OGV Energy - Issue 29 - February 2020 by OGV Energy

FEB 2020 - ISSUE 29

UKâ&#x20AC;&#x2122;s No

ENERGY SECTOR

PUBLICATION

The Subsea Expo 2020 Issue

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CONTENTS

NORTH SEA

7 North Sea Review

SUBSEA

12 Subsea Expo 13 Subsea UK Awards 13 Hiretech limited 14 Subsea Industry’s Comeback 15 Year in review - Rystad Energy

RENEWABLES

16 New technology proves vital to clean oceans 17 Top five renewable energy projects in 2019

18 TOYOTA to build prototype city of the future

20 ARC Marine challenge to operators

PEOPLE IN ENERGY

22 New Year’s Honour stuns energy business leader

EXPERT ANALYSIS

23 Look ahead to 2020

TECH & INNOVATION

24 Unity completes successful North Sea P&A pressure testing 25 Add Energy Aim’s High with digital transformation technology

US REGIONAL FOCUS

26 U.S. Oil Producers struggle amid stagnant prices, rising production

COMPANY FOCUS

27 ROSEN - Optimising data driven analytics and improving pipeline integrity management

EVERY MONTH

28 World Project Maps 30 Contract Awards 34 On the Move 36 UKCS Status Report 38 Bassoe Analytics 40 Events 42 Legal and Finance

SHELLEY MILNE EDITOR Its that time of year again, when Subsea Expo offers a deep insight into the industry, businesses, challenges and opportunities within the Subsea Sector. In support of the event and the sector, this month, we will be taking a closer look at technology and products that are innovating and streamlining sub-surface operations.

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From an array of eco-friendly technology in the green-zone to developments in data-driven software, this issue of OGV is a celebration of the Subsea sectors regeneration, green-thinking and progressive approaches. For genuinely inspiring 360 thinking, check out the ARC Marine article on their Reef Cubes - a groundbreaking technology that marries the need to for eco-friendly technology with the added benefit of marine biodiversity regeneration.

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OGV ENERGY

Editorial

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Advertising

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Journalists

Shelley Milne Tsvetana Paraskova Loren Steffy Katie Milne

Design

Ben Mckay Fara West

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CONTRIBUTORS

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Fuel economy and CO2 results for the BMW 320i M Sport Saloon: Mpg (l/100km): Combined 39.2 (7.2) – 40.4 (7.0). CO2 emissions: 132g/km. Figures are for comparison purposes and may not reflect real-life driving results, which depend on a number of factors including the accessories fitted (post-registration), variations in weather, driving styles and vehicle load. All figures were determined according to a new test (WLTP). Only compare fuel consumption and CO2 figures with other cars tested to the same technical procedure. John Clark BMW Aberdeen is a credit broker.

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THE RISE OF NAMAKA SUBSEA… Who is Namaka Subsea? Namaka Subsea is an Aberdeen based subsea consulting company that began trading in July 2014 and has since developed into a global subject matter expert. Sandy Harper, Director, has been at the forefront of the company from the beginning, and understands the importance of doing the job safely and to the Clients requirements.

ince the doors first opened the company has grown exponentially, with what first began as two men in a small office in Berry Street, Aberdeen soon saw them with offices located across three continents. They have been awarded several contracts as subject matter expert for diving contractors as well as contracts to act as Technical Authority on behalf of some of the industry’s leading oil and gas operators.

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What can Namaka Subsea offer? As an established global subject matter expert specialising in Diving, ROV and Subsea Operations, they offer their clients innovative solutions to ensure requirements and expectations are met anywhere in the world. All projects are carried out both safely and efficiently in accordance with best industry practices to ensure the contractor, and the subsequent oil and gas operator client, has sufficient confidence to carry out operations, ensuring compliance with current best industry practices as well as geographical legislation. It is their aim to take the knowledge and experience gained by their personnel to provide both technical and operational support to their clients within the industry. They provide clients with the required expertise to support their operations and projects with the onus on improving safety and efficiency, ensuring the client can secure a competitive advantage within the industry.

service, starting with a series of awareness courses. The first of which will be: • 3 Day Diving Operations Auditing & Assurance (Awareness Course) • 1 Day Failure Modes Effects & Criticality Analysis (Awareness Course) • 1 Day Diver Umbilical Excursion Supervisor Check Course

Later in the year will see a number of other courses being launched including topics such as ‘Diving System Automation Functional Safety (Awareness Course)’ and ‘Trainee Offshore Air Diving Supervisors Course’. As well as these there are several other courses planned for development 2020 is already shaping and release throughout the year and information up to be another will be announced on the exceptional year with Company website as and contracts and projects when available.

in the Middle East justifying an operational presence in the region

Working with their clients Namaka Subsea endeavours to ensure that processes and decisions result in the overall reduction of risk associated with projects, which includes managing and participating in project planning meetings and project HIRA’s, as well as the development of the project risk assessment and project plans. For a full list of services that Namaka Subsea has to offer please visit their website www.namakasubsea.com What’s in Store for 2020? Over the years the team at Namaka Subsea have been collating their collective knowledge to develop a series of training courses on various topics to help support the subsea industry. This year sees the launch of their new continued professional development

Lee Duncan, Business Development Manager, said “The growth of Namaka Subsea has exceeded our expectations within our first 5 years. We have been presented with many different challenges, all unique to each individual location and project, however, working with such a passionate and close team has been an enjoyable experience.

Our Aberdeen office has been very successful over a short period of time, securing contracts which have allowed us to invest in operations in Asia and South America. Our Asia office has been involved in a number of unique projects, including providing subsea operational support for an SBM subsea hose umbilical change out project and the development of an automated functional safety management system for diving support vessels. Trinidad has seen its first contract award with an international oil and gas operator and first project completion by the end of 2019. 2020 is already shaping up to be another exceptional year with contracts and projects in the Middle East justifying an operational presence in the region.”

Sandy Harper, Director & Lee Duncan, Business Developer

www.ogvenergy.co.uk I January-February 2020

NORTH SEA REVIEW

JANUARY

UK North Sea Oil & Gas Review By Tsvetana Paraskova

Despite the festive period, the UK oil and gas industry had an eventful month between the middle of December and the middle of January. Major industry reports, updates on field developments, and a lot of corporate contracts marked this past month in the UK North Sea oil and gas sector.

Deirdre Michie, Chief Executive, OGUK

Following the general election in the UK, industry association OGUK issued on 13 December a statement in response to the election results. “We look forward to continuing our constructive working with the Prime Minister and the UK Government as we work to ensure a safe and competitive industry which realises a successful future through the energy transition and a Sector Deal,” OGUK Chief Executive Deirdre Michie said. “As we go into the new year our priority will be to ensure and reinforce recognition of the positive role our industry is playing in helping to achieve net zero emissions alongside providing a major economic contribution and a big part of our energy security,” Michie noted. The Oil & Gas Authority said on 16 December that the 32nd Offshore Licensing Round generated considerable interest, attracting 104 applications for 245 blocks or part-blocks across the main producing areas of the UK Continental Shelf (UKCS). The OGA is currently evaluating the applications and expects to award blocks in the second quarter of 2020. The 33rd round is unlikely to take place this year, the OGA said. The OGA published in December its “UKCS Energy Integration: Interim Findings” report, which found that the UKCS is a critical energy resource which can be transformed to support the net zero target. Closer links between the oil and gas sector and renewables could help reduce carbon emissions from oil and gas production and in the longer term, actively support delivery of the UK’s net zero target through technologies such as carbon capture and storage (CCS), the report said.

NORTH SEA REVIEW

“The UK has significant wind power potential, untapped carbon storage capacity, and extensive oil and gas infrastructure in place,” the OGA said in its findings.

The UK has achieved the greatest decrease in operational expenditure per production unit, even when considering expenditure in local currency, Rystad Energy said. “The UK has experienced the greatest reduction in opex per boe, falling from more than $30 per barrel in 2014 to just $16 per barrel in 2019. The drop is attributable to two main factors: the general increase in production, and the falling share of production from mature fields as new fields came on-stream and old fields were shut-in,” said Sara Sottilotta, Oilfield Service Analyst at Rystad Energy.

In addition, hydrogen and energy hubs can enable the full-scale deployment of wind power and other renewable energy sources in the UK, the report notes. Commenting on the possible solutions to meet the UK and Scotland’s net zero ambitions, OGUK Upstream Policy Director Mike Tholen said in a statement: “From reducing emissions from the operational production of oil and gas through electrifying offshore platforms, to helping other heavy emitting sectors to decarbonise by developing carbon capture, usage and storage technologies at scale, our industry has the skills, capabilities and infrastructure to play a key role in developing solutions.” The OGA published on 19 December its Digital Strategy for the next five years, aimed at unlocking value from data and digitalisation and enhance public trust in open and transparent quality data and platforms.

The North Sea, including the UK and Norway, will continue to be an industry hotspot for mergers and acquisitions (M&A) in 2020 as production and exploration are also set to increase, Wood Mackenzie said on 9 January. Mike Tholen, Upstream Policy Director, OGUK

“Data is an enabler of new and disruptive business models, which can lower costs, develop new digital platforms and improve digital experiences,” said Simon James, Chief Information Officer at the OGA.

Oil and gas rroduction in the UK and Norway combined will rise this year by 5 percent to 6 million barrels per day, chiefly driven by the large oil and gas fields that started operations last year—Johan Sverdrup offshore Norway and Mariner and Culzean offshore the UK, WoodMac reckons.

