Oil, Gas and Shipping Magazine

ISSUE 78 www.ogsmag.com

Tullow Oil Africa’s leading independent oil company

The Editor

Editor

The

Martin Ashcroft

Quod erat demonstrandum

W

hen I was fourteen years old I questioned everything.

In the 1960s, teenagers took nothing for granted; we wanted explanations and believed no-one who couldn’t deliver them. I remember being particularly hard on the Sunday school volunteers who taught me about the Bible. Civil rights, Viet Nam and CND were the causes of our time. And we had Bob Dylan.

Nobody seems to question anything in the same way now. When I hear people interviewed on TV, they may give totally inadequate answers, but the interviewer lets them get away with it. Make them explain, I scream at the screen.

As an editor who makes his living from communication, I love email and the internet for making the process easier. What I don’t love is the way the internet has become the Bible for the impressionable. An editorial assistant once offered me a story for publication that Hans Christian Andersen would have been proud of. When I asked her why she thought it was true she said “it was on their website.”

In the age of mass communication we are bombarded with opinions disguised as facts and we have lost the ability to tell the

difference. Let’s take job creation as an example.

Politicians love to create jobs, because jobs create votes, but the job card they play is often a con trick. Where I live, our local authority considers planning applications for new wind turbines and solar power installations, and the sponsors of these projects inevitably cite job creation among their major benefits, with the insidious implication that only a heartless and irresponsible authority would deny anyone the opportunity to work.

But the answer is not blowing in the wind this time. It’s obvious.

What the wind warriors don’t want you to know is that their jobs are worthless without growth. At best they redistribute jobs, rather than create them. It’s market share they’re after. Think about it. Let’s say the demand for energy is x, and we currently satisfy that demand with a workforce of y. Every job we create with a wind turbine adds to y unless we lose a job somewhere else. If we produce the same amount of energy by other means, but use more resources to make it, we are less efficient than we were before. So unless we produce more energy, more jobs make energy more expensive. QED. I’m sure I had a maths question like that when I was fourteen. www.ogsmag.com

3

Contents Page 24 Cover story: Tullow Oil: Exploring Africa

03

The Editor

19

Global Marine Systems adds new ROV

70

Mercy Ships: A volunteer’s experience

09

News in Brief

21

Sequa Petroleum acquires Norwegian asset portfolio

74

Oil, Gas and Shipping media information

09

Matson completes Alaska acquisition

21

Norwegian shelf has more oil reserves

78

Offshore Europe 2015

09

DNV GL and Jotun cooperation

23

EBH Namibia welcomes first Panamax vessel

13

Tendeka opens facility in Texas

23

Peterson & Veolia announce new facility

13

China will host ANGVA2015

32

Marriott Drilling Group

15

Dubai to be a hub in global shipping industry

37

Interview: Jason Wilkes

17

Euronav acquires four existing VLCCs

38

Energy costs

17

The Judge enforces maritime security

42

The UK fracking debate

19

FROG marches into Mexican waters

46

Shell: The biggest getting bigger

ADVERTISERS Page: 2 Biardo Survival Suits BV 8 Ebara International Corp.

10 Oil, Gas and Shipping 12 TerraMar Networks 14 IT Vizion 14 Kippertool 16 Shepherd Offshore 18 The Heavylift Group 20 Telenor Satelite Broadcasting 22 KANON Loading Equipment 36 Technip 54 FMC Technologies 55 Heatric/Meggitt 60 Zenith Consultants 68 D&R Valves 68 Kvaerner 82 VersaDev 83 EverSea/GeoSea NV 84 World Mining Magazine

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Company Information

Page 40 Economics: Racing to the top and racing to the bottom

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Monthly news & features www.ogsmag.com

7

News and features

News in Brief Liner schedule reliability improved for the fourth consecutive month in May, according to Carrier Performance Insight, the online schedule reliability tool provided by Drewry Supply Chain Advisors. The latest 4 per cent monthly increase follows a similar rise in April.

Maersk Line remained the most reliable carrier with an on-time performance of 85.0% in May. G6 carriers NYK (78.9%), OOCL (78.7%) and MOL (77.4%) were the next best. At the other end of the table were Zim (51.1%) and Wan Hai (46.3%).

Matson completes Alaska acquisition for $469 million

* * * The US Energy Information Administration (EIA) has launched a redesigned International Energy Portal to improve access to international energy data and trends in global energy markets.

The Portal includes a powerful new data browser with historical information on country-level energy use. Users can convert between US and European common units of measurement for energy and can also compare data across different energy sources. http://www.eia.gov/beta/international/ * * * After six months of decline, global petrochemical prices climbed for the fourth consecutive month in May, according to the latest monthly Platts Global Petrochemical Index (PGPI).

Expressed as a monthly average, petrochemical prices rose $41 per metric ton (/mt) from April to $1,093/mt in May, an increase of four per cent. Prices are still way below last year, however, down 20% since May 2014.“ * * * Asia’s top four oil consumers, China, Japan, India and South Korea, collectively responsible for just over 19 million barrels per day (a fifth of global oil demand) might have begun the “demand response” to low prices that the market has been waiting for, according to a special report issued in Platts Oilgram News. The four consumed a little over 821,000 b/d more LPG, naphtha, gasoil, gasoline, jet/kerosene and fuel oil in the first four months of this year compared with the corresponding period of 2014, official data from the countries shows.

M

atson Inc has completed its previously announced acquisition of Horizon Lines, Inc, including Horizon’s Alaska operations and the assumption of all non-Hawaii business liabilities.

Separately and immediately preceding the completion of the transaction, Horizon completed the sale of its Hawaii trade lane assets and liabilities to The Pasha Group for $141.5 million.

Matson acquired the stock of Horizon for $69 million, and repaid Horizon’s outstanding debt, for a total transaction value of $469 million (before transaction costs).

Matson will continue Horizon’s long operating history in Alaska with a three vessel deployment of diesel powered Jones Act qualified containerships that provide two weekly sailings from Tacoma

to Anchorage and Kodiak, and a weekly sailing to Dutch Harbor.

In addition, Matson will be operating port terminals in Anchorage, Kodiak and Dutch Harbor and acquiring several reserve steam powered Jones Act containerships that may be used for drydock relief.

“We are pleased to have completed this strategic acquisition that substantially grows our ocean transportation business into the attractive Alaska market,” said Matt Cox, president and chief executive officer of Matson. “The Alaska market is a natural geographic extension of our platform as a leader serving our customers in the Pacific. We are excited by the longterm prospects of the Alaska trade lane and expect this transaction to deliver shareholder value through earnings and cash flow accretion.”

DNV GL and Jotun cooperate to improve hull performance DNV GL and the Norwegian paint manufacturer Jotun have signed a cooperation agreement to work on improving hull performance. The project will bring together Jotun’s Hull Performance Solution and DNV GL’s ECO Insight solution, to collect and analyse data on hull degradation.

Experts suggest that hull and propeller degradation account for up to 17 per cent of the world fleet’s fuel costs and greenhouse gas emissions. Advanced hull

coatings solutions or more regular hull and propeller cleaning are already widely accepted as effective preventive measures, but there is no conclusive evidence to show which coating solution is the most effective or when and how often propellers need to be cleaned.

DNV GL will provide Jotun with hull and propeller performance computations based on computational fluid dynamics models that include the complete operational range of the vessel. www.ogsmag.com 9

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News and features

Tendeka opens completions manufacturing and operations facility in Texas

Tendeka, a provider of completions systems and services to the upstream oil and gas industry, has opened a completions, manufacturing and operations facility in Fort Worth, Texas.

The new site provides Tendeka with a modern, bespoke, fully equipped facility encompassing a 14,000 sq ft workshop and an additional yard space totalling 2.5 acres.

The facility will manufacture a range of completions equipment including liner hangers, fracturing technologies and packers while providing an operations base for completions, monitoring solutions and downhole tool assembly for the North American market.

“Our investment in this new bespoke facility not only enhances our presence in North America, but it will be our completions manufacturing and operations facility serving the global market,” said Tendeka CEO Gary Smart.

“During the current industry downturn, it is essential that Tendeka is well placed to better service its customers. Our new site in Fort Worth will allow us to do just that, in terms of both capacity, providing a readily available on-ground supply of a range of technologies and in developing innovative cost-effective solutions.”

Tendeka has had a strong presence in the US market since 2008 designing, supplying and installing completions products and systems.

No.1 for natural gas vehicles, China will host ANGVA2015

With over four million NGVs and over 7,000 natural gas filling stations, China has emerged as the No.1 NGV nation in the world.

In line with this, the 6th Asia-Pacific NGV Association’s biennial exhibition and conference (ANGVA2015), will be held in Chengdu, China from 4 to 6 November 2015. With 14 million inhabitants, Chengdu is one of the most important economic, transportation, and communication hubs in Western China.

Filling station investors have already put the construction of new CNG stations across China in their 2015-2016 agenda.

In addition, more aggressive plans were set to enlarge LNG refuelling network.

Major energy companies plan to build LNG stations, including the construction of 1,000-2,000 stations in Shandong, Henan, etc, by Kunlun Energy. CNOOC aims to build 1,000 LNG filling stations,

while ENN and Xinjiang Guanghui set targets of 500 and 300 stations respectively, with many other investors set to join the market.

Meanwhile, NG commercial vehicle production has been increasing rapidly, becoming a feature of China’s commercial vehicles market. Around 140,000 of the 4.41 million NGVs (December 2014) are LNG vehicles. This is, by far, the largest LNG vehicle fleet and market in the world.

The theme of ANGVA 2015 is Natural Gas for Vehicles - A Realistic Choice of Clean Transportation. In the conference, there will be keynote speeches and panel discussions on regional and local NGV market development, policies and regulations on NGVs, refuelling stations and facilities, NGV and engine OEMs, renewable natural gas, LNG vehicles and stations, case studies, etc. www.ogsmag.com

13

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News and features

Dubai to be a hub in global shipping industry

A

fter successfully staking its claim as one of the world’s leading business centres, the Emirate of Dubai is now determined to become a key global shipping partner and maritime centre of excellence.

“We will achieve this by providing the best shipping infrastructure and businessfriendly environment in the Middle East region, helping shipping companies deliver on their global objectives,” comments Amer Ali, executive director of the Dubai Maritime City Authority, the organisation tasked with developing, monitoring and promoting maritime activity in the Emirate.

According to the new report from Menon, which polled around 1,600 maritime professionals and experts from 33 countries, Dubai will rank in seventh place amongst the leading maritime centres in the world in the next five years.

By 2020, this will put it ahead of longestablished global hubs such as London, New York, Tokyo, Copenhagen, and Rio de Janeiro.

Respondents to the report, which benchmarked centres according to

the four main maritime indicators of finance, technology, ports and logistics, and shipping, in addition to an overall assessment of the cities’ competitiveness and attractiveness, ranked the Emirate fifth overall under the ports and logistics indicator.

Industry experts positioned the city

H.E. Sultan Bin Sulayem

tenth in the world in relation to both the size of ship owners’ fleets and size of fleets managed from the city. Dubai also ranked among the top 10 global players in terms of leading centres for port and logistics services (sixth); site of worldclass specialised logistics services (sixth); and volume of twenty-foot equivalent units (TEU) handled in city ports in 2013 (tenth).

“As the results of the report show, we are particularly adept at providing worldclass port and logistics services, and will continue to further reinforce our capabilities and resources in this area,” said H.E. Sultan Bin Sulayem, Chairman of Dubai Ports, Customs and Free Zone Corporation and President of the Dubai Maritime City Authority. “We will also aim for excellence in other key indicators such as shipping services, maritime legal expertise, maritime insurance, and competitiveness and attractiveness.”

