Oil Review Africa 2 2014

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■ Geology - p32 ■ Gas - p34 ■ E&P - p36 ■ Technology - p44

Volume 9 Issue Two 2014

www.oilreviewafrica.com

Africa

Covering Oil, Gas and Hydrocarbon Processing

Oil Review Africa - Issue Two 2014

ROVs: a deeper market analysis Angolan legacy from Block 31 PSVM North Africa: What happens next?

Europe m10, Ghana CD18000, Kenya Ksh200, Nigeria N330, South Africa R25, UK £7, USA $12

Angola - soon to become Africa’s largest oil producer

Ramping up Côte d’Ivoire’s production The cost of corrosion offshore Multi-client FTG surveys Making data drive decisions The changing face of remote oilfield communications

www.oilreviewafrica.com

Reflex Marine’s first FROG XT4 has been supplied to Total E&P Nigeria See page 62

REGULAR FEATURES: ■ News ■ Contracts ■ Events Calendar ■ IT update ■ Company profiles ■ Products & Innovations

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■ Geology - p32 ■ Gas - p34 ■ E&P - p36 ■ Technology - p44

Contents

Volume 9 Issue Two 2014

www.oilreviewafrica.com

Africa

Covering Oil, Gas and Hydrocarbon Processing

ROVs: a deeper market analysis Angolan legacy from Block 31 PSVM North Africa: What happens next?

Columns

Europe m10, Ghana CD18000, Kenya Ksh200, Nigeria N330, South Africa R25, UK £7, USA $12

Angola - soon to become Africa’s largest oil producer

Ramping up Côte d’Ivoire’s production

Industry news and executives’ calendar

The cost of corrosion offshore

6

Multi-client FTG surveys Making data drive decisions

Analysis

The changing face of remote oilfield communications

Oil: The fundamentals change ROVs: A deeper market analysis

10 12

Country Focus

Reflex Marine’s first FROG XT4 has been supplied to Total E&P Nigeria See page 62

REGULAR FEATURES: ■ News ■ Contracts ■ Events Calendar ■ IT update ■ Company profiles ■ Products & Innovations

Angola

16

FMC Technologies employee at their recently expanded facility in Sonils.

Angola soon to become Africa’s largest oil producer.

An Angolan legacy from Block 31PSVM.

North Africa

22

North Africa’s recent upheaval may have altered the political landscape of the region forever, but its economy still hinges every bit on hydrocarbons.

Côte d’Ivoire

26

The country is ramping up its oil and gas production.

Safety and Security The cyber security threat

28

PGI has developed a strong specialist cyber secruity division.

Geology News and developments

32

A round-up of new geological activity from around the region.

Technology Maximising security and operations while minimising costs

44

Leveraging the technology’s ability to be tailored, OPT has developed a range of potential applications for the oil and gas industry with their ‘smart’ ocean-going buoys.

Corrosion management

48

Editor’s note ANGOLA MAY BECOME the largest producer in the African continent during the next few years. Sonangol is targeting a crude oil production rate of two million bpd in 2015 as new deepwater oil fields are scheduled to come online, and exploration activity in pre-salt formations is expected to ramp up this year, following the most recent auction of pre-salt blocks.

Angola is also planning to auction 10 onshore blocks believed to hold pre-salt prospects in 2014.

There are many IOCs invested in Angola that are currently or planning to undergo exploration activity in these pre-salt bearing blocks. These companies are very aware of the skills shortages in the global oil and gas industry, and are working hard to close the gap. This issue looks at cases where Subsea 7 and BP have collaborated in Angola to support and train local talent and also FMC Technologies.

Elsewhere in this issue our usual mix of industry analysis, news and technology - with articles on safety, corrosion management, multi-client FTG surveys, data processing and remote oilfield communications to mention just a few - offers something for everyone.

The cost of corrosion in the offshore industry.

A look at spray-applied epoxy coatings for erosion-corrosion protection for large offshore transfer pipes.

Multi-client FTG surveys

54

FTG data is playing a key role in African exploration by optimising the design of seismic surveys, reducing costs and providing a means of accessing high-quality data sooner.

Flow assurance

56

Why challenging subsea applications need robust and reliable products.

Enhanced oil recovery

60

How data - and the way in which it is managed - can become a competitive advantage rather than a hindrance for operators.

Sand Control

64

Options for controlling sand infiltration.

ICT The changing face of remote oilfield communications

72

The demand for more reliable and more complex communications presents a growing challenge.

44 Prepositioned AUV Operational Networks.

Managing Editor: Zsa Tebbit - Zsa.Tebbit@alaincharles.com Editorial and Design team: Bob Adams, Hiriyti Bairu, Lizzie Carroll, David Clancy, Andrew Croft, Prashanth AP, Ranganath GS, Rhonita Patnaik, Genaro Santos, Nicky Valsamakis, and Ben Watts Publisher: Nick Fordham Advertising Sales Director: Pallavi Pandey Magazine Sales Manager: Serenella Ferraro Tel:+44 2078347676, E-mail: serenella.ferraro@alaincharles.com Country China India Nigeria South Africa UAE USA

Representative Ying Mathieson Tanmay Mishra Bola Olowo Annabel Marx Camilla Capece Michael Tomashefsky

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Africa

Covering Oil, Gas and Hydrocarbon Processing

Head Office: Alain Charles Publishing Ltd University House, 11-13 Lower Grosvenor Place London SW1W 0EX, UK Telephone: +44 (0) 20 7834 7676 Fax: +44 (0) 20 7973 0076

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Production: Nathanielle Kumar, Donatella Moranelli, Nick Salt and Sophia White - E-mail: production@alaincharles.com Subscriptions: E-mail: circulation@alaincharles.com Chairman: Derek Fordham Printed by: Stephens & George Print Group ISSN: 0-9552126-1-8 © Oil Review Africa

Serving the world of business

Oil Review Africa Issue Two 2014 3

Industry News & Events

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Executives Calendar 2014 APRIL 27-29

3rd East Africa Oil & Gas Expo

NAIROBI

www.expogr.com

28-30

5th Eastern Africa Oil, Gas & Energy

NAIROBI

www.globalpacificpartners.com

1-2

7th Annual Sub-Saharan Africa Oil & Gas Conference

HOUSTON

www.energycorporateafrica.com

5-8

Offshore Technology Conference

HOUSTON

www.otcnet.org/2014

7-8

Morocco Oil & Gas Summit 2014

MARRAKECH

www.moroccosummit.com

7-9

Africa LPG Summit

ACCRA

www.cmtevents.com

8-9

3rd Annual Powering Africa Mozambique

MAPUTO

www.poweringafrica-mozambique.com

19-22

2nd Annual East African Energy Security Summit

NAIROBI

www.ea-energysecurity.com

20-21

11th Maghreb, Mediterranean, MidEast Upstream Conference 2014

NICOSIA

www.petro21.com

29-30

3rd Annual New Libya Oil & Gas Forum 2014

LONDON

www.libyaoilgas.com

2-3

11th African Independents Forum

LONDON

www.petro21.com

9

Somalia Oil & Gas

LONDON

cwc.com

10-12

East Africa Oil & Gas

LONDON

cwc.com

14-15

Angola Continuous Education & Career Development Forum

LUANDA

www.eliteic.net

24-26

3rd U&D Oil & Gas Summit

ABUJA

www.oilandgasexpos.com

2-4

Spotlight at Oil & Gas Africa Expo

CAPE TOWN

www.exhibitionsafrica.com

23-25

Tanzania Local Content Summit

DAR ES SALAAM

www.tanzanialocalcontent.com

5-7

NAICE - Society of Petroleum Engineers Nigeria Annual International Conference & Exhibition

LAGOS

www. spenigeria.spe.org/naice

18-19

West Africa Oil and Gas Security Summit

LAGOS

www.waoilgassecurity.com

18-20

Oil & Gas Summit Africa

MAPUTO

africa.oilgassummit.com

26-27

Gas Africa Conference

SANDTON

www.mcnaughtonevents.co.za

MAY

JUNE

JULY

AUGUST

Readers should verify dates and location with sponsoring organisations, as this information is sometimes subject to change.

African O&G attracts near-record foreign investment NET FOREIGN DIRECT investment (FDI) inflows to sub-Saharan Africa increased by 16 per cent to a near-record US$43bn in 2013, according to a new report from the World Bank. FDI was boosted by new oil and gas discoveries in many countries including Angola, Mozambique and Tanzania, said the bank’s latest edition of Africa’s Pulse – a twice-yearly analysis of the continent’s economic prospects.

Capital flows to sub-Saharan Africa also increased, reaching an estimated 5.3 per cent of regional gross domestic product (GDP) in 2013, which the report said was “significantly above the developing-country average of 3.9 per cent”.

Economic growth in sub-Saharan Africa is projected to rise to 5.2 per cent in 2014 from 4.7 per cent last year, which the report said was “boosted by rising investment in natural resources and infrastructure, and strong household spending”.

The World Bank’s vice-president for Africa, Makhtar Diop, said a number of African countries were now “routinely among the world’s fastest-growing countries as a result of sound macroeconomic reforms in recent years and the fact that the rest of the world has steadily updated its reality of the continent as a high opportunity region for trade, investment, business, science and technology”.

4 Oil Review Africa Issue Two 2014

In Memory of David Clancy 1956-2014 IT IS WITH great sadness that we have to report that David Clancy, editor of our sister magazine Oil Review Middle East, has died after a long battle with cancer.

David had been with the company for 25 years providing very high quality editing for Oil Review Middle East, and other magazines before that. There is no doubt that the magazine developed an excellent reputation for the quality of its content.

Throughout his long illness, David had always maintained his work output, fitting it in between his numerous sessions of unpleasant treatment. There can be few people who would show the same resolve. His expertise and guidance to others and his quiet sense of humour will be sorely missed.

He leaves behind his wife, Antonia and two daughters.

David Clancy www.oilreviewafrica.com

S02 ORA 2 2014 News B C - Analysis_Layout 1 4/17/2014 12:13 PM Page 5

Our business success is not only measured in barrels of oil and gas, but includes the socio-economic impact our activities have on people in our countries of operation. This is why we provide support for sustainable educational and health development programmes for citizens of our host communities.

At SAPETRO, we do not only explore hydrocarbons, we care for the people.

South Atlantic Petroleum NIGERIA BENIN MADAGASCAR JUAN DE NOVA CAR

Industry News & Events

S02 ORA 2 2014 News B C - Analysis_Layout 1 4/17/2014 12:13 PM Page 6

OneSubsea wins US$80mn contract in Egypt

Ghana ratifies petroleum agreement

ONESUBSEA HAS BEEN awarded a contract of more than US$80mn from Pharaonic Petroleum Company (PhPC) to supply subsea equipment for the East Nile Delta END-3 development offshore Egypt.

The scope of supply for the four well systems includes subsea production equipment, wet gas flow meters, HIPPS and installation and operational spares. This is an expansion of the Taurt development to which OneSubsea supplied equipment in 2006.

The development is located approximately 70 km offshore Egypt.

This field was the first to utilise the OneSubsea Broadband Communication System, which provides high-speed fibre-optic communication for long step outs.

OneSubsea CEO Scott Rowe said, “The Taurt development has been extremely successful and we look forward to being a part of this continuing success and furthering our relationship with PhPC.”

THE GHANA PARLIAMENT has ratified a petroleum agreement between the government of Ghana and five organisations for the exploration of oil in the Expanded Shallow Water Tano block, according to the the Ghana News Agency.

The organisations include the Ghana National Petroleum Corp. (GNPC), CAMAC Energy Ghana Ltd, Base Energy Ghana Ltd, and the GNPC Exploration and Production Co Ltd. As per the agreement, if a commercial discovery of oil is made in the Expanded Shallow Water Tano block, the GNPC, CAMAC Energy Ghana and Base Energy Ghana, who would be referred to as the contractor, would prospect for oil in the block for 25 years. If no commercial discovery of oil is made after seven years, the contract expires.

The contractor is required to reprocess existing 2D and 3D seismic data over the applied contract area and to drill one exploration well.

Operations are to begin no later than 60 days after this ratification.

Under the agreement, the contractor would relinquish 25 per cent of the original contract area at the end of the exploration period and 25 per cent of the remaining contract area after the first extension period.

Ghana is entitled to 12.5 per cent of oil and 7.5 per cent of gas as royalties. The GNPC has an initial carried interest of 10 per cent, with an additional interest of 10 per cent, and the government also has an entitlement of 35 per cent income tax.

The prospect area, bounded on the north by the Ghana coastline and on the west by the maritime border with Côte d’Ivoire, on the south by the Deepwater Tano block and on the east by the cape Three Points block, spans some 1,508 sq km.

GNPC wants to be an E&P operator SkyVision Global wins contract with SAPETRO SKYVISION GLOBAL NETWORKS Ltd, a leading global communications provider, has announced the successful implementation of its project with SAPETRO (South Atlantic Petroleum), one of Nigeria’s major oil and gas upstream companies with new operations in Benin, which includes the installation of a full suite of SkyVision connectivity solutions in Benin and the ongoing management of the project.

The five-year contract consists of an end-to-end voice- and data-managed solution, based on multiple technologies, integration and professional services, creating unique value to customer operations. The project includes mesh VSAT and wireless point to multipoint connections for Sapetro’s offices and operational sites, mobile terrestrial units and vessels, coupled with the integration of SkyVision services, including voice and telephony over IP, twoway radios, mobile satellite phones, managed firewall and WiFi.

Tower raises $32mn to buy Rift Petroleum OIL AND GAS explorer Tower Resources is raising US$32mn to expand its African drilling programme and help finance the acquisition of Africa-focused Rift Petroleum, the company has said.

Tower Resources also announced the purchase of a 15 per cent stake in Block 2B onshore Kenya from Taipan Resources for US$8mn, subject to approval of project partner Premier Oil. Tower Resources, listed on London's Alternative Investment Market (AIM), said with the successful takeover of Rift Petroleum it will be the only AIM-listed oil and gas explorer with significant exposure to licences offshore South Africa.

"The team has been searching for a good entry point to South Africa for some time, so the chance to acquire the excellent Rift Petroleum assets there and in Zambia was also too good an opportunity to pass up," said Tower Resources chairman Jeremy Asher.

6 Oil Review Africa Issue Two 2014

GHANA’S STATE HYDROCARBON company Ghana National Petroleum Corporation (GNPC) wants to be an E&P operator.

Until now it has combined the roles of state hydrocarbon company, with those of industry upstream regulator, as well as being the interface between government (Ministry of Energy) and oil companies seeking to establish a presence in the country.

In the past two years, however, the corporation’s regulatory powers have been reduced, as a new Petroleum Commission finds its feet. Now GNPC wants to concentrate on commercial issues. The corporation now wants to participate in equity investment through innovative risk sharing in alignment with the objectives of the corporation.

“Our vision incorporates a preferred alliance model (JOC/JV) with large- to medium-size independent companies”, a company spokesperson said. The corporation wants to be with partners “who will commit to developing independent operating capability of GNPC in the medium to long term and/or transfer of operatorship”.

GNPC’s ambition is to move rapidly towards full independent operatorship and commercialisation. It seeks to take on more commercial risk in selected blocks through a GNPC E&P subsidiary and building operatorship capability through Joint Operating Companies (JOCs) with world-class operators. “This strategy will increase the returns to GNPC and thus Ghana from any discoveries made, and will also place GNPC more directly in the role of operator, with a better ability to direct procurement decisions in a manner that achieves national local content aspirations.”

GNPC decided to use the Petroleum Agreement between the Government of Ghana, the Ghana National Petroleum Corporation, GNPC Exploration and Production Company Ltd and AGM Petroleum Ghana Ltd for exploration of the South Deep Water Tano block, as the first such JOC-based transaction.

GNPC has been the face of the Ghanaian government in negotiations of terms of entry for upstream companies. It had been the Ghanaian authority that outsiders saw as the state transformed into a mid-sized oil producer in the last eight years. www.oilreviewafrica.com

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Industry News & Events

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First major order from new GE-Angola JV GE OIL & GAS has announced the first major equipment delivery by its Subsea Systems business, for a major operator, under a contract established by its Angolan joint venture, GE-GLS Oil & Gas Angola Ltd. A primarily localised workforce assembled the first of 16 subsea production trees, destined for a development in the Atlantic Ocean, located in one of the first tranches of deepwater acreage offered by the Angolan government. The base scope of work includes a further 15 subsea production trees, 12 water injection trees, two water injection manifolds, four production manifolds, topside upgrades and associated equipment.

The delivery brought together a talented team from across GE O&G’s facilities in the UK, Norway, Angola and USA. The technology was designed and manufactured across various global subsea locations before being assembled locally in Angola, with the combination of proven, innovative technology — coupled with a skilled local workforce — facilitating the prompt delivery of quality products.

"This initial achievement is evidence of the successful partnership enabled by GE-GLS Oil & Gas Angola Ltd,” said Dr Eugenio Neto, president and CEO of GLS Holding, and vice-president of the JV. “We announced our intentions to further support the development of Angola’s growing oil and gas industry and, after only a year, are proving our commitment to the country’s ‘Made in Angola’ pledge. Setting up in-country has significantly improved our speed-to-market, allowing us to execute on critical project deliverables in a timely fashion.”

Due largely to its offshore energy resources, Angola has undergone rapid transformation and economic growth in recent years, experiencing increased exploration and development activity over the last decade, making it one of the largest producers of crude oil in Africa.

The JV was set up to better support the country’s rapidly growing oil and gas sector, bringing new manufacturing and industrial technologies to Angola, while creating hundreds of direct and indirect jobs. GE Oil & Gas also has invested significantly in developing local expertise and capability, with Angolan nationals trained at GE’s UK-based Centres of Excellence (CoEs) for subsea systems, controls and systems engineering.

This first subsea production tree to be delivered under the JV was assembled at GE Oil & Gas’ existing site inside the Sonils Base at the Port of Luanda.

"Localisation is about physically being where the customer is to ensure quality delivery on complex, remote projects,” said Marco Caccavale, president & CEO GE Oil & Gas for sub-Saharan Africa. "GE’s global footprint enhances delivery of services, technologies and expertise, while empowering decision-making at a local level, ultimately bringing growth opportunities to all of the stakeholders involved.”

8 Oil Review Africa Issue Two 2014

Oando sells EGHC to Seven Energy for US$250mn OIL AND GAS operator Oando has sold its gas subsidiary East Horizon Gas Company (EHGC) to Seven Energy as it seeks to grow its gas processing infrastructure.

Following an announcement of a planned US$800mn investment to fund projects across the country, Seven Energy recently revealed that an agreement was drawn for the acquisition of Oando’s EHGC assets.

The US$250mn deal is set to improve the company’s liquidity to further expand in the upstream sector, which has proved to be more profitable, Wale Tinubu, Oando's CEO stated.

“The proceeds of the sale will boost the group’s overall liquidity in furtherance of our main growth initiatives in the upstream,” Tinubu said.

The sale is also expected to support Oando’s plans to abandon non-core assets to centre its focus on expanding its upstream business, the CEO revealed.

The pan-African oil and gas company operates within both the upstream and downstream sector of Nigeria’s oil industry, covering exploration and production to refining and marketing.

Maersk’s local talent training programme MAERSK DRILLING HAS provided a report on the company's training programme in Angola to develop local talent in order to support its operations in the country.

“The local content requirement in Angola is 70 per cent local staffing, which is challenging to reach because the competency level of Angolan citizens has to match the high standards required to man Maersk Deliverer (UDW semisub),” said Vladimir Volkov, rig manager on Maersk Deliverer, who continued: “Accordingly, we have developed an Angolanisation plan, which focuses on training local talent.”

In 2013, Ana Santos was hired as a receptionist in Maersk Drilling, but after only three months she got promoted to HR assistant, aspiring to become an HR advisor.

Ana was born and raised in Luanda, and holds a degree in information technology from South Africa.

With no previous experience in HR, a training programme was created to ensure that Ana will be able to step up as an HR Advisor this year. The programme is a combination of on-the-job training, and courses both locally and globally.

Ana therefore went on a two week trip to Maersk Drilling’s headquarters in Denmark, were she got to meet the HR department, was trained in the company policies and core values and in their SAP system.

The trip was followed by a one-week course in Brazil to give Ana various tools in regards to performance coaching, employee selection, organisational culture, etc.

“Ana quickly proved her worth and was promoted to HR assistant, where she continued to work hard and evolve. Today she is first in line to take over from the expat who currently holds this position and lead the HR department for our Angolan colleagues,” said Volkov.

Maersk Deliverer.

Panda Antonio Sebastiao was the first local employee hired in Angola, and has worked as an HR assistant since 2012. Panda holds a degree in enterprise management and organisation and is particularly interested in CSR and local content. After two years as an HR assistant, Panda felt a need to develop further, for which reason he will be part of the CSR and local content team going forward.

“It is a dream of many young Angolans to work in the AP Moller-Maersk Group. The organisation has a good organisational culture, but it is important to preserve and deepen our ways to bring a different dynamic and to face new challenges in the market regarding the training and attraction of new talent,“ Panda said.

2014 is going to be a challenging, yet exciting year, where the newly established offshore trainee positions for dynamic positioning operator, drilling fluid operator, rig floor mechanics and electrician will be implemented; a total of 16 trainees.

Onshore, a new training matrix will be implemented with a main focus on company culture and values.

As Maersk Drilling expands its business into new markets in emerging economies, it has to address challenges and opportunities such as recruiting local people, sourcing options, security concerns, and sometimes corrupt business environments. With growth comes a larger responsibility. www.oilreviewafrica.com

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S02 ORA 2 2014 News B C - Analysis_Layout 1 4/17/2014 12:13 PM Page 10

Analysis

West Africa’s energy exports to North America can no longer be relied on to finance either national budgets or E&P activity; Asia is where most of the increase in demand will be coming from through 2035.

Oil:

the fundamentals change I

N 2012, THE USA’s oil imports averaged just under 10.6mn bpd, down from a recent peak of 13.6 in 2007. Within a few years the country that was, until recently, the world’s biggest importer could have ceased buying in crude altogether; by 2020 (or even earlier) it will be rivalling Saudi Arabia in the production league.

North America as a whole is expected to switch from being a net importer of energy to a net exporter within the next five years.

All due to the “shale revolution”, the most significant change to have occurred in the volatile crude business, the world’s biggest commodity marketplace, since the 1970s.

Already Africa, especially the west, is being affected by this colossal turnaround. In 2012 total US imports from this continent just passed the 1.2mn bpd mark; nearly three-quarters of those barrels came from West Africa. This hitherto very reliable trade, regarded in this way by both sides for many years, could wither away. The once highly profitable transatlantic spot business in liquefied gas for suppliers such as Egypt and Nigeria already seems to be heading the same way.

