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Contents INTERVIEW ‘OPEC has no choice but to maintain its current levels of production to compete the global market share’
VOL. 12 NO. 2 FEBRUARY - MARCH 2015 MUMBAI ` 150 OFFSHORE WORLD R.NO. MAH ENG/ 2003/13269 Chairman Publisher & Printer Chief Executive Officer
EDITORIAL
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Jasu Shah Maulik Jasubhai Shah Hemant Shetty Mittravinda Ranjan (mittra_ranjan@jasubhai.com) Rakesh Roy (rakesh_roy@jasubhai.com) D P Mishra, H K Krishnamurthy, N G Ashar, Prof M C Dwivedi Arun Parab, Prasenjit Bhowmick Abhijeet Mirashi Dilip Parab V Raj Misquitta (Head), Arun Madye
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– HE Abdalla Salem El-Badri, The Secretary General, OPEC
NEWS FEATURES African Hydrocarbon: On the Brink of a Boom
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– Chris Bredenhann
FEATURES
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When Time is up – Preparing for Decommissioning
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Offshore Platforms Decommissioning: A Sustainable Framework – Brian Nixon Deepwater Well Decommissioning
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– Darin Hilton Well Plugging and Abandonment Techniques 18 – Pat Bernard Legal & Regulatory Framework on Offshore Decommissioning 22 – James Phillips & Rosie Lord Offshore Decommissioning: A Regulatory Challenge for ASEAN States 24 – Mayla Fermina Alonzo Ibañez Energy Commodities Exhibited Mixed Price Movement 26 – Niteen M Jain & Nazir Ahmed Moulvi
PROJECT UPDATE
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Offshore World | 4 | February - March 2015
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THINGS CAN GET UGLY AT DEPTHS OF 10,000 FEET WE SEE A BEAUTIFUL OPPORTUNITY It’s clear that the days of easy oil and gas are over. As you explore further offshore in deeper and more harsh conditions, you’re certain to face many challenges. Like higher pressures, higher temperatures, corrosion and safety issues. Or maximizing your reservoir recovery from older reserves. One thing is certain: extreme conditions demand extremely reliable materials. Having supplied the offshore industry for more than 50 years and being present in all the major energy hubs, we understand your needs. So as you go deeper, we’re at your side, working to help you get there.
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news features
African Hydrocarbon: On the Brink of a Boom On the back of falling global crude price, many explorers or investors into the rich African hydrocarbon sector worry that the reduced oil prices will cause projects to be delayed or even cancelled which leaves the potential dormant with hydrocarbons continuing to sit beneath the surface. But the author, an energy industry leader in African oil & gas, believes the hydrocarbon prospects in African countries continue to show promise if we look towards the future. He further explains on the prospects & potential of hydrocarbon in many African countries in details through the article.
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On the back of falling oil prices, we take a look at the impact that this has on Africa. Oil price volatility is a part of the oil & gas industry. It results from complex interactions between supply and demand and reacts significantly to world and economic events. Despite this, hydrocarbon prospects in African countries continue to show promise as we look towards the future. The potential has not waned in light of the currently distressed pricing environment. The question that we must ask is when the promise converts to performance. Emerging economies like Mozambique, Kenya and Tanzania are dependent on a burgeoning oil & gas industry to drive GDP growth with high hopes that the result can make a sizeable impact on the local people by reducing poverty and improving lives. Many worry that the reduced oil prices will cause projects to be delayed or even cancelled which leaves the potential dormant with hydrocarbons continuing to sit beneath the surface. The good news is that oil & gas companies understand the cyclical nature of commodity prices, and for the most part they remain committed to their projects in Africa. After all, oil & gas projects have always been long-term by their very nature; the crash in prices is nothing new to the industry. Except where projects are notably more expensive to explore or produce, our view is that projects will proceed as planned. The difficulty we see on the horizon is the potential investor sentiment when it comes to the additional requisite infrastructure that will be needed to commercialise assets in certain frontier areas. Africa does have an overall infrastructure problem, and it was raised as a key constraint to development by respondents in our publication On the Brink of a Boom: Africa Oil & Gas Review conducted in 2014. Africa Oil & Gas: Prospects & Potential The proposed Uganda Oil Refinery in the western Hoima District of the country is a good example of a project which requires additional surrounding infrastructure in order to become commercially viable. At present, there is very little in place at Hoima. A heated pipeline will be needed to get the waxy oil to the East African coast, and this is a costly endeavour. In addition, central processing facilities and internal pipelines will be needed. While oil & gas companies typically approach projects with the long-term in mind, other investors that are needed to attain the requisite level of infrastructure, and they may not have the appetite for projects in emerging markets, given the currently suppressed pricing for crude. The potential impact of a drastically reduced oil price on Africa varies from country to country. Here is a quick snap-shot with some highlights. In Algeria, the country’s current account became negative in 2014. Fiscal reforms are expected but could be slow to happen. For Egypt, a net importer of crude, www.oswindia.com
the government has cut subsidies, and the lower oil price is expected to be favourable to the balance of payments. Jubilee, the large discovery in Ghana, is not expected to be delayed as the costs have been sunk and production is already underway. Tullow’s TEN project is also on-track for a 2016 start in production. In the deepwater sub-salt of Congo and Angola, exploration activities are likely to be delayed or cancelled. Angola, specifically, will be one of the hardest hit countries and likely faces austerity measures as the government is highly dependent on oil revenues. Offshore exploration in South Africa will also likely be delayed due to costs, price as well as regulatory uncertainties. Shale gas planning there could, however, continue to progress. Finally, in Mozambique we see that the LNG projects are likely to carry on; however, requisite infrastructure needs may cause severe delays. An Analysis At PwC, we do expect that overall exploration activities are likely to be reduced across the globe. Most explorers have cut their capital expenditure budgets; therefore, efforts will be much more focused. Areas within Africa that we expect to move ahead in exploration include areas with well-developed seismic and subsurface data as well as areas where exploration costs are lower. This includes onshore acreage in countries like Kenya and Congo. Angola may also be of interest if onshore licensing rounds should take place. Offshore exploration in emerging markets is likely to be delayed (or activities reduced) until prices recover, but we believe that offshore exploration programmes in more established markets, like Nigeria and Angola, may go ahead. The result of the precipitous drop in oil price is that inefficiencies hidden by capital inflows have been exposed. This type of rapid change often defines companies both in the near and long term. The inability to effectively transform their organisations leaves many companies lagging their peers. The knee-jerk response is to cut heads, but the slash and burn mentality often returns suboptimal results and stunts future growth. There are several sustainable strategies that we recommend for investors to adopt for their projects in the region. It can be handled in a phased approach consisting of a business model analysis followed by change execution. Transforming the business model requires a rapid yet systematic approach starting with an
Emerging economies like Mozambique, Kenya and Tanzania are dependent on a burgeoning oil & gas industry to drive GDP growth with high hopes that the result can make a sizeable impact on the local people by reducing poverty and improving lives.
Offshore World | 6 | February - March 2015
news features
organisational stress test to assess value from various assets and activities. For oil & gas operators, we recommend focused cost management, well-defined strategy and portfolio realignment.
Oil companies and investors who commit to being in Africa now (and for the long-haul) will certainly be the ones to experience the greatest successes in the future!
The business model alignment requires a consideration of the business direction and context. Questions include where you’re starting, what you wish to be known for, what you’re good at, where you operate (including geographies and value chain segments) as well as how you will deploy your capabilities and capital to exploit market opportunities.
can still be an energy industry game changer. The hydrocarbons that lie on the continent, both onshore and offshore, could be some of the largest discoveries made according to geologists. Oil companies and investors who commit to being in Africa now (and for the long-haul) will certainly be the ones to experience the greatest successes in the future!
This business model can then be utilised to scope the savings opportunity and identify addressable levers that can be pulled to attain it. At PwC, our approach is to set the tone, do the basics, do things one way, optimise the model and attain operational excellence. The Way Forward The way forward for Africa includes awareness such as this. It is about spreading the message of the opportunity that exists on the continent and convincing investors that they must take a long-term pay-off point-of-view when it comes to infrastructure investments. For Africa, infrastructure has long been a concern. Progress has been made in many ways, but we cannot allow the cyclical nature of the oil price to hold back development for these emerging markets. Africa www.oswindia.com
Chris Bredenhann Oil and Gas Advisory Leader PwC Africa chris.bredenhann@za.pwc.com
Offshore World | 8 | February - March 2015
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interview
‘OPEC has no choice but to maintain its current levels of production to compete the global market share’ OPEC (Organization of the Petroleum Exporting Countries), the conventional producers for decades part of an oil alliance, has dominated the global energy trade, have been feeling the pressure from the emergence of US shale oil. In the back of falling global crude price, HE Abdalla Salem El-Badri, The Secretary General, OPEC, shares his view on the future production strategy of OPEC, Shale challenge to OPEC future production, the future global crude demand drivers, impact of future oil price due to geopolitical unstable in some of the OPEC countries, etc with an email interaction with Rakesh Roy.
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In the back of falling crude price, what will the OPEC future strategies on production & develop new fields? The continuous falling of global crude price have apparently been due to slowing or reduced demand levels from a combination of slowing Asian economies, chronically slow and deteriorating EU economies, and substantial growth in US domestic crude oil production. While this level of price volatility is not without historic precedent, prices are projected to possibly decline to much lower levels by year’s end. OPEC has no choice but to maintain its current levels of production to compete the global market share. Oil investors and traders are monitoring a growing oil glut as supply remains steady despite the drop in global demand. Also, there is a chance to maintain the current level in future as Russia’s traditional market - Europe - is considering put sanction on Russian hydrocarbon industry. OPEC has historically a bigger share in the World crude oil supply as the most of the revenues of its members’ countries are came from crude import. Since 2008 Saudi Arabia, Iraq, UAE, and Kuwait exports have increased and their world market shares remained constant or increased slightly.
The continuous falling of global crude price have apparently been due to slowing or reduced demand levels from a combination of slowing Asian economies, chronically slow and deteriorating EU economies, and substantial growth in US domestic crude oil production. www.oswindia.com
It is said that two factors – one is US’s Shale boom and other is OPEC oil glut – are responsible for the current 6-years low global crude price. According to you, how will US’s Shale make a challenge the OPEC oil production in future? The US domestic crude oil production level has increased continuously since 2008, exceeded US net imports in 2011, and continues to grow at historic rates currently. Increased US domestic crude oil production has been due to substantial growth in ‘shale oil’ or what is commonly referred to as ‘tight oil’. Domestic US ‘tight oil’
Offshore World | 10 | February - March 2015
interview production has increased due to the successful development of new technologies such as ‘horizontal drilling’, and ‘hydraulic fracturing’. But the high cost to explore & develop ‘Shale or tight oil’ could be a large and longterm decline in crude oil market prices. This risk to US domestic oil production is quite real and could be the result of market conditions that shutdown previous shale oil development and production projects during the early 1980s. Other hand OPEC production & explore new fields is subjected to matter of its allies that much more depend to generate revenue for its economic growth. While European crude demand is predicted substantially low in near future, how India & China will drive the future global crude demand? Amidst the lower crude demand across worldwide, it is certainly India and China are major crude oil importers. While China saves USD 2.2 billion on every 1 per cent drop in crude oil, a decline of USD 30 per barrel of crude oil means a savings of USD 40 billion for India. The drop in crude oil prices will decrease inflation and improve the fiscal deficit and current account balance. This will boost economic growth in these countries. Global economist has predicted that global growth in 2015 and 2016 will be driven by China, India and Asia Pacific countries. Current lower crude oil prices and growth from these countries will drive crude oil consumption in the long term. A stronger economy will boost consumption, and the demand for crude oil could be increased and will lead to higher crude oil prices in the long term. How will geopolitical unstable in some the region affect the future crude price? Geopolitical risk is always a factor in oil pricing, but it has been especially prevalent this year. For example, when rebels commandeered major oil plants in 2013, Libya lost more than a million barrels a day in production – one of the main driving factors behind increased oil prices over the past year. Oil prices are also affected when the potential for disruption becomes apparent. For instance, the oil price jumped in a certain extent in June this year due to the growing presence of the Islamic State (ISIS) in Iraq. On balance, a period of higher volatility than we have seen in recent years seems imminent. On the one side, the impacts of any supply disruptions for operational or geopolitical reasons have potential to be amplified.
Amidst the lower crude demand across worldwide, it is certainly India and China are major crude oil importers. While China saves USD 2.2 billion on every 1 per cent drop in crude oil, a decline of USD 30 per barrel of crude oil means a savings of USD 40 billion for India.
How is the low price affect the economy some of the smaller countries in OPEC? Smaller countries of OPEC like Venezuela and Nigeria, which are already facing social unrest, may see even more domestic trouble. They didn’t have the fiscal or investment discipline to invest in their industry or save for a rainy day when they were flush with cash. The Middle East members of OPEC may be able to sweat out several months of low crude oil prices. Other hand, low oil prices are a boon for consumer countries and can help to maximize their gross domestic product growth.
Offshore World | 11 | February - March 2015
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Features Offshore Decommissioning
When Time is up – Preparing for Decommissioning Every active offshore platform will be taken out of production at some stage, thus operators need to embark well before for the day when facilities cease operation and focus on the process of taking down the platforms in a sound and responsible manner. The article explains on the challenges of decommissioning, managing HSE during decommissioning, meeting legal and environmental requirements in decommissioning project, detailed engineering for removal of well close-in and pipeline abandonment, and decommissioning on active facilities, etc in details.
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As offshore installations all over Asia as well as the rest of the world reach end-of-life it becomes ever more pertinent that oil companies with functioning facilities prepare for the day when facilities cease operation and focus on the process of taking down the platforms in a sound and responsible manner. The decommissioning of offshore platforms takes place at different paces around the world depending on the occurrence of extreme weather phenomena, climate conditions and the maturity of oil fields. But one thing is clear: all facilities will be taken out of production at some stage, and the need for preparing for that day becomes increasingly important as time goes by. More than half of all hydrocarbons today come from mature fields with ageing facilities. It is estimated that the ASEAN region has about 1,732 offshore installations and there is great diversity in the types of structures at present. To date, about 10 types of installations, including fixed jackets, gravity-base structures, production jack ups, semisubmersible production units, innovative stacked-leg structures, spars, monotowers, mobile offshore barges, tension-leg platforms, and floating production, storage, and offloading (FPSO) vessels are installed. While many of these may be rejuvenated through modifications, more than 800 installations have been in place over 20 years and close to 400 are over 30 years old, and naturally a good number will face decommissioning in coming years. In most countries, authorities demand that abandoned platforms are removed within a given time frame to avoid leaks and contamination from decaying structures. Most coastal states in Southeast Asia have laws that regulate offshore activities, but very few have specific legislation on decommissioning of offshore oil and gas installations. Authorities in the Southeast Asian countries are in the process of defining rules for decommissioning and adapting their current legal framework. Tropical Storms Accelerate Decommissioning In 1998, all the countries surrounding the North Sea adopted a law concerning removal of all installations in the North Sea to be carried out within 1 year after production has ended. The removal must reach down to 2 metres (6.6 feet) below the seabed and the well must be closed, restoring the area back to its natural condition and showing no signs of previous installations. The exceptions are steel pipes and concrete platforms as they are heavy and difficult to remove. In the US and other oil producing nations, similar requirements prevail.
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In hurricane prone areas like the Gulf of Mexico, platform and pipeline removal takes place continuously as damaged structures have to be removed before they interfere with ship traffic or pose safety or environmental risks. New Life with Rigs-to-Reefs Not all structures are removed completely when the facility’s end-of-life is reached. Some end their days giving new life to flora and fauna in the Rigs-toReefs programme. Rigs-to-Reefs is the practice of converting decommissioned offshore oil and petroleum rigs into artificial reefs. Such biotic reefs have been created from oil rigs in the United States, Brunei and Malaysia. In the United States, where the practice started and is most common, Rigs-to-Reefs is a nationwide programme, and in 2012 about 10 per cent of all decommissioned platforms had been converted to permanent reefs. US Rigs-to-Reefs rules require removal to 25 m (85 ft) below sea level for navigation safety. Only the structural steel skeleton is reefed, excluded equipment and piping that touched hydrocarbons or other environmentally sensitive products. The Challenges of Decommissioning The majority of platforms, however, end their days in salvage or decommissioning operations involving complete or partial removal. Following salvage, the majority of steel is typically re-cycled as scrap, and a portion of equipment is re-used. Occasionally the full topsides or jackets are re-used. The decommissioning of oil and gas facilities is a lengthy and often complicated process where strict environmental and legislative requirements need to be met. This is particularly true for the offshore sector which has to consider the sensitive marine environment in all removal operations. In South East Asia, the provisions of the 1989 IMO Guidelines and Standards which says installations which weigh 4,000 tons or less and are located in water of 75 meters depth or less should be entirely removed, is very relevant since most of the aging installations in this region fall into this category. However, some research suggests that structures left at sea are beneficial to the ecology of the The decommissioning of offshore platforms takes place at different paces around the world depending on the occurrence of extreme weather phenomena, climate conditions and the maturity of oil fields.