Send your news to martin@ogsmag.com www.ogsmag.com

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News and features

Euronav acquires four existing VLCCs under construction

E

uronav has agreed to purchase through resale four VLCCs which are completing construction at Hyundai Heavy Industries for an aggregate purchase price of $384 million ($96 million per unit).

The vessels are due to be delivered in September 2015, January, March and May 2016. The seller has also agreed to grant Euronav an option to acquire up to a further four VLCC sister vessels at $98 million each.

“Euronav is delighted to enhance our

fleet with the addition of four high specification modern VLCCs,” said CEO Paddy Rodgers. “The tanker sector continues to perform strongly with a positive outlook. This accretive transaction further cements Euronav’s position as the largest, independent quoted crude tanker platform.”

The transaction is consistent with three of Euronav’s core principles. Firstly, being ex-yard resales, the vessels do not add supply to the market and therefore meet the company’s requirement to add only

existing vessels to its fleet and not to order new ships, which reduce the value of the existing fleet.

Secondly, the time lag between the purchase and the deliveries to the company will be similar to buying a fleet on the water, therefore allowing the capital deployed to be rewarded by the freight market imminently, and finally, as the vessels are of the latest design and similar to or better than those acquired in July 2014, they will help to rejuvenate Euronav’s fleet and enhance its operational strength.

The Judge enforces maritime security in West Africa

I

nternational security specialist Pilgrims Group has upgraded a former US Coast Guard cutter with state-of-the-art navigation and anti-piracy equipment to help provide safe passage for clients working in West African waters.

The vessel, MV The Judge, was acquired by Pilgrims in the US three years ago.

Corporate clients, including oil companies, geological surveyors and cable laying

experts, have already enjoyed the protection of an armed escort provided by MV The Judge, whose captain, Shane Slabbert, has military experience with the South African Navy. The vessel, which has worked as far afield as Egypt, Somalia and Mombasa, is now based in Lagos, Nigeria, working alongside the Nigerian armed forces, and its area of operations now extends along the West African coast.

“The potential for attack by pirates is a regrettable feature of modern maritime activity and poses a significant threat to our clients, many of whom are involved in projects of international economic significance,” says Daniel Revmatas, general manager of Pilgrims Africa. “The Judge gives Pilgrims the ability to provide organisations with a complete solution to security provision.” www.ogsmag.com

17

News and features

FROG marches into Mexican waters

S

hortly after being certified by the Mexican Merchant Marines to market its personnel transfer devices in Mexico, Reflex Marine now has its first unit in operation.

Reflex Marine designs and manufactures personnel transfer equipment for the oil and gas industry to ensure crew are transferred safely and efficiently to and from offshore installations.

Olympic Shipping AS, an offshore shipping company located in Fosnavaag, Norway , purchased the six person transfer device, FROG-6, for use on its accommodation vessel, the MPSV Olympic Triton. The FROG-6 is being used to transfer Triton’s crew to and from other crew boats and supply vessels working on the Cantarell oil field in the Gulf of Mexico.

“As the master of the vessel, my concern will always be the safety of my crew,” said Olympic Triton’s Captain Martin Eysturdal. “I am confident that every operation is performed safely and efficiently, knowing that we have a device that I can rely on 100 percent. The general feedback I have received from our employees, and other personnel that have been transferred using the FROG, has been very positive - especially the feeling of comfort and safety during the transfer.”

Reflex Marine’s regional partner is GINEMEX, which has over 25 years’ experience in mechanical repairs and maintenance of offshore equipment, such as cranes, winches and pumps. The two companies have been working very closely to ensure that Olympic Shipping AS receives all the support it needs to

integrate the FROG into its operations.

The FROG-6 provides extensive protection from the four key risks of transfer including falling, collision, heavy landings and immersion. The buoyancy panels provide self-righting and floatation in the unlikely event of immersion in water. The FROG-6 seats are mounted on coil springs combined with gas dampers to protect passengers from heavy landings.

Since Mexico’s energy bill was passed in December 2013, international companies have access to deep-water oil and gas supplies in Mexican waters, previously only allowed for the state owned oil and gas company, PEMEX. As a result the potential for the introduction of the FROG-6 has expanded and it can now be used on all vessels operating in Mexican waters.

Global Marine Systems adds new ROV

G

lobal Marine Systems Limited has extended its subsea capability with the acquisition of a powerful jet trenching ROV. The new submersible complements its existing burial equipment portfolio and is designed for pre- and post-lay trenching as well as simultaneous lay and burial in the offshore subsea cable sectors.

The new addition is the Q1000 Jet Trencher, whose modular design allows it to be easily mobilised onto vessels. With 1000hp of total installed and variable jetting power, the ROV is suitable for trenching pipelines, umbilicals and cables to a burial depth of three metres at a speed of up to 400 metres per hour.

Operationally rated to a depth of 1000m, the Q1000 is easily configured for use with either tracks or skids to suit the application and can be deployed for trenching operations on all seabed conditions, from fine sand to firm clay, and in extreme environments and challenging weather conditions. www.ogsmag.com

19

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News and features

Sequa Petroleum acquires asset portfolio on Norwegian Continental Shelf

S

equa Petroleum NV (SPNV) has reached an agreement for the acquisition of the Norwegian company Tellus Petroleum.

At the same time Tellus has entered into an agreement with Wintershall Norge to purchase a 20% interest in the Knarr field, 15% in Maria, 6.5% in Ivar Aasen and 4.5% in Veslefrikk in a large asset portfolio transaction on the Norwegian Continental Shelf (NCS) from Wintershall Norge AS.

Included in the transaction is also 10% in PL 316 which contains Yme and interests in seven additional exploration licenses.

The asset portfolio transaction is subject to normal consent by Norwegian Authorities, including the approval of Tellus Petroleum as a new NCS player. Closing is expected at the end of 2015.

The purchase price for this portfolio is $602 million, which makes it one of the major acquisitions on the NCS so far this

year. In addition, Tellus Petroleum will make a further payment of up to $100 million depending on the oil price between 2016 to 2019.

The package is aligned with the Tellus and Sequa strategy to acquire oil and gas assets in production or being developed towards production. The current management team in Tellus will continue to run the company and the organisation will be further developed to manage the portfolio.

Norwegian shelf has more oil reserves than ten years ago

A

review by the Norwegian Petroleum Directorate of the resource basis in a select number of fields and discoveries on the Norwegian shelf between 2005 and 2014 has found that the current recoverable volume of oil exceeds the estimated figure in 2005; it is also presumed that more oil remains to be discovered.

“A lot of good work has been done to

increase the resources on the Norwegian shelf, and there has been substantial resource growth in many fields,” says Kirsti Veggeland, assistant director general for shelf analysis in the NPD. “The most important reasons for this are more wells, extended field lifetimes and improved knowledge. Decisions were also made to develop new deposits in the fields over the ten-year period.”

In addition to producing fields, the NPD has reviewed 62 discoveries for which development decisions had not been made in 2005. Over the course of this ten-year period, 28 of them have been developed, and their oil reserves have nearly doubled.

This is due to new information, better reservoir understanding and optimisation of development solutions and drainage strategies. www.ogsmag.com 21

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News and features

EBH Namibia welcomes first Panamax vessel

E

lgin Brown & Hamer (EBH) Namibia has welcomed its first Panamax-size vessel, signalling a new era in ship repair for the company.

EBH Namibia launched its new Panamax-size third dock (Namdock 3) in Walvis Bay in October 2013, but had to wait until 1 June this year before Bold Voyager, a general bulk vessel owned by Navigation Maritime Limited, became the first Panamax vessel to use the facility.

At 195 metres in length, and with a lifting capacity of 15,000 tons, Namdock 3 has opened the doors for EBH Namibia to provide a service for the Panamax vessel market, which includes container/general cargo ships and tankers.

“As the first Panamax-size vessel to be lifted and docked in Namibia, at the

only privately-owned floating dock of its size in western Africa, this was a truly ‘milestone moment’ and an occasion to go down in history,” said Hannes Uys, chief executive officer of EBH Namibia.

Bold Voyager, which operates in West Africa between South Africa, Namibia and Nigeria, set sail for Cape Town on 12 June, from where she will go to Nigeria for a steel delivery before returning to Walvis Bay for a salt loading consignment. The scope of work, completed in 11 days, included painting and blasting.

“With a length overall (LOA) of 185 meters and a beam of 30 meters, the vessel is the largest to be lifted by EBH Namibia, and required methodical planning prior to her arrival to ensure optimum work efficiencies and client

satisfaction,” said Uys. “The sheer size of the surface area to be coated meant meticulous resource management and sound communication skills. I am exceptionally proud that EBH Namibia rose to the challenge with flying colours.”

Several enquiries have been made from similar calibre vessels, according to Uys, and the company is gearing up for a busy period as Namdock 3 comes into its own.

“We believe our capacity to service the Panamax-size vessel market gives us a critical competitive advantage, allowing us to service a broader sector of the market. Namdock 3 has effectively given EBH Namibia ‘another string to our bow’, significantly boosting our reputation on the west coast as a ship repair destination of choice, and a major global player,” Uys concluded.

Peterson and Veolia announce new decommissioning facility

I

nternational energy logistics provider Peterson and environmental contractor Veolia have announced a £1 million investment in a new purpose built decommissioning facility in Great Yarmouth Port to target operators in the Southern North Sea (SNS).

The facility in the western terminal of the Outer Harbour at Great Yarmouth Port is due to be operational in July 2015 and will enable topside, jackets and subsea equipment to be off-loaded for dismantling and recycling.

“As recently highlighted by industry body Decom North Sea, costs for decommissioning North Sea offshore assets over the next decade are forecast to be around £14.6 billion,” said James

Johnson, decommissioning manager at Peterson. “We have a real opportunity, working in collaboration with our partners, to establish Great Yarmouth as the centre for decommissioning for the SNS, delivering comprehensive, safe and cost effective decommissioning solutions.”

Peterson was awarded £70,000 from New Anglia LEP’s flagship Growing Business Fund, to help establish the new facility.

The centre, based at the Outer Harbour, is located on one of six sites on the Great Yarmouth and Lowestoft Enterprise Zone.

“We are extremely pleased to have played a part in securing this new project for our vitally important energy coast,” said Chris Starkie, managing director of New Anglia LEP (Local Enterprise Partnership). “Our

funding, together with future private investment from Peterson, will launch Great Yarmouth and surrounding areas as a major new hub for decommissioning activity in the Southern and Central North Sea, a significant emerging sector estimated to be worth £125 million in the next ten years.”

The Veolia-Peterson joint venture will provide full service decommissioning including decontamination, deconstruction, waste management and environmental services together with associated logistics, marine and quayside operations. The company has five operating bases around the North Sea: Lerwick, Great Yarmouth, Hartlepool and Teesport in the UK and Lutelandet, Norway. www.ogsmag.com

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Tullow Oil: Exploring Africa Tullow Oil has become a major force in Africa over the last 30 years, and is well positioned to take advantage when market conditions improve www.ogsmag.com

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From humble beginnings back in the mid1980s, Tullow Oil has become a major player in oil and gas markets in Africa, by taking up the challenge of working fields that nobody else could or would.

Ghana and Uganda have been the main focus of the company’s capital spend and operational activities since 2007, where numerous fields have been discovered and developed.

More recently, however, exploration in Kenya and Ethiopia has been a major focus for the business and will continue to be so as it looks to make further discoveries and move towards development of the discovered resources. Today, Tullow Oil operates in 24 countries and has more than 2,000 employees.

In Ghana, the world-class Jubilee field was discovered in 2007.

First oil production commenced on schedule in November 2010. Tullow received plan of development (PoD) approval for the Tweneboa, Enyenra and Ntomme (TEN) fields in May 2013 and the development project is progressing on budget and is scheduled for first oil in mid-2016 with a gross capacity of 80,000 bopd.