Reliable substitute markets have already been found, of course, mostly in consumption-buoyant Asia, but there are specific new circumstances in the oil trades that are making all parties concerned these days. Output is rising fast in Iraq. The warming of business relations between the West and Iran’s new administration is promising to augment supplies to a market that the Saudis are trying hard to stabilise. Oil users generally, especially industrial ones, are becoming much more energy efficient.

And the prospects of hydraulic fracturing are now being investigated in many unlikely corners of the import-dependent world; already “tight oil” is being increasingly associated with an emotive term that was once used most exclusively in connection with natural gas.

these businesses – issued the latest edition of its Energy Outlook 2035. As an IOC producer’s point of view this was much more reassuring than the regional summary we have presented above. Chief executive Bob Dudley commented on “the power of competition and market forces in unlocking technology and innovation to meet the world’s energy needs”.

Good news for Africa’s exporters

Optimism in the world’s energy future

The good news for Africa’s oil producers, both OPEC members and the growing rest, is that there are no signs of the US Administration relaxing the long-standing outright ban on mainland oil exports overall; what limited outbound gas trade as does exist is subjected to long approval delays re expansion and new sourcing. Willing US energy businesses, both refiners and exporters, are forced to rely on outbound trade in finished fuels, petrochemicals and their intermediates, and on minor commodities like bottled gas.

In January, BP – a major player in most of

“These factors make us optimistic for the world’s energy future,” he concluded. Not a lot, however, was said about Africa’s own dependence on these vital businesses, a key component of the global security he referred to. Even if it is achieved most of this continent won’t benefit much anyway.

Behind the IOC’s reassuring tone was the fact that primary energy demand certainly continues to increase around the world, but that the pace is slowing and some regions/groups of countries (such as most of the industrialised OECD ones) are not conforming to the trend.

10 Oil Review Africa Issue Two 2014

Primary energy demand certainly continues to increase around the world but the pace is slowing.

“We are leaving a phase of very high energy consumption growth,” the Outlook says, pointing out that global all-forms consumption grew by 55 per cent over the last 23 years; between 2012-35 this increase is expected to reach only 41 per cent, with most of that growth taking place outside the traditional smokestack world.

And of the major fuels, consumption growth for oil, the easily shipped commodity on which so much of Africa’s energy exports depend, is the slowest of all. “Oil’s share continues to decline” the summary says.

So what will US oil businesses do with their new global role? Whether or not they become “swing producers” (unlikely as long as the export ban continues) more investment in prospecting in Africa looks certain. This is, after all, a region where there could be more unknowns than knowns in terms of reserves, especially in the east.

And for sure the Americans will want to keep ahead of the Chinese in terms of E&P activity, even if it is nearly all in locally-owned and managed operating companies. More sales activity, including the setting up of relationships, in India and the Far East looks to be certain.

Watch for more technical progress on tight oil plays. And a deliberately lower profile for the US energy businesses generally looks likely in the post-Obama years. ■

*bp.com/energyoutlook#BPstats www.oilreviewafrica.com

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Analysis

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It’s been many years since remotely operated underwater vehicles (ROVs) were first adopted by the oil and gas industry. Given the depth and distance of many reserves, it’s no surprise that ROV use is going to increase. But by how much? That's the subject of a new DouglasWestwood forecast that Vaughan O’Grady discusses with analyst Alec Mitchell.

ROVs:

a deeper market analysis R

EMOTELY OPERATED UNDERWATER vehicles — better known as ROVs — have existed for nearly fifty years. As their name implies, they are unmanned and operated by crew on the surface of the water. The crew’s vessel is linked to the ROV by a cable or tether, often referred to as an umbilical cord, that carries signals, instructions, power or images.

Although they were first deployed and developed with naval use in mind, their potential for oil and gas soon became apparent. In fact today, at a time when gas and oil E&P is ever more focused on deep-sea exploration far from land in such diverse areas as offshore Nigeria, Australia and Brazil, the importance of ROVs in this context can only grow.

And further advances are on the way to support deeper exploration further offshore.

Drilling support accounts for three-quarters of expenditure on ROVs between 2013 and 2017, and is expected to increase over the period by 13 per cent, according to the report. Douglas Westwood’s forecast suggests almost 527,000 days of ROV drilling support in the next five years, of which the majority is going to be made up of work on exploration and appraisal (E&A) wells.

Expenditure on construction support accounts for a fifth of ROV operations, with repair and maintenance accounting for the remainder.

Oil Review Africa asked Douglas-Westwood analyst Alec Mitchell to go into more detail about the affordability of ROVs. He pointed out that while the economics of ROVs may be improving, they are not necessarily one-off purchases. He explained, “ROVs are available to rent from a number of ROV operators, such as Oceaneering and Subsea 7, who have a variety of models in their fleet for rental purposes.” America is a

strong player in this market, he notes.

“Oceaneering is the largest manufacturer of ROVs and is headquartered in North America. Schilling Robotics (FMC Technologies) and Perry Slingsby (Forum Subsea Technologies) are also large ROV manufacturers and are also based in North America.”

So you don't have to buy an ROV outright.

However, the purchase or rent decision is not necessarily one that can be deferred until oil or gas deposits are found. ROVs are usually an earlier part of the process. Mitchell explained, “ROVs are also used for drilling support operations during the E&A process as well as during the drilling of development wells. The majority of ROV drilling support demand is for support activities during the drilling of E&A wells.”

At this stage, some decades since they first appeared, some level of standardisation might be expected, which could at least help with

Specific uses The specific uses of ROVs in the oil and gas industry are for construction and drilling support activities and for the repair and maintenance of subsea infrastructure in deepwater areas where divers cannot work. To ensure that this work is carried out efficiently, ROVs use tools purposedesigned to operate under high pressures. The vehicle’s electrical components are clearly among the most sensitive areas; these are often contained within pressurised or oil-filled compartments to protect against corrosion and high pressures.

This sort of capability doesn't come cheap.

However, technological development in the ROV industry and greater production of ROVs themselves, as well as greater demand for oil and gas at prices that can support investment, all seem to have accelerated take-up of the vehicles.

But don't take our word for it. The recently published sixth edition of the World ROV Operations Market Forecast from DouglasWestwood, an independent company that carries out business research for the international energy industries, offers a forecast of the market for the operation of work-class ROVs through to 2017. It suggests a total ROV operations expenditure of US$9.7bn, an increase of nearly 80 per cent over the previous five-year period.

12 Oil Review Africa Issue Two 2014

Photo: Subsea7 Technological development in the ROV industry and greater production of ROVs themselves, as well as greater demand for oil and gas at prices that can support investment, all seem to have accelerated take-up of the vehicles.

www.oilreviewafrica.com

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Analysis

have over the tools attached to the ROV, allowing more intricate work to be performed. Mitchell referred to a technology known as ‘forced feedback’, through which, he explained, “the ROV operator is physically able to feel the robotic arm or other attachments allowing force resistance and ocean movement to be relayed back to the operator.” This, he added, is a concept exciting a great deal of interest within the oil and gas industry.

Oceaneering International’s Millenium ROV was used to cap the BP oil spill in the Gulf of Mexico.

controlling costs. So are some ROVs off-the-shelf?

Or will each differ?

“ROV manufacturers design standard ROV models,” said Mitchell. “Most manufacturers offer a number of models from ultra-heavy-duty workclass ROVs to light ROVs suitable for inspection or observation. These models can then be fitted with various bespoke tools depending on the work required from the ROV.”

Advances in ROV technology Of course, while standard ROVs are helpful, the technology doesn’t stand still. There have been a number of advances in ROV technology, some of them quite astounding. Mitchell offers a couple of examples. “One of the key advances in the last few years has been in the robotic arms of the ROV,” he said, “with many manufacturers producing ROVs capable of performing the full seven functions of the human arm, whereas they were previously limited to five.” The link with the crew has also been enhanced. “A further important advancement has been in reducing the thickness of the umbilical cords allowing for better range and operational stamina of the ROV.” And further advances are on the way to support deeper exploration further offshore, notably involving the level of control operators

Africa will remain the largest region for ROV spend.

A great deal of interest in O&G industry We mentioned offshore Africa earlier. The report notes that Africa is forecast to experience strong demand from subsea development wells, driven by the discovery of new deepwater provinces offshore East Africa, and that Africa will remain the largest region for ROV spend. It will be followed by Latin America and Asia. The Middle East has the lowest ROV spend, and along with Norway will see a decline in that spend. Latin America is set to show the strongest growth of all regions.

Much East African demand is, inevitably, related to gas development. “The large majority of offshore reserves are gas fields,” Mitchell pointed out. “Mozambique has the largest reserves and is likely to commence significant production the soonest, with much of the needed LNG infrastructure in place.”

That said, deepwater West Africa, where oil rather than just gas is found, will also have uses for ROVs. In fact, Mitchell pointed out, “Any area of deepwater activity requires the use of ROVs to perform the support activities that divers are not

capable of performing at such depths. The demand for the use of ROVs will be higher in the areas where the majority of work is subsea completed as opposed to surface completion.”

But oil and gas price falls could slow this impressive demand — in theory at least. Don't forget there was a decline in the technological development of ROVs in the 1980s, driven, in part, by oil price falls. However, the question is whether the advances made by ROVs — and the continuing drive offshore — make today’s market much less vulnerable than it once was. Mitchell is fairly optimistic. “In the event of a sustained drop in oil prices, demand for ROVs for capex-phase activity — namely exploration and drilling — may be impacted,” he agreed. However, he added, “Operational-phase activity — production — is unlikely to be impacted for any project unless the oil price falls to a level well below anything we’ve seen in the last 10-15 years. While theoretically possible, the implications would be industry-wide rather than ROV-specific, and Douglas-Westwood does not foresee a significant drop in oil price over the next five years.”

So whether you are an ROV provider, a manufacturer or a user, you can take heart from the fact that the outlook for the ROV market is very good. Or, as Mitchell said, “The core market — deep and ultra-deep waters — is growing, and ROVs are absolutely integral to development of such projects.” ■

The World ROV Operations Market Forecast 20132017 from energy business analysis company Douglas-Westwood forecasts the market for the operation of work-class ROVs through to 2017.

The report also provides a comprehensive understanding of the key trends involved in shaping the requirement for ROV operations. For more information and pricing, go to http://www.dw-1.com/shop/index.php

The hidden risks of development decisions THE COMMERCIAL LANDSCAPE for oil and gas production has never been straightforward. Early stage planning has always been of paramount importance but today it has become increasingly vital to get it right as a range of factors continually transform the risk picture.

A recently published study into project execution and budget overruns by the Norwegian Petroleum Directorate (NPD), pinpointed insufficient planning at the front-end engineering and design (FEED) stage as one of the most critical failings of projects that had seen their schedules and budgets balloon.

All projects reviewed that had huge time and cost overruns, had major shortcomings in the early design work, said NPD’s Evaluation of Implemented Projects on the Norwegian Shelf report, referring to all engineering work before delivery of the proposed development option (PDO) and before procurement and construction starts.

Flaws and faults in the early planning will propagate further in the project.

Time spent early in a project’s life is crucial to the success of completing the project within time and cost estimate and according to quality standards, the report added. Furthermore, it’s easy to under-estimate the number of preliminary decisions that have to be made during the evaluation of a project and, as a result, get lost in the ‘decision jungle’. As soon as that happens, the risk of a poor outcome obviously increases.

Effective pre-decision management is really about orchestration and leadership: knowing all the players, everything that is involved in making the best decision possible. It demands a properly structured pre-decision process,

14 Oil Review Africa Issue Two 2014

based on a lot of detailed experience. There is always a way to make good early stage decisions, no matter how small or big you are, which fully takes into account all these developing risk factors and any others that may come down the track.

Given the sums involved in many major projects and the substantial knockon costs and effects of a bad decision, an external audit can add significant risk management value for a relatively tiny cost.

The increasing complexity of exploration as frontiers are extended into ever more challenging environments and depths and a background of a chronic skills shortage and tight supply markets, are all very real factors in today’s market.

These factors are pushing for new technology not only to tackle the new scenarios but to increase efficiency, particularly in production drilling, well completion, and floating production facilities with subsea wells. The implementation of this new technology has introduced significant new uncertainties that are not adequately considered in the budgeting and execution of projects. Throw in the changing face of regulations to the equation and early stage decision making suddenly looks a lot more challenging than it was in years gone by.

This is especially true for the growing number of NOCs and small and medium enterprises entering the scene, which, unlike super majors, simply don’t have the experience or permanent in-house capabilities.

www.upstream-advisors.com www.oilreviewafrica.com

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Angola

Angola may become the largest oil producer in the African continent during the next few years, due to a recent decision by the country’s government to put on auction 10 oil sites – each with reserves of 100 million tons – while also announcing plans of some global majors for expansion of their operations in the country’s oil and gas sector in the near future.

Angola soon to become Africa’s largest oil

producer A

CCORDING TO STATE company Sonangol, the government of Angola has decided to put on auction up to 10 national oil fields this year, of which seven fields are located in the basin of Kwanza river, while the remaining three are in the Congo river basin. Total oil reserves of all the sites are estimated at 70bn barrels.

According to Severino Cardoso, head of Sonangol’s department of development, each of the 10 sites has a huge potential of 700mn barrels of oil. He has also added that this figure may significantly increase after additional exploration. Despite the attraction of foreign investors, all the sites will still be owned by the Angolan government. The beginning of the development is planned for 2015.

Attracting strategic foreign investors The attraction of strategic foreign investors is part of the government's plans for a significant increase of oil production during the next few years.

At present the country produces 1.7mn bpd, but plans to increase this figure up to two million barrels already this year and up to 2.2mn by 2018.

This is expected to be achieved through the acceleration of oil exploration by licensing new blocks - up to 15 every other year - and testing new offshore wells, according to recent statements from Angolan oil minister Jose Botelho de Vasconcelos.

According to an official representative of the Angolan government, among the foreign investors which have already expressed an interest to the new fields will be several leading Russian oil producers, in particular Rosneft, Gazprom Neft (the oil arm of Gazprom) and Lukoil, which operate large financial reserves, but, unlike western companies, so far have had very little presence in the African continent and in particular in Angola.

According to Rosneft's press service, currently the company is considering implementation of several investment projects in Angola; however a final decision has not yet been taken. At the same time the company plans to participate in the tender for the country’s oil fields, considering them as very promising.

In the case of Lukoil, among the priorities for the company for 2014 is the expansion of operations in western Africa; however the company has also not ruled out the possibility of participating in the forthcoming tenders in Angola. In 2006, Lukoil signed a memorandum of understanding with Sonangol for the exploration and development of oil fields in southern Congo, North Kwanza, Kasanie and Etosha basins. However, the implementation of the project never started.

Currently Gazprom Neft remains the only Russian company, which already operates in Angola, and this happens through its Serbian subsidiary NIS.

High geopolitical risks Operations in Angola are usually associated with high geopolitical risks. Such projects often require huge investments in infrastructure and exploration, also due to the fact that the majority of the country’s oil reservoirs are located in deep waters and this increases the cost of production.

Currently Angola remains Africa’s second largest oil producer after Nigeria and there is a high possibility that during the next few years it may overtake the latter and become the leading oil-producing nation in the continent. This may take place as a result of the implementation of several investment projects, which were recently announced by some global oil producers operating in the country.

16 Oil Review Africa Issue Two 2014

Angola concession map. Source: Sonangol.

For example, French Total is currently considering implementing the Kaombo oil project, as well as the CLOV project in Block 17.

At present Total owns interests in several Angolan deep offshore blocks, and remains the country's leading oil producer with an output in 2013 of 600,000 boed.

According to Jean-Michel Lavergne, head of Total Angola, feasibility studies are under way for the 600mn-barrel Kaombo site in Block 32, which is expected to produce 200,000 bpd after its scheduled start by mid-2017.

The company also puts big hopes on the US$10bn CLOV project in Block 17, with the aim of producing 160,000 bpd, helping Angola achieve a target of two million bpd by 2015.

CLOV, which stands for the fields Cravo, Lirio, Orquidea, and Violeta, has 34 sub-sea wells at depths of 1.1 to 1.4 km located 140 km northwest of Luanda and is estimated to hold 505mn barrels of crude. First oil is planned for Q2 this year.

BP has high hopes for Angola At the same time, BP has high hopes for Angola for the near future.

According to earlier statements from the company’s top management, up to US$10bn will be invested in Angola over the next 10 years.

According to Paulo Pizarro, BP's communications and external affairs vice president for Angola, BP has already invested US$15bn in its business in Angola and it plans to continue doing so given the oil reserves in the country and its economic and social stability.

BP is the operator of blocks 18 and 31 in the deep and ultra-deep waters of the Congo basin and blocks 19 and 24 in the Kwanza and Benguela basins; BP holds non-operating participation in blocks 15, 17, 20, www.oilreviewafrica.com

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Angola

25 and 26, as well as the Angola LNG project in Soyo.

BP Angola’s net average production is around 200,000 bopd.

The UK company is a 13.6-per cent partner in the Angola LNG development, which will involve building a large LNG plant.

In the meantime the US oil and gas giant ExxonMobile has also had a strong presence in Angola.

Since 2011 Exxon has looked to offset its falling oil output with higher production of natural gas from onshore sources. The company became the largest producer of natural gas in the US with its acquisition of XTO Energy in 2010. However, the sharp fall in natural gas prices is forcing players to target oil production.

Currently the US company continues the development of the Kizomba Satellites Phase 1 project with a total output of 100,000 bpd of crude oil and plans to further expand its local operations.

In the meantime, amid the ever-increasing interest of majors in the Angolan oil and gas industry, the country’s government is considering ways for increasing budget revenue, which is expected to take place through the imposition of duties on imported materials.

According to local media reports, the Angolan government has already started to charge 0.1 per cent of the value of goods imported for oil and gas exploration and production, which had previously been exempt of duty.

Angola is one of the fastest growing businesses in BP’s exploration and production portfolio. Greater Plutonia FPSO in Block 18. Photo:BP.

Angola will become the main destination for investment in the oil industry in the African continent until 2018.

Future prospects Analysts believe that the Angolan oil industry has big potential for further growth and development. According to predictions from Business Monitor, the international consulting agency, Angola will become the main destination for investment in the oil industry in the African continent until 2018. One of the reasons for this is the forthcoming launch of exploration in the country’s pre-salt layer, a layer under the seabed that the Angolan authorities believe has the same huge potential as a similar area in Brazil.

In addition, according to an official representative of Sonangol, already this year there are plans to drill up to 32 wells, including 15 that will test pre-salt formations. As well as offshore fields, there is a possibility that during the next few years the development and production of onshore oil fields will be also accelerated. Onshore exploration and production activities have mainly focused around the Cabinda province and were halted during Angola’s civil war. However, thanks to the end of the war, an interest of investors to the country’s onshore fields is expected to grow. ■ www.oilreviewafrica.com

Oil Review Africa Issue Two 2014 17

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Angola

A successful collaboration between Subsea 7 and BP on the vast Block 31 PSVM Project in Angola not only fulfilled a contractual obligation to use local skills, services and resources, but it also made a significant long-term investment in young people and the region.

An Angolan legacy from

Block 31 PSVM S

UBSEA 7 HAS BEEN active in Angola for more than 20 years. It’s a national partnership that has helped to develop a skilled local workforce, develop local capability such as a spoolbase and fabrication yard and develop the skills base of engineering and project management capability in Luanda.

These successes are the result of Subsea 7’s approach to local development originating from the company’s commitment to the countries and communities in which it operates.

Whether through education, training, employment, or community-based support projects, the company’s strategic focus has always been a long-term vision in which sustainable relationships not only benefit the Angolan economy and local people, but also help to cultivate a skilled, experienced workforce capable of meeting the future requirements and challenges of the industry.

When BP Angola announced their statement of requirements in the last half of 2007, for the Engineering, Procurement, Construction and Installation (EPIC) contract to design, fabricate, install and commission temporary installation needs on its Block 31 PSVM Project, Subsea 7 were already well-positioned to partner with the operator.

required to demonstrate a commitment to incorporate social responsibility – the precise nature of which was left up to the contractor.

“We were required to deliver just under 150,000 man-hours of local content on the project, which was split into two approximately equal distinct areas,” explained Dave Pugh, Subsea 7’s project director. “The first – our people commitment – required us to deliver up to 72,000 man-hours by deploying our existing manpower resource in Angola, which we were able to do through our local affiliate, Subsea 7 Angola Ltd. “The remainder of the man-hours BP labeled our ’sustainability’ obligation. This required us to secure an additional 87,000 man-hours by recruiting, training and developing a new generation of Angolan employees.”

The Block 31 PSVM project directly supported the development of Angolan students through a variety of development programmes and on-the-job training.

Local content focus

Sustainable development

The contract, awarded in July 2008, included important caveats and obligations relating to the level of local content used to deliver the scope.

In addition to fulfilling a set amount of local man-hours, as the winning bidder, Subsea 7 was

By developing a variety of training opportunities, Subsea 7 was not only able to fully meet its contractual obligations, but also the legacy of the programmes will continue to deliver benefits for the business and local Angolans for years to come.

18 Oil Review Africa Issue Two 2014

FPSO PSVM, moored in 2,000 metres of water, is the first FPSO in Angola’s ultra deepwater.

One of the keystone (primary) initiatives in the project’s local development strategy was the formation of a sponsorship Programme with engineering students at the Agostino Neto University in Luanda. A total of 20 students, studying either mechanical or civil engineering, were sponsored throughout their studies prior to being recruited by Subsea 7.

A number of engineering graduates from Agostino Neto University have since progressed on to Subsea 7’s own Graduate Engineer Development Scheme (GEDS).

The Block 31 PSVM project directly supported the development of Angolan students through a variety of development programmes and on-the-job training, encompassing the full spectrum of Subsea 7’s business, from logistics support and engineering to ROV and marine operations.

Extensive recruitment in Angola was complemented by intensive engineering and project management development opportunities, designed to help enhance the capabilities of Subsea 7’s project office in Luanda. The result has been a steady withdrawal of expat employees in Luanda as local capability has developed.

Offshore saw the formation of a bespoke Marine and Construction Training Programme in early 2009, developed in conjunction with Cape Peninsula University of Technology in South Africa.

This new course focused on developing marine crew, including trainee deck and engineering ratings as well as marine officers. Among the 20 sponsored students from Agostino Neto students, five undergraduates progressed on to this new Marine Crew Training Programme.

www.oilreviewafrica.com

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Angola

S03 ORA 2 2014 Angola_Layout 1 4/17/2014 12:18 PM Page 20

After 12 months at sea in which the candidates gained invaluable operational experience onboard vessels such as the Seven Oceans and Seven Atlantic, complemented by theoretical classroom studies, 10 students passed out as ‘Officers of the Watch’; their first rung on the career ladder as a Subsea 7 Marine Officer.