Offshore World | 12 | February - March 2015
Features
As enhanced oil recovery methods have rendered it feasible to extend the lifetime of ageing offshore facilities, it has become necessary to decommission old equipment and worn out parts of the structure and install new ones.
site and increase the number and variety of fish in the area. The argument is that this in turn may result in improved commercial opportunities and therefore, the practice should not be viewed as dumping of waste as is currently the definition in the London Convention. When the initial decision to cease operation of an offshore facility is taken, a number of complex areas are central to manage in order to conduct an environmentally safe and logistically efficient decommissioning. Environmental Impact Assessments (EIA) have to be carried out as a basis for permitting, while well close-in, pipeline abandonment and the dismantling and subsequent removal of the platform and cleaning require planning and engineering. With offshore day rates being notoriously costly, it is imperative to have all relevant permits in place at project kick off to avoid delays and budget overruns. Managing HSE As with all oil and gas activities, decommissioning requires focus on HSE (Health, Safety and Environment). In turn risk assessments and environmental studies are indispensable parts of the decommissioning process. In some countries, the environmental permitting process has to be based on an EIA, and has to start 2-5 years before the actual removal can begin. The EIA typically has to address aspects such as assessment of toxic substances left in tanks and pipelines, assessment of environmental impacts during removal and assessment of emissions from vessels involved in the marine operation. Successful removal of a petrochemical facility also requires that risks must be identified and managed. Risk assessment identifies potential hazards and suggests mitigating measures that can eliminate or bring down the risk to an acceptable risk level. The introduction of barriers is one way of mitigating a hazard. The barrier can then be associated with a performance indicator to monitor the operational safety of the installation. Hazard identification and mitigating sessions such as HAZID, HAZOP, SIL/LOPA and ALARP are all valuable parts of the safety screening preceding decommissioning. Meeting Legal and Environmental Requirements Living up to legal and environmental requirements is at the top of the agenda for energy companies about to embark on a decommissioning project. The aim is to minimise the risk of unexpected environmental requirements that can end up compromising tight schedules. National legislation determines how early oil companies must apply for the permits, ranging up to 5 years in advance. An application consists of an EIA where the company clearly states which approach and procedures they plan to apply and where the impact of the operations and ship transportation in terms of emissions and energy consumption are accounted for. In order to secure relevant permits, it is important to have comprehensive
technical and environmental know-how coupled with in-depth knowledge of relevant legislation. If unaware of these facts, oil companies risk large delays. Engineering for Removal Well close-in and pipeline abandonment require specialist knowledge and equipment, and are essential parts of the decommissioning project. Once tanks and equipment have been cleaned for toxic or radioactive materials, the final phase of the decommissioning process begins. The final phase concerns engineering the best solution for actual removal of topsides and substructure. If the removal happens because of tropical storm damage, it is necessary to assess the state the structure is in by carrying out site inspection. Based on the inspection results, engineers can suggest the best ways of dismantling the structure. Knowing the precise weight is important if the facility is to be safely lifted onto a vessel and sailed back to shore. Other options are to remove the facility piece by piece by breaking it down to large chunks or to leave it for inplace decommissioning. Transportation back to shore is often expensive, and precision work is highly important to avoid delays and additional costs. Decommissioning on Active Facilities As enhanced oil recovery methods have rendered it feasible to extend the lifetime of ageing offshore facilities, it has become necessary to decommission old equipment and worn out parts of the structure and install new ones. Taking equipment out of service may involve many of the same aspects as in total decommissioning. Many factors need to be considered in a modification project like this, where equipment is removed on a producing facility. Risk assessments are key as is the environmentally responsible disposal of worn out equipment. Action is Needed There are different solutions to manage the end-of-life of an offshore facility and the regulatory requirements and climate conditions which influence the process vary from region to region. However, all facilities will need to be taken out of production sooner or later, and when the day comes, it is imperative that oil companies are prepared.
Mike Kuhn Project Manager Ramboll Oil & Gas Email: mkuhn@ramboll.com
Offshore World | 13 | February - March 2015
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Features Sustainable Decommissioning
Offshore Platforms Decommissioning: A Sustainable Framework As of now, regionally, there is an estimated 1733 offshore structures in Asia Pacific with Indonesia and Malaysia leading in numbers. For many of the platforms, their service life is approaching the end. The usual methods of decommissioning involve any of these options: complete removal, partial removal, reefing or re-using. In light of the pivotal protests surrounding Shell’s 1995 proposals for the toppling of the Brent Spar oil operators today are pressured by environmentalists into warranting ‘sustainable’ decommissioning practices. The article details on the decommissioning activities within the water depths no greater than 200 m define shallow waters.
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The challenges of offshore decommissioning are quite substantial due to rising concerns of sustainable development, the complexity and uniqueness of each removal activity, the high costs involved as well as the complex regulatory structure. Decommissioning of an oil platform may involve leaving in place, dismantling, removing or sinking disused facilities. This expression is widely accepted within the oil and gas industry rather than using the terms ‘abandonment’, ‘removal’ or ‘disposal’. Other technical activities include plugging and abandonment of wells, pipelines, risers and related facilities, which will not be discussed in this article. The decommissioning process differs between countries. For a successful, sustainable decommissioning of offshore platforms, there are four main phases that should be: pre-decommissioning, implementation, post decommissioning and field review. The scope of works will depend primarily on the type of installation and option for decommissioning. There are different governing legislations for decommissioning for different countries. However, the article explains compliance with at least eight laws: Merchant Shipping Ordinance, Continental Shelf Act, Exclusive Economic Zone Act, Environmental Quality Act, Fisheries Act, Occupational Safety and Health Act, Natural Resources and Environmental Ordinance and Conservation of Environment Enactment.
The third option is to completely remove a platform from the ocean. Materials from platform are removed for multiple destinations for reuse or recycling purposes after ensuring all wells are plugged. No other parts of the platform would remain above 4.5 meters below the mudline. Remnants of the structure could be disposed of at a deep ocean disposal site, on the sea floor near the original site of operations, or removed to shore for salvage. Onshore disposal involves cutting up the structure into manageable pieces which are then transported to shore for either recycling purposes or disposal. Often, operators opt for the latter as waste consists of mainly steel which has a recovery rate of 98 per cent. Sustainable Decommissioning With increased environmental awareness and the rising costs of material fabrication, the recycling and reusing of fixed offshore platforms are being examined carefully in view of sustainability feasibility. On average, an offshore platform is constructed out of 1000 – 20,000 t or more of steel (depending on the type of platforms).
Generally, worldwide, there are three types of main decommissioning alternatives are used. The first one is to leave a platform in place. Proper shutting down and stripping of all equipment directly involved in oil extraction are the key components of this option. This involves the plugging of wells in addition to the complete removal and severance of conductors, while all other parts of the platform remain. This scenario would entail the lowest costing due to minimal planning, engineering, and mobilisation and disposal costs. Secondly, a partial removal with either offshore/onshore disposal of material that is toppled in place or taken to another location. Topsides must first be completely removed. Removal here would entail the most expensive removal costing. www.oswindia.com
Figure 1: Material flow of a typical decommissioned platform.
Offshore World | 14 | February - March 2015
Features
Despite these laws, guidelines and contracts, however, analysts contend that there is still a lack of comprehensive regulatory framework in the region, which is manifested by the limited experience that the region has with decommissioning.
Figure 1 illustrates the material flow of a typical decommissioned platform. Abandoning these weathered yet possibly functional massive steel structures out in the ocean would be a waste of resources. In 2008 alone, about 475 x 106 t of steel scrap were recycled worldwide.This number tops the combined reported total for other recyclable materials such as glass and paper. Moreover, steel recycling and reusing account for significant raw material and energy savings as well as CO 2 emissions reduction. If 475 x 106 tonnes of hot rolled steel were produced purely from scrap steel, the total CO 2 savings is approximately 811 x 106 tonnes a year. Reuse takes place when end-of-life steel is reclaimed and reused, mostly retaining its original state of material. The embodied energy of steel is saved and the environmental impacts of creating new steel would be reduced. Reusing offshore platforms potentially removes thousands of tonnes of steel from the waste stream and reduces the input energy required for reprocessing or recycling. Taking salvaged steel as an instance, in 2007 the emissions cost of recycling over reuse cost the UK the energy equivalent of the output of two power stations. Reuse is an important aspect of sustainability as the energy used for remanufacture or refurbishment is relatively small compared to the energy of the recycling process.
Figure 2. The new European 5-Step Waste Hierarchy which classifies waste management strategies according to their desirability.
As illustrated in Figure 2, reuse is the second most viable option in the new European Waste Framework Directive (2008/98/EC) aimed at promoting recycling among EU member states. The framework applies to all materials, but the durability nature of steel makes reuse particularly pertinent. Thus, from an environmental, and often economic, point of view it is desirable that as many components of an offshore structure as possible are extracted from the waste stream for reuse at the end of their useful life. Although reuse has primarily been used in the Gulf of Mexico, as artificial rigs, the trend is picking up in other locations, such as the North Sea14 and Southeast Asia.
The potential of reusing the bare structure or components of the platforms is theoretically boundless. For instance, the steel column from the Frigg platform is now a breakwater while the topside is utilized as a training centre for offshore personnel6. These platforms also could be used as bases for search-and-rescue operations or centres for waste processing and disposal. Reusing of Offshore Platforms Decommissioned offshore platforms have also long been recognised as a component of artificial reefs (AR). These decommissioned platforms are ideal as artificial reefs as their open design attract fish. Additionally, the platforms increase the amount of available hard substrate needed for coral communities, which are natural fish habitats. This important feature results in a more complex food chain, leading to better fishery exploitations. Fish densities surrounding the artificial reefs have been found to be an amasing 20 to 50 times higher than in open water (this number is highly site dependent). The controversy as claimed by conservative environmentalists is that the practice is viewed as a simple and easy excuse to dispose of the used oil rigs into the ocean. The end-of-life oil rigs as artificial reefs would inevitably lead to a certain degree of habitat damage, localized contamination and spreading of hydrocarbon invasive. This is because the performance of AR as fisheries habitat was found to be highly dependent on the depth of deployment. This is due to the vast changes in temperature, salinity, turbidity and light across a vertical water column, which in turn affects the changes in plankton components with influences the plentiful presences of marine life. Conclusion With the impending rise of regional decommissioning of offshore platforms, it is important for all stakeholders to plan for a sustainable and profitable scheme. Being second in the waste hierarchy, reusing steel has been proven to incur less environmental impact relative to recycling the same amount of steel. Through extensive sustainability and technical comparisons, reusing an end-of-production-life platform can be feasible. The proposed approach of decommissioning as a Build-Operate-Transfer (BOT) commercial project is attainable with the fitting technology.
Brian Nixon Director Nixon Energy Ltd
Offshore World | 15 | February - March 2015
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Features Case Study
Deepwater Well Decommissioning The article explains the steps and options involved in plugging and abandonment of a deepwater well decommissioning project in 7919 ft at Golf of Mexico which is recently completed by Houston-based Helix ESG.
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Over the past several years, there has been a growing demand in the industry to safely and efficiently plug and abandon wells in the Gulf of Mexico (GOM). Having successfully decommissioned over 30 wells in more than 3,500 ft water depth in the GOM, Helix ESG has successfully abandoned a deepwater subsea oil and gas well in GOM with its purpose-built vessels with a dedicated Intervention riser package and experienced crew and project management teams to meet regulatory and industry standards.
pressurised riser should the emergency disconnect sequence be required. The IRS system is a lighter package than a traditional blowout preventer (BOP), minimising stress on the supporting well tree during latching.
The Q4000 and Purpose-Built Vessels
Accessing the Well with the IRS Package Once the IRS package is ran to depth in an identified safe zone, riser space out is confirmed by moving the IRS package over the well. The surface system is then rigged up with flow head, coil tubing lift frame and coil tubing BOPs once it returns to the safe zone. The system is then landed and latched up on the well utilising passive and active heave compensation. ROVs will then connect the installation workover control systems (IWOCS) and electric down line (EDL), utilising hydraulic flying leads (HFL) and electronic flying leads (EFL) jumpers for tree control. The IRS will then be pressure-tested to confirm integrity and the riser will be displaced with working fluid prior to opening the well.
Managing down lines, MUX cables, and a separate annulus line while operating an IRS requires proper set-up and an experienced crew. The riser also should be pressuretested periodically to confirm riser integrity while running.
Working Downhole
The Q4000, Helix’s vessel of choice in riser-based GOM work for the past decade.
The Q4000 has been the main vessel utilised by Helix for riser-based GOM plug and abandonment (P&A) work for the past decade, with one reason being that the open decks and large cranes provide efficient mobilisation of client equipment. Another advantage to the Q4000 is that the open multi-purpose tower (MPT) on the Q4000 allows unrestricted access on three sides, allowing for easier change of operational modes from, electric line, slick line, or coil tubing. In most cases, with a purpose-built vessel and a dedicated intervention riser system (IRS), stack-up and surface image testing (SIT) can be completed in transit, reducing the amount of testing time on critical path. Once mobilisation and testing is complete, the vessel runs the multiplex (MUX) controlled intervention riser system to depth, utilising a dual-string riser. The intervention riser system is unique and is comprised of a lower riser package (LRP) with a 7 3/8-inch. production through bore. The LRP also provides cut and seal fail-safe barriers on both the annulus and production sides. The IRS system is also equipped with a emergency disconnect package (EDP) to quickly detach and seal in the event of an emergency or station keeping incident. The EDP itself is equipped with a valve to ensure riser fluids are retained within the www.oswindia.com
A crane atop the Q4000 rigging up coiled tubing to perform deepwater P&A work.
Offshore World | 16 | February - March 2015
Features Downhole work begins once well access capability is established. If the well is designed with a horizontal tree, the first run will be for slick line to pull crown plugs. Coiled tubing is usually a contingency to slick line in case of stuck crown plugs or embedded debris. The IRS and riser can usually increase pressure on the bottom of the crown plugs to assist with retrieval. Once the well is opened, tubing fluids are displaced and the production zone is then killed with kill weight fluid. Another option is to run a tubing punch on electric line to create a flow path above the production packer, allowing for packer fluid in the annulus to be bull headed into the formation rather than circulating it out to surface. Either option is achievable in most cases. Once the well is killed, a gauge ring ran on slick line is conducted to ensure vertical access in the production tubing. Coiled tubing is then rigged up and ran to bottom. Coiled tubing ensures the plug is correctly located, provides an additional means of circulation if problems are encountered, and protects the tree and well control equipment from exposure to cement.
The open water-portion of the P&A can been done in many different ways, with different approaches to testing casing annuli. The most common method is utilising the easy drill subsurface valve (EZSV) and a tubing-conveyed perforated (TCP) gun to allow access to the annuli. This method is performed by tripping the EZSV and TCP guns to depth and setting the EZSV. Once EZSV is pressure tested from below to confirm it was properly set, the TCP guns will be fired, perforating the production casing. Pressure is monitored and recorded during firing. Any existing pressure will be bled off and monitored again.
After the cement is cured, the production plug is tested to confirm integrity. Once the pressure test is satisfactory, the first of two balanced cement plugs is set, sealing both the production tubing and annulus above the production packer by taking returns though annulus. Coiled tubing would then be recovered and electric line prepared. Once the cement is pressure-tested and its integrity with the balanced plug is confirmed, an electric line could then be ran into the well to act as a mechanical barrier in the production tubing above the cement plug. Electric line then perforates the tubing to prepare for the second balanced plug to be circulated into place with coil tubing. Once the second balanced cement plug is set and successfully pressure tested, electric line is directed into the well with a tubing cutter. The production tubing would be cut above the balanced plug to allow for the recovery of production tubing. Prior to unlatching, a negative test is performed with sea water and then well circulated to ensure kill weight fluid on both production and annulus sides in the well. Open Water and Setting the Plug Prior to pulling the trees during the riser-based portion of the P&A, ROVs flush and remove any flow line jumpers by pre-rigging them with slings and cutting the jumper into manageable sections for the subsea crane to recover concurrently to the P&A work. This eliminates the need for a construction ROV vessel to perform any prework prior to arrival on location of the P&A vessel. Once tubing is clear of the well the vessel will move to a safe zone to finish recovery. If the well was designed with a vertical tree, the IRS would be recovered through the riser and the tree would be concurrently recovered by the subsea crane. A tubing hanger running tool would then be tripped to bottom on drill pipe to retrieve the tubing after the IRS was recovered.
An ROV engaged in operations.
Open decks and sizable cranes aboard the vessel provide more efficient mobilisation.
An injection test is then conducted at a pressure greater than leak-off test pressure to check the integrity of the annulus. If injection is possible, a squeeze-cement job will be performed on the annulus. If injection is impossible, then a negative test is performed to confirm integrity. The string is then retrieved from the retainer. Once integrity of the squeeze is confirmed by both the pressure test and the negative test, a cement plug is set above the EZSV. The process would be repeated for the intermediate casing to 20in annuli perforating through two sets of casing with TCP guns. Another option is to cut the production casing and recover to surface once annulus integrity is confirmed between production and intermediate casing, allowing for a mechanical barrier to be set in the intermediate casing. If this option is elected to be performed, the TCP gun would only be required to perforate the intermediate casing to ensure integrity rather than perforating two sets of casing to access the intermediate to 20-in. annuli. Once complete, a surface plug would be set. The surface plug is weight tested, utilising drill pipe to tag the top of the plug and set down weight to confirm the plug has integrity. Upon completion of the surface cement plug, an ROV will set a debris cap on the wellhead, completing the well work. The vessel will then perform a final survey with the ROV and complete demobilisation from the well site. Darin Hilton Commercial Manager - Well Operations Helix ESG
Offshore World | 17 | February - March 2015
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Features Well Abandonment
Well Plugging and Abandonment Techniques The article illustrates various techniques to permanent oil & gas well plugging & abandonment in protecting underground resources, thus preventing potential contamination of potable water sources and preclusion of surface leakage.
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The purpose of permanent well abandonment is to isolate permeable and hydrocarbon bearing formation to the purpose of e.g. protecting underground resources, preventing potential contamination of potable water sources and preclusion of surface leakage. Abandonment aims at restoring the natural integrity of the formation that was penetrated by the wellbore. Abandonment procedures were developed in the oil and gas industry where several techniques were designed to prevent interzonal communication and fluid migration. If a well is not properly abandoned, it may provide pathways for brines, hydrocarbons or other fluids to migrate up the well and into shallow drinking water aquifers or to surface. The configuration of an abandoned well commonly comprises a surface casing often extending to depths below the lowermost drinking water aquifer, and a (set of ) production string(s) running to the target formation. The annuli between casing and formation, and between different casing strings in general is cemented at least to an extent. Abandonment plugs consist of tailored cement types that may be supported by mechanical plugs. In order to effectively seal a well, a stepwise procedure for plugging and abandoning wells are described below and addressing the removal of equipment and tools, cleaning the wellbore, plugging and testing. PRELIMINARY ACTIVITIES Removing Downhole Equipment: The first step when starting a well abandonment operation is removing existing tools. This can be done using an existing drilling or conventional workover rig with the capacity to pull out of hole all downhole equipment previously used by the operator, such as production tubing, downhole pumps and packers. If tool removal is not possible due to stuck or lost equipment, well abandonment strategies have to be revised and approved by concerned authorities.
formations is plugging of the well, creating an impermeable barrier between two zones. Well plugs are being used for several different operations in oil and gas industry, such as lost circulation control, formation testing, directional/ sidetrack drilling, zonal isolation and well abandonment. The scope of this study is restricted to the latter two applications. Well plugs can be either cement or mechanical plugs. Specifications of well plugs and abandonment are prescribed by regulatory authorities. In the oil and gas industry the most common material used for plugging wells is Portland cement, which is placed in the well as slurry that hardens under influence of the in-situ temperature and pressure. A cement plug consists of a volume of cement that fills a certain length of casing or open hole to prevent vertical migration of fluids. Cement satisfies the essential criteria of an adequate plug; it is durable, low-permeable and relatively inexpensive. Furthermore, it is easy to pump in place, has a reasonable setting time and is capable of tight bonding to the formation and well casing surface preventing fluid flow along these interfaces. Balanced Plug Method: The balanced plug or displacement method is the most common placement method. This technique involves the drillpipe or tubing to be placed at the planned plug base depth. Subsequently the cement slurry is placed on top of a mechanical device (such as a bridge plug) or viscous fluid or mud serving as the plug base. The slurry is pumped through the tubing until the level of the cement in the annulus is equal to that inside the casing (Figure 1). To prevent mud contamination, a spacer fluid is pumped ahead and behind the slurry. Once the plug is balanced, the tubing is pulled out of the slurry.