In January 2020, OGUK criticised stunts by climate protesters who boarded a Shell gas rig in Dundee and protested outside oil and gas offices in Aberdeen two weeks later. Extinction Rebellion Scotland boarded a Shell Gas Rig in Dundee on 6 January.

In company news, Rockrose Energy plc said on 11 December that the Noble Houston Colbert jack-up drilling rig was preparing to drill the first of two planned infill development wells on West Brae, which RockRose operates with a 40-percent working interest.

OGUK condemned the action, with Chief Executive Deirdre Michie saying that “This is a dangerous and short-sighted stunt which does absolutely nothing to help provide the solutions which will be required to meaningfully deliver net zero emissions by 2045 in Scotland.” On 16 January, commenting on the protests in Aberdeen, OGUK Stakeholder & Communications Director Gareth Wynn said that climate change challenges would be solved by solutions not stunts, adding: “This industry, through our Roadmap 2035, is committed to delivering an inclusive, fair and sustainable transition to a low carbon and diverse energy mix. Again, we welcome those who are willing to take part in meaningful and solutions-focused discussions.” Two analyst reports in January highlighted that the UK offshore industry has reduced significantly operational costs and that the North Sea remains a global hotspot in 2020. Since 2014, operational costs in the oil and gas industry have fallen, led by the UK, Rystad Energy said in an analysis on 8 January. Between 2014 and 2018, the industry in the UK reduced operational production costs by 31 percent, followed by Norway and the United States with opex reductions of 19 percent and 15 percent, respectively.

www.ogvenergy.co.uk I January-February 2020

“Private equity-backed companies will now be thinking about exiting. When combined with a continuation of the Supermajor sell-off, it means there could be bargains to be had in the UK,” said Neivan Boroujerdi, principal analyst, North Sea upstream, at WoodMac.

Petrofac has secured two new agreements for the provision of Engineering, Procurement, Construction and Commissioning (EPCC) services in the North Sea, the company said on 12 December. The first deal is a three-year contract awarded by EnQuest as part of a multi-contractor framework and covers EPCC services across the Operator’s North Sea and onshore asset base. The second EPCC agreement was awarded to Petrofac by a Southern North Sea Operator and is for two years with options to extend. Neivan Boroujerdi, Principal Analyst, North Sea Upstream at WoodMac

In January, Petrofac announced another deal, worth US$50 million from Petrogas NEO UK, a jointly owned company created by Petrogas E&P UK, and NEO Energy. The two-year deal will see Petrofac assist in the transition of operations on the Quad 15 & Flyndre area assets. Petrofac will also provide ongoing operational, maintenance, engineering and construction support; and deliver well engineering and project management support services for Petrogas NEO UK’s activities. United Oil & Gas PLC announced on the same day the completion of the sale of the North Sea Blocks 15/18d and 15/19b (Licence P2366) to Anasuria Hibiscus UK Limited for up to US$5 million. Spirit Energy said on 13 December it would become the Operator of a new Southern North Sea discovery, OssianDarach, after an encouraging exploration campaign. “We are very pleased with the results we are seeing in the Southern North Sea, and on Ossian-Darach look forward to continuing our work with our partners as we move towards

NORTH SEA REVIEW operatorship of the licence,” said Anne-Sophie Cyteval, UK Subsurface Manager at Spirit Energy. Serica Energy announced on 18 December that it had received an Out of Round award of a 100-percent interest in blocks 3/24c and 3/29c in the UK petroleum licence P2501. The blocks are located in the area adjacent to the Serica operated Rhum field. Serica has committed to drilling an exploration well within three years in the blocks. If it makes a commercial discovery, the company intends to develop the field via a subsea tie-back to the Serica operated and 98-percent owned Bruce facilities.

The OGA published on 19 December its Digital Strategy for the next five years, aimed at unlocking value from data and digitalisation and enhance public trust in open and transparent quality data and platforms.

Independent Oil and Gas plc said on 18 December that the Harvey discovery in the UK Southern North Sea likely contains sub-commercial volumes, but that post-well mapping indicates the northern part of pre-well Harvey structure likely holds gas volumes of approximately 40 Bcfe mid-case recoverable. The nearby Redwell discovery appears to be larger, and could have mid-case recoverable volumes of around 100 Bcfe, the company said.

i3 Energy plc said on 2 January that with the successful Serenity discovery and remaining potential at Liberator, the company had started planning a mid-2020, multi-well appraisal programme and is simultaneously conducting a farm-down process of its licences to potentially fund the 2020 drilling campaign. In early January, BP agreed to sell its interests in the Andrew area in the central UK North Sea

ARCM, Premier Oil’s largest creditor holding more than 15 percent across the Company’s debt instruments with blocking positions in two of them, said it opposes the proposed acquisition of assets from BP because it is “deeply concerned about Premier Oil’s intention to pursue acquisitions as stated in its announcement, as they will only serve to increase risk for stakeholders.” On 16 January Premier Oil said that the Court granted its request to start the scheme process for the acquisition. The company will convene the creditor meetings for the Schemes, to be held on 12 February 2020, with the Schemes sanction hearing expected to take place in March. RockRose Energy announced in its Year-end trading update on 7 January that its planned activity for 2020 includes two RockRoseoperated infill wells at West Brae, designed to access over 3 MMbbl of net 2P reserves and add net production of 2,500 barrels of oil per day (bopd). Scheduled to come on stream in Q1 and Q2 2020, drilling activity on the first of these wells has already started.

Solstad Offshore, provider of specialised offshore tonnage, has recently signed several contracts for its vessels in the UK North Sea. Solstad announced on 16 December that Apache North Sea Limited had extended the charters of platform supply vessels (PSVs) Sea Flyer and Sea Forth. Solstad Offshore also said that Technip FMC had extended the present agreement with Solstad for ploughing/trenching duties in the North Sea with 1 year. Solstad was also awarded a contract with Repsol Sinopec Resources UK for the CSV Normand Jarl, which Repsol Sinopec will use to support their maintenance activities in the North Sea. The contract will commence in May 2020 and have a firm duration of 105 days. Furthermore, Solstad Offshore extended contracts with Fairfield Betula for the charters of the PSVs Far Symphony and Normand Aurora, which have been supporting Fairfield’s UK operations since April 2017 and January 2019, respectively.

and its non-operating interest in the Shearwater field to Premier Oil for US$625 million. “BP has been reshaping its portfolio in the North Sea to focus on core growth areas, including the Clair, Quad 204 and ETAP hubs. We’re adding advantaged production to our hubs through the Alligin, Vorlich and Seagull tieback projects,” said Ariel Flores, BP North Sea regional president. Premier Oil said that the proposed acquisitions would be funded via a US$500 million equity raise, which has been fully underwritten on a standby basis, existing cash resources and, if required, an Acquisition Bridge Facility of US$300 million. But Premier Oil’s creditors opposed the acquisition.

RockRose will also drill one of two infill wells planned as part of the Blake life extension project in which RockRose holds 30.8 percent. This will contribute to extending production by five years to 2029. In addition, Repsol Sinopec and RockRose continue to target mid-2020 for the submission of a field development plan and project sanction of the Tain field, in which RockRose has 50 percent. The field is estimated to contain mid-case recoverable resources of 11.5 MMbbl (5.8 MMbbl net to RockRose) close to existing infrastructure. This would lead to first oil in the second half of 2022, the company said. Spirit Energy said on 13 December it would become the Operator of a new Southern North Sea discovery, Ossian-Darach, after an encouraging exploration campaign. “We are very pleased with the results we are seeing in the Southern North Sea, and on Ossian-Darach look forward to continuing our work with our partners as we move towards operatorship of the licence,” said AnneSophie Cyteval, UK Subsurface Manager at Spirit Energy.

NORTH SEA REVIEW April 2017 and January 2019, respectively. i3 Energy plc said on 2 January that with the successful Serenity discovery and remaining potential at Liberator, the company had started planning a mid-2020, multi-well appraisal programme and is simultaneously conducting a farm-down process of its licences to potentially fund the 2020 drilling campaign. In early January, BP agreed to sell its interests in the Andrew area in the central UK North Sea and its non-operating interest in the Shearwater field to Premier Oil for US$625 million. “BP has been reshaping its portfolio in the North Sea to focus on core growth areas, including the Clair, Quad 204 and ETAP hubs. We’re adding advantaged production to our hubs through the Alligin, Vorlich and Seagull tieback projects,” said Ariel Flores, BP North Sea regional president.

Serica Energy announced on 18 December that it had received an Out of Round award of a 100-percent interest in blocks 3/24c and 3/29c in the UK petroleum licence P2501. The blocks are located in the area adjacent to the Serica operated Rhum field. Serica has committed to drilling an exploration well within three years in the blocks. If it makes a commercial discovery, the company intends to develop the field via a subsea tie-back to the Serica operated and 98-percent owned Solstad Offshore, Bruce facilities.

Since 2014, operational costs in the oil and gas industry have fallen, led by the UK, Rystad Energy said in an analysis on 8 January.

provider of specialised offshore tonnage, has recently signed several contracts for its vessels in the UK North Sea.

