Oil, Gas and Shipping Magazine by Oil, Gas and Shipping

ISSUE 76 www.ogsmag.com

Cover Story:

Vulcan Systems

The Remediation of Drilling Waste

Editor

The

Martin Ashcroft

Suspicious mind

I’ve always been a little suspicious of renewables. I’m a little suspicious of climate change, too, but that could be a longer story. It’s not that I don’t accept it’s happening, but I’m suspicious of people who urge us to abandon the planet’s vast resources of oil and coal in favour of immature technologies that are decades away from being efficient alternatives. It’s all a bit too cosy, don’t you think? The alarming crises, the lobby groups, the political imperatives, and the subsidies that follow. All wrapped up in a holier than thou morality that brands anyone critical of the green movement as a wicked monster. Oh, dear! It’s all our fault that the polar bears are suffering. It’s so cleverly self-serving. State ownership of resources is usually associated with dictatorships or communism, but we had a period of state-owned utilities in the UK for over forty years until Margaret Thatcher reversed it. What we have now, with subsidised renewables

being promoted at the expense of our traditional industries, is neither one thing nor the other, but it does open doors for opportunists in politics and industry. We used to call it jobs for the boys, but the boys are a lot smarter than they used to be. It’s public/private partnerships now. I’m sure it’s a “good thing” to leave the legacy of a sustainable future for our grandchildren. I’m just not sure that the “solutions” offered by the environmental lobby are the altruistic imperatives they’d have us believe. Call me old fashioned but I’d rather see a nodding donkey in the desert than a wind turbine or an array of solar panels at the bottom of my garden. For a more logical analysis of this subject, be sure to read Rupert Darwall’s authoritative article on renewable energy in this issue. Martin Ashcroft martin@ogsmag.com www.ogsmag.com

Contents Cover Story Vulcan Systems: The remediation of drilling waste

03 21 22 25 25 25

The Editor and his suspicious mind Major oil discovery in South of England Halliburton to divest drilling units News in brief ROVOP opens new Houston headquarters Neo Oiltools

26 29 31 31 31 32

ly Month news & s feature

Shell to shell out ÂŁ47 billion for BG Group Sub $50 oil and the tank storage industry Monthly data on rail movements of crude oil OPEC net export revenues fall in 2014 Training tops chart for search and rescue C&N Petroleum Equipment

34 36 38 42 54 60

Tobias Read: Why oil prices will hit $30 Interview: John Gonzalez, International shipbroker Renewable energy: an expensive policy disaster KANON Loading Equipment Offshore Europe 2015 The unthinkable $30 oil, by Dr. David L. Blond

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SYSTEMs

Vulcan Thermal Desorption Unit Vulcan® Systems provides custom-built thermal desorption solutions for the remediation of drilling wastes, petroleum-contaminated soils and a variety of other materials. The Vulcan® Indirect Fired Thermal Desorption Unit can be custom-designed and manufactured to provide a thermal solution for numerous environmental issues, including drill cuttings, drilling muds, and soil remediation. This indirect fired system thoroughly processes and remediates drilling wastes and soils contaminated with petroleum hydrocarbons. With our engineering design, set-up and commissioning support and aftersales services, Vulcan® Systems offers comprehensive thermal solutions to meet each client’s individual project needs. 6

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Leading the way in Thermal Desorption Technology

are created in the earth. These holes are drilled for the extraction of oil and gas, as well as for core sampling and other purposes. Drilling mud aids in the borehole drilling process by acting as While the oil and gas industry may fluctuate, the lubricant for the drill bit while also transporting presence of drilling waste remains consistent—as drill cuttings—another form of drilling waste— does the need to dispose of that waste. Operators to the surface. Drill cuttings are broken pieces of are often on the lookout for innovative ways solid material that are created to handle, treat and even reuse as the drill bit penetrates waste from oil and natural gas “Drill cuttings and drilling and breaks the rock. As the drilling processes. drilling mud circulates up muds can be treated from the drill bit, it carries the Drilling mud, also known as drilling fluid, is one of these for beneficial reuse.” drill cuttings up to the surface, where the mud and cuttings common wastes and an essential must be separated before recovery. component of the drilling process. In oil and gas drilling operations, drilling muds are used to Thermal treatment presents operators with the control subsurface pressures, lubricate the drill opportunity to remediate and reuse drilling bit, stabilize the well bore and transport drill wastes. With the use of a thermal desorption cuttings to the surface. unit, drill cuttings and drilling muds can be treated for beneficial reuse. During the oil and gas drilling process, boreholes

Drilling Wastes: Recovery and Beneficial Reuse

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Types of Drilling Muds Depending on the application, one of three types of drilling muds may be used: water-based muds (WBMs), oil-based muds (OBMs) or syntheticbased muds (SBMs). Oil-based muds are one of the most effective drilling fluids, but many wells, especially in the southern gas basin of the North Sea, are drilled with water-based muds. Synthetic-based muds have a lower environmental impact and biodegrade more quickly, making SBMs one of the more frequently used types of drilling fluids. Water-based muds are produced with water mixed with clays and other chemicals to create a homogenous blend. WBMs generally consist of bentonite clay with additives such as barium sulfate, calcium carbonate or hematite. Thickeners, such as xanthan gum, glycol and starch, may also be used to influence the mud’s viscosity. Oil-based muds have a base fluid consisting of a petroleum product like diesel fuel. Because of their increased lubricity, enhanced shale inhibition and greater cleaning abilities, OBMs are more frequently used than WBMs. OBMs are also able to withstand greater heat without breaking down. Synthetic-based muds possess a base fluid of synthetic oil. These muds are most frequently used on offshore rigs because they have the same properties as OBMs but a toxicity of fluid fumes that is significantly lower.

Drilling Waste Disposal and Recovery After the drilling job is complete, the drilling wastes must be disposed of in some way. The U.S. Environmental Protection Agency (EPA) classifies drilling fluids as “special waste,” meaning that they are exempt from many federal regulations. Because of this classification, laws governing the disposal of drilling muds vary from state to state. In California, for example, the state government has a strict set of regulations for drilling wastes and requires operators to obtain approval before they may begin any type of disposal. In 2012, an oil company in Texas had to pay a $1.35 million fine after drilling waste that was placed on their “landfarm” contaminated nearby water sources. Landfarms are privately-owned, state-regulated fields where drilling waste is spread, and while they are legal, they are capable of causing damage to the surrounding environment. Drilling waste, even when buried, can easily contaminate soil and groundwater when the hydrocarbons and other chemicals leach into the earth. While most water-based muds are disposed of when the drilling job is completed, many oil-based and synthetic-based muds can actually be recycled. Drill cuttings can also be recycled and reused, after the hydrocarbons are removed. On a standard drilling rig, there are a variety of relatively simple processes that can be used to capture clean mud that would otherwise be discarded and put it to beneficial reuse. Throughout the drilling process, for example, drilling fluids are recirculated, which aids in decreasing waste by reusing as much mud as possible. Even the recovery of drilling fluids during tank cleaning may present an opportunity for reuse. Drilling mud transports the drill cuttings back to the surface in order to prevent the well from clogging. On the drilling rig, the cuttings are separated from the mud, and the mud is recycled for reuse. The drill cuttings, meanwhile, are either discharged to the seabed, re-injected into the well or taken ashore for treatment and disposal. These cuttings vary in size and texture, depending on the type of rock and drill used. Drill cuttings can range in size from fine sand to gravel. While drill cuttings are often disposed of after the drilling operation is finished, they can actually be treated and beneficially reused. Before drill cuttings can be reused, however, it is necessary to ensure that the hydrocarbon content, moisture content, salinity and clay content are suitable for the cuttings’ intended use.