Wellbore Cleanout: After the removal operation, the wellbore needs to be cleaned from fill, scale and other debris. To this purpose the wellbore is flushed by a circulation fluid with sufficient density to control pressure and with the physical properties that enable the removal of debris. Dependent on the specific conditions additional tools or additives may be required to successfully clean the hole. PLUGGING The principal technique applied to prevent cross flow between permeable www.oswindia.com
Figure 1: Balanced plug method (left) and Dump bailer method (right).
Offshore World | 18 | February - March 2015
Features This method is one of the simplest techniques used in oil industry and is often used for placement of the middle plug of a well. The main problem is that of potential cement contamination. This can be minimized by using appropriate plug base material, such that downward migration of the cement plug is prevented. Cement Squeeze Method: The presence and good quality of the primary cement sheath at the plugging level is essential for realizing zonal isolation. If cement behind the casing is lacking or inadequate, several methods can be applied to remediate the cement sheath and achieve isolation. API recommends using one of the three following cement squeeze methods: Squeeze cementing, block cementing or circulating cement. Squeeze cementing involves the process of forcing by pressure a cement slurry into a specified location in a well through perforations in the casing or liner. Once the slurry encounters a permeable formation, the cement solids are filtered out of the slurry as the liquid phase is forced into the formation matrix in the form of cement filtrate. Squeeze cementing is a remedial cementing technique used to repair flaws in primary cement or damage incurred by corrosive fluids. A properly designed squeeze-cement operation will fill the relevant holes and voids with cement filter cake that will cure to form an impermeable barrier. Block cementing is used to isolate a permeable zone. To this purpose the sections above and below the target formation are perforated and squeezed. This procedure is often applied before starting production of permeable zones. A circulating squeeze involves circulating cement between two sets of perforations, isolated in the string by a packer or cement retainer. The operations consist of an initial circulation with water or acid as receding fluid, a subsequent circulation of the interval with a cleaning wash fluid, and pumping and displacing of the cement slurry. This method is a low pressure squeeze. Except for some increase in hydrostatic pressure resulting from the increasing cement column in the annulus, no pressure buildup is associated with this type of cement squeeze. The exact amount of required cement is unknown, leading to the use of excess cement. This holds the risk that cement slurry enters the casing above the packer or retainer. If this cement would cure, the tubing may become stuck in the hole.
Alternatively, at abandonment an operator could cut and pull the casing and isolate the remaining stub using the displacement method. Dump Bailer Method: A dump bailer is a tool that contains a measured quantity of cement, lowered into the wellbore on a wireline (Figure 2). Applying this method, the cement is placed on top of permanent bridge plug placed below the desired plug interval. The bailer is opened by touching the bridge plug or by electronic activation and the cement is dumped on the plug by raising the bailer. As the slurry is stationary during its descent, considerations are required regarding special slurry-design. The dump bailer method is usually used for setting plugs at shallow depths, but can also be used at greater depths by using properly retarded cement systems. The advantages of this method are that the depth of the cement plug is easily controlled, and it is relatively inexpensive. A disadvantage is that the available quantity of cement is limited to the volume of the dump bailer. However, this can be solved by performing different runs. Furthermore, as the cement slurry is stationary in the bailer during its descent, special slurry design considerations are required to prevent slurry gelation or instability. Two-plug Method: The name of the two-plug method is derived from the fact that the cement plug is placed with two (top and bottom) wiper or cementing plugs (Figure 2). This method is described by Nelson and Guillot (2006) and involves a special tool setting a cement plug in a well at a calculated depth, with a maximum of accuracy and a minimum of cement contamination. The tool comprises a bottom hole landing collar installed at the lower end of the drill pipe, an aluminium tail pipe, a bottom wiper plug (carrying a dart), and a top wiper plug. The application of cementing plugs enables the effective separation of the cement slurry from other fluids, reducing contamination and maintaining predictable slurry performance. The bottom plug is launched ahead of the cement slurry to clean the drill pipe and to minimize contamination by fluids inside the casing prior to cementing. A diaphragm in the plug body ruptures by increased pump pressure to allow the cement slurry to pass through after the plug reaches the landing collar. The top plug is pumped behind the cement slurry to isolate the cement from the displacement fluid. This plug has a solid body that provides
Figure 2: Two-plug method Offshore World | 19 | February - March 2015
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Features positive indication of contact with the landing collar and bottom plug through an increase in pump pressure. The top plug then prevents cement from flowing up into the tubing string, meanwhile permitting reverse circulation. The drill pipe is pulled up until the lower end of the tail pipe reaches the calculated depth for the top of the cement plug. CEMENT PLUG EVALUATION After the well is plugged, testing is required to ensure that the plug is a placed at the proper level and provides zonal isolation. The plug can be verified by tagging its top, pump pressure testing or swab testing. Tagging the top of cement (TOC) can be done through the employment of a drill pipe, wire line, work string or tubing. The procedure, recommended by API, is a very straightforward operation with the benefit that no additional pressure needs to be put on the wellbore. It enables exact determination of the top of the plug. Tagging the plug with open-ended pipe can also be applied for testing the cement plug’s integrity. However, disadvantages of this method comprise the concentration of the load on the area where the pipe hits the cement, the required incorporation of corrections for buoyancy and friction when using the pipe weight, and potential weight insufficiency for shallow plugs. Furthermore, a plug may be tested to be rigid at the top, while it shows less strength further down, leading to potential fluid migration over time. Alternatively, pressure test can be executed using pump pressure. In this case the pressure is exerted uniformly on the plug and no corrections are required. The application of pump pressure provides more accurate data on the pressure, which could also be monitored over time. However, the associated changes in pressure itself could initiate casing integrity problems if the well cannot sustain the enforced pressure changes. Furthermore, it could lead to loss of wellbore control if conditions are not static. Another pressure testing method is swab testing or swabbing. This technique involves running of a swabbing tool that reduces the pressure in the wellbore above the plug to levels below the pressure gradient from the isolated reservoir below the plug. Subsequently fluid levels and pressure are monitored to ensure adequate isolation. Swabbing is more time-consuming relative to the other methods. Plugging Effectiveness: The risk of leakage through abandoned wells as a function of regulations toward drilling and abandonment enforced at the time of plugging, of the diligence expressed by the operator during the plugging, and of the materials used in the plugging operation. Inadequate well design, well construction or plugging/abandonment performance may lead to poor isolation. Primary causes of failure are connected to mud contamination as a result of poor mud removal (most common), unstable cement slurries, insufficient slurry volume, and poor job execution. These problems may be more abundant among older wells as plugging improvements were developed over time. First, the two-plug method, limiting potential mud contamination, was patented by Halliburton in 1922. Around 1930 the use of centralizers was introduced, enabling more uniform distribution of cement in wells through tubing. Furthermore, before the invention and www.oswindia.com
widespread use of a caliper survey instrument in the 1940s the exact quantity of cement needed for a thorough job was not available. In addition, before testing of the plug became a requirement, the plug location was not checked but assumed to be located as planned. It should be noted that the implementation alone of regulations and guidelines does not necessarily imply that these were followed in full, since regulations have not always been strictly enforced over time in different areas in the world. ABANDONMENT PRACTICES In order to develop a comprehensive overview of applied well abandonment techniques, common practice of well drilling, plugging and abandonment needs to be evaluated in different regions throughout the world. To this purpose, a questionnaire was developed and distributed amongst experts active in operating and service companies, consultancies, regulator bodies and research institutes involved in oil well drilling and abandonment activities worldwide. This section comprises a concise description of the results of the well abandonment survey. However, the collected amount of data proved to be insufficient to extrapolate and investigate regional differences. Overview of Well Characteristics from Representative Fields or Basins: Respondents provided information on well abandonment practices in Europe (onshore and North Sea), North America and Australia. Representative fields or basins mostly show well densities ranging between 1 to 100 wells/km2, while some records from North Sea gas fields indicate less than one well per square kilometre. Well densities in some high viscous oil fields exceed 100 wells/km2. Most of the wells in the representative fields are dated post-1960 and drilled to depths over 5,000 ft. A significant number of fields holds wells extending over 10,000 ft depth. This is obviously reflected by resulting pressures, showing a roughly even distribution over pressures from 1,000 psi to values higher than 5,000 psi. Data Availability: The majority of respondents indicated that for almost all wells (90-100%) data is available on well location (coordinates), present status of the well (i.e. operating, abandoned, etc.) and the well configuration. The latter comprises information on cased depths, top of cement, plug lengths, but also on the materials applied (i.e. type of cement, steel grade). A single respondent indicated that data is available only for 30-70% of the wells. Drilling and Completion: Various steel grades are used for casing, such as J55, K55, L80, N80, C95, P110 and Q125. In general the application follows guidelines on H2S content, temperature and pressure conditions. In corrosive environments, it is common practice to use Cr-13 type of steel (e.g. L80Cr-13), and/or corrosion inhibitor fluids. All respondents indicated that, prior to placement of annular cement, the borehole is prepared or cleaned. Subsequently, a primary cement sheath is placed over some length of the well, generally ranging from 30 to 90% of the wellbore length (one instance states 90-100% of the well being cemented). Approximately half of the respondents indicate that during drilling and completion no leakage occurs, while others indicate 10-30% of wells showing initial leakage (i.e. sustained casing pressure, gas migration outside the casing), as a result of casing corrosion or wear, poor cement coverage, improper slurry design or overpressurization of the wellbore.
Offshore World | 20 | February - March 2015
Features Abandonment: All respondents reported to perform well abandonment according to regional or national regulatory frameworks or, in absence of these, according to international guidelines of OSPAR or the London Convention. Variations in regulations are reflected in the differences between plugging requirements. While some regulations demand records (e.g. pressure tests and/or cement bond log) on the status or integrity of the wells prior to abandonment, others have no specifications on this topic. The majority of regulatory frameworks stipulates plugs to be emplaced using the balanced plug method, whereas the dump bailer method and a choice between the balanced plug and the two-plug methods are noted on a single occasion. The prescribed minimum number of plugs ranges from 1 to 3, with minimum lengths between 8 to 100 m. Regulated plug testing methods generally involve either a weight test or pressure test, possibly in combination with a tag test. Rarely specific requirements are in place for corrosive environments, but if so these comprise the application of Cr-13 steel or inhibiting fluids in the wellbore.
life applications, some started recently to evaluate the field’s value for future purposes prior to abandonment. In general, company practices closely reflects governing regulations, although operators may apply more stringent measures to secure well integrity (e.g. longer plug lengths) especially in corrosive environments (e.g. applying corrosion resistant measures and materials). This observation confirms the appropriateness of evaluating regulatory requirements as an adequate proxy for well abandonment practice. While most respondents indicated that leakage is seldom observed in abandoned wells, some incidences (amounting between 0 to 30% of the abandoned wells) of sustained casing pressure or gas migration outside of the casing is reported, probably due to e.g. poor cement coverage, improper abandonment, overpressurization of the well, or micro-channelling in the cement.
Between operators there is disparity regarding their approach to well abandonment with respect to potential future applications of fields and wells. Although the majority of operators does not take into account second
Pat Bernard Senior Executive Vice President - Global Technology/Subsea Superior Energy Email: p.bernard@superiorenergy.com
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Date: 15th February 2015 Offshore World | 21 | February - March 2015
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Features Decommissioning Legislation
Legal & Regulatory Framework on Offshore Decommissioning The dismantling/removal and disposal of redundant offshore oil and gas infrastructure was until recently, a topic of little or no importance at both national and international levels. However, as of today, the issue of what happens to redundant offshore platforms is a major problem and concern for both the international community and the oil and gas industry. The safety problems redundant offshore installations pose to marine life and other sea users, coupled with the fact that there is no income from the field at the relevant time, have made governments devise means of ensuring that a mechanism exists to guarantee the removal and disposal of these offshore installations at the end of their productive lifespan. The article details various International Laws for obligations for the decommissioning of offshore installations.
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The terms ‘decommissioning’ and ‘abandonment’ are used interchangeably in connection to the process of removing and disposing redundant offshore installations. However, due to the sensitive nature of this issue since the Brent Spar incident, the industry has somehow jettisoned the term ‘abandonment’, which was formerly used to describe the process, in favor of ‘decommissioning’ for fear that the former conveys the wrong image of what is involved. Decommissioning as it relates to offshore oil and gas exploration is the process by which possibilities for the physical removal, disposal or re-use of an installation/ structures at the end of their productive lifespan are assessed, a plan of action is prepared by the operator, approval is gained from the government and then implemented. There are four separate stages for the decommissioning process: firstly, options are developed, evaluated and chosen and put through a comprehensive planning process which includes engineering and safety preparation; then the operator has to stop producing oil or gas, plug the wells deep below the surface and make them safe; next, is the removal from the site of all or part of the installation; and finally, the disposal or recycling of those parts which have been removed. Available Choices for Decommissioning There are several decommissioning options available at the end of the productive lifespan of an offshore field. Nevertheless, exactly what tactics and strategies to be adopted for the process may vary from one installation to another. It would be subject to a number of considerations such as the kind of construction (steel or concrete), the size of the structure, the weather conditions, its distance from shore, and the intricacy of the removal process including the safety concern for the personnel. It is important at this juncture, to critically examine the various choices open to offshore operators for the two vital aspects of decommissioning – removal and disposal. International and Regional Decommissioning Laws As far as decommissioning is concerned, those installations placed within a country’s internal and territorial waters are entirely governed by municipal law, however, the reference point for any discussion of decommissioning involving
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operations on the Continental Shelf and the exclusive economic zones (EEZ), must be international law. APPLICABLE INTERNATIONAL LAWS ON DECOMMISSIONING United Nations Convention on the Continental S helf 1958 (Geneva Convention) The foundation document on offshore decommissioning is the 1958 United Nations Geneva Convention on the Continental Shelf (GC). The GC granted countries exclusive rights for the purpose of exploring the continental shelf and the rights to exploit its natural resources. To this end, it further entitled states to construct and maintain or operate offshore installations. It however, noted that the exploration of the continental shelf and the exploitation of its natural resources must not result in unjustifiable interference with navigation, fishing or the conservation of the living resources of the sea. It went on to explicitly provide that apart from giving notice of the existence of any such installations by providing and maintaining a permanent means of warning, any installations which are abandoned or disused must be entirely removed. Thus, by this Art. 5(5) any redundant offshore installation or structure must be totally removed. The 1982 United Nation Convention on the Law of the Sea The 1982 United Nation Convention on the Law of the Sea (UNCLOS) was prompted by the difficult – if not indeed impossible – requirement of the GC, for complete/total removal. Illustratively, the preamble explicitly stated that developments since 1958 have heightened the need for a new and generally acceptable Convention and it thus gave a less draconian requirement: Any installations or structures which are abandoned or disused shall be removed to ensure safety of navigation, taking into account any generally accepted Decommissioning as it relates to offshore oil and gas exploration is the process by which possibilities for the physical removal, disposal or re-use of an installation/structures at the end of their productive lifespan are assessed, a plan of action is prepared by the operator, approval is gained from the government and then implemented.
Offshore World | 22 | February - March 2015
Features
international standards established in this regard by the competent international organisation. Such removal shall also have due regard to fishing, the protection of the marine environment and the rights and duties of other states. Appropriate publicity shall be given to the depth, position and dimensions of any installations or structures not entirely removed.
At the moment, a more realistic solution is for countries to develop comprehensive legislations that tackle all known decommissioning issues, and are also open-ended enough to adapt to unforeseen eventualities.
It can be deduced from Art. 60(3) above, that while the acceptable standard is complete removal, it nevertheless unlike the GC, made provision for those exceptional occasions where total removal is not possible.
specifically covered by the convention, by defining ‘dumping’ to include any deliberate disposal at sea of vessels, aircraft, platforms or other man-made structures. It however, in the writer’s view, allowed for installations to be used as artificial reefs by exempting the ‘placement of matter for a purpose other than the mere disposal’.
The conflicting provisions on the extent of removal by both Conventions have created a controversy as to what the binding international law on decommissioning is. UNCLOS provides that ‘This law shall prevail as between State Parties over the Geneva Conventions on the law of the sea of 29 April 1958. International Maritime Organisation Guidelines 1989 The wording of Article 60(3) UNCLOS which requested States to take into cognisance international standards established by ‘the competent international organisation’, gave the International Maritime Organisation (IMO) and in particular its Maritime Safety Committee, the impetus to affirm its competence in this regard. Relying on the provisions of Article 60(3) UNCLOS, the body produced Standards and Guidelines on the removal of disused or abandoned offshore installations. These Standards and Guidelines are not legally binding, they are just recommendations to be taken into account by member governments when making regulations regarding the removal of abandoned or disused installations or structures. The Guidelines are meant to be minimum standards, thus member states can adopt stringent decommissioning requirements. The Guidelines provide that where it is proposed to allow the whole or part of an installation to remain in place, account must be taken of a range of factors including: potential effect on the environment; effects on navigation; the costs, technical feasibility and risks to personnel involved in the removal; and any new use or other justification for allowing all or part of the installation to remain. Though the Guidelines allow for the possibility of partial removal, the Standards provide that where an installation stands in less than 75 m of water and weighs less than 4000 tonnes it should be entirely removed. The Guidelines further provide for the entire removal of installations located in certain defined areas important for navigation, and that they should not be subject to any exceptions. They also provided that no installation should be emplaced on or after 1 January 1998, unless its design and construction is such that entire removal would be feasible. The Guidelines, though not a legally binding document, have been widely received and adopted. London Dumping Convention While the GC, UNCLOS and IMO clearly provided for the removal of offshore installations, whether wholly or partly, they all failed to provide for what should happen to them afterward. This lacuna was, however, filled by the Convention on the Prevention of Marine Pollution by the Dumping of Waste and other Matter at Sea (London Convention). The disposal of offshore installations is
This Protocol, which supersedes the London Convention, has changed the outlook on dumping from ‘a generally acceptable practice to a generally unacceptable one. The protocol’s adoption of the precautionary principle together with the ‘polluter pays’ principle, shows that whoever is proposing to dump an installation would have to demonstrate that there were no environmentally preferable options. Further, that appropriate preventive measures were being taken “when there is reason to believe that wastes or other matter introduced into the marine environment are likely to cause harm even when there is no conclusive evidence to prove a causal relation between inputs and their effects”. Abidjan Convention The United Nations Environment Program (UNEP) introduced a Regional Seas Programme in 1974, basically to promote regional collaborative action towards the protection of the marine and coastal environment, and the conservation of their resources. One of such programmes is the Convention for the Co-operation in the Protection and Development of the Marine and Coastal Environment of the West and Central African Region (Abidjan Convention). Conclusion As a recent phenomenon, the industry and affected countries are still grappling with how to find adequate and the most appropriate means of addressing decommissioning of offshore installations. At the moment, a more realistic solution is for countries to develop comprehensive legislations that tackle all known decommissioning issues, and are also open-ended enough to adapt to unforeseen eventualities.
