Oil and Gas Innovation Spring 2014

OIL & GAS INNOVATION

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Spring 2014 The Trusted Insider Source

Exclusive: Industry Skills Shortages

West Africa: The Security Situation

Oil and Gas Logistics: Dutch Ports

EMERY HILL MEDIA ©

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SPRING 2014

OIL & GAS INNOVATION CEO Matthew Patten

From the Editor:

Managing Editor Simon Milliere Technical Director & Website Todd Dobney tdobney@oilandgasinnovation.co.uk Publishing Director Edward Findlay edward@oilandgasinnovation.co.uk Commercial Director Nicholas Parker nparker@oilandgasinnovation.co.uk Office Manager Mylene Daugan mylene@oilandgasinnovation.co.uk Contributing Writers Mylene Daugan mylene@oilandgasinnovation.co.uk OIL & GAS INNOVATION

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Spring 2014 The Trusted Insider Source

EMERY HILL MEDIA ©

The Russian Federation stunned the world this past March with its brazen annexation of a part of the Ukraine, the Crimea. And while many pundits are trying to catch up with the geopolitical ramifications of such a calculation of Europe’s now not-so-friendly neighbour, one wonders what this could do for business in the region? It’s no small measure that most of Central and Eastern Europe’s gas imports come from the Russian Federation. Slovakia, Poland, Hungary, Finland, Greece, Austria and the Czech Republic each import at least 70% of their gas imports from Russia. Even Germany gets 39% of its gas from Russia. Possibly most important is Ukraine, who imports 77% of its gas from its neighbour.

The majority shareholder of the Russian gas giant Gazprom is of course the Russian state which controls 50.01% of the company. Its chairman of board of directors is Russian deputy prime minister Dmitry Medvedev. When calculating the risk of intervening in the Ukrainian crisis earlier this year, the potential oil and gas ramifications must have been on the table for the Vladimir Putin government. Traditional thinking has always been that Europe needs Russian gas, and Gazprom needs European sales. It’s a mutually beneficial relationship that is based more on need rather than want. Many cringed when the western powers brought up talk of European economic sanctions against the Russian state, as and sanctions against European imports would certainly hurt Europeans just as much as it would destabilize the Russian economy.

The argument coming from the Russian government is that Europe cannot slap heavy economic sanctions on the federation. And they are right. The Europeans cannot afford to risk having their houses not heated, or a major disruption in their gas supplies, or even a massive price increase in their heating bills. Russia holds a very strong hand here in dealing with this geopolitical crisis and that should have played well into the decision to annex The Crimea. In the end, it looks like Russia will repatriate the peninsula with relatively few immediate consequences because of its stranglehold on the European gas market. But there may be one miscalculation at play here for the Russian side.

Shale Gas. Shale gas plays have been found all over Europe, with huge concentrations found in Central and Eastern Europe. Places like Slovakia, Romania, Poland and western Ukraine have huge stores of the trapped gas. They also have the political will of the people and the permits to release it. Shale gas optimization was always a priority for many in the region, but we may now see an acceleration of efforts due to the current predicament the continent is in at the moment. Just as the USA has been singing the energy independence tune for the last two years, Europe may join in on the chorus as buying Russian gas may seem gradually more unscrupulous as relations between the EU and The Russian Federation become increasingly colder. An opportunity also presents itself for many companies who are currently working on shale based technologies and patents as well.

Emery Hill Media 37th Floor 1 Canada Square London E14 5AA Tel: +44 203 239 1581

It is my pleasure to present to you the Spring 2014 issue of Oil and Gas Innovation, and I hope you enjoy reading this issue. •

© COPYRIGHT 2013 EMERY HILL MEDIA

Simon Milliere Managing Editor 3 • Oil and Gas Innovation

CONTENTS

Industry News 6 Latest News From All Around the World Oil and Gas Innovation’s latest news from around the world.

To see our latest up to date news please visit www.oilandgasinnovation.co.uk

Page 26

Cover Stories & Specials 14 Skill Shortages

Oil & Gas Innovation’s Mylene Daugan presents a comprehensive review of the worldwide skill shortage affecting the oil and gas industry.

40 Heavy-Duty Lifting and Material Handling

AXTech explains to our readers about heavy lift equipment for harsh marine environments.

Exploration and Production 20 Special Report: Africa

42 High Quality Cylinders

22 Bearings for Extreme Downhole Applications

Refining and Processing 44 The Importance of Gas to Liquid Conversion

OGI touches on the precarious security situation in Nigeria, where militants there have taken over an oil terminal. Oando have further completed a deal where they will acquire production resources from Conoco Phillips.

Tackpoint explains to our readers the importance of bearing technology when dealing with hazardous and/or extreme conditions for the oil and gas sector.

26 Special Report: Australia

OGI looks at the difficulties facing Australia’s oil and gas interests. The problem is the lack of industry collaboration when it comes to many processes industry wide. More collaboration is desperately needed between the upstream, midstream and downstream sectors argues DNV.

28 Self Lubricating Bearings

Oil and Gas Innovation presents an in depth look at the importance of self-lubricating bearings for a range of applications in many sectors.

Transportation & Logistics 32 Monitoring of Internal Corrosion

Oil and Gas Innovation sits down with Ryan Finlayson, President of Rysco Corrosion Services to discuss why oil and gas companies should always keep a close eye on signs of internal corrosion possibly developing in their pipelines.

36 Special Report: Dutch Ports

The Netherlands have been outperforming many ports around the world for logistics. This heavily factors in for the oil and gas industry as Dutch ports have been leading the way for the movement of cargo, storage of commodities and the movement of breakbulk cargo as well.

OGI also sits down and has a chat with Zeeland Seaports to further the discussion.

The oil and gas industry has been using the best equipment designed to highest standards available at a time. Moving heavy loads or precise controlling of heavy equipment or tools with high reliability in harsh environment is key part of many applications today.

OGI speaks to GasTechno®, the world’s first patented single-step gas to liquids (GTL) conversion process. The company’s non-catalytic technology converts hydrocarbons to high-grade methanol, ethanol or diesel blends on-site, perfect for both offshore and onshore solutions.

48 Energy Efficiency Solutions With Waste Energy

Bronswerk Heat Transfer helps readers understand another breakthrough development to the market. The High Pressure Compact Header just such a Bronswerk development.

Health Saftey & Enviroment 50 Is Team-building Coaching Merely Repackaged

Team building has been a lucrative product for training companies since the late 80’s. This article considers team coaching through its use by a team responsible for high cost engineering and plant investment decisions.

Important Dates 54 Upcoming trade shows and conferences

Selected do not miss shows to round up 2013 for the Oil and Gas professional.

4 • Oil and Gas Innovation

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NEWS - EUROPE

Well-functioning Energy Market Key to Europe

New Awards in Oil and Gas Sector in Belgium

There is a pressing need to change Europe’s energy policy framework to make it more predictable and market oriented. This was a key message conveyed by Statoil natural gas senior vice president Rune Bjørnson at a conference in Brussels earlier this week.

Maire Tecnimont S.p.A. announces that its subsidiary KT – Kinetics Technology S.p.A. has been awarded by Total Olefins Antwerpen (Total Group) two contracts for the implementation of the Refinery Off Gas project (ROG) at Total’s Antwerp refinery in Belgium. The ROG project is aimed at recovering significant volumes of valuable hydrocarbons that are currently burnt as fuel gas and at processing such streams in the existing naphtha cracker.

Statoil is the second-largest supplier of gas to Europe.

“The good news is that it can be done. The ongoing process in Europe of establishing an energy and climate policy framework post-2020 is a golden opportunity to achieve this,” said Bjørnson.

“Our position is clear—we support a single CO2 target with at least 40% emission cuts in 2030, driven by a strengthened and more flexible CO2 emissions trading system. This will help drive emission reductions in the most cost-efficient way.”

Bjørnson underlined that if Europe is to succeed in reaching its decarbonisation target of 85-90% reductions by 2050, Europe needs to get rid of coal. The current European CO2 price does not provide an incentive for such a change. In fact, low global coal prices combined with a low CO2 price has seen Europe increase its share of coal in the energy mix.

“Natural gas is one of Europe’s most important and versatile sources of energy. In a low-carbon future, natural gas has to have a large share in the energy mix,” said Bjørnson.

He reflected that Europe’s drive to diversify its energy sources is understandable. Yet, it is important to not lose sight of that Europe is very well supplied and diversified. Further, the region is surrounded by huge natural gas resources.

“A well-functioning market is the best way of attracting this gas to Europe,” said Bjørnson.

Norwegian gas, of which Statoil produces and markets a large share of, is and will remain an important source of gas supply to EU. It accounts for more than 20% of the demand. The resources are connected to Europe through an extensive and robust pipeline network.

“With this in mind, we think of Norwegian gas as part of European indigenous supply,” remarked Bjørnson. •

The overall value of the two contracts will be approximately €190 million.

The first contract relates to the execution on an EPC basis of the new ROG unit, aimed at processing refinery off gases and recovering hydrocarbons. The new ROG Unit will be fully modularized in order to minimize site construction activities. The second contract relates to the execution on an EPCa (Engineering, Procurement and Construction assistance) basis of the modification to the existing naphtha cracker unit necessary to process the hydrocarbons streams recovered in new ROG and interconnecting works.

Total Raffinaderij Antwerpen is one of Total’s six major integrated platforms globally, and the crucial link in Total’s integrated petrochemical complex in Belgium. This project is part of one of the biggest investment schemes in a European refinery.

This important achievement reinforces Maire Tecnimont Group’s distinctive competences in gas processing thanks to the technological expertise of KT – Kinetics Technology and represents an important reference to best position Maire Tecnimont in the refining business.

Moreover, this award strengthens the relationship with Total, one of the supermajor oil companies.

Maire Tecnimont S.p.A. is a company listed with the Milan stock exchange. It heads an industrial group (the Maire Tecnimont Group) that leads the international Engineering & Construction (E&C), Technology & Licensing and Energy & Ventures markets, with specific competences in plants, particularly in the hydrocarbons segment (Oil & Gas, Petrochemicals and Fertilisers), as well as in Power Generation and Infrastructures. The Maire Tecnimont Group operates in approximately 30 different countries, numbering around 45 operative companies and a workforce of about 4,300 employees, of whom over half work abroad. •

Joint Industry Project For Increased Understanding of Gas Processing KANFA Mator has together with IFE (Institute for Energy technology), Statoil and Det Norske received funding for a JIP (Joint Industry Project) through the PETROMAKS 2 program.The aim of the JIP is to increase the understanding of gas processing and the challenges related to liquid carry over. Liquid carry over represent a large problem and has been the cause of several compressor breakdowns.The four-year JIP program will develop new tools and refine current tools to enable more correct understanding and design of gas processes by the development of more precise flow models.

The novel “liquid carry over sampler” developed by KANFA Mator will be one of the technologies to be used to gain increased understanding of gas processing. This technology has been used on four offshore tests and enables quantification (by volume) and qualification of the liquids carried over by the gas. Important information for understanding the design of future technology such as liquid droplet sizes and concentrations are obtained.

KANFA Mator provides services for optimal production, reduced discharge and reduced cost by combining in-depth process understanding and knowledge with an extensive and unique operational experience. One of the strengths of KANFA Mator is the continuous development in methods, tools and process competence.

Sevan Marine ASA is specializing in design, engineering and project execution of floating units for offshore applications, based on its patented cylindrical floater technology. Sevan Marine ASA is listed on Oslo Børs with ticker SEVAN.

6 • Oil and Gas Innovation

NEWS - EUROPE

NorSea Group buys Danbor from Mærsk

Union Gas supports Energy Conservation in London

NorSea Group is taking a major step forward in its international involvement by purchasing the Danish base and logistics company Danbor AS. In addition to enhancing the global presence of NorSea Group, Danbor will significantly boost the company’s capability in the wind power market.

Union Gas is helping the Mayor’s Sustainable Energy Council (MSEC) encourage the development and implementation of sustainable energy and energy conservation, through a $5,500 grant awarded today.

“International expansion is part of NorSea Group’s expressed strategy. Danbor is a solid company which is well-established in our core activity field and fits in well with the rest of the NorSea Group family,” says John Stangeland, CEO of NorSea Group. NorSea Group sees many similarities between the two companies and considerable potential for creating synergies between Danbor and NorSea Group’s other subsidiaries and activities.

Enhancing NorSea Group’s global presence NorSea Group is Norway’s leading supplier of base and logistics services to the oil and gas industry. The company also has offices in Aberdeen in Scotland and Perth in Australia. With its acquisition of Danbor, NorSea Group is taking a bold step into the international market. Danbor’s head office is in Esbjerg and its principal operations are on the Danish shelf, where it is a supplier to Mærsk Oil and Dansk Undergrunds Consortium (DUC). Danbor also has operations in Montrose and Aberdeen in Scotland, as well as a base joint venture with Royal Arctic Line in Greenland. The acquisition of Danbor will give NorSea Group a significant presence in Denmark as well as enhancing its presence in the UK. The company is now capable of serving customers throughout the North Sea basin.

Enhanced wind power capability In recent years, Danbor has also become well established in the wind power market, where the NorSea Group wishes to increase its focus.

Esbjerg is a focal point of the European wind turbine industry, and Danbor has contracts in the fields of logistics operations and the repair and maintenance of both offshore and land-based wind turbines.

Many similarities between the companies NorSea Group is taking over a solid, well-run company with a long history in the industry. This year, Danbor celebrates 40 years of operations, while NorSea Group will turn 50 next year. Besides their long industry experience, there are many similarities between the two companies in regards to their business models, culture and values.

“I am convinced that A.P. Møller-Mærsk has found the right purchaser to ensure Danbor’s future growth and enable us to maintain the quality of our operations and the level of service provided by our employees.

Our incorporation into the new company will have no immediate effect either on our daily operations or on our existing contractual obligations,” states Søren Fløe Knudsen, CEO of Danbor.

A.P. Møller-Mærsk is confident that Danbor is in good hands.

“Danbor is a healthy and well-run company whose operations are peripheral to our strategic focus and which therefore merits a dedicated ownership which will develop its activities. NorSea Group is a recognised operator in the industry and I am sure that it will carry on the company’s operations in the right spirit and with a long-term perspective,” says Jakob Thomasen, a member of the Executive Board of A.P. Møller-Mærsk.

Andrew Calder, Union Gas technician manager for London presented the cheque to London Mayor Joe Fontana and Paul van der Werf, chair of MSEC and member of the Mayor’s Sustainable Energy Council, today at city hall.

The funds will be used to help support ongoing MSEC initiatives including the Sustainable Community Development Initiative to foster the development of greener and more energy efficient homes and the Sustainable Energy Speaker Series, which promotes sustainable energy to various audiences.

“We’re particularly mindful of environmental conservation because nature provides the fuel that we deliver to our customers, and also because it’s an important way to ensure our children’s future will be as bright as ours,” said Calder. “We’re very pleased to support the Mayor’s Sustainable Energy Council, whose goals align so closely with ours.”

“We are grateful for Union Gas’ support of the Mayor’s Sustainable Energy Council (MSEC),” said van der Werf. “The funds will be used to help promote sustainable energy projects in the City of London.”