Solstad Offshore also said that Technip FMC had extended the present agreement with Solstad for ploughing/trenching duties in the North Sea with 1 year. Solstad was also awarded a contract with Repsol Sinopec Resources UK for the CSV Normand Jarl, which Repsol Sinopec will use to support their maintenance activities in the North Sea. The contract will commence in May 2020 and have a firm duration of 105 days. Furthermore, Solstad Offshore extended contracts with Fairfield Betula for the charters of the PSVs Far Symphony and Normand Aurora, which have been supporting Fairfield’s UK operations since

www.ogvenergy.co.uk I January-February 2020

Premier Oil said that the proposed acquisitions would be funded via a US$500 million equity raise, which has been fully underwritten on a standby basis, existing cash resources and, if required, an Acquisition Bridge Facility of US$300 million but Premier Oil’s creditors opposed the acquisition.

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SUBSEA By Tsvetana Paraskova

Biggest Ever Subsea Expo dives into the Blue Economy Subsea Expo 2020, set to be the biggest in the event’s 15-year history, has today announced its programme of speakers for the conference which will see 70 industry professionals take to the stage at P&J Live on 11-13 February 2020. Neil Gordon, chief executive of Subsea UK, said: “The subsea industry which operates in offshore oil, gas and wind, renewables, marine science, defence, subsea mining and aquaculture, is uniquely placed to be at the forefront of the energy transition and to exploit the Blue Economy. We have the knowledge, the technology and the expertise to devise the solutions that will enable new projects from wave and tidal to carbon capture and storage. “But we must be bold and brave in approaching these new markets, embracing new ways of working, new technology and digital applications. Our oil and gas heritage serves us well but it’s no longer the only path open to us and that’s why we’ve taken the theme of “New Perspectives” for Subsea Expo this year. “As we move deeper into alternative markets, we need lateral thinking, a new narrative and ways of applying our subsea expertise to capitalise on the rich resources from our oceans. Our undoubted ingenuity will be a key enabler of the Blue Economy.”

The three-day exhibition and conference, Subsea UK’s flagship annual event, with the theme of “New Perspectives” will focus on exploiting the Blue Economy, the energy transition and cross-sector collaboration to capitalise on emerging opportunities.

ore than 6,000 people from the subsea supply chain are expected to attend the event with visitors from Europe, Asia, the Americas, Africa and the Middle-east. Almost 200 exhibitors will be showcasing the latest technology and services from across the whole subsea supply chain.

www.ogvenergy.co.uk I January-February 2020

The opening plenary session, chaired by Subsea UK chief executive, Neil Gordon will feature experts from a range of sectors including renewables, carbon capture and storage, hydrogen, defence and oil and gas. Mhairidh Evans, principal analyst upstream supply chain research for Wood Mackenzie will provide insights on the subsea market both locally and globally. This will be followed by a panel discussion on the energy transition and cross-sector collaboration with Andrew Jamieson, CEO of ORE Catapult, Nigel Holmes, CEO of the Scottish Hydrogen and Fuel Cell Association and Mike Tholen, sustainability director of Oil & Gas UK. The conference sessions will cover a variety of topics including; cables, inspections, marginal developments, innovation and late life extension with presentations from Wood, Shell, National Oilwell Varco, the Scottish Aquaculture Innovation Centre, i-Tech 7, Xodus Group, Cellula Robotics and Ashtead Technology.

Sponsors of Subsea Expo 2020 include Baker Hughes, Subsea 7, Viewport3, Boskalis, Simmons Energy, SMD, Viper Innovations and the Oil & Gas Authority. Entrance to the exhibition and conference is free of charge. Pre-registration is recommended via the website www.subseaexpo.com

SUBSEA

Subsea UK Awards finalists announced

The finalists have been announced for next year’s prestigious Subsea UK awards, which recognise the companies and individuals leading the way in the UK’s £7.5billion subsea sector.

black-tie event, the Subsea UK Awards take place on 12 February 2020 at P&J Live in Aberdeen, during Subsea Expo – Europe’s largest subsea focused exhibition and conference and will feature Olympic medallist, presenter and author Kriss Akabusi MBE as a guest speaker. Finalists for the subsea company of the year award, sponsored by the Oil & Gas Authority include Enpro Subsea, TechnipFMC and JFD. Archer Knight (Holdings) Limited, Crondall Energy and KW Designed Solutions Ltd are competing for the sought-after honour of The Best Small Company Award, which is sponsored by Viper Innovations.

Ardent, PanGeo Subsea Scotland and ROVCO have been shortlisted for the innovation and technology award, sponsored by Simmons & Co International while the innovation for safety award, sponsored by Boskalis, will be contested by Helix Robotics Solutions Ltd, Halliburton and TechnipFMC. Sam Fraser from Neptune Subsea Engineering; Etteke Roebroeks from Fugro GB (North) Ltd; and Nicolas Lefebvre from Aquatec Group are shortlisted for SMD sponsored Emerging Young Talent award, before the evening recognises the Outstanding Contribution award, for the individual who has made a lasting impact on the subsea sector throughout their career. Neil Gordon, chief executive of Subsea UK, said: “Our annual awards dinner is an opportunity for the sector to look at how far we’ve come as an industry and reward those who are working hard to embrace opportunities, innovate and adapt. “With the UK’s reputation as the world-leader in subsea, there is an overwhelming amount of talent and expertise across the sector. This year’s judges had a real challenge trying to narrow down the shortlist of finalists as they all demonstrated that the UK subsea sector has what it takes to rise to the challenge – identifying ways to improve productivity and deliver much needed efficiencies.” For more information and to book tickets for the awards visit: www.subseaexpo.com/subsea-uk-awards/

Hiretech limited displays industry confidence through continued investment Hiretech Limited is displaying confidence in the subsea and decommissioning sectors through continued significant investment in equipment and personnel.

ecognising opportunities in the marketplace and benefitting from cash generation within the business, Hiretech has reinvested over £3 million in its rental equipment fleet over the past two years to ensure its offerings meet the needs of changing industry requirements. The company offers equipment rental and personnel supply to the oil and gas and marine industries to support hydraulics, well service, pipeline, chemical cleaning, decommissioning, subsea and renewable activities. Keith Mackie, Managing Director at Hiretech Limited commented “Confidence in the oil and gas and marine industries is growing following a period of turbulence. Through significant investment and operational manpower over the past few years, we have developed a large rental fleet of reliable, compatible equipment able to meet the changing demands of the industry. With new product lines being added in 2020, we will continue to strive to support our clients with evolving project requirements.”

Keith Mackie, Managing Director, Hiretech

Hiretech is also currently recruiting into several key roles within the organisation to further strengthen its position in key industry sectors. Adding to its existing team of key personnel, the firm aims to continue to apply sound technical knowledge and experience to provide a solutions based service to a growing client base. Investment is set to continue during 2020 as Hiretech aims to remain at the industry forefront through equipment dependability and client confidence.

VISIT US AT STAND 70 - SUBSEA EXPO

BRENT OIL PRICES OVER THE YEARS

YEAR AGO

- BRENT OIL PRICE 2019 - $63.96 February 2019 seen warmer-than-usual temperatures for most of the heating season, along with concern about climate change, rippling through natural gas and power markets. Patterson-uti energy, inc. Reported that for the month of February 2019, the Company had an average of 175 drilling rigs operating. For the two months ended February 28, 2019, the Company had an average of 178 drilling rigs operating.

YEARS AGO

- BRENT OIL PRICE 2015 - $58.10 Due to several years of big investment, February 2015 seen the first rise in production since the peak 15 years ago. It’s was on track to stay around that level through the rest of this decade. US shale oil, and to a lesser extent Libyan oil returned to the market, pushing up supply while a slowdown in the Chinese and EU economies has reduced demand.

YEARS AGO

- BRENT OIL PRICE 2010 - $73.75 Flowserve Corp secured a pump and solutions order worth more than US$31 million, from LUKOIL Neftochim Burgas AD in Bulgaria for Flowserve proprietary. Wood Group’s Multiphase Solutions Inc has completed integration and deployment of its subsea simulation system, which is being used by Shell engineers to utilise subsea separation caissons with electric submersible pumps.

SUBSEA By Tsvetana Paraskova

Overview: The Subsea Industry’s Comeback While industry observers were following the slowdown in US shale growth, OPEC’s production cuts, and the geopolitical turmoil in the Middle East in 2019, the global offshore oil and gas industry and the subsea market were making their comeback after years of setbacks, signalling improved market conditions for the offshore sector.

In the UK Continental Shelf (UKCS), most of the projects approved in 2018 were subsea developments, with the majority being tied back to existing infrastructure, industry association OGUK said in its Business Outlook 2019.

Regionally, Africa, Russia, South America, the Middle East, and Australia will see upstream investments rising this year, mostly thanks to projects offshore Brazil, Mozambique, Mauritania, and new LNG projects in Australia. Between 2018 and 2022, investments in the offshore shelf segment are set to grow at a compound annual growth rate (CAGR) of 4.3 percent, while offshore deepwater investments are set to increase at a CAGR of 7.7 percent over the same period, Rystad Energy reckons. The offshore sector is entering a new investment cycle, Espen Erlingsen, Head of Upstream Research at Rystad Energy, said in January 2020.