There are numerous applications for recycled drill cuttings, such as the stabilization of surfaces that are vulnerable to erosion, like roads and drilling pads. Oily drill cuttings can also serve the same function as traditional tar-and-chip road surfacing. Cuttings can also be used as aggregate or filler in concrete, brick or block manufacturing, as construction material or as daily cover at landfills. Recycled cuttings may also be used in the production of cement. Research has even been done on additional uses for recycled drill cuttings. There have been trials conducted in the United Kingdom to determine the feasibility of utilizing oily drill cuttings as fuel for power plants. In the U.S. the Department of Energy has researched the possibility of using drill cuttings as a substrate for restoring coastal wetlands. www.ogsmag.com

Vulcan® Thermal Desorption Units The Vulcan® Indirect Fired Thermal Desorption Unit, as shown below, is a new 6’ diameter x 35’ long heated zone 304 stainless steel rotary kiln with combustion chamber. This system is specifically designed to remediate soils and drilling muds contaminated with petroleum hydrocarbons. Consisting of a primary treatment unit, quench scrubber, knock-out pot, oil/water separator, secondary treatment unit, air-cooled helical rotary liquid chiller induced draft fan, discharge system and control room. In the process, the drilling mud is transferred to the feed hopper of the Primary Treatment Unit (PTU) with the client’s backhoe or skid loader. The material is then fed to a feed hopper mounted on a pugmill. From the pugmill, the material is transferred to the feed auger, which conveys the drilling mud into the PTU and maintains a seal/airlock for the system. The indirect fired rotary kiln has three heat zones, and the operating temperature of the drum can reach up to 950 degrees Fahrenheit (510 Celsius). The rotary kiln is housed in a combustion chamber with six 2.7 MMBtu/hour burners, producing a total of 16.2 MMBtu/hour of heat. The kiln operates in an oxygen-deficient and slightly negative atmosphere. Vapors from the contaminated drilling muds are pulled out of the system in a countercurrent direction to

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the material flow. The vapor from the PTU is pulled into a high-efficiency quench scrubber that uses oil as the quench liquid. The quench operates at 250 degrees Fahrenheit (121 Celsius) and removes dust particulate, in addition to condensing the heavier hydrocarbons in the vapor stream. The condensed oil and sludge are pumped through a set of filters to an oil/water separator and then to an onsite storage tank (to be supplied by client). The vapor that is not condensed in the quench scrubber is pulled through the knock-out pot, the custom-built vertical helical heat exchanger, which reduces the temperature to 70 degrees Fahrenheit (21 Celsius). The fluid from the knock-out pot—condensed water and oil—is pumped to an oil/water separator, then to a water and oil holding tank (to be supplied by client). The non-condensable gases are pulled from the knock-out pot by an induced draft fan and pushed into the secondary treatment unit, where all remaining hydrocarbons are destroyed at temperatures of up to 2,000 degrees Fahrenheit (1,093 Celsius) with a residence time of up to two seconds.

OTC 2015 Members of our Vulcan速 team will attend the Offshore Technology Conference (OTC) 2015 in Houston, TX on May 4th-7th in booth #6201

SPE Offshore Europe: Conference & Exhibition Our team will also attend SPE Offshore Europe in Aberdeen, UK on September 8th-11th in booth #4C202

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Thermal Treatment of Drilling Wastes The best method for unlocking all the potential uses of drilling wastes is through thermal treatment technologies, such as thermal desorption. Through the use of extremely high temperatures, thermal treatment reclaims or destroys hydrocarboncontaminated materials, such as drilling wastes. Thermal processes are the most efficient treatment for destroying organics, capable of reducing the volume and mobility of inorganics like metals and salts. Waste streams that are particularly high in hydrocarbons, such as oil-based muds, are excellent candidates for thermal treatment.

may be a final treatment process, resulting in inert solids, water and recovered base fluids. Through the application of heat, thermal desorption vaporizes volatiles and semi-volatiles and easily removes light hydrocarbons and aromatics. The process produces a variety of secondary waste streams, including solids, water condensate and oil condensate.

Rotary kilns and hot oil processors are the most frequently used equipment and most proven methods for the thermal desorption of drilling wastes. Indirect fired rotary kilns use hot exhaust gases from fuel combustion to heat drilling muds and drill cuttings. This type of kiln consists of a rotating drum placed inside a jacket. Heat for the process is provided through Thermal treatment may be a the wall of the drum by the hot short-term process to reduce exhaust gas that flows between the toxicity and volume, as well as prepare waste materials for further jacket and the drum. The drilling wastes are transported through treatment and disposal, or it the drum as it rotates, and the

treated solids are recirculated to prevent a layer of dried clay from forming inside the drum. A vapor recovery unit can be used to recover or condense hydrocarbons from the gas stream extracted out of the thermal desorption unit. The hydrocarbons are not destroyed but may be reused in the process as an alternative fuel source or sold as a by-product. Vapor recovery units from Vulcan速 Systems typically consist of a quench scrubber, mist eliminator, shell and tube heat exchanger, knock-out pot, oil/water separator and pre-combustion chamber. Depending on the process and material, optional items can be added to the process, including baghouses, thermal oxidizers or acid scrubbers. Vulcan速 Systems is able to offer estimates to design a vapor recovery unit to suit specific applications, as well as to meet environmental and emissions standards. www.ogsmag.com

SYSTEMs

Capturing Mercury Emissions Industrial processes that use mercury, waste generators and mineral mining operations all contribute to mercury pollution. Poor management of emissions or leakage can result in concentrations of mercury in the soil that are well above the regulatory limits. In 2007, the EPA reported that mercury was a â&#x20AC;&#x153;contaminant of concernâ&#x20AC;? at nearly 300 Superfund sites across the country. As a result, the EPA and other organizations around the globe have tightened regulations on emissions of hazardous chemicals, such as mercury. 14

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Fortunately, mercury can be cost-effectively removed from soil before it has a chance to negatively impact human health and the environment. Mercury can be removed from contaminated substrates through the use of thermal desorption. In this process, intense heat is applied to the material to volatize the mercury without damaging the material itself. In a thermal desorption unit, the contaminated soil is heated and the mercury is vaporized. A gas or vacuum system then transports the vaporized mercury and water to an air-emission treatment system.

Vulcan速 Systems is uniquely positioned to aid those in the industry in the removal of mercury and mercury products from contaminated materials. Vulcan速 has developed technology to remove mercury from substrates on a continuous basis. Our custom-designed and manufactured thermal equipment includes vapor recovery for the collection of vaporized mercury and has been demonstrated on both a pilot plant and a commercial basis. Our highly qualified staff is capable of designing systems to remove mercury from any industrial powders, such as activated carbon, fluorescent lamp powder, sludges and soil contaminated with mercury and mercury compounds. Mercury can be captured from cement kiln dust (CKD), eliminating over 99 percent of mercury and helping U.S. cement plants to adhere to the 2015 National Emission Standard for Hazardous Air Pollutants (NESHAP) regulations. Capturing mercury also presents more opportunities for raw material use for cement producers. This process can also be applied to a variety of other materials, including coal ash, activated carbon, clay and other industrial dusts. Mercury capture results in an almost mercury-free raw material and an insoluble concentrated form of mercury, which can be safely cast into concrete, disposed of or recovered. Mercury capture is an innovative method to reduce mercury emissions from cement kiln exhaust stacks and other emission sources. This technology can be utilized to capture both elemental and ionic forms of mercury. Mercury capture involves the use of thermal desorption to separate mercury from CKD, allowing the dust, essentially free of mercury, to be recycled and used anywhere within the process. This innovative process helps cement plants to meet the new NESHAP regulations, which will be in place in September 2015.

For more information on Vulcan速 Systems, visit our website, www.getavulcan.com, or contact Worldwide Recycling Equipment Sales, LLC at +1 (660) 263-7575 or wwrequip@wwrequip.com.

Custom Designed Solutions For a smaller, portable solution, the Vulcan速 Mobile Thermal Desorption Unit is a one ton per hour indirect thermal desorption system designed to remediate drill cuttings. This compact, mobile unit provides thorough remediation of drill cuttings contaminated with petroleum hydrocarbons. Optional components, including acid scrubbers and a flameless electric thermal oxidizer, may be added to the system for an additional cost. Recovering drill cuttings and drilling muds is often practical and cost-effective environmentally sustainable process. Recycling and reusing drilling wastes can help operators meet disposal regulations, reduce disposal costs, limit truck traffic and save money on building well pads and roads. The proper disposal of such wastes prevents the contamination of water supplies and the soil. Thermal treatment of drill cuttings not only reduces their volume but also enables operators to recover reusable drilling fluids, resulting in significant cost savings while also augmenting environmental performance.