The programme also enabled six Angolan students to successfully complete their cadetships as trainee Remote Operated Vehicle (ROV) Pilots.

All six have since joined the Subsea 7 fleet.

“The Seven Seas, our deepwater construction and advanced flexlay vessel, was deployed to deliver the offshore workscope for the project,” added Dave. “As candidates qualified through the new Marine and Construction Training Programme, they were able to join the vessel on the installation and commissioning phases of the project.

“The outcome of these combined initiatives was that we were able to fully deliver our 150,000 Angolan man-hours by September 2012, well in advance of the project completion.

The legacy of the project lives on, both through the local talent developed over the past five years, but also through sustainable relationships with the Benguela community, Investing in Benguela While work continued on the project itself, Subsea 7 was also investing in the future of local communities inland.

Through a long-established partnership with the international charity SOS Children’s Villages, Subsea 7 has nurtured a strong local connection with the Benguela community, located approximately 700 km south of the Angolan capital, Luanda.

Working in partnership with BP, the Block 31 PSVM Project enabled the Subsea 7 team in Angola to contribute greater resources in support of the charity’s work.

The village comprises of 12 family homes, providing a home for up to 120 children as well as a nursery, primary school and medical centre. As part of its obligations under the Block 31 Project, Subsea 7 began sponsoring one of the 12 houses, paying for all running costs, while simultaneously investing in the infrastructure in the village itself to help secure a robust water and electricity supply.

As Dave Pugh highlighted, by providing small cost-effective items such as mosquito nets for every building in the village “we have been able to reduce the incidence of malaria among residents.”

It was also important that the community began to develop its own sense of identity,” he added. “By donating items such as football shirts to the local village team we hoped to help foster pride in the village and its people.”

20 Oil Review Africa Issue Two 2014

The Seven Seas deepwater construction and advanced flexlay vessel was deployed to deliver the offshore workscope for the project.

Corporate support was further bolstered through regular donations from the Sevens Seas’ own vessel Welfare Fund. In recognition of safe operations during work on the Block 31 PSVM Project, crew chose to donate accrued funds to the Benguela community, the proceeds of which were then match-funded by BP to help make a real difference to the community.

Unexpected benefits As the Seven Seas and project team demobilised, it provided a further opportunity to support one Luandan-based charity close to Subsea 7’s heart in 2013.

Samusocial International has been working with street children in the Angolan capital since 2011, helping to provide a place of safety,

learning opportunities and the chance for a fresh start in life.

Unwanted equipment such as beds, mattresses and blankets were gratefully received by the Samusocial team, as were items such as wooden pallets, which can be used by the charity’s carpentry school designed to nurture life skills for young people who up until now have been left to fend for themselves on Luanda’s streets.

Subsea 7’s work on Block 31 is now complete and the legacy of the project lives on, both through the local talent developed over the past five years, but also through sustainable relationships with the Benguela community, which are set to continue for many years to come. ■

At a glance - Block 31 PSVM Project BP’s Block 31 PSVM Project is the largest deepwater project in Africa. The hub field development is located in the ultra deep waters off the Angolan coast unlocking reserves from the Plutão, Saturno, Vênus and Marte oil fields. Comprising the northeast sector of the license, about 321 km from Luanda and in waters measuring 2,000 metres.

Block 31 spans 5,349 sq km with waters ranging from 1,500 to 2,500 meters deep.

First oil was achieved on 6th December 2012. www.oilreviewafrica.com

S03 ORA 2 2014 Angola_Layout 1 4/17/2014 12:18 PM Page 21

FMC Technologies new machining plant at ZEE.

FMC TECHNOLOGIES IS in the midst of a major expansion of its facilities in Angola to meet the ongoing needs of the offshore oil and gas industry. These expansions, at the Sonangol Integrated Logistic Services (Sonils) facility in Luanda as well as at the Zona Económica Especial (ZEE) in Viana, will enable FMC to expand capacity as well as increase local content.

FMC has been supporting the offshore oil and gas industry in Angola since the mid-1990s with major involvement in offshore projects in the country beginning in 2000. Major projects that the company has supported in Angola include Chevron’s Nemba, Total’s Girasol, Jasmin, Rosa, Pazflor, CLOV and GirRI as well as BP’s Greater Plutonio. These projects have involved a wide range of subsea systems ranging from wellheads, jumpers, manifolds and xmas trees to complex subsea separation systems.

Established in 2000, the company’s manufacturing and assembly facility in Sonils has been expanded several times in order to support increasing levels of offshore activity. The facility includes a large workshop, manufacturing and assembly space, warehousing, office space and storage areas. The most recent expansion, begun in early 2013, will bring the total size of FMC Technologies’ facility at Sonils to over 40,000 sqm. This facility has been assembling subsea xmas trees locally since 2007 using a 100 per cent Angolan workforce.

Another recent addition to FMC’s facilities in Angola will be its new machining plant located at the ZEE in Viana. This state-of-the-art facility will include the latest welding and machining equipment and will enable FMC to increase the amount of complex machining and welding work conducted locally.

The facility will also enable the company to recertify installation tooling locally.

FMC's efforts to increase capacity and local content in Angola do not extend solely to facilities and products, they also include programmes designed to expand and improve its Angolan workforce and supply chain. Since it established its first facility in 2000, FMC Technologies has seen a dramatic increase in the size of its Angolan workforce from 72 employees to current levels of close to 500 employees. During this time period, the ratio of local employees to expats has improved dramatically from 31 per cent to current levels of more than 70 per cent. These positions run the gamut from management and administrative roles to technical and operational positions.

In order to support the expansion of the company’s capabilities in Angola, substantial investments have been made to develop its workforce through educational and training programmes as well as cross-training opportunities at other FMC Technologies facilities across the globe. These efforts have resulted in a highly skilled local workforce that has enabled the company to expand the types of fabrication and assembly conducted in Angola. Offshore, FMC’s Angolan installation and service technicians are highly regarded for their skill and are often utilised for projects outside Angola.

Working in conjunction with a wide variety of local contractors and suppliers, FMC has been able to consistently increase the amount of local content incorporated in subsea projects that it is involved in.

FMC Technologies involvement in Angola has already spanned nearly two decades. One of the main reasons for the company’s success in Angola has been its local content strategy. The company’s partnership with Angola’s talented workforce and capable commercial sector has enabled it to develop strong relationships that have allowed it to successfully deliver some of the world’s most complex offshore projects to its customers. Given the continued levels of activity offshore Angola, the company expects to continue expanding its local capabilities, capacity and workforce to meet the needs of the offshore oil and gas industry for many years to come.

Repsol’s activity in Angola THE PRE-SALT PLAY in Angola will be a key focus for Repsol this year, with two to three more wells expected to be drilled. The first well on the Ombovo prospect on Block 35 was spudded on 20 January 2014, whilst spudding of the second and third wells, on Block 37 and Block 22 respectively, are planned for Q3 2014.

Repsol is using its know-how from its successes in offshore Brazil using its pioneering Kaleidoscope technology, a supercomputer that manages complex mathematical algorithms to create high-resolution seismic images. This technology, coupled with risk mitigating geological analyses will continue to help Repsol minimise the uncertainty in exploring and cultivating new sources of oil.

Repsol has recently entered into an agreement with Sonangol, the national oil company of Angola. The corporation allows the firm to use Repsol’s Kaleidoscope technology, in order to model the Kwanza basin, which is an analogue to Brazil’s oil-rich Santos and Campos basins and has become a hot area for exploration in recent years.

Angola LNG sells its first LPG cargo ANGOLA LNG HAS announced the sale of its first LPG cargo from its plant in the port town of Soyo, at the mouth of the Congo River in the country’s north west.

The 5.2 mmtpa facility, built to create value from Angola’s offshore gas resources, was commissioned in mid-2013. The LPG and condensate jetty was commissioned immediately prior to commencement of loading operations. Commissioning included the testing of safety devices, mooring arrangements and loading arms.

Upcoming Training Highlights for E&P Professionals May 5-9, 2014 – Accra, Ghana Problem Solving and Decision Making (SSM36) May 12-16, 2014 – Accra, Ghana The Experienced Manager Programme (SSM41) May 20-23, 2014 – Vienna, Austria Integrated Reservoir Studies: The Project Management Approach (PBM07) Rock Typing - Reservoir Characterisation and Quality from Drill Cuttings (GG33) Jun 2-6, 2014 – Vienna, Austria Integrated Petrophysics for Reservoir Characterisation (PP02) Jun 9-13, 2014 - Istanbul, Turkey Carbonate and Fracture Petrophysics - A Roadmap (PP03) Jun 23-26, 2014 - Accra, Ghana Modern History Matching (RE26) Aug 4-8, 2014 – Istanbul, Turkey Petroleum Geostatistics - Integrating Data for Reservoir Modelling and Simulation (GG07)

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Angola

FMC Technologies expands capabilities in Angola to meet demand

S04 ORA 2 2014 North Africa_Layout 1 4/17/2014 12:21 PM Page 22

North Africa

North Africa’s recent upheaval may have altered the political landscape of the region forever, but its economy still hinges every bit on hydrocarbons.

North Africa:

what happens next?

I

T HAS BEEN a remarkable, and very unpredictable, few years for all concerned right across the North Africa region.

Some places, notably Libya, have been more deeply affected than others by the often tumultuous events, which have resulted in leadership change and even civil war.

Long-serving presidents including Libya’s Muammar Gaddafi and Egypt’s Hosni Mubarak have now been consigned to history.

That does not mean, however, that a new era of stability has come to the region.

Far from it. The often violent upheaval on the streets of Cairo and Tripoli may have resulted in new figureheads at the top, but there remains discontent and deep division on the ground.

Moreover, all of the problems facing ordinary folk before the Arab Spring erupted in 2011, notably poverty and the lack of any real stake in the economy, are still just as real.

Against this uncertain backdrop, it was inevitable that the region’s oil and gas industry would be affected.

In Libya’s case, that meant a complete halt on production and exports for a time; elsewhere it meant angry labour strikes and widespread revolt.

What happens next in North Africa remains critical.

In Algeria, there was the terror attack on the In Amenas gas facilities deep in the Sahara, highlighting another threat.

The news coverage may have moved on but North Africa’s energy sector is still counting the cost of it all, in terms of diminished output, damaged pipelines and - less visibly - a demoralised workforce.

And it matters profoundly to Europe too, which gets a large amount of its gas from the region.

Algeria, in particular, which sends pipeline gas and liquefied natural gas (LNG) across the Mediterranean, is regarded as a vital counter to Europe’s dependence on Russian gas.

Germany buys a third of of its gas from Russia making it especially vulnerable to the whims of Moscow’s foreign policy.

And so, what happens next in North Africa

22 Oil Review Africa Issue Two 2014

remains critical, not only to the millions of people on the ground, but also, given it’s vital strategic interest to European gas buyers, to international energy companies too.

Egypt: Gas exports interrupted In terms of international significance and regional clout, Egypt is without doubt North Africa’s super power. Its energy industry is also suitably large, though historically not on a par with Libya’s or Algeria’s.

After the popular protests that swept longtime leader Hosni Mubarak from office in 2011, the country has struggled to find its feet, however. And this has been telling on the oil and gas sector.

Production from the nation’s maturing gas fields is declining, and the government has forecast that consumption may soon outstrip output for the first time in years.

Egypt’s gas exports have suffered significantly. Gas exports began in the mid2000s, but more than halved from 2008 to 2012, and have now slowed to a trickle.

Initially, this meant a halt to controversial pipeline gas supplies to Israel, amid allegations of corruption and price fixing.

But the country’s flagship LNG projects are now also feeling the pain, with foreign investors facing immense challenges as a result.

BG Group declared force majeure on its LNG agreements from Egypt this January, reflecting the ongoing diversions of natural gas to the domestic market. The extra gas take for local users means the company has been unable to meet its obligations to deliver gas to Egyptian LNG, though it insists it remains committed to the project.

Once again, the key word here is uncertainty.

“There is considerable uncertainty over the number of LNG cargoes that Egyptian LNG will produce in 2014,” BG commented at the start of the year. Its overall production from Egypt sunk from 48.1 mmboe in 2012 to 40.7 mmboe in 2013, underlining the general slide in output.

Problems run deep. Fuel subsidies that cost Cairo US$15bn a year mean demand remains very high just at a time when production is waning. Qatar has supplied some extra LNG to meet the shortfall, and there are plans for a new floating import terminal. Both underscore the shift in Egypt from successful world gas exporter to net importer.

On a more positive note, there is momentum

Eni has started gas production in the Algerian Menzel Ledjmet East despite security fears.

on a new project to connect Egypt’s pipeline system to Jordan with another coming in from Iraq, to grow a nascent regional grid. This could make more gas, and potentially oil, available to Egypt, though Iraq faces its own challenges in making such a complex and costly project a reality.

With little sign Cairo is willing or able to curb its energy subsidies, and with political uncertainty still very much evident - people power has helped topple two presidents since 2011 - the outlook for new investment in the oil and gas sector in scale is not good.

Algeria: Still going strong Algeria has long been a strategic supplier of gas to the European market, both via pipeline under the Mediterranean and LNG, though it faces its own challenges. It received global, and most unwelcome, headlines in 2013, with the deadly terrorist attack on the Tigantourine gas facility near Amenas, one of the country’s most important energy sites.

Although this incident knocked supplies short-term, it is the longer term picture that may concern Algerian energy chiefs more.

According to the state energy firm, Sonatrach, gas exports only amounted to 45 bcm in 2013.

That’s still substantial, but way off when gas production peaked at 65 bcm in 2005. Both fall far short of earlier forecasts of about 85 bcm for 2012.

While Algeria is predominantly a gas country, oil production is also falling. Like Egypt, local demand is also high, and again inflated by costly energy subsidies.

There are hopes of a production turnaround as new projects come onstream. Algeria’s undoubted oil and gas wealth continues to stir interest among investors. New projects include upgrades to LNG infrastructure, with a recent www.oilreviewafrica.com

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North Africa

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enlargement to the liquefaction plant at Skikda, and plans for a new LNG unit at Arzew. The two schemes will lift the nation’s annual capacity for seaborne LNG shipments by 16 bcm to 60 bcm this year, according to Sonatrach. In addition, Algeria has two gas pipelines running to Spain and one to Italy.

These are challenging times and Algeria must remain vigilant on many fronts, not only for it to avoid any further production declines, but also in getting to grips with the terror threat in the remote south.

The gas industry has been affected, with strikes and worker protests shutting down some facilities during heated spells, but far less so than in other territories in transition.

And this means foreign investors remain in place. The country’s largest gas producer is Britain’s BG Group, which supplies over 60 per cent of the domestic output, and has invested more than US$4bn through the years.

Morocco: Interest on the up Morocco largely escaped the worst of the Arab Spring and has responded to any mass protests with some economic and social liberalisation measures. There remain challenges but still this corner of North Africa is mostly regarded as among the more stable areas of the region.

And, while Morocco is not a great producer itself, it is nonetheless seeing an uptick in upstream exploration interest on the back of recent drilling successes by smaller firms.

In the last couple of years, big names such as BP and Chevron have joined the oil and gas search announcing new projects or joining existing ventures. The country has typically been the domain of niche players, with frontier explorers like Longreach Oil and Gas and San Leon Energy among those active on the ground.

As well as enticing more investment, Morocco’s relative calm has meant gas flows out of Algeria continue to reach Europe.

Morocco’s coast, at times just 13 km from southern Spain, has long been a conduit for Algerian gas.

Drillers have also been tempted by the Western Sahara region, a disputed area in the south that was annexed by Morocco 40 years ago, where the likes of Kosmos Energy and Cairn Energy have registered an interest.

As well as enticing more investment, Morocco’s relative calm has meant gas flows out of Algeria continue to reach Europe.

Tunisia: Small but beautiful A small, but established producer, mainly of gas, Tunisia has emerged through the recent upheaval in the region comparatively unscathed.

It was, in fact, a prime mover in the Arab Spring with mass street protests and discontent with the autocratic rule of ousted president Zine alAbidine Ben Ali, inspiring other uprisings across the region. The country still faces a great deal of political uncertainty in the wake of this change, but Tunisia is more prosperous than its peers, from a diverse economy that includes tourism, agriculture and strong trade links with Europe, meaning it has some insulation.

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Earlier this year, Libya’s oil production was fluctuating around 400,000 bpd, according to the state-owned National Oil Corporation (NOC).

Libya: Still on the ropes Historically North Africa’s largest crude oil exporter, things haven’t gone well for Libya in more recent years after a deadly civil war and the demise of long-time leader Muammar Gaddafi in 2011 left production reeling.

During its heyday, in the seventies, Libya was producing and selling around three million bpd.

Unfortunately, there’s no sign yet of a return to those spectacular petrodollar years.

Earlier this year, Libya’s oil production was fluctuating around 400,000 bpd, according to the state-owned National Oil Corporation (NOC).

The country is now struggling with some of the armed groups and tribesmen who helped topple Gaddafi, but who have kept their weapons.

The government in Tripoli is also facing a wave of protests from disgruntled workers at key oil fields and ports, which have collectively decimated output.

Production has slowed to a trickle since these protests began last year, undermining vital oil revenues.

There has been little progress, however, in indirect talks between officials and former militia leader Ibrahim Jathran, who is now heading the protests.

He is calling for an independent commission to represent the three regions of Libya and to supervise the sale of oil and ensure the eastern region gets a fair share of the revenues.

Investment uncertainty The messy political backdrop and ensuing instability following Gaddafi’s 42-year rule has played havoc with those companies working on the ground.

And that includes the world’s heavyweights like BP, which has opted not to pursue its onshore oil search in the Ghadames basin because of security concerns.

"With respect to the onshore exploration drilling programme, a security review...concluded that this could not be safely and securely delivered by BP at this time.

Alternative approaches are being considered," BP said in March in its annual report.

BP's exploration and production sharing agreement covers onshore acreage in Ghadames, near the border between Libya, Algeria and Tunisia, and offshore acreage in the central Sirte basin.

The company does, however, intend to continue with its offshore plans, where safety risks are lower, with preparatory work for exploration drilling underway.

BP signed its Libyan exploration deal in 2007, when it was seen as a landmark deal that sealed former dictator Muammar Gaddafi's return to the international fold after years of sanctions.

It is one of a number of companies to rethink projects following three years of turmoil since the Arab Spring. Tough contract terms have also been cited as reasons for oil firms holding back on their plans.

ExxonMobil said last year it would cut staff and scale back its Libyan activities because of growing instability, while fellow US firm Marathon Oil attempted to sell its stake in one of the country’s top oil ventures, only for Tripoli to block the deal.

Shell abandoned exploration work on two of its blocks in 2012 due to disappointing results.

NOC leadership With foreign investors naturally hesitant, NOC is doing what it can to keep the oil flowing, much of it currently from the prolific El Sharara field, although even this has been affected at times by worker protests.

Although Libya has not published reliable export figures since the turmoil began, NOC usually directs about 140,000 bpd of its oil to refineries in Zawiya and Tobruk. This would leave some surplus, but way down on previous years export levels.

The effect on the nation’s finances will be perilous with some government ministries already reportedly struggling to pay their bills.

NOC itself faces a difficult and dangerous task ahead, with much of the nation’s oil and gas infrastructure damaged during the fighting.

Some strategic energy assets remain unavailable for other reasons too. Armed protesters seized three oil ports in eastern Libya last year, shutting down some 600,000 bpd of export capacity, to demand more regional autonomy and a greater share of the oil wealth.

But with oil sales drying up, the fear is that Libya may slide into greater instability, as budget problems worsen. For now, North Africa’s biggest oil province, which has teased and tantalised foreign investors for so long with its enormous hydrocarbon wealth, remains on the ropes, some three years since the fall of its famed former dictator. ■ www.oilreviewafrica.com

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New Libya Oil & Gas Forum 2014

FOR THE PAST six years Montgomery Libya Ltd has organised the successful annual exhibition and conference Oil & Gas Libya; the prevailing political climate in Libya, however, is proving difficult for international business activity in the country and has caused many foreign governments to advise their nationals not to travel to Libya due to the unstable security situation. This has had a negative effect on both international and national interest in plans for the Oil & Gas Libya 2014 exhibition and conference, which was scheduled for 12-15 May this year, which means the company is not confident of delivering a well supported exhibition as in previous years.

Although the event has the patronage of Libya's Ministry of Oil & Gas, it has not managed to attract the patronage of the National Oil Corporation (NOC) as it has for each of the past six Oil & Gas Libya events that have taken place, and therefore will no longer be organising the Oil & Gas Libya 2014 exhibition and conference.

Under such circumstances, Montgomery, as a responsible global organiser of international exhibitions, is offering to release all exhibitors from the contracts they have made with Montgomery for the Oil & Gas Libya 2014 event and to repay all monies received to date.

Montgomery has been closely involved for the past eight years in successful events for the oil industry in Libya and firmly believes that, in the longer term, Libya will offer excellent opportunities for a trade exhibition and conference in this sector to support the regeneration of the country's oil and gas industry and its economic future.

ON THE 29TH and 30th of May 2014 key figures from Libya's oil and gas industry will go to London to meet with international players and prospective investors. Oliver Kinross with co-organisers IRN and Barcah group have announced that the 3rd Annual New Libya Oil & Gas Forum is officially endorsed by the National Oil Corporation of Libya.

Libya continues to yield large oil & gas discoveries with the most recent being reported by The Polish Oil & Gas Company Libya (POGC) with their gas discovery in the Murzuk Basin. According to the National Oil Corporation and PGNIG the discovery is estimated to have a daily production rate of four million cubic feet. There are also reports that Libya is planning to build the country's first refineries which will considerably develop and advance the oil & gas sector.

The organisers of the 3rd New Libya Oil & Gas Forum have also confirmed that there will be a delegation from the National Oil Corporation as well as top Libyan government officials both presenting and attending the two day senior level meeting. Discussions will look at the 2014 licensing round, timing, fiscal and contractual terms for future exploration in Libya as well an extensive exclusive geological look Libya's onshore and offshore prospectivity.

The 3rd Annual New Libya Oil & Gas Forum will be sponsored by the International Human Resources Development Corporation; IHRDC, the global leader in the provision of environmental, industrial and emergency solutions; NRC, and the British Arab Commercial Bank; BACB. Official supporters of the forum are the Middle East Association and the Libyan British Business Council.

www.oilreviewafrica.com

Oil Review Africa Issue Two 2014 25

Libya

Oil & Gas Libya 2014 cancelled

Côte d’Ivoire

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Ramping up Côte d’Ivoire’s oil, gas production COTE D’IVOIRE’S PRIME minister is poised to increase its crude oil and gas production after a decade of turmoil. The country would boost oil production within five years to 200,000 bpd, rivaling neighbouring Ghana. If this ambition is to be realised, the state-owned national oil company Petroci, which controls the upstream oil industry, no doubt has a significant role to play.