James Phillips Senior Associate Burges Salmon LLP Email: james.phillips@burges-salmon.com Rosie Lord Associate Burges Salmon LLP Email: rosie.lord@burges-salmon.com
Offshore World | 23 | February - March 2015
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Features Decommissioning Framework
Offshore Decommissioning: A Regulatory Challenge for ASEAN States The growing energy demand of ASEAN region compels the region to install more offshore installations, FPSOs to its existing offshore installations. While much of the regulation and contractual agreements between resource-rich countries and oil companies are focused on the exploration and exploitation phases of an offshore oil and gas project, however little attention is paid to the decommissioning and closure phases as often evidenced by the lack or incomplete regulations on the subject matter in this region. The article discusses the regulatory challenges on decommissioning of offshore installations in ASEAN region in details.
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It is projected that Association of Southeast Asian Nations (ASEAN) energy demand will grow at the rate of 4 per cent annually to meet the growing economics and populations of the region. For this five year period alone, 322 new fixed structures and 22 floating production, storage and offloading vessels (FPSOs) will be needed for the regions expanding offshore oil and gas activities. These numbers will add to the existing 1,237 offshore installations in the region right now.
for coastal States seeking to regulate decommissioning of offshore installations within their jurisdictions. They are the 1982 United Nations Convention on the Law of the Sea (UNCLOS) and the 1972 Convention on Prevention of Marine Pollution by Dumping and Other Matter (London Convention) with its 1996 Protocol (London Protocol).
The exploitation of offshore oil and gas resources clearly presents many regulatory challenges for States because it entails enormous safety and security issues for maritime navigation, fishing and environmental conservation. However, much of the regulation and contractual agreements between resource-rich countries and oil companies are focused on the exploration and exploitation phases of an offshore oil and gas project. Little attention is paid to the decommissioning and closure phases as often evidenced by the lack or incomplete regulations on the subject matter.
UNCLOS has granted ASEAN State Parties such as Brunei, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore and Vietnam exclusive economic rights over the natural resources in their EEZ and continental shelf.
Decommissioning, a process of deactivating an oil and gas facility from operations, is a crucial decision point at the end of the life cycle of these offshore installations. When they are not properly decommissioned, they pose significant risks to maritime navigation as well as the marine environment. Decommissioning of offshore facilities is even more complex than onshore facilities because of the risk, cost and controversy that come with such undertaking.
Decommissioning Experience of ASEAN Member States To varying degrees, the ASEAN Member States that have engaged in offshore oil and gas development, namely Brunei, Indonesia, Malaysia, Myanmar, the Philippines, Thailand and Vietnam, have regulatory or contractual measures to govern the decommissioning of offshore oil and gas development in their jurisdictions. The decommissioning framework in ASEAN countries can be seen mainly through national legislation, production-sharing contracts and guidelines of national oil companies (NOCs).
In the ASEAN region, decommissioning of offshore installations presents a greater regulatory challenge because of the limited experience it has in the decommissioning process. As some of the offshore installations in the region are nearing or have reached the end of their life spans, the imperative for ASEAN Member States to provide for decommissioning regulations has become all the more urgent. S u s t a i n a b i l i t y a n d I n t e r n a t i o n a l C o n ve n t i o n s G o ve r n i n g Decommissioning of Offshore Installations There are two major international conventions that provide the legal framework www.oswindia.com
The generally accepted international standards referred to in the above UNCLOS provision is embodied in the 1989 IMO Guidelines and Standards for the Removal of Offshore Installations and Structures on the Continental Shelf and in the Exclusive Economic Zone.
Decommissioning regulations in many ASEAN countries is not usually covered by one comprehensive law but spread over several laws. For example, in Malaysia, decommissioning plans will have to comply with at least eight laws: Merchant Shipping Ordinance, Continental Shelf Act, Exclusive Economic Zone Act, The decommissioning framework in ASEAN countries can be seen mainly through national legislation, production-sharing contracts and guidelines of national oil companies (NOCs).
Offshore World | 24 | February - March 2015
Features
Despite these laws, guidelines and contracts, however, analysts contend that there is still a lack of comprehensive regulatory framework in the region, which is manifested by the limited experience that the region has with decommissioning.
Environmental Quality Act, Fisheries Act, Occupational Safety and Health Act, Natural Resources and Environmental Ordinance and Conservation of Environment Enactment. In Indonesia, there is Government Regulation 17/1974 concerning the Supervision of Oil and Natural Gas Exploration and Exploitation in Offshore Areas which mandates complete decommissioning but this should be read with Act. No. 4/1982 on Basic Provisions for the Management of the Living Environment as well as government regulations on environmental impact assessment. National Oil Companies would also have decommissioning guidelines as part of their upstream guidelines. For example, Petronas, the national oil company of Malaysia, would require that all disused structures located in Malaysia be fully decommissioned, except where non-removal or partial removal is allowed by the guidelines. Its decommissioning policy states that it follows standards no less than the established international rules and standards, requiring pre-, during- and post-decommissioning requirements such as a Decommissioning Options Assessment and a Post Environmental Assessment. Production-sharing contracts between the States, national oil companies and operators would also have standard provisions on decommissioning. For example, in the Philippines, the contractor is required to include in its development plan a provision for abandonment and payment of abandonment costs. The contractor is made responsible in the proper abandonment and rehabilitation of all sites affected by its petroleum operations while being required to put up a sinking fund to cover the expenses. In these contracts, while observance of environmental laws are made part of an operator’s obligations, they do not really contain strict or detailed guidelines that operators had to follow, as shown by productionsharing contracts in Indonesia. Operators still have to resort to other laws on the environment, health and safety, etc in order to know their other obligations and liabilities in the decommissioning process. Despite these laws, guidelines and contracts, however, analysts contend that there is still a lack of comprehensive regulatory framework in the region, which is manifested by the limited experience that the region has with decommissioning. So far, only Brunei and Malaysia, as carried out by private operators, have documented experiences in decommissioning a handful of offshore installations and turning them into artificial reefs. Furthermore, some of the platforms are re-used or retrofitted to extend their lifetimes, thus forgoing decommissioning plans. Constraints such as cost of decommissioning, the lengthy process, lack of facilities, etc. also contribute to the lack of decommissioning activity. As for the legislative horizon, Malaysia, after issuing the draft guidelines for contaminated land, is expected to follow it up with decommissioning guidelines for offshore installations. Thailand is also poised to come up with
decommissioning guidelines. What is notable with the Thai guidelines is that it is a result of a long-term project started in 2006, to come up with a more rigorous decommissioning regulation. Noting that neither its law nor concession contracts have instructions on how decommissioning should be conducted as well as the various considerations to be discussed, the Thai decommissioning regulation contains requirement for a management plan (including decommissioning technique, safety and environmental plan and financial costs). It hopes to manage the scale and timing the decommissioning of over 200 existing hundred platforms in the country, while at the same time implement procedures for stakeholder involvement and release of liability of operators. Conclusion While Malaysia and Thailand are clearly moving towards improving their regulatory frameworks and incorporating sustainability concepts to them, other ASEAN member states are still at the point of developing and improving their decommissioning regulations. Since decommissioning measures are unevenly implemented across the region and principles of sustainable development have yet to be embedded in decommissioning decisions, the challenge to sustain the marine environment of the ASEAN region - which is known for its rich biodiversity - will definitely be enormous. The increase of disused and abandoned offshore installations in the near future, clearly presents a regulatory challenge for ASEAN countries. It remains to be seen whether the ASCOPE Decommissioning Guidelines for Oil and Gas Facilities, which the ASEAN Council on Petroleum (ASCOPE) is presently drafting will be effective as the regional decommissioning guidelines for the operations of national oil companies in the region. It is hoped that these guidelines will adhere closely to the framework provided by international law which embodies sustainable decommissioning concepts, and at the same time, will pursue each ASEAN state’s role in promoting sustainable development within the law of the sea while balancing the economic, energy and environmental interests of the region.
Mayla Fermina Alonzo IbaĂąez Research Associate Centre for International Law - National University of Singapore Email: cilmfai@nus.edu.sg
Offshore World | 25 | February - March 2015
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Features Energy Watch
Energy Commodities Exhibited Mixed Price Movement Energy Column (Price Review): January - February 2015 Energy commodities exhibited mixed price movement in the two-month period of January and February 2015. Pressured by global over-supplied coal market, ICE Rotterdam monthly coal futures prices dropped the most amongst major energy commodity (under review), i.e. by 7.42 per cent. On the other hand, cold weather and a refinery strike helped NYMEX (CME) heating oil futures price to jump the most by 24.49 per cent.
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Continuing the trend of past few months, NYMEX (CME) crude oil (light sweet) futures started the month of January 2015 at USD 52.69 per barrel, down by 1.1 per cent from previous month’s close. Some anxiety over the news of hospitalization of King Abdullah (Saudi Arabia) pushed crude oil futures to the eventual two-month high of USD 55.11 on January 2. Later, however, concerns over a surging US dollar and nagging worries of growing oil supplies kept oil prices on downslide. Emergence of talks of a potential ‘Grexit,’ or Greece exit from shared European economy, thus adding to global economic uncertainty – kept downward pressure on oil prices. On supply front, two major oil producers, Russia and Iraq, were reported to have scaled up their oil production, with oil exports moving to their highest levels in decades. Additionally, the US shale revolution, aided by commercialised drilling technologies like fracking and horizontal drilling, continued to drive the boom in American oil production.
By mid-month, falling oil prices got some relief following the Swiss National Bank’s shocking decision to scrap a cap on its currency against Euro. Later, International Energy Agency’s statement that collapsing crude prices would cut into supply growth from oil producers outside of the Organization of the Petroleum Exporting Countries (OPEC) also helped oil prices. Nevertheless, overall sentiments continued to be bearish as JP Morgan became the latest bank to slash its forecast for oil prices in 2015. Notably, overlooking news of the death of Saudi Arabia’s King Abdullah and marginal improvement in China’s manufacturing data, weekly US oil inventory report that showed a larger-than-expected increase in US crude supplies, with inventories at their highest level in 80 years, kept oil prices under pressure. The bearish sentiments continued with an election win by Greek anti-austerity party Syriza. Eventually, NYMEX crude oil futures prices stooped down to the two-month-low of USD 43.58 on January 29.
Barring brief sessions of respite on positive US jobs report and news that US oil producers idled most oil rigs in a single week in more than two decades, overall, bearish sentiments in oil prices continued. Adding to downward pressure was sharp cuts by Goldman Sachs to its oil-price projections and the US (Energy Information Administration) EIA’s expectation of no fall in the pace of US oil production.
Thereafter, oil prices staged some recovery helped by short covering as well as on the data release showing a huge drop in US oil rig counts. Further the news that workers represented by the United Steelworkers union at US refineries (that produce nearly 10 per cent of the nation’s gasoline, diesel and other fuels) went on strike aided to the rise in oil prices. The release of better-than-expected US jobless claims data and a higher economic growth forecast for the European
240
216
Futures price movement (January - February 2015) NYMEX Heating oil (USd/gal) - LHS
70
64
NYMEX Gasoline (USd/gal) - LHS
192
168
NYMEX WTI crude oil (USD/barrel) ICE Rotterdam Monthly Coal (USD/MT)
52
144
46
120
40
Source: Bloomberg
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Offshore World | 26 | February - March 2015
Features
Futures price movement (January - February 2015) 3.4
8.00 NYMEX Natural gas (USD/mmBtu)
3.2
7.70
ICE-ECX EUAs (Euro/tonne)
3
7.40
2.8
7.10
2.6
6.80
2.4
6.50
Source: Bloomberg
Union helped improve the outlook for energy demand. Release of jobs numbers in US also gave some boost to oil prices as US added 257,000 new jobs in January to start off 2015 on a strong note. Meanwhile, a Platts survey showed OPEC oil production totaled 29.94 million barrels a day in January, down from 30.03 million barrels a day in December - attributing the fall to steep declines in Iraqi and Libyan supply. Later, oil prices traded range-bound with mild downward bias. Concerns about a persistent supply glut as US oil inventory levels continued to hover at 80-year high despite declines in the number of oil drilling rigs kept prices on mild downward slope. However, subsequently agreement to halt months of deadly fighting in Ukraine, thus easing concerns over Russian oil demand kept oil price range-bounded. Prices further continued to trade range-bound helped by sustained rise in US oil inventory levels as against US Federal Reserve Chairwoman Janet Yellen’s testimony (late in the month) to the US. House Financial Services Committee, suggesting there is no hurry to tighten policy. Finally, NYMEX crude oil futures closed the two-month period at USD 49.76, registering a monthly fall of 6.6 per cent. Unlike crude oil, futures prices of oil derivate i.e. heating oil and gasoline (both traded on NYMEX-CME platform) moved up in the two-month period of January-February 2015. While, concerns about excess crude supply in US markets kept crude oil prices on downtrend, cold weather and workers strikes in a few US refineries, including the nation’s largest fuel-making facility — the Motiva Port Arthur Refinery in Texas, pushed up heating oil and gasoline futures prices. Overall in the two-month period, NYMEX heating oil futures prices and gasoline futures prices jumped by 24.49 per cent and 23.15 per cent respectively. The other major energy commodity natural gas futures traded on NYMEX (CME) platform registered a price fall of 5.37 per cent in past two months. Initially in January, generally warmer-than-usual temperatures in key US heating markets along with weak global economic data and a sharp drop in crude oil prices pushed gas prices down. Later in February, lesser than expected fall in US gas
stocks that surpassed five-year storage levels, kept gas prices on downtrend. Another energy commodity, ICE Rotterdam monthly coal futures prices too moved down i.e. 7.42 per cent in the two-month period. While production in leading exporters such as Indonesia and Australia remained high, demand from top importer China tended slow in line with both its slowing economic growth plus a political move to support domestic coal miners. Additionally, sharp drop in oil prices – significantly reducing fuel costs for mining operations and strengthening of the US dollar against mining export currencies such as Australia’s dollar or Indonesia’s rupiah - allowing miners to offer their coal at a lower price, kept downward pressure on coal prices. Finally in emission segment, EUA (European Union Allowances) futures prices traded on ICE platform were down by 2.34 per cent in the two-month period. Weak economic growth especially in euro-zone denting industrial production and hence energy demand, created a glut of allowances in turn depressed EUA prices. Nevertheless, European parliamentarians adopting the Market Stability Reserve (MSR) – a legislation which aims to reform the European Emissions Trading System (EU ETS) on February 24 – denied major fall in EUA prices. (The views expressed by the authors are their personal opinions.)
Niteen M Jain Senior Analyst, Department of Research & Strategy Multi Commodity Exchange of India Ltd E-mail: niteen.jain@mcxindia.com Nazir Ahmed Moulvi Senior Analyst, Department of Research & Strategy Multi Commodity Exchange of India Ltd E-mail: nazir.moulvi@mcxindia.com
Offshore World | 27 | February - March 2015
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OSW marketing intiative
BP CHEMICALS ENHANCES SITE SAFETY WITH FLIR INFRARED In the production of acetic acid BP Chemicals is world renowned and responsible for a significant proportion of world capacity. Its proprietary methanol carbonylation technology, Cativa, is in demand globally and in particular in Asia where the company continues to establish new manufacturing partnerships. In the UK its site at Saltend in East Yorkshire is not only a manufacturing flagship but also a major centre for ongoing research and development of the process.
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Acetic acid is a highly versatile substance. It is perhaps best known as a major constituent in vinegar and other foodstuffs but is also widely used as a chemical intermediate and solvent in paints, adhesives, textiles, papers and chewing gum. It is produced by the combination of carbon monoxide and methanol in the presence of a catalyst. Every year the company invests many millions of pounds in improving production efficiency, minimising environment impact and protecting the workforce. And it is largely with personnel safety in mind that BP Chemicals is now taking a fresh look at how FLIR thermal imaging can help minimise leaks.
This now vitally important piece of equipment was one of three FLIR GasFindIR cameras recently employed to check plant integrity at the Saltend site. Dave Fashimpaur used his HSX model to detect a range of gases including methane and methanol that are both predominant at the UK plant; HSX is able to detect 20 different gases in total. In addition, a long wave version of the camera was used that is capable of detecting acetic acid, acetic anhydride and ammonia, three of the total of eight products processed at Saltend.
Effective leak detection is of course a site priority at Saltend and one of a number of procedures for ensuring safe operation. As Senior Technologist, Dr. Geoffrey Wilcox confirmed, “We have several established programmes which help us to comply with both regulatory and local requirements.” The EU Chemical Agents Directive to protect the health and safety of workers using chemicals and the Control of Major Accident Hazards Regulations, commonly referred to as COMAH, are typical examples.
Completing the set was a brand new camera in the FLIR GasFindIR family. This model is specifically designed to detect carbon monoxide, CO. To a greater or lesser degree, the majority of process gases at BP Chemicals are hazardous but CO is certainly in a class of its own. Even in the low parts per million it can cause serious health problems and naturally BP ensures that any of its personnel that could potentially come into contact with CO carry personal monitors at all times. The carbon element of CO is obviously a problem environmentally too so the detection of any leaks is doubly important.