In addition to natural gas delivery services for homes and businesses and contributing to the province’s economy through investment, job creation, municipal taxes and energy efficiency programs, Union Gas supports education as a way to build a skilled workforce for the future, support economic development for Aboriginal communities and encourage conservation. This value is reflected each year, as the company supports communities across Ontario through thousands of volunteer hours for local charitable and non-profit organizations, major charitable giving and sponsorships. Last year, Union Gas donated close to $3 million to community and charitable organizations in Ontario, including over $928,000 to United Way. In addition, Union Gas employees, retirees, family and friends provided over 17,000 volunteer hours to help strengthen the communities where they live and work. For more information visit uniongas.com/community.

MSEC’s mandate is to promote, encourage and support sustainable energy projects for London’s economic and environmental benefit.

This includes conservation and the development of new green energy projects. Londoner’s spend about $1 billion annually on their energy needs, whether at home or at work with most of that money leaving the City. MSEC has set a goal to facilitate projects, which can reduce or replace $150 million of these costs in a way that keeps this money in London.

Union Gas Limited, a Spectra Energy (NYSE: SE) company, is a major Canadian natural gas storage, transmission and distribution company based in Ontario with 100 years of experience and service to customers, assets of over $6.4 billion and approximately 2,200 employees. The distribution business serves about 1.4 million residential, commercial and industrial customers in more than 400 communities across Ontario. •

Through the acquisition of Danbor, NorSea Group has gained 370 new employees. “We have been made very welcome by Danbor and we are looking forward to getting to know our new colleagues,” says the CEO of NorSea Group in conclusion. • 7 • Oil and Gas Innovation

NEWS - MIDDLE EAST NORTH AFRICA

Leviathan Reservoir - Grant of Leases An immediate report that was published by the Company’s gas subsidiaries - Delek Drilling Limited Partnership and Avner Oil Exploration Limited Partnership (together “the Partnerships”) is included below, with regard to granting the Partnerships and the other partners in the 349/Rachel and 350/Amit Licenses, two title deeds in lieu of the Licenses - Lease I/14 Leviathan South and Lease I/15 “Leviathan North” (“the Leases”). The Leases cover the Leviathan natural gas field, with I/14 Leviathan South comprising part of the Rachel License and I/15 Leviathan North comprising part of the Amit License.

“Following on the Partnership’s immediate report of March 23, 2014 concerning extension of the 349/Rachel and 350/Amit licenses (“the Rachel License”, “the Amit License” and “the Licenses”, respectively), the Partnership hereby announces that on March 27, 2014, the Ministry of National Infrastructures, Energy and Water’s Oil Commissioner (“the Ministry of Infrastructures” and “the Commissioner”, respectively) granted the Partnership and the other partners in the Licenses, two title deeds in lieu of the Licenses - Lease I/14 Leviathan South and Lease I/15 “Leviathan North” (“the Leases”). The Leases cover the Leviathan natural gas field, with I/14 Leviathan South comprising part of the Rachel License and I/15 Leviathan North comprising part of the Amit License.

The Delek Group, Israel’s dominant integrated energy company, is the pioneering leader of the natural gas exploration and production activities that are transforming the Eastern Mediterranean’s Levant Basin into one of the energy industry’s most promising emerging regions. Having discovered Tamar and Leviathan, two of the world’s largest natural gas finds since 2000, Delek and its partners are now developing a balanced, world-class portfolio of exploration, development and production assets with total gross natural gas resources discovered since 2009 of approximately 37 TCF. •

Yemen Oil Asset – Acquisition Agreement Signed Petsec Energy is pleased to advise it has executed an agreement with a wholly owned subsidiary of AWE Limited (ASX: AWE) to acquire its 21.25% Participating Interest in the Block 7, Al Barqa Permit, in the Republic of Yemen.

Block 7 is an onshore exploration permit covering an area of 5,000 square kilometres (1,235,527 acres) located approximately 340km east of Sana’a, the capital of Yemen. The block is operated by Australia’s Oil Search Limited and contains the Al Meashar oil discovery as well as an inventory of leads and prospects defined by 2D and 3D seismic surveys with significant oil potential.

The terms of the transaction include a cash consideration of US$1 million; the replacement of AWE’s existing Letter of Credit with the Arab Bank; and working capital adjustments on completion.

Completion of the transaction is subject to customary approvals from the Joint Venture Partners and the state owned Yemen Oil and Gas Company.

Petsec Energy’s Chairman, Terry Fern, commented on the Agreement: “The signing of this agreement is the culmination of a number of years of strategic planning and marks the start of an expansion of Petsec’s portfolio of assets into the Middle East, with the aim of securing high value assets within a region that is highly prospective for oil. Block 7 has the potential to add significant oil reserves to the company’s resource base and significant value to its shareholders. We look forward to working with the operator, Oil Search, to further appraise the Al Meashar oil discovery and explore the remainder of the Block”. •

8 • Oil and Gas Innovation

NEWS - BRAZIL

Final Approval For Manati Field Acquisition in Brazil

McDermott Awarded Subsea Contract in Brazil

GeoPark Limited (“GeoPark”), the Latin American oil and gas explorer, operator and consolidator with operations and producing properties in Chile, Colombia, Brazil and Argentina (NYSE: GPRK), is pleased to announce that the Brazilian National Petroleum, Natural Gas and Biofuels Agency (“ANP”) approved in its Board meeting held on March 26 (i) the replacement of the parental guarantee of Panoro Energy ASA with the parental guarantee of GeoPark, and (ii) the transfer of the quotas of Rio das Contas Produtora de Petroleo Ltda. from Panoro Energy do Brasil Ltda. to GeoPark Brasil Exploração e Produção de Petroleo e Gas Ltda. The closing of the acquisition is expected to occur within the following days, after the payment mechanisms and transfer of quotas are completed.

McDermott International, Inc. (NYSE:MDR) (“McDermott”) announced today that one of its subsidiaries has entered into an agreement with Petrobras for the supply of its subsea Lay Vessel North Ocean 105 (“LV105”). This contract is included in McDermott’s first quarter 2014 backlog.

On May 15, 2013, GeoPark announced the execution of a quota purchase agreement with Panoro Energy do Brasil Ltda to acquire Rio das Contas Produtora de Petróleo Ltda, which holds a ten percent interest in the BCAM-40 block and includes the Manati Field in the Camamu-Almada basin. The agreed purchase price is US$140 million and GeoPark will receive the net cash proceeds from all production attributable to Rio das Contas since May 1, 2013.

GeoPark has entered into a 5 year credit facility agreement with Itau BBA International plc for US$70.5 million to finance 50% of the purchase price.

“The Manati Field acquisition, together with the nine blocks awarded to GeoPark by the ANP in Rounds 11 and 12, provide a solid riskbalanced entry platform into Brazil and confirm our commitment to developing a long term upstream oil and gas business in this high potential hydrocarbon country. Our new Brazil assets also represent an important component of our overall Latin American growth strategy which includes our expanding platforms in Colombia and Chile” commented James F. Park, CEO of GeoPark.

The Manati Field is operated by Petrobras (35% working interest), the Brazilian national company, largest oil and gas operator in Brazil and internationally-respected offshore operator. Other partners in the block include Queiroz Galvao Exploracao e Producao (45% working interest) and Brasoil Manati Exploracao Petrolifera S.A. (10% working interest). The Manati Field (100%) is currently producing approximately 212 mmcfpd of gas (37,740 boepd). •

The LV105 will carry out deepwater umbilical and flexible pipe installation in the pre-salt region and Campos Basin area offshore Brazil. Expected to commence during the third quarter of 2014, the term of the charter is approximately 200 days, with an option to extend.

“This new contract award highlights Petrobras’ ongoing confidence in McDermott to deliver leading subsea installation solutions,” said Tony Duncan, Executive Vice President, Subsea. “The charter also supports our vessel utilization targets as during the second half of 2014 McDermott will have three deepwater vessels on charter to Petrobras.”

Rosneft Brazil and HRT Sign Final Agreements on the Solimoes Project Rosneft announces that its subsidiary Rosneft Brazil today signed final agreements with HRT subsidiary HRT O&G to acquire additional 6% in the Solimoes project. This will lead to Rosneft Brazil receiving 51% control and taking over the operatorship in the joint venture in the Solimoes basin. The companies agreed that Rosneft and HRT will continue exploration activities with respect to Solimoes project and also agreed the sale of four heli-transportable rigs to Rosneft.

The relevant transaction amounts to $96 mln. The completion of the sale and purchase transaction between the companies shall be subject to the fulfillment of certain conditions, including the approval by the Brazilian National Petroleum, Natural Gas and Biofuels Agency (ANP). Rosneft will also provide to HRT a loan facility up to $40 mln to finance HRT investments on Solimões for a period of 12 months from the closing date.

The documents were signed in the development of agreements concluded during the visit to Brazil of Igor Sechin on November 22, 2013. •

NEWS - NORTH AMERICA

EPA Recognizes Ricoh AmericasWith 2014 ENERGY STAR® Award

U.S. Natural Gas Output Up 1.5% in March

The U.S. Environmental Protection Agency (EPA) has named Ricoh Americas Corporation a 2014 ENERGY STAR Award winner for Excellence in Energy Efficient Product Design for its outstanding contribution to reducing greenhouse gas emissions by designing energy-efficient products and educating consumers about energy efficiency. Ricoh’s accomplishments will be recognized in Washington, D.C. on April 29, 2014.

Spurred on by the top three highest producing days in U.S. history, domestic natural gas production in the lower 48 states averaged 66.6 billion cubic feet per day (Bcf/day) in March 2014, according to the latest estimates from Bentek Energy, the oil and natural gas analytic unit of Platts. Production levels on March 29, 30 and 31 all came in at 67.6 Bcf/d, the single highest production days since November 9, 2013.

March 28 production came in just 0.1 Bcf/d shy of these levels.

Ricoh Americas, an ENERGY STAR partner for nearly 20 years, is being honored for its leadership in designing products that earn the ENERGY STAR, the government-backed symbol of energy efficiency.

Average March 2014 gas production was up 1.0 Bcf/d or 1.5% from February 2014 and up 2.5 Bcf/d (4.0%) versus levels seen in March 2013.

Ricoh’s design philosophy is to provide energy efficient imaging equipment without compromising business productivity. Many Ricoh devices deliver superior energy performance by adopting unique technologies and features such as Quick Start-Up (QSU), energy efficient toner and low sleep mode electricity consumption.

The U.S. Energy Information Administration (EIA) will publish its domestic production estimates for March on or around May 31.

Ricoh played an active role in the ENERGY STAR Version 2.0 specification development process which resulted in publishing Recovery Time from various energy saving modes, allowing the consumer to select a device with minimum recovery time to enhance business productivity while achieving energy savings.

As part of Ricoh’s ongoing commitment to fight climate change, Ricoh has developed the Green Mode Activated program: an awareness campaign to minimize the environmental impact with the smart use of the features of the device.

“Ricoh is deeply committed to our partnership with ENERGY STAR – it is a very important component of our business,” said Dominic Pontrelli, Senior Vice President, Marketing, Ricoh Americas Corporation. “Our customers benefit greatly from using ENERGY STAR products, which can save them energy and money, while helping to protect the environment.”

Through 2013, with help from ENERGY STAR, American families and businesses have saved $297 billion on utility bills and prevented more than 2.1 billion metric tons of greenhouse gas emissions.

“With Ricoh’s help, Americans are saving energy and money while protecting the environment and fighting climate change,” said EPA Deputy Administrator Bob Perciasepe. “Their innovative efforts to promote ENERGY STAR products are helping consumers make smarter choices about the products they buy.”

The 2014 Awards for Excellence in ENERGY STAR Promotion are given to a variety of organizations in recognition of their contributions to reducing greenhouse gas emissions through superior energy efficiency. Award winners are selected from the 16,000 organizations that participate in the ENERGY STAR program.

ENERGY STAR was introduced by the U.S. Environmental Protection Agency in 1992 as a voluntary market-based partnership to reduce greenhouse gas emissions through increased energy efficiency. Today, ENERGY STAR offers businesses and consumers energy-efficient solutions to save energy, money, and help protect the environment for future generations. 16,000 organizations are ENERGY STAR partners committed to improving the energy efficiency of products, homes, and buildings. •

“The last week of March was remarkable from a supply perspective and is a reflection of U.S. producer’s resilience in the face of strong gas demand faced by the nation this year,” said Jack Weixel, Bentek Energy director of energy analysis. “Production in the Northeast basins like Marcellus and Utica are up 44% this March versus last March alone. It’s becoming increasingly clear the Northeast is the new center of the gas universe for North America.”

For 2013 as a whole, U.S. natural gas production averaged 64.8 Bcf/d, up more than 1.2 Bcf/d higher or 1.9% higher than the 2012 average of 63.6 Bcf/d. Bentek data analysis suggests 2014 production will average approximately 68.0 Bcf/d due to a higher overall price environment for producers and continued growth in liquids-rich basins such as the Eagle Ford, Bakken, Permian and Greater Anadarko, in addition to continued increases in dry production in the Marcellus.

The Bentek data analysis is based on an extensive sample of near realtime production receipt data from the U.S. lower 48 interstate pipeline system. Platts’ Bentek production models are highly correlated with and provide an advance glimpse of federal government statistics from the U.S. EIA. This Bentek Energy U.S. natural gas production data estimate will be published on the first Tuesday of every month, covering the previous month’s output activity. Bentek’s dry gas production estimates are not observed data and are based on pipeline receipt nominations and certain state production data.

Bentek Energy, which specializes in energy market analytics and is recognized as an industry leader in natural gas market fundamental analysis, was acquired by Platts in 2011. For more information about natural gas supply and demand fundamentals and Bentek Energy, visit www.bentekenergy.com.

For more information about natural gas spot price trends and Platts, a leading global energy, petrochemical and metals information provider, visit the website at www.platts.com.

Note: As with any modeled number, Bentek makes no warranty, express or implied, regarding the use of any information in connection with trading of commodities, equities, futures, options or any other use. •

10 • Oil and Gas Innovation

Secure wireless communications for oil and gas operations The RUGGEDCOM WiN series of products is the ďŹ rst broadband wireless product portfolio designed for private networks, delivering the beneďŹ ts of carrier-grade 4G technology to critical infrastructure applications in harsh environments.

To learn how RUGGEDCOM can add high speed voice, video and data communications to remote operations, in real time, visit www.RuggedCom.com/oilandgas

NEWS - BRAZIL

Brazil Oil and Natural Gas Production in February Petrobras announces that in February, Petrobras’ total oil and natural gas production in Brazil was 2,327,000 barrels of oil equivalent per day (boed), up 0.7% from January’s production of 2,310,000 boed. Including the output operated by Petrobras for its partners in Brazil, February’s production was 2,476,000 boed, up 1.5% from a month earlier (2,438,000 boed).

In February, Petrobras’ oil production in Brazil averaged 1,923,000 barrels per day (bpd), up 0.3% from January’s production of 1,917,000 bpd. Including the output operated for partner companies, oil production in Brazil was 2,021,000 bpd, up 1.2% from January’s production of 1,997,000 bpd.

Pre-salt records In February, oil production from presalt fields in the Santos and Campos Basins reported a record average monthly of 385,000 bpd, up 7.5% from January’s previous record of 358,000 bpd. A pre-salt daily output record of 412,000 bpd was set on February 27th.