Free cash flow (FCF) remained strong in 2019, Growing investment in deepwater exploration and producsignalling that the industry has entered a new tion is set to be the key market driver for the subsea sector offshore investment cycle. Operators approved a and supply chain over the next half a decade, analysts say. combined 20.6 billion barrels of oil equivalent (boe) On the other hand, extreme volatility of crude oil and natof projects last year, including 12.3 billion barrels of ural gas prices could negatively impact the subsea liquids projects and 8.3 billion boe of new industry’s revenues as operators could hold off gas projects. All oil and gas resources on sanctioning of some projects if prices are approved for development last year lower than the estimated breakeven prices surpassed 20 billion barrels of “After several tough for a project to be commercially viable. oil equivalent, which was the highest level seen since 2011. years, the sun may The subsea sector made a comeback The approved volumes for definally be ready to last year, with growth rates of subsea velopment last year were 110 shine again on the UK equipment and subsea, umbilicals, rispercent higher than in 2018, offshore market, ” Audun ers, and flowlines (SURF) becoming the according to Rystad Energy’s Martinsen, head of best-performing segments in the oilfield estimates. services sector in Q2 2019, independent oilfield services research energy research and business intelligence “Unsurprisingly, this rising tide at Rystad Energy company Rystad Energy said in September. of approval activity has carried Annual growth rates in the subsea equipment with it an increase in offshore and SURF sectors surpassed 10 percent in Q2, investments in 2019. Total offshore which was the second quarter with positive year-oncapex grew by 5% versus 2018, with a year growth. 7% rise in deepwater spending and a 3% boost in investments on the continental shelf. For 2020, “We expect 2019 to be the first year with subsea revenue offshore investments are on track to grow 8%, growth since 2014,” Rystad Energy said three months with deepwater up 12% and shelf spending up 2%,” before 2019 ended. Rystad Energy says. Looking at the prospects of the global upstream investments in 2020, Rystad Energy sees rising deepwater investments globally bucking the downward trend of an overall decline in the industry’s investments in exploration and production this year. Deepwater is expected to be the only segment to grow above 5 percent in 2020, spelling a boom for the industry, according to the energy research company, which sees overall upstream investments down by 4 percent this year, with investment in shale and tight oil plunging by 12 percent.

www.ogvenergy.co.uk I January-February 2020

In the medium to long-term through 2025, global drilling activity will experience considerable growth, with more than 12,936 offshore development wells estimated to be drilled over the next five years, Westwood Global Energy Group said in a report in November 2019. “Deepwater activity remains a bright spot over the forecast, with production growing 38% from 2019 to 2025. More than 1,315 wells will be drilled to achieve this,” according to Westwood’s World Drilling and

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Production Market Forecast 2019-2025 as of Q3 2019. Rising global investments in new offshore developments are set to lead to rising activity in the subsea supply chain and the subsea subsectors, including SURF and subsea manifolds, analysts reckon. According to Global Market Insights, Inc, the global SURF market is expected to exceed US$9 billion by 2025, driven by development of resources in remote locations and the upgrade of exploration and production technologies. Expected higher rate of deployment of floating production facilities, including Floating Production Storage and Offloading vessels (FPSOs), will also boost the global subsea supply chain over the next five years. In the UK Continental Shelf (UKCS), most of the projects approved in 2018 were subsea developments, with the majority being tied back to existing infrastructure, industry association OGUK said in its Business Outlook 2019. “Looking forward, most of the predevelopment opportunities in the basin will be progressed using subsea infrastructure, making use of existing host facilities and export routes where possible in order to maximise value,” OGUK noted.

The UK offshore industry is about to stage a comeback, Rystad Energy said in September 2019. The research firm expects as many as 38 new UK offshore projects to be sanctioned by 2022, representing combined greenfield expenditure of US$22.6 billion if UK prospective resources live up to expectations. Of those projects, subsea tiebacks will represent the majority of offshore greenfield project commitments. “If operators’ plans play out as intended, the 38 potential project commitments expected over the next three years will provide fertile ground for contractors, and a quick look at successful UK North Sea service companies from the recent past sheds some light on who may capture this growth in the near future,” Audun Martinsen, head of oilfield services research at Rystad Energy, said. The increased project sanctioning offshore the UK could lead to 65 percent growth of the engineering, procurement, construction, and installation (EPCI) market in the region over the next three years. The subsea market is set to expand by 35 percent over the same period, according to Rystad Energy. “After several tough years, the sun may finally be ready to shine again on the UK offshore market,” Martinsen said.

EXHIBITORS INCLUDE: STAND#

SUBSEA

By Henning Bjørvik, Senior Analyst Oilfield Service Research, Rystad Energy

Year in review

Intelligent Plant

2019 marked a breakthrough for integrated subsea contracts

ARC Marine 9

Leyton

Record-high number of subsea trees awarded via integrated contracts

Aleron Subsea 14

VIEWPORT 18

N-Sea 23

STR 24

Stats Group

fter hitting rock bottom in 2016, the subsea equipment market has gradually recovered, reaching over 300 awards of subsea trees in both 2018 and 2019 – three times more than in 2016. Integrated subsea contracts took center stage in 2019 and had a breakout year with 20 such contracts signed, representing a record-high of over 150 subsea trees awarded under such deals. Integrated contracts – where service providers partner with each other to provide the full subsea scope, covering both subsea production systems (SPS) and subsea umbilicals, risers, and flowlines (SURF) – have become increasingly popular in the last four years since they were introduced. Thus far, three main players have established themselves in this market and have secured major contracts: TechnipFMC, Subsea Integration Alliance (OneSubsea and Subsea 7), and Baker Hughes together with McDermott.

Motive Offshore

- Source: Rystad Energy SubseaCube

Harper UK 50

LMS 63

XODUS 64

ROVOP 65

ANASYS UK 81

Lokring

TechnipFMC is by far the biggest player within the integrated subsea contract segment and had a particularly dominant year, winning an extraordinary 11 out of the 20 integrated contracts awarded in 2019, including more than 50% of the total trees awarded under such deals.

HPR - Source: Rystad Energy SubseaCube 87

EC-OG 88

Interventek 97

Rever Offshore 106

Rotech Subsea 113

SEA 136

Brimmond Group 137

DOF Subsea UK 143

ROSEN 172

Proserv Controls

Looking ahead, the subsea market looks promising, fueled by an increase in sanctioning activity for deepwater projects. Rystad Energy forecasts that operators will increase their spending on subsea equipment and installation services by a healthy 8% annual growth rate during the next five years. It will therefore be interesting to monitor whether the higher operator budgets for this segment and the rising popularity of integrated contracts will result in any price inflation within the subsea market.

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Knowing Our Value

excellence in everything we do, and it is my conviction that our experts can deliver a responsible energy future.

Here at Xodus we have charged, confidently, into 2020 with a true sense of determination and pride. There’s a good reason for this: we know our value.

So, what is behind this value? At its heart, we have managed to attract and nurture diverse, high-calibre individuals. Our experts come from all over the world, from all sorts of backgrounds, and truly bring a range of perspectives to the problems we solve. I’m incredibly excited that the vast majority of our work utilises skills from across the business; from offshore wind supply chain experts, to commercial analysists, field and project

Knowing our value is what gets me out of bed every morning, it is what makes me care about my colleagues’ mental and physical wellbeing, it is the respect I have for honesty and integrity, it is the enthusiasm I have for genuine

New ROMAR Packer Management Technology proves vital to clean ocean operations.

With growing pressure on operators and service providers to adhere to the highest possible environmental standards, ROMAR’s Packer Management System (PMS) is fast becoming the go-to technology to reduce the risk of a fluid spill through proactive monitoring and preparation.

luid spills are a worst-case scenario for many operators resulting in damage to the environment as well as carrying the financial risk and reputational damage. Some of the greatest risks are present on semi-submersible rigs and drill ships operating in harsh Deepwater environments, such as the North Sea, Gulf of Mexico or South Atlantic. To compensate for the vertical movement of floating rigs, slip joint packers are applied to keep circulating fluid within the riser. However, these elastomer seals progressively wear under the action of rig heave. This is a particular concern in areas where harsh weather is more frequent. If packer wear is unchecked, leakage will occur, resulting in a spill of drilling mud to the ocean and an environmental incident. To combat this ROMAR International has developed a sophisticated packer management system as a solution to this challenge. This PMS monitors the pressure on an active slip joint packer, instantaneously detecting leakage. This detection then automatically energises the back-up packer to prevent a spill. This industry-proven technology has already been applied on over 140 rigs and platform around the world with an exemplary reliability record. Recent additions to the System have significantly increased the PMS’ capability, including the ability to actively monitor packer wear, determine seal life remaining - and thus predict the point of packer failure.

www.ogvenergy.co.uk I January-February 2020

All data is recorded digitally and transmitted back to the operator in real-time, giving the capability to schedule preventative maintenance. Previous processes have been dependent upon waiting for failure, and potentially a spill to occur before reacting. This new technology greatly reduces the threat to the environment in harsh offshore applications and is of major benefit to operators across the world.

With public perception, brand positioning and environmental concerns increasingly a factor in corporate decision-making, the ROMAR PMS is an innovative solution that will provide reassurance offshore, in the office and in the boardroom.

developers, geotechnical engineers, environmental scientists, subsea and structural engineers, technical safety and regulatory specialists (and many more!). All deploying their capabilities in an integrated, innovative and intelligent way. The thing is, we know this works and that it really does add value for our clients. But we also know that this diversity and approach is fit for purpose in a world where the focus is on a broad energy mix which embraces decarbonisation and meets increasing demand.

Which leads me nicely on to Xodus in 2020. We are already working on the next generation of UK energy projects across oil and gas, wind, hydrogen, batteries and transmission. We are advising on decreasing emissions, increasing efficiency and maintaining integrity of existing assets. And we are supporting investment decisions across the energy sector. Our client base and the locations of our projects are broader and more varied than they have ever been before. So what to expect from us in 2020? Expect more of this, much more.