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In Uganda, Tullow has held interests in three licences in the Lake Albert Rift Basin since 2004. To date, over 70 wells have been drilled and 1.7 billion barrels of recoverable oil resources have been discovered. In February 2014, a memorandum of understanding (MoU) was signed between the Government of Uganda and Tullow, CNOOC and Total, which outlines the framework for the Lake Albert Rift Basin development that is targeting over 200,000 bopd gross production. The export of the Ugandan and Kenyan crude will be an integrated project requiring a regional pipeline. The governments have signed an MoU and formed a steering committee to progress the pipeline project.

Tullow has had significant exploration success in the rift basins of East Africa, most recently in the South Lokichar Kenya Rift Basin. Accelerated exploration, appraisal and early development campaigns are now under way in parallel in Kenya and Ethiopia, across the 11 basins where Tullow has over 85,000 sq km of acreage.

Kenya

Evidence of Tullow’s influence on African oil can be found in its ongoing operations in Kenya. The company invested in exploration of Kenyan fields in 2010 and the discoveries made over the last four years have put Kenya at the heart of East Africa’s emerging oil province.

Despite this success, Tullow does not underestimate the challenges that lie ahead in bringing first oil to market.

Tullow Oil

Tullow plans to drill some 15 exploration wells this year, and will continue to be a leading explorer within the oil sector

Development and production of these resources is a long-term proposition, so Tullow is working together with its supplier and stakeholder partners to build understanding and knowledge about what activities need to take place at each stage of the journey. Securing an appropriate and economically viable plan for development will be critical to project success, but having the right infrastructure in place to support oil production will be equally important.

Significant infrastructure upgrades will be required to transport the oil from an area largely inaccessible today by roads and rail to the sea, over 850 kilometres away. Furthermore, Tullow will require access to a wide range of skills as well as competitive, high quality goods and services.

Key to growing a sustainable business in Kenya is Tullow’s recognition of the fragility of its operating environment. The environmental, social and cultural sensitivities will require careful management and extensive consultation and Tullow’s ability to develop the nation’s resources will be a collective effort.

Tullow is working with the national and county governments, the communities in which it operates as well as with other stakeholders, to realise the full potential of Kenya’s resources.

Kenya’s natural resources hold significant potential for the country’s people and Tullow is committed to ensuring this is delivered in a responsible manner.

In Kenya, Tullow operates in one of the world’s most environmentally sensitive regions, with national parks,

world heritage sites and areas of global archaeological and paleontological importance. From the outset, Tullow recognised the need to protect areas of cultural significance and partnered with the National Museums of Kenya (NMK) and Turkana Basin Institute (TBI) to help manage operations in these areas.

The scale of Tullow’s license areas in Kenya is comparable to the size of England. There is a wide variety of topography from very rough volcanic terrains in the southernmost and easternmost reaches, to vast savannahs and far-reaching deserts.

Rift basins are a core feature of Tullow’s East African exploration strategy and the plays targeted in Kenya are relatively young, at a few million years old. Geological rifts occurred when the Earth’s plates were pulled apart by forces deep within the Earth’s interior. As separation occurred, the ground collapsed to create lakes, which deepened and linked to the sea. Over time the lakes became isolated and filled with sediment deposits. The organic remains of micro-organisms that accumulated on the lake floor were then heated, compacted and converted to oil as they became buried in the collapsing rifts. The early stages of rifting are present in Kenya as the chain of lakes was rapidly filled with sediment eroded from the surrounding mountains. The combination of shale and sands that are deposited contain the oil source and reservoir rocks that Tullow is now exploring.

Rift basins in Kenya share many similar geological qualities with the Lake Albert Rift Basin in Uganda where Tullow has discovered estimated gross recoverable resources of over 1.7 www.ogsmag.com

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In 2014, Tullow had ten exploration and appraisal successes in Kenya’s South Lokichar Basin and two in the Lake Albert Rift Basin in Uganda

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Tullow Oil billion barrels of oil since the first exploration well in 2006.

This experience in the East Africa region gave Tullow valuable and advantageous technical insights, which it combined with the early adoption of key technologies in developing its exploration campaign in Kenya. Tullow conducted the world’s largest airborne full tensor gradiometry (FTG) gravity survey, at that time, as well as more conventional 2D surveys across Kenya’s Tertiary Rift Basins. FTG is efficient in terms of time and provides high-resolution information about variations in the density of subsurface materials, which is highly valuable to Tullow’s exploration teams in identifying possible hydrocarbon deposits.

Tullow is committed to bridging the existing skills gap to ensure that Kenya’s emerging oil and gas industry brings real, lasting benefits to the country’s people. At the end of 2013 there were approximately 100 permanent employees in Kenya, of whom more than 70% are Kenyan nationals. To date, Tullow has achieved 100% localisation of its HR, external affairs, finance, legal, IT and general support roles and the company is actively looking at development opportunities for graduates and experienced personnel to drive the localisation programme, both nationally and with respect to the area of operation.

New approach

Since the beginning of 2014 Tullow has been adapting its approach to exploration to fit the changing economic environment, protect the best interests of its shareholders and capture new opportunities. The company accepted that drilling complex wells, such as those in over-pressured deepwater plays, became too high-risk and expensive in the prevailing industry cost environment.

Many deepwater prospects, once considered to be material, are no longer commercially viable, so Tullow refocused its drilling on low cost onshore and offshore plays which do not involve complex wells. The dramatic drop in the oil price in the second half of last year and the consequent pressure on Tullow’s overall expenditure saw it reduce its planned investments in exploration to $200 million in 2015.

In 2014, Tullow had ten exploration and appraisal successes in Kenya’s South Lokichar Basin and two in the Lake Albert Rift Basin in Uganda. Tullow also carried out well flow tests to gain a better understanding of the basin’s oil production deliverability and encountered a natural range of flow rates with particularly encouraging high rates at Twiga South-2A. The exploration team’s work extends beyond finding untapped oil, however, as it’s also important to increase the size of existing discoveries. J-24, a Jubilee development well, was successfully deepened to test near-field exploration objectives and added high-value new oil to the near-term production reserves of Tullow’s major operated asset in Ghana. Integrated geoscience and reservoir engineering offshore Ghana, in Jubilee and TEN, has also delivered some contingent resource additions which will extend production life and sustain cash flows.

Future exploration

Tullow’s target for 2015 is to achieve a programme of low cost onshore and low complexity offshore drilling with the revised exploration budget of $200 million. These prospects will inevitably target a smaller volume of potential resources than previous exploration and appraisal campaigns when the budget was around $1 billion.

Tullow plans to drill some 15 exploration wells this year, and will continue to be a leading explorer within the oil sector. Wells for 2015 and 2016 include basin testing prospects in the Kenya www.ogsmag.com

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The Jubilee field in Ghana is scheduled for first oil in mid-2016 30

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Tullow Oil Rift Basins, turbidite plays in benign shallow water offshore Namibia and Suriname, and potential high-impact plays near infrastructure offshore Norway.

Opening more new oil basins along Kenya’s Tertiary Rift Valley, where Tullow has a commanding operated acreage position, would be a transformational achievement for the company and would directly impact the global non-OPEC oil supply equation from 2020, so this remains Tullow’s key campaign for 2015 and beyond.

Going global

Looking further ahead, the company has some exciting exploration opportunities within its portfolio that are likely to be drilled when market conditions improve. Its Namibian oil prospects target a new light oil play where turbidite fans, which were deposited in deepwater, are now buried in shallower water settings. Tullow has basin commanding positions in Mauritania and in the Caribbean-Guyanas where it hopes to utilise its expertise and knowledge from oil wells already drilled in those regions and in the West Africa turbidite plays that resulted in the Jubilee and TEN discoveries.

The Caribbean-Guyanas oil plays are especially well positioned to attract the attention of an industry which is currently excited about opening up the full potential of the greater Gulf of Mexico region. And the game changing plays within Tullow’s Norwegian acreage represent an exciting set of exploration opportunities which also have the potential to be transformational.

Tullow’s European, South American & Asian regions contain some of Tullow’s most mature producing assets and areas of frontier exploration. In 2013, Tullow announced the sale of its mature Asia gas businesses to allow it to focus on exploring for light oil. Its key activities in these regions last year included the acquisition of Spring Energy. Following this, Tullow commenced a high-impact exploration programme in Norway where the Hanssen-1 exploration well in the Barents Sea successfully added to the volumes of oil already discovered in the Hoop-Maud Basin acreage, a new basin opened in 2013 with the Wisting-1 discovery.

Supply chain and sustainability

Suppliers are critical to Tullow’s success as a business. The company is committed to encouraging and supporting local suppliers, either by working with them directly or through its own supplier network. A diverse and dynamic local economy benefits local people, and through its supply chain Tullow can help to build the right environment to attract investment and create jobs in host countries. By developing these suppliers, it helps to create value, manage cost and reduce risk, which in turn enables Tullow to keep its projects running efficiently and profitably in the long term.

Tullow’s strategy is focused on building sustainable long-term value growth, while ensuring safe and responsible people and operations. Its approach to sustainability focuses on a commitment to managing risks and mitigating the impacts of its operations, while creating shared prosperity for shareholders, governments, employees and industry partners alike. Tullow is rightly proud of its entrepreneurial culture, something it works hard to preserve.

As Africa’s leading oil & gas company, Tullow focuses on developing long-term relationships with host governments and safeguarding the communities and the environments in which it works, ultimately protecting its business, people and reputation. www.ogsmag.com

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Marriott drilling group The late Richard Marriott, grandfather of three of the management team in the Marriott Group today, started the company in 1947. Today, the Marriott Drilling Group is the largest onshore deep drilling company based in the United Kingdom operating 20 drilling and workover rigs and a wide range of drilling and associated services to the oil, gas, shale gas, gas storage, coal, CBM, mining, water and geothermal industries and for specialised geoscientific drilling projects in Europe and selected international markets.

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Tullow Kenya CEO, Martin Mbogo presenting Safety Award to Marriott Kenya’s Country Manager, Vignir Demusson

Marriott offers a selection of business arrangements from traditional day rate type contracts to incentive contracts, alliances and partnerships to provide clients with a wide range of services, particularly for special and long-term projects. The Marriott Drilling Group has an ambitious growth strategy including plans for increasing the rig fleet by adding state-of-theart equipment where opportunities arise and developing further international markets.

Oil and Gas

In 2014 Rig 46 working for Tullow in Northern Kenya, won a customer Health and Safety award, for operating for one year without a lost time accident. Operations in Northern Kenya are particularly challenging in the harsh desert environment with summer temperatures up to 50°C. As well as operating a land rig drilling exploration wells in a remote area, Marriott also manages a 225-man camp facility for the crews, service companies and the client.

Success in Africa

Shale Gas

Marriott undertakes oil and gas exploration, appraisal and development drilling in both environmentally sensitive areas of Europe and at a variety of international locations including remote jungle and arid locations using global experience and local knowledge and resources. Recent contracts have included deep HT/HP wells in Africa, exploration and development drilling in jungle terrain in Central America as well as exploration drilling for projects in Europe.

In 2013, Marriott Drilling Africa Limited (MDAL), a subsidiary within the Marriott Drilling Group, was awarded a threeyear contract with options to extend for a programme of oil exploration in Northern Kenya by Tullow Oil Kenya, a subsidiary of Tullow Oil plc. MDAL has established an office in Nairobi to support this contract and other operations in East Africa.