Daniel Gnangni, the man at the helm of affairs in Petroci, must rise to the challenge of attracting investments to the country to ramp up exploration and production projects.

“In terms of the upstream oil sector, that is exploration and production; our priorities are focused on increasing national production in the short term to reach at least 200,000 bopd and 300mn cfd of natural gas,” Gnangni had recently affirmed in an interview.

He also stressed the need to promote the nation’s largely unexplored sedimentary basin in a more sustained manner to attract increasingly more investors to step up exploration.

But beyond telling foreign investors about the enormous potential that the sedimentary basin offers, Gnangni has the important task of reassuring them that the country is safe and can offer a favourable environment for private investors within the scope of mutually beneficial partnerships.

Gnangni, who joined Petroci in 1979, was appointed director general in December 2010. He held several positions including head of geology; head of a project into the promotion of oil blocks; director of exploration and advisor to the director general. Having reportedly undertaken several projects overseas and with the experience garnered as chief of staff to the minister of mines, industry & energy from 1987 to 1993, he is expected to put in place necessary measures to intensify exploration so as to significantly increase production in the country.

Gnangni has an enormous task before him to ensure that oil companies increase exploration and drilling offshore after output more than halved to about 30,000 bpd because of technical problems.

Tullow optimistic about Ghana, Côte d’Ivoire oil dispute TULLOW OIL GHANA Ltd has expressed optimism that an amicable resolution of the long-standing maritime boarder dispute between Ghana and Côte d’Ivoire would be reached by June 2014. This optimism, according to Tullow Ghana’s general manager, is due to the commitment of both parties to find an amicable solution to the dispute which has raged on for a while now.

Ghana, who was the first to strike oil in the jubilee field has since last year been in contention with Côte d’Ivoire over which country owns the C100 maritime space area; an oil-rich field that lies between the two West African nations.

Ghana was thought to have exclusive rights to the area until April 2013 when Côte d’Ivoire announced its discovery of an oil block off its coast and adjacent to Ghana’s Jubilee field. Efforts by both countries to lay claims to the oil-rich C100 maritime space resulted in various meetings in 2013, though no concrete conclusions were arrived at.

According to conclusions at previous meetings in 2013, the last two meetings which were geared towards arriving at an amicable conclusion were scheduled for

January and March 2014 in Abidjan. The two parties set June 2014 as the date to conclude the matter.

Some legal practitioners have however indicated that the issue under contention was a complex one that required a cross national trans-boundary committee to address the concerns of both countries to prevent any further escalation.

The area under contention is said to have an estimated two billion barrels of oil reserves and another 1.2 tcf of natural gas. With a current emergence of African nations into the league of oil producing nations, both parties involved would be hoping to boost their oil production with the acquisition of the said area.

CNR pursues more oil offshore Côte d’Ivoire CNR INTERNATIONAL SAID production from the Baobab field offshore Côte d’Ivoire had to be shut down in December following failure of a mooring line on the FPSO. Production was restored temporarily in late January 2014, with final repairs due to get under way later this month.

During Q4 2013, the company contracted a drilling rig for a multiple-well programme at Baobab, designed to add 11,000 boed of net production. The rig is expected to start the campaign by Q1 2015.

At the Espoir field, the company is negotiating for another rig to perform an oil infill drilling programme targeting light crude, scheduled to start during in the second half of 2014. It hopes to add 5,900 boepd of net production.

The company also has two deepwater blocks off Côte d’Ivoire, thought to be prospective for channel/fan structures similar to the Jubilee discovery off Ghana and plays elsewhere offshore Africa.

Block CI-12 is 35 km west of Espoir/Baobab that CNR operates with a 60 per cent interest. Data from a 3D seismic programme shot late last year is in processing. Exploration drilling could start next year.

Over block CI-514, the partners have acquired seismic and contracted a rig due to start operating imminently, targeting structures in the lower Cretaceous formations that could hold 800-1,400mn barrels of oil.

Total hits oil off Côte d'Ivoire TOTAL HAS STRUCK oil at an ultra-deepwater frontier play off the coast of Côte d'Ivoire.

The French supermajor hit a light oil accumulation at the Saphir-1XB wildcat on Block CI-514. The well was drilled with the Ocean Rig semi-submersible Eirik Raude to a total depth of 4,655 metres in 2,300 metres of water. It encountered a series of thick sands of approximately 350 metres, throwing up a hydrocarbon column of some 40 metres, Total said.

26 Oil Review Africa Issue Two 2014

Marc Blaizot, senior vice president of exploration at Total, said: "Drilled in an abrupt margin play, this first well is the first discovery in the San Pedro basin.

"Having confirmed the presence of a petroleum system containing light oil, we will next evaluate this very promising find and focus on its extension to the north and east."

Total operates the block on 54 per cent with Canadian Natural Resources on 36 per cent and state player Petroci on 10 per cent.

The French company plans to drill two more wells off Côte d'Ivoire this year, on blocks CI-515 and CI-516 - both of which are ultra-deepwater blocks. It also has an interest in ultra-deepwater Block CI-100 where a discovery was made last year.

Total is now demobilising the Eirik Raude off Block CI-514 and will send it to South Africa to drill the first well on Block 11A-11B, where the French player is operator on a 50 per cent stake. www.oilreviewafrica.com

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www.taleverasgroup.com

London Geneva Dubai C a p e To w n Abidjan Abuja Lagos

A Leading Global Energy & Service Company

Safety and Security

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PGI is one of the UK’s fastest growing companies and its origins are in maritime security in East Africa, but it has developed a strong specialist cyber security division. Lord Boateng*, the international advisor to PGI, spoke to Oil Review Africa’s Stephen Williams.

The cyber security

threat

LORD BOATENG, COULD you explain why the issue of cyber security is so important, and what actual evidence there is that the oil and gas industry in Africa is particularly susceptible to this threat?

I would refer you immediately to a report by the US Council on Foreign Relations, that was released in June last year. It is called Cyber threats to oil and gas suppliers – it is as specific as that.

It demonstrates quite clearly that in a sixmonth period in 2012, the energy sector was targeted by cyber attacks more than any other industrial sector. The CFR took the figures from the US Department of Homeland Security, and those figures show that in that same year, 41 per cent of international cyber attacks on US critical infrastructure were targeted at energy infrastructure.

That figure rose to 53 per cent in 2013, and the same report saw a whole spectrum of attackers as being responsible. It was not simply foreign sponsored attacks by intelligence and defense agencies, it was also organised criminals, it was freelance hackers – all targeting the oil and gas industry. For me, that seems very significant.

But you can also look to those reports from the European Union, which looked at Europe

28 Oil Review Africa Issue Two 2014

last year, and that too found an increase in attacks. So the oil and gas industry is being targeted and it is at its most vulnerable, it can be argued, in Africa.

The nature of the ICT infrastructure is most vulnerable in Africa.

Why should that be so?

Because the way those who would attack the industry work is to look at those areas where there is least risk, and the nature of the ICT infrastructure is most vulnerable in Africa. The operating environment is vulnerable, and the capacity to corrupt individuals is possibly greater as is the capacity to identify weaknesses in terms of operational practice such as the use of mobile telephony, the use of tablets, and the use of a whole range of technological gizmos which are not actually under the control of the operator, and that enhances and increases the risk.

And how can PGI help in this regard?

PGI has a range of expertise available, not just simply the technical expertise to deal with

communications’ technology. It also recognises that the nature of the risk is also human; that it is not just what is in the box, it is also who is in the chair.

If you look globally at recent events, such as the Edward Snowden, or Bradley (now Chelsea) Manning leaks, you realise that it was not the technology that was the weak point, it was the human component.

And so PGI has this approach of not just seeking to make communications more secure, seeking to protect information by understanding the requirements of the operator, but also looking at the human factor with psychological profiling.

The oil and gas industry sees Africa as the next frontier, rightly so in my opinion, and so the sort of data that it is acquiring is of immense value, and the operating environment in which it is carrying out its work is potentially vulnerable. So it is a sitting duck for those who have criminal intent, or a gripe against the industry because they are state players. Then there are the commercial rivals who may be potential attackers.

Would you say the primary motivation behind these cyber attacks is pecuniary?

In the main, the motives are financial gain. But motives do vary. For some, the attraction is in www.oilreviewafrica.com

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Safety and Security

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obtaining commercially sensitive information that might have cost a great deal to acquire – and commercial rivals want it on the cheap.

Others have concerns about the operations, such as environmental activist extremists of one sort or another. And then there are always others who have other political motives. So there are lots of motives.

A precondition to successful economic development in any nation is making sure that your systems are secure.

And there must be times when companies are particularly vulnerable to cyber attacks…

Yes you can identify the times of greatest risk to a company are at any time where it is especially vulnerable to a competitor who is seeking to gain some sort of advantage. It might be you are opening a new office in a country where staff and infrastructure are unreliable and where competitors have a keen interest in the operations you are starting or in a joint venture you are entering with a new local partner with whom you are negotiating a new contract or a license – and a competitor or the entity with whom you are negotiating is prepared to use a range of means to get hold of the negotiating position of your company.

There are other sensitive periods too, such as when you are going to raise your company profile in some way that others do not like; when you are announcing profits; or even details of management remuneration might be of interest at certain times – these are all vulnerabilities.

30 Oil Review Africa Issue Two 2014

What would PGI’s strategy be to counter these threats?

What PGI does is to come in and to work with you, to harden you as a target, to bolster your defenses, and there is a range of ways of doing that with the training of staff and increasing awareness within companies of the threats that cyber crimes pose.

There is, as well, a technical, physical component to our services that can be as simple as guarding against unauthorised access to server rooms, for example, or penetration testing, checking out systems so that companies really understand their networks.

We can monitor systems by basically sitting on your server and watching all the activity. If any activity seems to be out of the normal then we would issue an alert that can either be act on or ignored, depending on how the threat is perceived.

To summarise, could you explain just why you consider this work to be so important?

I’ve been an economics minister, finance minister and I have been a diplomat who is responsible for development. What I have learnt is that you cannot separate security from economic success, and the delivery of value to shareholders and stakeholders.

I am absolutely convinced that the way forward for Africa is to create a secure environment for development for economic progress, doing so in ways that enhance local skills and local capacity. The days when people were flown in and flown out are over, and that is not the way in which PGI seeks to operate.

My engagement and concern with Africa is well documented. It is where I was brought up,

Lord Paul Boateng.

it’s where my roots and origins are, and there are potentially very positive contributions that the extractive industries can make, and PGI should play a role in that.

A precondition to successful economic development in any nation is making sure that your systems are secure. That requires cooperation between the private and the public sector and an understanding of limits as well as accountability. That is very important because, ultimately, responsibility for overall security lies with the state. And private companies have to understand where the boundaries are. And PGI has that as its bottom line. ■

*Lord Paul Boateng, the former chief secretary to the UK Treasury who also served as the High Commissioner to South Africa is now the international advisor to PGI – one of the UK’s fastest growing companies.

www.oilreviewafrica.com

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Geology

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EMGS bags Africa prize

SacOil to begin 3D OBC survey off Nigeria

NORWAY’S ELECTROMAGNETIC GEOSERVICES (EMGS) has secured an US$8.3mn contract to carry out 3D electromagnetic data acquisition off north west Africa.

Oslo-listed EMGS confirmed it had put pen to paper on the deal with an undisclosed client after being handed a letter of intent.

The one-month survey, which has already been launched by the vessel BOA Thalassa, bolsters the contractor’s position in the region where it earlier won a survey for Maersk Oil off Angola.

BOA Thalassa.

CGG introduces new lines CGG HAS CREATED two new business lines, GeoSoftware and GeoConsulting, within its Geology, Geophysics & Reservoir (GGR) division: GeoSoftware is the worldwide leader in advanced seismic reservoir characterisation technology. It brings together CGG’s commercial software including Jason, Hampson-Russell and TerraSpark, along with the associated sales, marketing and product services, such as training, product support and product mentoring.

GeoConsulting is a full-spectrum geological and geophysical consulting services organisation. In addition to CGG’s seismic reservoir characterisation services supporting its Jason and Hampson-Russell technologies, GeoConsulting offers the company’s unique line of Robertson geoscience consulting services and multiclient products including a full range of geological, petroleum engineering and economic disciplines. It also contains NPA satellite mapping and all global training services relating to GeoConsulting.

This move consolidates and aligns CGG’s expertise in a way that best reflects its customers’ needs to help them achieve their E&P goals.

More specifically, through GeoSoftware, CGG will further improve its products and services to provide customers with the best understanding of their reservoirs and deliver unsurpassed expertise and workflows for optimising decision-making. Through GeoConsulting, the company will further enhance its geological and geophysical multi-client products and reports and expand its highend consulting services across the E&P value chain.

By bringing together this best-in-class geoscience expertise, this new organisation will generate valuable synergies in development roadmaps, technology innovation and multi-client products. CGG will be able to better invest in and expand these key areas of its business, creating new and truly integrated geoscience offerings that draw on the unique knowledge of more than 800 CGG professionals working in over 20 key oil and gas centres around the world.

32 Oil Review Africa Issue Two 2014

SOUTH AFRICAN-BASED independent African oil and gas company SacOil Holdings Ltd and its OPL 233 partners have commenced operations for the 3D Seismic Ocean Bottom Cable (OBC) survey, with mobilisation of equipment for the survey in progress.

Following mobilisation, the 3D OBC acquisition work is expected to commence early April 2014 and be completed by the end of July 2014, subject to operational contingencies and weather related issues. Finalisation of formalities for the seismic data processing contract is ongoing.

The company, which is listed on the Johannesburg Stock Exchange and London, in an update on its on-going operational activities in Nigeria and Malawi, said satisfactory progress has been made across the existing portfolio of exploration and appraisal assets.

The 3D seismic data will provide valuable subsurface information relevant for the quantification of the license’s resource potential, as well as the selection of an optimal drilling location.

The company expects the processing of the raw data and interpretation of results to be completed by third quarter of 2014. SacOil holds a 20 per cent interest in OPL 233. The company said it also continues to evaluate a number of opportunities to secure new value accretive acreage in established and prolific African hydrocarbon jurisdictions and basins.

In preparation for the scheduled 3D seismic data acquisition project, the Environmental Impact Assessment (EIA) on the block, handled by Tidalflow Nigeria Ltd, has been completed with both wet and dry season sampling carried out, the company said. It stated that the Department of Petroleum Resources (DPR) has approved the result of the completed wet season sampling, while the dry season sampling is presently undergoing processing before being forwarded to the DPR.

South Africa survey success for PGS A NEW PGS MultiClient survey of a 13,000 line km in the frontier area offshore the east coast of South Africa is making excellent progress.

Petroleum Geo-Services (PGS), through an agreement with the Petroleum Agency of South Africa, is acquiring approximately 13,000 km multiClient 2D GeoStreamer survey covering the east coast basins. The acquisition programme is ahead of schedule and has successfully surmounted the many challenges of the area, including strong currents.

The data will give an approximate 20 km x 20 km grid of high-quality seismic over this frontier area and includes well-ties into the shallower waters in the south-west and north-east areas. This is the first comprehensive data-set to be acquired over these blocks.

The eastern coast of South Africa is a narrow passive margin that formed in late Jurassic to early Cretaceous times, during the breakup of Gondwana. A series of en-echelon rift basins, formed during the breakup along the southern coast and known as the Outeniqua Basin, contain several commercial oil and gas fields in early Cretaceous sands. This basic structure and a working petroleum system are predicted to continue along the eastern coast, overlain by Cenozoic sediments.

The plays expected along the east coast of South Africa are very similar to those on the conjugate Falklands north and south basins, where recent discoveries such as Sea Lion and Loligo have proved working petroleum systems. DSDP drilling in the 1970s on the Maurice Ewing Bank, to the east of the Falklands, also proved the existence of Late Jurassic to Early Cretaceous oil quality source rocks.

Key play types along the east coast basin are expected to include: Syn and post-rift Late Cretaceous deep-marine sands; Pre to early syn-rift lacustrine sands; Cenozoic deep-marine sands; and possibly fractured basement.

Acquisition of the deepwater multiClient 2D GeoStreamer survey offshore South Africa is expected to be complete in Q2 2014 with fully processed data available in Q4 2014.

Opportunities are still available to license the data, ensuring early access, as well as the opportunity to input into the processing workflow.

Early-access opportunities will expire in Q2 2014 www.oilreviewafrica.com

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Gas

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Nigeria to increase gas supply to Ghana THE NIGERIAN GOVERNMENT has expressed commitment towards a continuous supply of gas to Ghana to operate her thermal power plants.

Top officials of the West African oil giant made the commitment at recent crunch meetings held with Ghana’s minister for energy and petroleum, Emmanuel Armah-Kofi Buah.

The energy minister, accompanied by the chief executive of the Volta River Authority, Mr Kirk Koffie, went to Nigeria for discussions with the suppliers in a bid to boost gas supply.

As part of the media update on the current power situation held in mid-March 2014, the ministry indicated that one of the causes for the load management exercise being carried out by the Electricity Company of Ghana (ECG) was because of the erratic and very low levels of gas supply from Nigeria, resulting in Ghana's inability to power its thermal power plants to full capacity.

After intense negotiations with Nigeria’s minister for petroleum, officials from NNPC, Shell and Chevron, who together form N-Gas who are the suppliers of the natural gas to Ghana, the Ghanaian team was briefed about the causes of the low levels of gas supply and assured of a constant supply of 50mn Btupd, up from the 30mn Btupd or less being supplied in recent days. The committed 50mn Btupd falls far short of the contractual volumes of 123mn Btupd but could immediately at least keep the Sunon Asogli plant running, According to the statement the team also consulted with officials of the West Africa Gas Pipeline Company and the West Africa Gas Pipeline Authority and explored other potential private gas suppliers. The ongoing rationing of power across the country has been necessitated partly by a sharp drop in the volumes of gas received from Nigeria through the West Africa Gas Pipeline.

Tanzania’s LNG plant could be expanded TANZANIA’S FIRST PLANNED liquefied natural gas (LNG) export terminal could be expanded after the project partners discovered more gas than expected, shareholder Ophir Energy said.

East Africa, tipped to become one of the next big gas-producing regions after huge discoveries in recent years, is in a race with the likes of Russia, Australia and Canada to feed an expected supply gap around the turn of the decade.

Tanzania's LNG export terminal, backed by Britain's BG Group and Norway's Statoil, is expected to start shipping gas to customers from around 2020, with a final investment decision expected in 2016.

Gas resources discovered to date across the three blocks (1, 3 and 4) exceed the threshold for two planned five million tons/yr LNG trains. In addition, the appraisal results, including the multiple flow tests, should lead to cost savings in the development as well numbers will likely be lower than pre-appraisal expectations.

RWE Dea improves on Egyptian gas production GERMAN MINNOW RWE Dea has reported successfully flowing 16 mmscfd in its most recent appraisal of the North West Khilala (NWK) gas field.

NWK-1-4 is the fourth well to be drilled in the NWK structure and reached a total measured depth of 3,175 metres in the Abu Madi Formation.

“RWE Dea’s Disouq natural gas project in the Egyptian Nile Delta is progressing successfully”, the company said.

The Disouq project encompasses the development of seven gas fields in the Nile Delta and NWK was the first field brought into production in September 2013.

Currently, the NWK field produces 51.2 mmcfd from three wells.

RWE Dea will now move the Weatherford 94 rig to drill a four-well appraisal and development programme in the South East Sidi Salem and Disouq Fieldsapprox. 50 km west of the NWK Field. A total of 16 wells are expected to be integrated into production by the end of 2014.

Together with the state hydrocarbon company Egyptian Natural Gas Holding Company (EGAS) and the Suez Oil Company (SUCO), RWE Dea plans to produce a total of approximately 400 bcf of gas from the seven gas fields in the first phase of the Disouq Development Project.

Platform sells Egbeoma gas plant NIGERIAN GAS DEVELOPER, Owei-Linkso, has agreed to pay US$21mn to the Platform/Newcross Joint Venture for the purchase of the 30 mmscfd-gas processing plant on the Egbeoma Field in the Western Niger Delta.

The agreement calls for Owei-Linkso to revamp the plant, which was constructed for US$39mn, but had struggled with commissioning hitches, as a result of flawed design. The Egbeoma field produces 1,600 bpd of oil, but has a high GOR, resulting in significant flaring, a reason for which the plant was constructed in the first place.

The lean gas will be transported via a 48 km gas pipeline to Seplat-operated Oben field gas facility.

The pipeline construction is expected to start in the third quarter of 2014. Seplat and Platform/Newcross JV are currently engaged in right of way acquisition.

Jubilee gas output ‘in sight’ PROCESSING OF ASSOCIATED gas from Tullow Oil’s Jubilee oilfield off Ghana is likely to start in the third quarter with construction of a new onshore gas plant set for imminent completion, according to the head of the state oil company.

Field partners recently applied for a waiver of current legal restrictions on flaring of gas produced from the field that is now being reinjected into the reservoir while pipelines are laid to the gas processing facility being built

by Sinopec at Atuabo in the country’s Western Region.

It is understood that operator Tullow and partners Kosmos Energy and Anadarko Petroleum are concerned delays in completing the gas infrastructure pose a risk to oil wells and the field’s Kwame Nkrumah FPSO vessel as they are unable to contain

34 Oil Review Africa Issue Two 2014

The gas processing plant should be ready mid year.

more associated gas.

The 1.2bn-barrel oilfield, which started production in late 2010, also holds an estimated 1.4 tcf of gas.

Construction work on the US$700mn gas plant, originally scheduled to be completed last year, has been delayed because of financial and technical issues.

However, state-owned Ghana National Petroleum Corporation’s (GNPC) acting chief executive Alex Mould was reported as saying

by Reuters: “Mechanical completion is expected by the end of this month... then commissioning may take up to three months.

So we believe that somewhere in the third quarter, it (gas processing) should happen.”

Mould said the plant would ramp up to a maximum 150 mmcfd of gas, most of which would be fed into the Takoradi power plant farther east for power generation.

A statement on Tullow’s website said, “Tullow is confident that once the gas processing facilities onshore are completed, the Jubilee Field will be able to produce to its full potential, given the field's well capacity and the strong performance of both the reservoir and the FPSO to date. www.oilreviewafrica.com

S06 ORA 2 2014 Geology - Gas A B_Layout 1 4/17/2014 12:29 PM Page 35

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E&P

Statoil farms down Angola pre-salt to Genel STATOIL HAS SIGNED an agreement to farm down a 15 per cent interest in pre-salt block 39, offshore Angola, to a joint venture involving Genel Energy.