I started off talking about knowing our value. That means we know what to spend our time and energy on, how to stay true to ourselves, and to never compromise on our vision or values. It is with absolute confidence, therefore, when I say we are not a company lost in [the energy] transition; we are a company embracing our abilities and together, delivering a responsible energy future.

The top five renewable energy projects financed in 2019

Mohammed bin Rashid Al Maktoum Solar Park fourth phase Value: $3.9Bn Location: Mohammed Bin Rashid Al Maktoum Solar Park in Dubai, UAE Type: 950 megawatts (MW) hybrid concentrated solar power (CSP) and photovoltaic (PV) solar power station. Developers: Saudi Arabia’s ACWA Power), Shanghai Electrical Group Company (SEGC), The Industrial and Commerical Bank of China (ICBC), and Spain’s Abengoa. Details: Expected to be fully operational by the end of 2020, the Noor Energy 1 solar power complex will contribute to the Dubai Clean Energy Strategy 2050, which aims to achieve 75% of Dubai’s power generation from clean energy sources by 2050.

Neart na Gaoithe Value: $3.42Bn Location: North Sea, 15.5km from Fife Type: 450 megawatts (MW) capacity Developers: EDF Renewables and ESB Details: meaning “strength of the wind” in Gaelic NnG begins construction in 2020 to be operational by 2023. Offsetting 400k tonnes. CO2 per year, this wind farm will supplying enough low-carbon electricity for about 375k homes.

Yunlin Offshore Windfarm Value: $3bn Location: Yunlin county, Taiwan Type: 640 megawatts (MW) Developers: WPD 73% stake, Starwind Offshore consortium 27% Details: On completion, Yunlin will be one of the biggest wind farms in Taiwan. Set to provide clean electricity to more than 450k homes, Yunlin will offset 916k tonnes of CO2 a year. Construction on the project is scheduled for March 2020, with commissioning on schedule for December 2021.

Saint Nazaire

Formosa II

Value: $2.5bn Location: Guerande Peninsula, Western France Type: 480 megawatts (MW) windfarm Developers: EDF Renewables, Enbridge Details: Saint Nazaire will be the first ever offshore wind farm in French waters. Production is expected to commence spring 2020for completion in the summer of 2022.

Value: $2bn Location: Miaoli County, Taiwan Type: 376 megawatts (MW) windfarm Developers: Macquarie Group, Swancor Renewables Details: Upon completion in late 2021, Formosa II will be one of the largest offshore wind projects in Taiwan. Designed to support the Taiwanese government’s efforts to reduce fossil fuel energy reliance, Formosa is part of an ambitious plan to generate 20% of the country’s total power from renewable sources by 2025.

GREEN ZONE The city is planned to be fully sustainable, with buildings made mostly of wood using traditional Japanese joinery and robotised production methods, to minimise the carbon footprint. The roofs will be covered in photo-voltaic panels to generate solar power, adding to the energy produced by hydrogen fuel cells. Toyota also plans to weave in the natural world throughout the city, with native vegetation and hydroponics.

TOYOTA

to build prototype city of the future

Residential buildings will be equipped with the latest human support technologies, such as in-home robotics to assist with daily living. Homes will use sensor-based AI to check the occupants’ health, take care of basic needs and enhance daily life. The project will be an opportunity to deploy connected technology with integrity and trust, securely and positively. Only fully autonomous, zero-emission vehicles will be allowed on the main thoroughfares to move residents around. Throughout the city, autonomous Toyota e-Palette vehicles will be used for transport and deliveries, and as changeable mobile retail units.

Toyota has revealed plans to build a prototype “city” of the future on a 175-acre site at the base of Mount Fuji in Japan. Announced at CES 2020, the global consumer technology show in Las Vegas, the Woven City will be a fully connected ecosystem, powered by hydrogen fuel cells.

Neighbourhood parks, a large central recreation area and a central plaza for social gatherings will be designed to bring the community together. Toyota believes that encouraging human connection will be an equally important aspect of the Woven City experience. Toyota plans to populate Woven City with employees and their families, retired couples, retailers, visiting scientists and industry partners. The plan is to start with 2,000 people and increase the number as the city evolves. Ground-breaking for the site is scheduled for early 2021. Those interested in partnering with the project can find more details at Woven-city.global.

nvisioned as a “living laboratory,” the city will be home to full-time residents and researchers who will be able to test and develop technologies such as autonomy, robotics, personal mobility, smart homes and artificial intelligence in a real-world environment. Akio Toyoda, Toyota Motor Corporation President, said: “Building a complete city from the ground up, even on a small scale like this, is a unique opportunity to develop future technologies, including a digital operating system for the infrastructure. With people, buildings and vehicles all connected and communicating with each other through data and sensors, we will be able to test connected AI technology, in both the virtual and physical Only fully realms, maximising its potential.” Toyota will extend an open invitation to collaborate to other commercial and academic partners and invite interested scientists and researchers from around the world to come and work on their projects in this one-of-a-kind, real-world incubator.

autonomous, zeroemission vehicles will be allowed on the main thoroughfares to move residents around.

“We welcome all those inspired to improve the way we live in the future to take advantage of his unique research ecosystem and join us in our quest to create an ever-better way of life and mobility for all,” said Akio Toyoda. Toyota has commissioned Danish architect Bjarke Ingels, CEO of Bjarke Ingels Group (BIG), to design Woven City. His team has designed many high-profile projects, from 2 World Trade Center in New York and Lego House in Denmark, to Google’s Mountain View and London headquarters.

Design of the city Under the city’s masterplan, street use has three designations: for faster vehicles only; for a mix of lower-speed vehicles, personal mobility and pedestrians; and for pedestrians only (a park-like promenade). These three street types will weave together in an organic grid pattern to help accelerate the testing of autonomous transport.

www.ogvenergy.co.uk I January-February 2020

Toyota plans to populate Woven City with employees and their families, retired couples, retailers, visiting scientists and industry partners. The plan is to start with 2,000 people and increase the number as the city evolves.

03 19

GREEN ZONE

SPONSORED BY

Whilst innovation plays a fundamental role in every economy, many UK firms remain unaware of the full range of Government incentives available to them in support of their product or service developments.

Leyton is proud to have returned over £35million in R&D Tax Relief, R&D Allowances, Patent Box Relief and Grant Funding to our Oil & Gas and supply chain clients. In many instances, our clients were already claiming under these schemes, often with the support of accountants or other specialist firms. In these situations we have been able to enhance their existing claims processes, resulting in a typical claim uplift of 40% for R&D tax relief alone.

Leyton, with 20 offices, is Europe’s largest R&D Tax Consultancy, having assisted over 8,000 UK clients and returned over £500million in reliefs and incentives. The challenges and opportunities faced within Oil & Gas mean that now more than ever, firms are thinking differently about how they do things and are continually developing and improving their products and services.

In the UK, in addition to our tax expertise, Leyton’s specialism sits with our Technical Consultants. Coming from a broad range of industries and sectors, they understand our clients’ processes and the challenges they face in day to day projects. As a result, they can easily relate to the advancements being sought to proactively highlight your R&D activity.

“Leyton’s specialism is not only in their tax knowledge around R&D legislation, but in their technical knowledge. Their technical team have done our job, therefore they are readily able to identify areas of R&D that we previously thought were routine. The ease of the process really helps our staff get on with their work, and gives us peace of mind that such a niche area is being looked after. Would highly recommend them to businesses even if they already claiming, their record speaks for itself.” MD, Oil & Gas Engineering.

With the changes in the industry, now is the ideal time to understand what help is available to your business from government incentives or to review your existing process in claiming relief.

www.leyton.com

UNITY COMPLETES SUCCESSFUL NORTH SEA P&A PRESSURE TESTING IN PARTNERSHIP WITH PETROFAC

Unity, Europe’s largest provider of well integrity technology, services and engineering solutions, has successfully completed a preparatory P&A project in partnership with oilfield services provider Petrofac.

he Aberdeen-based business deployed its Temporary Abandonment Cap Test Tool (TACTT) to pressure test two suspended mudline wells in the North Sea in support of an end of life campaign undertaken by Petrofac for a multinational operator. The TACTT is the only technology of its kind, able to seal on to any type and size of temporary abandonment (TA) cap fitted to a suspended well, pressure test the seal to ensure well containment, then test and vent

www.ogvenergy.co.uk I January-February 2020

pressure from below the TA cap. It can also leave a reliable secondary seal in place if required. The technology is designed to provide a fast and mobile method of pressure testing, to simplify and improve safety for the re-entry of suspended wells. It also allows operators to understand the amount of pressure accumulation below the TA cap since the last intervention so the information can be factored into the operational plan for decommissioning. In this project, the technology quickly confirmed zero pressure below the TA caps of the two wells, allowing efficient plugging and abandonment (P&A) operations to continue. The TACTT was deployed on drill pipe from a rig, however it can also be cable deployed for vessel-based P&A activity and added cost efficiency. Only two engineers are required for deployment and it can be rapidly mobilised to meet operator schedules. In this case, the TACTT was delivered within just one week, returned to Unity after the first well, redressed in 3 days and then remobilised for the second well. Gary Smart, Unity CEO said: “Re-entering offshore wells, which may have been suspended for a considerable number of years, is challenging and high risk, particularly as any pressure build up behind the back-pressure valve of the TA caps cannot usually be measured. For the first time, there is a safe and efficient method to test and vent these wells prior to re-entry.

