

steel has cost-saving potential
Enhanced metallurgy can overcome
chlorine pitting corrosion, crevice issues
Barinder Ghai
Sandvik Materials Technology
Table 1. Pitting resistance equivalent (PRE)

numbers of different stainless steel grades.
Alloy
s production platform operators face growing pressures to

curtail the costs of expensive offshore projects, the industry
is embracing new material innovations in order to overcome
these challenges.
A key issue is failure caused by severe corrosion in the
types of conventional stainless steels used for critical components
such as hydraulic and instrumentation (H&I) tubing and chemical
injection lines. With a possible solution being to improve the metallurgy of key components, the goal here is to examine how operators
are upgrading to more advanced stainless steels. Through innovation, materials are evolving to yield superior performances, improved corrosion resistance, and better overall production economy.
Conventional corrosives
Operators typically opt for conventional materials, such as carbon

steels, 304L, and 316L grade stainless steels, in H&I systems and
chemical lines due to low cost. However, these conventional grades
do not justify the life cycle if there are severe corrosion issues.
The normal lifecycle of American Iron and Steel Institute (AISI)
316L steels in non-corrosive environments does justify the cost.
Nevertheless, the same grade has exhibited a service life of less
than five years in corrosive chloride-containing environments, or
less than one year in some cases. Such failures will increase the
Sandvik SAF 2507

ASTM 904L
%Cr
%Mo
%N
PRE
25
42.5
20
4.5
34
AISI 304L
18.4
18
AISI 316L
17
2.2
24
costs of maintenance and down time and result in production losses

that cannot be afforded by operators.
Enhanced metallurgy
Higher contents of certain alloying elements within stainless

steels can greatly improve their resistance to stress corrosion cracking (SCC); i.e. the introduction of nickel or ferrite into the metallic
structure. Steels with an austenitic-ferritic metallurgy are found to
be superior to conventional austenitic grades like 316 because they
have higher mechanical strength and greater stability.
It is possible to gain a better understanding of how chemical composition affects a materials resistance to corrosion phenomena,
like SCC or pitting, by examining the pitting resistance equivalents
(PRE) values of stainless steels. This number is widely accepted as
the best method to rank this resistance.
PRE values are measured in accordance with exact testing procedures specified in theASTMG48 standard. Generally, the higher the
PRE number, the more corrosion resistant the steel. The formula used
to calculate PRE takes into account the content of chromium (Cr),
Left: Five tube grades were installed for tests on the lower deck of a platform installed in the Gulf of Mexico. (All images courtesy Sandvik Materials
Technology) Right: AISI 316L stainless steel and SAF 2507 installed side-by-side in the Gulf of Mexico. Whereas the AISI 316 tubing shows extensive
corrosion, the super-duplex tubing showed none. (Schiroky, Dam, Okeremi and Speed, 2009.)
P R O D U C T I O N O P E R AT I O N S
steel characterized by high resistance to pitting, with a

minimum PRE value of 35; and super-duplex SAF 2507.
These materials were installed on the platforms lower,
or spider, deck where saltwater spray levels were high.
The tubes were subsequently exposed to an average temperature of 30C (86 F) rising to a maximum
of 42C (107F) over the 18-month test period. After
the trials conclusion, the tubes were subjected to
laboratory tests and analysis in order to assess their
corrosion behavior.
A visual inspection revealed that the 316L tube was
most corroded, particularly on the section that had
faced seawards. Corrosion damage, discoloration and
Shown here are the levels of corrosion present on the 316L tubing sample after just 18
pitting were found. Sandvik SAF 2507 exhibited no
months of exposure.
signs of corrosion or pitting. Closer examination of
the tubes with an optical microscope found crevice
corrosion on the 316L and 904L tubes, but not on the
super-duplex specimen.
The super-duplex SAF 2507 and AISI 316L grades
were subjected to detailed analysis using energy dispersive x-ray spectroscopy (EDS) and also scanning
electron microscopy (SEM). This exposed the presence of sulfur and chlorine in the corrosion area on
the 316L tube sample.
The SEM/EDS scans revealed no visible signs of
corrosion in the SAF 2507 tube sample, and they confirmed that no harmful corrosion agents were present
after 18 months exposure in the Gulf of Mexico enviSAF 2507 tubing sample showed no traces of additional sulfur or chlorine and no visible
ronment. In addition, no chlorine was present, only
signs of corrosion during the 18-month test.
the original sulfur content of the material.
molybdenum (Mo) and nitrogen (N) within the steels metallurgy
The Gulf of Mexico findings are highly relevant to companies
defined as, in weight: %PRE = % Cr + 3.3 %x Mo + 16 x % N.
seeking to upgrade their H&I or chemical injection tubing. The reThe PRE values in the table show that AISI 304L and AISI 316L sults show that super-duplex stainless steels offer an alternative to
have a relatively low resistance to pitting. Austenitic ASTM 904L H&I tubing with superior corrosion resistance when the marine en(UNS S08904) has a comparably high PRE number because it con- vironment proves too severe for conventional materials.
tains high levels of molybdenum and nickel. However, the limited
The super-duplex materials performance in seawater is compamarket availability of these elements makes the grade more expen- rable to highly alloyed austenitic stainless steels despite an overall
sive, as is the case with 6% molybdenum, or 6Mo, steels which are lower content of costly constituents such as nickel and molybdechosen frequently for hydrogen sulfide (H2S) processes.
num. While it can be said that the performance requirements are
The highest PRE value is attributed to Sandvik SAF 2507 (UNS addressed by 6Mo grades to some extent, those materials can be too
S32750), a high-alloy duplex steel, known as super-duplex due to its expensive to be cost-effective.
minimum PRE value of 42. The grade is characterized by its good
chloride corrosion resistance combined with its high mechanical Conclusions
strength. These properties make it suitable for use in aggressive enThe right choice of tube material, with an enhanced metallurgy,
vironments such as warm, chlorinated seawater and acidic, chloride- can be crucial in overcoming chlorine pitting corrosion and crevice
containing media.
issues with instrumentation, hydraulic systems, and chemical lines.
An 18-month test on the lower deck of a platform in the Gulf of
Gulf of Mexico installation
Mexico shows that SAF 2507 is operationally reliable and longer
In either offshore or shoreline installations, H&I tubes used to service life in corrosive, chloridic environments where seawater is
process oil or gas are typically subjected to high levels of salt, hu- present as an alternative to carbon steels, 304L and 316L stainless
midity, ultraviolet light, and temperature. This is especially true in steels, and 6Mo grades. The super-duplex is equipped to help operaenvironments where seawater is present and evaporates, leaving a tors improve their production economy, and can therefore reduce
higher concentration of chlorides on the tubing.
the costs of expensive offshore projects.
To more closely assess the corrosive effects of seawater on stainless steel tubes, Sandvik Materials Technology implemented a test
installation on a platform in the Gulf of Mexico that lasted 18 months. Author
Five grades were installed, including 316L (with a minimum 2.5% Barinder J S Ghai is the Regional Technical Marketing, EMEA at
Mo). Also fitted was UNS NO8904, commonly known as 904L, a low Sandvik Materials Technology based in Birmingham, UK. With
carbon high alloy austenitic stainless steel in which the addition of more than 20 years of industry experience, Ghai focuses on maintaining and developing the technical marketing organization within
copper gives it corrosion resistant properties which are superior to the region to extend the technical and application knowledge on a
conventional chrome nickel stainless steels.
regional and global level. He is a member of NACE, Eurocorr, SS
The other tested grades were: Sanicro 28 (UNS N08028), a high-al- World, MTI Europe and in 2016, presented and supported papers
loy austenitic stainless steel designed for service in aggressive and cor- at several global conferences, including SS World and International Refining and
rosive environments; SAF 2205, a duplex (austenitic-ferritic) stainless Petrochemical Conference Abu Dhabi.
SUBSEA
Retrofitted flow access hub widens

options for deepwater intervention
System compatible with all subsea vendor configurations
The ESSI Flow Access Modules (FAM) are

said to provide operators with a flexible
suite of enhanced production solutions.
(All images courtesy Enpro Subsea)
s fields mature and production rates

begin to decline, subsea intervention
plays an increasingly important role
in maximizing recoverable reserves.
There are almost 6,000 subsea
trees installed in shallow, deep, and ultradeepwaters worldwide, but subsea wells
typically produce 10-30% less hydrocarbon
than equivalent platform-based wells. The
main reason for the difference in performance is the complexity and cost of monitoring, measurement, and intervention on
subsea wells. Typically, recovery without
regular intervention is only 22% of available
reserves, although appropriate intervention
could increase that figure to 50%.
The challenge for operators has been to
find cost-effective methods that provide the
flexibility required to enhance subsea production throughout the life of an asset. Conventional liquid intervention systems involving rig-based intervention, via the tree or a
choke-replacement system, are constrained
by the wide array of individual manufacturer
specifications, varying interfaces, crossed license agreements, increased payloads, flow
restrictions, and limited workover access.
An intimate knowledge of as built and as
installed engineering is also required for
each tree.
Tom Bryce
Enpro Subsea
Decisions on subsea production systems

are often based on limited information obtained from exploration wells. How production and water injection wells will behave
over their lifecycle is, therefore, uncertain.
Unlike a topsides well, which can be accessed at any time, a subsea well requires
coordination of significant hardware rig,
vessel, equipment and so on to enable access. Measures such as logging, zonal isolation, and mechanical intervention, which
typically require a mobile offshore drilling
unit (MODU) or light well intervention
(LWI), are often prohibitively expensive.
To address these various issues, Enpro
Subsea has developed the Enhanced Subsea
Sampling & Injection (ESSI) system which
can be adapted to any subsea tree or manifold for accessing hydrocarbon flow subsea
to facilitate a range of applications including
well control, scale squeeze, acid stimulation,
fluid sampling and multiphase metering. It
provides a universal open standard interface that can be deployed at multiple loca-
tions, including the jumper hub, pipeline

end termination (PLET) or manifold.
The team behind the development was
also responsible for the MARS (Multiple
Application Reinjection System) which Cameron acquired in 2007.
The ESSI flow access hub is a safe access
port for well or pipeline operations that can
either be retrofitted into existing subsea
hardware or seamlessly integrated into a
new field development. It is located off the
tree and comprises key subsea components
that can be standardized to enable fasttrack
procurement, giving operators the ability to
manage production efficiency as required
across all phases of the project cycle.
The patented Flow Access Module (FAM)
hub can be supplied in a single or dual-port
version either with new hardware or permanently retrofitted onto existing infrastructure. It can be located at the PLEM, PLET, or
flowline termination, tree or manifold. The
modular design, employing standard offthe-shelf components, provides a universal
subsea interface with an open standard design that supports all vendor configuration,
manufacturers and regions.
The ESSI fluid intervention system can be
configured for single-vessel operations, significantly lowering the economic threshold
SUBSEA
The ESSI Flow Intervention

System, deployed by ROV,
enables multi-well stimulation campaigns from a
single vessel.
of deepwater well control, scale squeeze and

acid treatments. It can withstand significant
loads and gives operators access to a comprehensive range of production enhancement
tools. With the FAM hub in place, a range
of interchangeable units can be deployed allowing numerous optimization solutions to
be enacted individually, concurrently or in
combinations from the first day of production
onwards. These enable multiple enhanced
production solutions such as flow assurance,
well control, scale squeeze, acid stimulation,
hydrocarbon sampling, multiphase metering
or multiphase pumping.
To reduce the risk and costs associated
with fluid intervention, the ESSI system bypasses the traditional approach of squeezing
wells via a MODU, LWI vessel or multiple
vessel solutions using separate intervention
and stimulation packages. Instead it combines storage, pumping, delivery and deployment equipment onto a single optimized
vessel deck. The ESSI Flow Intervention
Services (FIS) are universally applicable
and interface to all well access points, such
as the tree cap, a MARS-enable choke or
ESSI FAM hub.
The ESSI head is a lightweight ROV-installed solution that minimizes deployment
loads onto the receiving structure. It provides
automated flow control and shut-off which
further reduces the complexity and footprint

of the deployment system, enabling multiwell campaigns from a single vessel.
Potential FIS operations include:
Well fluid treatments and sampling
Well flow rate, water cut, sand production monitoring for well performance
and production system integrity