Statoil, which operates the block, will retain a 40 per cent interest after the farm down.

Sonangol P&P holds 30 per cent of the remaining interest, while Total holds 15 per cent.

The Genel/White Rose Energy Ventures joint venture – WRG Angola Block 39 Ltd – has also acquired from China Sonangol International Holdings a 15 per cent share in the Statoil-operated block 38. Following the acquisition Statoil retains a 55 per cent stake, while the remaining 30 per cent is held by Sonangol P&P. Gareth Burns, senior vice president for exploration strategy and business development at Statoil, commented in a company statement: "This is part of Statoil's active portfolio management. The farm-down reflects the attractiveness of Statoil’s acreage in Angola and having WRG onboard allows us to share exploration risk, while retaining a significant working interest. WRG brings technical experience to a challenging geological setting, and we look forward to a productive relationship with them in Angola."

In its statement about the deal, Genel said that the exploration blocks hold multi-billion barrel prospects and that the play has already been derisked by exploration drilling in Angola and in the directly analogous Santos and Campos Basins, offshore Brazil.

The firm added that the Stena Carron (DW drillship) vessel has been contracted for a drilling programme that is expected to begin during the second quarter of this year, with the first well in the programme expected to target the Dilolo prospect on Block 39.

Commenting on the deal with Statoil, Genel chief executive Tony Hayward said: "This transaction provides a rare opportunity to enter into a low risk, multi-billion barrel resource play. It fits with our stated strategy of securing high quality exploration opportunities targeting very material resources, and further enhances the opportunity to add significant shareholder value through the drill bit in Africa.

"Partnering with White Rose offers us a unique opportunity to secure a material interest in the exciting pre-salt play whilst managing our financial exposure to a level appropriate for a company of our size. White Rose brings significant directly relevant technical experience which together with Statoil, a first-class operator with longstanding regional knowledge and relationships, establishes a strong and exciting partnership with which to establish an entry position in Angola."

Nigeria’s Taleveras, Aiteo bid for Shell block NIGERIAN FIRMS TALEVERAS and Aiteo have made the highest bid of US$2.85bn for the biggest of four Shell assets up for sale, but the oil major is holding out while it tries to persuade them to team up with Seplat, an existing operator.

Several oil industry sources told Reuters that, although there is little doubt the duo can raise cash for the block, Shell is concerned about the reputational risk of selling it to two exporters of crude and importers of gasoline that have no previous experience in running producing oil assets.

Shell is divesting its 30 per cent stake in four Nigerian oil blocks, with France's Total and Italy's Eni also set to profit from their 10 per cent and five per cent shares. The Nigerian National Petroleum Corporation (NNPC) owns the remaining 55 per cent.

As well as being an existing operator, Seplat is currently beginning to trade on the London and Lagos stock exchanges.

36 Oil Review Africa Issue Two 2014

Small oil companies eye big prizes in Ghana SINCE THE FIRST discovery of the massive Jubilee oilfield in Ghana by a start-up company, the West African playing field has begun to change, and so too have investor sentiments, disappointed most recently by the low fourth-quarter 2013 results of major integrated oil companies like ExxonMobil, Royal Dutch Shell, Chevron and BP. But while the supermajors are struggling with soaring project costs and poor balance sheets, innovative juniors and start-ups are increasingly swooping in to take advantage of new highly prospective plays – and as long as they don’t come up dry they are turning into superstars overnight.

West Africa’s emerging hotspot of Ghana is one of the best indicators of how the oil and gas playing field is undergoing a major transformation.

Kosmos Energy, with the discovery of the Jubilee field, prompted the unparalleled development of oil and gas plays in West Africa. Another startup, the African-based subsidiary of CSE-listed Gondwana Oil, is continuing the trend in Ghana. The company has rescently won exclusive rights to negotiate for the offshore Cape Three Points South Block in the highly prospective Tano Basin, about 30 km from Jubilee.

This particular block hopes to take off where Kosmos left off with Jubilee.

The block is surrounded by 20 producing discoveries in an area that has a commercial success rate for drilling of over 60 per cent. Gondwana is in a similar position to Kosmos when it made the Jubilee discovery.

So while there is some safety in the diversification of the major oil companies, it’s also harder for investors to get big returns on a hot new play like Ghana. As such, investors are increasingly willing to risk on juniors and start-ups who are focused on a single hotspot that promises a big reward. If these low-market-cap companies can actually get their hands on significant acreage in venues like Ghana, investors seem ready to take notice.

In the meantime, the bigger companies continue to make significant headway with Ghana’s oil, despite a few setbacks, including delays to the country’s gas infrastructure, which means that associated gas is being lost to flaring or has to be re-injected into wells.

Italian oil giant Eni SpA has been successful in the Tano Basin, not far from Jubilee, estimating that field holds around 150mn barrels of recoverable oil. Hess Corporation is also prioritising Ghana, with seven successful wells so far in the Tano Basin and new exploration planned for this year.

Ghana oil output to hit up to 110,000 bpd OUTPUT FROM GHANA’S offshore Jubilee oilfield will hit between 105,000 and 110,000 bpd in 2014 versus a budgeted 110,000 bpd, according to the chief executive of Ghana National Petroleum Corporation.

"It is expected that the field could produce an average of 100,000 barrels, which is budgeted for, but I am sure we will hit about 105,000 to 110,000 barrels in 2014," CEO Alex Mould told an investment conference in the Ghanaian capital.

"The average oil production as of 25 March 2014 was about 104,000 barrels. We're currently [at] about 109,000 barrels," he said.

Ghana discovered oil in 2007 and began producing in 2010, adding to confidence over its economy whose GDP growth rose to 11.8 per cent the following year.

Production has been hampered in recent months, in part because of delays in the construction of a pipeline to bring gas onshore, which has in turn raised the issue of whether the country should flare gas.

Ghana has lifted approximately 20 per cent of the crude produced from the time Jubilee started in December 2010 to this March, Mould said.

Tullow, listed on the Ghana Stock Exchange, holds a 35.5 per cent stake in Jubilee. Other stakeholders are Ghana's state-run GNPC with 13.6 per cent, investment group Kosmos Energy, Anadarko Petroleum Corp and Sabre/PetroSA. www.oilreviewafrica.com

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Longreach spuds in Morocco E&P

LONGREACH OIL & GAS has spudded a well on its operated licence in Morocco.

The company has started drilling ahead at the Kamar-1 well at the Sidi Moktar exploration licence area.

Kamar-1 has a total planned depth of 3,500 metres, with drilling expected to take about 70 days, and is targeting the lower Liassic reservoir and Triassic clastic reservoirs.

Longreach will use the drilling rig Saipem Drillmec Mas 7000 to drill the well.

The Kamar prospect is thought to hold best-estimate potential resources of 78 bcfg and five million barrels of condensate, according to an assessment by Gaffney Cline & Associates.

Last year, Longreach saw gas shows on the licence with the drilling of Koba-1.

The well intersected a 45-metre gross reservoir interval in the lower Liassic sandstone and recorded gas shows with “heavier hydrocarbon components”.

Chariot extends portfolio CHARIOT OIL & GAS has been awarded a 75 per cent interest and operatorship of a licence offshore Morocco.

The company’s wholly-owned subsidiary Chariot Oil & Gas Investments won the Mohammedia Reconaissance licence in partnership with state-owned Office National des Hydrocarbures et des Mines (ONHYM).

The licence is near Chariot’s existing Loukos and Rabat Deep licences and covers an area of 4,600 sq km.

Chariot has identified a significant MioPliocene lead in the Loukos licence which extends into Mohammedia following the reprocessing of 2D seismic.

The company dropped the parts of the Loukos licence which were not prospective and instead took a stake in the Mohammedia.

Chariot has awarded a contract to Dolphin Geophysical to carry out a 3D seismic programme across three of its licences using the Sanco Swift vessel. Carrying out the seismic will satisfy all of the commitments across the company’s Moroccan licences for their exploration periods.

Once it is complete, Chariot will be able to enter a full exploration permit with ONHYM for the Mohammedia area.

The award is still subject to final approval. www.oilreviewafrica.com

Oil Review Africa Issue Two 2014 37

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E&P

Ophir completes sale in Tanzanian blocks AFRICA-FOCUSED OPHIR Energy has completed the sale of a 20 per cent interest in its Blocks 1, 3 and 4 in Tanzania to Pavilion Energy.

Ophir said it has received cash of US$1.26bn and that a further US$38mn is payable following the final investment decision with respect to the development of the blocks that is expected in 2016.

Ophir said that the proceeds from the transaction will support its plans that include investing in a number of new opportunities that are under consideration and have transformational growth potential. The firm added that the new funds will also give it the flexibility to rapidly capitalise on any exploration success from its current drilling programme.

Ophir CEO Nick Cooper commented: "We are delighted to welcome Pavilion Energy into the Tanzanian LNG development across Blocks 1, 3 and 4. The partial monetisation of our interests is in keeping with Ophir's strategy of minimising exposure to development capex and realising the value created from exploration success at the appropriate time."

Aker wins contract for Kaombo development

Total launches development of Kaombo

AKER SOLUTIONS HAS won a contract worth US$2.35bn from Total to provide a subsea production system for the Kaombo Block 32 development in Angola.

Aker Solutions will deliver 20 subsea manifolds and 65 vertical subsea wellsets. The order also includes associated controls as well as work-over and tie-in systems. The first deliveries are scheduled for the second quarter of 2015.

"This is a landmark contract and further strengthens an important relationship with a key partner," said Øyvind Eriksen, executive chairman of Aker Solutions. "It's a significant commercial achievement for our subsea business as well as an important strategic development in our expansion in Angola and the broader region."

TOTAL AND ITS joint venture partners have made the final investment decision to develop the ultra-deep offshore Kaombo project in Angola. With a production capacity of 230,000 bpd, Kaombo will develop estimated reserves of 650mn barrels. Following an intensive optimisation exercise, the project’s capital expenditure to reach full capacity was reduced by US$4bn to US$16bn, with an expected start-up in 2017.

“With the launch of Kaombo, the upcoming start-up of CLOV and three exploration wells planned in the Kwanza basin this year, Angola remains a priority country for Total” outlined Yves-Louis Darricarrère, president Total Upstream. “While continuing our commitment to develop the Angolan oil industry, Total has significantly optimised the project’s design and contracting strategy in recent months. Kaombo illustrates both the Group’s capital discipline and objective to reduce capex.”

Located approximately 260 km offshore Luanda in water depths ranging from 1,400 to 1,900 metres, the Kaombo project will develop six of the 12 discoveries already made on Block 32. The six fields (Gengibre, Gindungo, Caril, Canela, Mostarda and Louro) cover an area of 800 sq km in the central and southeast part of the block.

The Kaombo development scheme includes 59 subsea wells, connected through around 300 km of subsea lines, to two floating production, storage and offloading (FPSO) vessels, each with a production capacity of 115,000 bpd. The two FPSOs will be based on conversions of very large crude carriers (VLCCs) into production units. Associated gas will be exported to the onshore Angola LNG plant.

The Kaombo development includes a substantial level of local content. Over 14mn manhours of fabrication and construction works will be performed locally in Angolan yards which will be used for equipment fabrication and assembly.

Vaalco restarts Etame Marin FPSO US-BASED VAALCO Energy has completed maintenance work on the leased floating production, storage and offloading vessel at the Etame Marin block off Gabon and restarted production ahead of schedule.

Work focused on the FPSO Petroleo Nautipa's processing systems including the gas compressor, the high pressure separator, the high pressure flare scrubber, and the installation of a new fuel gas scrubber.

Vaalco also conducted maintenance on other infrastructure in the Etame Marin block, replacing the electrical submersible pumps on the Avouma 2-H well and bringing the well back online.

The company is working to return oil production from the four producing fields on the Etame Marin block to "pre-shut-in levels".

The Etame Marin permit was previously producing 18,000 gross bopd, according to Vaalco's latest presentation. Vaalco operates the block with a 28.1 per cent interest, alongside partners Addax, Sasol, Sojitz, PetroEnergy and Tullow. Vaalco is anticipating a second FPSO shutdown in the second half of 2014 to upgrade the fire and gas detection systems.

CAMAC adds Ghana to the cart CAMAC ENERGY HAS added a shallow water acreage off Ghana to its growing list of hydrocarbon properties.

In March 2014 the Ghanaian Parliament ratified the petroleum agreement between the government of Ghana and five organisations for the exploration of oil in the Expanded Shallow Water Tano (ESWT) Block.

The organisations include the CAMAC Energy Ghana Limited, Ghana National Petroleum Corporation (GNPC), Base Energy Ghana Limited and the GNPC Exploration and Production Company Limited. The agreement says that if a commercial discovery of oil was made in the ESWT block, the GNPC, CAMAC Energy Ghana Ltd and Base Energy Ghana Ltd, collectively referred to as ‘the contractor’,

38 Oil Review Africa Issue Two 2014

would prospect for oil in the block for 25 years. If no commercial discovery of oil was made after seven years, the contract expires. The contractors are obligated to spend a minimum of US$30mn.

Camac’s equity in the Ghana asset is far more limited than its participation in Nigeria, Kenya and The Gambia, where it has operatorship and a 100 per cent interest in eight production and exploration licenses, including the Oil Mining Leases (OMLs) 120 and 121, in deepwater Nigeria, Blocks L1B and L16 onshore Kenya, Blocks L27 and L28 offshore Kenya, and Blocks A2 and A5 offshore Gambia.

The ESWT block is in one of the most prospective areas offshore Ghana. It spans some 1,508 sq km.

www.oilreviewafrica.com

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E&P

Comoros clears way to start offshore exploration BAHARI RESOURCES HAS won formal approval for an exploration and productionsharing agreement (EPSA) from the National Assembly of the Union of the Comoros.

The islands’ government signed the EPSA following implementation of a new Petroleum Code at the start of this year.

Bahari’s license area takes in Blocks 35, 36, and 37 and covers around 18,000 sq km offshore the Comoros. It is adjacent to the Rovuma gas basin, offshore Mozambique, where Anadarko and Eni have proven 175 tcf of in-place gas in Area 1 and Area 4.

Existing 2D seismic suggests the Rovuma Basin floor fans could extend into the EPSA license area.

Bahari, working with partner Discover Exploration, will conduct a phased seismic and drilling programme, and complete a regional study of the entire Comorian territory on behalf of the government. Seismic work is expected to start in Q2 2014.

OMV enters Namibian project AUSTRIA’S OMV HAS entered into a new exploration project offshore Namibia. OMV said that this is the third "major milestone" for the comany in the sub-Saharan region after it acquired interests in Madagascar and Gabon in 2013.

Brazilian exploration company Cowan, which currently holds 85 per cent of the blocks, will farm out 45 per cent to Murphy and 20 per cent to OMV, while retaining 20 per cent. The joint venture partners plan to conduct an extensive 3D seismic programme beginning in Q2 2014.

OMV CEO Gerhard Roiss commented in a company statement: "OMV is well on track to position its assets into more high-return upstream projects. By achieving this third milestone in just over six months, OMV has once again demonstrated its ability to deliver on strategic objectives." www.oilreviewafrica.com

Oil Review Africa Issue Two 2014 39

S07 ORA 2 2014 E&P - Rig Count - Mid Downstream_Layout 1 4/17/2014 2:25 PM Page 40

The Baker Hughes Rig Count tracks industry-wide rigs engaged in drilling and related operations, which include drilling, logging, cementing, coring, well testing, waiting on weather, running casing and blowout preventer (BOP) testing.

MARCH 2014 - LAND & OFFSHORE MARCH 14 Country Land & Offshore ALGERIA 44 ANGOLA 14 CAMEROON 2 CHAD 10 CONGO 4 EQUATORIAL GUINEA 0 GABON 7 GHANA 1 COTE D'IVOIRE 1 KENYA 14 LIBERIA 0 LIBYA 12 MOZAMBIQUE 2 NIGERIA 14 TANZANIA 0 TUNISIA 1 UGANDA 1 D R CONGO 2 NAMIBIA 0 SOUTH AFRICA 0 MAURITANIA 1 ETHIOPIA 0

FEBRUARY 14

VARIANCE

MARCH 13

Land & Offshore 54 19 2 10 4 0 2 0 0 12 0 17 1 18 0 2 1 2 0 1 2 1

From Last Month -10 -5 0 0 0 0 5 1 1 2 0 -5 1 -4 0 -1 0 0 0 -1 1 -1

Land & Offshore 47 9 3 2 5 1 4 1 1 2 1 15 1 13 0 2 2 1 0 1 1 0

FEBRUARY 13 Land & Offshore 42 9 2 2 6 1 5 2 1 1 1 15 1 17 1 2 1 1 0 0 0 0

VARIANCE From Last Month 5 0 1 0 -1 0 -1 -1 0 1 0 0 0 -4 -1 0 1 0 0 1 1 0

Source: Baker Hughes

ExxonMobil to hunt for oil off SA coast AMERICAN PETROLEUM GIANT ExxonMobil has joined the hunt for oil and gas off the coast of South Africa, including KwaZuluNatal, with plans to start a three-year exploration in a massive 50,000 sq km search area early next year.

The exploration zone stretches from Port St Johns in the East Cape to Richards Bay in the north of KZN, at sea water depths of up to 3.6 km. At its closest point, the exploration area is about 50 km off the coastline, stretching almost 400 km out to sea.

Several other companies have also applied for exploration permits off KZN over the past few years, including Sasol and the Singapore-based Silver Wave Energy group.

However, unlike previous and current exploration, based mainly on 2D seismic surveys, ExxonMobil is considering more sophisticated 3D and multi-beam sonar surveys, robotic submarine scanning,

40 Oil Review Africa Issue Two 2014

aircraft fly-overs, sediment core sampling and temperature measurements of the seabed.

The exploration plan follows the decision by the Petroleum Agency of SA to grant a technical co-operation permit to ExxonMobil’s South African-based subsidiary company in December 2012.

Before exploration can start, ExxonMobil has to submit an environmental management programme to the government and has set aside US$10.1mn in financial provision to manage or rehabilitate any potentially negative impacts during exploration.

A draft environmental management plan for the project suggests that ExxonMobil’s decision to explore this area indicates a strong likelihood of making further oil and gas discoveries off South Africa.

“Current interest in exploration in South Africa by experienced international

exploration companies, in the face of a very competitive market for exploration acreage, indicates that the potential exists in the South African offshore for commercial oil and gas discoveries. This will be to the benefit of the country and its people through additional government revenues, job creation, security of the supply for South Africa’s oil and gas products, and contribution to economic growth,” says the draft report.

The draft environmental management programme by local consultancy firm Environmental Resources Management (which only covers the exploration phase – not drilling or pumping oil), rates the overall environmental impacts as either “low” or “negligible”. This is despite continuing scientific controversy over the potentially harmful impacts of underwater noise on whales, fish and other sea creatures as a result of seismic and sonar surveys. www.oilreviewafrica.com

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Midstream

S07 ORA 2 2014 E&P - Rig Count - Mid Downstream_Layout 1 4/17/2014 2:25 PM Page 42

Kenya eyes initial work on oil pipeline plan THE KENYA GOVERNMENT is expected to invite international bids for the design and construction of the US$3bn oil pipeline that will connect the oil fields of Turkana and the Indian Ocean Port of Lamu. The route is also expected to be used for exporting oil from other discoveries in neighbouring Uganda. Based on finds so far, Tullow Oil has said Uganda and Kenya could together produce about 300,000 bpd. By comparison, in 2012, the established sub-Saharan producer Equatorial Guinea accounted for about 280,000 bpd, while Nigeria's output was 2.4mn bpd.

Uganda to announce oil refinery investor UGANDA WILL ANNOUNCE the lead investor and operator for its planned oil refinery in July 2014 and expects to conduct a licensing round for its vacant petroleum exploration acreage next year, a senior energy official told Reuters.

The East African country first discovered crude deposits in the Albertine rift basin along its border with DR Congo in 2006 and reserves are estimated by the government at 3.5bn barrels.

The government moved closer to getting the hydrocarbons industry off the ground recently when it signed a memorandum of understanding with three oil firms laying out a blueprint for the commercial development of its oil fields.

According to the deal, crude produced by the three firms - Tullow Oil, Total and CNOOC - will be shared between a thermal power generation plant, a planned refinery and an export pipeline.

Commercial oil production is expected to begin in 2016 at the earliest.

In December, the energy ministry announced that five consortia and one individual firm had been shortlisted to bid for the US$2.5bn refinery. The lead investor - which will also operate the plant is expected to take up a 60 per cent stake, with the remainder going to the Ugandan government.

The individual company shortlisted is Marubeni Corp, while the five consortia are respectively led

by Petrofac, Global Resources, China Petroleum Pipeline Bureau, SK Energy and Vitol.

Robert Kasande, the energy ministry official overseeing the project, said the government had been holding pre-bidding talks with those shortlisted.

"They are expected to submit their final proposals in May, then evaluation will follow," Kasande said. "In July, we will announce the winner."

Uganda has scaled back its refining ambitions over the past two years. It now plans to start with a refinery with a capacity of 30,000 bpd, gradually rising to 60,000 bpd. It had initially wanted a plant that could process 120,000 bpd but oil firms argued that would not be commercially viable.

42 Oil Review Africa Issue Two 2014

Energy and Petroleum cabinet secretary Davis Chirchir said the aim was to invite expressions of interest for a range of preparatory works "in the coming days, not weeks" on the pipeline project. This is an initial step before a tender inviting formal bids. The tenders would include starting work "on the route to market, social investment programmes in terms of infrastructure, support to the various communities along the route, the road infrastructure that will support the building of the pipeline." It could also include a power line along the route as well as fibre-optic cabling.

Chirchir said Kenya was in talks with Uganda and South Sudan on jointly building the pipeline before issuing a tender for that work. "It is important that even as we go to tender that we have carried along our partners."

In Kenya, Tullow and its partner Africa Oil Corp have discovered about 600mn barrels of oil in the Lokichar Basin - enough, the UK firm says, to make a pipeline from there to the coast viable even without Ugandan oil. It says there is potential for one billion barrels in Kenya's South Lokichar Basin, while analysts suggest other Kenyan basins could also hold significant reserves.

Nigeria, Namibia to build joint oil refinery THE FEDERAL GOVERNMENT of Nigeria and the Republic of Namibia have proposed to construct a joint oil refinery to maximise cooperation in the area of energy.

The decision was reached during a recent two-day official visit by President Goodluck Jonathan to Namibia.

According to a joint communiquĂŠ issued on the visit, the refinery, which would be located in Walvis Bay, would be wholly privately financed.

The two leaders urged the private sector of both countries to work toward a speedy realisation of the joint oil refinery.