• Unity TACTT offshore rig deployment

“This latest project in partnership with Petrofac, builds on our successful track record and the value the industry already recognises in the TACTT technology. We look forward to continuing to deliver further cost, efficiency and safety benefits for our clients through this and our other innovative technology.” With well abandonment activity in the UKCS increasing four-fold since 20161 the TACTT technology was developed to solve a related operational challenge, improve safety, reduce cost and meet increasing operator demand.

• Unity TACTT

INNOVATION & TECHNOLOGY ZONE ADD ENERGY AIM’S HIGH WITH DIGITAL TRANSFORMATION TECHNOLOGY PEOPLE We may be evolving to become a technology-led company, but it’s driven by our people. We are who we are because of our people – it’s they who have developed our cutting-edge solutions and it’s their commitment to pushing the envelope that has seen Add Energy achieve unprecedented growth over the last three years.

CULTURE Aim-Hi™ cloud-based tool

berdeen-based, Add Energy Asset Integrity and Maintenance (AIM), has developed a thriving technology division to deliver the benefits of digitalisation to the integrity and maintenance sector. Here, Peter Adam, Add Energy AIM’s Executive Vice President, discusses their four components of building an innovative offering. The digital transformation of the energy industry has brought clear opportunities for forward-thinking companies to both benefit from and develop a digital offering. Evolving and modernising our offering was critical to ensuring we continue to be at the forefront of our specialism – we believe this technology lead is what will deliver our business goals over the next 10 years. Moving from a traditional consultancy to one with next-generation technology at its core has not happened overnight. It’s been part of a long-term strategy that has focused on four key strands.

EXPERTISE Regardless of whether we’re providing traditional consultancy services or developing new software, acting from a position of knowledge is crucial and we have invested heavily to ensure we have the right blend of people with the right expertise. We now have one of the largest team of asset and maintenance specialists in the world and support super majors. We don’t expect everyone to know everything. Our subject matter experts provide guidance based on their in-field experience. They work alongside our data scientists, lead analysts, trainers and facilitators. More generally, our expertise of working with many of the world’s major operators and large service companies as well as being active in other sectors has enabled us to develop an in-depth understanding of the industry’s asset integrity and maintenance challenges while drawing on lessons learned from other industries. This enables us to address even the most complex problems with confidence and ensure our technology is tailored to provide the most effective solutions.

Developing a strong and consistent culture across our global team has been central to fostering innovative ideas and solutions. Having a senior team who leads by example is fundamental to developing that culture. As a company we have always been hugely resilient and innovative – these are values that all our people live by. We thrive on doing the jobs that other people pass up as being too difficult. Hiring bright minds and letting people know it’s OK to fail provided they learn from that has been a key part of building our technology arm.

RELATIONSHIPS Forging mutually beneficial relationships with both our clients and industry peers is the cornerstone of Add Energy’s growth. An unwavering duty of care to our clients and collaborations with companies who are already looking ahead to where they want to be in the next decade have been founding principles. As our clients have succeeded and grow, we in turn expand the support we provide to them – often partnering to problem solve in new areas. This has allowed us to expand into new areas of expertise. One of the relationships I’m most proud of is our award-winning partnership with the University of Salford, which through the Knowledge Transfer Partnership programme saw us work with their students to develop and launch our Aim-Hi™ solution which provides real-time visualisation and data insights into asset performance, maintenance and risk.

As the global oil and gas industry seeks every more efficient operating methods, optimising asset performance and maintenance programmes while reducing risk is a priority.

AN INNOVATIVE SOLUTION TO RISK AND PERFORMANCE Aim-Hi is a cloud-based tool that provides realtime visualisation and data insights into asset performance, maintenance and risk across the energy and utility sectors. The software, which is the culmination of a five-year partnership between Add Energy AIM and the University of Salford, has already been deployed on three assets including a power generation plant, a mining and metals business and a gas processing terminal, where it has helped maintenance teams to save time and cost by expediting the traditionally complex and lengthy process of preparing KPI data manually, reduced corrective maintenance by 8% and halved the amount of time spent on emergency work. In addition to providing greater transparency around key performance indicators, Aim-Hi™ also enables users to understand why assets are performing as they are and make informed decisions based on reliable, up to date data. It focuses on five core areas of compliance analysis including preventative maintenance, corrective maintenance, emergency maintenance, scheduled maintenance and planned vs unplanned maintenance compliance. The approach to the design and utilisation of the software was to enable users to get what they need in no more than three clicks: • With no clicks, users can see an overview of how they are performing • With 1 click, users can discover more about a single KPI, including why they are not hitting their target • And with 2 clicks, users can dig even deeper, and identify specifically what is causing the issue. Aloysius Peter, Business Solutions Architect at Uniper Energy said: “Aim-Hi™ not only tells you how you are performing against your KPI’s relating to maintenance but, more importantly, it tells you the why behind them. “Gaining access to such insights at the click of a button, enables business to be more efficient by focusing on fixing issues, rather than manipulating data and spending excessive time investigating the reasons behind underperformance.” Ultimately, Aim-Hi™ provides asset managers with the top critical issues they need to go after, with specific data points that back it up

US REGIONAL FOCUS

By Loren Steffy

U.S. Oil producers struggle amid stagnant prices, rising production In the days after a U.S. drone strike killed Iran’s top military commander, Qassem Solemani, U.S. oil producers found themselves a victim of their own success. Crude prices started their predictable rise following the attack and the prospect of a potential military conflict that it unleashed. Tension in the Mideast has long been a driver of global prices, of course. But this time, something odd happened: nothing. West Texas Intermediate rose to $63 a barrel, then quickly settled back below $60. Prices had been higher last spring, when they briefly touched $66. Rising U.S. production —which hit a record 13 million barrels a day in early January — continues to put a damper on global prices. U.S. oil exports, which were a mere 600,000 barrels a day in early 2017, soared to more than 4 million barrels by December. Ironically, none of this is good news for U.S. producers, even though they’re coming off a banner year. In Texas, which produces more oil than any other state, the industry paid a record $16.3 billion in taxes and royalties to local governments. But in the last half of 2019, the number of active rigs working in the Permian Basin, the state’s most prolific oilfield, fell dramatically. Job losses across the industry are rising, and so are debt defaults. Several producers have filed for bankruptcy. Many companies had expected prices to rebound to the $70 range in 2019, and when that didn’t happen, they found themselves in a financial crunch. Todd Staples, president of the Texas Oil and Gas Association, predicts the worst may be yet to come. “With production strained by prices, we may have additional bankruptcies and mergers,” he told reporters on a conference call. With prices stubbornly hovering in the sub-$60 range, companies that invested heavily in shale plays are struggling to make debt payments. In the third quarter of last year, seven companies filed for bankruptcy after defaulting on $15 billion worth of bonds. In January, some producers got a slight reprieve, not from higher commodity prices, but from investors’ increased appetite for riskier debt.

www.ogvenergy.co.uk I January-February 2020

Taking comfort in a strengthening economic outlook, investors snapped up $6 billion worth of bonds from companies with lower credit ratings, including offshore driller Transocean and shale producer Laredo Petroleum. The spate of bond offerings came as surprise. The capital markets had largely shunned energy companies in recent months because of producers’ heavy debt burden, wanton spending on new drilling and land acquisition and dimming financial picture.

“This practice reflects an underlying weakness in the fundamentals of contemporary oil and gas business models: revenues from the supermajors’ operations are not covering their core operational expenses and capital expenditures,” the study said. “This helps explain why energy has been the poorest-performing sector in the stock market in recent years despite oil prices having more than doubled since hitting $29 per barrel in 2016.”

Since 2017, the majors have spent more than $10 billion buying acreage in the Permian Basin, according to the research firm Enverus. Laredo, for example, told investors in The big companies largely sat out November that wells it completed in the early phases of the shale 2018 fell short of its production boom, allowing independents forecasts, in part because of the to lead the technological proximity of newer wells to older innovation that unlocked Many companies had ones. The company said it shale reserves. But as expected prices to will use the new debt — with shale plays matured and rebound to the $70 interest rates as high as 10.25 the Permian became the percent — to repay bonds that world’s top oil producer, range in 2019, and when were set to mature in the next the majors have swooped that didn’t happen, they three years. in to take a dominate found themselves in a position. Chevron and financial crunch. All told, energy companies in Exxon are now the biggest North America face more than producers, having surged $40 billion in debt maturities this ahead of independents such year, and over the next four years, that as Pioneer Natural Resources. number rises to $200 billion, according to Moody’s Investors Service. Companies such as Exxon touted their strong balance sheets and deep cash reserves. The Wall Street has grown weary of the industry’s IEEFA report raises the prospect that the majors traditional financing model, in which companies may be caught in much the same financial emphasise production and acquisitions. As conundrum as the independents. a result, more investors and companies are beginning to focus on free cash flow as a A recent forecast by the U.S. Energy Information measure of their financial health. Administration offered little solace. The agency predicts crude prices to average about $60 a It’s not just the independents who are struggling. barrel this year and about $63 next year, which The major oil companies, which have pushed into means the price rebound many in the industry the West Texas shale plays in a major way, face were hoping for may not materialise. Another cash shortfalls to pay dividends. Some are selling year of disappointing prices will add to the assets to help make up the difference. A recent mounting debt concerns. analysis by the Institute for Energy Economics and Financial Analysis found that since 2010, the At the same time, production continues to rise. cost of dividends and buyback have exceeded The EIA predicts an average output of 13.3 the free cash flow at each of the five majors. million barrels this year and 13.7 million in 2021. Four of those — Exxon Mobil, BP, Chevron and That’s up from 12.2 million in 2018. The industry, Shell — have made significant investments in it seems, faces at least a couple of more years of U.S. shale plays during that time. wrestling with its own success.