Bought in 2005, the FLIR GasFindIR camera has been central to Dave Fashimpaur’s troubleshooting work and it now accompanies him all over the world. He added, “There’s no set-up involved. When you switch the camera on it has to cool down to the required temperature but after that you get your images immediately. There’s no post processing involved and I just play the video footage back via Windows Media Player.” The camera allows him to inspect wide areas efficiently and to pinpoint the source of the leak. “I’m looking for motion in the black and white image,” he continued. “Of course that could be steam or metal tags waving in the breeze so my judgement is informed by experience but by changing the lens I can capture the complete scene or a small detail.” The 25mm lens is the most popular but Dave also has 50mm and 100mm for longer range inspection.
Although some process areas of BP Chemicals at Saltend are nearly 30 years old this is a site that is exceptionally well maintained and this was born out by the relatively few emissions detected during the IR survey. Nevertheless all three cameras acquitted themselves well by pinpointing several gas leaks. In the case of the FLIR GasFindIR™ HSX camera there had been some previous evidence of leakage at the plant entry point for natural gas from which carbon monoxide is produced. To enhance safety, odour is added to the natural gas and as Process Engineer CS Chung confirmed, “We were able to smell the leak but didn’t know its exact location.” The HSX camera found the culprit to be a leaking flange that has since been tagged for repair during the next maintenance shut down.
Dave Fashimpaur from BP ischecking for leaks of natural gas using his GasFindIR HSX www.oswindia.com
Offshore World | 28 | February - March 2015
OSW marketing intiative One of the main sources for the natural gas used in the process is the BP terminal at nearby Dimlington. The site processes in the region of 900 million standard cubic feet of North Sea gas daily. The infrared survey at Dimlington confirmed more than 99% of components to be leak-free. However the HSX camera was able to trace the source of an odour at a condensate sump and small leaks around compressor flange plates. This FLIR GasFindIR™ HSX camera is designed for outdoor use. For that purpose it comes complete with selectable frame acquisition rates to suit the ambient temperature. Too great a heat results in a saturated image and too cold, insufficient detail. This feature ensures optimum performance whatever the ambient temperature so that the GasFindIR can be used with equal efficiency for inspecting hot compressors or sites characterised by permanent ice. Unlike other gases at Saltend CO doesn’t have the advantage of odour and therefore unless the emission exceeds the alarm setting of a personal monitor or a fixed detector, a leak will remain undetected. The first small escapes that the FLIR GasFindIR CO camera found were from an infeed pipe and a heat exchanger flange, both part of an electrically driven compressor. From a gantry in an adjoining covered section of the plant, the camera was then used to inspect a series of steam driven compressors. Two further CO leaks were found. In high sensitivity mode both were clearly visible as plumes of gas. “These were great examples of small and easily fixable leaks that the camera picked up speedily and at a safe distance,” Geoff Wilcox explained. The FLIR GasFindIR LW proved equally effective. This camera was primarily developed for the detection of the greenhouse gas, sulphur hexafluoride (SF6), but its wider capabilities made it a good choice for BP. It can also ‘see’ acetic acid and therefore provided clear images of small emissions from the vapour space in tankers and from a vent in the roof of the loading bay. It also identified small escapes from automatic loading arms whose emissions are largely controlled by recovery systems. Ammonia is another gas detectable by this LW camera and this was seen in a vent situated 20m above ground level with the camera position at a distance of 150m or so. FLIR GasFindIR cameras are increasingly being adopted by plants across the world for the visualization and documentation of gas leaks. The reasons for this were clearly demonstrated at BP Chemicals. FLIR GasFindIR can scan large areas rapidly and pinpoint leaks in real time. It is ideal for monitoring plant that is difficult to reach with contact measurement tools and literally thousands of components can be scanned per shift without the need to interrupt the process. It reduces repair downtime and provides verification of the process. And above all it is exceptionally safe, allowing potentially dangerous leaks to be monitored from several meters away.
In both pictures CO leaks where found with the GasFindIR CO
Press enquiries, electronic press releases and digital photography: Trudi, Sal or Caroline at NEW RIVER Tel: 01920 468443 Fax: 01920 460528 Email: info@newriver.co.uk www.newriver.co.uk For more information, visit www.flir.com/thg or contact:
Using GasFindIR HSX to check for natural gasleaks
FLIR Systems India Pvt. Ltd. 1111, D-Mall, Netaji Subhash Place Pitampura, Delhi - 110034, India Tel: +91-11-45603555 Fax: +91-11-47212006 E-mail: flirindia@flir.com.hk Website: www.flir.com Offshore World | 29 | February - March 2015
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OSW marketing intiative
Our initiatives have always symbolized the hallmark of passion and compassion Unique Hydra, a Unique Group company based in Cape Town, South Africa, established in 2000, is a leading manufacturer and supplier of marine and diving equipment to the oil and gas industry. Rodney McKechnie, Managing Director, Unique Hydra, shares his view on the company’s organizational value, vision and future plans in details, with Offshore World.
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Tell us about Unique Hydra right from inception and its vision, mission and organizational values? Unique Hydra is a Unique Group company based in Cape Town, South Africa. Established in 2000, as a leading manufacturer and supplier of marine and diving equipment to the oil and gas industry. The personnel have over the years established substantial experience in marine engineering, hyperbaric, military defense, aerospace, nuclear and chemical engineering. The company manufactures and offers a complete range of diving systems – from air and mixed gas to complete built in saturation diving systems. Unique Hydra is also a supplier member of IMCA (The International Marine Contractors Association) and is DNV accredited to the following standards ISO 9001, ISO 14001 and ISO 18001. We have recently been audited by VARD, Bibby Offshore, Oceaneering and Subsea 7 to name a few international subsea offshore companies. What has your company to offer and to which particular segment of industry does it caters to? What has your company always been striving for? Our company is a leading manufacturer and supplier of deep sea marine and commercial diving equipment, chiefly catering to the oil and gas industry. We offer a wide range of IMCA compliant and classed (Lloyds Register, ABS, DNV) diving equipment and systems. Some of these include commercial diving equipment, saturation diving systems, daughter craft systems, decompression chambers, hyperbaric rescue facility, breathing air compressors and many more. Unique Hydra has built more than 10 classed saturation diving systems. The saturation systems on offer include modular or portable saturation diving systems, DSV saturation diving systems, hyperbaric reception facilities (HRF) and numerous modifications/upgrades to these systems including the fitting of an SPHL. We also have a Marine Services Division to support the marine equipment needs of our clients. We are the preferred dynamic positioning
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(DP) specialists in Africa. DP services include DP surveys, DP installations, DP repairs and DP training in a Nautical Institute accredited training facility in Cape Town. Other equipment we offer for sale or rental includes NDT Inspection equipment, marine survey equipment, acoustic and navigation equipment, vessel automation and engine monitoring systems. We also offer a comprehensive range of marine communications systems, including portable radios, rescue transponders, satellite antennae, satellite terminals and GMDSS solutions. Over the years, Unique Group has built up an impressive reputation for quality, innovation, service and speed of response and continually strives to improve its product and service enhancements. After a significant investment partnership from Blue Water Energy, we are now remarkably working over its expansion plans that also include targeting new and competent markets across the globe. We are committed towards growing our verticals in every country that the Group has its presence in. Our initiatives have always symbolized the hallmark of passion and compassion. The Group’s way of giving back to society is its constant quest to alter lives for the better. What will be your future plans to equip with the latest developments in deep sea marine and commercial diving equipment and also with the related technologies, materials and design? Our latest developments are in connecting our machinery and systems with a complete monitoring and integrated network system. We hope to see this rolling out in late 2015 on the first items of machinery. What is the growth rate you are aiming at during the current fiscal and how is it poised to grow in the next five years? It is tough times at the moment but we are positive that the industry is still in a long term rising growth rate and with the need for new DSV and equipment we see a positive future.
Offshore World | 30 | February - March 2015
OSW marketing intiative
‘It is all about competence!’ To improve the safety in process plants, it is significantly have to focus on the competence of the people working in the process plants. Dr Thorsten Arnhold, Chairman, IECEx Committee, and Vice President – Technology, R STAHL Germany, says IECEx struck a good balance to solve the personnel competence scheme instead of a certificate for training organization by implement a pool of “Recognized Training Providers (RTP)”.
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At the plenary session of the annual PCIC North America conference, Mr. Paul Owen of Shell Global Solutions gave an impressive presentation to the audience comprising of more than 1500 people. His central statement was: ‘It is all about competence!” He introduced the new Shell programme of a systematic qualification of the staff working in the process plants all over the world. He was propagating a “revolution in learning” using elements of conventional training in classrooms and especially with e-learning elements. It is clear that such comprehensive qualification programmes need the participation of external service providers. For me as the chairman of the IECEx system, his message showed clearly that the decision to extend our conformity assessment system to cover the personal competence, four years ago, was absolutely the right one. It is all about competence! This could be also the headline for all the activities in IECEx to establish a highly professional certification system for competent personnel working in the hazardous areas. In the past there have been many systematic investigations to uncover the reasons for accidents related to explosion, in the worldwide process industry. The outcome was quite similar: in almost all the cases the real reason was a lack of competence whether of the operators or the management. In only very few cases a failure of the equipment was the cause of the explosions. The safety level of the equipment seems to be high enough. The international standards defining the requirements for such high safety levels exist since many years. So do the certification systems like ATEX or IECEx. To improve the safety in the process plants significantly we have to focus our efforts now on the competence of the people working in the process plants. The start of the IECEx Personal Competence Scheme was very encouraging. During that time eight Certification Bodies were accredited to carry out the examination of the experts and to issue the certificates. More than 600 people got certificates for one or more of the units of competence. The fact that the standard generation in TC31 and the certification process is conducted under the roof of IEC ensures that the certificates that are issued are genuine and on the basis of the state of the art. During the 2012 IECEx Management Committee Meeting in Calgary, the US National Committee proposed to extend the Personal Competence Scheme to training providers. At the first glance this looked reasonable. A good training is the basis of every competence building process. Like often the devil was in the detail. At IECEx we wanted to avoid a close interconnection between training organisations and the certification of the single persons.
We wanted to avoid conflicts of interests and we wanted to keep the education and certification system as flexible as possible. There have been some practical problems as well. How to certify training organizations? Should we check some hundreds of power point presentations? How to evaluate the trainers? They need both the technical and the didactic skills. Finally we struck a good balance, which solves all our problems. Instead of a certificate for training organizations we will implement a pool of “Recognized Training Providers (RTP)”. A training organization, which wants to achieve this status, has to fulfill certain documented requirements for the quality management system, the qualification of the trainers, the ongoing updating of the training material etc. It must follow the IEC rules regarding the use of the IEC and IECEx logo. After a declaration to follow all this rules the Recognized Training Provider will be listed in a certain public data base on the IECEx homepage. To keep the quality level high there will be the possibility of a direct feedback to the IECEx central office in Sydney for the customers who attend the trainings. The process was started during the annual IECEx working group meeting in May 2014. After the endorsement of the proposals during the by the IECEx Management Committee in August 2014 we are now planning the fine tuning of this new element during our next meeting session in spring of Y 2015. I am quite confident that we can offer this new service in year of 2015. With the Recognized Training Provider program we will create the next important element of a certification system covering all important aspects of the whole life cycle of hazardous area installations.
Offshore World | 31 | February - March 2015
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india news ONGC Bags Exploration Block Offshore New Zealand Right Time to Build and Raise Strategic Crude Oil New Delhi: ONGC Videsh Ltd, the overseas Reserves: ASSOCHAM
N K Verma, Managing Director & CEO, OVL
investment arm of the State-owned Oil and Natural Gas Corp (ONGC), has won an offshore oil and gas exploration block in New Zealand, the first by an Indian firm in that country. The exploration Block – 14TAR-R1 – is in New Zealand’s Taranaki basin, in the same region which has several commercially successful oil and gas fields. New Zealand launched the bidding round in April, offering five offshore and three onshore release areas. OVL has taken a 12-year permit in the Taranaki Basin.
OMV New Zealand, a subsidiary of Austrian oil major OMV and already producing oil and gas offshore Taranaki, was awarded another offshore Taranaki and one Pegasus permit. Narendra K Verma, Managing Director & CEO, OVL, said that the fim’s ‘maiden entry into the hydrocarbon province of Taranaki offshore basin in New Zealand shall provide an opportunity to explore interesting hydrocarbon potential in the region and act as a foothold for greater participation in the far-east region.”
New Oil & Gas Contracts may be Tough on Investors New Delhi: The petroleum ministry is looking to rework several of the contentious clauses in the proposed model revenue sharing contract, including those related to the escrow account, production targets and monetisation of petroleum in the reservoir, which private players argue is an attempt to take a share of the profit from sale of rights in the blocks. Sources said that the review of the proposals circulated in the draft model sharing contract is based on feedback received from stakeholders. A key concern, industry players said, relates to monetisation. The draft contract under which the next round of oil and gas blocks will be auctioned seeks to close all the loopholes in the earlier production sharing agreement for which the government was criticised by the CAG. In the new contract, the government has proposed to have complete control of cash flows, operators cannot profit from block sales and are subjected to an environment damage liability that is more stringent than under the Nuclear Liability Act. According to the draft, released for comments, the tough conditions will cause private companies to review their plans. In effect, it seeks to put a lid on selling of stakes in oil blocks by companies without sharing the gains with the government.
Oil India Shale Drill in Northeast Mumbai: Oil India has sought permission from the government to hunt for shale oil and gas in several of its blocks in Arunachal and Assam. At least two of the PSU’s blocks in Arunachal Pradesh - Deomali and Jairampur - and three in Assam - Chabua, Dibrugarh and Dumduma - hold potential. The Union cabinet has already approved the ministry of petroleum and natural gas’s proposal to allow state-run oil and gas firms to hunt for shale oil and gas in their existing acreages. Top officials said Oil India believed Dishang Shales in the 120-sq-km Deomali tract alone could prove to be a major find for the company. www.oswindia.com
Mumbai: It would take just about half in building strategic crude oil reserves throwing a tempting opportunity for India to increase the storage capacity by raising investment multi-fold in physical infrastructure besides signing forward contract with the exporting countries. “It is once in several decade opportunity for India to scale up its strategic oil reserves at much higher level than even three months’ consumption, which itself is a long way to go for us at this point of time,” a paper by industry body ASSOCHAM has pointed out. In the backdrop of falling global crude price, India’s crude oil import bill has been drastically decreased in the last six months. It will cost India 40 per cent less to build strategic energy reserves at the present prices. But to take the advantages, the government has to take speedy initiatives on underway projects because who knows by the time our storage capacity for the reserves is ready the crude would not have bounced back. The government should quickly get the viable projects examined and take quick decisions while those in the private sector should be given the support in terms faster RBI clearances and easier tax administration. Presently, there are three strategic reserves - one in Andhra Pradesh and two in Karnataka and four more facilities are proposed at Bikaner in Rajasthan, Rajkot in Gujarat, Padur in Karnataka and Chandikhole in Odisha. The government may be planning to spend about ` 50-60 billion on building these capacities. Given the opportunity, the government must commit and increase this investment at least three-four times to ` 150-200 billion and let the oil marketing companies invest in the same along with the special purpose vehicle- Indian Strategic Petroleum Reserves Ltd (ISPL), the report suggested.
Gas Pricing Regime should be Remunerative for Producers: Panel New Delhi: A Parliamentary committee has said that the domestic gas pricing regime should be remunerative so as to ensure fresh investment in the sector even as it stated that a hike gas price will heighten the subsidy burden. The Standing Committee on Finance, headed by former Oil Minister M Veerappa Moily, said that all actions of the government should be dictated by ‘public interest’ and also fair to all stakeholders. “The Committee is of the firm opinion that it is also important to have a policy regime that ensures remunerative price to gas producers as well in order to stimulate fresh investments in the sector,” the report tabled in Parliament said. Simultaneously, it added the government should devise an optimum pricing formula, which is fair to all stakeholders and also safeguards the long term interest of economy. The Committee also said that the increase in price of gas will heighten the subsidy burden on the exchequer, as the MRP of urea is statutorily controlled. Among others the Committee also include former Prime Minister Manmohan Singh.
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india news Allocation of 116 NELP Blocks Gets Delay in Statutory Clearances: OilMin
Parl Panel Pitches for Bold Initiatives to Contain CAD
New Delhi: As many as 116 exploration blocks under the New Exploration and Licensing Policy have been affected due to delay in grant of statutory clearances. “Exploration operations have suffered in NELP exploration blocks due to delay in grant of various statutory clearances required from Ministry of Defence and other central government or state government Dharmendra Pradhan, regulatory authorities,” Minister of Petroleum Oil Minister and Natural Gas Dharmendra Pradhan said in a written reply to the Lok Sabha. Exploration operations have suffered in 116 NELP exploration blocks due to delays in grant of Petroleum Exploration Licence by state governments including 76 blocks affected due to delay in Defence Ministry approval.
New Delhi: A Parliamentary Panel has called for ‘bold policy initiatives’ including steps to contain the current rupee depreciation so as to get complete handle over the current account deficit (CAD) situation. With petroleum prices having shown a southward trend, the situation is ripe for ‘bold policy initiatives’ by the government to maintain the trend of easing of CAD, Standing Committee on Finance headed by Veerappa Moily said in a action taken report tabled in Lok Sabha. Noting that the unrelenting situation of CAD of the past few years has eased a bit alongside fiscal deficit, the Committee expected the Government will not let this opportunity go a begging.
On the progress of revival of sick oil and gas wells, Pradhan said, it is a continuous process. “Revival of sick oil and gas wells is a continuous process and all the contractors under PSC (production sharing contract) regime, undertake several measures on regular basis to revive the sick wells to increase production,” he said. The revival process includes measures such as periodical well intervention through work-over jobs, well stimulation, installation of suitable artificial lift systems and side tracking of wells etc. Sick wells are also abandoned by the contractors either on completion of their economic life or due to fact that they could not be economically revived. He added that the revival of sick wells of fields of ONGC and Oil India under nomination regime is monitored on continuous basis by Directorate General of Hydrocarbons (DGH).
This Panel has said that rupee depreciation needs to be contained to bridge the CAD-Gross Domestic Product (GDP) divide. Simultaneously, competitive domestic production needs to be reinforced along with opportune policies to maintain the growth in exports. This would go a long way towards maintaining sustainable CAD at an acceptable level of GDP. “The CAD is a serious malaise gnawing at the vitals of the Indian economy and needs to be treated as an overriding priority”, the report said. India’s CAD in the first half (April-September) of this fiscal was USD 17.9 billion (1.9 per cent of GDP) as against USD 26.9 billion (3.1 per cent of GDP) in same period last year, data released by Reserve Bank of India (RBI) recently showed. CAD remains within RBI’s comfort zone of 2.5 per cent of GDP.