Well pumping to increase well flow rates
and recoverable reserves
Well solids removal/treatment
Well kill and control
Production flowline integrity, providing
flow access and flowline de-sanding and
de-wax treatments.
The system has further variants that allow operators with gravity-based structures
to fulfil commissioning obligations in compliance with OSPAR convention guidelines.
The ESSI decom systems uses a patented
anchor hub that locks onto the cell top of
gravity-based structures, enabling drilling,
sampling and pumping operations via a safe
and secure connection.
ESSI systems are being manufactured for
programs in the Gulf of Mexico, West Africa,
and the North Sea. This month, a US operator will take delivery of ESSI Flow Access
Modules (FAM) and intervention hubs in
the GoM. The dual-bore FAM hubs will enable multiple applications, including:
Managing production by allowing retrievable flowline instrumentation such
as multiphase metering, water cut metering and acoustic sand detection
Mitigating hydrate remediation risk
through retrievable chemical injection
(methanol)
Maximizing production through reservoir stimulation (squeezing).
Additionally, ESSI FAM intervention hubs
are under construction for production optimization at facilities offshore West Africa.
Since October 2015, an ESSI decom system has been used in the North Sea to remove trapped fluid from a concrete gravitybased structure during decommissioning.
The ESSI decommissioning system enables operators with gravity-based structures to inspect and
clean concrete cells in compliance with OSPAR convention requirements.
WWW.TOPSIDESEVENT.COM
WHERE
IT ALL
COMES
TOGETHER
ERNEST N. MORIAL CONVENTION CENTER
NEW ORLEANS, LOUISIANA USA
CONFERENCE & EXHIBITION
FEBRUARY 21-23, 2017
Include TOPSIDES, PLATFORMS & HULLS as a key component of your marketing strategy and gain one-on-one
access to hundreds of key decision-makers. The industrys only event providing direct access to a distinct
audience of buyers at TOPSIDES, PLATFORMS & HULLS ensures high visibility of your products and services.
OWNED & PRODUCED BY:
PRESENTED BY:
SUPPORTED BY:
HOSTED BY:
Dont miss out on one of the

fastest growing events in the offshore industry!
If your company has involvement in the following areas, Topsides, Platforms & Hulls is
an essential platform for exhibiting your products and services:
Pr
P
Proc
oces
esss Sy
stem
emss
Syst
TTechnoolo
logyy
afet
etyy Syyst
stem
em
emss
Safet
ondi
diti
di
ttion Mon
onit
itor
it
oringg
orin
or
Con
In
Inte
te
erf
rfac
acee Ma
ac
Mana
nnaage
me
ment
ent
ggeem
ta
atio
at
ion
io
Ins
nsta
tallllllat
n
xi
FFle
lexi
le
xibiilility
ty
Opperrat
atin
ing
in
g Sy
Syst
stem
st
em
ms
Oper
Fabrication
F
TTra
rans
rans
nspo
ppo
ort
rtat
atio
at
io
ionn
Des
esig
ignn Safe
Safe
fety
ty
t
Brow
Br
ow
wnfieeld
odifi
od
dific
atio
ions/
ns/
ld M
Mod
ifificat
ions
EExxpa
p ns
nsio
ions
io
nss
Op
Oper
erat
er
attio
ionn Asssu
ura
ranc
anc
nce
e
Inspection
I
Value
ue IImp
mpro
rovi
ving
ng P
Pra
ract
ctic
ct
tic
ices
es
M
Miini
nima
mall pl
ma
plat
at
atfo
fo
form
rmss
rm
R
Riig In
Rig
Inte
tegr
te
ggrat
atio
iion & Innte
terf
rffac
rfac
ace
e
Mana
Ma
naggeeme
nage
ment
me
nt
n
Sta
tage Gate Pr
Proc
oces
esss
Maintenanc
ncee &
Modification
Spar
Sppar
arss & TL
TLPs
Ps
xe
Fixe
Fi
xedd Pl
Platt fo
orm
rmss
FFPSO
SOss
Standardization
R
Reg
egul
ulat
ator
ory
Floa
oato
oa
tove
to
verr In
ve
stal
st
ti
Fl
alla
alla
lati
tion
on
Inst
S
Semi
miss
Project Management
C
Con
once
cept
pt S
Sel
elec
ecti
tion
on
edness
Hu
H rr
rric
ican
ic
anee Pr
an
Prep
epar
epared
aredne
ss
Co
Conv
nver
ersi
sion
onss
Start-up Commissioning
Hull Forms
D
Deco
comm
mmis
mm
issi
sion
onin
ingg
Worldwide Capacity
Control Systems
Mooring Technology
Topsides Hull Integration
Tensioners
IIntegrity Management
Ris
iskk Ma
Mana
nage
geme
ment
nt
ab
Re
Relililiab
abilililit
ab
ityy & M
it
Maain
inta
in
tain
ta
in
inab
abilililit
it
ityy
Topsides, Platforms & Hulls exhibitors receive:
Cost To Exhibit:
Complimentary floor passes to distribute to

your customers and prospective clients
The exhibit space only rate is USD $35.75 per sq. ft.
For Premium Space (island booth), add USD $1.00 per sq. ft.
One full conference registration for a member of

your staff per each 100 sq. ft. of booth space
Two booth staff personnel passes per each
100sq.ft. of booth space (does not include lunch)
35 word/200 character listing in the Topsides,
Platforms & Hulls show guide
50 word/300 character listing on Topsides,
Platforms & Hulls website
Extensive event advertising in the industryleading magazine Offshore
Booth backdrop, side dividers and
company identificationsign
For more information on exhibiting,

please visit www.topsidesevent.com or contact:
Sara Lowery Ng United States & Europe
Phone: +1 713 963 6277
Cell: +1 713 725 8536
Fax: +1 713 963 6212
Email: saran@pennwell.com
Justus Swantner United States
Phone: +1 713 963 6243
Cell: +1 713 597 1367
Fax: +1 713 963 6285
Email: justuss@pennwell.com
New tools and technology for the offshore industry

Multi-function gate valve provides improved shear, seal capabilities
Michael OSullivan
Enovate Systems
Well barrier philosophy is a critical component of all aspects of life
cycle well integrity management. During workover of a live subsea well
the intervention system typically includes an emergency disconnect
package and either a lower riser package (LRP) or well control package
(WCP). The safety barriers are located in the LRP/WCP. Industry
standards require two well barriers during all well activities where a
pressure differential exists that may cause uncontrolled outflow from
the wellbore to the external environment [1]. These barriers typically
comprise a safety head (SH) and production isolation valve (PIV).
Enovate Systems has developed En-Tegrity, a 738-in., 10,000-psi (689bar) shear and seal gate valve (SSV) with dual independent barriers for
use as a SH, PIV, and/or combined SH and PIV. The SSV has been qualified as a SH and is currently undergoing qualification as a PIV. The use of
a single valve as a SH/PIV facilitates a reduction in the number of valves
in the LRP with consequent savings in weight and stack height.
There are six key innovations that differentiate this technology from
conventional gate valves, namely:
A reverse actuation method. To close the valve the gates are pulled
across the bore rather than pushed into it. This means that the hydraulic pressure is aligned with the bore pressure resulting in the
latter assisting closure and allowing the SSV to close on a flowing
well. Wellbore pressure assists closure.
Superior shearing. The actuator system can deliver 1 million lbf
and is designed to shear all envisaged work strings and tubing
likely to pass through the wellhead during intervention operations
at lower pressures than conventional gate/ram valves. During
qualification testing En-Tegrity cut 3.5-in. S135 drill pipe at pressures of around 1,500 psi (103 bar) and 278-in. 90ksi coil tubing
at 500 psi (34.5 bar). In deepwater applications the lower cutting
pressures required more efficient use of accumulation because of
the improved useable volume available.
Improved sealing. Full metal-to-metal sealing provides better sealing capability than
conventional gate valves through having
separate shearing and sealing surfaces
means that during shearing operations the
sealing portion of the gate remains clear of
the shear area, minimizing the risk of damage to this surface.
Bi-directional sealing. When closed, upper
and lower seal plates align with upper and
lower seats providing bi-directional sealing.
Dual independent barriers from below. The
system is operated by two independent hydraulic actuators. Well isolation is achieved
even with only the upper gate functioning.
Reduced maintenance. Conventional gate
valves require frequent maintenance to replace elastomer seals due to damage caused
by erosion and degradation from temperaSour service testing of the thermoplastic lip
seals and chevron-stack seals at Element using a
bespoke test fixture that replicates the elastomer
sealing arrangement in the valve.
PR2 qualification at -18C (-0.4F). (All images courtesy Enovate Systems)
ture exposure and corrosive chemicals. As the SSV does not have
any elastomers in the bore, maintenance intervals can be extended.
Over the last two years Enovate has performed a program to qualify
the En-Tegrity SSV as a SH, in accordance with the following standards:
API 6A (ISO 10423), Annex F, PR2 for a temperature range of
-18C to +121C (-0.4 to 250F) [2]
API 6A (ISO 10423), Annex I, Class II Flow Testing
API 17D (ISO 13628-4), Annex L, Hyperbaric Testing to 3,000 m
(9,842 ft) [3]
Norsok D-002, Annex B Cutting. [4]
Further planned developments of the technology include extending the qualification of the 738-in. SSV as a PIV and development of an
18-in. preventer for use in place of a blind shear ram/casing shear ram
in BOPs. New requirements in the recently published BSEE Final Well
Control Rule for BOPs mean that existing BOP rams will have difficulty
demonstrating their ability to cut all pipe used
during well completion and drilling operations.
However, the shear and seal capability of the EnTegrity system is not impacted by the new rule.
References
[1] NORSOK Standard D-010, Rev 3, August 2004
[2] API 6A, Specification for Wellhead and Christmas
Tree Equipment, 19th Ed, July 2004
[3] API 17D, Specification for Subsea wellhead and tree
equipment, 2nd Ed, September 2011.
[4] Norsok D-002, Well Intervention Equipment, Revision1, 2000 and Revision 2, June 2013
The author
Michael OSullivan is Technology & Development Director

at Enovate Systems.He has 25 years of experience in the
subsea industry and is an acknowledged authority on riser
system technology.He has worked on many joint industry
initiatives to develop subsea technology and enhance system
reliability.He led the JIPs that developed the current API
standards for unbonded flexible pipe (API Spec 17J and
API RP 17B) and flexible pipe ancillary equipment (API
Spec 17L1 and API RP 17L2).He holds bachelors degrees
in Mechanical Engineering and Law, and a Masters
degree in Aeronautics & Astronautics from MIT.
Wild Well Control successfully combines

new, existing technology on GoM P&A job
Wild Well Control recently combined its well intervention solution
with a riserless internal-cementing tool to P&A a well in 7,000 ft (2,134
m) of water in the Gulf of Mexico. Using this new strategy, the company has successfully P&Ad six more in record time, so far completing
seven of nine wells since the campaign began earlier this year.
In a press conference at Mays Offshore Technology Conference,
Martial Burguieres, Wild Well vice president of Marine Well Services,
said: The new tools and techniques used on this project have already
exceeded expectations.
The system combines two technologies: the 7Series intervention system in conjunction with its new Wild Well DeepRange cementing tool.
The riserless subsea P&A tool is an alternative to traditional method
operations that can save customers millions of dollars, commented
Burguieres. Around 50% is shaved off of current market rates, he
observed.
New cementing tech