The first well, SPS-77, started-up operation in February interconnected to a buoyancy supported riser (BSR) connected to FPSO Cidade de São Paulo, in Sapinhoá field, in the Santos Basin pre-salt. The well has been demonstrating excellent performance and is currently the best production well in Brazil. Its output of approximately 36,000 bpd contributed to February’s monthly and daily records. Three additional BSRs are due to be installed in the first half of the year, which will enable output in the pre-salt layer to continue to rise by interconnecting eight new production wells on FPSOs Cidade de São Paulo and Cidade de Paraty. Therefore, these units will achieve maximum output and processing capacity by the third quarter of the year.

Temporary production stoppages The decommissioning process of FPSO Brasil, in Roncador field, began in February and production will cease this Monday (3/31).

The wells will be rearranged successively to other platforms operating in the same field (P-52 e P-54), what will be done until the 4th quarter of this year. Also in Campos Basin, a shutdown has been in effect on platform P-20, in Marlim field, to repair fire damage to the platform’s chemical products system. This interruption accounted for a loss of roughly 22,000 bpd. Operations are expected to restart in the next days, shortly after receiving all evaluations and authorizations

to resume production, what has already being granted by certifying entity DNV (Det Norske Veritas) and the Navy.

The reported rise in output was possible despite these temporary losses and the maintenance stoppages of platforms PCE-1, in Enchova field, and FPSO Cidade de Anchieta, in Baleia Azul, both in Campos Basin.

Natural gas production February’s natural gas production in Brazil was 64,085,000 cubic meters per day (m³/d), up 2.5% from January’s production of 62,517,000 m³/d. Including the output operated by Petrobras for associate companies, natural gas output was 72,344,000 m³/d, up 3.1% from a month earlier.

Potential and Operational Efficiency The lower decline in the output potential of Baleia Azul (FPSO Cidade Anchieta) and Jubarte (P-57) fields have contributed to the results obtained in February. Similarly, the noted operational efficiency of production units P-53 (Marlim Leste), P-52 and P-54 (Roncador), whose efficiency rates were 99.8%, 99.1% and 99.2%, respectively, have also contributed significantly to production in February.

Rising production in 2014 Platform P-55 started-up on the last day of 2013 in Module 3 of Roncador field with an output capacity of 180,000 bpd. Operations to interconnect new wells are ongoing.

Platform P-58 started-up in Parque das Baleias, northern Campos Basin, on March 17th through pre-salt production well 7-BFR7-ESS, producer of pre-salt reservoir. This well has been showing excellent productivity with 20,000 barrels per day. Two additional wells of similar potential are due to start-up in April.

With an output capacity of 180,000 barrels per day, P-58 s approximately 85 km off the Espírito Santo coast, at a water depth of 1,400 meters.

In the upcoming months, 15 production wells, eight in the pre-salt and seven in the post-salt, as well as nine injection wells

will be interconnected to it through 250 km of flexible pipelines and two subsea manifolds (equipment that transfers oil from wells to the platform).

Also in March, well JUB-45 connected to FPSO Capixaba started-up with an output potential of 18,500 bopd. In the same month, platform P-63 began injecting water in PapaTerra field, south of Campos Basin.

In addition, in the first half of this year, platforms P-62 and P-61 will start-up in the Campos Basin post-salt. P-62 has an output capacity of 180,000 bopd and is located in Roncador field. P-61 is located in Papa-Terra field and will be interconnected to semisubmersible Tender Assisted Drilling (TAD) platform SS-88, which is already in Brazil.

These platforms will contribute to the 7.5% (+/- 1%) sustained production growth in 2014, as provided for in the 2014-2018 Business and Management Plan.

Production abroad In February, total oil and natural gas extraction abroad was 206,712 boed, up 2.5% from January’s output of 201,653 boed. Oil production was 115,279 bpd, up 2.5% from January’s production of 112,462 bpd.

This rose was due to the start-up of wells CA-6 and CH-5, in the US Gulf of Mexico’s Cascade and Chinook fields. Combined the output of these wells rose from 15,900 bopd in January to 21,594 bopd in February (Petrobras’ share). The development of Cascade and Chinook fields is ongoing and production takes place through the first FPSO installed in the US Gulf of Mexico, with an output capacity of 80,000 bpd.

Natural gas production abroad was 15,534,000 m³/d, up 2.5% from January’s production of 15,154,000 m³/d, due to increased demand by the Brazilian market for gas from Bolivia.

Including production abroad, Petrobras’ total oil and gas production in February was 2,534,000 boed, up 0.9% from January’s production of 2,512,000 boed. •

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SPECIAL FEATURE - SKILL SHORTAGES

Report: Skill Shortages Plague Many Oil and Gas Producing Areas Around the World Skills shortages are the primary challenge facing two-thirds of employers in the oil and gas sector for 2014, revealed the Oil & Gas Global Salary Guide.

Oil and gas industry employers are facing significant skills shortages according to the Oil & Gas Global Salary Guide, and over 65 per cent (68.1%) of employers plan to increase headcount in 2014, exacerbating the already skill-short market, adding pressure to increase salaries to attract candidates, which is based on data from 24,000 respondents.

By Mylene Daugan

83 per cent of employers predict an upturn in salaries in the coming year as hiring managers vie for top talent, at the same time as further emphasis is put on benefits. The number of employees receiving benefits grew by over seven per cent over the last 12 months as employers look to bolster compensation packages with incentivised bonuses or attractive pension plans. UK respondents indicated, 27 per cent of employees are offered bonuses, 25 per cent pension plans and 19 per cent have private health plans as part of their remuneration package. Although in 2013 salaries flattened for the first time in three years employers’ confidence in the market is high as 72 per cent of hiring managers have a positive or very positive outlook on the oil and gas industry.

Ed Allnutt, Director of Hays Oil & Gas, comments: “Salaries in the UK have held up well in a tough climate but with such an improvement in employers’ outlook and more positive sentiment, we are expecting 2014 to provide plenty of opportunities for professionals. Professionals with very niche skills and experience can command high salaries and are highly sought after and this will become more widespread over the coming months.”

Allnutt continues: “Skills shortages are continuing to plague the industry and are clearly a concern for employers. Although there are measures underway to tackle this it should remain a key focus. Developing graduates in STEM subjects and ensuring talented professionals have access to work in the UK are both critical. Government, business and education need to work together to make inroads that will benefit the industry and everybody working within it.”

The Guide produced by recruiting experts Hays Oil & Gas and leading jobsite Oil and Gas Job Search, shows UK local average salaries to have gone up by 0.85 per cent, whereas salaries for imported talent declined by 1.4 per cent compared to the previous year.

For comparison, the industry globally has seen a decline of 1 per cent in salary levels from 2013. The slight reduction in growth of salaries can also be attributed to a market correction after a particularly buoyant two year period of increases within the industry. This is probably a necessary correction after two consecutive years of growth in salaries that have started to threaten the financial performance of some companies and assets including the UK’s ageing North Sea Oil fields.

Duncan Freer, Managing Director of Oil and Gas Job Search adds: “Whilst the overall level of increase in pay in the UK has slowed, the government has taken steps to welcome further business and investment in the UK by announcing a new tax allowance aimed

SPECIAL FEATURE at boosting the development of shale gas resources in the UK.” Duncan Freer, comments: “Despite the concerns over a sluggish economic recovery, the feeling in the industry remains positive.

Employees and new entrants to the industry can look forward to working dynamic and rewarding global sector.”

Industry Acting to Address Skills Shortage, says Oil & Gas UK Malcolm Webb, Oil & Gas UK’s chief executive, said: “Oil & Gas UK forecasts record investment in producing Britain’s oil and gas reserves this year, boosting jobs across the UK. However, companies frequently cite the skills shortage as the biggest challenge in achieving growth so as an industry we are pulling out all the stops to make sure we have the skilled people required to develop oil and gas for decades to come.

“Many oil and gas companies are already offering transfer training to people from outside the sector with relevant skills,

whether engineers, craftsmen or technicians, so that they can build on their valuable experience to develop the new capabilities the oil and gas sector requires.

The industry is also pleased to be working with the Ministry of Defence and the Career Transition Partnership to match industry job profiles with military roles to identify directly transferable positions and to highlight where training and conversion may be required. With a view to longer term, companies are also now working together to ensure school children and university students are aware of the exciting and challenging opportunities the oil and gas sector offers to build a long-term career.”

gas companies are opting to upgrade their existing staff by sending them to universities and technical schools primarily in Europe, the UK and North America.

Universities and technical schools around the world try to help solve the problem.

The Traditional destinations for post graduate studies in disciplines such as petroleum engineering are the Middle East, USA and the UK. This provides a great opportunity for schools in these regions to support a mechanism where oil companies from growing regions can send their engineering staff in bulk to upgrade their education and training. Mylene adds, “the difference between the skill set of an engineering graduate with a BA in Pet Eng and one who now has his or her master is quite intriguing. We are also finding oil companies from places such as Angola, Brazil and Malaysia have increased production as a direct result from close cooperation with Western based University programs.”

While many companies in regions around the world such as Brazil, India, China and the Far East are trying to eliminate this problem by importing staff from other countries, Oil and Gas Innovation finds a new development is emerging. From a survey conducted by our distribution team to our readers we find that many oil and

Many compnaies are increasing training rather than hiring.

Mylene Daugan, staff writer at OGI disseminates the data obtained. “The issue in many places is not so much a labour shortage rather than a skill shortage. We used Brazil as an example, along with Angola. The reason why is, both these regions have experienced unprecedented growth in their respective oil and gas sectors over the past years.

And while more engineers may provide a quick temporary solution to the problem, the real solution long term is engineers of a higher quality and training.”

The industry catches on to this latest trend A Special Program for Youth and Young Professionals Planned at the 2014 International Petroleum Technology Conference. Through its theme, “Unlocking Energy Through Innovation, Technology and Capability”, the 7th International Petroleum Technology Conference (IPTC) in Doha features a variety of special activities for high school and university students as well as young professionals from Qatar and around the world. More than 6,000 industry representatives, youth and young professionals are expected to converge at 7th IPTC, the largest multi-society, multi-disciplinary oil and gas event in the Eastern hemisphere.

Dr. David Khemakhem, an advisor with Exxon Mobil Corporation’s Corporate Strategic Planning department and co-chairman of the IPTC’s Young Members Activities, said that getting more young men and women interested in contributing to the oil and gas industry requires strong collaboration between the industry, government and educators, as well as parents. “IPTC provides an excellent platform for young people to communicate with industry leaders on global issues and concerns, and address the important role they will play to ensure global energy sustainability when entering the industry,” he said.

The cornerstone of the young members’ activities is the Education Week for college students. Under the theme, “Energy Challenges + Education = Our Future”, about 110 college engineering

Engineers at work on a drilling platform of a shale fracking operation.

and science major seniors from more than 31 countries and 67 institutions are converging in Doha and working together on a number of energy industry-related topics. These students have the opportunity to work with a number of industry young professionals and leaders and learn about the importance of this sector while expanding their personal networks.

More than 40 percent of the students invited are female, about the same percentage of engineering students in Qatar at both Qatar University and Texas A&M Qatar. The Middle East, and specifically Qatar, has encouraged female students to pursue engineering higher education, which provides an important source of talent to the oil and gas industry.

“This is an encouraging trend as the industry seeks a skilled and talented workforce,” Dr. Khemakhem added. “We stand a better chance of developing a steady pipeline of qualified graduates who can be recruited to address the world’s energy challenges.”

Another highlight of the conference is the International Young Professionals Competition, with the theme “World Energy…Gate to the Future”. Young professionals will address, among other topics, the future of energy supply and what steps should be taken to ensure that such supplies are accessed, produced and used in a safe and environmentally friendly manner.

“Many oil and gas companies are already offering transfer training to people from outside the sector with relevant skills, whether engineers, craftsmen or technicians, so that they can build on their valuable experience to develop the new capabilities the oil and gas sector requires.”

The 7th IPTC takes young members’ activities a step further as it will, for the first time, feature a special ‘Future Engineers’ Parents Dinner’ designed to make parents aware of the opportunities available in engineering, geosciences and science higher education within the oil and gas industry.

A one-day teachers’ workshop also provides a variety of free instructional materials that expand on essential scientific concepts related to the oil and gas industry. Teachers from local high schools have also registered for the program.

In addition, an “Energy 4All” Education Day will introduce high school students to the disciplines of petroleum engineering and the industry, as well as opportunities in the sector. Fun and interactive activities including science shows and scavenger hunts are planned for youth between the ages of 14 and 16 years. • This article had contributions by OGI’s Mylene Daugan, Ed Allnutt - Hays Oil & Gas, Duncan Freer - Oil and Gas Job Search, and Malcom Webb from Oil and Gas UK contact: mylene@oilandgasinnovation.co.uk

16 • Oil and Gas Innovation

MASTERS IN OIL AND GAS ENGINEERING Global College Malta (GCM) in partnership with Robert Gordon University (RGU) is offering three oil and gas engineering courses commencing September 2014.

MSc Drilling and Well Engineering MSc Oil and Gas Engineering MSc Petroleum Production Engineering The programmes combine on campus tuition and online tutorials. This means the courses emulate those offered at RGU’s main campus whereby after successful completion of the course, students will graduate with a degree certificate awarded by Robert Gordon University.

ENQUIRE TODAY Global College Malta Tel.: +356 21801252 enquiries@gcmalta.com, www.gcmalta.com SmartCity Malta, SCM01, Ricasoli

SPECIAL FEATURE

Launch of the Oil and Gas Academy Scotland The Oil and Gas Academy Scotland (OGAS) is publicly launched today (TUESDAY) at an event at the Scottish Parliament. The Scottish Funding Council-funded organisation which will address training and educational requirements in the oil and gas industry is a collaboration of five training & education providers for the industry. These are the University of Aberdeen, Forth Valley College, Heriot-Watt University, North East College Scotland and Robert Gordon University. The event, for invited guests and hosted by Maureen Watt MSP, will feature a keynote speech from Scottish Minister for Energy, Enterprise and Tourism, Fergus Ewing MSP. Established to support Scottish Government objectives for the Energy sector, OGAS brings together existing skills and expertise with partner institutions and training providers to facilitate innovative and effective oil and gas training and education, supporting the next generation of industry experts to keep Scotland at the forefront of the oil and gas sector.

OGAS director Rulzion Rattray said: ³I am excited and passionate about the current and potential new opportunities made available through the formation of the Oil & Gas Academy of Scotland. The key thinking in the formation of OGAS has been and continues to be that of collaboration and cooperation. ³Our key aims are to develop a one-stop shop for the training and education needs for the Oil and Gas Industry; to work closely and collaboratively with all stakeholders in the industry; facilitate the delivery of focused ‘mid-career’ education and training to support industry succession planning; work with partners and organisations across Scotland to secure a Scotland-wide training and education solutions, based on regional specialisms and to collaborate in the development of new provision of training and education, based on market research and emerging needs. ³I would suggest that the OGAS partners between them represent a very significant global capacity for education and training focussed on the Oil & Gas sector and that this probably has no rival outside the US. This is particularly the case if we focus on the offshore element of this capacity as represented by the OGAS partners and by the wider stakeholders in the community of Scotland’s on-going experience of working in the North Sea.² Professor Sir Ian Diamond, Principal and Vice-Chancellor, University of Aberdeen said: ³The University of Aberdeen is committed to supporting the energy industry, locally and

globally, and I am delighted to be part of this exciting venture with our partners to create one of the largest and most capable oil and gas training bodies in the world. Individually we offer excellence in learning and research, and as part of OGAS we can contribute even more.² Professor Ferdinand von Prondzynski, Principal of Robert Gordon University, said: ³OGAS is a vital initiative for Scotland and for the industry, involving a close partnership between some of the key providers of education and training, and allowing the industry to access courses and expertise through a single point of contact. The OGAS partners will ensure that Scotland has the skills to be a recognised global centre of excellence for oil and gas.²

“Chancellor, Heriot-Watt University, said: ³Being able to bring together academic expertise from both Heriot-Watt University and Forth Valley College, in addition to the exceptional training opportunities provided by the wider partnership, will make for an outstanding opportunity for any young person wishing to go into this important field.”