Refining Giants on Expansion Mode in Gujarat
IOCL to Upgrade Nigerian Refineries
Ahmedabad: Gujarat, which is already hailed as the refining hub of the world, is likely to be increased refining capacity.
New Delhi: India’s biggest refining and oil marketing company, Indian Oil Corporation (IOC), may consider taking up modernisation of existing refineries in Nigeria subject to allocation of equivalent oil equity in producing blocks with substantial recoverable reserves in its favour. As Nigeria is a major oil producer and India’s oil security is on priority, it would be a win-win for both the nations.
Over the next few weeks, petroleum giants Reliance Industries Ltd (RIL), Indian Oil Corporation (IOC) and Essar group will ink agreements pledging ` 1,12,000 crore to build and expand refineries. All three companies may sign memoranda of understanding during the upcoming Vibrant Gujarat summit in January 2015.
Nigerian National Petroleum Corporation (NNPC) has four refineries, two in Port Harcourt (PHRC) and one each in Kaduna (KRPC) and Warri (WRPC). The refineries have a combined installed capacity of 445,000 barrels-per-day (bpd). As a result of poor maintenance, theft and fire, none of these refineries have ever been fully operational. In recent years, these refineries have often operated at their lowest levels of just 30 per cent of capacity. New refineries have been planned for several years now, but lack of financing has caused several delays. Currently, the PSU refiner buys crude from Nigeria. Although IOC seeks larger supplies of Nigerian crude on term contracts, nearly 90 per cent imports are spot market deals. Nigerian crude is preferred under the low-sulphur category for IOC refineries. In 2013-14, the company imported about 8.5 million ton of Nigerian crudes.
This will consolidate Gujarat’s position as the world’s leading supplier of fuel almost doubling the total refining capacity from the existing 66.7 MT per annum. While IOC plans to invest Rs 40,000 crore to build a greenfield refinery in Mundra - the fourth in Gujarat - RIL will set up a new ` 42,000 crore facility next to its existing refinery in Jamnagar. Essar too plans to pump in ` 30,000 crore on expanding capacity in Jamnagar. With its Mundra refinery, IOC will raise processing capacity to 100 million tonnes. The capacity of its 13.7 MT refinery in Koyali near Vadodara is being raised to 18 million tonnes at a cost of about ` 5,000 crore. Already, two single buoy moorings (SBM) at Mundra are being operated by IOC and HPCL. This facilitates transport of crude to the refineries. RIL, on the other hand, wants to build a 400,000 barrels per day refinery at its Jamnagar complex to process cheap, heavy crudes. RIL’s existing refining complex - world’s biggest - at Jamnagar Reliance can process 1.4 million barrels per day of oil.
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india news Petroleum Pipeline from Siliguri to Parvatipur Kolkata: Oil Minister Dharmendra Pradhan has pushed for laying of a petroleum product pipeline from Siliguri to Parvatipur in Bangladesh for supply of fuel. Pradhan met Dr Tawfiq-e-Elahi Chowdhury, Energy Advisor to the Prime Minister of Bangladesh, to discuss the pipeline.
Former Indian Oil Chairman Appointed Gulf Petrochem Advisor New Delhi: UAE-based oil manufacturing group Gulf Petrochem has appointed former Indian Oil chairman as its Strategic Advisor and member of Board of Directors.
“Both sides discussed the need to greatly enhance cooperation in the oil and gas sector to the mutual benefit of people of the two countries,” an official statement said. Pradhan requested cooperation from Bangladesh government for materialisation of Indo-Bangla product pipeline from Siliguri to Parvatipur, which is a part of Prime Minister Narendra Modi’s view that North-East is our Natural Economic Zone (NEZ). India, he said, is keen on setting up of marketing infrastructure in Bangladesh, including infrastructure development projects on a case-to-case basis. “The two sides agreed to have frequent interactions to further (this) cooperation,” it added.
Essar Group Pacts with Rosneft Mumbai: Essar Group has signed a USD 10 billion contract to import crude oil from Russia over a 10-year period. Essar signed a deal with Russia’s top crude oil producer Rosneft to buy 10 million tons a year of oil for 10 years beginning 2015. The deal was among a host of agreements being signed during Russian President Vladimir Putin’s visit to the country for talks with Prime Minister Narendra Modi. Moscow-based OAO Rosneft Chairman Igor Ivanovich Sechin said the agreement was to ship by sea as much as 10 million tons of oil per year to Essar Group. The oil deal, Sechin said, could be extended beyond 10 years.
ONGC Awards Contract to Technip New Delhi: State-owned Oil and Natural Gas Corp (ONGC) has awarded a EUR 100 million contract to French firm Technip to build an oil and gas terminal at Odalarevu in Andhra Pradesh. Technip’s scope of work for this contract includes basic design, detailed engineering, procurement, fabrication, inspection and testing, installation, precommissioning and commissioning of the new onshore terminal facilities which will be integrated to the existing terminal. The terminal, which will have a capacity of 6 million standard cubic meters per day, will receive gas from ONGC’s Vashistha and S1 fields in Bay of Bengal, Technip said in a statement here. The Vashistha and S1 fields are located 30-35 km off the Amalapuram coast in the KG Basin, off the East Coast at water depths of 250 to 700 meters. www.oswindia.com
Brij Mohan Bansal, Strategic Advisor, Gulf Petrochem
Brij Mohan Bansal, with over 40 years of experience in the energy sector, will oversee Gulf Petrochem Group’s strategic expansion plans especially within the mergers and acquisitions space as well as managing the process of integration and diversification.
Bansal has overseen and assumed strategic responsibility for the growth of Indian Oil and Kenya Petroleum Refineries besides identifying and initiating foreign and domestic strategic partners. As an IMD Certified Project Director bestowed from the International Projects Management Association, Bansal will lead the group’s project formulation, implementation and operations ensuring that quality, safety and cost efficiencies are maximised.
Gas Discovers in Tamil Nadu Chennai: Bharat Petroleum Corporation Ltd (BPCL) ha announced that its partner Oil and Natural Gas Corporation (ONGC) has discovered gas in one of its oil blocks in Tamil Nadu’s Nagapattinam district. The block is held jointly by ONGC and Bharat Petroresources Ltd (BPRL), a subsidiary of BPCL. ONGC had previously entered into an exploration partnership agreement with BPCL for the Cauvery basin. According to BPCL’s note to National Stock Exchange, the exploration well in the block - MD 5 - was drilled down to a target depth of 2,175 metres and trapped natural gas in the block flowed at a rate of 61,800 cubic meters per day. It also showed the presence of condensate (a form of volatile light oil) at the rate of 9.6 cubic meters per day. The discovery has been termed Thirunagari Gas Discovery after the name of the nearby village where the gas was found. This is the second hydrocarbon discovery made by ONGC in the NELP-IV block. The first discovery in this block was made in October 2012, which established the presence of crude oil. However, these sets of discoveries are exploratory in nature and the two companies will be starting the appraisal to find out the exact amount of reserves in the block. If found commercially viable, production may start from Mid 2015. BPRL has a 40 per cent interest in the block and the rest is held by ONGC.
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india news Unviability of Production of Natural Gas by GSPC
OPEC’s Face off against Shale will Gain for India: CRISIL
Ahmedabad: Petroleum & Natural Gas Minister, Dharmendra Pradhan, has informed the Rajya Sabha in a written reply that Gujarat State Petroleum Corporation (GSPC) has not intimated about the start of commercial production of gas from its discoveries in the Block (KG-OSN-2001/3) in KG basin. As per the approved Field Development Plan, initial production of 1.0 MMSCMD (Miliion Standard Cubic Meters per Day) and peak production of 5.0 MMSCMD is envisaged.
Mumbai: Excess global supply, weak demand growth and OPEC’s unwillingness to cut production despite glut is expected to result in sharp fall of 25-30 per cent y-o-y in crude oil prices in 2015. This along with recent deregulation of diesel prices is likely to benefit India in multiple ways, according to the latest report by CRISIL. CRISIL says on account of the above two factors, underrecoveries (loss on sale of regulated fuels below cost price) on petroleum products would plummet by over 60 per cent to ` 500-550 billion in 2015-16 from ` 1,400 billion in 2013-14.
GSPC had requested this Ministry to nominate Gujarat Narmada Valley Fertilizers & Chemicals Ltd (GNFC) for supply of DDW field gas at price and delivery terms actually negotiated between GSPC and GNFC based on arm’s length principles. GSPC has also informed that GNFC agreed to purchase gas produced from DDW field at USD 8.5/MMBTU. In this regard, on 14th November, 2014, this Ministry has decided that the matter of pricing of DDW gas would be as per the New Domestic Natural Gas Pricing Guidelines, 2014 notified on 25th October, 2014. PPAC has notified the gas price of US $5.05(GCV) based on above mentioned guidelines to be applicable from 1st November, 2014. For development of discoveries made in Ultra Deepwater & Deepwater Areas, (well head shut-in pressure > 690 bars, bottom hole temperature > 150 degree centigrade), it has been decided to give a premium for all such discoveries after the issuance of these guidelines, on the price determined as per the abovementioned
OVL Eyes Stake in Israel’s Leviathan Gas Project Mumbai: ONGC Videsh (OVL) is eyeing to mark a entry in Western Asian nation oil & gas industry by strike a deal in Israel’s prolific Leviathan gas project. The state-run oil firm sought guidance from the petroleum ministry to pursue exploration and production (E&P) investments in Israel. Leviathan, discovered in 2010 off Israel’s Mediterranean coast, is poised to be the world’s largest gas find in recent times and production is slated to commence in 2017. In July, according to reports by consultant Netherland Sewall & Associates (NSAI), the reserve estimate was revised to 21.93 trillion cubic feet from 18.91 tcf earlier.
The sharp drop in petroleum product under-recoveries will significantly reduce the government’s contribution to ` 250-275 billion in 2015-16 from Rs 707 billion in 2013-14. Upstream oil companies will also benefit as their share of under-recovery burden (PSU upstream companies sell crude produced from their fields at discounted prices to OMCs) will reduce to ` 250-275 billion in 2015- 16 from ` 670 billion in 2013-14
Revenue-share Model to Debut with Marginal Fields New Delhi: The ministry of petroleum and natural gas (MoPNG) is likely to usher in the much-anticipated revenue-share model for the nearly 60 small and marginal fields surrendered by PSUs ONGC and Oil India and are being auctioned. The ministry is currently preparing the policy guidelines for the auction, and if the Cabinet Committee on Economic Affairs (CCEA) approves the proposals, it would mark the launch of the new bidding mechanism for hydrocarbon explorers, as recommended by the C Rangarajan Committee. The move comes at a time when it is widely believed that auction of hydrocarbon acreages under the next (10th) round of the New Exploration and Licensing Policy (NELP) regime will be based on the revenue-share model. The MoPNG also intends to offer an attractive fiscal regime for those who bid for the marginal fields. This is in keeping with the government’s strategy of plucking the low-hanging fruit first when it comes to augmenting the country’s oil and gas output.
India Refiners Surge amid Oil Bust New Delhi: Oil’s slump has almost doubled the value of India’s big, state-owned refiners, outpacing the rest of the industry from China to the US. The companies had been forced to make a large proportion of sales at below cost for over a decade. Now, they can profit from fuels after India’s new government saw its opportunity in falling oil prices to deregulate the market without bothering its inflation targets. OPEC’s decision to sit on its hands in the face of an oil glut has only accelerated share gains. India’s big three state refiners - IOCL, BPCL and HPCL - are up 53 per cent, 84 per cent and 131 per cent respectively over the year to Dec. Hindustan Petroleum is the best performing oil stock in the world, outpaced Asia’s biggest refiner - China Petroleum & Chemical Corp, and even the largest US processor - Phillips 66. Whether India’s refiners can maintain their tear will depend on the constancy of politicians and markets. In the meantime, there’s a new-found freedom to make money.
Videocon-BPCL Discover Oil in Brazil Mumbai: A consortium of Videocon Industries, Bharat Petroleum Corporation Ltd (BPCL) and Brazilian state-owned company Petroleo Brasileiro SA (Petrobras) has announced ‘significant’ discovery of oil, off the coast of Brazil. “The well 3-SES-186 was drilled 103 km from the city of Aracaju, Brazil, and 10 km from the discovery well in 2,467 meter of water. The well will be drilled to 6,060 meters. This accumulation is part of the exploratory project in the deepwater Sergipe-Alagoas basin,” Videocon said. Petrobras operates the consortium with 60 per cent interest in partnership with IBV-Brazil (an equal joint venture of Videocon Industries and BPCL), which holds the remaining 40 per cent. “The result obtained in this well confirms the extension of the light oil reservoirs previously discovered by the ‘Farfan’ discovery well.
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india news M Ravindran takes over as Chairman of Indraprastha ONGC, OIL Ink Pact for Crude Oil Transport to Northeast Gas Ltd Mumbai: M Ravindran, Director (Human Resources) of state-owned gas utility GAIL (India) Ltd, has taken over as the Chairman of Indraprastha Gas Ltd, the firm that sells CNG in the National Capital. He replaces K K Gupta, Director (Marketing), Bharat Petroleum Corporation Ltd (BPCL), who has relinquished the charge upon completion of his two-year tenure, M Ravindran, Chairman, IGL said in a statement here. IGL is a joint venture Indraprastha Gas Ltd of GAIL, BPCL and government of Delhi. The post of chairman is rotated among GAIL and BPCL every two years. The firm is the sole supplier of Compressed Natural Gas (CNG) and Piped Natural Gas (PNG) in the National Capital Territory of Delhi, Noida, Greater Noida and Ghaziabad. It has around 9500 km of pipeline network and meets fuel requirements of over 0.77 million vehicles running on CNG in NCR.
Shell Gears up for Bigger Market Share Mumbai: The market for lubricants in India is set to get exciting as Shell, one of the largest private players in the industry, is set to embark on a major branding exercise. Among one of its new marketing initiatives is an industry first: The first engine warranty by a lubricant maker. India is the third largest market for lubricants in the world after the US and China. And the growth prospects here have made major lubricant makers sit up and take notice. “We are not just focused on earning a higher volume share but we are aiming for higher brand awareness and equity,” says Mansi Madan Tripathy, CMO with Shell Lubricants India. Rival brands such as, Castrol has managed to push ahead of Shell in certain categories like two wheelers. Tripathy wants to make up for the lost ground, fast. Shell has tied up with around 55,000 mechanics across the country for its loyalty programme in addition to working on increasing its distribution points. “Product availability is a big driver in the purchase decision of heavy duty engine oil segment (truckers),” says Tripathy.
Elango Joins HOEC as MD Mumbai: Former Cairn India CEO P Elango has joined smaller oil exploration firm Hindustan Oil Exploration Company Limited (HOEC) as Managing Director. Elango quit Cairn in May last year.
P Elango, Managing Director, HOEC
He was named CEO of the company in August 2012 when Cairn India’s first chief executive officer Rahul Dhir resigned.
“These are challenging times for both the oil and gas industry and the company itself. My long term vision is to build a world class, independent oil and gas company strongly rooted in india, providing a robust platform to talented professionals to add value and make a difference,” said Elango. www.oswindia.com
Mumbai: State explorers Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL) have signed an agreement for transportation of crude oil in North Eastern states. The two firms have signed the Crude Oil Transportation Agreement (COTA), OIL said in a statement here. The agreement formalised the long standing arrangement between these two companies to transport ONGC crude to the refineries in the North East through OIL’s pipeline facility. The pact was signed by OIL Director (Operations) S Rath and ONGC Director (Offshore) T K Sengupta on January 28, it added.
Oil Ministry Seeks More Share in Extended Production Contract New Delhi: The oil ministry proposes to raise the government’s share by 5 per cent and insist on explorers accepting Delhi as the seat of any future arbitration, irrespective of any other provision in the agreement, for granting extension to production sharing contracts for small and marginal fields. Government sources said the extension policy being worked out in the ministry does not envisage any concession on royalty and cess to explorers but lays down time limits for the ministry and its technical arm, Directorate General of Hydrocarbons, to process and decide applications for extensions.
Cairn India to Invest in KG Basin Mumbai: Cairn India may spend Rs 130 billion in developing an oil and gas block in Krishna-Godavari Basin over a period of time even as it geared up to undertake drilling of 64 exploratory and appraisal wells in that block. The oil and gas major has sought permission to prepare Terms of Reference for undertaking drilling of the wells in the block- KG-OSN-2009/3 in the Bay of Bengal, according to minutes of meeting of Expert Appraisal Committee under the Ministry of Environment. Cairn India had earlier said it declared force majeure of two of its oil and gas blocks including KG-OSN-2009/3 due to the objections raised by the Ministry of Defence for taking up exploratory works.
Petronet Shortlisted for Bangladesh LNG terminal New Delhi: Petronet LNG Ltd, India’s biggest importer of liquefied natural gas (LNG), is among five global energy firms that have been shortlisted for setting up an LNG import terminal in Bangladesh. Bangladesh is looking at setting up a 3.5 million tons a year LNG import facility at Matar Bari in Moheshkhali Island of Cox’s Bazar district or Anwara, Chittagong. The terminal, which is to be set up on the build-own-operate basis, will supply gas to power plants. Of these, five -- Petronet LNG, Anglo-Dutch super-major Shell, China’s Huanqiu Contracting & Engineering, Tractebel Engineering of Belgium and Japan’s Mitsui have been shortlisted, industry sources said.
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international news West Warns Libya Risks Bankruptcy
Offshore Drilling Rig Count Declines
UK: The United States and five of its European allies have warned that Libya could face bankruptcy if its oil output and prices on international markets continue to fall.
USA: The international offshore rig count for January 2015 was 314, down 24 from the 338 counted in December 2014, and up 12 from the 302 counted in January 2014, reports Baker Hughes.
In a statement voicing alarm at the deteriorating security situation in the conflict-wracked North African state, the allies also warned that Libya was on the brink of economic implosion because of a collapse in its production and the sliding value of crude.
The worldwide count for both offshore and onshore rigs for the period declined from 3,570 to 3,309. The largest drop, 199 rigs, came in the United States.
“We remain deeply concerned about the economic impact of the political and security crisis on Libya’s future prosperity,” the joint statement read. “In light of low oil production and prices, Libya faces a budget deficit that has the potential to consume all of its financial assets if the situation does not stabilise,” it says. The joint statement was issued by Britain, France, Germany, Italy, Spain and the United States.