The DeepRange cementing tool is certified to depths of up to 10,000
ft (3,048 m) and a maximum working pressure of 10,000 psi (690 bar).
It employs a binary plug comprising resin and cement, developed along
with CSI Technologies, to increase the likelihood of a successful test
as well as the overall long-term effectiveness of the plug. The operation
takes place from a multi-service vessel (MSV) that contains about 1,000
sq m (10,764 sq ft) of back deck, a moonpool, working-class remotely
operated vehicles, and a heave-compensated knuckle boom crane with
60 tons (54 metric tons) capacity at depth.
Although this is the companys second P&A campaign, with the first
being deployed in Angola, it is Wild Wells first in deepwater. The main
difference between the two is that the engineers had to place a minimum 200-ft (61-m) cement barrier into the outer annuli in deeper water.
After the company used the 7Series circulating lines and pressure
control valves to deal with annular casing pressure, divers used the hot
tapping equipment to penetrate into the production bore from outside
the wellhead. But in the new campaign, hot tapping would not work.
The idea was to be able to keep all operations under constant pressure
control and eliminate the need for diver intervention.
While current P&A methods could range between $40 and 60 million
per well, Wild Well Control claims that it has found a way to reduce
those costs significantly. The DeepRange operation occurs from a MSV,
which costs less than a mobile offshore drilling unit. Burguieres stated
that while totals can vary slightly, given the total amount of work and
configuration of the well and production system, huge cost savings are
occurring. The companys target was $12 million per well, and on this
recent campaign, he said that the price exceeded the goal by a very
small amount.
This new technology is a game changer, and is going to be the
future of P&A practices, he added.
P&A process
Wild Well Control crews temporarily abandon the well, then cut and
pull the tubing before installing a cast-iron bridge plug in the production casing on electric wireline. The upper abandonment consisting
of an isolation bushing, tubing-conveyed perforating guns, and a seal
assembly are landed and latched into the 7Series and packer.
Perforation charges are deployed on e-line and are used to perforate
the tubing into the B annulus, just above the top of the cement. Circulation is established through the tubing, into the lower perforations, up
the B annulus, out through the upper perforations, and back up the production annulus. The isolation bushing diverts flow to the return lines,
commented Burguieres.
The binary plug is circulated into the B annulus. After waiting on
Wild Well Control recently combined its 7Series intervention system with its
DeepRange cementing tool to record results on a recent P&A job in the GoM.
It believes this method can drastically reduce P&A costs, which can currently
range from $40-60 million per well. (Image courtesy Wild Well Control)
the cement to harden, a mandatory pressure test is performed on the

tubing and annulus of the plug, in accordance with US Bureau of Safety
and Environmental Enforcement regulations.
Circulation is then established through the C annulus by firing the
previously set, tubing-conveyed upper perforation guns and e-line
conveyed lower guns. The perforating gun is then run on e-line, below
the lower packer and detonated, creating holes through the production
and surface casing into the C annulus. Circulation is again established
through the C annulus as with the B annulus before.
The binary plug is circulated into the C annulus and is left in a
balanced condition with the production annulus. After waiting on the
cement, another test is performed. The volume of resin displaced into
the cement will be dictated by the competency of the cement plug. A
plug is set in a profile below the packer, which turns into an additional
mechanical barrier. The P&A retrieving tool is run on the crane wire
and the P&A tool assembly is released and recovered to the surface.
The upper abandonment assembly is unlatched from the packer and
pulled from the well. The cast-iron bridge plug is set above the highest perforations and cement is bailed. The well is then fully P&Ad to
satisfy annular isolation regulations, he said.
On the most recent well completed, Wild Well successfully performed the operation on the B, C, and D annuli.
New metering pump reduces topsides footprint, weight

Offshore operations are fraught with many
daunting challenges from harsh environmental conditions to high opex. Space limitations
are one of the most common challenges, as
operators must fit heavy-duty drilling and production equipment onto a rigs topsides. Plus,
depending on whether it is a jackup, semisubmersible or a drillship, topsides availability can
be a major obstacle. As a result, equipment
size and weight are key considerations for
offshore installations.
The NOVADOS metering pump with a
double acting double diaphragm head developed by Bran+Luebbe, an SPX FLOW brand,
helps offshore operators meet those challenges. It reduces the footprint, size, weight,
and cost compared to other available hydraulic
diaphragm and plunger pumps. The high
precision metering pump delivers the same
capacity as an equivalent duplex pump, while
decreasing topsides footprint and weight by
20% saving much-needed, critical space on
offshore rigs.
SPX FLOWs NOVADOS metering pump
has a sturdy gearbox that is designed for
continuous duty, improving reliability and
minimizing the risk of downtime during critical operations. The gear set is splash-lubricated, no external oil pump or tubing is needed,
The high precision metering pump delivers the same capacity as an equivalent duplex pump, while
decreasing topsides footprint and weight by 20%. (Photo courtesy SPX FLOW)
reducing the need for extra accessories on

offshore rigs. Operators have the flexibility to
adjust the pumps capacity via stroke length
manual, electric, or pneumatic are all fully
interchangeable with each other or speed via
a variable speed drive.
The new metering pump offers flexibility
for operators working in the unpredictable and
constantly-changing offshore environment.

All gear sizes in the NOVADOS series can
be combined with a variety of diaphragm or
plunger head designs to achieve the required
flow rate and pressure parameters. The
metering pumps can accommodate single or
multi-stream applications and are available in
horizontal or vertical configurations.
Hydratight upgrades subsea pipeline offshore Western Australia

Hydratight has completed an upgrade project on the John Brookes subsea pipeline on
the North West Shelf of Western Australia.
Contracted by Quadrant Energy Pty Ltd. on
behalf of the John Brookes joint venture, Hydratight engineered, manufactured, delivered,
and supported the installation of an 18-in.
MORGRIP connector on the subsea pipeline
The MORGRIP series of connectors were first installed in the 1980s as an alternative to welding.
(Photos courtesy Hydratight)
located 54 km (34 mi) northeast of Quadrants

Varanus Island facilities.
Hydratight engineers Mark Fisher and Bob
Till were embedded in the offshore installation team.
This was an exciting project to be part
of due to strict safety and environmental
expectations in place, explained Fisher.
These included working closely with a DNV
inspector who flew in from Singapore to witness all aspects of the upgrade. It also meant
an independent critique of our manufacturing
procedures.
The component parts were of extremely
high specifications and we had strict rules on
forging and manufacturing. These included
the use of a compliant biodegradable mineral
hydraulic fluid used for activating the tensioners and flushing and cleansing all tooling. We
ensured no other unassessed hydraulic fluid
was used.
A representative from Quadrant Energy
oversaw the factory acceptance test of the
completed connector in the UK, before
witnessing a second test and diver training on
arrival in Australia.
Fisher added: We were pleased to be able
to provide face-to-face technical support to
Quadrant prior to and during this challenging
international project.
Diver installing connector on the John Brookes

subsea pipeline offshore Western Australia.
Bespoke features were included on the engineered product including corrosion resistant
alloy cladding, composite graphite seals, the
companys ball and taper technology and its
subsea tensioning equipment.
The company says the MORGRIP series
of connectors is known for a leak-free record
since they were first installed in the 1980s
as an alternative to welding. They take less
manpower and fewer man hours during
commissioned projects. The technology is a
permanent solution, yet the connector can be
detached and reused.
GE Oil & Gas launches new subsea connector

GE Oil & Gas has completed the qualification of its upgraded 36kV high-voltage wet
mate connector.
The company said that MECON WM
36/500 is designed to offer more reliability
and predictability in subsea power system
connections, and can be used with equipment
such as transformers, switchgears, variable
speed drives, and motor loads. It also noted
that by improving the reliability ofsubsea
MECONTM WM 36/500 is designed to improve

the reliability ofsubsea power transmission and
distribution, which GE Oil & Gas said supports
operators in developing cost-efficient subsea
production and processing facilities. (Image
courtesy GE Oil & Gas)
power transmission and distribution, MECON

WM 36/500 supports the ambitions of oil and
gas operators to develop cost-efficient subsea
production and processing facilities.
Alisdair McDonald, subsea power and

processing leader, GE Oil & Gas, said: Unlike
conventional stab-type connectors, we deploy
a unique connection process that ensures that
we are in full control of the electrical environment inside the connector before completing
the electrical connection.
GE uses the same patented technology for
all of its MECON wet mate connectors. An
in situ flushing process enables the verifica-
fluid. The dielectric fluid is analyzed to verify a

benign electrical environment before the electrical and mechanical connection is completed.
The process is enabled by a closed-loop flushing tool mounted on a conventional ROV and
takes less than 20 minutes in total to complete
and no fluids are released to the environment.
In addition, GE said MECON WM 36/500
can act as an isolation switch at rated system
voltage and can be used to verify system
tion of a benign electrical environment, it

explained. The flushing process is performed
after the connector halves are brought
together and before the electrical connections
are completed.
Firstly, the connector is flushed with
seawater to remove any contaminants, then by
fresh water, then alcohol, and finally dielectric
health prior to commissioning or to find faults

after failure.
MECON 36/500 has undergone more
than a year of testing to comply with industry
standards, the company added.
The connector has been certified for operation up to 36 kV and 500 amperes in water
depths down to 10,000 ft (3,000 m).
Saipem, Total collaborate on subsea water treatment technology

Saipem has entered into an agreement
with partners Total and Veolia for the
co-ownership and exclusive commercialization of SPRINGS subsea water treatment
technology.
An alternative to topsides water treatment
and injection units, SPRINGS, which stands
for subsea process and injection gear for
seawater, is a nanofiltration-based sulphate
removal unit designed for use in deepwater
environments.
Saipem said one of its main advantages is
that it allows for greater flexibility in the water injection pattern in order to better sweep
the reservoir. In addition, SPRINGS can lead
to savings on topsides weight and deck space
through the removal of the subsea water
injection network.
The three companies collaborated on the
technology, and a deep sea test was success-
fully completed in 2015 offshore West Africa.

Development began in 2007.
By moving the sulphate removal process
subsea, Saipem said the technology enhances
the economics of oil recovery by:
Eliminating water injection sealines
Freeing up deck space for production
equipment and reducing topsides weight
producing savings in terms of weight
and deck space
Easing brownfield retrofits by, particularly on FPSOs
Making satellite, deep injection wells
economical.
Development on SPRINGS began in 2007, and

a successful deep sea test was recently completed offshore West Africa. Partner Saipem
said that the subsea systems main advantage
is that it offers improved flexibility in the water
injection pattern. (Image courtesy Saipem)
Materia introduces new thermoset resin line

Materia Inc. has launched its Proxima resin
portfolio, developing a range of products that
it says can provide reliable, practical, and
economical solutions to challenges in subsea
thermal insulation, subsea buoyancy, and
downhole tools.
The resins are easy to process due to their
low viscosity and controlled cure profile, explained the California-based company, adding
that the resulting products are ideal for use in
extreme environments.
Compared with commonly used polymers,
Proxima thermosets withstand the most
extreme hot/wet conditions and provide excellent performance, Materia said.
The technology lines HTI resins for hightemperature subsea thermal insulation provide
a thermal barrier between high-temperature
flowlines and seawater, enabling production of
reservoirs with oil temperatures up to 400F
(204C) without resorting to pipe-in-pipe or
subsea cooling systems.
In addition, the lines polymers maintain
structural integrity in operating environments
at water depths greater than 10,000 ft (3,048
m). The company said this insulation technology can be applied in the factory or the field.
Brian Conley, senior Proxima product
With the release of its Proxima thermoset

resin technology, Materia said it delivers a
broad range of products designed to increase
reliability and performance for high-pressure/
high-temperature applications in deepwater and
downhole exploration and production. (Image
courtesy Materia Inc.)
development manager, said, Materias subsea

thermal insulation products offer full system
integrity for high-temperature deepwater environments. The use of Proxima HTI polymers
results in lower risk and better reliability for
insulation of high temperature subsea flow-
lines, field joints, and equipment relative to the

alternative engineered solutions.
Proxima STR thermosets are designed for
use in syntactic foams in subsea buoyancy
applications. These lightweight materials
withstand the severe hydrostatic pressures of
deepwater and ultra-deepwater environments
while providing substantially improved buoyant support to critical subsea components.
Daryl Allen, Proxima product development
manager, said, Proxima HPR casting resins
offer thermal stability and toughness with fast
and easy polycrystalline diamond compact or
tricone drillability for many downhole applications. When long fiber composite performance
is required, Proxima ACR infusion resins offer
exceptional performance with fiberglass and
carbon fiber.
These bring improved thermal stability,
corrosion resistance and reliability when
compared to standard composite materials.
Both the HPR and ACR systems provide
superior materials that solve todays downhole
challenges.
Materia supports its customers with application engineering services provided from
its prototyping and polymer testing facility in
Pasadena, California.
Weatherford introduces deepwater integrated completion technologies

Weatherford has developed a new portfolio of
integrated completions technologies specifically
for deepwater wells. These solutions have been
engineered and tested beyond API 14A standards to
provide reliability in the most challenging environments.
Weatherfords annular safety valve

(ASV) system applies RFID technology
to downhole completion tools.
WFX0 gravel pack system

The first fully integrated, V0-rated gravel-pack system, the WFX0
system combines the gravel-pack string with a deep-set barrier.
Incorporating an ISO/V0-rated WFX0 packer, WFX0 quick connect,
and WFX0 gravel-pack sliding sleeve, and designed to run with the TerraForm packer, shunt-tube screens, and the OptiBarrier ball valve, the
new system eliminates the need for a dedicated deep-set barrier run
with an additional packer and ball valve. By enabling single-trip gravel
packing across multiple zones, the gravel pack system has the potential
to save two to three days of rig time.
Optimax series safety valves