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Monthly news & features Please send your news and press releases to martin@ogsmag.com www.ogsmag.com

19 19

Monthly news & features

Major oil discovery in South of England Exploration company UK Oil and Gas Investments (UKOG) has found what could become the largest onshore oil discovery in England since the 1980s. Analysis conducted on behalf of UKOG by US-based Nutech Ltd, one of the world’s leading companies in petrophysical analysis and reservoir intelligence, estimates that the Horse Hill-1 well in the Weald Basin has a total oil in place (OIP) of 158 million barrels per square mile, suggesting a total of around 100 billion barrels. Only a fraction of this will be recoverable, but it still amounts to a lot of oil. Discoveries with similar geology in the United States have recovered between 3% and 15% of the oil resources. To put it in persepctive, oil extraction in the

North Sea has produced around 45 billion barrels of oil in the last 40 years. “Drilling the deepest well in the basin in 30 years, together with the ability to use concepts, techniques and technology unavailable in the 1980s, has provided new cuttingedge data and interpretations to comprehensively change the understanding of the area’s potential oil resources,” said Stephen Sanderson, UKOG CEO. “Appraisal drilling and well testing will be required to prove its commerciality,” he continued, “but this hybrid play has the potential for significant daily oil production.” Oil production in the South of England is nothing new. There are currently around a dozen oil production sites across the Weald,

a region spanning Kent, Sussex, Surrey and Hampshire. “We believe we can recover between 5% and 15% of the oil in the ground, which by 2030 could mean that we produce 10%-to-30% of the UK’s oil demand from within the Weald area,” said Sanderson. Environmental organisations are worried about the controversial practice of hydraulic fracturing, known as ‘fracking’, used in some areas to recover oil in commercial quantities, but UKOG claims that the oil at Horse Hill is held in rocks that are naturally fractured, which “gives strong encouragement that these reservoirs can be successfully produced using conventional horizontal drilling and completion techniques”.

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Halliburton to divest drilling units for Baker Hughes deal The $35 billion merger between Halliburton and Baker Hughes was confirmed last November, but in order to receive approval from the competition authorities, Halliburton was required to divest some of its overlapping businesses. Shareholders of both companies voted overwhelmingly (over 98%) in favour of the merger on 27 March, and Halliburton has now identified three business units it is prepared to sell. These are the company’s Directional Drilling unit, Fixed Cutter and Roller Cone Drill Bits, and Logging-While-Drilling (LWD)/ 22

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Measurement-While-Drilling (MWD) businesses. Although these businesses will be marketed separately, the company has made it clear that they will not be sold until the Baker Hughes acquisition has been wrapped up. “Thanks to employees’ hard work, these businesses represent strong products and services in the oilfield services industry, and we believe the value inherent in these businesses will be recognized by prospective buyers,” said Dave Lesar, chairman and chief executive officer of Halliburton. “Although we would prefer to retain these assets, we will be required to divest some of our

overlapping businesses to obtain competition authorities’ approvals as anticipated when we announced the Halliburton-Baker Hughes transaction. We are excited about the many benefits of our pending acquisition of Baker Hughes, which was recently approved by the stockholders of both companies, and look forward to creating a bellwether global oilfield services company for the benefit of our stockholders, customers, employees and other stakeholders.” Halliburton expects to complete the sale of the businesses in the same timeframe as the closing of the pending Baker Hughes acquisition late in the second half of 2015.

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Monthly news & features News in Brief Ocean freight rates for major EastWest routes have edged upwards slightly between November 2014 and February 2015, according to Drewry’s Benchmarking Club, a user group of multinational retailers and manufacturers monitoring international freight costs. In contract negotiations mainly for the European trades, shippers have had to agree to increases in the base rate on some routes for the first time in years. * * * China’s apparent oil demand in February contracted 1% year over year to 40.7 million metric tons (mt), or an average 10.66 million barrels per day (b/d), according to a recently released Platts analysis of Chinese government data. Despite the contraction, this was still the second-highest monthly volume on record, the highest being in February 2014 after apparent oil demand was retrospectively adjusted to an average 10.76 million b/d. * * * The Energy Institute (EI), in partnership with Oil & Gas UK, has published the sixth edition of its Pipeline and Riser Loss of Containment (PARLOC) report, containing statistics from a 12-year operating period. The data covers loss of containment incidents at pipelines and risers on the UK Continental Shelf (UKCS) between 2001-2012, collating incidents reported to the Health and Safety Executive (HSE) and the Department of Energy and Climate Change (DECC), and various surveys and databases. * * * Leading international oilfield services company Expro has been presented with the eni safety award for well testing services at a ceremony in San Donato, Milan. This is the second consecutive year Expro has won the award, which recognises a contractor that has achieved the best safety results while working with the Italian operator. Expro has provided well testing services to eni for over 10 years, predominantly in West Africa.

ROVOP opens new Houston headquarters After a global increase in demand for its services, independent subsea ROV (remotely operated vehicle) services provider ROVOP has established a western hemisphere headquarters and support base in Houston, Texas, and has appointed three highly-regarded ROV industry professionals to lead the business. Scott Wagner, Brett “Gonzo” Eychner and Wayne Betts bring a combined total of more than 100 years’ global experience in the ROV services sector to ROVOP. They join an established management team and staff of 130 based in Aberdeen, Scotland, who have developed ROVOP into a leading player in the ROV field. ROVOP’s facility is located in North West Houston on a 1.5 acre site which includes a 4,500 ft2 office

and a 17,300 ft2 workshop where the company will manage its fleet of FMC Schilling Robotics and SAAB Seaeye ROVs. “The recent mobilisation of two Schilling Ultra-Heavy Duty (UHD) Generation III ROVs, capable of closing a blow out preventer (BOP) within 45 seconds to meet American Petroleum Institute (API) requirements, illustrates ROVOP’s commitment to supporting clients with industry leading technology in the Gulf of Mexico,” said ROVOP chairman Mark Vorenkamp. As well as five vessel-based ROV systems already contracted in the region, ROVOP has invested in a further two complete ROV spreads that benefit from features making them especially attractive for deep water vessel and rig support applications.

Neo Oiltools has launched a ground-breaking down-hole torque management tool, NeoTork, which automatically manages torque generated from the drill bit and mitigates axial and torsional vibrations, bringing down drilling time, reducing the cost of drilling operations and improving drilling performance. The technology has been designed to ensure that once down-hole torque exceeds the preset limit, a system of disc springs and steel cables automatically contracts to reduce the bit depth of cut. www.ogsmag.com

Shell to shell out £47 billion to aquire BG Group In one of the biggest M&A deals of recent times, Royal Dutch Shell is to acquire oil and gas exploration firm BG Group for £47 billion. The two companies have agreed on a cash and shares offer which rewards investors with a 50% premium on BG Group’s share price on 7 April. The combined company will have a value of around £200 billion, after a 20% decline in share price last year saw BG’s market capitalisation fall to £31 billion. With the price of oil still alarmingly low, the emergence of this deal signifies a strategy where the purchase of existing exploration assets is seen as better business than high cost speculative exploration. Shell said the deal would add 25% to its proven oil and gas reserves and 20% to production capacity, 26

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particularly in Australia’s liquid natural gas (LNG) market and in deep water oil exploration off the Brazilian coast. 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.” BG Group was created in 1997 when British Gas demerged into two separate businesses. BG adopted the exploration, production, transmission and distribution interests and Centrica took charge of the UK retail business. In 2000, BG split again, divesting the British transmission and distribution business Transco to Lattice Group. BG Group shareholders will own approximately 19% of the combined group. Shell said it would offer BG Group shareholders a “mix and match facility”, allowing them to

decide how much to take in cash or new Shell shares. “This offer represents an attractive return for BG shareholders,” said Andrew Gould, chairman of BG. “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.“ It is widely believed that Shell has been preparing to acquire BG for many years. Insiders joke about people working on the project having retired already. The timing of this deal is significant, therefore, given the current uncertainty in the industry after the price of oil fell by 50% in six months. There are likely to be job losses in the North Sea, which Shell and BG Group described as “global synergies”, but without this deal, there may have been many more. Shell and BG Group expect to make annual savings of $2.5 billion as a result of the deal.