In Oil Price War, Gulf Producers Grab Market Share in Asia UAE: Saudi Arabia’s move to slash the price it charges in Asia to the lowest in more than a decade is the latest aggressive action by Gulf States to defend market share in the world’s top oil consuming region. A price war between producers has raged since Saudi Arabia and its Gulf allies at the Organisation of Petroleum Exporting Countries (Opec) last November chose to keep their taps open in a bid for market share over price, sending oil prices down more than a third to under USD 50 a barrel in just two months. Since then, Gulf producers — including Saudi Arabia and the UAE — have steadily increased shipments to Asia, helped by low production costs that allow aggressive discounts, at the expense of West African and Latin American supplies.
More Oil Resource at Krafla Offshore Norway Norway: Statoil has completed a two-well appraisal program in the Krafla area of the Norwegian North Sea. The semisubmersible Transocean Leader drilled well 30/11-10 A, the ninth in production license 035, in 105 m (344 ft) of water. This was designed to appraise Statoil’s 2011 30/11-8 S discovery, 25 km (15.5 mi) southwest of the Oseberg Sør platform. According to the Norwegian Petroleum Directorate, the aims included delineation of the discovery and reducing the range of uncertainty of recoverable resources in Mid-Jurassic reservoir rocks (the Tarbert formation). The well encountered an oil column totaling around 260 m (853 ft) in the Tarbert formation, divided between the upper and middle Tarbert, with good-quality reservoir rocks.
Heavy Oil Found at Basilisco in Campos Basin Brazil: Petrobras has discovered heavy-oil accumulations in the BM-C-35 concession in the postsalt Campos basin. Well 1-BRSA-1289-RJS was drilled on the Basilisco structure in 2,214 m (7,264 ft) of water, 143 km (89 mi) from Armação dos Búzios on the Rio de Janeiro state coast. The well encountered oil at reservoir depths of 3,190 and 3,521 m (10,466 and 11,552 ft). Petrobras and partner BP will take action to assess the extension of the discoveries, and the concession’s exploratory potential.
Nasr Oil Field Sees First Production UAE: Japan Oil Development Co Ltd (JODCO) has started oil production from the Nasr oil field offshore Abu Dhabi, the United Arab Emirates. In the first development phase, the INPEX subsidiary is producing through the existing facilities of the Abu Al Bukoosh (ABK) and Umm Shaif oil fields, located adjacent to Nasr. Full field development of Nasr is in progress, and after completion, the field is expected to produce oil at a peak rate of 65,000 b/d. The oil produced from Nasr in the first development phase is transported via an existing subsea pipeline to Das Island. Nasr is approximately 130 km (81 mi) northwest of Abu Dhabi City. INPEX has jointly developed the Nasr oil field with Abu Dhabi National Oil Co., BP, and TOTAL.
First Oil from Brynhild Field UK: Lundin Petroleum AB, an independent international petroleum company formed in 2001 and based in Sweden, has reported the discovery of first oil from the Brynhild field. The field, located on PL148 in the Norwegian sector of the North Sea, is a subseatieback to the Pierce field, operated by Enterprise Oil Ltd (a subsidiary of Shell UK Ltd), in the UK sector. The Brynhild field is estimated to contain gross reserves of 23.1 MMboe, and production is in excess of the forecast gross plateau rate of 12,000 bopd. Drilling of the third development well is ongoing, and the fourth and final development well will be completed in 2015.
Offshore World | 37 | February - March 2015
www.oswindia.com
international news UH to Lead Offshore Energy Research Center
FMC Nets Deepwater Angola Production Order
USA: The University of Houston will lead a national research center for subsea engineering and other offshore energy development issues, including research and technology to improve the sustainable and safe development of oil and gas resources in the Gulf of Mexico.
Angola: Eni Angola has commissioned FMC Technologies to supply subsea production systems for the deepwater block 15/06 East Hub development. Value of the order is $393 million.
The work is intended to reduce the risk of offshore accidents, oil spills, and other deepwater disasters. The Subsea Systems Institute, announced by the Texas Commission on Environmental Quality, will be funded by the RESTORE Act (Resources and Ecosystems Sustainability, Tourist Opportunities and Revived Economies of the Gulf Coast States), resulting from the 2010 Deepwater Horizon oil spill. Outgoing Texas Gov. Rick Perry said that $4 million in funds given to Texas by BP after the 2010 oil spill will be distributed to fund the center launched by the university, as well as a second center to be led by Texas A&M University-Corpus Christi. The Institute will be led by UH, working in collaboration with Rice University, the Johnson Space Center, Texas Southern University, Houston Community College, and Lone Star College.
Eni operates the block in partnership with Sonangol Pesquisa e Produção, SSI Fifteen, and Falcon Oil Holding Angola.
Ennsub Unveils New Deepwater Deployment Systems UK: Ennsub has completed the design and manufacture of two workclass ROV deployment systems, which have been designed and manufactured for ROVOP and are due to be installed into a new build, Tier 1 pipelay vessel early in 2015. Ennsub’s DEEP 4000 system includes a unique cable handling solution designed to maximize umbilical lifespan, particularly in ultra-deepwater and other highfatigue applications such as active heave compensation. The system also has a high-speed electric winch with full active-heave compensation, semi-dipping extendable A-frame, and a transfer skidding system for large tool packages. A new control system and human machine interface (HMI) provide clients with a fully integrated and centralized operating station.
Lucius enters production in the ultra-deepwater GoM Dolphin Gets 3D Project Offshore Africa Mexico: Petrobras has started production at the Lucius field in the ultradeepwater Gulf of Mexico. The field, which includes portions of the Keathley Canyon blocks 874, 875, 918, and 919, is around 236 mi (380 km) southwest of Port Fourchon, Louisiana, in water depths of 7,086 ft (2,160 m). Lucius was developed with six subsea wells tied back to a truss spar floating production unit (FPU), a cylindrical-shaped vertical platform connected to the shore via dedicated oil and gas pipelines. The FPU has the capacity to process up to 80,000 b/d and 450 MMcf/d (12.7 MMcm/d) of natural gas.
Africa: : Dolphin Group ASA has won a 3D seismic contract including fasttrack data processing by an undisclosed major oil company for a project offshore Africa. A Dolphin high-capacity 3D vessel will commence operation on the three- to four-month project during 2Q 2015.
TGS begins Australasia frontier seismic surveys
The operator is Anadarko Petroleum Corp Petrobras is one of seven partners in Lucius, with 11.5 per cent interest.
New Zealand: TGS has started a 17,500-km (10,874-mi) 2D seismic survey offshore northeast New Zealand, which it expects to completed during early 2Q. Additionally, the contractor has begun acquiring the second phase of its Nerites survey in the Great Australian Bight off South Australia. This 13,000-sq km (5,019-sq mi) survey should also be complete during 2Q. Last year’s highlights for TGS included completion of 5,400 km (3,355 mi) of a multi-year 2D program offshore northeast Greenland, 10% more than planned for the season.
2D Seismic Survey Starts in Offshore Brazil
Plan for Seismic Survey in offshore Western Australia
Brazil: Spectrum is performing a 12,000-km (7,456-mi) multi-client 2D seismic survey in the Pelotas basin offshore Brazil. The new acquisition program will infill both of Spectrum’s 7,500-km (4,660-mi) survey acquired in 2013 and 12,000 km of data reprocessed in 2014, covering open acreage in the Pelotas basin and providing more than 31,000 km (19,263 mi) of new data over the area that may be included in the next licensing round, expected in late 2015.
New Zealand: Searcher Seismic and project partner BGP have announced a 2015 GroupSeis campaign over the North West Shelf offshore Western Australia. The 2015 GroupSeis campaign currently includes the acquisition of three individual broadband seismic surveys with further additions being negotiated for the final 2015 time slots.
The data is being collected by the vessel BGP Challenger and will be processed in the company’s processing center in Houston. PreSTM and PreSDM data will be available in early 3Q 2015, says Spectrum. www.oswindia.com
The current surveys include the 437-sq km (169-sq mi) Quoll 3D seismic survey in the Bonaparte basin, the 500-km (311-mi) Dunnart 2D seismic survey (which includes coverage of the Jansz gas discovery), and the 146-sq km (56-sq mi) Numbat 3D seismic survey, both in the Carnarvon basin.
Offshore World | 38 | February - March 2015
products
FIXED GAS DETECTORS
OPEN PATH GAS DETECTORS
Designed to provide thorough, continuous monitoring of many hazardous gases, the indoor/outdoor Ultima X Series gas monitors offer excellent performance and MSA quality craftsmanship. Dura Source Technology offers extended sensor life, while HART provides convenient setup, calibration and diagnostics. HART also allows for existing component install and wiring to be used. A single circuit board increases reliability, while their patented sensor disconnect-under power feature allows all sensors to be replaced in hazardous areas without area declassification. The units are crafted from either stainless steel or polycarbonate, and the interchangeable smart sensors eliminate the need for reconfiguration. Their scrolling LCD screen display sensor reading and gas type, while the calibration process includes date stamping. For details contact: Multitech Enviro Analytical Pvt Ltd 206 Poooja House, Commercial Complex, Karampura New Delhi 110 015 Tel: 011-42461403
Using superior Xenon Flash technology the SafEye range is immune to false alarms caused by partial blockage and extreme weather conditions (fog, rain or snow) and direct or reflected sunlight, flame or other black body radiation sources. SafEye 700 Series includes heated optics to withstand severe environmental conditions such as icing, snow and condensation, and has a data port to allow easy access for maintenance or configuration changes. Fully functional with up to 90% of signal obscuration, eg, in heavy fog, its special optics design has a misalignment tolerance of ¹1° in all directions. SafEye 200 Series offers an economical solution for those wishing to incorporate open-path technology into their safety system. Proven on hundreds of installations, it offers an economical solution for those wishing to incorporate open-path technology into their safety system. High immunity to false alarms and rugged design means high availability and reliability.
MULTI GAS DETECTORS JVasthi Engineers Pvt Ltd offers wide range of multi gas detectors. It is specially designed to analyze any gas of your choice, its automatic operation, accurate measurement and crystal clear digital display makes this design more users friendly. Moreover, it acts effectively in on site instant analysis. Its portability makes it more comfortable for user it was designed in such a way it provides all immediate necessary data that is required to analyze any type of gas in no time, its computer interface stores key data that can be analyzed in the laboratory. The gas detectors can be used to detect combustible, flammable and toxic gases as well as oxygen depletion. This type of device is used widely in industry and can be found in a variety of locations such as on oil rigs to monitor manufacture processes and emerging technologies such as photovoltaic. For details contact: Vasthi Engineers Pvt Ltd Opp: Qutub Shahi Masjid, Sensation Theater Road, Khairatabad, Hyderabad, Telangana 500 004 Tel: 0863-2238667, (40)-23242024 Fax: 91-0863-2238667
Crowcon offers open-path infrared (IR) gas detection systems based on well-proven technology for fast detection of combustible gases and vapours over a lineof-sight up to 140 m (460 ft) long.
Duct Mounted SafEye flammable gas detectors specially designed duct open path detectors designed and widely used to monitor ingress of hazardous flammable gas concentrations into air intakes of turbine engines and HVAC air ducts. For details contact: Core Safety Group A-303 Raj Cresent, Royal Complex, Borivali (W) Mumbai 400 091 Tel: 022-28919541 Fax: 91-022-23473340
PORTABLE SINGLE GAS DETECTORS The offered portable single gas detectors is known to be highly sought for in the market. It is also known as Gasman. Making of this product is done as per the set industry norms, for reasons of quality maintenance. In addition, the quality raw materials and modern machines applied in its making, give the product an impeccable performance, strength and functional life. For details contact: Crowcon Detection Instruments Limited ( A Division of Halma India Pvt Ltd) B-1 Boomerang, Chandivali, Andheri (E), Mumbai 400 072 Tel: 022-67080400 Fax: 91-022-67080405
Offshore World | 39 | February - March 2015
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products
OIL PURIFIER
ORIFICE GAS FLOW METERS
The Pall HLP6 oil purifier combines the excellent efficiency of mass transfer purifiers with an exceptional level of reliability and ease of use. Water contamination in oil systems is responsible for major maintenance and operational problems of critical components in lubrication and hydraulic circuits. From power generation turbines to paper machines, these problems include increased corrosion in the system, especially at bearing locations; increased oil oxidation and acid build-up; and sluggish response of control systems. For details contact: Pall India Pvt Ltd 6th Flr, Sumer Plaza, CTS-419, Marol Maroshi Road, Andheri (E) Mumbai 400 059 Fax: 91-022-67995556
Cosmic Technologies offers for low flow applications from low cost volumetric measurement to specialized applications requiring on-line density correction complete integrated ready to use orifice flow measurement systems. The orifice is designed for customer specific application and integrated with the best of components from their manufacturing range to provide you with the most accurate and predictable flow measurement solution. The orifice design as well as their flow computers follow international standards as ISO 5167 to ensure that the flow computation is accurate. Their gas flow computer GFC-147 is a unique instrument designed specifically for orifice applications which computes not only the flow using ISO 5167 standards, but also the gas density using complex equations. It uses the internal database of physical and chemical properties of gas flowing to compute the flowing density of gas to ensure that the mass flow computed and totalised is very accurate.
GAS DETECTORS Idea Marketing offers gas detection equipment for the protection of personnel and facilities around the world. Idea Marketing supply all kind of gas detectors for any leakage of dangerous gases. For details contact: Idea Marketing 109 Netaji Subash Road, 2nd Flr, Room No: 37, Kolkata 700 001 Tel: 033-39855080
For details contact: Cosmic Technologies Plot No: 87, IndlArea, Phase 9 Mohali, Punjab 160 062 Tel: 0172-5096230 E-mail: vikram@cosmictechNo:com / info@cosmictechNo:com
APQ LPG GAS PRESSURE REGULATO APQ LPG gas pressure regulator R120ES is suitable for direct use on LPG lines.
LPG GAS SENSOR, TRANSMITTER, DETECTOR Gas Alarm India offer LPG sensor transmitter/detector/ analyzer from MSR Electronic, Germany, finds application in gas bank, LPG bottling plant, LPG booster station, LPG store, pharmaceutical, cylinder store, gems processing, heat processing, furnace, engine room, testing rooms, automobile, defence, warship, anniling plant, chemical plants, oil and gas, fire safety, kitchen, refinery, food processing, cement, bearing, machine industry, swimming pool, combustion area, bakery, commerical, hotels, mines, confined space, LPG pipeline, etc For details contact: Intelligent Gas Alarm India Pvt Ltd 350, Ramgali-8, Kusum Vihar, Jagatpura Jaipur, Rajasthan 302 017 Tel: 0141-2753769 Fax: 91-0141-2753769 www.oswindia.com
It can be ordered/fitted with an internal overpressure shut-off device to prevent accidental overpressures downstream of the regulator. It is available for inlet pressures up to 8 bar and outlet pressures from 150 to 500 mbar. Popular Models include: APQ Gas Pressure Regulator R 120 ES; APQ Gas Pressure Regulator RC 2500 Series; and APQ Gas Pressure Regulator SUTON Series. For details contact: Minicon Thermal Systems Gala No: U-50, Nr Paliwal Doodh Jai Matadi Compound, Opp: Rajlakshmi Complex Thane-Bhiwandi Road, Kalher, Bhiwandi, Maharashtra 421 302 Tel: 02522-662064
Offshore World | 40 | February - March 2015
products
LPG FILLING MACHINE
LPG GAS FILTER
The automatic electronic LPG filling machine is compact and highly efficient machine. This multi-function multi-featured machine meets the custom requirements of filling for LPG bottles. The electronic filling machine makes use of strain gauge-based load cell. The tare weight of the empty LPG cylinder is entered by means of a keyboard integrated with the enclosure. Digital indicators provided with 3 display windows and an integrated keyboard enclosed in an enclosure.This machine has a flexibility of filling 5 to 50 Kg net weight cylinders. The filling machines are equipped with roller table or lifting table for mounting of cylinders thereby allowing it to install online or offline the chain conveyor. For details contact: PAM Systems Pvt Ltd 350, SICOF, Plot No: 69, MIDC. Area, Satpur Nashik, Maharashtra 422 007 Tel: 0253-6513114, 6603285 Fax: 91-0253-2350266
PROPELLENT FILLING MACHINE Twin Tech India Pvt Ltd offers semi-automatic propellent (gas) filling machines in standard as well as custom specifications as per the customers’ requirement. The entire system of the semi-automatic propellent (gas) filling machines consists of booster pump and pneumatic controls. These table-mounted as well as twin-controlled, provide partial filling arrangement or fast filling. Completely safe even for LPG, these are accessible at best industry prices. These are semi-automatic propellant (gas) filling machine and are suitable for liquid gases like FREON, HYLON, DME, LPG, etc. For details contact: Twin Tech India Pvt Ltd H-75-A, Sector-12, Pratap Vihar, Nr Santosh Medical College Ghaziabad, Uttar Pradesh 201 009 Tel: 0120-2840276, 2841949, 6545141 Fax: 91-0120-2840723 E-mail: sales@twinindia.com / info@twinindia.com
GAS DETECTORS Tstar Aerosol offers LPG filling machine which is used to filling the LPG gas for house hold, commercial purposes and vehicles usage. It is round in shape and designed very neatly to be used by any one. For details contact: Tstar Aerosol Unit No: 19, Raj Prabha Param Estate, No: 1, Naikpada Valiv Vasai (E), Mumbai 401 208 Tel: 0250-3217557
Energy Combustion offers precision-engineered LPG gas filter, which is designed as per the flow requirement, line size, working pressure, working temperature and level of filtration rating. The offered gas filters are made using SS 316, SS 304, carbon steel or aluminium and modern machinery on the basis of their filter housing at vendors’ end. Further, for replacement of existing vessels and new design vessels, Energy Combustion provide filter elements that are made using varieties of selective fibre media to ensure the desired filtration level. Energy Combustion made these as per the requirements of processes to offer high filtration area, lower pressure drop and extended service life of filter element. Filter housings for these filters are available in standard design codes like ASME SEC VIII DIV. For details contact: Energy Combustion 6 Prarthana Estate, Nr Shakriba Party Plot Revabhai Estate, CTM Char Rasta, Amraiwadi Ahmedabad, Gujarat 380 026 E-mail: info@energyindustrialburners.com / energycombustion@gmail.com / sales@energyindustrialburners.com
LPG DENSITY METERS DLG-400 is completely new concept of the combined density and level detection system. Two different probes has been mounted together to provide highly accurate density, level and temperature measurements in seconds. Simple installation requires only one mounting flange for both level and density probes. No separate cabling required. Use the proven vibrating element technique which is widely accepted as the most accurate method of continuous online density measurement, Lemis India Pvt Ltd offers unique proprietary design of resonant tube sensor allowing accurate measurement of liquid density and magnetostrictive probe for level. An integral high accuracy Pt100 probe continuously monitors liquid temperature allowing temperature compensation and future calculation of reference density. The technology proves high accuracy of measurement and long term calibration stability even in sever operation conditions. Equipped with alarm option to prevent high water level in the tank. DLG-400 is complete fuel management system, which designed to offer the ability to measure simultaneously and continuously both critical variables of the process liquid in one device saving installation and maintenance cost. For details contact: Lemis India Pvt Ltd 504 Bhumiraj Costarica, 5th Flr, Plot 1 & 2, Sector 18, Sanpada Navi Mumbai 400 705 Tel: 022-67215655 Fax: 91-022-67942666
Offshore World | 41 | February - March 2015
www.oswindia.com
products
LPG DETECTORS
GAS LEAK DETECTOR
ETC Sales offers LPG detectors. These contains audio-visual alarm that helps in alerting from the dangerous situation of gas leakage for LPG, natural gas application and other gases on demand. These are equipped with three alarm relay output that are largely employed for industrial application. This product can guarantee an effective detection in areas where specified protection certification is required.