They commended the hosting of a business forum between the private sector stakeholders of both countries on the margin of the state visit.

The leaders urged their respective private sector stakeholders to take full advantage of the abundant business opportunities, to optimise trade and commerce between the

Photo: Siphiwe Sibeko/ Courtesy Reuters.

two countries.

Meanwhile, the Federal Government has agreed to train Namibian diplomats at the Nigerian Foreign Service Academy.

The Federal Government also agreed to provide volunteer health professionals to Namibia under the Technical Aid Corps, TAC, Scheme.

The agreements were among the 11 Memoranda of Understanding (MoU) signed by both countries to broaden and deepen bilateral co-operation.

Nigeria mobilises US$700mn for Trans-Sahara gas project PRESIDENT GOODLUCK JONATHAN has announced that Nigeria has mobilised US$700mn to support the completion of the Nigeria-Algeria gas pipeline project.

Jonathan made this known in a report on the status of the Trans-Saharan gas pipeline project, presented at the 30th meeting of the NEPAD Heads of State and Government Orientation Committee.

Represented by the acting minister of foreign affairs, Prof Viola Onwuliri, Jonathan renewed the special commitment of Nigeria to jump start the project, which has an estimated cost of US$20bn. He said the immediate focus for Nigeria was to connect major gas supply sources in the Niger Delta region through pipeline infrastructure that traverses the northern half of the country and delivers gas to the Nigeria/Niger border.

"We have raised US$450mn in Eurobonds and an additional direct equity contribution of about US$250mn in support of this project. The NNPC, which is the executor of this project, has completed the concept design for the pipeline, which is an important milestone since my last update".

The report by the president noted that work had begun in the acquisition of the Rights of Way survey of key segments of the pipeline, while work on the environmental impact assessment study of the pipeline would soon commence.

Jonathan informed the NEPAD meeting, chaired by President Macky Sall of Senegal, that the front end design of the pipeline would be completed by the end of Q3 2014.

"This will be followed closely by major construction activities on the Trans-Nigeria segment. "It is our expectation and aspiration that work on the Trans-Nigeria segment will be completed, as planned, by 2018".

The US$20bn trans-Saharan project, when completed, will transport about 30 bcm of natural gas from Warri through Niger Republic to Algeria and on to Spain and Europe. www.oilreviewafrica.com

S08 ORA 2 2014 Technology A B_Layout 1 4/17/2014 2:29 PM Page 43

Think Well Testing, Think Well Fluid Services

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S08 ORA 2 2014 Technology A B_Layout 1 4/17/2014 2:29 PM Page 44

Technology

For the past 15 years, Ocean Power Technologies (OPT) the world-leading supplier of moored, floating buoys that harvest energy from waves, has been testing, developing and improving its PowerBuoy technology.

Maximising security and operations

while minimising costs T

HE AUTONOMOUS DEVICES work by using a ‘smart’, ocean-going buoy consisting of a surface float, a spar containing a power take-off and battery system, and a heave plate constraining the motions of the spar. This captures and converts wave energy into electricity. The technology is capable of delivering energy from a few KW to several 100 KW, with future evolution planned to deliver even larger power.

The process begins by the rising and falling of waves; the resultant mechanical stroking is converted via a sophisticated power take-off to drive an electrical generator. This power is then transmitted to external equipment via underwater power cable, or direct to a payload integrated into the structure itself, it is then available 24/7 with the option of timed power bursts.

Internal intelligence on the PowerBuoy continuously monitors the performance of the various subsystems and environments with data transmitted to shore in real time, allowing the structure to provide updates on health and status.

This gives control back to the operator and, with no planned maintenance for three years, offers significant OPEX savings.

The communication system within the structure also means that it actively assesses oncoming waves to ensure that it extracts maximum power. In the event of particularly large waves, the system automatically locks up and ceases production. In this case, on-board batteries ensure power is still available and when wave heights return to normal, the system unlocks recommencing operations. In high seas when the battery is fully charged, excess power is sent to a dump resistor.

Whilst new to the oil and gas industry, the technology, which can be tailored, already has an established track record in the defence and utility sectors.

US Navy LEAP project case study OPT established the LEAP (Littoral Expeditionary Autonomous PowerBuoy) project after being approached by the US Navy as it was aiming to increase the coastal monitoring and security surveillance capability of its High Frequency (HF) radar network.

To extend the offshore range of the coastal radar system, an APB-350 designed by OPT was deployed around 35 km off the US east coast. The HF antenna was mounted on the top of the APB-350 to transform a monostatic shore-based network to have a bistatic operating mode for improved performance.

44 Oil Review Africa Issue Two 2014

Electric tree power and control.

Leveraging the technology’s ability to be tailored, OPT has developed a range of potential applications for the oil and gas industry.

The Navy’s specifications for the project included, among other requirements: 6 Uninterrupted power supplied to the HF radar payload and to communications systems 6 Ability to remain on station in all ocean conditions 6 Mechanical, electrical and mooring systems capable of surviving defined extreme ocean conditions 6 Dimensions suited to deployment by a Coast Guard cutter vessel (transportable in standard ISO 12m shipping container) 6 Deployment for a long period 6 Autonomous operation without a need for constant on-site monitoring and maintenance It was this that guided the overall design and testing of the APB-350, including its electrical, mechanical, and mooring subsystems. The utilisation of the HF radar on the PowerBuoy resulted in resolution and tracking of vessels being greatly improved with detection ranges doubled, helping to reduce spurious alarms and offer all round improved management of the offshore enterprise.

Beyond its communications ability, the overall robustness of the APB-350 was tested, including mechanical, electrical, and mooring components.

The structure successfully withstood Hurricane Irene, which passed just west of the deployment site, with it remaining on station despite ninemetre significant wave height that the storm produced over a 48-hour period.

What is even more notable, however, is that the system remained fully operational throughout, providing power to the payload, with a posthurricane inspection of the structure and mooring revealing no damage. This highlights, in transferable terms, the technology’s ability to withstand extreme conditions such as deep and ultra-deep water environments in the energy sector.

Phase 2 of the programme was deployed in July 2013 and included the addition of a passive acoustic monitor for subsea vessel tracking, demonstrating the multi-use and flexible nature of the technology.

Applications in the oil and gas industry Leveraging the technology’s ability to be tailored, OPT has developed a range of potential applications for the oil and gas industry: 6 Advanced in ocean security networks for offshore developments (eg, anti-piracy) 6 Real time on-site meteorological monitoring 6 AUV garages for permanent infield monitoring/inspection of assets 6 The control of electric trees for CO2/water field injection www.oilreviewafrica.com

S08 ORA 2 2014 Technology A B_Layout 1 4/17/2014 2:29 PM Page 45

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S08 ORA 2 2014 Technology A B_Layout 1 4/17/2014 2:29 PM Page 46

Technology

This persistent system enables the operator to address minor maintenance issues quickly from the desk top and major issues have a longer lead-time for planning and response, lowering the risk of production outages. The technology does all this while minimising the need for maintenance staff, providing a safe and costeffective solution.

The technology provides ample power to recharge/power most AUVs and could be scaled up to support larger workhorse vehicles. The system is equipped with a number of different on board communication capabilities including satellite (Iridium), High Frequency (HF) and Wi-Fi. And can support VSAT systems that currently serve the Gulf of Mexico.

Prepositioned AUV operational networks.

6 Real-time on site field monitoring/sensing systems for 4D reservoir analysis and pre/post deployment surveys 6 Continuous pipeline heating and monitoring 6 Diesel replacement Increasingly, field developments are taking place in areas of the world where piracy and other security issues are common. These areas are often remote and local support is sporadic. This presents a problem both in terms of personnel safety and field integrity. Damage to field infrastructure due to other marine activities such as fishing and theft of the security equipment itself are both areas of additional concern. Pin pointing the culprits is often difficult and prosecutions are hard to enact due to the lack of evidence.

While satellite tracking and monitoring schemes supported by surface infrastructure are potential solutions, these are not sufficient in large fields (radar horizon is approximately 40 km) or in the drive to full subsea production. The real time communications facility of the APB-350 can deliver information on such activities in advance of any potential issue as shown in the LEAP defence application described earlier. It can be configured to provide subsea monitoring through both active and passive sonar, photographic/video evidence via a surface mounted remotely operated or motion sensing camera (particularly suitable in cases of theft or malicious damage to the APB-350 itself), and longer radar range detection.

These features when combined, offer operators a comprehensive system to ensure field integrity and safety. An example of this is the passive sonar.

Each vessel has its own acoustic signature allowing accurate identification. This signature can be detected at large distances and it is easy to ascertain the type of vessel in the area.

This early detection can enable the camera to be turned towards the oncoming vessel for monitoring and evidence gathering purposes

Electric tree power and control Electric trees offer the potential for improved control system response and increased reliability over similar hydraulic controlled systems. Using the APB-350 as a power source and control hub potentially avoids a complex and costly subsea umbilical installation.

46 Oil Review Africa Issue Two 2014

The current means of delivering power to the electric well head is to obtain it from remote surface infrastructure. The APB-350 solution offers a potentially lower cost solution with equivalent levels of reliability and safety.

To use the APB-350, it must have sufficient power characteristics with a margin of safety to meet the needs of the electric tree for safe and reliable operation. The electric tree is mainly a lowpower system operating on a fraction of the power of subsea pumps. The fact that there are no moving parts inside the subsea control module however still requires intermittent bursts of high power to operate valves.

Changing the power source to the tree does not in itself represent any increased safety concern; however, as the APB-350 is on the surface, this does represent a risk that is not experienced by submerged cable. This is mitigated by up-to-date navigational aids mounted on the APB-350 along with being marked on marine charts.

The APB-350 continuously transmits a “health check” status to operators to alert of any incidents or failures. The APB-350 is designed to be fitted with a high integrity shutdown mechanism. To ensure that any failure requirement is not enabled due to communications failure, the APB-350 will include a failsafe closure signal that will be transmitted to the tree if a reset signal is not received from the control centre within every four-hour period.

Diesel replacement

Prepositioned AUV operational networks

In addition, the planned evolution of the technology means that larger PowerBuoys have the potential to redefine the way assets are managed by reducing or replacing diesel usage, making current fields that offer low commercial returns more attractive for investment.

Applying the technology as a persistent power source for prepositioned Autonomous Underwater Vehicles (AUV) systems, alongside AUV garages, offers operators a fast, persistent and cost-effective solution. The APB-350 offers many advantages over existing ship-centric AUV systems, especially as most oil and gas fields are spread over a wide area (km²) and are increasingly being developed in remote locations.

Currently, AUV operational performance is hampered by the need for the AUV to re-surface to be re-charged programmed for missions, and upload resultant data, all of which is particularly difficult in sea states of three and above.

Employing an AUV garage removes these limitations by offering an in situ charging point and two-way communications from the device without the need to resurface.

OPT’s PB40 device is currently being prepared for a trial off the north coast of Spain as part of an FP-7 funded project (Waveport). The PB40 is designed to deliver 40kW and to be scaled up to 80kW through module additions to the PTO (power take off).

Diesel generators are the most common method of power generation in the current market but this comes at a price for both the fuel and the transportation needed for its delivery to the asset.

The PB40 can provide support in this situation offering a power supply that can support existing diesel generators by connecting to the (uninterruptable power supply (UPS) on the platform via underwater cable, significantly reducing the operational costs involved. This duel power source allows: 1. Drastic reduction in diesel consumption through reduced generator usage 2. Reducing the load on the generators, which increases their reliability and life 3. Reduced maintenance and associated manpower, transportation and operational downtime costs 4. Increased redundancy and safety of the overall power system 5. Greener production

Conclusion Similar to the defence sector, African energy infrastructure relies upon high performance, where flexibility and reliability have a direct impact on the success of operations.

OPT and its technology both in its current state and with future evolution has the ability to redefine the way assets are managed in the region, saving both OPEX and CAPEX expenditure whilst providing invaluable reliability and security to operators allowing them to get the most out of any asset. ■ www.oilreviewafrica.com

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Technology

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Metal corrosion is a costly fact of life in the oil and gas industry. Surface deterioration of the metal components used in offshore production processes can lead to premature and often sudden failure with the risk of costly, unscheduled downtime and the threat of hydrocarbon leaks. Andrew Courtney of Surface Technology* looks at the issue.

The cost of corrosion in the

offshore industry C

ORROSION CAN BE defined as the gradual destruction of materials by chemical reaction with their environment. For oil and gas producing operations, there is no escaping the challenge of corrosion; steel is susceptible to corrosion and the harsher the environment, the more accelerated the corrosion process becomes. As offshore exploration moves into deeper and more hostile waters, so the potential impact of corrosion increases. The greater difficulty maintaining components in increasingly remote and challenging environments requires the need for extended component life. Components which have enhanced resistance to the effects of corrosion are now essential as they increase service life and reduce the need for costly maintenance. Developments within the industry, aimed at reducing offshore development costs, involve reduction in platform weight and increasing use of satellite wells and subsea manifolds, all of which require specific attention to corrosion prevention.

Any surface deterioration on the metal products used in key applications can lead to premature and often sudden failure. In addition to corrosion, wear is another factor, typically from abrasion and impact, and while each is damaging enough on their own, they can combine to cause aggressive damage – pitting, roughening, grooves, dents, cavitation and cracking to name but a few. Individually, corrosion and wear are problematic, combined the sum can be greater than the parts.

In offshore oilfields, metal structures and components are under constant attack from a variety of sources from drilling muds to water and carbon dioxide to acid. Much metal loss in oilfield casings is caused by crevice corrosion. Although corrosion will initially be uniform across the surface area of the metal, in time it will accelerate in any small crevice in the metal.

Crevice corrosion often starts at drill-point joints, tubing or casing collars.

Pitting equally causes vulnerability when a small scratch, impurity or deformity in the metal can start the corrosion process. Corrosion that starts with pitting can ultimately progress into cracks in the metal, which can be accelerated by tensile stress, resulting in stress corrosion. Corrosion fatigue,

Corrosion can be inhibited by the application of specialist engineered coating solutions to extend the service life of components and control maintenance costs. when metals are subjected to alternating stresses in a corrosive environment, can affect all types of welded connections on drill ships, drilling and production rigs and platforms.

With an issue as significant in terms of both cost and productivity, we cannot afford to think in terms of rectification. We are, instead, looking at surface engineering – the treatment of material surfaces to change their properties or characteristics to achieve improvements in performance eliminating corrosion by design. When considering offshore and subsea components, engineered surface coating solutions can be employed to achieve, amongst other things, improved corrosion and wear resistance. As such, it is a discipline that should be applied throughout the design, specification and manufacturing process as an integral part of component development to ensure that the specific needs of the operational environment are addressed.

While corrosion is inevitable, it can be inhibited by the application of specialist engineered coating solutions to extend the service life of components and control maintenance costs. Steps taken at the product finishing stage will minimise the risk and effects of corrosion and so optimise performance and longevity.

Although there are a number of options, including changing the environment by the use of inhibitors, cathodic and anodic protection – even using more highly alloyed specialist stainless steels – the application of corrosion-resistant coatings is perhaps the most widely used way of protecting steel. The choice of coatings includes organic, metallic or inorganic and there is a wide variety to choose from.

Specialist engineered coating solutions can address issues of corrosion, gall resistance or fouling problems. Applications typically include Christmas trees, subsea connectors and seals, riser systems, clamps, seat, seals and valves, hangers, threaded components such as nuts and bolts, as well as manifolds and valve bodies.

Coating options offshore

The paint spraying process.

48 Oil Review Africa Issue Two 2014

Thermal spray coatings exhibit high resistance to corrosion and wear in extreme applications and are increasingly being used in the oil and gas industry. The use of thermal spray to apply coatings, such as High Velocity Oxy Fuel (HVOF), is one of the most commercially viable and allows the control of various parameters including powder particle velocity and temperature, which influence coating properties such as residual stress, bond coat strength and microstructure.

Another coating system used to provide corrosion resistance, often to offshore structures on-site, is wire arc spraying. Wire-arc thermal sprays provide a dense and strong metal coating and they are an excellent choice for protection against corrosion. Galvanically active coatings such as zinc and aluminium can be applied using the wire-arc process.

Wire-arc metal spraying is also used to apply non-slip coatings to protect both infrastructure and employees and is typically applied to walkways and tread plates. Thermal Spray Aluminium (TSA) is also applied using a wire-arc spray gun.

Fluoropolymer coatings are a blend of high performance resins and www.oilreviewafrica.com

S08 ORA 2 2014 Technology A B_Layout 1 4/17/2014 2:35 PM Page 49

Technology

ROV buckets coated with paint system for corrosion protection.

fluoropolymer lubricants, such as polytetrafluoroethylene (PTFE). This type of coating offers a superior dry film lubricant that produces a smooth, hard, slick surface and provides excellent corrosion and chemical resistance, often used to meet the environmental demands within the offshore oil and gas industry.

Fasteners are particularly suited to PTFE coating, with its ability to provide a combination of high corrosion resistance combined with accurate torque loadings. Well head equipment operating under extreme conditions can also take advantage of PTFE high performance coatings, both for corrosion resistance and its load bearing and release properties.

Armourcote is an engineered coating solution developed by global leader in specialist surface coatings for the oil and gas industry, Surface Technology, to inhibit corrosion and provide surface release for marine equipment. The brand was originally established with the introduction of proprietary composite coating systems developed to overcome the inherent softness of the materials used for surface release and friction control applications. These composites were first developed using fluorocarbon and fluoropolymer coatings and have subsequently been extended to include high load bearing, high temperature precision deposited dry film lubricants.

With an ageing asset infrastructure, preventing corrosion is vital in every step of the offshore oil and gas production industry.

Benefits include improve wear resistance and lower friction, leading to improved abrasion resistance. Loads are taken up by the reinforcement peaks and any wear and abrasion that occurs exposes more of the fluoropolymer coating. The peaks of reinforcement are continuously smeared with the coating, which results in a smooth wear and abrasion-resistant, low-friction finish.

Where greater levels of corrosion protection are necessary for operations in hostile and demanding environments advanced multi-coat, anti-corrosion paint systems are often specified, which complement other protective surface coatings to overcome these serious situations. The anti-corrosive qualities of epoxy paint systems make them suitable for providing marine barrier protection on sub-sea equipment that will be permanently immersed or in the splashzone. Epoxy systems are also resistant to chemical attack, making them useful on equipment such as pipelines and chemical tanks.

Responding to the challenge With an ageing asset infrastructure, a constant need to improve productivity and a move towards increasingly hostile production environments, preventing corrosion is vital in every step of the offshore oil and gas production industry.

Having more than 50 years’ experience serving this market globally, providing a complete range of engineered surface coatings combined with extensive technical knowledge and application advice, Surface Technology is well placed to help the industry mitigate the threat of corrosion and meet its key challenges of extending equipment life, reducing downtime and reducing operating costs. â–

* Surface Technology is part of Norman Hay plc and a global industry leader in specialist engineered surface coatings www.oilreviewafrica.com

Oil Review Africa Issue Two 2014 49

S09 ORA 2 2014 Technology C D_Layout 1 4/17/2014 2:41 PM Page 50

Technology

This article looks at spray applied epoxy coatings for erosion-corrosion protection for large offshore transfer pipes, where the lining is spin-sprayed as one coat to internally protect the pipe and cover the girth weld.

Spraya

ble ero

for pip

sion-c

orrosio

ework

n inter

nal lin

ings

Figure 1 – Single coat application of Belzona 1331 achieves full coverage of a 1.5mm high weld bead. The masking tape was removed to reveal the weld bead.

P

IPELINE ASSET OWNERS have specified the protection of external pipelines for many years but advances in robotic spin spray techniques have created new opportunities for internal pipeline coating and inspection. Internal pipeline coating not only provides corrosion-erosion protection but also improves flow efficiency resulting in reduced power consumption and can be specified to prevent corrosion contamination where the purity of the fluid being transported is important.

An area of significant growth in recent years involves the coating of internal field joints in pipelines. Belzona 1331 and Belzona 1381 are new generation cold cure epoxy coatings employing a novel polymer alloy technology. The polymer alloy contains an immiscible blend of a tough ductile phase within a hard epoxy matrix. These coatings have been formulated to meet the specific requirements of internal field joint coating applications. Belzona 1331 is specified for use at ambient service temperature while Belzona 1381 is the elevated temperature equivalent.

Internal field joint coating requirements

Where pipe diameters do not permit manual application, an internal pipe coating must be robust to a number of robotic spray techniques including centrifugal spin spray. In application trials, a single coat of Belzona 1331 was applied at 1,800 micron wet film thickness to the internal wall of a 60 cm diameter test pipe with a 1.5 mm high internal girth weld bead. A smooth coat was applied without sagging and single coat coverage of the girth weld was achieved.

These coatings proved to be robust within a wide range of spin spray operational variables. Due to the coatings’ pseudoplastic rheology, wet film thickness of up to 2,000 micron was possible even on a weld bead heated to 90°C to mimic the residual heat which may be present as a consequence of the welding process.

In addition to high wet film thickness, these coatings have excellent edge retention. In testing via NACE TM03041 (Offshore platform atmospheric and splash zone maintenance coating system evaluation), Belzona 1331 and Belzona 1381 achieved the required 0.5 peak to flat coating thickness ratio over a ridge radius curvature of 0.7mm. Edge retention is an important coating property where protrusions or sharp edges are present on the weld bead or on poorly aligned field joints.

Due to the ductile phase of the polymer alloy, these coatings exhibit flexibility and impact resistance superior to conventional epoxy coatings and can therefore tolerate greater stress during pipeline field assembly and in-service soil movement.

These coatings passed when independently tested at 2.5° per pipe diameter for NACE RP0394 (Flexibility Figure 2 – Excellent edge retention: NACE TM0304 specified 90°angle aluminium specimen with ridge radius of coating for field bending)2. curvature of 0.7mm. The peak to flat coating of 0.5 is achieved.

50 Oil Review Africa Issue Two 2014

www.oilreviewafrica.com

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Technology

S09 ORA 2 2014 Technology C D_Layout 1 4/17/2014 2:41 PM Page 52

In an in-house three point bend test, Belzona 1331 and Belzona 1381 were found to bend at a 60° angle from the horizontal (the maximum for the gauge). Conventional epoxy coatings typically achieve a 30° bend angle from the horizontal before cracking failure occurs.

Belzona 1331 and Belzona 1381 may be applied as single or multi coat systems and are spark testable allowing high-voltage holiday testing and insitu film thickness measurements to be carried out.

Impressed current cathodic protection of pipelines is common practice and the coatings were independently tested for resistance to cathodic disbondment according to ASTM G953 (Standard test method for cathodic disbondment test of pipeline coatings). Disbondment of only 4.5mm for Belzona 1331, and 2.5mm for Belzona 1381 was recorded. This is well within the accepted maximum limits expected from coatings operating in conjunction with an impressed current protection system.