The Optimax series itself is not new; 7,000 valves have been
deployed with 20,000 years of cumulative service life and zero failures
attributed to the design. Recently, the series has expanded with the
addition of super-slim valves and deep-set valves. Compared to curvedflapper safety valves of an equivalent size, Optimax super-slim flappers
have a reduced outside diameter for use in smaller casing strings. The
new deep-set valves are designed to provide fail-safe closure at depths
greater than 12,000 ft (3,658 m) without being affected by tubing pressure or relying on the long-term storage of nitrogen.
Annular safety valve system

One example of how Weatherford applies RFID technology to downhole completion tools is the annular safety valve (ASV) system. The
system incorporates
three field-proven technologiesthe high-pressure-rated
OptiPkr+ production packer, the Optimax series ASV, and the RFID-enabled
hydraulic communication subto help prevent
unplanned gas releases during gas-lift operations.
UltraLift deepwater gas-lift system

The UltraLift deepwater gas-lift system combines a new high-pressure-rated valve with the field-proven Weatherford DVX gas-lift mandrel
to enable gas injection deeper in the well and enhance completion integrity in challenging deepwater environments. The new Ultra-HP valve
incorporates dual-edge welded bellows for high-pressure reliability and
meets the highest industry standards. The DVX side-pocket gas-lift
mandrel uses a dual-injection flow path to minimize pressure drop and
can be validated to API 19G1 V1 standards. As a whole, the system
enhances production and improves completion integrity in ultra-highpressure lift applications.
17 TH ANNUAL
MARCH 21-23, 2017

HENRY B. GONZALEZ CONVENTION CENTER
SAN ANTONIO, TEXAS USA
WWW.SUBSEATIEBACKFORUM.COM
MEETING
THE CHALLENGES
Over two days of sessions, dialog among strategic decision makers is facilitated through focused presentations,
extended question and answer sessions, real-world project examples and networking. Speakers and attendees will
share knowledge and collective experiences crucial to improving the quality, safety, and economics of the subsea
tieback industry. The highly technical and specialized nature of this industry will be covered by operating companies
and regulators. The Subsea Tieback exhibit hall floor is the industrys leading platform for information exchange,
networking opportunities and new business development. You cant afford to miss this event!
Owned & Produced by:
Presented by:
Supported by:
OIL, GAS
&petrochemequipment
BUSINESS BRIEFS
People
Li Fanrong has resigned as CEO, president, and executive director of CNOOC Ltd.
The company has appointed Yang Hua as
CEO and executive director; Yuan Guangyu
as president and executive director; and
Chen Wei as compliance officer and general
counsel.
Petrobras has appointed Pedro Pullen
Parente as CEO. Luciano Galvo Coutinho
has resigned from the companys board of
directors.
Cobalt International Energy Inc. has appointed Timothy J. Cutt as CEO and as a
Class I member of the board of directors. He
succeeds Joseph H. Br yant. The company
has appointed William P. Utt as interim
chairman of the board of directors and Van
P. Whitfield as interim CEO and a Class II
member of the board of directors.
Harald Espedal has resigned as chairman of the board and director of Prosafe SE.
The board has accepted the resignation and
has appointed Glen O. Rdland as the new
interim chairman of the board.
The board of Seadrill
Ltd. has appointed Anton
Dibowitz as executive
vice president of Seadrill
Management Ltd.
Audubon Engineering Solutions has named
Stafford Menard as vice
president of deepwater
development.
Saipem has appointed
Menard
Giulio Bozzini as chief
financial and strategy
officer.
Baker Hughes Inc. has named Belgacem
Chariag as president, global operations; Art
Soucy as president, products and technology;
Derek Mathieson as chief commercial officer
of the newly formed commercial strategy
organization; and Richard Williams as senior
advisor to the companys executive leadership
team.
WGP Group Ltd. has named Francis Smulders as non-executive chairman.
Dr. Alexander Horch has joined HIMA
Paul Hildebrandt GmbH as head of development.
Eni Norge has appointed Philip Hemmens as
managing director.
ExxonMobil has
elected Angela Braly to
its board of directors.
The Energy Industries
Council has appointed
Stuart Broadley as
CEO.
James Efstathiou
Broadley
has joined Energean Oil
In Memoriam
James H. Stasny passed away on
May 27, 2016, in College Station, Texas,
after a lengthy illness. In 1986, Stasny
along with business partner, Joe R.
Janac, founded Dynacon Inc. in Bryan,
Texas. Dynacon was acquired by Forum
Energy Technologies in December
2012. He most recently founded another
company, JMF Landworks, with his son
Mark.
Dr. Lee Ott passed away on June 1,
2016. He was the chief scientist that enabled the first satellite-based positioning by a commercial company.
Both men were members/supporters
of the Houston Section of the Marine
Technology Society.
& Gas as exploration
director.
DEA Norge has appointed Hans-Hermann
Andreae as managing
director.
DownUnder GeoSolutions has hired Christopher Davin as COO.
Braemar Engineering
Davin
has appointed Sheila
McClain as managing
director.
Ikon Science has
named Julio Gomez
as vice president global
sales.
Global Maritime
Consultancy & Engineering has appointed Anna
Keen as regional manager for the Asia Pacific
McClain
region and Mikal Grure
Eie as regional manager for Norway.
InterAct, an Acteon company, has added
Jerr y Nichols, senior geophysical advisor, to
its technical team.
Trelleborgs offshore operation has named
Sebastian Araujo as managing director of its
Brazilian manufacturing facility in Macae.
ROVOP has hired
Neil Francis as vice
president of business
development in Houston.
Exova has appointed
Ronan Harkin as vice
president of sales for the
Americas region.
Ferguson has
appointed Sonnie
Harkin
Groombridge as APAC
business unit manager.
Siri Hatlen has stepped down from Sevan
Marine ASAs board of directors.
ACE Winches has appointed Chris Waller
as engineering manager.
Stokes & Spiehler has
appointed Blair LeBlanc as vice president
offshore operations;
Tony Shell as vice
president sales and
marketing; and Donnie
Busscher as engineering manager.
Busscher
Blaze Manufacturing
Solutions has appointed
Gordon Cook as service
manager.
Leonard Brasseaux
has joined Hydratight as
product account manager
and will be responsible
for the upstream market
in Louisiana, Alabama,
and Mississippi, focusing
Shell
on all offshore activity.
KBR has appointed
Lynn Nazareth as vice
president of investor
relations.
RigNet Inc. has named
Steven E. Pickett as
CEO and president. He
will be based in Houston
and succeeds Marty
Jimmerson, who has
served as interim CEO
LeBlanc
and president.
Don Fr yhover has
joined RAMTeCH Software Solutions as senior
vice president of energy data management.
AccessESP has appointed Anwar Assal as
Middle East and North Africa region manager.
SIMMONS EDECO Europe Ltd. has named
Gavin Sherwood as business development
manager.
BIRNS Inc. has hired Xin Lian as manufacturing engineer.
Company News
The International Pipe Line & Offshore
Contractors Association (IPLOCA) says that
a new biennial award will be presented for the
first time at the IPLOCAs 50th anniversary
convention in Paris, Sept., 12-16, in recognition
of Excellence in Project Execution. IPLOCA
says that this award will be given for a particularly high standard of project execution,
in recognition of a step change in both the
companys satisfaction and a trade mark for
the contractors execution capacity.
Baker Hughes has consolidated its previous regional operations structure into one
global organization with responsibility for driving operational performance, service and sales
execution, and delivering strong operating
profits. It also has combined its technology and
BUSINESS BRIEFS
global products and services organizations to

create one global organization responsible for
strengthening the companys technology commercialization and investment strategy.
Wood Group Mustang has formed a joint
venture with Mexican oil and gas operator and services company Grupo Diavaz.
They aim to capitalize on Mexicos energy
reforms. Mustang Diavaz, based in Mexico
City, will provide engineering, procurement,
and construction management services to
offshore and onshore facilities, and pipelines
in Mexicos upstream and midstream oil and
gas markets.
Saudi Aramco has signed a memorandum
of understanding with GE and Italian group
Cividale. They plan to build what they claim
will be the Middle East and North Africas first
high-end forging and casting manufacturing
facility designed to serve the regions maritime and energy industries. The new facility,
involving a joint investment of more than $400
million, will be located in Ras Al-Khair, Saudi
Arabia under the Royal Commission of Jubail
and Yanbu industrial area. This should be
operational in 2020, creating 2,000 jobs and
helping to support development of local Saudi
small and medium enterprises.
United India Insurance Co. has re-appointed Aqualis Offshore to provide marine
warranty services to ONGC offshore India.
Marine warranty surveyors from the companys office in Dubai will support ONGCs fleet
of jackup rigs and mobile offshore production
units in Indian waters. Operations include
reviews of rig move documentation, issue of
certification and on-board attendance.
Following the latest report from Accident
Investigation Board Norway, the Nor wegian
Civil Aviation Authority has suspended all
use of H225. According to Statoil, this helicopter type has already been suspended from
regular traffic following the crash of an aircraft
transporting offshore crew members at Tury,
western Norway, on April 29, 2016. The restriction applies to all use of this helicopter for
search, rescue, and medical assignments.
Schlumberger has acquired Saltel
Industries, an engineering, manufacturing,
and service company that offers expandable
patches and steel packers technology for the
oil and gas industry.
Barakah Offshore Petroleum subsidiary
PBJV Group has received a letter of award
from Murphy Oil to provide welding services
for a drilling and subsea program offshore
Malaysia. It will guarantee manpower, equipment, and consumables for the welding work
throughout the duration of the contract, which
is set to run until mid-2018.
CORTEC has expanded its CORTEC
Manifold Systems Lafayette manufacturing
facility and relocated to new premises in Port
Allen, Louisiana.
Cyberhawk Innovations has signed a

partnership agreement Norwegian UAV
operator Nordic Unmanned. This will give
customers in Norway access to Cyberhawks
cloud-based asset management software
iHawk, which converts UAV-captured images
into asset management information in the
cloud. It is said to provide intuitive access
to inspection data using a simple map-based
interface, demonstrating the status of the
asset using a traffic light system and allowing
the user to probe for further engineering commentary and evidence.
Ocean Team Group has established
Ocean Team Fluidcare UK, a base in
Aberdeen.
National Oilwell Varco Inc. has entered
into a definitive agreement to acquire the
completion tools business of Trican Well
Ser vice Ltd.
Tenaris has begun operations at its new
Rig Direct Academy, a training and testing
center in Veracruz, Mexico.
Suretank has entered into a formal agreement in Angola with local partner ESS. The
latter is a 100% Angolan company offering procurement, importation and customs clearance,
facility and project management, consulting
and staffing services.
Hydratight has moved all offshore equipment from Deer Park, Texas, to its facility in
Gonzales, Louisiana.
Offshore Technical Compliance has introduced two new IADC-accredited regulatory
compliance training programs: an offshore
drilling and a marine regulatory compliance
training.
OEG Offshore has acquired AOR Containers.
The Weatherford drilling services facility
in Nisku, Alberta, Canada, has received API
Specification Q2 certification.
National Safety Apparel has acquired
Drifire.
Vallourec Tube-Alloy has opened a new
plant in Singapore, to be known as Vallourec
Tube-Alloy Asia-Pacific.
Wrtsil has donated an eight-cylinder
Wrtsil 20 engine and generating set, to the
Marine Engineering Technology Department
at Texas A&M University at Galveston.
The donation includes specialty tools and
will provide students with valuable hands-on
experience for expanding their knowledge of
engine repairs, emissions and fuel economy.
In addition to the equipment, the company will
also offer engine training to the Texas A&M
Galveston engineering professors through the
Wrtsil Land and Sea Academy based in Fort
Lauderdale, Florida.
GE Oil & Gas has certified Chet Morrison Contractors as a licensed inspection
and repair service provider. Its Deepwater
Riser Services facility in Houma, Louisiana,
is qualified for disassembly, inspection, and