JL-303 halogen leak detector has powerful function and high sensitivity, and is stable and easy to operate.Detects all kinds of halogenated refrigerants; single colour LED display with 6-level leak alarm; tricolor display of battery voltage; reset key that can provide convenient and fast resetting function; real time sensitivity adjustment; adopts quality sensors that can detect slightly leaked halogen gases; and 14 inches flexible SS probe.
For details contact: ETC Sales 3-236-1 Jaya Nivas, Kallajari Road Post Bajpe, Mangalore, Karnataka 574 142
JL303 halogen leak detector can also be used in other systems and storage/ recovery containers. The unit responds to all halogenated (with chlorine and fluorine included) refrigerants. This includes, but is not limited to CFCs. Detects ethylene oxide gas leaks in hospital sterilizing equipment (it will detect the halogenated carrier gas); SF-6 in high voltage circuit breakers; most gases that contain chlorine, fluorine and bromine (halogen gases); cleaning agents used in dry cleaning applications such as perchloroethyl; and halogen gases in fireextinguishing system.
FLAMMABLE GAS DETECTOR WITH DISPLAY Flamgard Plus is a Flameproof (Ex d) flammable gas detector, which uses poison-resistant pellistors to detect explosive levels of hydrocarbons, hydrogen and other flammable gases and vapours, including aviation fuel and leaded petrol vapours. Calibration can be performed locally without the need for hot work permits. Local display and magnetic key enable calibration without opening the junction box. A 4-20 mA signal is provided and optional alarm and fault relays are available to drive local alarm devices. If required the sensor can be mounted remotely from the display/transmitter enclosure. Constructed using highly durable marinegrade alloy with a tough polyester coating. Ingress protection to IP65 as standard. Uses long-life poison resistant pellistors. For details contact: Super Safety Services 5, Gr Flr, Indu Chambers, 349/353, Samuel Street, Masjid (W) Mumbai 400 003 Tel: 022-23473300, 23473311 Fax: 91-022-23471133
GAS DETECTOR Maxima Automation Solutions Pvt Ltd offers gas detector in compliance with industry set parameters, using quality tested raw materials and innovative technology.
For details contact: Maxima Automation Solutions Pvt Ltd 2/87 Raghava Nagar, 7th Street, Movvarasanpet, Madipakkam Chennai 600 091 Tel: 044-45565025 Fax: 91-044-45565026 www.oswindia.com
For details contact: Instruments & Machinery Sales Corpn 58/1, Goa Mansion, 2nd Flr, Goa Street, Fort Mumbai 400 001 Tel: 022-22691733, 22678864 Fax: 91-022-22678864
OIL PURIFICATION & CLARIFICATION SYSTEM HMT Ltd offers compact oil purification and clarification system. Its application find its best use in curbing expenditure of oil to its fullest advantage by recycling and reusing the spent oil through this recovery system. The oil purification and clarification system OPCS-01, capacity : 1000 LPH is well suited for purification and separation of water from mineral oil, as well as for separation of liquid mixtures, or for the purification of fluid from solid constituents(dirt, dust etc). Process of Purification is separation of the two liquid phases from the solid content/impurities and separating the two liquid phases from each other too. The high efficiency of separation of the two liquid phases is achieved by choosing the suitable regulating disc. Process of Clarification is separation of the solid content/impurities from the liquid phase. The high efficiency of the clarification is achieved by minor manual adjustment in the purification bowl. HMT’s unique bowl design makes it possible to use the separator both as purifier and as clarifier with minor adjustments only. For details contact: HMT Ltd H-2, MIDC, Chikalthana Indl Area, Aurangabad, Maharashtra 431 006 Tel: 0240-2485008, 2485596 Fax: 91-0240-2485007
Offshore World | 42 | February - March 2015
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project update
Media Barter with gulfoilandgas.com
Projects Database Petrochemical Plants and Refineries
Major Projects in the Middle East, Africa and Caspian Sea
Project
Country
Value ($)
Status
Bahrain Aromatics Plant
Bahrain
-
Study
Sitra Refinery Expansion Project
Bahrain
6,500,000,000
Execution
Baiji Oil Refinery
Iraq
-
Execution
Bazian Refinery Expansion Phase 3
Iraq
-
Bidding
Miran and Bina Bawi Development Project
Iraq
-
Study
Nebras Petrochemical
Iraq
11,000,000,000
Execution
Al Zour Refinery
Kuwait
14,000,000,000
Bidding
Clean Fuels Project (CFP)
Kuwait
18,000,000,000
Execution
Duqm Refinery and Petrochemical Complex
Oman
6,000,000,000
Bidding
Salalah Ammonia Plant
Oman
700,000,000
Bidding
Sohar Refinery - Flare Gas Recovery Project
Oman
-
FEED
Halul Island Master Plan
Qatar
-
Bidding
Ras Laffan Condensate Refinery - Hydrotreater Complex
Qatar
350,000,000
Execution
Ras Laffan Condensate Refinery - Phase 2
Qatar
1,200,000,000
Execution
Gasan - Calcined Petroleum Coke (CPC) Plant
Saudi Arabia
-
Execution
Jizan Export Refinery
Saudi Arabia
10,000,000,000
Execution
Jizan Export Refinery - IGCC Project
Saudi Arabia
8,500,000,000
Execution
Petro Rabigh Refining & Petrochemical Complex - Phase 2
Saudi Arabia
8,500,000,000
Execution
Chemaweyaat - Petrochemicals Complex Phase 1
UAE
10,000,000,000
Bidding
IPIC - New Fujairah Oil Refinery
UAE
3,500,000,000
Bidding
Petrixo Biofuels Refinery
UAE
1,300,000,000
Bidding
Ruwais Refinery Expansion (RRE) Africa
UAE
10,000,000,000
Execution
Africa
Country
Value ($)
Status
Hassi Messaoud Refinery I & II
Algeria
-
Completed
Tiaret Oil Refinery
Algeria
6,000,000,000
Execution
Lobito (SonaRef ) Refinery
Angola
8,000,000,000
Execution
Soyo Refinery
Angola
-
Planning
Middle East
Offshore World | 45 | February - March 2015
www.oswindia.com
project update
Cameroon Ammonia Urea Fertilizer Plant
Cameroon
1,400,000
Study
Ain Sokhna Petrochemical Complex - Ammonium Nitrate
Egypt
600,000,000
Execution
Alexandria Petrochemicals Complex - Ethylene Plant
Egypt
600,000,000
Execution
Alexandria Petrochemicals Complex - Polyethylene Plant
Egypt
-
Execution
Egypt / South Korea Petrochemical Plant
Egypt
4,800,000,000
Study
Tahrir Petrochemicals Complex
Egypt
5,000,000,000
Execution
Gabon Ammonia Urea Fertilizer Project
Gabon
1,300,000,000
Execution
Atwereboanda LPG Storage Facility
Ghana
200,000,000
Study
Equatorial Guinea Fertilizer
Guinea
-
Study
Kenya Petroleum Refineries Limited (KPRL) Mombasa Refinery
Kenya
17,000,000
Execution
Mellitah Complex
Libya
-
Execution
Mohammedia Refinery Rehabilitation & Expansion
Morocco
816,000,000
Execution
Zinder Refinery (Soraz)
Niger
980,000,000
Execution
Dangote Oil Refinery
Nigeria
-
Execution
Ibeno Petrochemical Complex
Nigeria
1,500,000,000
Execution
Coega (Mthombo) Refinery
South Africa
10,000,000,000
FEED
Mnazi Ammonia/Urea/Methanol Project
Tanzania
-
Study
Hoima Oil Refinery
Uganda
2,500,000,000
Execution
Caspian Region
Country
Value ($)
Status
Baku Heydar Aliyev (Azerneftyanajag) Refinery Upgrade
Azerbaijan
-
Execution
Oil, Gas Processing & Petrochemical Complex (OGPC) Project
Azerbaijan
15,000,000,000
Study
Sumgayit Nitrogen Fertilizer-Urea Complex
Azerbaijan
-
Execution
Abadan Second Refinery
Iran
3,500,000,000
Execution
Bandar Abbas Refinery Upgrade
Iran
300,000,000
Execution
Hormoz Extra Heavy Crude Oil Refinery (Bahman Geno)
Iran
4,000,000,000
Execution
Ham Gas Refinery
Iran
550,000,000
Completed
Lavan Refinery Upgrade
Iran
-
Execution
Marjan Methanol Plant (7th Methanol Unit)
Iran
212,000,000
Execution
Parsian Gas Refinery
Iran
400,000,000
Completed
Persian Gulf Star Gas Condensate Refinery (PGSCR)
Iran
2,600,000,000
Execution
Siraf Refining Park
Iran
-
FEED
Tabriz Refinery Expansion (Shahriar Refinery)
Iran
2,000,000,000
Execution
Atyrau Refinery Upgrade
Kazakhstan
1,040,000,000
Execution
Kazakh GTL Plant
Kazakhstan
50,000,000
Planning
Pavlodar Refinery
Kazakhstan
40,000,000
Execution
Moscow Refinery Upgrade
Russia
-
Execution
Novokuibyshevsk Refinery Upgrade
Russia
-
Execution
Omsk Refinery Upgrade
Russia
5,000,000,000
Execution
Tuapse Refinery Upgrade
Russia
2,000,000,000
Execution
Volgograd Refinery Upgrade
Russia
-
Execution
ZapSib-2 Project
Russia
9,500,000,000
Execution
www.oswindia.com
Offshore World | 46 | February - March 2015
events diary EWEA OFFSHORE 2015 Date: June 23-26, 2015 Venue: Expocentre – Moscow, Russia Event: The 13th biennial Moscow International Oil & Gas (MIOGE) Exhibition will take place on 23-26 June 2015 at the Expocentre in Moscow, Russia. The adjoining 12th Russian Petroleum and Gas Congress (RPGC) will take place on 23-25 June 2015. MIOGE is the largest and most recognized oil and gas trade event in Russia and Central Asia. For over 20 years, MIOGE has become the traditional meeting place for the world’ leading oil and gas companies to converge and build new business partnerships with local trade operators and suppliers. Rosneftegaz, LUKOIL and Gazprom, plus many others, have previously participated. Traditionally supported by the Ministry of Energy of the Russian Federation, RPGC provides a senior-level platform for in-depth discussions and analysis on Russia’s thriving oil and gas market. Over the past 12 years, RPGC has connected thousands of oil and gas professionals from more than 40 countries For details contact: S K Singh | CEO EXPO CONSULT LLP- Team MIOGE 2015 Mumbai: 6, Monalisa Apartments, 1st Road, T P S IV Bandra (W), Mumbai- 400 050 Bangalore: Old Airport Road, Bangalore-560017 Email: sksingh@expoconsult.co.in, expoconsult.india@gmail.com URL: www.mioge.com Mobile: +91-98860 50823, +91 95900 50236
ADIPEC 2015 Date: November 9-12, 2015 Venue: Abu Dhabi, UAE Event: The Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) is the world’s new meeting point for Oil & Gas professionals. The 30th Anniversary edition closed on the 13 th November 2014 having attracted 1,868 exhibitors and 76,240 attendees from 112 countries during the 4 days of the event. ADIPEC provides an unrivalled global platform for Oil & Gas professionals to do business. The world-renowned conference programme within ADIPEC further educates and provides knowledge transfer and unparalleled network working opportunities. Located in the capital city of the United Arab Emirates, Abu Dhabi acts as a natural cross-roads between the east and the west and is fast becoming one of the world’s most influential energy hubs for the 21 st century.ADIPEC is supported by industry through its unique Executive Committee that convenes to shape the conference content of the event and is supported by many of the world’s leading National Oil Companies, International Oil Companies and key service providers. For details contact: dmg events Jhoanna Kilat T: 02 6970 529 E: JhoannaKilat@dmgeventsme.com
9th Annual Gas Turbines Date: 14 - 16 April 2015 Venue: Singapore Event: The 9th Annual Gas Turbines Conference, to be held in Singapore on 14 – 17 April 2015, serves as a platform for turbine users to share best practices and meet with key Original Equipment Manufacturers (OEMs). Discover how to effectively manage cost, new retrofitting options to adopt and operate efficiently at this only commercial event in Asia! Asia’s ONLY commercial event for gas turbine users that focuses on technological innovations, operations and maintenance (O&M) best practices, and cost management strategies Dedicated technology and spare parts showcase on the latest upgrade options and technologies to enhance operational efficiency Featuring industry solutions to hot topics including Troubleshooting, Modernization Options, Risk Management Strategies, Fuel Efficiency and Asset Management Network & Partner with Oil & Gas Majors, Gas & Power Companies, OEMs, Maintenance & Repair Companies, Independent Turbine Technology Providers, Financiers and more! For details contact: Ms. Sabrina Low Conference Producer IBC Asia (S) Pte Ltd - an informa business Email: sabrina.low@ibcasia.com.sg Tel: +65 6508 2411
Oil & Gas World Expo 2016 Date: March 2016 Venue: Mumbai, India Event: Oil & Gas World Expo 2016, the 7 th International will organise by CHEMTECH Foundation, who has been a pioneer in connecting & conceiving international exhibitions & conferences since 1975. The international expo & conference is for aiming to connect, discuss and conclude views of leaders, policy makers, regulatory authorities, service providers of the Indian & Global hydrocarbon industry. Since its inception in 2004, the series of Oil & Gas World Expo has been a big affair of luminaries of global hydrocarbon industry that reflect India’s growing role in the global hydrocarbon industry. The expo will provide a platform to showcase services, technologies, innovations & current & future trends of the entire value chain of hydrocarbon industry ranging from upstream to midstream and downstream. For details contact: Jasubhai Media Pvt Ltd 3rd Floor, Taj Building, 210 D N Road, Fort Mumbai - 400001, Maharashtra, India Tel : 022-40373636 Fax : 022-40373535 Email: conferences@jasubhai.com Web: http://www.chemtech-online.com/
Offshore World | 47 | February - March 2015
www.oswindia.com
book shelf
DECOMMISSIONING THE BRENT S PA R Authors: Paula Owen, Tony Rice Paperback: 192 pages Publisher: CRC Press Book Description: Decommissioning of Brent Spar chronicles the events leading up to the recent decision to recycle the offshore installation in a Norwegian fjord; the Greenpeace campaign to stop it being dumped at sea; the repercussions of Shell’s decision to abort the decommissioning at the eleventh hour; and the dialogue processes that have occurred to attempt to resolve the issue. This book will give a balanced, impartial account of the whole situation to its present day, its key aim being to inform the reader about the facts and mechanisms of the dialogue process and the need to approach decisions in a different way. Readers will benefit from an account of the mistakes made by both sides, the input from government, the scientific community, the press and public, and can apply this knowledge to future environmental issues.
DECOMMISSIONING ACCOUNTABILITY “EXPECTATIONS GAP” Author: Labaran Lawal Paperback: 316 pages Publisher: VDM Verlag Book Description: One of the great challenges facing the international oil and gas industry in the near future is how it will cope with the financial and environmental issues associated with the decommissioning of its oil and gas infrastructures. And in these days where transparency is called for in every aspect of governments? activities relating to their management of public assets this book is perhaps timely in that it addresses the decommissioning problem from an accountability viewpoint. The book identifies and analyses different views held by the many stakeholders in the oil and gas industry of their relative rights and responsibilities to information about the decommissioning activities taking place in Nigeria. Indeed the main research result reported on in the book is the so called? accountability expectations gap? which the evidence shows to exist between these stakeholders. This analysis should help shed more light on the kind of decommissioning performance information and disclosure required to prevent more political unrest occurring due to different expectations of the key stakeholders in the industry.
OIL AND GAS DECOMMISSIONING: L A W, P O L I C Y A N D C O M P A R A T I V E PRAC TICE Author: Marc Hammerson Paperback: 391 pages Publisher: Globe Business Planning Book Description: Part I of this new practical book therefore analyses each professional area relating to decommissioning. As well as these professional disciplines and agreements, Part I contains chapters on UN law, OSPAR regulations, government policy, offshore contracting, health and safety and technical issues. These topics are further examined using a case study from a completed North Sea decommissioning project. Part II provides an international comparative analysis. It features coverage of how international laws on decommissioning are implemented in the major oil-producing jurisdictions around the world. www.oswindia.com
DECOMMISSIONING OFFSHORE S T R U C T U R E S ( E N V I R O N M E N TA L SCIENCE AND ENGINEERING / ENVIRONMENTAL ENGINEERING) Editors: DG Gorman, June Neilson Paperback: 166 pages Publisher: Springer Book Description: Increasingly over the next few decades, the oil and gas industry faces the complex task of decommissioning its offshore platforms, pipelines and sub-sea equipment as they reach the end of their operational capabilities. Decommissioning involves and integrates many distinct aspects: engineering, environmental, economic, legal, political and safety considerations. A practical strategy for removing and disposing these structures needs to be developed which best meets the demands of all of these different aspects. Specialists in these various fields have been brought together for this volume to contribute their assessments of the situation. The result is an important step toward the development of a co-ordinated approach to the subject. It is essential reading for all those who are involved with major decommissioning projects.
Offshore World | 48 | February - March 2015