Principal Rob Wallen, North East Scotland College said: ³With increased investment in North Sea drilling planned over the next three years, it¹s vital that we can continue to support the specialist training required by the oil and gas industry. We already have the facilities and expertise here in the North-east, and we are committed to work together to support the industry further by identifying skills gaps and investing in new technology.² Dr Ken Thomson, Principal of Forth Valley College, said: ³We are delighted to be a key partner in the new Oil and Gas Academy for Scotland. We have significant industry experience and we look forward to sharing our knowledge and expertise. Forth Valley has recently opened a new £1.2million training facility which offers a range of state-of-the-art simulated environments including a chemical distillation plant, virtual control room, minirig lab, process training plant and mechanical workshop. This world class facility will ensure we are at the forefront of delivering high quality skills and training for the energy sector.² Professor Steve Chapman, Principal and ViceChancellor, Heriot-Watt University, said: ³Being able to bring together academic expertise from both Heriot-Watt University and Forth Valley College, in addition to the exceptional training opportunities provided by the wider partnership, will make for an outstanding opportunity for any young person wishing to go into this important field. ³This area of research is vital to our country’s future and we are very pleased to be so directly involved in providing the highly skilled engineers that are crucial to the UK economy.

Heriot-Watt¹s Engineers for the Future scheme is already highly regarded within the industry and a good example of successful educationindustry partnerships.² •

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E & P - AFRICA

Militants Claim Sabotage on Nigerian Oil Terminal Niger Delta militants claim scuba divers Thursday further sabotaged a pipeline where leaks have forced Shell Nigeria to halt exports from its Forcados terminal since March 4.

A statement purporting to come from the Movement for the Emancipation of the Niger Delta said they initially sabotaged the undersea pipeline on March 1 and that scuba divers early Thursday caused “further damage to the ongoing repair works.”

Shell Nigeria did not immediately respond to requests for comment, and there was no way to independently verify the militants’ claim.

On Tuesday, Shell blamed “unknown persons (who) installed a crude theft point” for the leak on the pipe eight meters (26 feet) below sea level.

The company, part-owned by Nigeria’s

government, declared “force majeure” effective Tuesday to get some legal protection against contractual obligations.

Shell has refused to say how much oil has not been exported since it halted Forcados exports on March 4. The terminal can handle 400,000 barrels of crude daily, more than a fifth of Nigeria’s production of 2.2 billion barrels.

Sabotage by militants largely ended with a 2009 government amnesty that bought out militant leaders and more than 26,000 fighters, some of whom were contracted to guard the very installations they had been attacking. But some militants who did not benefit from the amnesty, and others who have since lost contracts, recently have threatened more attacks.

Many oil producers in Nigeria are moving thier operations offshore

At the height of the insurgency, militants halted a quarter of Nigeria’s oil output with attacks on facilities and kidnappings of foreign oil workers.

Since then, oil theft attributed to other causes has risen to more than 200,000 barrels a day, most blamed on large criminal enterprises who sell the crude on the oil markets in deals that also benefit politicians and senior military officers. All those thefts occur on land. President Goodluck Jonathan this week announced the government has earmarked $1 billion to fight oil theft. Most communities in the oil-rich delta are impoverished despite decades of oil production that should make Nigerians wealthy but benefits only an elite.

The Niger Delta militants claim to be fighting for justice for such ordinary people. •

E& P - AFRICA

Oando Energy Resources Extends Completion Date for Acquisition of Nigerian Upstream Oil and Gas Business of ConocoPhillips

Oando Energy Resources Inc. (“Oando Energy Resources” or the “Company”) (TSX: OER), a company focused on oil and gas exploration and production in Nigeria, today announced that, further to its press releases dated December 20, 2012, September 16, 2013, November 28, 2013, January 31, 2014, and March 3, 2014, the outside date for completion of the proposed acquisition of the Nigerian Upstream Oil and Gas Business of ConocoPhillips (NYSE: COP) (the “ConocoPhillips Acquisition”) has been extended to April 30, 2014.

Pursuant to an amendment agreement executed on March 27 2014, Oando Energy Resources and ConocoPhillips agreed to extend the outside date for completion of the ConocoPhillips Acquisition from March 31, 2014 to April 30, 2014 to enable the companies to satisfy all closing conditions including the anticipated consent of the Honourable Minister of Petroleum Resources in Nigeria. In consideration of this extension OER has consented to increasing its deposit by $25 million on April 17, 2014, if the consent of the Honourable Minister of Petroleum Resources is not received on or before April 11, 2014.

“As we approach the final stage of creating Africa’s leading indigenous independent oil and gas company, we have committed to increasing our deposit as a goodwill gesture to ConocoPhillips, whilst we continue to work together to fulfil all conditions precedent for closure of this transaction,” commented OER Chairman, Wale Tinubu. •

E&P

Tackpoint Delivers Custom Bearings for Extreme Downhole Applications Most companies servicing the oil and gas industry have their origins tied to creating a product or providing a service to fill a need in the market. Tackpoint has filled the need for specialized thrust bearings in sealed directional drilling mud motors since 1998.

Photo: DynaBearing compared to Machined Bronze Thrust Bearing

Although the original directional drilling mud motors originated in Europe and Texas in the 1970’s, Edmonton Alberta became a hot bed for design and development of the oil sealed directional mud motors in the 1980’s and 1990’s. The original mud motors utilized 4 point contact stacked ball bearings which had drilling mud flow through the bearing stack. These motors had limited weight on bit capacities and drilling rates due to the stacked ball bearings.

The stacked bearings would fracture balls or races once the capacities and life were exceeded. Oil sealed drilling motors allowed the use of cylindrical roller thrust bearings which have higher capacities than ball stack bearings due to line contact of the cylindrical rollers vs. point contact of the bearing balls.

Since cylindrical rolling elements can not operate in a drilling mud environment, the mud motor bearing assemblies must be sealed with oil.

The companies that were producing the sealed mud motors in Edmonton began using catalog thrust bearings from traditional bearing manufacturers. Shaft and housing sizes were designed around catalog size thrust bearings which would then compromise shaft and other component designs in the motor.

These catalog thrust bearings were made from either machined bronze with a steel band around the outside to retain the rollers, or a polyamide plastic moulded cage.

The bronze cage construction resulted in fewer rollers and a lower capacity than the polyamide cage due to the amount of bronze required between the rollers to maintain cage strength. Although the polyamide cages had higher capacities, they were limited to 140 °C which was not sufficient for most downhole applications. The thrust washers for both types of cages were made from through

hardened 52100 bearing steel which provides excellent wear properties, however the material will fracture when subjected to repeated shock loading, which occurs in drilling motors.

“Each year the market for custom bearings continues to grow as the traditional bearing companies are unable to produce or react to small run special bearings with short lead times.”

In 1998 a small group of bearing industry salesmen and engineers worked together to develop a unique custom thrust bearing design with features specifically for the downhole drilling motor industry. The result was the patented DynaBearing cylindrical roller thrust bearing assembly. The two piece cage was made from steel and was held together with a positive engagement snap mechanism.

The design allowed increased oil circulation between the maximum number of rollers and the largest rollers possible for any cross section that the customer required. The DynaBearing design allowed for more rollers than the polyamide cage yet was able to operate in temperatures up to 200 °C. The thrust washers in the DynaBearing were made from impact resistant case carburized 8620 which provided extra insurance in hard drilling formations. The DynaBearing could also be produced in small or large quantities with 4 to 6 weeks lead time, with each component engraved for traceability which is a requirement for the downhole industry.

Sixteen years after the introduction of the DynaBearing into the market, Tackpoint continues to design and produce custom thrust bearings for downhole sealed mud motor manufacturers around the world.

Tackpoint has also expanded its custom bearing designs and solutions well beyond the original DynaBearing.

Each year the market for custom bearings continues to grow as the traditional bearing companies are unable to produce or react to small run special bearings with short lead times. This has created new opportunities for special radial needle bearings, thin section ball bearings, mud lube stack bearings and combination radial / thrust bearings.

These new bearing solutions challenge the Tackpoint team to continue to raise the bar with innovation in both design and manufacturing.

The Tackpoint engineering team consists of a group of bearing engineers with combined bearing industry knowledge of nearly 70 years. The group uses advanced bearing calculation programs and Finite Element Analysis to analyze and create innovative

bearing solutions for any downhole bearing application. These solutions include swivels, liner hangers, pulsing tools and both sealed or mud lube directional and steerable drilling tools. Whatever the application, the requirements are always high capacity, low lead time and reliability in a harsh environment. In the presence of drilling mud, special materials and coatings are always being reviewed and utilized to improve the reliability and durability for these downhole applications.

DynaBearing in a tandem stack arrangement

Quality control and documentation have always been demanded for products being supplied to the downhole industry. With API standards, the level of documentation, certification, and process control required by the industry has increased to a new level. In addition to ISO 9001 certification, Tackpoint works closely with our local and major international customers to assure that our processes are consistent and compliant so that our products can be used in their tools and applications. Regular ISO and customer audits are also part of our continuous improvement program that allows Tackpoint to stay ahead of the dynamic industry standards.

Visit Our Booth #3466

Many Oil & Gas suppliers were conceived out of necessity. Tackpoint is a company that was born to fill the need in the niche bearing market where standard catalog bearings can not do the job. We started with downhole applications but have expanded into other markets. We are based in Edmonton, Alberta Canada with additional sales people in Houston Texas. Our bearings are operating all around the world, deep below the earth’s surface, and beneath the ocean floors. We would like to learn about your difficult and demanding bearing applications. Please contact us at and visit our website. If you happen to be in Houston May 5 – 8, please visit our booth # 3466 at the Offshore Technology Conference and come talk to the Tackpoint engineering and sales team. •

“The Tackpoint engineering team consists of a group of bearing engineers with combined bearing industry knowledge of nearly 70 years.”

CONTACT DETAILS Tackpoint

For more information, please visit www.tackpoint.com

Mud Lube 4 Point Stack bearing 23 • Oil and Gas Innovation

T: +1 780-437-9510 E: info@tackpoint.com

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NEWS - FAR EAST

BP Bulwer Island Refinery Processing To Halt In 2015

Husky Energy Delivers Production at the Liwan Gas Project in the South China Sea

BP announced today that it intends to halt refining operations at its 102,000 barrels per day (bpd) Bulwer Island refinery in Brisbane, Queensland by mid-2015.

Husky Energy and CNOOC Limited have commenced first production at the landmark Liwan Gas Project in the South China Sea.

Andy Holmes, President of BP Australasia, said that the growth of very large refineries in the Asia-Pacific region was driving structural change within the fuels supply chain in Australia and putting huge commercial pressure on smaller scale plants.

“It’s against this background that we have concluded that the best option for strengthening BP’s long-term supply position in the east coast retail and commercial fuels markets is to purchase product from other refineries.

“And while more of our transport fuel demand will be met by imports in future, ample supplies are available to maintain Australia’s energy security.”

Holmes continued: “While this decision will significantly improve our competitive position, it will result in job losses and I would like to acknowledge the enormous commitment and contribution made over many years by our staff at Bulwer Island. We will be doing everything we can to support them through this transition.”

To ensure no disruption to customers, alternate supply arrangements have been made and this includes imports of Jet fuel and a long-term agreement with Caltex for the provision of motor spirit and diesel from the nearby Lytton refinery.

It is expected that it will take some twelve months to implement the changes required to maintain supply and safely shutdown the process units.

Once processing has been halted, the import jetty, aviation fuel tanks and associated pipelines will remain operational while other storage tanks and pipelines will be placed on a care and maintenance basis pending a decision to convert the site to a multi-product import terminal.

The processing units will be isolated and made safe while plans for their eventual removal and any environmental remediation are developed.

BP currently employs some 380 staff at the refinery and between now and mid-2015 this is expected to fall to around 25.

Tim Wall, Managing Director of Bulwer Island refinery, said: “This is a sad day for all of us at Bulwer and I know that these changes will be difficult for our employees.

“We will be putting measures in place to assist our affected employees, including transitional support and job placement assistance.

“Given the quality of our people, I’m confident that those who choose to look for alternative employment will be highly regarded by employers in this area,” said Wall.

“Liwan is Husky’s largest project to date and places us inside the door of one of the fastest growing energy markets in the world,” said CEO Asim Ghosh. “It was a massive undertaking and is a great achievement for deepwater gas production in the Asia Pacific Region.”

Located approximately 300 kilometres southeast of the Hong Kong Special Administrative Region, the project consists of three fields: Liwan 3-1, Liuhua 34-2 and Liuhua 29-1, which share a subsea production system, subsea pipeline transportation and onshore gas processing infrastructure.

The Liwan 3-1 field has started production, with initial natural gas sales expected to be approximately 250 million cubic feet per day (mmcf/day) gross and increasing to approximately 300 mmcf/day in the second half of 2014. Initial sales of condensates and natural gas liquids from Liwan 3-1 are expected to be approximately 10,000 to 14,000 barrels of oil equivalent per day (boe/day) gross.

The Liuhua 34-2 field will be tied into the Liwan infrastructure in the second half of 2014, subject to final approvals. Production from the Liwan 3-1 field is scheduled to go offline for approximately six to eight weeks to provide for the tie-in of the field.

Following the tie in of Liuhua 34-2, combined gas sales are anticipated to increase to approximately 340 mmcf/day (gross). Natural gas from both fields will be processed at the onshore gas terminal at Gaolan and sold to the mainland China market, with initial gas production covered by fixed-price gas sales agreements.

Total gas sales are expected to rise towards a range of 400 to 500 mmcf/day (gross) with the planned tie-in of the Liuhua 29-1 field in the 2016-2017 timeframe.

Production from Liwan will contribute to the Company’s growth this year as per overall guidance. The startup was achieved during one of the most extreme weather seasons in recent history in the South China Sea. Husky expects to achieve the lower end of its Asia Pacific production guidance of 35,000 to 45,000 boe/day.

Husky holds a 49 percent interest in the Production Sharing Contract (PSC) for the Liwan Gas Project and operates the deepwater infrastructure. Its partner CNOOC Limited holds a 51 percent interest in the PSC and operates the shallow water facilities and onshore gas terminal. The first stage of the US$6.5 billion project connecting the Liwan 3-1 field and work to date to tie in the Liuhua 34-2 field have been completed on budget.