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Monthly news & features

What does a sub-$50 barrel of oil mean for the tank storage industry? When the industry last assembled in Dubai for Tank World Expo 2014, the price of a barrel of oil was averaging $104. Now, 12 months later, this year’s Tank World Expo sees the price around $44 per barrel. The effects on the tank industry have been significant, with traders looking for storage so they can sell at a profit when the price rebounds. Traders are buying up storage at such a rate that the International Energy Agency anticipates with stocks levels already at an 80-year high, the limits of some regions’ tank capacity are now being severely tested. The rising demand for storage has been accompanied by the use of more unconventional sources, including floating storage at sea, in rock caverns in Singapore

or simply leaving drilled oil in the ground untapped (also known as the ‘fracklog’). So, while the low price of oil provides challenges for sections of the energy industry, for storage it presents a major opportunity, and one explored in detail by the global expert speakers at Tank World Expo (13-14 April 2015) in Dubai. Tank World Expo assembled a host of global speakers to discuss this issue and many others, including representatives from facilities, terminals and ports in the UAE, Oman, Egypt, Jordan, Turkey, the Netherlands, Nigeria and India plus exhibitors based in 15 different countries across three continents. Let us know what you learned in your two days of expert insight, practical case studies, in-depth discussion, technology launches and networking in Dubai. www.ogsmag.com

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Monthly news & features

Monthly data on rail movements of crude oil For the first time, the US Energy Information Administration is providing monthly data on rail movements of crude oil, which have significantly increased over the past five years. The new data on crude-by-rail (CBR) movements are integrated with EIA’s existing monthly petroleum supply statistics, which already include movements by pipeline, tanker, and barge. The new monthly time series of crude oil rail movements includes shipments to and from Canada and dramatically reduces the absolute level of unaccounted for volumes in EIA’s monthly balances for each region. EIA is initiating the new series with monthly data from January 2010 through the current reporting month, January 2015.

Please send all news and press releases to Martin Ashcroft martin@ogsmag.com

OPEC net export revenues fall in 2014 The net oil export revenues of OPEC countries (excluding Iran) fell by 11% in 2014 from $824 billion in 2013 to $730 billion, according to analysis by the US Energy Information Administration (EIA), largely because of the decline in average annual crude oil prices, and to a lesser extent from decreases in the amount of OPEC net oil exports. This represents the lowest earnings for the group since 2010. Saudi Arabia earned the largest share of these earnings, $246 billion in 2014, representing approximately one-third of total OPEC oil revenues. For 2015, EIA projects that OPEC net oil export revenues (excluding Iran) could fall further to about $380 billion (unadjusted for inflation) as a result of the much lower annual crude oil prices expected in 2015. EIA expects that OPEC’s crude oil production and exports (as a whole) in 2015 will be unchanged from 2014 levels, following OPEC’s decision on 27 November not to change its production targets. For 2016, OPEC revenues are projected to rebound to $515 billion with the expected rebound in crude oil prices. Consistent with OPEC’s announcement, Saudi Arabia has indicated its intention to maintain its export market share rather than cut production to keep prices higher. In the past, Saudi Arabia often played the role of the swing producer, temporarily cutting its production to offset supply growth elsewhere or weaker global demand, or increasing its output level to make up for a supply shortfall. These net export earnings do not include Iran’s revenues because of the difficulties associated with estimating Iran’s earnings.

Training tops chart for search and rescue professionals The outstanding priority for over 40 percent of search & rescue professionals in 2015 is the improvement of training, techniques and procedures (TTPs), according to survey findings by Search and Rescue Europe ahead of the Annual Search and Rescue conference being held in the UK from 21-23 April. The past 12 months has witnessed several disasters requiring mass search and rescue operations, including missing or crashed aircraft, the ferry disaster off the coast of Greece and migration in overcrowded boats from North Africa to the Mediterranean. These missions have tested the skills and capabilities of the SAR teams on scene, and highlighted the importance of seamless international coordination and interoperability. The most notable enhancements to SAR operations within respondents’ area of interest were predominantly technology-focused, with unmanned aerial vehicles highlighted numerous times, as well as the availability of GIS and GPS. Event details and registration information can be found at www.sar-europe.com/news www.ogsmag.com

C&N Petroleum Equipment

C&N Petroleum Equipment, South Africa and Africa’s leading provider of bulk liquid transfer solutions in the petroleum and chemical industries, founded by Yvonne van Schalkwyk has grown from strength to strength. Yvonne van Schalkwyk, Managing Director and founder is an amazing woman. She started C&N Petroleum Equipment as the only sales person and has since grown the company to a company of 30 plus employees. She has proven to be a leader and role model for young women, accepting all challenges as new ways to learn. She strives to create solutions for the oil and gas industry. Yvonne has taken part in outstanding leadership awards such as the Top Women Awards where she was runner up in the division of Top Gender Empowered Company: Resources. Started by Yvonne in the year of 1992, C&N Petroleum Equipment has grown to become a leader in the supply and servicing of liquid storage to fuel handling, safe product transfer, vapour recovery, loading crude oil, Dock oil suction and delivery and fuel

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decanting for industries including the Oil & Gas, Mining, Rail, Aviation and Marine Industries. The reputation of C&N Petroleum Equipment was built up by focusing the brand on quality. The global standards that C&N Petroleum Equipment conform to include the following: ISO 9001, ISO 2014, NRCS, SABS, European EN and American API standards. The Marine Onshore Equipment that C&N Petroleum Equipment has to offer is of the highest standards and quality the industry has to offer. These include the following; Marine Loading Arms, Docking Hose, Dry- Disconnect Couplings, Roman Seliger Break-Away Couplings and MannTek Break-Away Valves. C&N Petroleum Equipment also supplies Marine Offshore Equipment such as Floating Hoses and Safety Break-Away Valves.

C&N Petroleum Equipment’s Mining Equipment range is designed to adapt to the fluid transfer operations conducted on mines. These include the following; Mining Loading Arms, Break-Away Valves, Flomax Mining Nozzles, Mining Docking Posts, Diesel Trailers and Mining Hose. Looking forward C&N Petroleum Equipment plans to expand even further into Africa by continued supply of quality equipment and staying on the forefront of innovations in the Fluid Transfer Industry. C&N Petroleum Equipment will also continue to give back to the community by giving young students, hoping to break through in this rapidly evolving industry the opportunity to become interns for C&N Petroleum Equipment by taking part in C&N Petroleum Equipment’s very own, unique internship programme.