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Marriott has been involved in the pioneering shale gas exploration programme in the UK as part of a longterm alliance with an Operator since 2009. This includes drilling vertical and lateral wells, wireline coring, workover programmes, hydraulic stimulation and the provision of cementing services and also shallow hole drilling for the

Marriott Drilling Group Marriott Rig 10 drilling geothermal wells for OrPower in Hells’ Gate National Park, Kenya

(above and below)Marriott Rig 46 has successfully completed twelve deep oil wells for Tullow Kenya in the remote and inhospitable desert region of Turkana, northern Kenya

installation of instrumentation for monitoring potential induced micro-seismicity during stimulation programmes. The Company has also assisted in workover and hydraulic stimulation programmes in continental Europe.

Geothermal

Marriott and the key personnel within the Marriott Group have been involved in geothermal exploration and development for over 30 years. Projects carried out include high temperature hydrothermal wells and hot aquifer wells as well as for engineered geothermal systems projects in basement rocks. The Marriott rig inventory includes rigs with high substructures to accommodate the large blow out preventers necessary for geothermal exploration and development.

Gas Storage

The Marriott team has been involved in both depleted reservoir and multi-well leached cavern gas storage investigation and development programmes in layered salt and the associated pad drilling operations, including rig skidding, and the supporting workover activities. Marriott is currently involved in the design and planning for an unusual leached cavern gas storage facility involving an innovative solution to the need for accurate directional wells to access a shallow salt deposit from pad sites.

Marriott offers an integrated service package for these major projects.

Mining

Marriott carries out deep mining exploration boreholes including boreholes for coal and potash with particular experience in the use of heavy-duty mining wireline system for large diameter high quality core and associated testing programmes. These systems have been successful used in boreholes, which have been sidetracked to obtain additional geometric control on formation structure. Similar heavy duty coring systems has been used by Marriott personnel for geological and hydrological investigations

for potential sites for deep mined repositories for radioactive waste disposal in a range of geologies.

Water

Water well drilling was the origin of the Marriott Group over 65 years ago and today the Company operate a range of small drilling rigs suitable for water well drilling and refurbishment including large diameter wells up to 60 in (1.5 m) using normal and reverse circulation, air drilling and down-the-hole hammer methods. Marriott has the equipment and capability of drilling water wells up to 1000 m depth.

Specialist Services

Marriott offers a range of integrated service packages and alliance relationships for special projects. Marriott also offers service groups a drilling capability for their integrated service projects.

The capability also extends to include deep drilling and associated services for high quality geoscientific investigations for such projects as geology and hydrogeology characterisation, carbon capture feasibility and investigations of sites for radioactive waste disposal.

Other services include cementing in certain locations, waste treatment and disposal services.

Marriott is a member of the International Association of Drilling Contractors (IADC) and a member of the Well Drillers Association (WDA). www.marriottdrilling.com +44 (0)1246 861900 Springwater House/Old Pit La, Chesterfield S45 9BQ. UK www.ogsmag.com

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Interview

Interview: Jason Wilkes, entrepreneur and sportsman Jason Wilkes, entrepreneur and 10-time Ironman competitor, visits Gibraltar regularly with his family onboard M/Y Ikandi, a 21-metre Sunseeker Predator 62. Jason says the Ikandi is home from home, and why not, with five berths, two ensuite bathrooms, galley, lounge with TV and Bose surround sound system. The outside includes sunbathing areas, a BBQ, garage and a jet boat.

What attracts you to Gibraltar?

We love the friendly local people, and the Rock itself. Walking up and down Main Street looking at the English shops (we live in the Canary Islands so it is just like the UK for us). Cinema, bowling, ice-skating; our kids love all that.

What benefits does Gibraltar have?

Competitive fuel prices. Fuel is one of the most important costs when owning a yacht, and any saving in this department is always a bonus. Tax-free shopping is also a benefit.

Marina Bay is cheaper than other nearby ports in Spain; we have known the staff there for years now. Recommended.

We did not tie the tender on, or lock the anchor. During our passage via the Strait of Gibraltar, the sea got rougher and rougher causing the anchor to break free, striking the hull. I put the throttle into neutral so the chain would not tangle into the props but while I winched the anchor back up, the yacht was pushed beam on.

Everything went everywhere inside, the tender was half on. My wife and kids were terrified — schoolboy error.

Are the high maintenance costs a myth or is a yacht expensive to keep?

Certainly not a myth, the bigger the boat the more it costs to keep.

Before you ‘invest’ make sure you find out and budget for annual running costs including insurance, berthing, servicing and general upkeep. If you do not look after your pride and joy properly then it will soon deteriorate.

Your favourite book: Bravo Two Zero by Andy McNab. Your favourite ship: Ikandi...

On a larger scale, Queen Mary.

What do you enjoy about being at sea?

Being at sea gives you freedom and quality family time.

What has been your most challenging moment onboard M/Y Ikandi?

With the family we left a Spanish port heading for Gibraltar in a totally flat sea.

First published by P. Gonzalez- Morgan in Gibraltar Shipping, May 2015 @ShippingGib www.ogsmag.com

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Energy costs The Worldwatch Institute’s State of the World 2015 explores the hidden threats behind rising energy costs

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lthough gas prices are temporarily low at the pump, long-term energy costs are on the rise. Nations are papering over those costs with debt, according to State of the World 2015 contributing author Nathan John Hagens, a former hedge fund manager who teaches human macroecology at the University of Minnesota. Higher energy costs are leading to continued recessions, excess claims on future natural resources, and more-severe social inequality and poverty.

The relatively low cost of energy extraction compared to the benefits obtained from fossil fuels has been perhaps the most important factor in the industrialized world’s economic success. Historically, large quantities 38

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of inexpensive fuels were available even after accounting for the energy lost to extract and process them. But, as remaining fuels become less accessible, higher energy costs will have ripple effects through economies built around continued large energy-input requirements. Rising costs will endanger highly energyintensive industries and practices, including the energy sector itself, as well as widen and deepen poverty as everything becomes more expensive.

“Despite having ‘plenty of energy,’ higher physical costs [of extraction] suggest that energy will likely rise from a historical average of 5 percent of GDP to 10-15 percent of GDP or higher,” writes Hagens.

In the short term, nations are taking on growing debt

Energy costs

to avoid losses in GDP, an indicator of the economic health of a country. Since 2008, the Group of Seven nations (Canada, France, Germany, Italy, Japan, the United Kingdom and the United States) have added about $1 trillion per year in nominal GDP, but only by increasing their debt by over $18 trillion.

Continued use of credit to mask the declining productivity of energy extraction is unsustainable, however. For each additional debt dollar, less and less GDP is generated, and, at the same time, our highest-energy-gain fuels are being depleted. Energy is becoming more expensive for the creditor in the future than for the debtor in the present.

“We have entered a period of unknown duration

where things are going to be tough,” writes Hagens.

“But humanity in the past has responded in creative, unexpected ways with new inventions and aspirations.”

While policy choices such as banking reform, a carbon and consumption tax, and moving away from GDP as a proxy for well-being are good long-term ideas, “we urgently need institutions and populations to begin to prepare for a world with the same or less each year instead of more.”

Worldwatch is an independent research organization based in Washington DC that works on energy, resource, and environmental issues. www.worldwatch.org. www.ogsmag.com

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Racing to the top and racing to the bottom Dr. David L. Blond speculates on the future of globalization in a desperate world and asks, who wins from international trade?

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am, for all intents and purposes, an international economist.

This title can mean two things – an economist who has specialized in studying the global economy, or possibly, and here’s the rub, an economist who business is integrated into the global system.

I have worked for international agencies, national governments and the private sector, and most of my work has been with people whom I have never met in person. I am one of the winners from globalization.

Global trade grew by an average 7 percent from 1995 to 2015 and is forecast to grow only around 5 percent between 2015 and 2025. During the period of rapid globalization the ratio of

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world trade growth (real) to world GDP growth (real) averaged between 2.1 and a high of 3.3 prior to the global recession of 2001 (the dot com bust and the 9/11 terrorist attack).

In the decade after, with slower real growth in GDP the ratio average is 2.5, but with the financial recession the rule of thumb changed, with world trade growth just over world GDP growth.

The forecast suggests a recovery, but a weak one back to 2.0 as both trade and GDP growth slow (4.8% real growth in trade 2015-25 and 2.5% growth in world GDP for that same period).

This mirrors the growth rate over the period 1990 – 2015 almost exactly, 5.2% growth in trade and 2.5% growth in GDP).

In rich and poor countries alike, globalization has been both a help and a hindrance for pay and job opportunities in the workforce. In poor countries, like China, rapid wage inflation has allowed more Chinese to reach the middle class (as measured in purchasing power parity). It has also forced the Chinese government to see that the way forward may not be the way just passed.

The share of income attributed to international trade declines and then stabilizes as Chinese export shares flatten, due to the shift towards selling to domestic buyers. At the same time the United States became more integrated with the world as both import and export share of consumption continued to increase. The reason for this improbable shift in 2008 in relative shares is that while US manufactures output stagnated, Chinese manufacturing continued to grow, but more of this output went to domestic consumption. With wages in China increasing six fold while consumption per capita increased two fold (between 1995 – 2025) this changed the balance in the economy from

Economics

purely export led growth to a more even approach to driving GDP growth.

Higher real wages drive Chinese domestic consumption up, as factory workers living in dorms move into apartments and start to fill them with personal goods. In the United States, by contrast, wages have remained relatively stable in real terms with consumption growing slightly faster. This is likely the by-product of multiple tax cuts and other government programs designed to replace the failure of wages to grow with productivity.

End of an era – is globalization as a development tool dead?

It is hard to tell if we have reached the point of diminishing returns from global integration, but given the difficulty that President Obama has had in selling to his own constituency the Trans Pacific Partnership (TPP), it is likely that support for this kind of multi-national integration is waning.

As the international trade share of consumption increased in the US, wages stagnated and millions of high paying manufacturing jobs have disappeared. There is no refuting this linkage. If there is a limited income to spend and if more of it is spent, then jobs are lost to foreign producers. Moreover, this result is being repeated in other parts of the world as more of global output of traded products migrated to Asia and ultimately from Asia to China.

For countries less endowed with human resources and geographic access to world markets, the costs of globalization have been realized in their dependence on exports of raw materials rather than domestic manufacturing to drive development. Increasingly they may find this integration with the world community failing to solve the underlying problem of poverty afflicting a larger number of the world’s people.

As economic migration increases, it may be the right time to consider domestic development as the solution to this and other problems of the world, rather than this seeming panacea of embracing globalization and the Washington consensus.

Dr. David L Blond is President of Quantitative Economic Research International

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The UK fracking debate Partner Amy Comer and associate Anna Nerush from the London office of global law firm Morgan Lewis, ask if fracking can revolutionise the UK energy market?

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atural gas plays an important role in the UK energy mix. According to the Department of Energy and Climate Change (DECC), oil and gas provide more than 70% of the UK’s total primary energy, of which 50% is supplied from domestic production.

The decline in North Sea production of conventional gas has resulted in a transition from self-sufficiency as recently as 2004 to imports in 2014 of about 50% of annual gas intake. North Sea production is expected to further decline, and the United Kingdom Onshore Operators Group (UKOOG) estimates that by 2030 the UK will import at least 70% of its gas.

Geopolitical conditions have also threatened the supply of Russian gas and forced Europe, including the UK, to rethink its reliance on imports. Although we have seen an increase in coal-generated power in the UK, consumption of gas remains high due to its importance for domestic heating, industrial feedstock and heat processing. If the UK is to reduce its dependency on imported gas, it must look to its domestic industry and given declining conventional gas reserves, this means serious development of unconventional gas extraction.