Adhesion to a number of substrate materials including grit blasted mild steel and OEM fusion bonded epoxy coating was tested in accordance to ASTM D45414 (Standard test method for pull-off strength of coatings using portable adhesion testers). Excellent adhesion comparable to conventional epoxy coatings was achieved.

The high temperature immersion resistance of these coatings was assessed by Atlas cell, in accordance with NACE TM01745 (for six months continuous immersion in deionised water under cold wall conditions). Belzona 1331 was found to be suitable for immersion at temperatures up to 50°C (122°F), whereas Belzona 1381 is suitable for immersion at temperatures up to 95°C (203°F).

Superior erosion resistance Cold curing epoxy coatings, reinforced with hard ceramic fillers have proven over many years to be effective in dealing with erosion-corrosion in fluid handling systems. There are, however, downsides to the use of ceramic fillers.

They can cause wear to spray equipment and as a result are only suitable for manual brush application inside large diameter pipes.

Belzona 1331 and Belzona 1381 are a new generation of erosion resistant coatings based on polymer alloy technology. These coatings have superior erosion resistance to ceramic filled epoxy coatings yet cause negligible wear to spray equipment as they do not contain hard angular ceramic particles.

Erosion due to impingement of entrained solids in the conveyed fluid is categorised into ductile and brittle mechanisms. Ductile erosion involves material removal due to cutting or ploughing via sliding abrasion (eg, along pipeline straights and risers). Brittle erosion involves material removal due to radial crack formation via impact abrasion (eg, pipeline elbows, bends and protrusions).

Hard ceramic filled coatings resist ductile erosion mechanisms but suffer from brittle erosion due to their low fracture toughness. The tough ductile phase of the polymer alloy is capable of elastic deformation and is, therefore, resilient to brittle erosion mechanisms and due to a low co-efficient of friction, also resists ductile erosion mechanisms.

Erosion resistance testing Numerous test methods exist to evaluate a material’s resistance to erosion and a meaningful test programme employing a number of abrasion mechanisms allows for good approximation of field conditions and is a necessary step in validating product quality. Several abrasion test methods are therefore employed in the evaluation of Belzona 1331 and Belzona 1381.

Slurry erosion testing was carried out in accordance with ASTM G66 and reproduces the environment experienced by pipe internals exposed to highly abrasive slurries, where the entrained solids slide and cascade against the coated specimen rods resulting in both sliding and impact abrasion.

Figure 3 – Belzona 1331 and Belzona 1381 jet impingement erosion versus ceramic filled epoxy coating.

A measure of erosion resistance can be determined from the calculated volume loss.

The degree of erosion to a cast disc of the cured epoxy coating was similarly determined by ASTM D40607 (wet taber abrasion).

Impact erosion was measured via a jet impingement test carried out by the School of Mechanical Engineering at the University Of Leeds (UK). The high velocity jet on the specimen is comparable to the impingement experienced at pipeline elbows, protrusions and edges typically found in practical pipeline geometries.

Conclusion Belzona 1331 and Belzona 1381 have been designed to meet the challenges typically encountered in pipeline assembly and operating conditions. These coatings are particularly suited to coverage of girth welds on internal field joints and provide a long lasting reliable solution to pipeline integrity.

Belzona 1331 and Belzona 1381 are a novel class of spray applied erosion resistant coatings which utilise a polymer alloy as opposed to the traditional ceramic filler. Product testing has demonstrated that Belzona 1331 and Belzona 1381 have superior erosion resistance when benchmarked against traditional ceramic filled epoxy coatings. ■

References 1 – NACE TM0304 (2004), Offshore Platform Atmospheric and Splash Zone Maintenance Coating System Evaluation, www.nace.org 2 – NACE RP0394 (2002), Standard Recommended Practice – Application, Performance, and Quality Control of Plant-Applied, Fusion-Bonded Epoxy External Pipe Coating, www.nace.org 3 – ASTM Standard G95-07 (2013), Cathodic disbondment test of pipeline coatings, ASTM International, West Conshohocken, PA, DOI: 10.1520/G0006, www.astm.org 4 – ASTM D4541, Standard Test Method for Pull-Off Strength of Coatings Using Portable Adhesion Testers, www.astm.org 5 – NACE TM0174-02, Laboratory Methods for the Evaluation of Protective and Lining Materials on Metallic Substrates in Immersion Service, www.nace.org 6 – ASTM Standard G6 – 07 (2013), Abrasion resistance of pipeline coatings, ASTM International, West Conshohocken, PA, DOI: 10.1520/G0006, www.astm.org 7 – ASTM Standard D4060-10, abrasion resistance of organic coatings by taber abraser, ASTM International, West Conshohocken, PA, DOI: 10.1520/D4060-10, www.astm.org

Table 1: Volume loss (cu cm) due to erosion of epoxy coatings subjected to abrasion testing

Belzona 1331 Belzona 1381 Non-sprayable Ceramic Filled Epoxy Competitor "sprayable"Ceramic Filled Epoxy

52 Oil Review Africa Issue Two 2014

Dry Taber Abrasion ASTM D4060 0.013 0.009 0.015 0.027

Wet Taber Abrasion ASTM D4060 0.046 0.047 0.127 0.208

Slurry Drum Abrasion ASTM G6 0.117 0.116 0.142 0.288

50 Hrs. Jet Erosion Leeds University 0.061 0.046 0.195 Not Tested

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Technology

Whether it is through its ability to optimise the design of future multi-client seismic surveys, reduce costs and risk in exploration, or provide a means of accessing high-quality data sooner and at a lower cost than proprietary data, multi-client FTG data is playing a key role in African exploration.

The rise of multi-client FTG surveys

in Africa

With such vast areas to map out throughout Africa, few operators have the resources to expend vast amounts of money on 3D seismic.

A

FRICAN OIL & GAS exploration has always had its fair share of challenges as the vastness of the continent means that only a tiny percentage has ever been explored.

E&P companies are frequently faced with sparse seismic lines, huge exploration blocks, difficult terrain and an often difficult geopolitical situation.

This can add up to potential cost overruns, delays or poorly focused exploration.

To help mitigate the inherent risks in African exploration, many companies look to multi-client data for economies of scale, to help better target and de-risk their prospects, ensure optimum seismic survey design, and to provide input to crucial investment decisions.

This rise in multi-client services is especially being seen in the field of seismic data where the last few months have seen a variety of 2D and 3D multi-client surveys being deployed. The North West Africa Atlantic Margin, offshore Benin and Liberia and the South Africa Orange Basin have all been the targets of recent multi-client seismic surveys.

Yet, it’s not just multi-client seismic surveys that are garnering attention in African exploration.

Potential field data is a growing part of the multiclient story with one technology particularly prevalent – that of Full Tensor Gravity Gradiometry (FTG).

Full Tensor Gravity Gradiometry, which has been previously covered in this publication, maps the

54 Oil Review Africa Issue Two 2014

small density variations in underlying rocks by measuring the gradient of the earth’s gravity field.

The high resolution data and bandwidth generated, coupled with the strong signal-to-noise ratio, makes FTG a highly effective technology in modelling complex geologies, generating accurate velocity/density relationships and in supporting existing and yet to be acquired seismic data.

FTG data is also becoming particularly attractive as part of multi-client data set for a number of reasons.

FTG data is also becoming particularly attractive as part of multi-client data.

FTG and Africa’s geologies Firstly, FTG is well suited to African geologies, particularly in under-explored basins with sparse seismic and where exploration efforts to date have not been sufficient to fully appraise the area for hydrocarbon systems.

FTG works best in areas with lateral density contrasts where movement in the basement, salt and rifting yield features that are easily detectable and mapped with the technology.

The relatively under-explored East African Rift, for example, extends from the Red Sea in the north

to Mozambique in the south and is characterised by a variety of lateral density contrasts and complex geologies from rift margins to varied depositional settings, volcanic features and Paleocene, Oligocene and Miocene sedimentary rocks (clastics).

In such areas, FTG can map and detect features at high resolution, derive basement structure maps, provide input to the structural definition of overlying sedimentary sections and act as an important complement to seismic data.

Offshore and FTG data also plays a key role in sub-salt exploration. This is particularly appropriate for West Africa where geologists have for some time been pointing out the similarities between South American and West African margin basins when it comes to pre-salt depositional sequences.

In offshore regions in Namibia, Angola and Gabon, the relatively low density of salt in comparison with typical host material and the typical morphology of salt bodies are ideally suited for detection and modelling using high resolution FTG data. Illumination problems in salt faced by seismic can also be addressed.

With the growth in shale gas deposits in countries, such as Algeria, Libya, Tunisia, Morocco, South Africa and the Western Sahara, FTG also helps operators in unconventional fields develop accurate structural models, identify faults, and calculate zones where there is a higher or lesser probability of structural complexity. www.oilreviewafrica.com

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Through multi-client FTG surveys, economies of scale can also be delivered.

Improved accessibility, reduced costs As well as FTG’s ability to provide a more detailed characterisation of the subsurface, there is also the accessibility and reduced costs of multi-client FTG surveys.

With such vast areas to map out throughout Africa, few operators have the resources to expend vast amounts of money on 3D seismic over such areas and, instead, need to focus on key zones of interest.

Airborne and maritime FTG addresses issues of cost and accessibility with hundreds of square kilometres of exploration prospects surveyed quickly, efficiently and cost effectively without the need for large-scale and invasive seismic equipment.

Through multi-client FTG surveys, economies of scale can also be delivered, lowering the cost of access and spreading the acquisition and processing costs among multiple customers.

It is this ease of accessibility and reduced cost that enables FTG to come earlier in the exploration lifecycle where it can generate most value and act as an important compliment to seismic. FTG data also never goes out of date with the ‘off the shelf’ data able to be re-interpreted or re-processed on the basis of additional information from new seismic and/or well data.

Whether it is through its ability to optimise the

An ARKeX plane conducting an airborne FTG survey in Africa.

design of future multi-client seismic surveys, reduce costs and risk in exploration, or provide a means of accessing high-quality data sooner and at a lower cost than proprietary data, multi-client FTG data is playing a key role in African exploration.

A multi-client survey, offshore Gabon ARKeX is currently focusing on several multi-client FTG surveys in Africa. We see multi-client surveys as a key means of promoting and extending the adoption of FTG in the region as well as introducing the technology earlier in the exploration decision-making process.

One such example is offshore Gabon where ARKeX carried out a FTG survey on behalf of CGGVeritas over 9,000 sq km of the Zone Sud area.

In this area, the deepwater blocks had been virtually unexplored, due to the large and complex salt sheets which hide the prospective geology below.

Prior to the FTG survey, three wells had been drilled in the target area along a clear trend of oil & gas subsalt fields with one appearing to be gasbearing and two others dry. There were also significant discrepancies between predicted and actual depths, highlighting the need for new and independent geophysical data.

The goal of the survey was to increase understanding of untapped potential in the pre-salt province by better constraining the extent of individual salt bodies, to improve the geologic modelling, and identify prospective areas where future 3D seismic acquisition should be performed.

Due to the high density contrast between salt and surrounding Madiela limestones and dolomites, the area was considered ideal for a multi-client FTG survey with FTG offering the high resolution necessary to image the shallow salt structures with confidence.

Following data acquisition and processing, a series of 2D seismic lines were iteratively interpreted by integrating acquired FTG data with existing seismic interpretations and well data.

Interpretation was driven by the need to match both the density profiles (guided by gravity response) and structurally balanced cross-sections.

The high resolution FTG data facilitated an accurate investigation of the 3D Shallow Earth Model (SEM) with the modelling of seismic sections constrained by FTG. As a result of the FTG survey, 11 seismic lines have been selected for reprocessing by operators and depth migration and initial 2D density/velocity models were built using the multi-client FTG data.

Mozambique In Mozambique, ARKeX and the Mozambique Instituto Nacional de Petróleo (INP) are in discussions regarding multi-client onshore and offshore airborne FTG surveys as a prelude to a fifth oil & gas bidding round.

The acquisition of this FTG data will demonstrate the petroleum potential to interested parties and provide a powerful interpolation tool that, combined with available 2D seismic data, will deliver an enhanced 3D perspective of the region’s geology.

A hot-spot of exploration activity As more exploration areas are opened up and the number of licensing rounds increase, Africa will remain a magnet for exploration activity over the next few years.

FTG multi-client surveys will be a key part of the exploration toolkit as operators look to focus their investments and activities on the most prospective areas. ■

Chris Anderson, ARKeX.

ERW casing pipes by Interpipe INTERPIPE HAS ANNOUNCED the production of ERW casing pipes, which is in accordance with API 5CT standard. Interpipe NMPP has passed the certification audit and has been given the license to use the API monogram for it ERW OCTG product with diameter from 8 5/8” to 20” (H40, J55 steel grades, pipe estimated weight from 3.31 kg/metre to 13 kg/metre).

ERW casing pipes meet standard requirements and are applicable for the exploration and operation of oil and gas wells, according to Interpipe officials.

FadiHraib, CEO of Interpipe, said: “The development of new products is key to success in the harsh conditions of today’s market. Mastering ERW casing pipes, as well as the start of steel billet sales enables us to extend Interpipe’s production portfolio to meet real market needs.”

Interpipe NMPP are also currently beginning to reportedly master ERW casing pipes with an outside diameter of 6 5/8”. Once accomplished Interpipe would certify the product according to API 5CT standard. www.oilreviewafrica.com

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Technology

FTG also provides confirmation on whether two independently interpreted faults on two seismic sections may or may not be connected and is particularly applicable to areas where it is too difficult or too costly to acquire new 3D seismic data.

The result is highly valuable information ahead of licensing rounds, giving operators an advance and better understanding of prospects and enabling them to conduct a complete risk evaluation prior to making an investment commitment.

Technology

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With the offshore industry continuing to move towards even more challenging subsea applications, the need for high performance, robust and reliable products, has never been greater. Grethe Hartviksen*, innovation & technology manager, Trelleborg Offshore, explains.

Going with

the flow O

NE AREA IN particular, subsea thermal insulation, has an important role to play to ensure the smooth running of a facility and as such, is a key element of many offshore drilling projects. However, as budgets get leaner, fluids get warmer and water depths get deeper, can the sector keep up? I would say 'yes' and argue that innovative synthetic rubberbased solutions not only address these concerns and provide a reliable alternative, but are the only true choice for subsea thermal insulation.

The offshore oil and gas industry is notorious for continuously pushing the limits. The exploration of offshore gas/oil has been moving to more and more deepwater fields and demanding that wells be drilled deeper and reach further in order to provide more cost-effective and safe well completions. In addition, the requirement to extract more oil and gas than ever before, and exploit ever harsher reservoir environments in new locations around the world, adds a further challenge.

As the water depth becomes greater and the reservoir is located deeper underneath the seafloor, additional pressure is put on the performance of oil and gas products which must now be able to cope with much higher pressures and temperatures than shallow reservoir products.

As such, particularly in this difficult economic climate, customers require solutions which are not only superior when it comes to performance, but more cost-effective, focusing more on price and longer lifetime. Not long ago customers required products that could last 20 years; now it’s often up to 40 years.

When it comes to material selection to handle these challenges, rubber-based materials are, not surprisingly, becoming a more popular solution within the offshore industry as rubber is an extremely flexible and durable material. Compared to alternative materials, such as steel and fiberglass, rubber has an extensive temperature range and exceptionally high pressure resistance, it is a flexible material that can damp, seal and protect, and most of all, has an extremely long lifetime.

So, as exploration and drilling go deeper, the need for reliable and efficient thermal insulation increases; flow assurance is a critical element of deepwater developments. Effective insulation of subsea structures helps maintain flow rates, optimize productivity and reduce processing costs.

It also provides optimum defense against wax and hydrate formations.

As part of the drilling process, hot oil or gas composition flows up at the wellhead and is

Grethe Hartviksen.

then transported through a combination of XMTs, manifolds, various critical instruments, spools and flowlines before the riser finally brings it to the surface.

Insulation is a necessary part of this process in order to avoid formation of hydrate plugs and wax build-up (paraffin). The formation of wax and hydrates occurs when the oil or gas composition is depressurized and exposed to the low seawater temperature at the seabed.

A hydrate is formed when crystalline water is stabilized and light hydrocarbon molecules are captured in the crystal lattice. Hydrates can be formed at high pressures and at temperatures around +68°F to 77°F (+20°C to +25°C). Without insulation the cold seawater would rapidly cool the oil, allowing the oil to create hydrate and wax formations, and making it impossible for a safe flow of oil and gas.

Hydrate and wax, if sufficiently built up over time, can partially or totally block oil production to uneconomical levels requiring shutdowns and/or corrective treatments; this will in turn cause unnecessary downtime and cost.

Thermal insulation materials are applied in order to prevent formation of hydrate and wax during a shutdown scenario. During shutdown, the extra insulation gives sufficient time for inspection of the pipe and equipment, so engineers can have time to solve production problems and for methanol or glycol injection.

Enhanced performance

Trelleborg’s Vikotherm II subsea insulation is applied onto a pipe by the extruding process.

56 Oil Review Africa Issue Two 2014

The increasing challenges faced by the offshore industry have spurred manufacturers to consistently push to develop products that can keep up with the demands of the offshore engineer.

However, it’s not always about finding completely new solutions. If they are to stay ahead of the game, manufacturers must continuously look at their current product portfolios to find new ways to make existing products work even harder than they already do. www.oilreviewafrica.com

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Technology

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Valve insulated with Trelleborg’s Vikotherm II.

As the industry moves towards ever more demanding subsea applications, the need for high-performance, durable and reliable products has never been greater.

As such, some leading manufacturers are reassessing subsea thermal insulation materials, which have been successfully installed throughout the subsea oil and gas industry for many years, to see how best to enhance their performance in line with these growing demands.

The latest generation of subsea insulation solutions, an example of this dedicated improvement from one leading manufacturer, have a k-value of 0.13 W/mK, can be used up to 9,842ft (3,000m) deep and utilized of liquid temperatures up to +311°F (155°C), as well as external temperatures as low as -31°F (-35°C).

In order to provide even more flexibility when it comes to design and logistics, it now also allows for mobile production and can be installed on-site, at a water depth of 9,842ft (3,000m).

These flexible insulation systems consist of a three-layer buildup. First, an inner layer for corrosion and/or Hydrogen Induced Stress Cracking (HISC) protection; this could be a Neoprene compound that is qualified up to +203°F (+95 °C), or an EPM

Application of Trelleborg’s Vikotherm II system.

58 Oil Review Africa Issue Two 2014

compound that is qualified up to +311 °F1 (55 °C).

Both compounds provide excellent corrosion or HISC protection, and have been extensively tested for adhesion, aging and cathodic disbondment.

The middle layer has been designed to provide the thermal insulation protection and various compounds are applicable depending on the specific requirements. The compounds provide a kvalue of 0.13 W/m2K up to 0.19 W/m2K. The flexibility and stability of the rubber makes this an excellent choice with respect to thermal expansion.

The insulation layer is protected by the outer layer. This is a strong and robust layer that provides excellent seawater and mechanical protection and has a successful track record as far back as the early seventies in the North Sea. The insulative elastomer coating system used is a development based on ordinary rubber technology and consists of a rubber elastomer chemically modified to give a very high insulating property, while maintaining its inherent rubber properties in respect to sea-water resistance, pressure resistance, mechanical properties and temperature. By utilizing a solid rubber-based coating, these new products have very good thermal insulation properties while providing maximum corrosion protection.

With the lifetime of an oil field expected to be a minimum of 25 years and design temperatures of the field varying throughout (up to +392°F/ +200 °C), it is important that products can prove they stand the test of time. Continuous and extensive testing is the only way to remain at the forefront of material development and lies at the heart of material advances and product solutions.

Whether within laboratories, witness testing or ongoing research and development, testing is a major focal point for all leading manufacturers. Given the numerous considerations that need to be made when evaluating the suitability of a material, it is

important that a number of testing programs are undertaken to ensure that the most appropriate material solution is chosen for any given application.

This can include material characterisation where a wide range of laboratory scale testing is undertaken to determine the material properties and reaction at given simulated application and environmental conditions. Tests, which could include thermal conductivity and density, through to compressive strength and tensile properties, ensure that, in terms of material properties, the most appropriate material is selected for a given temperature and pressure combination.

Extensive test programming has been carried out on these next-generation insulation solutions to prove their integrity for the lifetime of the field.

Short-term testing was also developed to recreate as close as possible to the in-situ conditions for operations.

Following testing according to Exxon specification GP 65-08-01, they are designed to last the life of the subsea project (20 to 40 years), are maintenance free and will normally never be replaced.

Conclusion As the offshore oil and gas industry continues to push the limits when it comes to demanding subsea applications, the need for reliable and durable solutions that deliver proven performance for critical thermal insulation installations, has never been greater.

With the formation of hydrate plugs and wax build up (paraffin) a real risk during operation shut downs, solid rubber-based coatings provide a practically incompressible, seawater and impactresistant solution that has very good thermal insulation properties and also provides maximum corrosion protection. They are designed to last the life of the subsea project (20 to 40 years), are maintenance free and will normally never be replaced, giving peace of mind to the offshore industry. 

*Grethe Hartviksen has a Master of Science Degree in Chemistry from NTNU (Norwegian Science and Technology University) and has worked in the industry for more than 17 years.

She has spent the last eight years working at Trelleborg Offshore and is currently Innovation & Technology Manager. In the past Grethe has worked for companies including Draka Norsk Kabel and Bredero Shaw. www.oilreviewafrica.com

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"Tolmann Allied Services Company Ltd shall officially commission a new Deepwater Simulation Theatre (DST) in Port Harcourt, a world class Facility built solely for the purpose of addressing the safety, survival and training needs of persons working in and around Deepwater facilities and installations.

In achieving this laudable objective, we have put in place global standard infrastructure that demonstrates Health, Safety, Environment and Security challenges which are of immense value to deepwater operations and maritime related activities.

The official opening/commissioning ceremony will take place on the 14th April, 2014."

We offer the following courses at the center among others: TBOSIET HUET/SAS Basic Fire Fighting & Self Rescue Basic First Aid Offshore Safety Induction FOET

AED Advanced Fire Fighting Advanced First Aid IMIST STCW 95 PSCRB

COXSWAIN HLO Swing Rope EHS Fork Lift Crane Operator

OFFICE/TRAINING FACILITIES Offshore Safety Training Centre (OSTC) 58 Trans-Amadi Industrial Layout, Port Harcourt Tel: +234 803 312 9962, 0803 760 0151, 0809 990 1280 Email: tolmann@tolmann.com. Website: www.tolmann.com International Centres Texas Engineering Extension Services (TEEX) USA Survival Systems Ltd. Canada

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Technology

Laurent Roussel, Schlumberger outlines how data—and the way in which it is managed— can become a competitive advantage, rather than a hindrance, for operators.