C&N Petroleum Equipment

Why oil prices will hit $30 this quarter Oil will hit $80 by the end of the year, but before we get there, we’re going to see a price of $30 and we’ll see it soon. by Tobias Read Experts from all areas of the industry have continued to get it wrong; predictions are brave in this environment, but this week I’ll give you three reasons why I’m happy to commit myself to this opinion. If you are not concerned about $40 oil then you know something the rest of us don’t. It’s hugely important for the world economy. Price is the result of a variety of different factors, but there are immediate issues which I think are going to fundamentally shape the price of oil in coming months: 1. Global storage capacity There has been much recent debate on storage capacity in the US and overseas, and that’s understandable. Imagine you are a tomato farmer. After several good years, your customers have filled their cupboards and fridges with your tomatoes to the point where they have almost no room left. What’s the effect on your ability to sell the tomatoes you’re still producing? Simple – it’s going to get harder. Much harder. And 34

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ultimately, if you want to make any money at all, you’re going to have to lower your price. Some suggest the same thing may soon happen in the oil sector. First the facts. Global oil storage capacity is about 4bn barrels. Public data shows that inventory is at record levels; we are at 70% of capacity in the US, 80% in Europe and 90% in Japan. I don’t have data on the Chinese capacity but the newsreels state they have recently been buying oil on the cheap, their storage is filling up and they are likely to reduce demand before new capacity comes on stream in late 2015. So it looks like China is at 90%+ capacity in the short term. Oil production is still running ahead of demand by about 1.5m barrels per day. The short term demand is not projected to increase substantially and supply is expected to remain at current levels (or to increase slightly) with new assets coming on line and US production is not likely to decline till Q3. It is difficult to accurately determine (e.g. transportation, well-site, and other national strategic suppliers)

but the simple worrying truth is that we are running out of space to store oil. Theoretically, global capacity could extend current production by six months to a year, perhaps longer in markets like the US where inventory hit 80% in 2013. However, at some point the man behind the curtain is simply going to stop buying. Like the farmer with a fresh load of new tomatoes, if nobody wants them, then no matter what the price he won’t be able to sell them until his customers have eaten their tomatoes, depleted their stores and decided to buy more. The oil sector is more complicated. The price of oil may well spike down very substantially for a short period of time. Some producers will simply continue selling irrespective. Others with a choice may stop pumping and leave the asset in the ground till the price rises. Some, mainly the marginal debt funded US players, may go bust. It’s great for consumers and gas may be really cheap for a short period. While inconceivable in

Tobias Read

2014, prices may bottom out at sub $30. Not so great if you are in the industry, however. The stock market is volatile and there is a definite herd mentality. The expressions Bull and Bear are not accidental and markets over-react substantially based on imperfect data. If the price falls to $30 because of capacity issues then we all know that it will recover. But markets don’t behave rationally and with so much inventory in the system it is difficult to know how long the downturn will last and how far the herd will push the price down before it returns to a sensible equilibrium. This leads to uncertainty … 2. Uncertainty As FDR said, “We have nothing to fear but fear itself”. The sector is beset by fear, nobody seems to know which way is up or when the market will recover. Fear breeds over-reaction and paralysis of decision making. Like stock-market investors, managers in the oil & gas sector can and do over-react. Most operators claim that cap-ex decisions are made over a five to ten year timeframe. This may not be true for the shale plays but it does not explain the current wave of lay-offs or the slashing of cap-

ex. If investments were truly being made over multi cycle timeframes then IOCs and NOCs should be investing: now is the time. Prices are low and project staff are readily available for the first time in seven years. However, with a market uncertain and going downwards it would take a brave CEO to confront the fear in the faces of the investor community who, like the bears, are running from financing or investing in the sector today. Similarly, job cuts are all around us and companies seem to be cutting hard. I understand shareholders may want short-term profitability, but when the market returns these companies may not have the talent to kick-start new projects. These cut-backs in cap-ex, and the lay-offs, are going to have an impact and the impact will not just be in the US, it will be felt globally. Metaphorically we have taken our foot off the gas. While there may be substantial inventory to meet short-term demand, the fear in the current market will lead to 12 to 24 months with few substantial new investments. The US is expected to lose up to 1mbpd of production by the end of the year, and the world economy is expected to increase demand by over 1mbpd by the end of the year. Yet in the middle of this there will be a huge gap opening up as other global assets deplete without new production coming on line. We can forget Iran. Embargos will remain, but we should be worried about conflict (Yemen for example). This will take a heavy toll down the line and lead to rocketing prices as the global economy once again accelerates. So given this uncertainty why is it that the Saudis continue to invest? 3. Saudi policy on production and investment OPEC may have fewer teeth than a decade ago, but OPEC led by Saudi Arabia can still turn the market. With all the current turmoil, the Saudis are taking a huge shortterm hit, but will end up being the winners. Many national producers are operating at full capacity to maximize revenue to fund

expensive social programs and because of this they can’t afford to cut back production. Also, because they depend on oil, cash is short (e.g. Venezuela, Angola etc.) so they can’t afford the cash to invest ahead to increase output. By contrast the Saudis could increase capacity by 1.5 to 2.0 mbpd tomorrow. They could bring the global price back to $80+. However they have not. While the math may not immediately add up, the Saudis have sufficient cash on hand combined with regular dividends from wise historic investments to fund the gap (between $50 and $100 oil) for several years if not a decade. They can ride this one out. Conspiracy theories abound about Saudi policy, but while conspiracy theories offer fun for idle speculation they do not generally trade in facts. The facts show that the Saudis are continuing to make investments. They don’t seem to be nervous. When the market is down, they are taking staff from the US oil fields cheaply. When drilling, materials and product rates are down they are signing contracts. With all this turmoil, marginal producers and national oil companies will get hurt, global production will decline and in the middle of all this the Saudis are making investments that will deliver new production at the point global demand accelerates and the price rockets. It looks like the Saudis might just have outsmarted us all. We are still in a cycle and most people remain confident that oil will recover; the market is strong. Despite this we are highly likely to see the price drop before it rises. You can blame the fear itself. You can call it an unnecessary over-reaction. You can blame the actions of the most powerful market players, or you can sit back and enjoy the cheap tomatoes. Whatever your attitude, don’t expect to be back on firm ground for some time. Tobias Read is the CEO of Swift Worldwide Resources, a world leader in Oil & Gas staffing with thousands of employees across the global industry. www.ogsmag.com

Interview: John Gonzalez, International shipbroker John Gonzalez, originally from Gibraltar, is an experienced international shipbroker and fellow at the Institute of Chartered Shipbrokers in London. He has travelled the world in his extensive career as a shipbroker, specialising in the sale and purchase sector. How has the shipbroking industry evolved since you started in 1975?

as you have good and reliable communications; it is the broker that has to be competitive.

I would say the evolution has been substantial – taking into account globalisation and communication. The large brokerage firms now have offices worldwide covering the markets 24 hours a day. A single laptop has replaced whole rows of telex machines which were the norm back in the 70s. It’s far more competitive today than ever but simultaneously the ever-existing pressure to get results has had a knock-on effect on ethics.

Where do you see the local shipping sector in the next five years?

How competitive is Gibraltar for shipbroking? Shipbrokerage can be practiced from virtually anywhere as long 36

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In shipping it’s difficult to predict so far ahead. I hope that Gibraltar will retain its current position in agency, bunkering, cruise calls, etc, and I think it should look at certain diversification within the trade in the coming years. Gibraltar has over 280 registered ocean going vessels; perhaps more should be done to encourage owners and ship managers to actually base themselves also in Gibraltar, which in turn will encourage other shipping related services to establish a presence. Political changes in the world can

International shipbroker

affect Gibraltar in many ways; ie, Greece is cash strapped, the Syriza party could increase taxation within the Greek shipping industry which could lead to shipping related companies considering alternate locations from where to run their business.

What are the challenges faced by shipbrokers in the current economy? The challenges remain the same and so do the opportunities in both good and adverse market conditions. In 2008 Capesize tonnage was being chartered out for $235,000 daily, today they are being scrapped - there is business to be concluded under all market conditions. Where are the main European shipbrokers located? London, Hamburg, Genoa, Paris, Athens/ Piraeus and Oslo.

What was the most exciting period of your extensive career? Learning the profession - post fixture work with Shinwa Kaiun Kaisha London then as a sale &

purchase broker with Anthony Veder in Rotterdam during the late 70s and early 80s.

Any shipbrokers in the family? Alas no - the boys tried it for a time but decided to pursue other endeavours; this will make retirement easier.

Your favourite book? Have too many to mention - as a young lad Enid Blyton books kept me enthralled, Exodus by Leon Uris, even the Bible.

Your favourite ship... ? Friendship.