repair of GE Oil & Gas marine drilling risers.
It is one of only two such facilities in the state
of Louisiana.
Damen Shiprepair Oranjewerf has
received ISO 9001:2008 certification.
HIMA has chosen Singapore as its hub
from which to coordinate activities in the
Asia/Pacific region.
Oilennium Ltd. has completed the Well
Control Awareness Course (Level 1), which
was developed for the International Well
Control Forum.
Inspection Oilfield Ser vices has celebrated 25 years as the leading independent
provider of tubular management services.
eDrilling has teamed with PetroEDGE
(PE) to provide training for upstream oil and
gas companies in the UAE and Asia. They aim
to help customers improve the competency
of their engineers via realistic simulator training using eDrilling software and simulators.
eDrilling will provide planning, training,
drilling, analysis, and learning solutions, while
PE provides training course development and
delivery support.
ClassNK has re-opened its office in Tehran
and signed or approved agreements with
the Iranian Classification Society (ICS),
Ports and Maritime Organization (PMO),
and Ministr y of Roads & Urban Development of Iran. The office, originally opened in
December 2009, was closed three years later,
but the company has decided to return following the relaxation of sanctions against Iran. Its
new accord with ICS sets out a framework for
surveys and certifications for NK/ICS dualclassed ships, while the agreement with PMO
due to be finalized will allow ClassNK to
perform statutory surveys and certifications
on Iranian-flagged vessels in cooperation with
Port & Flag State Control officers.
Wood Group has acquired the trade and
assets of Enterprise Engineering Ser vice
Ltd.s (EESL) Aberdeen-based fabrication and
manufacturing business. Last month EESL
entered administration. Wood Group says the
acquisition will enhance its asset integrity
management capabilities, adding fabrication
to UK upstream/midstream life extension services. EESLs employees will remain at their
existing 4,000-sq m (43,055-sq ft) fabrication
facility in Aberdeen.
Correction:
The 2016 Deepwater Solutions &
Records for Concept Selection poster,
which ran in the May 2016 issue of Offshore, erroneously listed the Jolliet TLP
as decommissioned. This TLP, operated
by MC Offshore Petroleum, LLC, is still
in operation and producing in the Gulf
of Mexico.
Offshore
MARKET
C
SEE RESULTSAsk me how!
MARY SUMNER
713-963-6274
MaryS@PennWell.com
Offshore reaches over 48,000+ decision makers specifically focused on offshore exploration and production
EMPLOYMENT | EQUIPMENT/PRODUCTS | CONSULTING/PROFESSIONAL SERVICES | REAL ESTATE/LEASES | BUSINESS OPPORTUNITIES
The Right Torque Solution

For leg load balancing of jack-up oil rigs,
torque monitoring and/or calibration
of make-up/breakout machines,
top drive torque measurement/control,
in-line measurment of torque as PMI of
motors, pumps, compressors,
load distribution and balancing
for winches and hoists, and
measure actuation
torque for valves.
MCRT 39000X
S. HIMMELSTEIN
AND
www.himmelstein.com
COMPANY
800-632-7873
Advertise in Offshores
Market Connection
and
Reach 48,000+
Decision Makers!
Contact Today:
MaryS@PennWell.com
The latest Offshore news,

when you want it!
Download Offshores Mobile App now!
ADVERTISERS INDEX
SALES OFFICES
PENNWELL PETROLEUM GROUP
1455 West Loop South, Suite 400, Houston, TX 77027
PHONE +1 713 621 9720 FAX +1 713 963 6228
David Davis (Worldwide Sales Manager)
davidd@pennwell.com
Shelley Cohen (Regional Sales Manager)
shelleyc@pennwell.com
Mary Sumner (Classified Sales) marys@pennwell.com
GREATER HOUSTON AREA, TX
David Davis davidd@pennwell.com
USA
Shelley Cohen shelleyc@pennwell.com
WASHINGTON OREGON CALIFORNIA
CANADA
Mary Sumner marys@pennwell.com
UNITED KINGDOM SCANDINAVIA
THE NETHERLANDS MIDDLE EAST
10 Springfield Close, Cross,
Axbridge, Somerset, United Kingdom BS26 2FE
PHONE +44 1934 733871
Graham Hoyle grahamh@pennwell.com
FRANCE BELGIUM PORTUGAL
SPAIN SOUTH SWITZERLAND MONACO
NORTH AFRICA
961 Camp Redon, 83830 Callas, France
PHONE +33 (0) 4 9470 8263 FAX +33 (0) 4 8981 9982
Stefania Piciotti Thompson stefaniat@pennwell.com
GERMANY NORTH SWITZERLAND
AUSTRIA EASTERN EUROPE
RUSSIA FORMER SOVIET UNION BALTIC
Sicking Industrial Marketing
Kurt-Schumacher-Str. 16, 59872 Freienohl, Germany
PHONE +49 (0) 2903 3385 70 FAX +49 (0) 2903 3385 82
Andreas Sicking wilhelms@pennwell.com
ITALY TURKEY GREECE
CYPRUS MALTA
SILVERA MEDIAREP
Viale Monza, 24 - 20127 Milano, Italy
PHONE +39 (02) 28 46716 FAX +39 (02) 28 93849
Ferruccio Silvera info@silvera.it
JAPAN
e.x.press Co., Ltd.
AIOS Gotanda 606, 1-10-7 Higashi-gotanda
Shinagawa-Ku, Tokyo 141-0022, Japan
PHONE +81 3 6721 9890 FAX +81 3 6721 9891
Masaki Mori masaki.mori2@ex-press.jp
Aker Solutions ........................................9

www.akersolutions.com
Alimak Hek ............................................33
www.alimakhek.com
IPLOCA ..................................................41
www.iploca.com
OneSubsea, A Schlumberger
Company ............................................... 13
onesubsea.slb.com
Bastion Technologies, Inc. ...................35

www.HiConTraining.com
www.BastionTechnologies.com
Bristow Group ...................................... C3
Bristowgroup.com
Brunswick Commercial &
Government Products ............................7
www.brunswickcgp.com
C
Crowley Maritime Corporation............ C4
www.crowley.com
D
Delmar Systems, Inc. ............................25
www.delmarus.com
Delta Subsea LLC ................................ C2
deltasubsea-rov.com
Dril-Quip ..................................................1
www.dril-quip.com
E
ERA Helicopters....................................23
www.erahelicopters.com
F
S. Himmelstein and Company .............66

www.himmelstein.com
W
Weatherford.............................................5
weatherford.com
Wilhelm Layher GmgH & Co. KG......... 11
oilandgas.layher.com
The index of page numbers is provided as
a service. The publisher does not assume
any liability for error or omission.
Framo AS .................................................3
framo.com
HRM FOR THE

OIL & GAS INDUSTRY
NIGERIA
Flat 8, 3rd floor (Oluwatobi House)
71 Allen Ave, Ikeja, Lagos, Nigeria
PHONE +234 802 223 2864
Dele Olaoye dele.olaoye@q-she.com
BRAZIL
Centro Empresarial Mourisco
P. Botafogo 501 / Sala 101
Torre Po de Acar, Rio de Janeiro 22250-040
PHONE +55 21 2586 6302
Deny Tenenblat denyt@PennWell.com
FOR ASSISTANCE WITH MARKETING

STRATEGY OR AD CREATION, PLEASE
CONTACT:
PennWell Marketing Solutions
David Davis
PHONE +1 713 963 6206
EMAIL davidd@pennwell.com
P
PennWell
Deepwater Operations
Conference & Exhibition .................51
www.deepwateroperations.com
Subsea Tieback Forum &
Exhibition .........................................63
www.subseatieback.com
Topsides, Platforms & Hulls
Conference & Exhibition ......15, 56-57
www.topsidesevent.com
S
AUSTRALIA NEW ZEALAND

13 Langrune Grove,
Port Kennedy, WA, Australia 6172
PHONE +61 8 9593 4405 or +61(0) 437 700 093
FAX +61 8 9593 3732
Mike Twiss miket@pennwell.com
CHINA SOUTHEAST ASIA

19 Tanglin Road #05-20
Tanglin Shopping Center
Republic of Singapore 247909
PHONE +65 9616 8080
FAX +65 6734 0655
Michael Yee yfyee@singnet.com.sg
ISBN: 978-1-59370-362-2
Price: $89.00
410 Pages/Hardcover/6x9
February 2016
An in-depth look at human

resource management for
all aspects of the oil and gas
sector. Managing Human
Resources in the Oil & Gas
Industry will help:
Guide managers in the oil and
gas sector on how to better
manage their employees
Explain ways to deal
eectively with the
complexities of globalization
Describe numerous ways to
foster a safety culture
Show how eective
managment of human
resources can improve
project success
Order Your Copy Today!
www.pennwellbooks.com 800-752-9764
BEYOND THE HORIZON
Mesh networks can unlock further

efficiencies for offshore oil and gas
Lower oil prices and declining revenues continue to make headlines,
but a lack of production efficiency may be the underlying issue for profitability in the oil and gas industry. A study by McKinsey and Company
in 2014 concluded that automation is key to improving the efficiency of
production operations, and even minor improvements can deliver material benefits to the bottom line.
The studys benchmark analysis of North Sea fields shows, however,
that production efficiencies declined rather than improved in the past
decade, and that the performance gap between industry leaders and
other companies almost doubled in the same period. In other words,
most oil and gas companies have some catching up to do. So if automation can drive production efficiency, why is much of the industry
lagging behind?
Offshore oil rigs and wellhead platforms are located in environments
far from IT infrastructure and support, adding new layers of complexity
to automation and the communications networks needed to enable it.
The network challenges associated with incorporating streams of data
from sensor-equipped machines in these areas often prove greater than
the IT resources available, so data remains unseen and unused. Human
error is an ever-present risk, and the data is often out of date before it
even enters the IT systems. Traditional wired networks are difficult to
maintain and often connect only a fraction of equipment, and the challenges of the future such as the Industrial Internet of Things look to
bring a quantum leap in complexity and cost.
As offshore operations demand smarter and more cost-effective application solutions, the traditional practices for physical equipment are
changing, and many companies are looking at wireless kinetic mesh
networks, which are capable of using smart sensors and data transfer
techniques to handle condition surveillance and machine-to-machine
communications.
Wireless kinetic mesh networks were born from military and mining
applications and the communications infrastructure failures that occurred on Sept. 11, 2001. Now, energy and natural resource companies
are beginning to use them to support critical operations at the offshore
wellhead. This type of network has no single point of failure and overcomes many of the challenges associated with communicating across
rugged or difficult terrain. Kinetic mesh radios are intelligent, leveraging multiple channels and frequencies to ensure workers can access
applications and data more quickly.
The current economic realities mean that the oil and gas industry
is ripe for solutions that raise the bar on global operational efficiencies
and enable the transformation of certain facets of offshore production operations. For example, the ability to add production equipment
to a kinetic mesh network enables condition-based maintenance to
be carried out that is, equipment can be serviced when parts and
components issue pre-failure warnings (i.e., that they are in danger of
failing), rather than waiting for the machines to stop functioning and
incur downtime.
The detection of a leak on a surface choke might have involved
the well going idle for two days while personnel were scheduled and
dispatched to replace the failed choke; today, the real-time monitoring
of H2S sensors via kinetic mesh enables the company to remotely sense
minute quantities of escaping gas and schedule a fix long before the
situation becomes critical. This allows the operator of the well to proactively identify wellhead conditions likely to lead to equipment failures,
take preemptive action to avoid outages, and schedule repairs during
time windows when critical processes are not impacted.
The benefits of mesh-based solutions are not limited to the avoidance of unnecessary downtime and expensive maintenance; in fact,
these pale in comparison with the penalties associated with spills, explosions and other incidents, which lead to loss of life or environmental
damage that could be avoided by being able to remotely open or close a
valve, speed up a pump, or reduce pressure when conditions suddenly
demand. Catastrophic events are a real possibility when decision makers are unaware of what is happening on an offshore oil rig or wellhead
platform, and risks posed to oil and gas producers includes not just
heavy fines, but also bankruptcy and jail.
As global telecom leaders partner with kinetic mesh network providers, like Rajant, the oil and gas industry has the opportunity to deploy
kinetic mesh across offshore oil rigs and wellhead platforms with a
single provider. Oil and gas producers requiring a positive shift in their
production efficiency can look to kinetic mesh technology and network
providers for mobile solutions and next-generation collaboration tools
worldwide.
Gerard ONeill
Global Services Energy & Resources Practice