The Company continues to advance a rich portfolio of opportunities in the Asia Pacific Region, including shallow water gas developments offshore Indonesia and exploration prospects offshore Taiwan. •

The Bulwer Island refinery was built on reclaimed land by Amoco between 1964 and 1965 and was bought by BP in 1984. Over the years it has been subject to a number of modifications and improvements and in 2000 was significantly upgraded to produce low sulphur fuels. •

25 • Oil and Gas Innovation

E & P - AUSTRALASIA

Greater industry collaboration is needed say Australian oil & gas leaders

Australia’s oil and gas industry must fix its sights on developing greater collaboration as it brings a range of mega projects into operation, according to a group of sector leaders at a DNV GL-hosted briefing and round table event in Perth.

The need for oil and companies to become more coordinated was a hot topic at the DNV GL event, which involved more than 30 industry executives talking under Chatham House rule. This assertion was sparked partly by media attention in February 2014 on the construction of three giant LNG plants side by side on Curtis Island in Gladstone, Queensland, resulting in billions of dollars of duplicated investment. Similar overlaps have been flagged elsewhere.

“The Australian oil and gas industry is simply not collaborating enough. Operators and suppliers across the country would benefit greatly by sharing best practice and the lessons they have learnt in a structured forum. We are doing a lot of things for the first time here. We should be sharing our experiences,” said a board member of an offshore services company during the discussions at the DNV GL-hosted event.

Another participant in the roundtable discussions commented that companies in Australia seem to have an issue with working together, which doesn’t make sense considering that the majority of the country’s

major projects are being developed by joint ventures.

Richard Palmer, Regional Manager, DNV GL Oil & Gas - Australia, New Zealand and Papua New Guinea, said “If we want to maintain security of energy supply, our industry has to set our sights on working in deeper and harsher conditions, and keep pushing the boundaries of safety, reliability and performance in our projects and operations. Industry collaboration will be central to achieving that.

“DNV GL has an important role here in bringing together some of the oil and gas sector’s best known operators, suppliers, regulators and industry bodies to develop and maintain industry best practise. We offer open access to more than 170 international oil and gas industry standards and recommended practices. As DNV GL’s presence in Australia continues to grow, we are firmly committed to helping our customers drive innovation through industry collaboration.”

Some senior leaders at the DNV GL’s roundtable discussions agreed that the government also has a role to play in helping Australia’s oil and 26 • Oil and Gas Innovation

i gas industry to work together more effectively.

“The government fines operators who don’t invest in innovation. This doesn’t encourage a long-term view on collaboration. We need the government to facilitate us working together, not force us,” said a senior safety manager for an Australian mega project.

Other contributors suggested that companies should do more to foster internal collaboration before they address the approach of crossindustry working. “The organisational set-up of the bigger oil and gas companies is extremely complex. I sometimes get the feeling that the left hand doesn’t know what the right hand is doing with some operators, and that is an issue that needs to be addressed properly if we are ever going to collaborate effectively as an entire industry,” disclosed a senior manager for an international oil company.

The drive towards greater collaboration was also highlighted in DNV GL’s report, Challenging Climates: The outlook for the oil and gas industry in 2014, in which nearly half of respondents (49%) say they will need to increase alliances with others to share knowledge in order to cope with more challenging environments. •

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E&P

Case Study: Self-Lubricating Bearings

Oil and Gas Innovation presents an in depth look at the importance of self-lubricating bearings for a range of applications in many sectors. Federal-Mogul DEVA out of Germany helps us take a closer look at why maintenance-free bearings are considered a standard in offshore equipment for over five decades. We also look at the Hardanger Fjord Bridge Project.

Federal-Mogul DEVA is known worldwide, particularly for manufacturing maintenance-free, self-lubricating sliding bearings fulfilling the highest standards in industrial applications. At their location in Stadtallendorf/ Germany, they use state-of-the-art equipment to develop, test and manufacture bearing systems from 1 to 32,000 mm in diameter.

Self-lubricating bearings are used whenever conventional solutions such as greased bronze are not practical, can´t be realized for technical reasons or their function cannot be guaranteed. The focus will primarily be on applications with very high loads but relatively low sliding speeds.

The tribological process within self-lubricating sliding materials, whether metallic or non-metallic is basically the same: Micro-movement generates the so-called micro-wear on the sliding surface where the embedded solid lubricant is released. This solid lubricant (which may be graphite, PTFE or others) is transferred to the mating material where it forms a stable lubricating film between bearing and shaft and safeguards the function of a bearing system.

Oil and Gas Innovation takes a look at the different types of bearings which are applicable for the offshore industry: The Traditional solution In recent years, users were relying almost exclusively on high-strength, corrosion resistant aluminum-bronze in such cases, with self-lubricating properties generated by the insertion of solid lubricant plugs (usually compressed graphite or PTFE). deva.glide: This proven bearing concept will be intensively used as well in the future with the main focus on large spherical bearings and cylindrical bearings with inner diameters of 500 mm to 4000 mm. deva.glide® materials consist of highly wear-resistant copper cast alloys showing sliding surfaces with evenly provided solid lubricant plugs according to the so-called “macro distribution“ principle. These plugs are arranged according to the movement requirements. The high density of the bronze ensures high stability under load along with good dirt particle embedding properties into the lubricant plugs.

From a technical point of view, however, it is most crucial to ensure that there is sufficient movement in this kind of bearing system over the entire life in order to achieve an “overlap” between the lubricant depots. This is the only way a uniform lubricant film can be continuously built up on the mating material. Therefore it is technically no longer appropriate to use this system for applications with very small angular or micro-movements deva.glide®

Metallic based options by Federal MogulDEVA deva.metal® is a family of high performance, self-lubricating bearing materials. The deva.metal system is based on four main groups – bronze, iron, nickel and stainless steel – each containing dry solid lubricant, most commonly graphite, uniformly dispersed within the metal matrix.

Important selection criteria are the sliding speed, specific load, temperature and other application- specific influences.

deva.metal®

deva.bm® (bottom right) is a self-lubricating composite bearing material, comprising a seawater resistant stainless steel backing with a sliding layer of deva.metal.

Additional options by High Tec composite materials However, it’s not only metallic bearing materials which are used in the offshore sector. Moreover heavy-duty, durable polymeric composite systems play an important role in the decisive process towards a suitable bearing material these days. Their suitability also includes applications involving sustained high loads, low sliding speeds in comparison with metal solutions which are supplemented, where other properties are required. Significant increased demands in a very low wear rate, in a high corrosion resistance (especially seawater), in a low weight and, above all, in a most consistent coefficient of friction at low levels have caused a shift of mind set in offshore applications.

deva.tex®

deva.tex® is a self-lubricating, glass-fibre reinforced composite bearing material which is produced using a special winding technology. The base material ensures high strength, while the sliding layer contains special non-abrasive fibres and solid lubricants which ensure excellent tribological properties even in damp environments or in the event of edge loads. The solid lubricants were developed to give extremely low coefficients of friction and wear rates in both wet and dry-running conditions. Therefore alternative solutions based on “High-Tec polymers” are gaining increasing importance and approaching areas where metallic materials were used successfully for decades. deva.tex® 552 as an example has been developed specifically for under water applications. Current examples for that kind of new approach in the offshore/subsea market are various riser applications like tensioning systems, hang-offs and connectors or sliding plates for turret systems, stab connectors for ROV´s just to mention a few.

Reliable compliance with maximum sliding-bearing wear during service life Which material in the end is the right choice, is a matter of reliable compliance with maximum permissible bearing wear within the scheduled service life. Characteristics such as friction coefficient, corrosion resistance, thermal stability and ductility are important. Federal-Mogul Development Engineers and Applications Engineers can meet these requirements with self-lubricating sliding materials developed for this purpose.

Maintenance-Free Bearings from Federal Mogul Support One of the World’s Longest Suspension Bridges August Stadlmayr, Managing Director from Federal-Mogul DEVA GmbH explains how self lubricating bearings were vital to completion of the Hardanger Fjord Bridge in southwest Norway. It will be one of the largest in the world, spanning 1,310 meters (4,297ft) between pylons. A total of

The most severe changes can be found in Fairleads & Chain-stopper.

The key word here is “ Out of plain bending”! Valid for decades, solutions with plugged bronze are increasingly replaced by high-tec composites. Those kinds of applications shall be designed by today´s expectations for 20-25 years lifetime, therefore demanding essentially low friction values and wear rates. However, demands for safety and reliability are also valid for fiber-wound material, so form stability nondelamination & non-swelling properties are “a must” for a filament material!

deva.bm®

128 spherical plain bearings using Federal-Mogul’s DEVA® self-lubricating material technology will accommodate the small but essential movements that occur between the bridge and its supporting cables.

Hardanger Fjord Bridge

“Wind pressure, load and vibrations from traffic flow and temperature changes are all contributors to road movement on suspension bridges,” explained Stadlmayr, “The Hardanger Fjord bridge was particularly challenging because of its length and the loads generated, so we are pleased to have developed such a low-maintenance, yet highly effective solution.”

Conventional roller bearings were not wellsuited for the prolonged, minute movements of the bridge while under constant heavy load and could potentially suffer from surface failures called ‘brinelling.’ Federal-Mogul’s thin walled, selflubricating sliding material, deva.bm®, addresses this issue by providing a larger load-carrying surface, providing sufficient durability for the life of the bridge without repair or replacement.

The design of each bearing installation ensures that even if the sliding layer became damaged by exposure to loads in excess of the design values, the structure of the joint is protected and the plain bearing would function at a reduced level.

The complete bridge includes 120 spherical plain bearings with a shaft diameter of 160 mm and eight with a shaft diameter of 300 mm, used for the main retaining cables adjacent to the two bridge towers. The bearing solutions for these exceptionally challenging requirements was developed by Federal-Mogul DEVA GmbH, based in Stadtallendorf, Germany, where engineers used a combination of materials from DEVA’s standard, well-proven product range.

The joint balls are made from stainless steel, which is pressed into a plain bearing made from deva.bm. A low-friction sliding bearing consists of a backing comprised of steel, stainless steel or bronze, with a deva.metal® surface layer. This surface layer is a bronze material manufactured using powder metallurgy – it is not porous and oil-impregnated, but rather highly compressed and coated with a layer of solid lubricant material, such as graphite or PTFE.

ideal for dry running at slow sliding speeds with very high resistance and are well-suited for extreme temperatures and corrosion.

The bearing housing forms a two-part spherical ring, also lined with deva.bm, to provide an extended, maintenance-free service life, high static and dynamic load capacity, and low friction properties resulting from layers of homogeneous solid lubricants. The design is completed using thrust washers that are also made from deva.metal, which absorb axial forces. The bearings are

This is not the first time that DEVA plain bearings have provided reliable, lowmaintenance solutions for bridge construction projects. A number of bridges around the world benefit from this Federal-Mogul technology, including the flap bridge in the port of Valencia, Spain over which the Formula 1 race circuit passes; the bridge over the Peene near Anklam, Germany; and the Rethe Bridge in Hamburg, Germany. If you would like more information on our products please contact us directly. •

CONTACT DETAILS Federal-Mogul DEVA GmbH http://www.deva.de Phone: +49 (0) 6428 701 0 E-mail: info@deva.de

By: Dipl.-Ing. Martin Müller-Brodmann is the is Senior Head of Engineering of Research and Development, Hubert Hilp, Application Manager Offshore & Marine Federal Mogul DEVA GmbH & Mylene Daugan, OGI. 30 • Oil and Gas Innovation

TRANSPORT & LOGISTICS - SPECIAL

The Monitoring of Internal Corrosion is Vital For Many Reasons, and It’s Not Just Asset Protection.

Oil and Gas Innovation sits down with Ryan Finlayson, President of Rysco Corrosion Services to discuss why oil and gas companies should always keep a close eye on signs of internal corrosion possibly developing in their pipelines. Of course it’s a matter of money, but it’s also a matter of environmental protection and ultimately a matter of an oil company’s public perception.

OGI: Could you please start by telling us the significance of the internal corrosion problem?

Ryan: In pipelines, internal corrosion can be a significant cause for the failure (leak or rupture where product is lost) of pipelines.

In our geographic area (Alberta, Canada), internal corrosion accounted for 54.8% of the failures from January 1, 1990 to December 31, 2012 [AER Report 2013-B]. It is a leading cause of failures amongst all of the tracked categories.

Internal corrosion is further defined (although not necessarily statistically tracked) by the specific mechanism that causes or attributes to the corrosion. These mechanisms are based on the local environment that can be due to operating pressures; temperatures; flow regimes; liquids, solids, and gas chemistries; and the presence of contributing bacteria.

The real significance is the consequence of a failure, and of course where that failure occurs within the pipeline system. There are public safety and environmental considerations due to the release of hazardous products that are within the pipeline. These considerations are further amplified based on proximity to habitation, sensitive surface environments, water bodies, and flowing water bodies.

With internal or external corrosion, the significance is real and the consequence of a failure can be real. Not to minimize any of this, but the considerations are the same for any man made infrastructure. Everything is subject to corrosion, whether it’s bridges, residential plumbing, vehicles, or airplanes.

Ultimately, everything wants to return to its natural state, and its base elements.

OGI: Internal corrosion is a leading cause of pipeline failure, and one of the most difficult to detect. What are the potential solutions to internal corrosion, and how does Rysco help companies avoid or deal with this problem?

Ryan: There are several approaches to internal corrosion protection. Common considerations in the design phase of pipelines is to add increased material thickness (corrosion allowance), or to consider changes in metallurgy to more corrosion-resistant materials. However, it’s not always just a simple metallurgy change.

Different alloys have different physical properties – some of which are desirable and some of which aren’t. Mild carbon steels have different physical attributes than stainless steels. Stainless steels, while generally having a better corrosion resistance (due to chromium oxide protective layer) can be subject to cracking failures in high chloride

environments. So while limiting conventional internal corrosion mechanisms, another failure mechanism is introduced.

Composites (plastics and hybrids) are another consideration, although they may have limiting physical properties as well.

These are the reasons why we don’t see common infrastructures made from stainless steels – there’s no magic bullet.

Rysco Corrosion Services helps companies combat corrosion by providing measurements of the internal corrosion rate in pipelines, and by providing support for the identification of the mechanisms. Understanding the rate of corrosion and the mechanisms allows pipeline operators to design and perfect corrosion mitigation strategies to save the infrastructure. With good monitoring, the pipeline operator can evaluate the effectiveness of their strategies, and measure the effects of any changes in those strategies.

Also, changes in production and their corrosion effects can be identified too.

OGI: What are the potential consequences if internal corrosion is not dealt with

adequately?

Ryan: The consequence of not adequately addressing internal corrosion will be the eventual failure of the pipeline, resulting in a release of the product transported within the pipeline. The primary consequences are always the potential impacts to public safety and to the environment.

The degree of the impact will be dependent on the volume of the product released, and the nature of the product – for instance how hazardous the product is.

There are additional consequences as well.

There is the real effect of public opinion.

There are financial, legislative, legal, and regulatory impacts to the pipeline operator.

Additionally, the pipeline that has failed will not be able to transport the product until it has been repaired and any investigations are completed. In some jurisdictions, there is also the potential for civil liability for the decision makers of the pipeline operating company.

These are all real consequences that pipeline operators take into consideration. In the end, from a purely cost-benefit analysis, it is always

much less expensive to monitor and mitigate corrosion, then it is to deal with the aftermath of poor due diligence.