First published by P. GonzalezMorgan in Gibraltar Shipping, March 2015 @ShippingGib www.ogsmag.com

Renewable energy the most expensive policy disaster in modern British history. Written by Rupert Darwall

In a new report Central Planning with Market Features: how renewable subsidies destroyed the UK electricity market, published by the Centre for Policy Studies on Wednesday 18 March, Rupert Darwall shows that recent energy policy represents the biggest expansion of state power since the nationalisations of the 1940s and 1950s – and is on course to be the most expensive domestic policy disaster in modern British history. Darwall argues that the electricity sector is being transformed into a vast, ramshackle Public Private Partnership, an outcome that promises the worst of both worlds – state control of investment funded by high cost private sector capital, with energy companies being set up as the fall guys to take the rap for higher electricity bills. Competition between electricity suppliers is an expensive sideshow if it does not drive competition between generators and market investment in the most efficient generating technologies. 38

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Government policies aim to hide the full costs of intermittent renewables, which as a result are systematically understated. In addition to their higher plant-level costs, renewables require massive amounts of extra generating capacity to provide cover for intermittent generation when the wind doesn’t blow and the sun doesn’t shine. Highly subsidised wind and solar capacity flooding the market with near random amounts of zero marginal cost electricity wrecks the economics of conventional power stations. It is therefore impossible to integrate large amounts of intermittent renewables into a private sector system and still expect it to function as such. As a result, the State has stepped in with a patchwork of interventions to support prices. Because revenues are dependent on continued government interventions, private investors end up having to price and manage political risk, imparting a further upwards twist to electricity

bills. Without renewables, the UK market would require 22GW of new capacity to replace old coal and nuclear. With renewables, 50GW is required, i.e. 28GW more to deal with the intermittency problem. Then there are extra grid costs to connect both remote onshore wind farms (£8 billion) and even more costly offshore capacity (£15 billion) – a near trebling of grid costs. No British government has yet to produce an analysis demonstrating renewables are the most efficient way of cutting carbon dioxide emissions. Neither has any government published any valuefor-money analysis to justify the use of high cost private sector capital against a public sector comparator using the State’s balance sheet. There is one simple conclusion to be drawn from all this. You can have renewables. Or you can have the market. You cannot have both. This leaves us two options to align ownership and control:

Renewable energy

if renewables are a must-have – although no government has made a reasoned policy case for them – then nationalisation is the only sensible answer; or the state has to cede control, ditch the renewables target and return the sector to the market. Nationalisation removes political risk, thereby cutting the sector’s cost of capital. Together with the savings from abolishing retail competition, it would cut average bills by around £72 a year now, and £92 from 2020. By contrast, ditching the renewables target and returning the sector to the market would save households around £214 a year, assuming gas replaces renewable power. This option would depend on securing a permanent opt-out from the EU renewables directive and any successor policy imposing targets on individual member states. As Sir Ian Byatt comments in the Foreword to the paper: “Ministers have destroyed the emerging electricity market while talking of

“You can have renewables, or you can have the market. You cannot have both.”

how it could improve competitive processes. They and their advisers have not understood that effective competition proceeds from the right structure of suppliers and works in innovative, not predictable ways... Good intentions in the form of a desire to save the planet have led to our impoverishment. We need better analysis, greater transparency and more effective discussion of social and environmental issues, not Whitehall playing shops. Rupert Darwall provides us with the tools for such discussions in the area of energy and, in his policy lessons, points us towards better approaches.” Rupert Darwall is a former Treasury special adviser and is the author of the acclaimed The Age of Global Warming: A History (Quartet Books, 2013). www.ogsmag.com

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KANON Loading Equipment BV

Smooth transfers

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KANON Loading Equipment

With an eye for ease of operation and low maintenance, KANON Loading Equipment BV has become a global leader in liquid and gas transfer systems

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t’s often said that a company is only as good as its supply chain. I can think of no sector where this applies more than oil and gas, where one mistake can be devastating for a company’s reputation, not to mention its workforce, its balance sheet and the environment. The industry can be thankful, therefore, that the Dutch company KANON Loading Equipment BV specialises in the design, manufacture and installation of loading and unloading systems for marine, road and rail tankers from its facilities in Zeewolde in the heart of the Netherlands. KANON’s portfolio of world class products have pride of place in petrochemicals, but the company also provides solutions in the pharmaceutical, food and beverage, chemical and healthcare sectors for a wide range of liquids and gases from cryogenic to high temperature applications, including the most hazardous and corrosive of fluids. From its very beginning in the late 1970s, the company has been dedicated to the development of superior loading equipment and is now a global leader in liquid and gas transfer systems. KANON manufactures and supplies this equipment through its own sales and distribution network, and also offers customers extensive aftercare services including maintenance, engineering, product management and technical support. The guiding principle of all fluid transfer systems is the avoidance of contact between man and the fluid itself. To put it bluntly, many of these liquids are nasty. Even in the food and beverage or healthcare sectors, the liquids being

transported in ships or tankers are in concentrations to which no human being should be exposed, yet human beings are required to operate the equipment that moves them from one place to another. Wherever liquids and gases need to be transferred from ship to shore or tank to truck, KANON’s portfolio includes a product for the purpose, from marine loading arms and 46

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truck loading arms, to folding stairs, safety cages and elevating platforms. KANON has consistently pushed the boundaries of design along with the latest developments in efficiency, safety, operator convenience and ultra-low maintenance. Its status as the world’s only supplier of symmetric marine loading arms bears witness to this.

Marine loading arms

In an industry that tends to stick to traditional designs, KANON takes a more innovative approach, developing equipment with an eye for ease of operation and low maintenance. When loading or unloading a ship, a loading arm has to follow the ship’s horizontal movement to accommodate drift and sway, and its vertical movement to deal with changes in draft, tide and wind. The critical components in achieving the required flexibility are the swivel joints. When marine loading arms became popular some 50 years ago, swivel joints were not as reliable as they are today, so a supporting structure consisting of a separate support frame was essential to carry the weight of

“Wherever liquids and gases need to be transferred from ship to shore or tank to truck, KANON’s portfolio includes a product for the purpose” the piping. Compared to a self-supporting product line design, however, a supporting structure increases complexity and the need for regular maintenance, as well as adding to purchase costs and cost of operation. A self-supporting design has many advantages over a separate support frame, but can only be possible when the swiveling joints are so strong and reliable that no replacement of the swivel joints is needed during the entire lifetime of the loading arm. Renowned for the strength and durability of its swivel joints, KANON has been able to fully standardise its products on the selfsupporting design.

KANON Loading Equipment

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KANON marine loading arms are manufactured in accordance with the latest requirements of OCIMF (Oil Companies International Marine Forum) and major oil companies, and require minimal maintenance as all product seals can be replaced without scaffolding or dismantling of the loading arm itself. All KANON arms, including manually operated models, can be fitted with a virtually non-spill emergency release system which ensures that the liquid and vapour lines are both sealed after disconnection. Once the emergency sequence commences, the arm automatically rises and returns to its parked position, allowing for immediate departure of the tanker if necessary. The MLA260 series is the most efficient range of marine loading arms on the market and can be used with virtually all liquids and gases that are capable of being transferred through pipes. KANON launched its range of marine loading arms with a fully rigid and symmetric design around the turn of this century, and they have proved their reliability over and over again. The recently introduced â&#x20AC;&#x2DC;twin armâ&#x20AC;&#x2122; allows two 48

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independently controlled product lines to be mounted on the same base plate. This use of a unique double inboard arm results in the smallest possible design footprint while ensuring that the loads encountered at the base plate are lower than found with any other type of arm. The symmetric design divides the mechanical forces equally on the swivel joints and within the loading arm structures themselves. Symmetry also reduces the overturning moment (OTM) on the jetty to almost zero. This makes them particularly suited for unusual applications such as oversized dimensions and mounting on moveable carts and floating jetties. Simultaneous connection of two liquid lines from the same marine loading arm assembly not only doubles the capacity of the equipment but has benefits in jetty design, too, enabling new jetty designs to be considerably smaller and existing jetties to be upgraded without major adjustments, an important cost-saving feature in either case. The symmetric design also opens up the possibility of including the integration of large diameter and high

KANON Loading Equipment

pressure vapour return lines, increasingly required by local authorities to minimise the escape of volatile organic compounds (VOCs) to the atmosphere.