BT (British Telecom)
This page reflects viewpoints on the political, economic, cultural, technological, and environmental issues that shape the future of the petroleum industry. Offshore
Magazine invites you to share your thoughts. Email your Beyond the Horizon manuscript to David Paganie at davidp@pennwell.com.
FLEXIBLE
SCALABLE
EFFICIENT
SUCCESSFUL
Words our clients use to describe Crowley Marine Solutions.
No matter the size and scope of your marine project, Crowleys engineering and
project management professionals will help you achieve your objectives in the safest,
most efcient and cost-effective manner possible.
Crowley.com/MarineSolutions | 832.850.5322
crowley.com/social
ENGINEERING VESSEL DESIGN
M A R I N E O P E R AT I O N S & H E A V Y L I F T
C O N S T R U C T I O N M A N A G E M E N T FA C I L I T I E S E N G I N E E R I N G
S E R V I C E S O F F S H O R E E N G I N E E R I N G A R C T I C LO G I S T I C S
MANAGEMENT
& O P E R AT I O N
adver tisement
AUSTRALIA
THE NEXT ERA OF ENERGY
Regarded as one of the worlds ultimate gas bounties, Australia has long featured prominently
in the minds of investors. Indeed, with eye-watering LNG mega-projects maturing the country
into an energy superpower, a well-stocked pipeline of brown and greenfield options, and a dazzling
array of unconventional prospects ripe for the picking, there is certainly much that appeals. This
is the only country in the world to have enjoyed 25 years of uninterrupted growth and its progressive
business climate makes for an absolutely fantastic place to invest, affirms Franois Romanet,
president of the French Australian Chamber of Commerce and Industry.
Nevertheless, today the local industry finds itself in the midst of unprecedented upheaval. As
the golden age of construction draws to a close, and the countrys main energy protagonists
hastily adapt to a de-alignment of demand and fluctuating oil price, it is clear that business-asusual will no longer suffice. The paradigm is shifting and with it the rules of the game. Only a few
years ago, the mood was almost complacent. Now its the opposite, reflects Niels Marquardt,
CEO of AmCham as he contemplates an industry readying itself for change.
THIS SPONSORED SUPPLEMENT

WAS PRODUCED BY FOCUS REPORTS.
Report Publisher: Mariuca Georgescu
Senior Editor: Louis Haynes
Project Director: Valerie Baia
JULY 2016 ENERGYBOARDROOM.COM
Editorial Coordinator: Jun Wakabayashi,

Laurent Pichotski-Libano, Christopher
Crachiola
Report Assistant: Frances Doria
Cover illustration: Miriam Len
For exclusive interviews and more info, please

log onto www.energyboardroom.com
or write to contact@focusreports.net
BULLISH ON LNG
Gorgon, at USD 54 billion, constitutes the largest
With a worldwide push towards low-carbon economies underway,
single private sector investment ever in Australia. It
LNG has steadily crept into the global energy mix, acting as a promi-
also enjoys a 99 percent Australian workforce, and
nent and cost-effective source for diversifying and securing energy
youre seeing this sort of phenomenon replicated
supplies, particularly for gas-hungry nations across the Far East. Ac-
around the country. Meanwhile Ichthys project in
cording to the International Gas Union, natural gas now accounts for
Darwin has deployed some 750,000 tons of steel to
since the turn of the millennium. Australia, for its part, having shrewdly
Josh Frydenberg
MP, Minister
for Resources,
Energy and
Northern
Australia
invested USD 200 billion a full 12 percent of the nations GDPin
pears smartly positioned to gain enormously from the export income
a plethora of large-scale LNG projects, looks well set to reap a windfall
that is accrued from LNG. We will be tripling our production from
from the anticipated uptick in demand.
now until 2020 and by then it is expected to be worth more than AUD
around 1/4 of global energy demand, of which 10 percent is supplied

in the form of LNG. Meanwhile LNG supply has proliferated faster
than any other source of gasaveraging 7 percent per annum growth
construct its gas pipeline, which is testament to the

scale of whats going on when you consider that the
Eiffel Tower required only 7,500 tons, he enthuses.
Both economically and politically, Australia ap-
With an expected capacity exceeding 85 mtpa after the completion
40 (USD 28.9) billion in annual export income. Meanwhile we are also
of these projects, the rise in local natural gas production places the nation
providing critical energy supply to a demand-heavy region, which
on a steadfast trajectory to overtake Qatar as the worlds largest LNG
affords us ever-greater strategic strength. By 2020, Australia will be
exporter by 2020a truly impressive endeavor. In fact, were the only
supplying around 40 percent of Japans gas needs, 40 percent of
country in the world to be producing LNG from conventional wells,
Chinas, and 25 percent of Koreas, he predicts.
unconventional wells and of course floating platforms when the Prelude
However, with receding global gas prices, a contraction in demand
facility is up and running, exclaims the recently appointed Minister of
from key Asian consumers, and increasing competition from US shale
Energy and Resources, the honorable Josh Frydenberg. Australians
producers, there seems to be a never-ending myriad of factors conspiring
should be proud of the sheer enormity of these projects. For example
to undermine the countrys grand ambitions. Current expansion efforts
Australias Super-Size Gas Projects

1
Wheatstone
Start date: 2017
Start date: 2005
Production Capacity:
8.9 MTPA
3.7 MTPA
Budget: USD 29 bn
Budget: USD 1.5 bn
4
2
Gorgon
Start date: 2016
Darwin LNG
Australia Pacic LNG

Start date: 2015
10
15 MTPA
9 MTPA
Budget: USD 54 bn
Budget: USD 24.7 bn
Pluto
Queensland Curtis
LNG
Start date: 2012
Start date: 2014
4.3 MTPA
8.5 MTPA
Budget: USD 15.3 bn
Budget: USD 23.7 bn
North West Shelf

Venture
Start date: 1989
16.3 MTPA
Budget: USD 50 bn plus
Prelude
Ichthys
10 Gladstone LNG
Start date: 2017
Start date: 2017
Start date: 2015
3.6 MTPA
8.4 MTPA
7.8 MTPA
Budget: USD 13 bn
Budget: USD 34 bn
Budget: USD 21.6 bn
Source: Appea.
ENERGYBOARDROOM.COM
JULY 2016
to widen and deepen the
AFTER THE PARTY: WHAT NEXT FOR EPC?
Panama Canal will likely
Attracted in by Australias unprecedented pipeline of supersize LNG projects
further boost American
over the last decade and the countrys stable governance, most of the major
LNG exports to Asia, as
multinational engineering, procurement and construction (EPC) players have
larger ships will be able to
long considered it worth their while to establish a strong footprint Down
harness this lower cost delivery path to their advan-
tage, analyzes Greg Vesey,
Greg Vesey,
CEO, LNG
Limited
Under to fulfill the enormous construction needs that the Australian LNG
revolution generated.
Thats not, of course, to imply that the Australian market has not posed
CEO of LNG Limited (LNGL)
its own unique challenges requiring distinctive workaround solutions. The
and thats not to forget the
primary hurdle has always been the comparatively high costs associated
strong immediate competi-
with Australias operating landscape, recalls Peter Bennett, the recently
tion already posed. North
appointed CEO of Perth-based Clough, while noting that the prevailing low
America already constitutes
oil and gas prices currently hampering the industry only serve to further
an agile, business friendly
environment highly responsive to shifts in market de-
Colin Barnett
MLA, Premier
of Western
Autstralia
Peter Bennett,
CEO, Clough
exacerbate this impediment. When grappling with this sort of external

environment, it thus makes a lot of sense to orientate towards solutionbased rather than process-based services which entails listening intently to
Scott Cummins,
CEO, McConnell
Dowell
mand and strategically situ-
the real needs of your customers, and being bold enough to consider fresh,
ated close to many major LNG off-take
novel, outside-the-box responses that may provide for more efficient and productive outcomes,
markets, he warns.
counsels Scott Cummins, CEO of Melbourne-based McConnell Dowell.
Despite these manifold challenges, the Pre-
Some Australian LNG projects straddling Class-A nature reserves have also presented an
mier of Western Australia, the honorable Colin
additional layer of technical and regulatory challenges for the engineering companies servicing
Barnett remains optimistic of his nations ability
these mega-projects. Environmental considerations and requirements on Chevrons Gorgon
to capitalize upon the LNG fever. Were talk-
ing about a growth industry for the next 20
years bearing in mind Australias offering is

robust for customers, producers, and investors
alike: a significant undeveloped resource base,
political stability, sound rule of law, an estab-
lished business culture underpinned by integrity and trust, and close proximity to major
Asian consumer markets, he declares.
While recognizing that the commodity
price fade out may slow down the penetration

of gas in various markets, Barnett is nonetheless confident that the fundamentals for long-
term gas demand will prove enduring, espe-
cially in large consuming turbo economies

such as India and China. The pride and politi-
cal will, particularly in these emerging nations,

will become increasingly important as envi-
ronment-related, health-driven reforms edge

into the global spotlight. Therefore, though
the inherent cyclicality of price may indeed

prove troublesome to the most fragile actors,
LNG actually offers genuine supply security,

especially in coastal countries, while serving
as a pivotal medium in transitioning to a lowcarbon economy, he confidently assesses.
project were probably among the highest and most
witnessing a decisive shift in demand from construc-
stringent ever implemented on any project of this
tion, installation and commissioning to O&M proj-
type, expounds Brian Kelly, regional leader Asia
ects so are naturally seeking to bolster our capabili-
Pacific at SNC Lavalin. Nevertheless, most EPC
ties in areas such as assisting clients to mitigate and
actors agree that Australia still possesses the right
avoid shutdowns, reasons Mitchell Buswell, re-
foundations to remain attractive over the long run

with the slight twist being that now much of the
major infrastructural apparatus has already been
Brian Kelly,
regional leader
Asia Pacific, SNC
Lavalin
completed. Will we ever see a recurrence of those
Mitchell Buswell,
regional
manager
Australasia,
Brunel
gional manager of Brunel, which delivers specialist

manpower to EPC operations.
Weve also been anticipating the end of the

boom for some time, agrees Eric Jas, managing
fabulously heady investment levels witnessed over the past decade?
director of engineering consultancy, Atteris. The
I doubt it in the foreseeable future, muses Bennett.
scope of our work has gradually shifted from primar-
The pending completion of all major LNG construction projects
ily servicing mega greenfield projects, where we
indeed forces locally implanted EPC players to adapt their strategies
designed new-for-new infrastructure, to engineering
to a new normal, where fresh projects will continue to arise, but most
support for existing infrastructure and also to smaller
certainly in a smaller and scarcer fashion than during the big boom
period of mega-constructions experienced over the last decade. The
gold-rush of yesteryear has now passed as one commentator bluntly
brownfield sites, he recalls. Businesses that came

Eric Jas,
managing
director, Atteris
strictly for the boom shall either wind up, or exit

the country, leaving behind the better, more com-
puts it. Many of the main EPC players will now be looking to leverage
petent, wiser professionals that can service the
through operations and maintenance (O&M) contracts the experience
hydrocarbons sector more specifically by targeting asset integrity
they accumulated during the assembly phase. As the capital-intensive
management and smaller tieback projects, he calculates.
build side of things inevitably enters slow down, well be focusing our
When it comes to fully capitalizing on Australia-bred expertise to
efforts on redeploying our resources elsewhereright now, we are
benefit from new opportunities, many players are now squarely swivel-
ENERGYBOARDROOM.COM
JULY 2016
Top 20 Oil and Gas Explorers

listed on the ASX
ling their gaze abroad. We firmly believe our successful [Australian]

track-record will significantly increase the likelihood of being involved
in other major LNG developments across the Asia-Pacific region, while
Company name
this expertise can now also be appropriately mobilized across other

geographies displaying similar challenges such as Canada or West-
Africa, attests SNC Lavalins Kelly.

Following the money, even the local, homegrown EPC players are
Oil Search Ltd.

27
now ramping up their overseas footprints. Our next growth markets
will be found internationally... some aspects of our strategy will consist
30
35
36
37
39
44
51
54
58
61
BRU
Buru Energy Ltd.
65
from our innovation, as well as fresh ingenuity from increased collabo-
SEH
Sino Gas & Energy Holdings
Ltd.
ration into a project development scenario, the greater the impact

we can potentially make, concludes Cummins.
CVN
Carnarvon Petroleum Ltd.
our presence and our connectivity at the front-end of our business

with all our customers The sooner that we can apply the knowledge
STX
Strike Energy Ltd.
will have to show themselves adept at assuming a completely new
array of responsibilities. We are presently very focused on increasing
HZN
Horizon Oil Ltd.
pooling of minds and resources. This new industry paradigm indeed

implies that entities seeking to hoover up the next batch of contracts
NZO
New Zealand Oil & Gas
Ltd.
EPC players are being called upon to provide an increased level of
certainty to their clients, which can only be attained through a genuine
SXY
Senex Energy Ltd.
the sorts of high-profile and immensely costly blowouts that we have

sometimes witnessed in the past, analyses Cummins. More than ever,
DLS
Drillsearch Energy Ltd.
about the smooth operation of highly complex, multifaceted, big
money projects. The industry simply cannot afford anymore to have
AWE
AWE Ltd.
ing profound transformation. One of the key components of this

new era will be renewed attention to collaboration. Were talking
FAR
FAR Ltd.
tion enters the twilight zone, giving rise to the new phase of O&M
opportunities, the modus operandi of EPC companies is also undergo-
KAR
Karoon Gas Australia Ltd.
we forecast a lot of potential, explains Cloughs Peter Bennett.