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Michael Young Senior Engineer ROSEN

Optimising data driven analytics and improving pipeline integrity management

Every operational asset is unique, exhibiting variation in mechanical characteristics, operating conditions, physical location, technical standards and governing legislation which applies to it. Guidance, methods and techniques of identifying threats and managing asset integrity are both well established and improving. However, implementation of integrity management is fragmented within the oil and gas industry.

he interpretation of standards and regulations, implementation of inspection planning and anomaly management can vary significantly between operators and between assets. And the drive for digitisation within the industry in combination with both large amounts of archived records and an ever-growing inspection database are all factors which make a uniform approach to asset integrity management difficult to achieve. These factors mean adopting a uniform approach to asset integrity management is challenging. ROSEN launched NIMA, their new digital integrity management framework, in 2019 to help meet this challenge. The NIMA platform provides operators with a digital tool to make secure decision making about the integrity of their assets by enabling an accurate reflection of individual integrity management processes and giving easy access to all pertinent data. NIMA is designed to provide operators with a structured and tailored level of support to meet their individual demands. From instant remote execution of integrity processes via a custom cloud platform, to expert advice on specific integrity challenges, to the training of personnel, NIMA can be used to support the entire integrity management cycle. NIMA comes with a certified standard set of templates for the most common integrity management processes. These templates are developed by ROSEN’s in-house expert integrity assessment engineers. NIMA also allows users to digitise their own analogue processes and share them with colleagues - and even with other operators - allowing for individual adaptations.

To help address the challenges faced by operators with ageing subsea assets in the North Sea, the ROSEN Integrity team has investigated ways to utilise the NIMA framework for the optimisation of offshore Pipeline Integrity Management and to provide an almost real time visualisation of asset integrity status. The offshore implementation of NIMA will facilitate integration of multiple data sets, including subsea survey, in-line inspection data and risk-based inspection (RBI) within a single platform that allows for optimised integrity decision support. This will help ensure operators maintain safe and reliable operations while attaining the ultimate goal of zero incidents. Fully integrated. Isolated software packages, redundant databases and multiple user environments are no longer an issue. Fully integrated, NIMA offers well-defined, understandable and extendable workflow integration. All workflows related to the integrity management process are clearly defined and visible to all users so that they know what the next step is.

Always at your fingertips. NIMA is available as a cloud-based service and allows clients immediate, quick and easy access to information at any time. This software-as-aservice approach is a flexible solution that respects the dynamic nature of decision-making. Always up-to-date. All relevant data is guaranteed to be the most up-to-date data available from a company’s system of record and can even be downloaded straight from the field. Heavy lifting. NIMA supports fast integration and processing of huge amounts of data. Don’t worry about big data – let NIMA do the heavy lifting. Truly transparent. Today’s stringent regulations require now, more than ever, clear documentation of the integrity management process. NIMA supports data analysts, integrity engineers and consultants with a truly transparent way to track down and communicate what has been done in the integrity management process and how it was done. Clear governance. NIMA is designed to support both the data management and the integrity assessment side of a business. The separation of upload, alignment and analysis of data greatly clarifies and simplifies the governance of data and processes.

WORLD PROJECTS

WORLD PROJECTS MAP JANUARY-FEBRUARY 2020

BRAZIL - Sao Paulo Lara Central de Tratamento de Resíduos US$240m Development of a 77MW waste-to-energy plant in the São Paulo metropolitan area. The facility, which will feature two steam turbines, will be built at the Lara landfill and is planned to receive 3,000 tonnes of waste per day from nine cities.

POLAND - Olsztyn Miejskie Przedsiebiorstwo Energetyki Cieplnej (MPEC) US$916m Development of a 13MWe and 30MWth EfW plant that will process 100,000 tpa of refuse derived fuel. Dobra Energia secured a PLN 2.8 billion contract to build and operate the plant and will commence construction works in spring 2020. Full operations are anticipated for 2022.

www.ogvenergy.co.uk I January-February 2020

INDONESIA - Sunter PT Jakarta Propertindo (Jakpro) US$250m A 35MW EfW plant that will use thermal technology to process 2,000-2,200 tonnes per day of household waste. International Finance Corporation is providing funding and the EPC tendering process is ongoing. Pre-construction works have commenced for full operations in March 2022.

WALES - Uskmouth SIMEC Atlantis Energy Ltd. US$250m Conversion of two 131MW units at the existing Uskmouth B coal power plamt to a 220MW EfW pellet plant. SIMEC Atlantis has awarded a contract to Mitsubishi Hitachi Power Systems Europe for the design and development of the plant’s combustion system. Operations will occur in H1 2021. Vølund for commissioning in 2020.

CHINA - Shenzhen Shenzhen Energy Group US$3000m Development of a 168MW EfW facility, set up to be the largest in the country to date. It will process 5,600 tonnes of waste daily and feature a combustion grate system. Construction works are underway by contractor Babcock & Wilcock Vølund for commissioning in 2020.

UAE - Sharjah Bee’ah & Masdar US$220m A new 300,000 tpa facility with a power capacity of 30MW, and possible expansion plans of up to 90MW in the future. The plant will be the first EfW in Sharjah and is under construction, for operations in 2021.

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EGYPT - Cairo Government of Egypt US$500m

RUSSIA - Moscow RT-Invest US$2080m

AUSTRALIA - East Rockingham New Energy Corporation US$200m

Proposal of a 100MW EfW plant to serve cities affiliated to the NUCA in east Cairo, including New Cairo, El Shorouk and Badr City. FAS Energy signed an MOU with the Egyptian Minister of Housing’s NUCA for the project. FAS Energy will carry out the technical, environmental, and financial studies.

Four EfWs in Moscow with a total power capacity of around 280MW. The plants will process around 700,000 tpa each and will reduced the proportion of waste sent to landfill in the Moscow region by more than 25%. HZI is the technology supplier and construction is underway for the first plant.

An EfW plant 40km south of the Perth Central Business District. The facility will process around 300,000 tpa and have a capacity of 29MW. Acciona secured the EPC contract for the works with HZI providing technology. HZI has announced plans to commence construction works in January 2020.

INDIA - Ghazipur East Delhi Muncipal Corporation US$1bn Development of a 610MW EfW plant in Delhi using decomposed waste available at Ghazipur’s landfill site. The plant will feature AG Dauters’ LT Plasma Gasification Technology and construction will take place in two phases, with the first generating 50MW and the second 560MW.

SERBIA - Belgrade Beo Cista Energija (BCE) US$319m Proposal of a 30MWe and 56MWth EfW plant which will process up to 700,000 tpa. CNIM has a contract for the full turnkey supply of a steam turbine generator and auxiliaries. Construction works are underway and is anticipated for operations in 2020.

OMAN Oman Power and Water Procurement Company (OPWP) US$800m Plans to build the first EfW in Oman, with an estimated 150MW capacity. Interested developers are being sought for the project, with prequalification bids to be invited in 2020. Operations is scheduled for Q2 2023.

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CONTRACT AWARDS

CONTRACT AWARDS Aker BP awards Maersk Drilling two-well contract extension Maersk Drilling has secured a two-well contract extension from Aker BP for the ultra-harsh environment, low-emission jack-up rig Maersk Integrator. In direct continuation of the rig’s current workscope, Maersk Integrator will move to the Ivar Aasen field offshore Norway to drill two wells, with work expected to commence in October 2020. The extension has an estimated duration of 93 days and a contract value of approximately US$25.5m, excluding a potential performance bonus. The contract includes an additional one-well option. Maersk Integrator is contracted under the terms of the alliance agreement Maersk Drilling entered into with Aker BP and Halliburton in 2017. The tripartite alliance uses a shared incentives model, thereby securing mutual commitment to collaborate to reduce waste and deliver value. Contracts under the alliance are based on market-rate terms but add the possibility of an upside for all parties, based on actual delivery and performance. “We are thrilled to be able to firm up activities for Maersk Integrator in 2020 by continuing to work closely together with Aker BP in an alliance which is enabling new ways of working across the value chain. The alliance is enhancing efficiency through increased coordination and involvement, and we are starting to see the first tangible results of this. Higher efficiency in itself reduces the CO2 emissions associated with a drilling campaign, and this is further improved by the low-emission upgrades Maersk Integrator will receive before it begins working at Ivar Aasen,” said COO Morten Kelstrup of Maersk Drilling. Maersk Integrator is an ultra-harsh environment CJ70 XLE jack-up, designed for year-round operations in the North Sea. It was delivered in 2015 and is currently operating offshore Norway for Aker BP. The rig is expected to perform its scheduled Special Periodic Survey in August 2020 and will undergo a series of upgrades to turn it into a hybrid, low-emission rig prior to moving to the Tambar field in September 2020.

www.ogvenergy.co.uk I January-February 2020

CONTRACT AWARDS

CONTRACT AWARDS Sparrows awarded five-year Tengiz inspection contract Sparrows has worked with the operator since 2004 and this latest award will extend their relationship to 20 years. The contract will see Sparrows conduct premobilisation and annual inspections for mobile cranes, gantry cranes, forklifts and boom trucks. The company’s experienced engineering teams will also manufacture custom-built wire rope slings to suit TCO’s operational and drilling requirements.