OGI: Could you tell us an example of the possible consequences of a pipeline rupture due to this problem?

Ryan: The primary concern with a pipeline rupture is public safety and the potential for environmental damage. The impact of a pipeline failure is dependent on the physical properties of the commodity, the method of failure, and the relative proximity to habitation and sensitive environmental areas.

Pipeline operators generally speak in terms of risk. Risk is usually the determined probability of failure multiplied by the determined consequence. By this simple math, low failure probability pipelines that operate within high consequence areas can still represent substantial risk – and are treated accordingly.

Secondary concerns are related to the expenses due to lost production, environmental mitigation/reclamation, and repair of the infrastructure and pipeline assets. These costs are somewhat dependent on the magnitude of the damage, and further related to the area where the failure has occurred and any damages to public or private infrastructure.

There are examples available of internal corrosion causing failures in oil and gas pipelines. Perhaps the most widely reported and investigated instance in North America in recent history is the pipeline explosion in Carlsbad, New Mexico. The root cause of this failure was determined to be internal corrosion (MIC) in the 30” natural gas pipeline. The failure occurred in June 2000.

As a result of this investigation, many international organizations began to actively create standards and regulations regarding internal corrosion mitigation and monitoring – a process that continues to evolve today.

OGI: What sort of industry regulation & government legislation apply to the monitoring of pipelines in Canada?

Ryan: There are a few levels of jurisdiction in Canada when it comes to industry regulations and associated legislation. Within provincial boundaries, the provincial governments have jurisdictional control through their pipeline regulatory bodies. Pipelines that cross provincial boundaries are regulated by the Canadian National Energy Board (NEB).

All of the regulatory organizations reference standards and procedures from accepted and respected international bodies such as ASME, API, NACE, and ASTM. These regulations will cover pipeline design and construction requirements, and operational and maintenance requirements – which

Internal corrosion can be a significant cause for the failure of pipelines.

includes internal and external monitoring requirements.

In Canada, all pipeline operations follow the Canadian Standards Association (CSA) code Z662 for Oil and Gas pipeline systems. This code is updated and revised on a 4 year cycle, or as required.

OGI: Where can we expect to see Rysco products and services in the short to medium term future?

Ryan: At the time of this writing, Rysco Corrosion Services Inc is primarily engaged in oil and gas fields throughout the Western Canadian Basin – from Ft Nelson in north east British Columbia to Weyburn in south east Saskatchewan. We work in onshore conventional oil and gas production, and in SAGD production.

In the short to medium term, expect to see Rysco Corrosion Services Inc’s representatives in international locations. We are currently entertaining opportunities in Africa, the Middle East, and India.

Weight Loss Corrosion Coupon Pit Morphology

As always, we are evolving and growing our expertise into different areas in order to meet the demands of our clients. Expect to see our service offering grow to include additional analytical testing, enhanced microscopy, cathodic protection, and

offshore services monitoring. •

related

to

corrosion

Rysco Corrossion Service Inc +1.877.899.5988 / info@ryscocorrosion.com Mylene Daugan contributed to this article

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TRANSPORT & LOGISTICS REPORT- DUTCH PORTS

Netherlands up in Logistics Performance Index 2014 In the 2014 LPI report of the World Bank, the Netherlands ended at the second position, three higher as compared to the previous Index. Germany again showed the world’s best overall logistics performance.

Restricted to infrastructure, and Belgium ended three. Restricted to infrastructure the top three remained the same: Germany, Singapore and the Netherlands.

The report, Connecting to Compete 2014: Trade Logistics in the Global Economy, ranks 160 countries on a number of dimensions of trade -- including customs performance, infrastructure quality, and timeliness of shipments -- that have increasingly been recognized as important to development. The data comes from a survey of more than 1,000 logistics professionals. The World Bank Group’s International Trade Unit has produced the Logistics Performance Index (LPI) about every two years since 2007.

Report The gap between the countries that perform best and worst in trade logistics is still quite large, despite a slow convergence since 2007, according to a new World Bank Group report released today. This gap persists because of the complexity of logistics-related reforms and investment in developing countries, and despite the almost universal recognition that poor supply-chain efficiency is the main barrier to trade integration in the modern world.

The report, Connecting to Compete 2014: Trade Logistics in the Global Economy, ranks 160 countries on a number of dimensions of trade -- including customs performance, infrastructure quality, and timeliness of shipments -- that have increasingly been recognized as important to development. The data comes from a survey of more than 1,000 logistics professionals. The World Bank Group’s International Trade Unit has produced the Logistics Performance Index (LPI) about every two years since 2007.

“The LPI is trying to capture a rather complex reality: attributes of the supply chain,” said Jean-François Arvis, Senior Transport Economist and the founder of the LPI project. “In countries with high logistics costs, it is often not the distance between trading partners, but reliability of the supply chain that is the most important contributor to those costs.”

In the 2014 LPI report, Germany showed the world’s best overall logistics performance. Somalia had the lowest score. As with previous editions, the 2014 report finds that high-income countries dominate the world’s top-ten performers. Among low-income countries, Malawi, Kenya, and Rwanda showed the highest performance. In general, the trend across past reports has been that countries are improving and low-performing countries are improving their overall scores faster than high-performing countries. •

Zeeland Seaports: Excellent Access to the North Sea Offshore Industry.

Oil and Gas Innovation presents an in depth look into one of the most important ports in Northern Europe for Europes Oil and Gas Industry.

Zeeland Seaports is a one stop shop hub for the offshore, marine, renewable and many other sectors. Logistically it it has congestion-free links to the hinterland by rail, road, inland waterway, shortsea shipping and pipeline.

OGI’s Mylene Daugan asks the seaport about topics such as it’s offshore capabilities, breakbulk capabilities and it’s links to the North Sea Oil and Gas sector.

Zeeland Seaports 37 • Oil and Gas Innovation

Connected to the European hinterland through a dense network of railway, road, inland waterways Zeeland Seaports, the ports of Vlissingen and Terneuzen, has many advantages when it comes to handling various types of cargo: the location on open sea, the depth of 16.5 metres, the congestion-free hinterland connections and the specialised terminals.

But it’s the people who really make our port unique. Everyone who does business with the Zeeland ports becomes acquainted with professionals who take pride in their work and their ports. And, as you know, pride is what fuels motivation. We know what is important for our clients and it is that extra step that makes all the difference.

OGI: Could you please start by telling us the significance of the port’s location, in term of the Oil and Gas Industry?

Zeeland Seaports: Being located close to the North Sea, Zeeland Seaports is ideal for oil and gas industry. First because it is relatively close to the oil and gas fields so ideal for transporting new material. Our port can be reached without any locks or height, width and airdraft restrictions. Secondly we have large storage capacity for liquid bulk with companies such as Vesta Terminals, Vopak and Oiltanking.

Third: We have a large cluster of petrochemical industry like DOW, Yara, Zeeland Refinery, Arkema, Invista, using oil, gas and oil related products as raw material or source of energy.

Fourth: we have a large cluster for offshore activities: terminals for transport and handling of project cargo like Verbrugge and BOW Terminal, manufacturing companies like Heerema, GS Staalwerken, Overlasko, Hoondert and VDS, maintenance and conversion companies like Damen Shiprepair Vlissingen, VDS Offshore Construction Terminal, and service providing companies such as Multraship Towage and Salvage and even a heliport at only 3,5 kilometers from the port. You can name us the one stop shop port for the industry.

OGI: How have the Zeeland Seaports fared in the offshore market over the years?

Zeeland Seaports: In the last few years from our port more than 20 offshore wind projects have been taken care of successfully. New projects are already fixed for the next 2 years.

So I think we did well.

38 • Oil and Gas Innovation

Offshore Within the offshore market, Zeeland Seaports has been a reliable and sizeable player for many years, thanks to its strategic location vis-à-vis many offshore oil and gas rigs and wind farms in the North Sea, and also thanks to the excellent nautical access for installation vessels: no locks and hardly any waiting times.

And all of this is combined with excellent access via inland shipping.

Offshore cluster The strong offshore cluster that the Zeeland port has built up through the years offers numerous synergetic advantages. Just take the wealth of experience among logistics service providers when it comes to the storage and handling of different types of large objects, or the specialist knowledge on assembling parts. It is not for nothing that this year the twentieth wind farm was delivered from the Zeeland port.

Flexibility The proven track record of existing companies provides plenty of opportunities for new commercial activity that can further reinforce the offshore cluster. Such as for

producers of large objects, with their subcontractors and service providers, or logistics companies which specialise in heavy-lift operations. And whether it’s a question of physical space or facilitating new activities, flexibility goes without saying at Zeeland Seaports.

OGI: We know the seaport is a great accessibility point for the North Sea, but could you explain in detail the various other type of transport which would be available from the port, such as road, rail and even inland waterways?

Zeeland Seaports: Zeeland Seaports is connected to the European hinterland through a dense network of railway, road, inland waterways and even pipelines. Also there are various shortsea connections to other European ports. The big advantage is that our port is in an area without any congestions on road, rail and waterways so goods can be transported easily and fast, not only in, but also out over land and sea.

OGI: We’re seeing developments in world trade are putting increasing pressure on ports to have more space for breakbulk cargo, how is Zeeland Seaports positioned to deal with this effectively?

Zeeland Seaports: We are one of the fastest growing ports for breakbulk. One of the main reasons for this are the various terminals specialized in breakbulk and project cargo.

For future developments we still have plenty of room in both Vlissingen as in Terneuzen port area.

Breakbulk Breakbulk plays a key role in the commercial activity within the Zeeland ports. Zeeland Seaports offers the flexibility to process a wide range of breakbulk cargo quickly, efficiently and for optimum costs. Not only thanks to unhindered access from the sea and a trimodal connection to the hinterland, but definitely also due to the presence of specialist logistics service providers.

Strong clusters Within Europe, Zeeland Seaports has acquired a leading role as storage and handling location for wood pulp and aluminium, for example. Partly as a result of this, the clusters forest products and metals are very well represented in the Zeeland ports.

These clusters are only growing stronger because companies in the port dare to invest in expanding and modernising their capacity.

Room for growth Zeeland Seaports sees opportunities for growth when it comes to breakbulk. The leading role it already occupies in a number of market sectors serves as an example of how the Zeeland port can grow further in the storage and handling of other types of cargo, such as metals.

The developments in world trade and the changing logistical concepts demand more space in seaports. This also applies to a seaport that has efficient access by inland shipping, coastal shipping, rail and road transport.

Zeeland Seaports can offer this space and these distribution possibilities. Furthermore, the shipping companies benefit from our central location and the shorter sailing times.

OGI: How do you accomodate a company which handles large objects or even a company that specializes in heavy lift?

Zeeland Seaports: In our port all services are available for helping these companies.

We have rooms on the landside for storage, maintenance and production. We have room at the quays to accept all types of craneships, in Vlissingen we have no locks and no cruiseships and ferries moving in and out so ships can enter without waiting.

OGI: Can you tell our readers of any exciting future developments regarding the ports?

Zeeland Seaports: We are presently extending the quay of BOW (Breakbulk & Offshore Wind Terminal) with 175 meters, giving a total quaylength of 525m. In additional we are developing an area of 40 hectares dedicated to offshore and heavy lift activities, especially for the manufacturing of the new generation offshore wind parts, bringing production closer to logistics.

OGI: Thank you very much for your time. • Zeeland Seaports Schelpenpad 2, P.O. BOX 132 NL-4530 AC Terneuzen Tel: +31 (0) 115 647400 Fax: +31 (0) 115 647500 e-mail: port@zeelandseaports.com

TRANSPORT & LOGISTICS

Heavy-Duty Lifting and Material Handling Equipment For Harsh and Corrosive Marine Environments.

Module Handling Tower and Moonpool deck hatches

40 • Oil and Gas Innovation

AXTech AS is an engineering company providing design, delivery, installation and service of special equipment related to heavy lifting and material handling for the marine and offshore industry.

AXTech Supplies a Wide Range of A-Frames and Skidding equipment

AXTech’s main products are: • • •

• •

•

Winches and Winch systems A-Frames Towers for Module Handling and Light Well Intervention Skids, Trolleys and Movable Platforms Active and Passive Heave Compensation Systems Power Drives

Manufacturing of our products is subcontracted to approved fabrication facilities worldwide with a favourable location for the delivery of the equipment.

Winches AXTech design and deliver a wide range of winches tailor made to suit Clients requirements.

Typical range is from 10Te to 850Te capacity and with a wire capacity of 100m to 3000m.

All tailored and engineered to suit Client specific requirements.

• • •

For steel wire or fibre rope applications Electric or Hydraulic drive systems With or without Active Heave Compensating (AHC) System

Module Handling Towers AXTech provides advanced, flexible, reliable and safe tower systems. Tailor made solutions based on functionality and vessel layout. Tower design may allow for fast mobilization by “single point lift” solutions or being integrated in vessel structure. We also provide tower systems to be

integrated in a vessels hangar. Capacity from 20T to 600T @ 3000m water depth Including:

request). A-Frames may be designed with standard or wide angle design specially designed as defined by Client.

• • •

• •

Trolleys AXTech provides most types of deck skidding trolley systems. All systems specially designed to suit vessel and clients requirements.

Lift- and Guide Wire Winches Control cabin/ system Cursor guide system with adjustable prongs Hatch and Skidding systems Electric or Hydraulic drive systems

A-Frames AXTech deliver a wide range of A-Frames and LARS systems. All may be specially designed to suit Clients requirements. Typical range is from 50T to 500T (even bigger on

Compensators (Heave/Tension) The Heave/Tension systems are offered as two alternative principle designs.

• Integrated directly in the winch

drive system. Hydraulic or electric drives.

• Designed as in-line and separate

free standing cylinder unit.

Detail design and capacity is pending on the vessels movement.

Hydraulic/ Electric Power Units AXTech designs and delivers all required HPUs and/or EPUs (incl. brake resistors) for operation of our equipment. Typical range is 200kW and up to 10.000kW. •

CONTACT DETAILS AXTech AS Fannestrandvegen 85 PO Box 2008, 6402 Molde, Norway Tel.: +47 911 90 200 E-mail: axtech(@axtech.no Web: http://www.axtech.no

400T Lifting Tower for Asgard B Gas Compression Project 41 • Oil and Gas Innovation

TRANSPORT & LOGISTICS

High Quality Cylinders Are Vital For Heavy Lift Operations in the Oil and Gas Sector The oil and gas industry has been using the best equipment designed to highest standards available at a time. Moving heavy loads or precise controlling of heavy equipment or tools with high reliability in harsh environment is key part of many applications today.

RUHFUS Systemhydraulik GmbH a privately owned SME established in 1907, has been involved for over 60 years in the design and manufacturing of special hydraulic cylinders and related intermediate products.

The company offers complete system engineering and turnkey packages for oil and water hydraulics. Dimensions and sizes of these hydraulic cylinders are quite impressive by either up to 17 meters stroke and 670 mm piston diameter or 3 meters stroke and 1200 mm piston diameter. The total weight of one of those cylinders may easily go up to 25 tons.

Many traditional cylinder manufacturers are looking only for series production of similar cylinders and perform type tests only. In contrast RUHFUS has concentrated on individual solutions and each and every product goes under intensive function and pressure tests before they leave the factory.