As the golden age of big-ticket Australian infrastructure construc-
BPT
Beach Energy Ltd.
of organic growth and deploying resources from Australia to the US,
while Africa represents another fast emerging strategic market where
OSH
67
LNR
Lonestar Resources Ltd.
BIG CONTINENT, JUNIOR AMBITIONS
69
of the hydrocarbons ecosystem: small speculative and opportunistic
start-ups and undercapitalized risk-takers aspiring to tap into big

rewards. Australian juniors, however, have proven to be anything but
small. Many have been paving the way with big ambitions, rolling out
shrewd and successful business strategies despite times of great oil
72
77
Some of the most performing Australian small and mid cap explor-
ers share a common thread as demonstrated by their notable ability

to engage in expeditions in some of the most remote and inhospitable
places on earth. Whether it is the nations well-ingrained heritage in
CTP
Central Petroleum Ltd.
82
AJQ
Armour Energy Ltd.
83
of Australian junior E&P ventures is simply second to none, assesses

one commentator.
COE
Cooper Energy Ltd.
price uncertainty, and projecting a positive brand image based on a

potent mix of audacity, technical prowess and agility. The pedigree
SEA
Sundance Energy Australia
Ltd.
All too often, junior oil and gas explorers are considered the minnows
EGO
Empire Oil & Gas NL
84
JPR
Jupiter Energy Ltd.
Most Recent Market

Trade Price* Capitalization**
4.5
6846.8
0.272
354.1
1.15
283
0.049
182.5
0.311
163.6
0.332
153.3
0.102
118
0.247
94.9
0.052
68.1
0.078
64.7
0.056
57.4
0.155
52.8
0.023
46.8
3.01
45.3
0.068
37.9
0.106
35.3
0.074
32.1
0.088
28.4
0.275
28.2
0.177
27.1
*($USD, Historical rate)

**($USDmm, Historical rate)
Overall Ranking on ASX
Source: Australian Stock Exchange (ASX)
mining or the unforgiving outback terrain that have
ready in place to enable ultimate project realization,
given these feisty young players the gumption to
he reveals.
tap into success not only domestically, but abroad
The success of Australian juniors is not created
as well, it is undeniable that many have progressed
in a vacuum, and many are discovering that there is
into a league of their own. Australia constitutes a
strong interplay between the unique expertise and
land of extremes of weather and distance thus the

characteristically Australian aptitude for solving stubborn problems is borne out of hands-on experience,
Todd Martin,
general manager
bulk liquids &
gases, Ixom
reflects Todd Martin, general manager of the inde-
Adrian Cook,
managing
director,
Carnarvon
Petroleum
pendent outfit, Ixom
technology being developed throughout Australia,
and contemporary market dynamics on which to

capitalize. Carnarvons own strategy, for example is
grounded upon 3 core pillars, namely: early positioning into new untested resources, applying latest
While the targeted regions of Australian junior players are diverse,
generation technology to discovered resources, and
in many ways their motives and attributes remain similar. Many Aus-
improving cost structures to enhance project
tralian juniors seek to capitalize upon the opportunities of being listed
economics.
When working outside of Australia, however,
on the Australian Stock Exchange (ASX) and leverage this to accrue
sometimes it is not just the remote and difficult
stable shareholder support. When seeking sources of oil and gas to

expand shareholder value, regardless of where in the world exploration
is taking place, the drivers ultimately remain the same. For Adrian
Cook, managing director of Carnarvon, project selection is determined
Matthew Allen,
managing
director and
CEO, Otto
Energy
environment that poses a challenge. As Matthew

Allen, CEO of Otto Energy points out, navigating
the business climate of a foreign site, such as working
by the presence of a number of factors. Essentially we gravitate to-
with American counterparts in the Gulf of Mexico,
wards places where there are adequate hydrocarbon volumes to attain
requires its own type of skills and strategy. Despite the Gulf of Mexico
our financial aspirations, effective governance, attractive fiscal regimes,
being a highly interesting place to do business, notes Allen, a
a high deal frequency and tempo and the requisite oil and gas services
number of foreign entities have tried to do business there and have
High impact exploration for

oil and gas with a regional focus
on North America
Drilling success
positions Otto to
return to production
Otto Energy Ltd, 32 Delhi Street,
West Perth, Western Australia 6005
T: +61 8 6467 8800
info@ottoenergy.com
F: +61 8 6467 8801

ASX: OEL
ENERGYBOARDROOM.COM
JULY 2016
LIFTING THE LID ON AN AUSTRALIAN EXPLORATION PIONEER
hile the vitality of Australias exploration remains fruitful, many
to date have confirmed that all three variables have
junior E&P have turned their sights on plays beyond the borders
been mitigated, and we are now planning for the
of the land down under. 88 Energy, together with JV partner Burgundy
next well (Icewine#2H), which will be a horizontal
Xploration, has over the last year accumulated a substantial position
with a multi stage fracture stimulation. Theres still
in Alaskas Central North Slope, grossing 272,422 acres, in pursuit of a
an ample amount of work to be done, but weve
liquids-rich exploration opportunity coined Project Icewine. The primary
gone a long way in de-risking a play, which could
objective is an untested, unconventional liquids-rich shale play in a pro-
host a huge recoverable resource.
Dave Wall,
managing
director, 88
Energy
lific source rock, the HRZ shale (Brookian Sequence), that co-sourced
Geological data aside, the play is also further
the largest oil field in North America; the giant Prudhoe Bay Oil Field
supported by several external factors. On top of
Complex.
relative proximity to existing infrastructure, generous exploration incen-
Since spudding the first well, Icewine #1, on October 22, 2015, the
tives are provided by the State of Alaska with up to 85% of exploration
company has taken core which has demonstrated very favorable char-
expenditure in 2015 cash refundable, dropping to 75% until mid 2016
acteristics in early lab evaluation. Weve been on the lookout for three
and thereafter 35%. From this point forward, the company intends to
Achilles heels: thermal maturity, permeability, and frackability, reveals
initiate seismic acquisition to de-risk any localized faults in the area,
88 Energys managing director David Wall. The results from evaluation
while also finalizing funding / partnering for the of Icewine #2H.
spectacularly failed. As the US is a mature oil industry where landown-
potential for success is limited and moving on to new opportunities
ers have the rights to title for their crude, business operations are very
is a key factor that allows for certain Australian independents to attain
different to Australia where, as Allen believes, there is an increased

focus on engineering, geoscience and expertise. In the US, he
contrasts, land men are just as important as the technical skills used
to operate a business. Finding a partner that has a good mix of both
technical capability, and the ability to manage and grow a business is
thus very important and this is not something that can be done from
Perth. It is vital to go out and meet partners on the ground, in places
in the region, such as Houston, and create a business this way.
Imparting wisdom for other juniors, Allen believes that it is a trap
for junior companies to become too attached to their assets, and

become weighed down by them. To refrain from being blindsided
from other assets and opportunities that may be available, Allen prescribes cycling in and out of assets as an integral strategy by which all
juniors should abide. One of the key elements of flexibility in this regard
is that juniors in Australia can offer a highly liquid investment with pure
play leverage. For Australian juniors, being listed on the ASX provides
many positive opportunities to attract further investment. Even in
bearish scenarios, 50 cents or 10 cents a barrel when multiplied by the
resource potential is still several times many of these entities market

capitalization.
Operating as a junior still poses many risks, with exploration more
often than not equating to a trial and effort process. The skill and
expertise of Australian juniors, however, in deploying state-of-the-art
CVN
Unlocking opportunities
on the North West Shelf
seismic scanning and surveying technology to lessen the risks of a
gamble associated with exploratory drilling is in also notable. In some
www.carnarvon.com.au
instances, accepting failure or at least being able to judge when the
productive outcomes
for their teams and
respective shareholders. As David Wall of

88 Energy proffers
COUNTER-CYCLICALITY IN
THE NEW NORMAL
The Floating Dock at

the Australian Marine
Complex Common
User Facility lifts Skandi
Singapore, the heaviest
ship to be docked in
Western Australia
The oil industry has changed for good. This,

at least, is the perspective of many an analyst
when contemplating an oil price stubbornly
regarding the com-
languishing below USD 50 per barrel. The price
panys strategy for
of oil has, of course, dropped many a time in
their flagship Icewine
the past, but current market dynamics and geo-
#1 project based in
political tendencies suggest a full rebound will
Alaska, it was de-
not be forthcoming any time soon. This harsh
signed for one pur-
reality poses significant challenges for an Aus-
pose, and that was
tralian market addicted to what John Griffiths,
to tell us if we were
CEO of Gas Energy Australia refers to as gold
going to fail, and if so,
plating of infrastructure investments where
to fail as quickly as
contractors are guaranteed a rate of return just
possible.
for undertaking a particular project regardless
As opposed to some of the larger companies that might undertake an extended multi-well
of cost inputs. Moreover it completely flips
drilling program before realizing feasibility, we juniors must adopt a more agile mentality in
mega-project initiatives on their heads, built
order to limit liabilities and sustain operations, he continues. Whereas a fail fast philosophy
under the assumption of a stable USD 80 per
may at first sound counterproductive, the ability to prepare for both successes and missteps
barrel or higher market price. Despite this, many
allows for companies like his to work as efficiently, and cost-effectively as possible and even
of Australias leading energy sector protagonists
turn potential setbacks into advantages.
whether the junior explorers, oilfield service

providers or EPC outfits have proven unexpect-
edly resilient, in rendering their market strategies

fit for forty.
In some instances, E&P players are even
We understand that some of

the risks your organisation
faces keep you awake at night.
choosing to take advantage of the current market dynamics as the basis for new prospects, as
Canarvons Adrian Cook notes, believing, that
current distressed market conditions offer the

most advantageous window in which to accu-
mulate quality opportunities. We definitely see
it as a window of opportunity and have been

building and diversifying our portfolio during this
downturn. Rather than being pessimistic, a more
proactive approach has been implemented to

identify what could be undervalued, quality
projects and try to capitalize on such
opportunities.
Ultrapure MEG
IXOM Ultrapure MEG supports
your gas assets to continue
to perform after years of
hard service, with guaranteed
dissolved oxygen levels less
than 20 ppb on delivery.
Spent Adsorbent Processing

IXOM processes ensure your
catalyst operations have the
lightest possible environmental
footprint, assured through
compliant documentation.
LNG Refrigerant Gases

Our strength in logistics
& safe chemical handling
means that your
refrigerant supply chain is
buttressed to the highest
level of safety & supply
security.
Choosing IXOM means that you can sleep easy

whilst we get on with doing what we do best.
For more information contact +61 3 9906 3008 or khozema.kaka@ixom.com
When life gives you lemons, as the saying
goes, the moral is always to make the most out

of what opportunities you can. This has been
very much the outlook of Matthew Allen of Otto

Energy, whose team found that the oil price
shift had created a vacuum in the market, and

an opportunity for companies that had capital.
Otto took the initiative to sell their Filipino Galoc
asset for USD 108 million, which put us in a very
ENERGYBOARDROOM.COM
JULY 2016
positive position where we boasted a substantial balance
tions we would have historically advised, and to look at
sheet while many of our peers have been struggling
new technologies and processes that would better fit
with debt. This allowed for the company to refrain
with our clients evolving needs. Part of this fact is that
from any negative repercussions that come with difficult
previously higher oil prices initiated a culture in the in-
market conditions, and rather capitalize on endeavors
dustry eager for constructing larger projects in much
with promising future potential.