The rise in production of unconventional gas, and in particular shale gas, has revolutionised the US energy market, transforming it from an LNG importer to a major LNG exporter in less than five years. There has been discussion of whether this success can be replicated in the UK, and following the recent parliamentary election, development of unconventional gas appears high on the political agenda. Many in particular viewed the appointment of Amber Rudd – a keen shale gas advocate – as

“While it is generally believed that the UK has significant shales at depth, their geological characteristics are unknown” Energy and Climate Change Secretary as a signal of intent, supporting David Cameron’s position that his government is “going all out for shale”.

The government has announced tax reductions on early profits to encourage investment in onshore oil and gas, and government agencies, including DECC, the Department for Communities and Local 44

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Amy Comer

Government, and the Environment Agency, are working to simplify existing regulations.

Unlike the US or Australia, however, where the shale gas industry is well established, the UK lacks data about the extent of its technically recoverable resources and the impact of fracking on the environment. This has fuelled media speculation about potential pollution levels and the effect of shale gas production on the UK economy.

While it is generally believed that the UK has significant shales at depth, their geological characteristics and gas storage compositions are unknown. The Government has commissioned studies (including one by the British Geological Survey) to estimate total volumes of shale gas, but accurate prediction of technically and commercially recoverable reserves is difficult. These can only be established by exploration drilling and testing.

According to UKOOG, around 2,000 wells have been drilled in the UK, of which only 200 have been hydraulically fractured. There are reasons to believe, however, that an increase in the currently modest levels of shale exploration may be forthcoming; in addition to Cuadrilla’s resumption of operations and recent acquisition of exploration licences by a European major, recent legislation permits horizontal

The UK fracking debate

“Accurate prediction of technically and commercially recoverable reserves is difficult. These can only be established by exploration drilling and testing”

Anna Nerush

drilling under protected areas provided that wells start outside their boundaries. Technical and geological challenges aside, however, public opinion remains negative and the industry’s success will largely depend on its ability to demonstrate that the onshore extraction of shale gas can be commercially viable and environmentally safe.

Shale gas extraction differs from other types of hydrocarbon extraction in a number of ways. The larger scale entails a greater number of wells, many of which are often drilled more deeply. This depth, combined with a lack of natural fissures in the rock formation, means that extraction requires large volumes of high pressure water and chemicals, and the reservoirs’ low permeability at such depths means that a high number of production wells is needed to produce gas at a commercial rate. These levels of activity are unwelcome to local communities, and in contrast to the US or Australia the UK’s relatively small size results in dense areas of activity.

Mineral rights in the UK vest in the Crown. This is again in contrast to the US, where it is common for landowners to own mineral rights and receive up to 20% of production revenues. As such, there is little encouragement in the UK for people to support exploration or production activities in

their communities. An incentive package has been proposed by the industry with government support, comprising £100,000 for the affected community and 1% of revenues from production, with the local authority retaining 100% of the business rates collected from the exploration sites. Whether this is sufficient to overcome negative public opinion and planning objections remains to be seen, and while the Institute of Directors has welcomed the proposal to allow local authorities to retain all business rates, others have raised concerns over potential conflicts of interest.

The UK shale gas industry faces a number of challenges, some of which are inherent to the UK given its geology and mineral rights laws, and others which are more reflective of the European unconventional gas industry as a whole. For now, though, the greatest hurdle is negative public perception. Many of the environmental concerns might be assuaged through further studies, as well as regulation and technological improvements.

Provided that the industry can convince communities in this way and offer attractive financial incentives, it should be in a strong position to reiterate the benefits of a developed domestic industry and a reduced dependency on imports. www.ogsmag.com

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Shell:

The biggest getting bigger

Royal Dutch Shell has a strong history of growth, both organic and by acquisition, that has made it a leading force in today’s global economy.

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“Bold, strategic moves shape our industry. BG and Shell are a great fit�

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Shell Last month, in the biggest deal within the oil sector for more than 20 years, Shell announced a merger with its rival BG Group. The deal comes at a time of uncertainty for oil and gas companies. In the past six months the price of oil has fallen by about 50 percent. Meanwhile, analysts have warned that investment in North Sea oil exploration has all but dried up, threatening the entire industry. BG Group warned in February that it would write down the value of its oil and gas assets by nearly £6bn due to the oil price slump. Similarly, Shell announced in January that it would be cutting spending by nearly £10bn over the next three years.

As it announced the takeover bid, Shell said it expected to make asset sales totalling $30bn between 2016 and 2018, although it did not specify which assets it was reviewing for sale. Asked about potential job losses in the North Sea, Shell and BG Group said they expected there to be “global synergies”, while adding that if the deal had not happened, they might both have had to make job cuts. Current BG Group chief executive Helge Lund, who took up the post last month, will remain with BG Group while the deal goes through, but is expected to leave once it is completed.

Analysts gave a mixed reaction to news of the deal. Investec analyst Neil Morton said a tie-up had “been mooted for about 20 years”. He added: “BG investors receive what we see as a compelling offer. For Shell shareholders, we are less convinced of the merits. The deal is predicated on a strong recovery in oil prices ($90 per barrel from 2018), while we suspect that Shell is pouncing on BG’s imminent free cash flow to protect its burdensome dividend payout.”

Christian Stadler, associate professor of strategic management at Warwick Business School, said BG would fit well with Shell’s portfolio. “Shell has a very good track record in offshore oil and gas fields, and BG will help them solidify this area,” he said. He added that acquiring BG would help Shell’s replacement ratio: the number of oil fields Shell has lined up to replace the oil it is currently producing. But he warned cost savings would be hard to achieve and “with the current downsizing www.ogsmag.com 49

“This transaction fits with our strategy and our read on the industry landscape around us�

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Shell in the oil industry, you would expect some job losses”.

Commenting on the takeover announcement, Jorma Ollila, Chairman of Shell said: “This is an important transaction for Shell, accelerating the delivery of our strategy for shareholders.

The result will be a more competitive, stronger company for both sets of shareholders in today’s volatile oil price world. BG shareholders will receive significant value through the premium being offered for their shares. They will become shareholders in Shell, accessing an attractive dividend policy, a share in the significant synergies and the compelling upside and enhanced operating capability of the combined group. We believe that the combination is in the interests of both our companies and their shareholders.”

Commenting on the combination, Ben van Beurden, CEO of Shell said: “Bold, strategic moves shape our industry. BG and Shell are a great fit. This transaction fits with our strategy and our read on the industry landscape around us. At the start of 2014, Shell embarked on an improvement programme, including divestments and the restructuring of underperforming businesses, whilst at the same time delivering profitable new projects for shareholders. This programme is delivering, at the bottom line. BG will accelerate Shell’s financial growth strategy, particularly in deep water and liquefied natural gas: two of Shell’s growth priorities and areas where the company is already one of the industry leaders. Furthermore, the addition of BG’s competitive natural gas positions makes strategic sense, ahead of the long-term growth in demand we see for this cleaner-burning fuel. This transaction will be a springboard for a faster rate of portfolio change, particularly in exploration and other long-term plays.

We will be concentrating on fewer themes, and at a larger scale, to drive profitability and balance risk, and unlock more value from the combined portfolios. Over time, the combination will enhance our free cash flow potential, and our capacity to undertake share buybacks, where I expect to see a substantial increase in pace.”

Andrew Gould, Chairman of BG also supported the combination: “This offer represents an attractive return for BG shareholders. BG has a strong portfolio of operations including growth assets in Australia and Brazil and a highly competitive LNG business, as well as an enviable track record of exploration success. The BG Board remains confident in BG’s long-term prospects under the leadership of Helge Lund. Shell’s offer, however, allows us to accelerate and www.ogsmag.com 51

“BG will accelerate Shell’s financial growth strategy, particularly in deep water and liquefied natural gas: two of Shell’s growth priorities and areas where the company is already one of the industry leaders”

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Shell de-risk the delivery of this value. The structure of the offer will provide BG shareholders with an attractive premium and a substantial cash return as well as enabling them, if they wish, to participate in the benefits of the combination through the share component. For these reasons, the BG Board recommends the offer.”

The confirmation of the deal creates a company with a combined value of almost £180bn - overtaking HSBC to become the biggest on the FTSE 100 - and results in the 13th biggest merger ever. The two firms said it was expected the cash and shares transaction would be completed early next year.

Huge scale of operations: Shell Prelude FLNG

The acquisition adds to Shell’s already impressive portfolio of operations, not least its investment in Shell Prelude FLNG, a floating liquefied natural gas facility to be located off the coast of Australia and the first of its kind in the world. The FLNG facility is designed to operate and stay safely moored even in the most extreme weather conditions. The sheer size of the full-scale facility will help it to withstand very high winds and giant waves. In addition, it will be secured in place by one of the largest mooring systems in the world. A 93-metre (305-foot) high turret, spacious enough to house the Arc de Triomphe, will run through the facility. Four groups of mooring lines will anchor it to the seabed. The system allows the facility to turn slowly in the wind – absorbing the impact of strong weather conditions – while remaining moored over the gas field. It can stay safely moored at sea even during the most powerful cyclones. This saves valuable production days that would otherwise be lost on disconnecting the facility and moving it off the field. Three 6,700-horsepower thrusters will sit in the rear of the facility.

Two of these will operate at any one time to turn the facility out of the wind and allow LNG carriers to pull safely alongside to load.

The facility’s storage tanks will be below deck. They can store up to 220,000m3 of LNG, 90,000m3 of LPG, and 126,000 m3 of condensate. The total storage capacity is equivalent to around 175 Olympic swimming pools.

The project will create around 350 direct and 650 indirect jobs. Recruitment of staff to operate the facility will ramp up during 2013 and 2014. Prelude will also provide taxes and revenue to Australia, create opportunities for local businesses and result in Shell spending billions in capital and operating expenditure. www.ogsmag.com 53

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Heatric printed circuit heat exchangers are unlocking the future of FLNG The key technical challenge of FLNG is to take a process developed in the relatively calm, accessible and ‘spacious’ onshore environment and deploy it where few of these things are true – with all the heightened safety considerations that this brings.

Heatric printed circuit heat exchangers (PCHEs) are already well-established in FPSO applications because they help simultaneously tackle the three great offshore challenges – space, weight and safety. Now they are also playing an important role in shrinking and lightening the topside bulk of the new global fleet of FLNG facilities, including Shell Prelude. A total of 18 Heatric PCHEs are being installed on Prelude. Their duties embrace a wide range of operations, among them natural gas extraction and fractionation including first and second stage cold recovery, gas dehydration, and gas and refrigerant compression. Together they save some 1500 tons of topside weight, lowering the vessel’s centre of gravity and improving stability in heavy weather. A PCHE will typically be just onefifth the size and weight of an equivalent shell and tube-type unit thanks to its exceptionally high heat transfer-to-volume ratio. But for all their light weight and compact footprint, PCHEs are still comfortably able to handle pressures up to 650 bar (almost 9450 psi) and temperatures from cryogenic to 900°C (1650°F) while delivering closely-controlled process parameters. For existing platforms, PCHEs can debottleneck and boost throughput. For newbuild projects, like FLNG, they offer the opportunity

to design-in higher levels of process efficiency, safety and durability right from the start, unlocking a host of additional financial and operational benefits along the way.

Pioneer and leader It is fair to say that no-one understands printed circuit heat exchangers (PCHEs) like Heatric. It was the pioneering research of the company’s founders that created the very first PCHE in 1985. Only Heatric has invested continuously for more than 30 years in refining and developing the technology, working with the world’s leading oil and gas companies along the way. Today the company’s 15,000m2 of advanced production facilities – a single, integrated operation which includes one of the largest radiography and pressure-testing facilities in the UK – are still unique in being dedicated exclusively to PCHE design, development and manufacture.

Heatric PCHEs are fully scalable with the recently extended factory able to accommodate the construction of the highest duty exchangers either

Heatric. Leading heat transfer solutions www.heatric.com

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info@heatric.com

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T: +44 (0)1202 627000

as single units or as multiple manifolded units – as was the case with some of the largest PCHEs provided for the Prelude project.