Swivel joints

The use of swivel joints in metal loading arms is critical because of the extraordinarily high bending and axial load combination, due to the reach of the loading arm and wind forces. KANON swivel joints are developed to withstand these loads without leaking. In addition, the need for regular maintenance is also avoided because the joints are supplied with long life lubrication. KANON swivel joints are all machined in one piece with ultra-high precision, and no after-treatment whatsoever. No replaceable parts other than balls, seals and O-rings are needed. This design is extremely important to KANONâ&#x20AC;&#x2122;s customers, since in the harsh conditions in which many of their clients operate, it is vital that the loading arm and its critical components need as little maintenance as possible.

LNG Transfer

For the transfer of liquid natural gas (LNG), KANON has invested heavily in swivel joint research and development for its cryogenic swivel joint to meet the requirements of the latest European EN1474-1:2009 standards by designing them to perform entirely without grease, graphite or other lubrication. The cycle test comprises up to 400,000 cycles under load, simulating 10 years of operation, and was completed successfully. The extremely stringent load test, involving a PCA load of up to 1125 kN, also failed to find any leakage or damage. The KANON cryogenic swivel joint is now so strong that it allows a unique and revolutionary approach for self-supporting marine loading arms for LNG, giving its customers the same benefit enjoyed by users of its noncryogenic marine loading arms. The KANON LNG swivel joint design, in combination with the field-proven highly reliable symmetric marine loading arms, has definitely set a new standard in reliable LNG transfer arms. www.ogsmag.com

Truck loading arms

It would be quite wrong, however, to imagine that KANON’s capabilities are ‘all at sea’. Liquids are transported by road, too, so it’s no surprise that KANON also produces truck loading arms which deliver a comparable level of performance to their marine counterparts (using the same maintenance free swivel joints as the MLAs). These come in two main types, top loading arms and bottom loading arms, which are suitable for transferring just about any kind of liquid or gas, whether they be toxic, corrosive or at extreme temperatures. Customers making decisions about the design of road and rail tanker loading stations need to consider some basic principles. Top and bottom loading each have their own advantages, which can benefit the installation when correctly applied. In general terms, the basic design data needed for a loading station include the type of fluid and its temperature and pressure; its viscosity in normal and abnormal conditions; the number of different fluid media 50

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at one loading station; the number of loading arms filling simultaneously at one tanker; environmental requirements (ie, vapour return or recovery overspill protection); the required level of operator safety and integration with metering or weighbridge facilities. KANON truck loading arms are perfectly balanced to ensure easy handling by a single operator. Balancing of the arm is achieved by counterweight or by a spring balance cylinder. The company supplies standard models but also offers a bespoke service for customers with specific requirements. Loading arms can be manufactured for any application and after years of experience KANON has developed some widely accepted solutions for filling tankers. Its top loading arms are specially designed to suit both open filling of a wide range of products across all industry sectors and closed filling of the type of highly aggressive liquids associated with the chemical and petrochemical industries. The advantage of bottom loading arms is that they can

KANON Loading Equipment

“The guiding principle of all fluid transfer systems is the avoidance of contact between man and the fluid itself ”

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MEET THE NEW STANDARD KANON LNG MARINE LOADING ARMS

VISIT US AT STOCEXPO - ROTTERDAM Booth H18, March 17-19

TANKWORLD - DUBAI Booth D2, April 14-15

NISTM - ORLANDO Booth 519, April 27-29

✔ NEN-EN 1474-1:2009 CERTIFIED SWIVEL JOINTS AND COUPLERS ✔ EFFICIENT REVOLUTIONARY DESIGN ✔ FLEXIBLE BUNKERING SOLUTIONS ✔ ONSHORE AND SHIP TO SHIP CRYOGENIC EXCELLENCE The new KANON Cryogenic swivel joint design in combination with the field-proven highly reliable symmetric Marine Loading Arms have definitely set a new standard in reliable LNG transfer arms.

ENGINEERED FOR GENERATIONS. WWW.KANON.NL www.ogsmag.com 48

KANON Loading Equipment be operated at ground level without any need for loading platforms. With a single bottom loading arm, vapour is usually vented through an opening at the top of the tank, preferably one capable of being opened from ground level, avoiding the need for the operator to access the top of the truck. This loading procedure, using a single bottom loading arm, is widely used and is referred to as an ‘open loop’ product transfer. Increasingly, however, a combination of two bottom loading arms is used to provide ‘closed loop’ product transfer. In this configuration, the product is filled through one bottom loading arm while the vapour is recovered through a second, which usually has a smaller diameter than the product arm. This technique is used for low density liquids (such as butane and propane) and fluids with toxic or explosive vapours because it prevents product escaping into the atmosphere and offers the best possible operator safety.

Elevating platform

An elevating platform is used to provide safe and easy access to road and rail tankers of varying heights and lengths, whether to load or sample liquids or to open vents

“In an industry that tends to stick to traditional designs, KANON takes a more innovative approach” for bottom loading. Customer demand led KANON to design and build its own version. Used in conjunction with the KANON range of loading equipment, the system can be designed to meet almost any customer requirement. The platform can be manufactured for any size loading area from 2m to 15m, and even retrofitted to existing platforms. With the company’s emphasis on safety and ease of use, the

entire elevating platform can be adjusted to the slope of the tanker and the platform is raised and lowered by hydraulic power. Manually operated flip-up floor panels allow full access to the top of the tanker so that hatches can be opened whatever their position, and the platform includes many safety features including hand rails and guard rails for the protection of operators and protection bars to prevent damage to trucks. KANON’s product range also includes folding stairs to provide safe and efficient access between a loading platform and road or rail tankers. Built to the latest safety standards, the spring balanced design ensures easy operation by a single operator and as with other KANON products, the stairs require minimal maintenance and are repairable in the field.

Service

As you might expect, KANON has a modern and fully equipped service department specialising in truck loading arms, marine loading arms, safety access equipment and grounding devices. Highly skilled and experienced service engineers are available to install, service and maintain customers’ equipment anywhere in the world. All engineers are fully qualified in hydraulics, pneumatics, mechanics and electronics and carry all necessary tools and spare parts in a fully equipped service van. All service jobs are scheduled and coordinated from the head office in Zeewolde, from where many industrial areas and seaports in the Netherlands, Belgium and Germany can be reached in a two hour drive. If the customer is further away than this, the engineer will fly to the required location. In addition to having a comprehensive standard product range, KANON has built an excellent reputation for developing custom made loading systems. Through years of experience and know how KANON is well placed to offer the very best advice in liquid transfer systems. Ease of handling and safety for the operator and environment, as well as a reliable performance for many years, are the basics for the design of KANON equipment. www.ogsmag.com

www.ogsmag.com

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

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EXHIBITION AND CONFERENCE

HOW TO INSPIRE THE NEXT GENERATION

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:

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

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COVER STORY:

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BE LIKE BP, SHELL, HALLIBURTON, DOW, HESS, TULLOW OIL, BHP BILLITON, SUBSEA 7, STATOIL, AND MANY MORE. BE ON THE FRONT COVER AND HAVE THE LEAD STORY IN A MAGAZINE WITH NEARLY 90,000 READERS. PROMOTE YOUR COMPANY VALUES TO THE GLOBAL OIL, GAS AND SHIPPING INDUSTRIES.

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Issue 65 “Solving challenges”

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D O W I N N OVAT I O N S U P P O RT I N G E X H I B I T I O N S AND CONFERENCES G LO B A L LY Oil, Gas and Shipping is the supporter and media partner of many exhibitions and conferences worldwide. These include ADIPEC, ONS, Offshore Europe, OSEA, SMM Hamburg, CIPPE, GASTECH, World Gas Conference, LNG, Tank World and many more. Our magazines are also distributed at many other events.