One of the major repercussions of the low oil price
environment has been the curtailment and shelving of
many greenfield developments and corresponding
refocusing on ongoing operations. Geeta Thakorlal,
Geeta Thakorlal,
senior vice
president
Global Offshore
Consulting &
ANZ, INTECSEA
Brad Lingo,
managing
director & CEO,
Elk Petroluem
faster times, with operators, looking for faster project

delivery and wanting to get their return on investment
much sooner. This is not to say that projects will no
longer be able to enjoy the benefits of expedited con-
struction phases, but rather, new strategizing will need to be considered.
senior vice president Global offshore Consulting & ANZ, INTECSEA posits
One technique under increased consideration is the use of predictive
that, operators all over the world are currently focused on developing their
analytics. Many companies are now able to take data from their respective
existing portfolios and, given the current pricing context, they indisputably
databases and utilize new algorithms to build insights to optimize their
need to assess development options with more scrutiny than ever. Whereas
plants operations, notes Ken Fitzpatrick, chairman of National Energy
capital expenditures are generally being slashed across the board, opera-
Resources Australia (NERA). We are also hearing of exemplary cases in
tors still need to generate new sources of production to fulfill their require-
process engineering, where data is synthesized and interpreted to prevent
ments, which on the other hand bolsters a certain upturn in consulting
shutdowns and considerably enhance productivity and competitiveness,
services, she reasons.
he adds.
The new normal of the current low oil price market is thus shaking up
Another trend is to devote more energy to Enhanced Oil Recovery
the foundations of effective strategies to succeed in the oil and gas industry.
(EOR). There are a lot of people walking away from assets leaving more
Thakorlal emphasizes this fact in regards to how her company addresses
in the ground than they actually took out, proclaims Brad Lingo, managing
clients, pointing out that, low prices force us to rule out most of the solu-
director and CEO of EOR specialist, Elk Petroleum. In the current operating
Global
Solutions
you can
From its origin in 1975, Brunel has developed into a global service provider
specialising in the flexible deployment of personnel to the international oil &gas,
mining engineering and construction, automotive, manufacturing and other related
industries. With over 13,000 specialists working worldwide, Brunel offers its Clients
industry specialists that deliver skills and expertise.
Global Mobility
visit us at:
www.88energy.com
Headquarters:
PO Box 1674, West Perth, WA 6872
E: dwall@88energy.com | T: +61 8 9485 0990
At Brunel we support our specialists throughout their complete assignments, which

means that we take care of all related financial, administrative and operational
processes; from insurances, payroll and taxation to immigration and logistics. Our
specialised teams deal with more than 40,000 flights, 2,000 visa & work permit
applications on an annual basis and run more than 40 different payroll administrations globally on a monthly basis. With our local knowledge we ensure full
compliance as well as accurate and timely processing.
For more information visit brunel.net
and understand what it takes to excel using this type of oil production are
PERTH: ENERGY HUB

AT THE END OF THE WORLD
the ones creating valueThe notion that EOR is only profitable with high
Rome wasnt build in a day, neither was Houston. In
oil prices is a complete misnomer. Considering that the first budget to
little over a decade, however, Perth has successfully,
get cut by senior management is exploration, EOR is actually born out of
albeit rather abruptly, transformed itself into a thriving
low oil prices, he concludes.
melting pot of hydrocarbons expertise. Today Western
environment, assesses Lingo, the companies that come to this revelation
Even tangentially linked service providers have suddenly found themselves
Australias capital city boasts over 85,000 industry pro-
compelled to rethink their business models. Our challenge in these strait-
fessionals spread across some 700 odd petroleum-
ened times is to retain relevance increasingly our most formidable com-
focused equipment, technology and services compa-
petitor is not another recruitment company, but rather a clients internal
nies. Moreover, far from merely relying on the wealth
talent pool and hiring process, which is a typical cost-saving measure. So
of natural resources laden throughout the regions
it is vitally important to demonstrate that we make our clients lives signifi-
prolific basins, the local government has been busily
cantly easier than if they had to do it themselves, reasons Brunels Mitchell
investing in state-of-the-art technologies and niche
Buswell.
industry segments that further distinguish the city from
Australia has not experienced the challenges associated with a dip in
other international oil and gas hubs and foster a mutual
oil prices alone, and the squeeze has been felt throughout many regions
growth perspective geared towards projecting Austra-
across the globe. The lessons to take away from the Australian model,
lian LNG and FLNG prowess abroad.
Malcolm
Roberts, CEO,
APPEA
Bill Marmion,
Minister for
Finance; Mines
and Petroleum
for Western
Australia
however, has been the pragmatism to step back and review new strategies
Nor should Western Australias role in real value
and opportunities that exist due to this new market dynamic, and remain
creation be downplayed. As befitting of a region where
both creative and adaptive to best achieve success and results. If youre
resources underpin the economy, we boast not only
hiding under a rock because the sky is falling, then youre not going to be
an incredibly sophisticated indigenous supply chain, but also huge where-
able to see the silver lining, jokes 88 Energys David Wall.
withal to innovate to the point where we now possess the capacity to

support first-in-kind projects for LNG, floating LNG, carbon capture and
storage, observes Malcolm Roberts, CEO of APPEA. Already numerous
examples abound of locally derived and validated gas technologies and
Government of Western Australia
know-how being exported worldwide. Greg Vesey, CEO of LNG Limited
Department of Commerce
(LNGL), for instance recounts how the company has been growing into a
pioneering global player in mid-scale LNG infrastructure investment, thanks

to its Optimized Single Mixed Refrigerant (OSMR) liquefaction process
technology.
Were talking about a country that has built its innovation off the sheeps
back, so to speak, meaning that innovation is truly initiated and inspired

by direct market trends and affiliated needs, expounds Todd Martin,
general manager of Ixom. He explains how his companys renowned Pure

MEG hydrate inhibitor, was a completely in-house innovation, initially forged
in response to Chevrons hydrates challenges encountered on the Gorgon

project before being scaled up and applied to Wheatstone project as well.
For anyone seeking to invest in oil and gas, Perth is the obvious place
to be, proclaims the honorable Bill Marmion, Western Australia Minister
for Finance, Mines and Petroleum. Were busy cultivating a global invest-

ment, thought leadership and technology hub, delivering high-skilled job
! ! !
!
! !
!! ! ! !!!!!
!!!!!!!!

! !! !
! !
creation and bountiful growth opportunities within the context of a face-

,.-. -
.* ..*

,
,-
--

!".#.!+)".+)&$

,.,.--. -

,,

!".#.$%&'.()((

to-face business culture underpinned by integrity, cooperation and
goodwill.
The publicly owned Australian Marine Complex and its Common-User

Facilitys waterfront and heavy load-out capability fully embodies the
Western-Australian avant-garde streak and willingness to embrace fresh

thinking. With its attentiveness to enlightened collaboration, cost-efficiency
10
ENERGYBOARDROOM.COM
JULY 2016
and risk sharing, the complex has already

attracted the active participation of iconic
entities such as FMC Technology and OneSubsea. Our Common User Facility (CUF)
is absolutely unique in its operating model

and offers an unparalleled degree of affordable access to high capability infra-
structure with companies only paying for
usage as and when they require the facility.

This model enables even less capitalized
Jonathan
Smith, general
manager,
Australian
Marine Complex
Common User
Facility
Bernadette
Cullinane,
managing
director energy,
Accenture
companies to hold their own within highly
John OHare,
acting director
industry and
innovation,
Western
Australia
Department of
Commerce
competitive international markets, reveals

Jonathan Smith, general manager of AMC Management.
While it already contributed more than USD 2.4 billion of projects since 2003 many of which
are unlikely to have materialized without this facility, AMCs ecosystem is also stimulated by a large
number of its clients having participated in the construction of two of the most complex Australian
LNG projects: Chevrons Gorgon and Wheatstone. Primarily focused on oil and gas players, this
unique facility now strives to bolster a valuable cross-sector interplay by coopting companies from
other cutting-edge industries. Even if the final use may differ from one industry to another, quality
standards are, for instance, similarly applied across the oil and gas subsea segment and the submarine
and shipbuilding industries, notes Smith. We believe that, in the future, the most high performance
companies will be adopting a broader business approach that entails finding solutions and closing
strategic partnerships beyond the boundaries of their own narrow industryour collaborative approach is already pioneering and supporting this increasing trend, he affirms.
Indeed, according to Kym Bills, CEO of the Western Australian Energy Research Alliance (WA:ERA),
one of the defining characteristics that marks Perth out from other oil and gas cities is its status as
a truly diversified resource capital where knowledge, learning and expertise from the worlds of
minerals, mining and hydrocarbons can intersect and collide. Complementary to the promotion of
common use, shared infrastructure, Bills is keen to mainstream the practice of joined-up action when
it comes to conducting research. One of our overriding goals is to grow pre-competitive areas
where research costs can be shared and expertise pooled, he elaborates.

This collaborative approach takes on a crucial importance as Perth truly emerges as a laboratory
for pioneering gas and marine technologies, such as Floating-LNG (FLNG), propelled by Shells
flagship Prelude project in the region. Significant technology is imbedded within [Western-Australian]
projects. Shells Prelude FLNG facility is an absolute worlds first: a massive floating facility with a
complex and integrated operation, underscores Bernadette Cullinane, managing director energy
Australia at Accenture. Together with the operator, we believe that we can build up Western
Australias capacity to be the world class center in FLNG knowledge, agrees John OHare, acting
director industry and innovation, Western Australia Department of Commerce. We are mobilizing
the Western Australian educational structures to enable the up-scaling Australian oil and gas
professionals so that they possess skills that are internationally transferrable so in turn Perth can
ERRATUM / CORRIGENDUM
In our special report on the Indonesian oil
and gas market, Indonesia: Striving for a
Comeback, published in the April edition,
we incorrectly referred to Mr Achmad Zakky
Ridwan as President Director of DNV-GL
Indonesia. He is in fact Country Manager.
Apologies for this oversight.
SUCCESS
THROUGH
INSIGHT
encompass centers of knowledge where companies

can go to solve not just Australian problems, but
problems that may be faced in other fields and
jurisdictions. Aberdeen and Stavanger have both

proven to be excellent examples of this expertise
export model, and this is very much a pathway we
INTECSEA.COM
CONNECT WITH US
seek to emulate here, he confides.
11

Offshore201607 DL

Загружено:

Сведения о документе

Оригинальное название

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

Offshore201607 DL

Загружено:

Авторское право:

Доступные форматы

Houston

For continuous news & analysis

Latin America update

Celebrating 60 Years of Trends, Tools, and Technology

Mexicos deepwater round to employ license

Technology venture looks to prevent

Guyana emerges as major frontier market............................. 30

DRILLING RIG UPDATE

2016 Worldwide MODU construction/new order survey ........ 36

GEOLOGY & GEOPHYSICS

DRILLING & COMPLETION

Real-time, flow-off pressure data service

OFFSHORE NORTHERN SEAS

EQUIPMENT & ENGINEERING

EQUIPMENT & ENGINEERING

4 Offshore July 2016 www.offshore-mag.com

COMPLETE SOLUTIONS FOR

Rather than adapting older technologies for new

2016 Weatherford. All rights reserved.

DRILLING & FORMATION EVALUATION

VICE PRESIDENT and

Bruce A. Beaubouef bruceb@pennwell.com

Sarah Parker Musarra

E. Kurt Albaugh, P.E.

AUDIENCE DEVELOPMENT MANAGER

1455 West Loop South, Suite 400, Houston, TX 77027 U.S.A.

New tools and resources

New maps, posters, and surveys

New on demand webcast

6 Offshore July 2016 www.offshore-mag.com

David Paganie Houston

Operators gaining confidence

Articles are available in

Changes in oilfield service purchases

Enhance email campaigns

For additional information,

To respond to articles in Offshore, or to offer articles for publication,

Our strongest asset

Latin America subsea capex (%) by country 2011-2020

10 Offshore July 2016 www.offshore-mag.com

Water depth (m)

Source: Infield Systems Market Modeling & Forecasting Database

Iran oilfield >>>>>>>>>>>>>>

Source: IHS RigPoint

Fleet utilization rate %

Latin America >>>>>>>>>>>

Notes: Rig types included are jackups, semis, and drillships.

Oilfield services in Iran

Source: Rystad Energy DCube June 2016

THE LEADING SCAFFOLDING

Layher Allround Scaffolding. Reliable and always up to date since 1974.

Learn more on oilandgas.layher.com

Statoil proved two more oil fields during

Mexicos Phase 4, Round 1 auction, likely to

Jeremy Beckman London

Brazils National Petroleum Agency has

Equatorial Guineas government is reportedly offering 32 offshore blocks under

Eos Investment Group subsidiary GNL

Eni has contracted the ultra-deepwater

12 Offshore July 2016 www.offshore-mag.com

wells designed to extract 30 MMbbl from

Mellitah Oil & Gas, a consortium of NOC

Eni has discovered another large gas field