Light and effective The key to a Heatric PCHE’s powerful package of weight savings and capabilities is its diffusion-bonded core, which creates an exchanger with exceptionally high transfer efficiency and structural integrity. The characteristics of this design provides PCHEs with inherent and integral safety benefits which, together with a host of operational features, are of particular value to remote, floating processing applications. The seamless core construction minimises hold-up as well as vibration fracture risks, rendering PCHEs immune to catastrophic failure modes seen in other exchanger designs. Fire risks are also reduced because each PCHE is constructed entirely from stainless steel or higher alloys, with no aluminium or other low melting point material used in their construction.

The future shape and disposition of a fullyfledged global FLNG fleet remains to be seen. But whatever liquefaction choices an operator makes, the compactness and robustness of PCHEs renders them uniquely able to deliver strong, powerful, structurallysimple solutions, all within an unmatched security and safety ‘envelope’.

The Shell Prelude FLNG facility will have a total storage capacity equivalent to 175 Olympic swimming pools

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Shell The Prelude FLNG Project will use significantly less materials, land and seabed area than developing the same gas via a similar onshore facility. Developing the gas at the location of the gas field will reduce impact on sensitive coastal habitats as FLNG avoids the need for shoreline pipe crossings, dredging and jetty works.

Product carriers will be far from coastal reefs or whale migration routes.

In December 2013 the 488-metre-long hull of Shell’s Prelude FLNG facility was floated out of the dry dock at the Samsung Heavy Industries (SHI) yard in Geoje, South Korea, where the facility is currently under construction. Once complete, Prelude FLNG will be the largest floating facility ever built. Shell’s ambition is to launch a fleet of future Preludes to pioneer a new chapter in the story of fossil fuels by opening gas fields previously thought to be too tricky or expensive to tackle.

LNG project – Sakhalin-2

Sakhalin-2 is one of the world’s largest integrated, export-oriented oil and gas projects, as well as Russia’s first offshore gas project. The project infrastructure includes three offshore platforms, an onshore processing facility, 300 kilometres of offshore pipelines and 1,600 kilometres of onshore pipelines, an oil export facility and a liquefied natural gas (LNG) plant.

Sakhalin-2 is a project of many firsts. The offshore oil platform Molikpaq was the first to be installed on the Russian shelf.

The Lunskoye-A and Piltun-Astokhkoye-B (PA-B) platforms are also the first of their type to be installed on the shelf. The LNG plant is the first in Russia.

Now that Sakhalin-2 has reached its full capacity, it takes 5% of the world’s current liquefied natural gas (LNG) market. Japan and South Korea are the main customers for oil and LNG exports. Virtually all the gas from Sakhalin-2 has now been sold under long-term contracts to customers in the Asia-Pacific region and North America. Sakhalin-2 is technically challenging. It is equivalent in size to five world-scale projects, located in a hostile sub-arctic environment, and covers a vast area in a region with almost no existing infrastructure.

There are also environmental, ecological and social sensitivities to be tackled. The float-over installation of the topsides for the PA-B platform set a world record at some 28,000 tonnes. The previous record was held by the Lunskoye-A platform at 22,000 tonnes. Two 800-kilometre pipelines, which bring oil and gas from the fields in the north of the island to the ice-free export terminal in the south, traverse mountainous terrain in an www.ogsmag.com 57

Sakhalin-2 is one of the world’s largest integrated, exportoriented oil and gas projects

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Shell earthquake zone and cross more than 1,000 watercourses, many of which are ecologically sensitive.

LNG Project - Pearl GTL

Shell is one of the world’s largest suppliers of natural gas. Natural gas is abundant, acceptable and affordable. Shell believes that it is an important component of a sustainable global energy mix. It is helping to meet the world’s growing energy demand while limiting CO2 emissions by delivering more cleaner burning natural gas. Shell is also pioneering new techniques to help tap difficult-to-reach natural gas deposits. These include unlocking natural gas trapped tightly in rock pores, producing gas in harsh sub-Arctic conditions, and cooling gas at sea to turn it into liquid for shipment by carriers. Shell develops groundbreaking technology that transforms natural gas into valuable liquid products and a prime example is Pearl GTL, the world’s largest gas-to-liquids plant, located in Qatar.

The Pearl GTL project was developed in two phases after major construction was completed at the end of 2010. The first phase started up in early 2011 and exported the first commercial shipment of gasoil in June 2011. Phase 2 of the plant started up in early November 2011 by bringing in sour gas from offshore wells. The whole plant ramped up to full production towards the end of 2012. Pearl GTL now runs some of the largest gas processing trains in the world and is doing so safely and reliably.

Upstream, Pearl GTL produces and processes around 1.6 billion cubic feet a day of wellhead gas from the world’s largest single non-associated gas field - the North Field - which stretches from Qatar’s coast out into the Gulf. The plant will process about three billion barrels-of-oilequivalent over its lifetime. The offshore scope includes 22 development wells, two unmanned wellhead platforms in about 30 metres of water and two 30-inch pipelines running about 60 km to shore.

Onshore gas-processing facilities treat the sour, rich wellhead gas to remove contaminants such as metals and sulphur and further extract natural gas liquids: ethane for petrochemical processes; liquefied petroleum gas (LPG) for domestic heating and cooking; and condensates as a feedstock for refineries. Elemental sulphur produced as a by-product is turned into pellets and shipped to the nearest market to make hydrosulphuric acid, fertilizer or other valuable products. The pure gas, or methane, that remains then flows to the GTL section of the plant, where it is www.ogsmag.com 59

Zenith Consultants work across the UK and globally and have been successful in building strong working relationships with our clients across all sectors. Our Clients include some of the largest oil, gas, power and petrochemical companies in the world and we have developed a diverse portfolio of complex and interesting projects in each sector.

Recently Zenith Consultants were responsible for the detailed design of a bespoke strengthening scheme for an existing multi flare support structure for Qatar Shell GTL Ltd. on the Ras Laffan site in Qatar. In conjunction with the strengthening design, Zenith Consultants were also responsible for the detailed design, procurement and supply of the specialist lifting and winching equipment to service the operation, allowing two flare tips to be replaced at any one time.

The exposure of Zenith Consultants to the oil, gas, power and petrochemical industries has served to provide an excellent platform to develop the Consultancy services. In addition to our working at height and off shore abilities, we have been able to combine our skills to establish a diverse and complete business. We are able to offer full structural and civil engineering support services in conjunction with highly experienced survey and inspection capabilities. Our inspection services include (not limited to) detailed visual inspection, material NDT, verticality/tension checks and guy wire magnetic flaw detection.

Zenith Consultants core values are ‘Design – Innovation – Excellence’. We work closely with all our clients to fully understand their brief and assist to value engineer solutions to minimise time and out turn costs. We are experienced at working within small working windows and utilise up to date techniques to capture key critical information in short periods of shutdown or closure to build templates of information to allow our assessments, designs and specifications to be made.

www.zenith-consultants.co.uk Tel: +44 (0)131 440 3000

If you wish to discuss any of your project requirements with a member of Zenith Consultants team please do not hesitate to contact us at: 38 Dryden Road Bilston Glen Industrial Estate Loanhead, Midlothian EH20 9LZ Scotland United Kingdom

Pearl GTL produces and processes around 1.6 billion cubic feet a day of wellhead gas

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Shell combined with oxygen and converted in a state of the art three-stage process into a range of gas-to-liquids products using Shell proprietary technology.

The proprietary Shell Middle Distillate Synthesis (SMDS) process is at the heart of the two-train Pearl GTL plant. Developed over more than three decades, the process has been proven on a commercial scale at the 14,700-barrel-per-day Bintulu GTL plant in Malaysia, which began operation in 1993. Shell has over 3,500 patents across all stages of the GTL process. The Bintulu experience helped improve the chemical catalysts integral to the SMDS process.

These improvements help reduce unit capital expenditure, allow faster processing and should enable Shell to produce greater volumes of fuel and other products at Pearl.

The plant includes systems to capture energy given off during the processes, converting it to steam that drives the plant’s compressors and generates electricity. The water recycling plant – the largest of its kind – treats water for re-use in steam production and cooling.

It can process 45,000m3 per day of water, without discharging any liquids from the plant.

Building on its extensive experience marketing GTL products from Bintulu, Shell exports Pearl’s high value, differentiated premium products, including GTL gasoil, kerosene, naphtha, normal paraffin and base oils for lubricants, to markets around the globe.

Together with Qatargas 4, Pearl GTL represents a multi-billion dollar commitment to Qatar by Shell and the project was developed in line with its sustainable development principles. The project was designed to use technology that helps limit any environmental impact.

The facility is designed to use every drop of water as part of Shell’s approach to prevent the release of any liquids from the plant. Pearl GTL’s industrial water processing plant is the world’s largest, recovering, treating and re-using all the industrial process water. With a capacity to treat 280,000 barrels a day of water, Pearl GTL’s water treatment plant is comparable to that for a city of 140,000 people.

Deepwater Project - GumusatKakap

On 8 October 2014, Shell announced first oil from another major project, the Gumusut-Kakap platform off the coast of Malaysia. With an annual peak oil production of around 135,000 barrels a day, the platform contributes up to 25% of the country’s oil production. Sabah Shell Petroleum Company is the operator of the www.ogsmag.com 63

Pearl GTL’s water treatment plant can treat 280,000 barrels of water a day

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Shell development, which employs Malaysia’s first deep-water semi-submersible production system.

The field comprises 19 subsea wells, with oil exported via a 200-km long pipeline to an oil and gas terminal in Kimanis, Sabah.

In 2008, development drilling began in the Gumusut-Kakap field and early production started at the field in November 2012.

This was ahead of engineers completing the floating production system by linking Gumusut-Kakap’s production wells to the Kikeh production facility, the country’s first deep-water development, operated by Murphy Sabah Oil. This early production was an interim measure to bring 25,000 barrels a day on stream ahead of completing the FPS. The project has allowed Shell to share deep-water expertise with Malaysian energy companies and uses Shell Smart Fields technology to carefully control production from the undersea wells to achieve greater efficiency.

Natural gas that is produced along with the oil will be re-injected into the reservoir to help improve oil recovery. With oil production now under way, work on the gas facilities is continuing with an expected start-up later this year.

In Malaysia, Shell continues to run major social investment programmes focused on capacity building, environmental conservation and community development. Located off the coast of Sabah, the Gumusut-Kakap development area is particularly rich in yellow-fin tuna. Shell and the Sabah Department of Fisheries are working together on a project to enhance fishing stocks in alternative areas for local fishermen. Shell is also leading and supporting activities to promote environmental awareness in Sarawak and Sabah; for example, through the SERASI (environmentally-friendly school competition) and Nature Education Camp programmes for schools. Shell also supports research and environmental conservation efforts in Sabah’s pristine areas in Danum Valley and Maliau Basin.

Deepwater Project – Parque De Conchas

Shell has been a leader in deep-water exploration and production for 30 years.

Parque das Conchas (BC-10) offshore Brazil is one of its most challenging deepwater projects. Shell has a 73% interest in the project and is the operator. Parque das Conchas (BC-10) lies in around 1,780 metres of water. The heart of Parque das Conchas (BC-10) is the floating, production, storage and offloading vessel (FPSO) Espἰrito Santo with 100,000 boe per day processing capacity. Built by SBM in Singapore, the FPSO was delivered to www.ogsmag.com 65

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Shell Brazil in late 2008 and moored in around 1,780 metres of water at the Parque das Conchas (BC-10) site in the Campos basin.

The first phase of the project included the development of three fields tied back to the FPSO, via subsea wells and manifolds.