Issue 70 “Fueling sustainability & productivity”

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O U R R AT E S F O R P RO M OT I N G YO U R C O M PA N Y TO N E A R LY 90,000 READERS WORLDWIDE Front page (dedicated to your company) + 12/16 page lead main editorial £7995.00 (usual rate £19,995.00) Double page advertisement £6000.00 Full page advertisement £4895.00 Half page advertisement £2450.00 Quarter page advertisement £1450.00 (all prices are in £ GBP and if you require conversion please contact us)

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Issue 73 “A British success story”

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A British Success Story

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

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Issue 67 “Navigating complexity, unlocking potential” OT H E R C O M PA N I E S F E AT U R I N G A S T H E C OV E R A N D L E A D A RT I C L E I N C L U D E : KANON Hess Corp Teekay Shipping Statoil Flexitallic Dylan Group Linde Ag Tyco and many more... Go to www.ogsmag.com to view our latest and previous issues

For more information please contact us at info@ogsmag.com or telephone +44(0) 203 5751249. You can also visit our website for further details and media information www.ogsmag.com

Thinking about the unthinkable: $30 oil by Dr. David L. Blond, President, QuERI-International

www.ogsmag.com

Forty years ago I wrote a novel during the first energy crisis after OPEC quadrupled the price. It dealt with a collapsing confidence in future prosperity and involved a complex plot by a group of altruistic billionaires intent on destroying Wall Street in the name of creating a world where short-term goals are replaced by the bigger picture. They were doing it for purposes of righting the wrongs of poverty and inequality, but the unintended consequences were a world far worse than the one they started with. www.ogsmag.com

Over succeeding financial and business cycles I dusted it off and rewrote it. In 2012 a publisher showed an interest so I updated the scenario and introduced the economic events that have shaped our lives since September 2001. The engineered collapse of the world economy and markets was pushed to October 2016. In that novel, the price of oil falls to $30 a barrel (it was over $100 a barrel when it was rewritten). The reason for the steep drop was a mix of supply, and a sudden, unexpected, recession in China and other emerging markets as property bubbles popped. China could go through something like 62

www.ogsmag.com

that sooner rather than later if some forecasts prove correct. Clearly if it does, then given the instability in the oil market today, with prices hovering around $50, half of what they were six months ago, then $30 oil is a possibility, but is it likely? The novel was finally published in March 2014 by Wattle Publishing, a UK company, under the title The Phoenix Year. Itâ&#x20AC;&#x2122;s the first of two additional novels going full circle from the collapse to recovery and a new, alternative form, of capitalism that I call cooperative capitalism. After it was published I started to see signs that some of the more outrageous predictions in the

book were indeed starting to come true. China is trying to engineer a soft landing without stopping the machine that has allowed millions to come from poverty into a middle class lifestyle. World trade has slowed or even gone negative in real terms for the last two years. I expect some recovery this year to 4% to 5% real volume growth, well below the 10% growth of the turn of the century. Europe continues to be a basket case. Right wing parties are becoming more evident in northern European countries, even as more socialist and even communist parties gain strength in the weaker southern European regions. The

David L. Blond

IMF is calling this slow period of global growth â&#x20AC;&#x201C; in the 2.5% to 3% range â&#x20AC;&#x201C; a pause, but they are uncertain if there will be a recovery to the robust and unsustainable growth of the earlier periods when 3% was the minimum and some emerging markets were moving towards double digit growth rates. And there are energy alternatives. I have worked with a nuclear scientist who is going to start producing diesel fuel and chemical feedstocks from cellulose materials â&#x20AC;&#x201C; animal waste, damaged wood from forest fires, corn stalks, etc. using a modified fisher-tropsch system using a molten salt heat transfer. This system could,

in its larger, nuclear version, eliminate the need for drilling for oil to get chemical feedstocks or transportation fuels while reducing carbon pollution and solving the problem of what to do with billions of pounds of animal waste by processing these through waste digesters before turning the byproduct into transportation fuels. Battery technology is becoming better, making electric vehicles possible if the electricity is generated by safe, less costly, electric power base stations driven by a new form of nuclear energy (be it accelerator driven fission or even fusion) and there are abundant natural gas supplies with their

lower carbon emission coming from fracking, dooming the coal industry. So it is perhaps time to diversify and the wild guess I made of $30.00 crude by October 2016 might not be that wild after all. The Phoenix Year is available on Amazon and digitally on all major electronic mediums. Also there are some additional observations on capitalism at www.davidlblond.com.

www.ogsmag.com

OTC

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Offshore Technology Conference 2015: d5 “The Next Big Thing” d5 is a new Offshore Technology Conference (OTC) event designed to inspire leaders and innovators to address current challenges and drive exponential growth in the energy industry. Themed “The Next Big Thing,” d5 will be unlike any other industry event before it. Motivational speakers and group discussions will spur creativity to help identify the next big step for the energy industry, in the way of technology game changers, leadership practices and competitive advantages. d5 is designed as the perfect companion event for OTC, as it will expose attendees to disruptive technologies from other industries, help them build unique connections, and develop innovative solutions that can be applied to their business area.

Speakers: Bjorn Lomborg, world-renown political scientist and author Jane McGonigal, leading speaker on the application of game-design to the real world Mike Abrashoff, former Commander of USS Benfold Michael Bloomfield, former NASA astronaut and exofficio member of Columbia Accident Investigation Board Frans Johansson, author, entrepreneur, and consultant Lisa Bodell, globally recognized innovation leader and futurist Juan Enriquez, one of the world’s leading authorities on genomic research Avi Reichental, president and CEO of 3D Systems Michael Porter, economist, researcher, author, speaker, and professor

Who will attend? Offshore industry technology executives, mid-level technical practitioners, R&D managers, C-suite and other executives, entrepreneurs, active young professionals, and academia

Where and when: University of Houston, Houston, Texas, USA 8th May 2015 64

www.ogsmag.com

OTC 2015

OTC

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d5 Program Committee Art Schroeder, Energy Valley (Chair)

d5 Advisory Board:

Steve Brown, Mærsk Oil Houston Inc. Brad Burke, Rice Alliance Greg Carter, Nautilus Offshore Knut Eriksen, Oceaneering

Steve Balint, Shell (Chair)

Tom Gay, Consultant

John C. Bartos, Cameron

John Hallman, Weatherford

Felipe Bayon, BP Brad Beitler, FMC Technologies

Sammy Haroon, Baker Hughes

John I. Howell, III, Portfolio Decisions

Brittany Laughlin, Union Squares Venture Dan McConnell, Fugro GeoConsulting, Inc. Dan Smallwood, ConocoPhillips

Prashant Kale, Rice University

Jim Sledzik, Energy Ventures

Don Lessard, MIT

Amber Sturrock, Chevron

D.C. (Dave) Lucas, Texas A&M University

Morton Wiencke, GE

Jim Raney, Anadarko

David Wisch, Chevron

Orlando Ribeiro, Petrobras

Presenting Sponsor

Helge Hove Haldorsen, Statoil

Mario Ruscev, Baker Hughes Art Schroeder, Energy Valley

Shell

Supporting Sponsors

Tom W. Schuessler, ExxonMobil Production Ram Shenoy, ConocoPhillips

DNV-GL ExxonMobil FMC Technologies Statoil Autodesk

Greg Sills, Cobalt International Energy LP

Supporting Organizations

Alan Thomson, The Boston Consulting Group Elisabeth Heggelund Tørstad, DNV-GL Oil & Gas Kim Weninger, Atkins Oil & Gas

Houston Technology Center TIE Silicon Valley University of Houston-UH Energy Open Houston Rice University

Cindy Yeilding, BP

Organisers: Offshore Technology Conference 10777 Westheimer Road, Suite 1075, Houston, Texas 77042 Telephone: +1.972.952.9494; Facsimile: +1.713.779.4216

Email: meetings@otcnet.org Website: 2015.otcnet.org/d5

www.ogsmag.com

KIRK & HOLM

ONE-STOP-SHOP FOR THE OIL AND GAS INDUSTRY Four decades of providing offshore services and solutions worldwide have conveyed lots of experience, expertise and know-how to our staff.

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