We have developed our own calculation systems either internally by our R&D and design engineers or in collaboration with several reputed universities all over Europe.

We reliably calculate all the aspects in details to the individual problem when it comes to calculation of stress, dimensions, deflection or buckling of rods or complete cylinder.

Machining a cylinder body on a CNC milling machine.

Simulations is an integral part of our product development where we simulate for example damping systems with a very close result to reality before a cylinder be detail designed and manufactured.

On the material side, it is not strange for our products to work in constant contact with corrosive agents like chlorides, H2S gas and other highly corrosive chemicals mixed

Hydraulic Cylinders 42 • Oil and Gas Innovation

with oil or gas from production stage up to distribution. Therefore, besides using high alloyed special steels, we also use advanced surface engineering technics for coating parts with different grades of carbides and ceramics like Cr3C2, Al2O3/TiO2, WC as well as traditional coatings like Ni/Cr or welding processes like cladding by Inconel alloys. Based on requirement and type of mechanisms, Tribological properties are

Power Pack & Control Cabinet

carefully considered where we have collected a vast experience from several decades of producing various parts for diverse industrial products.

Our machine park is unique in its type and is available to companies who wish to subcontract specific production processes or buy complex single items made of high strength steels, super alloys, light weight or various grades of stainless steels. In this respect we regularly sell our services of deep hole- drilling, skiving & roller burnishing, precision honing, CNC turning and milling as well as various welding and cladding options to many OEMs in Oil & Gas industry worldwide. Single parts made for OEMs

by RUHFUS has been serving oil & gas industry in many applications like in BOPs, Platform supply vessels, high pressure piston type gas accumulators, actuators controlling gas pipeline valves, drilling mud pumps, refineries and others…

Our custom-designed hydraulic cylinders, power units, electrical controls (PLC or relay-contactor based) are being used in demanding applications such as • Riser tensioner • Heave compensation • Heavy lifting, marine-grade crane

and hoist • Submersible equipment,

underwater machinery • Linear motors, actuators, jacks • Energy dissipation or storage

(cylinder with integrated accumulators) • Jack up, drilling rigs, platforms • Pipe laying vessels, A-frames, salvaging

which are designed based on API, DIN EN, … standards and produced to class requirements, such as: • Det Norske Veritas - DNV • Germanischer Lloyd - GL • Lloyds Register of Shipping - Lloyd’s • American Bureau of Shipping - ABS • Bureau Veritas - BV Special features: • light weight, high pressure cylinders • stainless steel and high strength

material for parts or for complete cylinder • bearings in composite, bronze and stainless • hollow rods and telescopic cylinders • various safety and control valves • corrosion protection options

(carbide, ceramic, nickel-chrome,

hard chrome, cladding

by super alloys) • various stroke measuring systems

like LPM, wire transducer,

temposonic, …

Other services: • maintenance, repair, upgrading,

reconditioning of hydraulic cylinders • parts and spares, spare cylinder • parts for OEMs e.g. for hydraulic-

driven solids pumps, for hydraulic

hammers and so on RUHFUS Systemhydraulik GmbH is a certified company since 1996 by the Bureau Veritas International (BVQI) with the EN ISO

43 • Oil and Gas Innovation

9001 certification of quality management.

Among others, RUHFUS is certified by German railway according to DIN EN 13261 and DB AG – BN 918 275 as well as AD 2000 and DIN EN ISO 3834-2 by TÜV Rhineland.

To manufacture a lasting product, one needs a lot more than just knowing the specification.

Superior hardware and machinery together with high level of expertise and experience are crucial for success. Knowledge of the industry, the specific application, the physical demands and the environmental conditions are crucial to create a trouble free product that will operate for a long time.

RUHFUS specializes in the manufacturing of custom-tailored single and double-acting hydraulic and pneumatic cylinders. RUHFUS develops and designs cylinders that fulfill customer outlines and are also manufactured according to drawings provided by the customer.

Our engineers work closely with your experts to develop cost-effective solutions and guarantee the highest quality. For queries and questions please contact us •

CONTACT DETAILS RUHFUS Systemhydraulik GmbH Büdericher Straße 7 D - 41460 Neuss Germany Tel: +49 2131 914 6 Fax: +49 2131 914 820 Email: sales@ruhfus.com URL: www.ruhfus.com

REFINING & PROCESSING

The Importance of Gas to Liquid Conversion For Commercial Purposes The World Bank estimates that over 150 billion cubic metres of natural gas are flared or vented annually, an amount worth approximately 30.6 billion dollars, equivalent to 25 percent of the United States’ gas consumption or 30% of the European Union’s gas consumption per year, a resource that could be useful using gas to liquid conversion (GTL). It’s no wonder why Petrobras in Brazil has ordered two small experimental GTL production facilities intended to be posted at offshore oil fields too distant or deep to justify gas pipelines to an onshore GTL plant. Gas Technologies LLC out of the United States helps our readers understand this excellent opportunity for the Oil and Gas Industry.

G

The Portable Mini-GTL Operation

asTechno® is the world’s first patented single-step gas to liquids (GTL) conversion process. The company’s non-catalytic technology converts hydrocarbons to highgrade methanol, ethanol or diesel blends onsite, perfect for both offshore and onshore solutions.

Economic GTL solutions GasTechno’s patented single-step GTL conversion process is a proven innovation in the GTL sector. By avoiding the capital costs involved with gas pre-treatment and synthesis gas (syngas) conversion, GasTechno is able to manufacture market-ready, end products with a 50% to 60% CAPEX reduction. Not only does this allow GasTechno to deliver the world’s best GTL economics on mediumsized sites of five million standard cubic feet per day (MMSCFD) to 30 MMSCFD, but it creates the world’s only Mini-GTL market on sites as small as 200,000ft³/day.

Mini-GTL 40

Applying this technology provides oil companies with a working solution for gas capture during onshore or offshore oil extraction. Oil assets previously frozen due to flaring regulations or costly re-injection now have a scalable and profitable solution, allowing oil companies to focus on core operations. Because GasTechno does not require syngas conversion, its facilities have significant weight and size advantages, crucial during onshore or FPSO design, engineering and operations.

Potential for the Shale Gas industry There is a potential for the Gas to Liquid technologies to have a great impact of the Shale Gas and Oil Shale phenomenon of late.

It seems that the breakthroughs which are happening between potential natural gas conversions would apply to surge of Shale Gas usage in places like the United States for example. In 2000 shale gas provided only 1% of U.S. natural gas production; by 2010 it was over20% and according to the U.S. government’s Energy Information Administration

predicts that by 2035, 46% of the United States’ natural gas supply will come from shale gas.

If the research being conducted remains viable all the Shale gas being produced around the world could be converted into usable liquid fuels. This is important for the USA to say the least of their energy security policy, they could potentially find themselves in a position of being energy self reliant by the middle of this century.

Furthermore this process is changing the dynamic of the Petrochemical industry which has traditionally relied on oil to create their products. But with the low price of natural gas, firms are increasingly turning to gas as a source of fuel for their operations.

This could potentially have a profound impact on the price of gas. At the moment due to supply and demand the price of gas is quite low in North America. But with increased usage of natural gas for different operations, the demand would rise, thus creating higher prices for the commodity. This would in turn give producers more incentive to drill in proven shale plays as their profit margin would go up. However, gas to liquids technologies can create more incentives to convert low priced gas into high priced liquid fuels and chemicals. Why wait?

Figure 1 - Value Chain Savings

everything from skidmounted modular solutions (such as GTL In A Box™ and Methanol In A Box™) to four larger commercial scales of plant designs, GasTechno® has a solution for an enormous range of sites. GasTechno® plants are estimated to have up to 70% lower capital costs and 20% lower operating costs over traditional GTL plants at commercial scales.

The technology requires no catalyst and handles carbon dioxide as high as 60%.

GasTechno® is able to generate valuable liquids that integrate with commercially available processes for the synthesis of methanol into diesel, gasoline, olefins, polypropylene, acetic acid, formaldehyde, biodiesel, di-methyl ether, and other market-specific products

Elimination of Midstream One of the main advantages of using the GasTechno GTL process is the elimination of any midstream related processes. Typically a hydrocarbon source goes through a chain of processes before it arrives at a refinery where it is converted into usable commodities such as petrochemicals, fuels, and petroleum.

Midstream processes that require processing and treating, transportation, storage and fractionation are typical stops along the value chain before a hydrocarbon can become a chemical or fuel for example. These steps are obviously costly. Transportation can be through pipes or vehicular, while storage in pressurized tanks, which are usually certifiable for safety can be quite costly. The GasTechno solution actually eliminates the whole midstream process by directly going from upstream production to downstream as illustrated in figure 1.

This elimination of the midstream process would save time, effort and money in the process. quite costly.

extensive review of their process designs, reactor features and chemical reaction fundamentals, I can confidently state that this one step technology of converting natural gas to methanol, when verified for commercial readiness, will alter the technology view which currently exists in the major chemical and petroleum industry…”

GasTechno® Walter Breidenstein, CEO and founder of GasTechno®, explains: “We are an alternative energy company helping gas producers create value from small sources of stranded, vented and flared gas. We work with numerous sources of methane feedstock, including natural, landfill and biogas, for the conversion into liquid fuels and chemicals.” With

(see Figure 2). It is the only proven technology in the world that can do this at low cost and smaller scales than tradition competitors. The GasTechno® process is designed to operate profitably at gas volumes as small as 200 thousand standard cubic feet per day (mscfd) up to 30 million standard cubic feet per day (mmscfd). Because the GasTechno process scales so efficiently, it is the only mini-GTL technology which can effectively monetize associated flare volumes under 700 mscfd.

Flexible offshore technology With everything from skid-mounted modular solutions (GTL In A Box™ and Methanol In A Box™) to four scales of plant design, GasTechno has a solution for an

Dr. Krishna K. Rao, Former Head of New Business Venture Technology (Process Division) & Technology Asset Manager, ExxonMobil Chemical worte about this one step technology, “After having performed my own Figure 2 - Chemical Value Chain

enormous range of sites and gas production peak and decline curves. The company has recently filed new patent applications regarding the use of the technology offshore that deal with the use of both oxygen and air as a feedstock. The unique improvements to the system design will allow the technology to be utilized offshore where other technologies are not economic or practical.

Low-maintenance gas to liquids conversion GasTechno’s simple process of direct partial oxidation and Energy Efficient Recycle® are indifferent to nitrogen content and require no catalyst, resulting in no fouling and low cost maintenance. Its exothermic reaction is paired with a large recycle loop and integrated with a proprietary methanol scrubber system where pure carbon dioxide is captured and utilized. All of this translates into industry first’s in managing CO2 emissions.

Regulation and Environmental Impact As with most sectors, new legislation and regulations have had their impact, however Breidenstein believes that there is more to come. “Early GTL adoption is driven by regulatory requirements. Eventually it will become commonplace but, for now, regulations remain a primary driver.

External pressure to stop flaring is coming from everyone; environmental advocates, shareholders, local communities and landowners all have reasons to curtail flaring,

so we are definitely seeing positive trends.

As awareness around the issue grows, we are seeing some strong moves from governments in North Dakota, Texas, Alberta and Saskatchewan in North America, with similar trends developing worldwide. We believe more needs to be done, but it is nice to see the progress over the last few years.”

Gas Technologies has recently completed a $7 million preferred unit equity private placement offering and is seeking its first round of capital starting April 2014. The companies’ patents were ranked #1 in Ocean Tomo’s IP Innovation Index Top 100 for the State of Michigan in July 2013, edging out some of the worlds most recognized patent brands including; Dow Chemical, Ford, GM, Siemens, University of Michigan, Michigan State University and GE Aviation. GasTechno® has already completed numerous feasibility studies worldwide and is positioning for an aggressive international growth strategy.

GasTechno research and development began in 2004. By 2010, the company’s first pilot facility was in operation, converting natural gas to market-ready products such as methanol and ethanol. The company successfully rolled out its first modular commercial unit using associated flared gas in August 2013. Numerous independent industry professionals have recognized GasTechno’s patents and process, including Crains’ Business in its reporting of the independent Ocean Tomo IP Rating, Nexant ChemSystems, the World Bank’s Global Gas

46 • Oil and Gas Innovation

Flaring Reduction (GGFR) programme and other available references upon request.

GasTechno is currently seeking commercial partners to grow and develop its technology.

Walter Breidenstein, CEO and founder, Gas Technologies LLC Mr. Breidenstein, 48, is the founder and CEO of Gas Technologies LLC, the parent company of GasTechno Energy & Fuels (USA) LLC. He has over 20 years of experience in the fields of oil & gas, renewable energy, and management and has conducted business in nearly 50 countries. In April 2007, he received the ‘Leaders & Innovators’ award by Lawrence Technological University for his contributions to Michigan’s advanced technologies. Walt earned an associate’s degree in Petroleum Technology from Northwestern Michigan College and a bachelor’s degree in Business Administration from Ferris State University, where he co-founded and became president of FACE (Ferris Association of Collegiate Entrepreneurs). GasTechno is currently seeking commercial partners to grow and develop its technology. If you’d like to learn more please use the contact details below.

CONTACT DETAILS GasTechnologies LLC

Name: Walter Breidenstein

Tel: +1 231 535 2914 Fax: +1 231 535 2915

Email:walterb@gastechno.com Web Address: www.gastechno.com

N IO ATPEN TR O IS G OW RE N

WEST AFRICA EXPLORATION & PRE-SALT FORUM 2014 3-5 JUNE 2014 | WINDHOEK, NAMIBIA

Uncovering the Strategic and Commercial Opportunities for Promoting Pre-Salt Exploration and Partnerships in West Africa Leading Industry Speakers include: Immanuel Mulunga, Petroleum Commissioner, Ministry of Mines and Energy, Namibia Obeth Kandjoze, Managing Director, NAMCOR, Namibia Francisco Lopes Cunha, Block Chairman, Sonangol, Angola Gil Holzman, President and CEO, Eco Atlantic, Canada Viannet Okouma, Assets Development Director, Gabon Oil Company, Gabon Jean Pierre Saba, Director of Exploration, SNPC, Republic of the Congo

Visit www.presaltafrica.com for the latest event updates or contact Laurence Allen, Marketing Manager on laurenceallen@dmgevents.com for further information.

Organised by

Bronze Sponsor

Event Sponsor

REFINING & PROCESSING

Process Optimisation: Energy Efficiency Solutions With Waste Energy The Afval Energie Bedrijf (AEB) in Amsterdam has been processing waste for almost a century. The company aims for maximum environmental efficiency, in the sense that waste does not simply remain waste, but is converted into energy and basic materials. The waste is incinerated and the energy released is used to generate electricity, while the remainder of the energy released becomes usable heat. As many valuable materials as possible are reclaimed from the ash residue.

Figure 1: Waste Energy Company Amsterdam (24-02-2014)

Figure 2: Process overview - ReHeater

“For a company aspiring to be a market leader, it is necessary to introduce a breakthrough development to the market every now and then. The High Pressure Compact Header referred to here is just such a Bronswerk development.”

To produce electricity from the available combustion energy, the well-known cycle of steam boiler, a steam turbine (connected to the generator), a condenser and a feed water pump is used. It is also commonly known that the higher the pressure and temperature of the steam supplied to the turbine and/or the lower the pressure and temperature of the steam leaving the turbine, the higher the conversion efficiency is of fuel into electricity.