The double-hulled FPSO’s design required significant power and heat delivery systems to drive the seabed lift equipment and process the heavy crudes. The fields came on-stream in July 2009, with this first phase involving nine producing wells and one gas injector well. By July 2013 the project had produced more than 70 million boe.

Phase 2 of the project, to tie-in the Argonauta O-North field, came on stream in October 2013 with a peak production of 35,000 boe per day. In July 2013 Shell and its partners announced that they would move forward with Phase 3 of the project, which will include the installation of subseainfrastructure at the Massa and Argonauta O-South fields. These fields will be tied-back to the Espírito Santo. Once online, Phase 3 of the BC-10 project is expected to have a peak production of 28,000 barrels of oil equivalent per day.

Deepwater project – Perdido

Shell has been a leader in deep-water exploration and production in the Gulf of Mexico for over the last 30 years. Perdido in the Gulf of Mexico is one of Shell’s most challenging deep-water projects. Perdido is in a water depth of some 2,450 metres (8,000 feet). First production from Perdido was on 31 March 2010.

The Perdido spar was constructed by Technip in Pori, Finland and began its 13,200-kilometre (8,202-mile) journey to Texas in May 2008, arriving in the Gulf of Mexico in August 2008. The 170-metre cylindrical spar was secured to the sea floor and Shell completed the installation of the drilling and production platform on top of it. There are 22 direct vertical access wells from the spar, with capability for an additional 13 tieback wells from subsea completions in the area near the platform.

The Perdido hull is nearly as tall as the Eiffel Tower and weighs the same as 10,000 large family cars. The Noble Clyde Boudreaux platform pre-drilled the 22 direct vertical access production wells.

The Tobago field, which came on production in late 2011, set a world water depth record in drilling and completing a subsea well 2,934 metres below the water’s surface. This eclipsed the previous subsea water depth well record set at the Silvertip field of 2,852 metres and is nearly 40 percent deeper than the previous record of 2,118 metres, also set by Shell in the Gulf of Mexico’s Fourier field. www.ogsmag.com

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Complex refinery project – Port Arthur

Shell has a 50 per cent ownership in the Motiva Enterprises Port Arthur Refinery (PAR) in Texas and in 2012 completed a project to expand capacity by 325,000 aPPRoval PRoof barrels perof day (bbl/d), taking total capacity to 600,000 bbl/d. Following its expansion, the PAR is now the largest refinery in the USA and is now capable of handling most grades of crudes, even the lowest quality. A new three-unit naphtha processing complex includes a catalytic reformer, which will convert 85,000 b/d into high octane gasoline for blending.

The scale of the expansion includes 725 pumps, 19 compressors, 514 heat exchangers and several new tanks. At Port Arthur, where the local community supported the expansion, more than $17 billion has been generated in regional economic development. Around 14,500 people worked on the expansion project at

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The Perdido hull is nearly as tall as the Eiffel Tower

peak construction and more than 300 new permanent jobs were created. Strategies were implemented that improved public infrastructure and reduced the impact of construction on local communities. Shell has the largest branded fuels retailing network in the USA. The Port Arthur expansion delivers increased supplies of petrol, diesel and aviation fuel nationally as well as for export to other countries.

The refinery’s strategic location on the Gulf of Mexico allows crude oil to be brought in by sea and it has excellent links to the national fuel distribution network.

Oil Sands project – Athabasca

Canada’s oil sands are an important source of energy in a world where demand is continuing to grow. At Shell’s Athabasca Oil Sands Project the oil is mined, then separated from the clay, sand and water before it is shipped by pipeline to an Upgrader at Scotford, where it is converted

into synthetic crude. In 2012 it represented around 4% of Shell’s total production. The current production capacity of AOSP is 255,000 b/d of synthetic crude.

Shell has plans in place for a 115, 000 b/d expansion of Muskeg River Mine and an additional 100,000 b/d from the first phase of Jackpine Mine. In addition, Shell has received conditional approval for a 100,000 b/d expansion of the Jackpine mine and submitted a regulatory application for a 200,000 b/d development of the Pierre River Mine. Shell has existing licenses for 290,000 b/d of synthetic crude production at the Scotford Upgrader and is embarking on the Quest Carbon Capture and Storage project, which would capture 1 million tonnes of CO2 per year from the Scotford Upgrader and store it permanently underground.

More than 9 billion people are expected to live on Earth by 2050, up from 7 billion today. Asia’s fast-growing cities will absorb

much of this growth, with three in four people living in urban centres. Billions of people will rise out of energy poverty. As living standards improve for many across the world and more people buy their first refrigerators, computers or cars, energy use will rise. Total global energy demand could rise by up to 80% by mid-century from its level in 2000. By investing in these projects and more besides, Shell is positioned as the key player in all areas of energy provision.

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Mercy Ships: A volunteer’s experience Ward nurse Vanessa Thomson from Devon talks about volunteering on board the world’s largest non-governmental floating hospital 70

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I

have been qualified as a nurse for five years and have been volunteering with Mercy Ships, an international charity which operates the world’s largest civilian floating hospital, for the last year. The charity’s hospital ship, the Africa Mercy, sails to some of the poorest nations in the world to deliver much-needed medical care and assistance.

Even though I have been on the ship for a while, the level of need continues to surprise me. Every day we meet such incredibly brave patients who have travelled for hours, sometimes days, to receive life-changing medical treatment on board.

In October 2014 the ship docked in Madagascar, an island nation 72

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situated off the southeast coast of Africa, to treat patients with a wide range of needs. Whether a patient requires maxillofacial, ophthalmic, orthopaedic, general, dental or any other kind of surgery, the volunteer crew on board the Africa Mercy has it covered.

For the nurses, we begin our medication rounds at 8am and prepare the first patients for surgery. After the other patients have breakfast we distribute nutritional supplements to those in need, as many are malnourished due to poor living conditions, which means they may take longer to heal from their surgeries. At 11am we play a movie on the ward, either in French or English,

Mercy Ships

“When there is free time on the wards we play a lot! There are always plenty of bubbles and balloons to play with the children” which the patients always love. Everyone crowds around the TV, babies on laps, children on blankets, and this allows us to prepare the first patients coming back from surgery. We have anything between four to eight surgeries a day on our ward, depending on the schedule.

After lunch we take the patients up to the deck for fresh air, exercise and a chance to play. Lots of bikes and scooters have been donated to Mercy Ships for the children to play with, and there is always a group of people playing Jenga or dominoes.

On occasion, someone will bring a guitar up and everyone will sing. In the evening Mercy Ships volunteers from other wards or departments (not everyone is a medical volunteer) are able to come and spend some time with the patients. After that everyone gets a cup of tea or hot milk, and sometimes a biscuit depending on supplies, and those going for surgery the next day will get some bread and butter as they will not be permitted to eat from midnight until after their operation.

When there is free time on the wards we play a lot! There are always plenty of bubbles and balloons to play with the children.

We like to think up a theme, currently it’s under-the-sea, and

then do craft projects around the theme. The patients, day crew and nurses all get involved and it’s a really great way to build community and have some fun! Many of the women like to knit, and through kind donations, we can often supply them with knitting needles and wool and let them be creative, alongside embroidery thread which a lot of the younger women like to make into friendship bracelets. The Malagasy love music and we often listen to it on the ward, which often results in little dance parties!

During the summer months the ship will dry dock to receive routine maintenance work. Vanessa is committed for the next field service until June 2016, which will also be in Madagascar.

If you would like further information about the work of Mercy Ships, please visit www.mercyships.org.uk or contact info@ mercyships.org.uk. www.ogsmag.com

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“Oil, Gas and Shipping Magazine has a readership of over 105,000 people across the globe every month”

Advertisement prices: Front Page (dedicated to your company) and 12 Page lead/ main editorial £19,995.00 Double Page Advertisement £6000.00 Full Page Advertisement £4895.00 Half Page Advertisement £2450.00 Quarter Page Advertisement Banner Ad on www.ogsmag.com Side Ad on www.ogsmag.com £1450.00 (All prices quoted are in Great British Pounds and payments can be taken through bank transfer or credit card. If you require a quotation in any other currency please contact us)

Specifications: Double - page: 426mm (width) x 303mm (height) - includes of 3mm bleed Full-page: 216mm (width) x 303mm (height) - includes 3mm bleed Half-page: 190mm (width) x 131.5mm (height) Quarter-page: 93mm (width) x 131.5mm (height)

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Media information cover, nor anyone apart from the customer and associated advertisers who would read a four page article at the back of one of these monstrosities.

Oil, Gas & Shipping magazine will generally publish a readable 60 to 100 pages, because I want our customers to have their articles and advertisements read.

How do you reflect on the challenges of your early years?

When I started the company with my wife Vanessa we had very little money, no backing from the banks and there was a worldwide recession going on! All we had was an idea to sell to our customers.

Our plan was to build a solid readership based on quality editorial and we believed that advertising would follow. Our readership is now almost 110,000 and is producing great business for our clients and ourselves.

We now feature the biggest players in the industry in our editorial coverage and these customers find that promoting themselves in our magazine is a cost effective alternative to printing their own brochures and distributing them themselves.

How do you plan to develop in the future?

We have no ambition to become the world leader in our sector! We leave that to those with greater resources (and egos) than we have. We do want our magazine to be a voice for its customers, however, rather than preaching to them, and for it to continue to develop as a valuable marketing resource.

We welcome suggestions and editorial contributions because we want to publish a magazine that people want to read and respond to.

What was your motivation for starting We have recently added Martin Ashcroft to your own magazine? our editorial team to help us step up to the next I had been an employee of media companies for a level. Martin has edited business magazines for long time and while their magazines were often good 20 years and his professionalism and insight publications, their relationships with their customers into news stories and features has already left a lot to be desired, failing to deliver what was made an impact on our website and our printed needed to promote their products and services. magazines.

I believe strongly that when customers spend time Any company looking for editorial coverage and money promoting their business, every effort should contact Martin as he has the gift of should be made to help them get their message across writing the most readable, promotable and unto their target audience. When the customer gets a brochure like material you will ever read. positive response, we have a great chance of doing With Martin’s help we have launched a new business with them again in the future! magazine called World Mining, which follows We have significant readership across the globe the same concept as Oil, Gas & Shipping and we offer our clients the opportunity to have the magazine. World Mining has already achieved magazine distributed to companies of their choice. a readership of approximately 93,000 with This helps our customers and ourselves; ensuring its 4th issue. It’s a logical development for us, that the magazine is read by the customer’s target as many of our clients in Oil, Gas & Shipping audience helps us to grow our distribution list. operate in, or sell products and services to the mining industry, too.

Simon Ward founded Worldwide Business Media in 2009 to produce the magazine Oil, Gas & Shipping. Here, he shares his value-for-money vision for serving customers.

What is your major objective for Oil, Gas & Shipping magazine?

Quite simple, really. To publish a magazine with a quality readership and quality content that promotes its customers by covering the subjects and issues that concern them.

What makes Oil, Gas & Shipping magazine different?

My previous employers were committed to maximising the number of adverts in their magazines, to such an extent that issues containing 200 or even 300 pages were being published every month. These were very well designed, pleasing on the eye, and quite profitable, but did little for the benefit of their readers or clients.

I don’t know anybody (apart from the proofreader) who has read a magazine of this size from cover to

Contacts: Worldwide Business Media Ltd. Oil, Gas and Shipping Magazine World Mining Magazine London, EC1V 2NX. United Kingdom Tel: +44 (0)203 5751249 Reg No: 6809417 News and Features Editor: Martin Ashcroft martin@ogsmag.com General Editor: Vanessa Ward vanessa@ogsmag.com Sales: sales@ogsmag.com General: info@ogsmag.com Artwork: artwork@ogsmag.com

www.ogsmag.com If you would like to advertise or feature over several issues of the magazine please contact us for our reduced price deals we can offer for frequent advertisers.