Sparrows Group has secured a five-year contract with Tengizchevroil (TCO) to deliver specialist lifting inspection services for the Tengiz field in Kazakhstan. TCO is a joint venture between Chevron, ExxonMobil, KazMunayGas and LukArco.

The operator’s on-site rigging and lifting workshop will be operated by Sparrows personnel for the duration of the project. Manpower, equipment rental, turnarounds and special projects will all be delivered from the workshop, located in the industrial base of the Tengiz field. The company currently has 40 personnel dedicated to the project but expects this to increase as the project develops.

Stewart Mitchell, chief executive officer at Sparrows said: “Having worked with TCO for 15 years we have a strong understanding of its inspection and maintenance requirements. We are delighted that the business continues to see the value we deliver, and this latest award would not be possible without our highly skilled and dedicated personnel. “We have continued to see demand for our services increase in Kazakhstan as operators understand the long-term benefits strategic inspection and maintenance campaigns can deliver for their fields. We look forward to extending our relationship with TCO and working closely with the team to deliver operational and safety benefits to the Tengiz field over the next five years.” The Tengiz field is an onshore reservoir located in north-west Kazakhstan which is ranked as the world’s deepest producing supergiant oilfield and the largest single-trap producing reservoir in existence.

THREE60 ENERGY awarded Neptune contract THREE60 ENERGY, the global energy services group, has won a framework contract to deliver engineering and support services for Neptune Energy’s UKCS portfolio. The contract will see THREE60 ENERGY provide both concept and front-end engineering studies as well as engineering, procurement, construction and commissioning activities for Neptune Energy. THREE60 ENERGY has secured this contract as a direct result of a competitive tender process, which covers concept and front-end engineering studies as well as detailed engineering, procurement and construction activities. The contract will run for an initial two-year period and includes two, one-year extension options. Commenting on the award, CEO of THREE60 ENERGY, Walter Thain, said: “We are delighted to

have been selected by Neptune Energy to provide this level of service for its UK assets. It’s great to see our track record of scope challenge and delivery execution being recognised by an agile and growing E&P company. “Neptune Energy is already a hugely important customer to us in Engineering and Wells in Norway and it’s great to see our differentiated delivery given further recognition across our common geographies.” Since its inception, THREE60 ENERGY has built a global service offering that supports the whole asset life cycle. Its services include subsurface, well delivery, facilities engineering, construction and commissioning and operations management. The company has established a sound-track record, and its team of over 350 multi-disciplined technical experts now serve the world’s major oilfield operators.

Subsea 7 and Eidesvik Offshore’s Hybrid Vessel wins IMCA Environmental Sustainability Award 2019 Subsea 7 and Eidesvik Offshore has been presented with the International Marine Contractors Association (IMCA) Environmental Sustainability Award for 2019 in recognition of its efforts to reduce vessel emissions and improve energy efficiency. I n January 2019, Seven Viking was successfully converted from a conventional to a hybrid vessel as part of its long-term Inspection, Repair and Maintenance (IRM) services contract with Equinor in Norway. The conversion, which involves the installation of a battery system and land-based power supply, delivers a range of benefits including significant fuel savings, emission reductions from ship operations, reduced maintenance costs on diesel engines and increased flexibility in the use of Power Generation plants. Additional benefits include improved dynamic positioning capability performance, shore power connections for energy supply whilst

www.ogvenergy.co.uk I January-February 2020

quayside, and innovative features such as the ability to regenerate power from project equipment and to charge autonomous ROVs in the field. Robin Mawhinney, i-Tech 7’s region director for Europe, Africa and Canada, said: “Since its launch in 2013, Seven Viking has been an innovative and successful IRM vessel. We are delighted with the success of this conversion and see it as a promising step towards improving the environmental footprint of this vessel.” Environmental sustainability is one of two key strategic themes for IMCA and the IMCA Environmental Sustainability Award recognises the best environmental sustainability initiatives developed by IMCA members during the last two years. Named Nor-Shipping’s “Ship of the Year” in 2013, Seven Viking is a harsh environment IRM vessel with

a crew capacity of 90 and special features such as an enclosed module handling system, scale squeeze system and an ROV hangar. The vessel, which is co-owned by Subsea 7 and Eidesvik Offshore, previously worked for Equinor on a fiveyear contract and started a new five-year contract with Equinor in January 2019, through i-Tech 7, Subsea 7’s Life of Field business unit.

CONTRACT AWARDS

Petrofac inks supplier agreement with SSE for Seagreen wind farm project Aker Solutions has secured a contract to support the development of BP’s Cypre project, offshore Trinidad and Tobago. The contract will see Aker Solutions deliver frontend engineering and design for the first platform in a potential series of future assets within BP’s Trinidad and Tobago portfolio. The award comes following the successful delivery of early phase studies by Aker Solutions’ team in London. The study will be completed in the summer of 2020. The FEED could lead to a full EPC contract combining green- and brownfield scopes, which would be executed from Aker Solutions’ London, Aberdeen and Mumbai offices.

“We are excited to be expanding the collaboration with BP to develop the oil and gas resources in Trinidad and Tobago, which is a new region for us,” said Luis Araujo, CEO of Aker Solutions. “We will utilise our front-end engineering capacity to maximise the output and minimise the footprint of the project.” “We believe the Cypre project will set a new standard in ‘minimum facilities’ platform concepts, combining technology and improved processes to achieve fully unmanned operations,” he added. Unmanned facilities offer benefits to operators by reducing travel and CO2 emissions, as well as improving safety by removing permanent personnel offshore.

The project is operated by BP Trinidad and Tobago, which is a partnership between BP and Repsol SA.

Oil Plus secures global contracts worth in excess of £4million months extending the headcount to 50, with plans to secure another 10 in the first quarter of this year. The recently awarded scopes of work include a significant project to develop an onshore front-end engineering and design (FEED) study for a water disposal and injection system for a major North African E&P operator.

Specialist oil and gas consultancy Oil Plus Ltd has seen its international growth plans boosted after being awarded contracts totally in excess of £4 million as it enters 2020. New business secured in the last quarter by the oilfield chemistry, microbiology and process design company is up 22% compared to the same period in the previous year. The increased workload has resulted in a recruitment drive. Ten personnel have been taken on in recent

As a result of the newly awarded campaigns, the UK company which has its corporate headquarters and lab facility near London and an office in Aberdeen, has expanded its footprint in the Middle East, South East Asia, Europe and North Africa, including a project in Trinidad & Tobago for the first time. Since 1978, Oil Plus has worked with more than 270 upstream oil and gas companies in its key disciplines of production chemistry, microbiology, specialised reservoir souring and process engineering. It has continued to achieve significant growth since it was acquired in 2017 by Aberdeen entrepreneur, Mark Cavanagh. Mr Cavanaugh has more than three decade’s experience in the oil and gas sector which includes founding and running a successful asset management consultancy and engineering businesses.

Oil Plus global business development director Clarke Shepherd said: “Oil Plus has been operating for more than 40 years and has evolved and grown rapidly since it was acquired three years ago. Starting 2020 with a strong order book which includes the first significant onshore FEED project for our process engineering division, demonstrates the value and confidence our clients have in our approach. “We have an excellent team that provides the highest quality of engineering and design to our clients. Coupled with our business being completely independent from all chemical and water process equipment vendors, we are becoming further recognised around the world for delivering cost-effective solutions quickly and safely. “These factors were key to our success in 2019 where we enjoyed a solid increase in external sales, revenue and profit year-on-year. With an even stronger order book as we start 2020, our focus will remain on supporting our clients as well as targeting sustained and supported growth within our core business areas.”

Subsea Integration Alliance wins contract for Sangomar field development Subsea 7 and OneSubsea, through their Subsea Integration Alliance, have been officially given a contract for the first phase development of the Woodside-operated Sangomar field offshore Senegal. The subsea flowlines, umbilicals, and risers (SURF) contract to the Subsea Integration Alliance was announced in December 2018 and has now been finalised after Woodside and its partners took a final investment decision on the Senegalese oil project earlier this month. Under the contract, the Subsea Integration Alliance will be responsible for the engineering, procurement, construction, and also the transportation and installation of the SURF system and associated subsea production systems (SPS). The contract value has not been disclosed but Subsea 7 indicated its share to be in the $500m-$750m range.

Subsea 7 Africa region vice president Gilles Lafaye said: “Subsea 7 brings decades of experience in working safely and reliably in the region as well as bringing global engineering and execution capabilities to support Senegal as it increases energy production.” The phase 1 development of the Sangomar field will involve drilling of 23 wells, and will see the installation of 107km of rigid flowlines, 28km of flexible risers and jumpers, and 45km of umbilicals. All the SURF equipment will be installed in water depths in the range of 700m-1400m. According to Subsea 7, offshore activities of the contract will be carried out between 2021 and 2023 using its reel-lay, flex-lay, and light construction vessels. The company revealed that the Subsea Integration Alliance team, which was created during the front

end engineering design (FEED) phase will now move into the full EPIC phase, working from the Subsea 7 Global Projects Centre (GPC) in Sutton, UK. Subsea 7 GPC centres located in Sutton and Suresnes, France will carry out the SURF engineering, while a base in Senegal will provide support to the offshore campaign and undertake site receipt testing and storage of equipment.