In a steam turbine not only the pressure of the steam decreases, the temperature also drops increasingly, creating ‘wet’ steam; an increasing amount of condensate forms in the steam. If the water content in the steam becomes too high, it will damage the turbine. As a result the condensate in the steam ultimately determines the achievable outlet pressure and thus to a large extent, the shaft power.

When the steam entering the turbine is superheated steam (dry steam), the moment that condensate formation starts is delayed, and the steam pressure at the outlet of the turbine may be reduced. The result is a higher shaft power. The design goal is that not the moisture content of the exhaust steam determines the pressure at the turbine outlet, but the temperature of the condenser cooling medium, usually the outside air or cooling water.

There is sufficient cooling water at AEB, so in principle a very deep vacuum could be achieved at the outlet of the turbine. But then extreme superheating of the boiler steam would be required. However, the many corrosive constituents in the boiler’s combustion gases limit this temperature, since the already very expensive materials would corrode too quickly.

To break this circle of limited conversion rate, AEB opted for a two-stage turbine, with reheating the steam between the two stages.

The steam – moderately superheated – flows through the first (high-pressure) stage of

the steam turbine, up to a location where, approximately, condensation would start. Here, a connection has been created in the turbine housing for the steam to exit. This steam is then extremely superheated in a re-heater and will enter the second (low-pressure) stage of the steam turbine as superheated steam. A very deep vacuum can now be achieved in this second stage. Using a two-stage turbine with reheating increases the efficiency of the system by more than 30%, which means additional electricity production of over 30% from the same amount of fuel!

The high-pressure steam from the boiler (1) has a pressure of 130 bars. This means an evaporation temperature of 330˚C. The steam flowing to the high-pressure stage (2) of the turbine is superheated by more than 100˚C. After this high-pressure stage, the steam has a pressure of 14 bars, at the corresponding temperature of more than 190˚C. The steam first flows to the separators. Here any water droplets formed in the turbine are collected and discharged. Then the dry steam goes to the superheater (position 6 in Fig 2.), where the temperature is increased by approximately 130˚C, from 190˚C to 320˚C. A portion of the high-pressure steam is used as a heating medium. The superheated low-pressure steam flows through the red pipes to the low-pressure stage of the turbine (4). In addition to the separator and the reheater, both reheater units consist of a condensate vessel for the highpressure condensate formed. These vessels are necessary for controlling the units. The low pressure steam from the turbine is condensed in the condenser (5). The high-pressure stage of the turbine and the low-pressure stage transfer their mechanical energy to the generator (3), where it is converted into electrical energy.

The reheater units were so crucial to realising a properly-working, highly-efficient installation, that AEB decided to purchase the installations themselves directly. When 49 • Oil and Gas Innovation

Bronswerk received the request for the reheaters, it proposed supplying the complete units, including separator, condensate vessel and the connecting piping. The proper operation of the separator is crucial to the proper operation of the reheater. To prevent having the warranty spread over two suppliers, it was wise to keep everything in one hand. AEB gave Bronswerk the opportunity to supply the complete installations.

The proposal by Bronswerk Heat Transfer contained a surprising combination of techniques that together result in a compact and robust unit. The High Pressure Compact Header, which had just been developed by Bronswerk, was provided for the high-pressure steam. To avoid vibrations due to high flow rates of the low-pressure steam in the condenser , a ‘no-tubes-in-windows’ type was used, while low-finned tubes provide good heat transfer to the low-pressure steam.

For a company aspiring to be a market leader, it is necessary to introduce a breakthrough development to the market every now and then.

The High Pressure Compact Header referred to here is just such a Bronswerk development. It is also essential to know the discipline to the finest detail. This makes it possible to use the right combination of existing and new technologies.

This project shows that Bronswerk also masters these aspects.

AEB was so pleased with the design of the reheater unit that it also awarded Bronswerk the dump condenser. Ultimately, AEB now has an incinerator with uniquely high efficiency. • This article was written by, Johan van der Kamp & Hans van Essen from Bronswerk Heat Transfer Tel: +31 33 24 72 500 email: info@bronswerk.com www.bronswerk.com

HEALTH & SAFETY

Is Team Coaching Merely Team Building Repackaged?

Team building has been a lucrative product for training companies since the late 80’s. Product managers know that as a product moves through its lifecycle maximising profit depends on adjusting the marketing mix, so does that mean that ‘team coaching’, a term that is in increasing use, is merely team building in new clothes? This article considers team coaching through its use by a team responsible for high cost engineering and plant investment decisions.

Heavy industries like oil and gas, or nuclear, depend on the quality of their long term investment decisions, decisions that over a lifespan will encounter controllable and uncontrollable challenges. Those challenges can range from political or technological changes to the quality and speed of implementation of the decision. On such high cost decisions unpredicted changes not only increase costs but also schedule, delaying return on investment.

The example through which we contrast team coaching with team building is with a senior Research and Development (R&D) team tasked with the greatest challenge they had ever faced. The goal they were given by the Executive was to reduce the time and cost of heavy plant investment decisions: the strategy was to be through merging and engaging the organisation’s engineering community in order to develop a different mindset and approach to project planning and implementation.

Team Building or Team Coaching?

At the commencement of large and challenging projects many teams use team building to establish clarity and strength by bolstering team fundamentals, such as good communication and positive team climate.

Team building has been generally associated with multi-day programmes that use activities, either indoors or outdoors, to generate a shared experience and build trust and openness. The process enables a team to develop how they relate to and function with each other.

Such programmes can be powerful in opening new perspectives and understandings between team members that can then transfer to the workplace in the form of strengthened collective identity and clearer communication.

They generally focus on behaviour. Behaviour is what we see and experience, it is salient, and team building events by their nature push people’s comfort zones and can result in behaviour and interactions becoming the dominate topic and subsequent focus of the event. This is undeniably useful, but is it also

an opportunity lost?

Team coaching shares properties with team building. For example relationships are just as important, but they are one ingredient in the mix rather than the mix itself. Some other differences are:

•

Time. Team building is typically a one-off, multi-day event, say at project launch, which requires considerable investment. Team coaching has reduced investment but clearer payback as it can be short in time scale, often one day, and conducted on an on-going basis.

•

Style. Team building is often based on reviewable activities, team coaching is based on key areas of focus and the pertinent questions arising from them.

•

Focus. Perhaps the key area.

As highlighted above team building is drawn to developing the quality of relationships within the team, but Michael West’s (2012) extensive research into teams demonstrates that successful teams monitor two key areas, social effectiveness and also task, because they are both recognised as integral to success.

Research by West (2012), Hawkins (2011) and Manktelow (2009) demonstrates that effective teams are reflexive. Reflexivity is the on-going belief and practice that nothing remains static and that anticipation and adaption are vital in achieving the primary goal task achievement. Reflexivity is the willingness to scan, test, review and adapt in order to attain the primary deliverable.

The Team’s Challenge The goal our R&D team in question was given was to reduce the time and cost of heavy plant investment decisions. Culturally decisionmaking had been driven by a predominantly engineering mindset, a mindset with good

intentions but which in practice overspecified requirements to reassure differing engineering stakeholders of robustness under extreme conditions. In complex systems communication flows elongate, decisions become protracted, technology changes, elements needed re-specifying, costs increase, return on investment is delayed and the cycle begins again.

In practical terms their task was to work as a leadership team to integrate Research and Development with Engineering so that technical and scientific knowledge and the methodology they used could be used to produce faster but still robust specification decisions.

Team coaching – where to focus?

Hawkins (2011) believes leadership teams must pay attention to, and maintain, an ongoing dialogue about four broad areas in order to be effective., (See right). As covered earlier team building events are often drawn to the bottom left box, which can be useful and cathartic but may not explicitly address the other areas. Hawkins (2011) experience, like West’s (2011), is that effective teams continually maintain ongoing monitoring, dialogue and action in relation to every box to ensure they are focusing efforts on what is required, and what and who is needed to bring the goal to fruition. Effective teams are reflexive teams.

Internal to the team Within the team’s control

External to the team Outside the team’s control Task-related The project commissioners The commissioners’ brief The focus/purpose of the commission Contracting the commission • goals, timescales • resources, budget • boundaries i.e. decision making

rules, authority, responsibility,

support etc.

Task-related Their purpose Their objectives Their plan Their processes: decision-making, communication etc.

Internal to the team Within the team’s control

External to the team Within/outside the team’s control

Behavioural/process-related Their internal dynamics Their ability to co-create conditions for performance Their culture Their interpersonal and team dynamics Their codes of conduct, group process

As covered earlier team building events are often drawn to the bottom left box, which can be useful and cathartic but may not explicitly address the other areas. Hawkins (2011) experience, like West’s (2011), is that effective teams continually maintain ongoing monitoring, dialogue and action in relation to every box to ensure they are focusing efforts on what is required, and what and who is needed to bring the goal to fruition. Effective teams are reflexive teams.

The ‘how’

“Heavy industries like oil and gas, or nuclear, depend on the quality of their long term investment decisions”

Team Coaching’s approach is to view the situation systemically. The team cannot be separated from the surrounding system and team coaching aims to help the team generate insight into who, where and how the surrounding system needs to be influenced, and adapting themselves accordingly to ensure task delivery.

A simple framework for systemically generating insight can be: Purpose and focus • The measure of success. Effective

teams understand the need to

maintain focus on task achievement Team leadership • In order to maintain momentum

what style of leadership does the

team need and how should that be

dispersed throughout the team 51 • Oil and Gas Innovation

Behavioural/Process-related Relationship with other stakeholders their project may impact upon: • Other functions, departments • Other regions • Other managers, above, to the

side, below • Customers • Systems owners

Process and interaction • In order to be effective (rather

than efficient) how does the team

coordinate effort Team influence • In order to be successful who

and what does the team

needs to influence in the external environment People • The team’s social dimension, robust

social health, enables effective

support and resilience In terms of reflexivity, both task and social, the delivery team scored highly because team coaching (as opposed to team building) was considered integral to their formula for success, and at the start of a new challenge it was natural to turn to team coaching.

By doing so the team collectively identified and understood a number of issues that affected task delivery. An example of some of the issues were,

•

The overall goal of reducing the time and cost of heavy plant investment decisions made sense as the need to do so was apparent to all team members. However the strategy and expected time scale was unclear (Purpose and focus).

continued on the next page..

i

A key action agreed upon was the use of a two fold strategy: 1. Ensure that an on-going relationship and dialogue was developed with the Executive in order to test and retest their understanding as the initiative progressed (Purpose and focus/Team leadership/Team influence/Process and interaction) 2. Adopt a generative, rather than imposed, strategy for merging with and developing the Engineering functions. Doing so would take time but in the longer term would engage people (Purpose and focus/Team leadership/Team influence/Process and interaction)

The challenge was unlike anything the organisation had ever undertaken before and represented new ground for an established culture.

That uncertainty would in all probability manifest as resistance (Purpose and Focus)

i Agreed upon was that the change was more profound than developing new skills and resistance was natural, however the team

held lower resource power and needed to remain resilient over the long term by using its expert power to best effect (Team

influence/Purpose and focus).

•

•

The scope of the challenge meant the team would often need to work independently (Team leadership/Process and interaction) i Agreed upon was that each team member’s resilience was crucial. From past challenges the team acknowledged that high social

health of the team had been a vital component in maintaining resilience, and agreement was reached that on-going

team coaching and on-going informal ‘health’ checks would be vital in maintaining not only social health but, critically, task

effectiveness (People/Team influence/ Purpose and focus/Process and interaction).

A key concern related to identity. The delivery team was small and had a lesser profile in the organisation. Because of the need to work independently and influence as wide as possible the team was concerned their identity could easily be subsumed into the Engineering function and their capacity to influence collectively lost (Team influence/Purpose and focus).

i Agreed was the importance of maintaining visible support by on-going communication from the Executive in order to

reinforce their legitimate as well as expert power. Also agreed was need to ensure their own communications were coordinated

and consistent with the core message of the time (Team influence/People/Team leadership/Process and interaction).

•

We work to help project and bid teams succeed.

We develop people and business leadership.

We improve business performance in infrastructure, nuclear and construction.

Just think what we could achieve for you.

As they embarked on a challenge that would take time and much energy the team thought they were well prepared in terms of the collective commitment to the challenge and their commitment to ensuring they were creating the conditions to enables one another’s success.

Summary Team building and team coaching may share similar properties but team coaching endeavours to build a comprehensive appreciation of the system a team must work . • West, Michael A (2012). Effective teamwork. Practical lessons from organisational research. BPS Blackwell Hawkins, Peter (2011). Leadership team coaching. Developing collective transformational leadership

a t e w

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UPCOMING EVENTS Offshore Myanmar 2014

Africa Oil & Gas Expo

URL: www.offshoreyangon.com

http://www.africaoilexpo.com/

FLNG World Congress 2014

RIO OIL & GAS 2014

27 May - 29 May Email: info@offshoreyangon.com

10/09/2014 - 10/10/2014 Johannesburg , South Africa

25 Jun - 28 Jun Email: enquire@iqpc.co.uk

Rio de Janeiro, Brazil

3rd Oct 2014

URL: www.flngworldcongress.com

IPLOCA’s Annual Convention

New Libya Oil & Gas Summit

Abu Dhabi , United Arab Emirates 10/13/2014 - 10/17/2014 http://www.iploca.org/page/content/index.

05/29/2014 - 05/30/2014 London , United Kingdom http://libyaoilgas.com

asp?MenuID=518&ID=1360&Menu=1&Item=34.7

Adipec 2014

Offshore Energy Exhibition and Conference

10-13th november

Amsterdam , Netherlands http://registration.offshore-energy.biz/

Abu Dhabi

Global Petroleum Show

Calgary AB , Canada 06/10/2014 - 06/12/2014 http://www.digitalrefining.com/55,events,Global_Petroleum_Show. html

10/28/2014 - 10/29/2014

World Shale Oil & Gas Summit

Dallas TX , United States http://www.world-shale.com/ 11/04/2014 - 11/07/2014

Pipeline and Energy Expo 08/25/2014 - 08/27/2014 Tulsa OK , United States

Caspian Oil & Gas 2014 Exhibition and Conference

http://www.pipelineenergyexpo.com/home

3 - 6 June 2014

Baku, Azerbaijan

Oil Sands Trade Show and Conference

KIOGE 2014

09/09/2014 - 09/10/2014 McMurray AB , Canada http://oilsandstradeshow.com/2014/

30 September - 3 October 2014 Almaty, Kazakhstan

IADC World Drilling Conference and Exhibition

06/18/2014 - 06/19/2014 Vienna , Austria

54 • Oil and Gas Innovation

22nd Kazakhstan International

OIL & GAS

Exhibition & Conference

EXHIBITION

2014

30 Sep - 3 Oct Almaty • Kazakhstan Atakent IEC

CONFERENCE

www.kioge.com

2014 1 - 2 October

Almaty • Kazakhstan InterContinental Almaty

CENTRAL ASIA’S LEADING OIL & GAS EVENT For further information, please contact: Tel: +44 (0) 20 7596 5082 Email: og@ite-events.com London • Moscow • Almaty • Baku • Tashkent • Atyrau • Aktau • Istanbul • Hamburg • Beijing • Poznan • Dubai

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