Have electronic magazines replaced hard copy printed magazines?

Definitely not!

An electronic magazine is a great vehicle for sending out an instant promotion, but a printed magazine can be used at exhibitions and faceto-face meetings with greater effect than a tiny image on a tablet, mobile or laptop.

Companies that produce only electronic magazines still charge hard copy print rates for advertising, despite their online magazines being cheaper to produce.

We take a belt-and-braces approach to publishing by producing a printed hard copy and an emailed electronic copy of our magazines, so our customers can benefit from the best of both worlds.

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Be on the front cover and have the lead 1218 page editorial of an edition of your choice

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Oil, Gas and Shipping Magazine offers its customers the opportunity to feature as the front cover and the main/lead article of the magazine. This gives companies the opportunity to discuss their operations and developments in more depth and reach our large global audience at a fraction of the cost it would take to publish sole brochures.

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All companies who take this option will also be given magazines to distribute on their own behalf. Previous customers have found this particularly useful for exhibitions and conferences and when new products have been developed.

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Previous companies who have taken this option include Maersk, Statoil, Tyco, Shell Group, Subsea 7, Teekay Corporation, Halliburton, Hyundai Heavy Industries, Tullow Oil, BP and many more.

This complete package includes: Front Page (dedicated to your company) 12-18 Page Lead/ Main Editorial Full Page Advertisement Total price: £19,995.00 This package is available for all our editions including our editions distributed at our supporting and partnering exhibitions/conferences.

If you would like to appear as the front cover and lead article please contact us at info@ogsmag.com or editor@ogsmag.com

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“Na v com igatin g p unl lexity o pot cking ent ial”

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Media information

(Issue 67: Subsea 7- article snippet below and cover image right) (Left: Previous front covers of Oil, Gas and Shipping Magazine)

A PARTNER IN PIONEERING SUBSEA TECHNOLOGY Subsea 7 builds on its track record in the harshest offshore environments

depth of expertise Investing in technology

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In the offshore energy industry, Subsea 7 is the leading global contractor in seabed-to-surface engineering, construction, inspection, repair and maintenance (IRM) and other services.

In recent years, this subsea market has entered an era of increasing challenge, with reservoirs at greater depths and in more hostile environments. The company has responded by developing a wide and versatile range of market-driven, enabling technologies and by extending its technical expertise.

“Many of the large subsea developments in recent years are either marginal or extremely technically challenging, and probably wouldn’t have been attempted a decade ago,” says Øyvind Mikaelsen, Subsea 7 Senior Vice President, North Sea and Canada.

“Today, Subsea 7 is much more than an installer of subsea infrastructure – we design pipeline systems for clients, develop technologies to support flow assurance in hostile conditions, and invest in world-class high-performance vessels which enable the execution of large, complex projects even in extremely deep waters.”

The catalyst for this accelerated commitment to technology was the successful combination between two complementary predecessor companies, Acergy S.A. and Subsea 7 Inc. in 2011.

“The 2011 merger delivered much more than enhanced volume, capacity and geographical range,” says Steve Wisely, Subsea 7 Executive Vice President Commercial. “It also gave us the widest range of technologies in key sectors in the subsea market, including pipeline riser systems, pipelay techniques, pipeline Bundles, Life-of-Field services and Remotely Operated Vehicles (ROVs).

“As a result, the technologies we use are independent and fit for purpose. We are not committed to using in-house hardware – we meet the challenge of delivering each complex subsea project through selecting the most effective technical solution.”

Subsea 7 operates in every major offshore region worldwide, including the North Sea, the Gulf of Mexico, West Africa, Brazil’s pre-salt fields, West of Shetland, Western Australia and, most recently, the Norwegian Sea. Well established for decades in the Norwegian offshore market, and listed on the Oslo Børs, Subsea 7 is focused on playing a leading role in delivering technology-rich subsea projects in Norwegian waters.

Safety remains the number one priority in all Subsea 7’s operations, and powerful hazard identification, risk assessment and safety management processes all contribute to the highest levels of safety performance.

In Norway, Subsea 7 has had no Lost Time Incidents in over a year during more than 2,000 vessel days and 12 current projects.

Subsea 7 is certainly well placed to meet this requirement. The company has extensive global project experience in every element of subsea construction and engineering, from conceptual design through to installation and commissioning.

“Many of our areas of technological expertise are not what clients expect from an ‘installer’; flow assurance, Finite Element Analysis (FEA), concept analysis, structural riser design, the development of Autonomous Inspection Vehicles and other cutting-edge areas.”

“We have executed a huge number and diversity of subsea projects on a worldwide basis, and we harness all this technological expertise and know-how into safe, reliable delivery,” says Sunde.

As a result of this experience, the company is an acknowledged leader in key sectors of the subsea market, including Subsea Umbilicals, Risers and Flowlines (SURF) and Life-of-Field (LOF).

Subsea 7’s Seven Borealis a world-leading pipelay and subsea construction vessel

The subsea market Subsea installation is already a major growth sector of the oil and gas market, as operators explore technological alternatives to conventional offshore drilling and platform production, most notably for deepwater field developments.

Industry analysts forecast that subsea production will match or exceed conventional platform production in the next 15 years, with the subsea processing market in particular estimated to grow from its current annual value of $500 million to a projected $8 billion by 2020.

As subsea infrastructure grows in size and complexity to meet the demands of higher pressure deepwater installation, an increasing number of operators are demonstrating a preference for the packaged EPIC (Engineering, Procurement, Installation and Commissioning) or EPCI (Engineering, Procurement, Construction and Installation) contract models, which only a number of large top-tier contractors are able to deliver.

“Innovative subsea technologies and large EPIC/EPCI contracts represent the future, but cost and reliability remain the two principal drivers in this industry,” says Thomas Sunde, Subsea 7 Vice President Technology. “Operators are prepared to give increased installation responsibilities to their contractors – but they want confidence in the contractors’ track record.”

SUBSEA 7

SUBSEA 7

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Offshore Europe 2015 EXHIBITION AND CONFERENCE SIGN UP AT

8-11 SEPT 2015

OFFSHORE-EUROPE.CO.UK/ ATTEND

ABERDEEN, UK

SPE OFFSHORE EUROPE

LEADING INTERNATIONAL E&P EVENT MEET FACE-TO-FACE WITH 1,500 EXHIBITORS

“

ACCESS NEW TECHNOLOGIES ACROSS THE E&P VALUE CHAIN

Impressed by the number of exhibitors covering all aspects of the oil and gas industry particularly the focus on subsea.

INNOVATE WITH 130+ NEW EXHIBITORS

SUBSEA PROJECT MANAGER, BP

PARTICIPATE IN 40+ FREE CONFERENCE SESSIONS

“

DEVELOP GLOBAL BUSINESS AT 34 INTERNATIONAL PAVILIONS

An excellent mix of super major & major oil companies, with niche oil services and product vendors.

CONSULTING PARTNER, WIPRO UK

NETWORK WITH 63,000+ INDUSTRY PROFESSIONALS

The worldwide development of deep and ultra-deep field discoveries is essential for sustainable oil and gas production.

Our Deepwater Zone showcases the advanced subsea, seabed and floating production hardware and expertise being utilised in these frontier projects.

Benefit too from meeting suppliers from Aberdeen, a major global exporter of subsea products and services.

30+

NETWORK WITH

EXHIBITORS

8,000+

SHOWCASING SPECIALIST TECHNOLOGIES AND SERVICES

INTERESTED IN DEEP AND ULTRA-DEEP WATER

ATTENDEES

OVER

15 HRS OF FREE EXPERT CONTENT FROM GLOBAL ASSOCIATIONS

Programmed by:

Photo Photocredt: credit:Aker AkerSolutions Solutions

Organised by:

TURN OVER FOR CONFERENCE! www.ogsmag.com

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EXHIBITION AND CONFERENCE

HOW TO INSPIRE THE NEXT GENERATION

SIGN UP AT OFFSHORE-EUROPE.CO.UK/ ATTEND

PEOPLE • TECHNOLOGY • BUSINESS Keynote Programme

Technical Programme

Hear senior global representatives and government officials debate current issues and critical future trends in the E&P industry, at the free to attend Keynote Programme.

“

The Keynote Programme will focus on the basic challenge of meeting energy demand while balancing concerns over climate change, security of supply and consumer affordability.

This challenge incorporates related issues: the well-being of our people and neighbouring communities, environmental risks and the safety and security of upstream assets.

MICHAEL ENGELL-JENSEN, SPE OFFSHORE EUROPE 2015 KEYNOTE CHAIRMAN

Over 100 selected papers will feature in the 2015 Technical Programme, which will cover the breadth of the E&P value chain with expertise from across the globe.

“

Whilst we continue to push the boundaries of technology and innovation, we must find better ways to attract and encourage the next generation of talent into our industry. For the first time we are inviting technical papers based on both people and technical challenges, to address both aspects in parallel.

CHARLES WOODBURN, SPE OFFSHORE EUROPE 2015 TECHNICAL CHAIRMAN

TECHNICAL SESSIONS WILL INCLUDE:

> DEVELOPING TALENT TO MEET DEMAND Insight on current challenges and best practices to develop our young and experienced professionals.

> HSE - A FOCUS ON PROCESS SAFETY New insights into health, safety and environmental management with a specific focus on process safety.

> FIELD RESTORATION (WELL ABANDONMENT & DECOMMISSIONING) The latest legislation, practices, case studies and activity with regards to well abandonment, abandoned well monitoring and the decommissioning of platform and pipeline infrastructure.

> SMARTER AND MORE EFFICIENT FIELD DEVELOPMENT The latest practices, concepts and case studies on the innovative, efficient and smarter development of offshore oil and gas fields. > ASSET & WELL INTEGRITY Advancements in assessing, monitoring, managing and assuring the integrity of the well, production facilities and field infrastructure. > SUBSEA Insight into latest drilling, completion, intervention and production technologies for subsea developments.

“

> MAXIMISING RECOVERY The latest technical advancements in sub-surface practices and technologies to enhance production and increase the recovery of mature fields. > SHALE AND OTHER UNCONVENTIONAL HYDROCARBONS The latest technologies, practices, legislation and general state of this area of the industry.

SPE Offshore Europe helps me keep up to date with “step changes” in our industry.

MECHANICAL ENGINEER, AMEC

Official Patron:

WHEN: WHERE: STAY:

8-11 SEPTEMBER 2015 AECC, ABERDEEN, UK OFFSHORE-EUROPE. CO.UK/SLEEP

Official Media Partner:

TRAVEL:

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OFFSHORE-EUROPE. CO.UK/TRAVEL

ADD TO CALENDAR

Offshore Europe 2015

Official media supporter:

www.ogsmag.com www.ogsmag.com

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Providing Oil & Gas solutions for tomorrow’s needs

EverSea provides integrated contract solutions to the following focus markets: • engineering, procurement, construction and installation of minimum facility platforms; • engineering, preparation, removal and disposal of decommissioned platforms; • offshore service and maintenance support for platforms facilities; • well intervention services and P&A of wells.

EverSea NV Part of GeoSea NV Haven 1025, Scheldedijk 30 . B-2070 Zwijndrecht, Belgium T +32 3 250 53 12 . F +32 3 250 55 41 info.eversea@deme-group.com . www.deme-group.com/eversea

FPAL Registration N°: 10054164

Member of the DEME-Group

A global leader in mining, metals & minerals

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World Mining

March 2015 Issue 4

Involved in the mining industry?

World Mining Magazine has over 93,000 readers across the globe. Take a look at www.ogsmag.com