Making data drive decisions,

not distractions T

HE MODERN E&P environment presents challenges enough for operators—before data is even generated, acquired, or stored. An ever-increasing global energy demand, at a time when many established assets are maturing or declining, is forcing the industry to consider resources that would have been dismissed as uneconomic, or unrealistic, a decade ago. Once operators get to the point in an asset’s lifecycle when data becomes a significant concern, a whole new set of potential issues must be successfully negotiated.

The optimal use of E&P data is becoming an increasingly important consideration. The last decade has brought a proliferation of data across every working aspect of the industry, and its management has significant implications for operator success. Data has become the basis for all decisions: from exploration, to day-to-day operations, to the long-term development planning of every field. Operators often find themselves in one of two groups: using a range of modern field measurement and monitoring systems to feed realtime information directly into data repositories, or having asset teams manually enter and maintain information in often unsuitable generic spreadsheet applications. Clearly there are challenges with both situations; the first requires the ability to deal with significant and constantly changing data volumes.

The second scenario relies on manual data entry, is significantly slower, and is prone to errors and duplication.

As well as input and storage considerations, asset teams are at their most productive when they are able to easily access relevant, up-todate, information in context; and then share this information to collaboratively solve problems. If operators can implement a fully integrated system through the introduction of dedicated software applications - one which blends the data repository with the collaborative project environment, and allows for knowledge sharing and preservation - optimal working processes can be established. A recent example of this can be seen when the Société Nationale des Pétroles du Congo (SNPC) used such an approach to integrate its E&P data, and create a new management system.

Case study: SNPC SNPC needed to integrate over 50 years of exploration, production, and reservoir data into a single platform, accessible to its geoscientists through an easily navigable, web-based front end.

60 Oil Review Africa Issue Two 2014

SNPC uses ProSource Front Office as the interactive front end for all company departments.

If operators can implement a fully integrated system through the introduction of dedicated software applications, optimal working processes can be established.

It had been using an outdated system that presented a number of challenges: suboptimal visualisation capabilities for logs, awkward administration and access, and integration and maintenance issues. After meeting with Schlumberger, it became clear that a solution based around ProSource Front Office software, and the Studio E&P knowledge environment would deliver significant process efficiencies.

The proposed workflow would automatically channel SNPC’s interpretation project data from the Petrel E&P software platform and the Techlog wellbore software platform. The Schlumberger team performed initial system checks and ensured that suitable configurations and standards were present before upgrading SNPC hardware to handle the new workflow.

As well as creating a centralised repository, the new setup was designed to improve collaboration; this allowed SNPC teams to use instant messaging to connect and communicate, introduce session sharing with experts or peers, and add knowledge such as notes or analogues to data.

Final installation and testing was then undertaken. The Studio environment was installed as the project database for the asset team in charge of interpretations, with ProSource Front Office implemented as the interactive front-end administration system for the corporate database.

Integrated workflows would allow SNPC users to easily find all available information, in context, regardless of type or location. Intelligence can be sourced from other projects and repositories: legacy data from reservoir characterisation software, a wellbore software platform, and external databases.

Relevant data is easily loaded into a current project.

With the new integrated data delivery system in place, SNPC users now have easy access to varied data from over 1,700 wells, as well as 20 terabytes of seismic information. ProSource Front Office allows access to the lease map, wells, and seismic lines from the web, delivering new 3D visualisation tools to display well deviations for easy browsing. Log information, layer positions, markers, cores, and perforations are all available in the same view. The workflow is the same to obtain seismic traces from the web. www.oilreviewafrica.com

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Technology

Data access is also more intuitive, allowing new SNPC staff to be trained within 10 minutes; the previous system required at least a half-day training course. In addition, administration times are significantly reduced — user account creation takes around a minute, compared with 30 minutes in the previous system. General administration tasks can also be completed easily and quickly, while data security and integrity are improved with a new backup system and data-loading procedure. The environment helps capture and retain knowledge with its scalable database, so that nothing is lost for future teams and new staff.

An optimised environment Users now have easy access to data from over 1,700 wells and 20 terabytes of seismic information.

Specific wells or areas of interest can be hyperlinked or embedded directly into the portal.

Integrated access This new web interface helps SNPC users search, browse, and visualise stored well data, to better understand and take advantage of geoscience assets. The search-refinement capabilities built into ProSource Front Office provide an efficient means to locate, visually filter, and deliver data relevant to current projects. The software can also be integrated with SNPC’s corporate web portals and Microsoft SharePoint sites. Specific wells or areas of

interest can be hyperlinked or embedded directly into the portal. SNPC’s geoscientists and engineers can streamline workflows across the asset lifecycle, while capturing vital knowledge to maximise personal and team productivity. It allows users to find all relevant data, collaborate with peers, and record and share best practice in the context of their workflow.

SNPC users can reach their entire data environment from within a project. Innovative indexing technology provides access to structured and unstructured data in the environment’s repositories, as well as third-party applications and data sources. Search tools enable results filtering based on data-specific criteria. Seamless integration with web map services—Esri ArcGIS, OpenGIS standards, and Microsoft Bing—allows users to rapidly integrate spatial information.

SNPC users can now evaluate multiple interpretation and modeling concepts, and publish results when they are ready; team members subscribe to receive notifications of changes and updates. The environment also allows users to annotate project windows: adding text, documents, images, and video.

Users can quality tag interpretations to highlight confidence level and depth of analysis, and embed context and calculations to show how particular interpretation decisions were made.

The challenges that data currently poses the industry and how we might better deal with them in the future will form part of a wider theme to be discussed at the 2014 SIS Global Forum, held in Barcelona on April 15–17. This biennial industry conference will focus on the future of digitally mitigating E&P risk, using simulation and software technology. Operators must ensure that the huge volume of E&P data generated every day in the field does not become a distraction, and that it can be properly harnessed to drive optimal decisions. This requires the right technology and integration capabilities. ■

Total E&P Nigeria snaps up first of Reflex Marine’s Frog-XT4 range REFLEX MARINE, A global leader in safe marine transfer solutions to the offshore, marine and renewable industry, has recently supplied the first production unit of the newly developed FROG-XT4, to Total E&P Nigeria Ltd. The FROG-XT is an advancement of the company’s industry-leading personnel transfer technologies and the product of more than twenty years of experience in the oil and gas industry. An estimated one million safe crew transfers are carried out every year using the Reflex Marine’s FROG and TORO devices.

The FROG-XT4 was developed in line with the industry’s continued drive to improve the safety of its operations – a vision which Reflex Marine shares. The device provides greater comfort and safety to passengers, wider operating parameters, and higher capacity transfers. Its compact frame allows for easy storage and cost-effective shipping.

Lifting points are now at eye level, making them easier to access and inspect, and a new stretcher mounting system enables rapid

62 Oil Review Africa Issue Two 2014

deployment in a medical evacuation situation (MedEvac).

Reflex Marine has previously provided a number of FROG and TORO units to Total for use in Nigeria and other regions of the world, with the FROG-XT4 being the latest addition to that fleet. The new XT unit is to be used on the Odudu Field.

After the global FROG-XT4 launch in February, the response from the wider industry has been really positive, with this first unit heading to Nigeria, and a second

unit destined for Mozambique for another international operator.

Kate Twitchen, business manager for Nigeria, commented: "Reflex Marine has worked with Total for over 14 years, providing safer crew transfer solutions. Within Nigeria, we have a nominated representative, Precision Logistics Ltd, who offer local support and servicing and together with Reflex Marine aim to increase the safety of offshore personnel transfer. Selling the first FROG-XT4 into this region is a step in the right direction to further enhance the safety and performance of Total's crew transfer operations.”

Reflex Marine has established a number of accredited service centres for FROGs and TOROs around the world, offering stock, spares, rental services, inspection and maintenance and training to exacting standards set by Reflex Marine. The company is looking to launch a higher capacity version of the product, the FROG-XT10, to the market in the coming months. www.oilreviewafrica.com

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Innovations

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Handling and lifting equipment for tough offshore environment JD NEUHAUS' RANGE of handling and lifting equipment has made a mark in the global oil and gas industry. The products are used actively across the world in jack-up rigs, semisubmersibles, drill ships and FPSO vessels.

The company's product range incorporates both air and hydraulically powered hoists, with individual lifting capacities ranging from 250 kg to 100 tonnes. These products can also be incorporated into single or double girder overhead travelling cranes, underslung cranes with special low headroom trolley designs, together with purpose-designed slewing jib cranes. Hoists can be supplied for specific function duties such as BOP handling (up to 200 tonnes), as well as providing virtually unlimited lifting and general load movement solutions including both oblique and horizontal pulling under pre-determined conditions.

A BOP handling unit incorporating four JD Neuhaus type EH50 air-operated monorail hoists has been supplied to the Maersk offshore rig Guardian, for synchronised BOP lifting and

handling during both pre and post-drilling operations. Two hoists are mounted on each of the twin parallel overhead rails, with each hoist providing 50 tonne load and 20 metre lift capacities for between-deck operations. With the two sets of hoists operating together, a combined lift capacity of 200 tonnes was made available.

Synchronised operation of all linear movement

and lifting operations of individual, paired or all the four hoists when used in conjunction, was provided with JDN type F multi-function controllers incorporating the main air emergency stop together with a load-monitoring device.

All JDN products combine a rugged build quality with high performance, 100 per cent reliability and the utmost in safety. The products are also impervious to dust and damp working conditions, and operate within a temperature range of -20ºC to 70ºC. Where supplied for offshore operation, either on rigs or ocean-going vessels, the equipment is provided with a full offshore package, which includes extra corrosion protection to cater for rough, salty weather conditions.

Standard safety features of the hoists include integrated adjustable overload protection for load ratings of one tonne and above. A selfadjusting failsafe braking mechanism is fitted, together with trolley anti-climb drop devices and an emergency stop switch integrated in the main power supply.

Chevron, GE form technology alliance

Heavy-duty lifting technology

GE OIL & GAS has announced the launch of its new Downstream Technology Solutions (DTS) business to more efficiently supply equipment and services to the US$10bn refining, petrochemical, industrial and distributed gas segments.

Headquartered in Houston, DTS offers multiple downstream technologies and services including steam turbines, blowers, distributed gas solutions, reciprocating compressors, pumps, valves and distribution systems. The business also provides maintenance services and remote monitoring and diagnostics.

“By launching our new Downstream Technology Solutions business, GE can help our customers optimise their operations and accelerate their own growth in this opportunity-filled sector,” said Lorenzo Simonelli, president and ceo—GE Oil & Gas. “The new business also positions GE to more effectively focus on key downstream industry trends and to better anticipate customer needs.”

In January 2014, GE agreed to acquire Cameron’s Reciprocating Compression division, which, subject to customary approvals, upon closing also will join DTS. The high-speed reciprocating compressors are used in applications in the development of shale oil and gas fields. DTS also is the home of the recentlyacquired Salof product lines of small-scale, modular liquefied natural gas plants designed to help rail, marine, trucking and industrial customers convert to cleaner-burning natural gas for fuel and power generation.

“Our new Downstream Technology Solutions business allows us to be leaner, faster and closer to our customers that are doing business in an increasingly competitive global landscape,” said Hasan Dandashly, vice president— Downstream Technology Solutions for GE Oil & Gas. “The creation of this new business demonstrates how GE, although a large company, can be agile and fast when it comes to new business opportunities.”

Meanwhile the company has also created the Chevron GE Technology Alliance with Chevron Energy Technology Company; this will develop and commercialise valuable technologies to solve critical issues for the oil and gas industry.

The Alliance builds upon a current collaboration on flow analysis technology for oil and gas wells and will leverage research and development from GE’s newest Global Research Center, the first dedicated to oil and gas technology.

“Chevron’s deep understanding of the oil and gas industry, combined with GE’s long tradition of technology development and close collaboration with strategic partners, will uniquely position this new alliance to address the industry’s technology needs,” said Lorenzo Simonelli, CEO of GE Oil & Gas. “The solutions developed by this alliance will take on even more industry significance given Chevron’s proven leadership in being first to field-test and deploy new technology breakthroughs.”

AS THE GLOBALLY recognised leader in heavy-duty lifting technology, Vacuworx Global provides the most comprehensive and complete line of lifting and material handing systems on the market.

It is the premiere supplier of cutting-edge lifting technology for the pipeline industry. Its Vaculift pipe lifter systems are widely recognised as the best technology for safely and costeffectively handling large (and small) heavy sections of pipe. The systems can move stock off the truck and into the trench in seconds!

The Vaculift system is the pioneer of vacuum lifting for field application. The product has an excellent reputation around the world and is regarded by the oil and gas industry as one of the best innovations in 20 years.

The Vaculift will handle any type of line pipe (steel, plastic, concrete, cast iron, etc) with any kind of coating (tape, FBE, coal tar, concrete, etc). The surface of the pipe can even be somewhat uneven, and the Vaculift pad will compensate for it.

The product being lifted does not have to be round. It can be flat, like steel piling, steel plate, or pre-cast concrete slabs.

Vacuworx Global vacuum-based technology heavy-duty lifting products and services provide the most comprehensive family of solutions for in-field lifting applications. Vacuworx lifting products have been market proven as the safest, fastest and least labourintensive available to the market. Vacuworx products allow projects to be completed in half the time as before vs conventional methods and with half the number of people. It effectively eliminates the need for other unsafe lifting mechanisms such as hooks, chains or straps. The risk of damage to product or coating is virtually eliminated and fewer ground personnel means a safer working environment. All of this translates to a real attribute that can be effectively managed permitting the end user to impact their overall bottom line in a manner not possible with competitive products or alternative methods.

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Project Databank Compiled by Data Media Systems

OIL, GAS AND PETROCHEMICAL PROJECTS Project Block 31 Offshore Oil Development Field MEW - Sumbe Water Supply, Sanitation and Institutional Support Project Vanza Longui Area (GVLA) MEW - Cambambe II Hydropower Plant Maersk Oil - Block 23 Maersk Oil - Block 8

Sector Oil, Offshore Water

Facility Oil Field Development Waste Water Treatment

Budget 10000000000 1800000

Status Start Date Construction 1999-Q1 FEED 2012-Q2

Completion Date 2014-Q4 2018-Q1

Offshore Power Oil Oil

Offshore Platform Hydro Power Station Exploration Oil & Gas Field

4000000000 129000000 500000000 157000000

2006-Q1 2013-Q1 2006-Q4 2006-Q4

2017-Q4 2017-Q1 2016-Q4 2016-Q4

VAALCO ENERGY - BLOCK 5 TOTAL - Dalia, Rosa, Girassol, Jasmine, Camelia Fields Exploration GAMEK - Caculo Cabaca Hydro Power Station

Oil Offshore

Oil Oil & Gas Field

500000000 1000000000

FEED Construction Construction Feasibility Study EPC ITB Construction

2009-Q1

2018-Q1 2014-Q4

Power

Hydro Power Station

3000000

MEW - Tombwa Wind-Power Park Chevron - South Nemba Auxiliary (SNX) Platform ExxonMobil - Kizomba Satellites Phase II Chevron - South N'Dola Field Development SONANGOL EP/Total - Block 32 Field Development Lianzi Development Project Block 14 Lucapa Field Development Greater Plutonio Offshore Oil & Gas Development (Block 18) ENE - Lauca Dam Statoil - Kwanza Block - Block 39 Statoil - Kwanza Block - Block 38 CABGOC - Bomboco Sanha Offshore Oil Development ENI - SONANGOL - Block 15/06 Development ENE - Luachimo Dam Block 9 & Block 21 Development Block 17 Offshore Oil & Gas Development - Clov Project Block 14 Negage Field Development Congo River Crossing Pipeline Project

Renewable Wind Offshore Oil & Gas Field Oil Oil Field Development Offshore Offshore Platform Oil, Offshore Oil Field Development Oil Oil & Gas Field Offshore Oil Field Oil, Gas, Oil & Gas Field Pipeline, Offshore Power Hydro Power Station Oil Exploration Oil Exploration Oil, Offshore Oil Field Development

CABGOC - Mafumeira Field Development Lobito Refinery

2020-Q1

174000000 510000000 1500000000 3000000000 200000000 1900000000 300000000 4000000000

Engineering & Procurement EPC ITB 2012-Q4 Construction Construction FEED FEED Construction 2009-Q1 FEED 2006-Q1 Construction

3900000 700000000 700000000 2000000000

Construction Construction 2011-Q4 Construction 2011-Q4 PMC

2017-Q4 2019-Q4 2019-Q4 2014-Q2

Oil Oil & Gas Field Power Power Plant Oil Oil Field Development Oil, Gas, Offshore Oil & Gas Field

500000000 183000000 700000000 9000000000

Construction 2006-Q4 Construction Construction 2007-Q1 Construction 2007-Q1

2015-Q1 2017-Q1 2015-Q1 2017-Q1

Oil, Gas, Offshore Oil & Gas Field Pipeline Gas

450000000 2000000000

2016-Q4 2014-Q3

Oil Oil, Refining

5600000000 8000000000

FEED ITB Engineering 2009-Q1 & Procurement Construction 2009-Q1 Construction 1998-Q1

Oil & Gas Field Refinery

2018-Q1 2015-Q1 2015-Q2 2020-Q1 2018-Q2 2015-Q4 2020-Q1 2017-Q4

2015-Q1 2018-Q3

Project Summary Project Name

Chevron - South N'Dola Field Development

Status

FEED

Name of Client

Chevron Texaco Angola

End Date

Q1-2020

Budget ($ US)

3,000,000,000

FEED

Technip

Award Date

Q3-2014

Location

Block O, Angola

Facility Type

Offshore Platform

Project Backgrounds Chevron Texaco Angola plan to develop South N'Dola Project, located in the southern portion of the N'Dola field in Block O, offshore Angola.

Project Status March 2014

A final investment decision is expected in 2014.

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ICT

For companies providing communications services to remote oilfields or those far offshore the demand for more reliable and more complex communications presents a growing challenge. In the first of two articles on the changing face of oilfield data and voice communications in remote locations, Phil Desmond looks at the new communications needs that are driving demand.

The changing face of remote

oilfield communications Y

OU’RE NEVER FAR from a phone these days. Even on an oil rig or supply vessel, you can usually talk to someone hundreds of miles away. The quality of the call may vary, of course, but it’s the contact that matters. Or at least, it used to. Today people on remote platforms and vessels often expect much better voice quality, not to mention video, internet and fast data speeds.

And that means they need the highest bandwidth they can get. Simon Bull, senior consultant with specialised telecommunications consultancy Comsys, explains that while oil and gas production generally may involve the need to send and receive data, when a rig is drilling a lot more is required — and even more when you are discussing a seismic vessel. “That’s real-time mission critical data, which seems to be on the rise,” he explained.

And if it’s mission-critical it can’t wait days or even hours to get back to head office. Add the number of staff actually on a rig who need to communicate verbally or by video link with head office, other fields or just friends and family and demand isn’t going to slow down any time soon.

More demands coming to the fore Service provision companies agree with this assessment — and can suggest even more demands coming to the fore. Bill Green, global account director with Hermes Datacomms, a provider of managed networks for the upstream oil and gas sector worldwide, pointed out that today’s exploration and development relies heavily on communications to provide data acquisition and allow instant decisionmaking to generate and maintain revenue. But he added that “companies in the oil and gas sector are increasingly moving to a centralised computing topology, a ‘cloud’ model, accessing data centres from all around the globe…Locations are in normal business locations but also in ‘hostile’ environments with greenfield sites being joined dynamically to the cloud. The user experience is expected to be the same on the rig as in the Houston office block.”

But this ingenious approach to communications could be challenged if a remote site cannot be contacted. Production losses totalling millions of dollars per day could result. “So,” said Green, “robust connectivity is paramount to adopt the cloud model and service users.”

With or without the cloud model, however, bandwidth matters. Green added: “Higher bandwidth is now needed with the move away from tape and disc transit of seismic data to this being sent over the WAN [wide area network] links.”

Of course data demand isn’t only a matter of pictures from a wellhead or videoconferencing. Small amounts of information gleaned from sensors dotted around equipment on the rig can be transmitted and give valuable information on how well the rig is functioning. Individually they would not trouble a satellite link but the amalgamated information from thousands of sensors is a different story.

Asset monitoring - an important market And asset monitoring is an important market. As Martin Denari Orange Business Services' global director of oil, gas and mining vertical, said, “We provide solutions that are related to asset and personnel tracking, monitoring and integrity. Based on RFID solutions, we can deliver asset traceability to ensure control of proper maintenance, repair and inventory of key components like pumps, valves and blow-out preventers, to name just a few.”

He, like Bull, also noted, “The log and seismic data acquired and used for interpretation has grown exponentially over the past decades. All of this, together with the addition of different components of the ‘digital oilfield’, contributes to greater amounts of data to be moved from the field to central offices.”

70 Oil Review Africa Issue Two 2014

Even on an oil rig or supply vessel, you can usually talk to someone hundreds of miles away. An offshore Statoil rig.

Companies in the oil and gas sector are increasingly moving to a centralised computing topology.

Near-shore installations can use dedicated fibre for their communications needs. However, when a field is a long way offshore — or just requires backup — satellite remains popular. But the days of modest rates are gone. The satellite communications industry needs to do better, which, said Bull, it has.

“The industry has reacted. New systems coming out will actually process multi-megabit rates.”

Thanks to technological advances like these, and competition from a growing number of satellites and service providers, end users are getting more for their money than they were a few years ago. Nevertheless satellite is still not a cheap service because, said Bull, “providing a service to a rig sitting offshore Angola or Brazil the biggest part of the cost is not actually the data itself a lot of the time.

It’s everything that stands behind that to make that work.”

What stands behind that starts with satellite systems with global or regional coverage. These satellites are owned by companies like Intelsat, Eutelsat, SES, Yahsat, Inmarsat and many others. They own the satellites and sell bandwidth.

A VSAT operating company then buys the terrestrial infrastructure needed to put in a service — a hub, a teleport and a VSAT system — hires people to install and maintain it, contracts for the bandwidth and sells the service to BP, Total or another E&P or oilfield services company.

However, satellite owners often own their own teleports to enable easy access to their satellites. In this case service providers may simply host their hub or their services from that teleport location. It’s a business model that can save a lot of money for the service providers but restricts their access to that particular satellite operator’s fleet.

Alternatively, the service provider may use a third party independent teleport or, as noted above, establish its own teleport.

The number of satellite partners — or the systems they launch — is still growing. One new arrival (it launched four satellites last year and more are to follow this year) is O3b. Like some competing systems, it is using Ka band, a piece of the spectrum not widely used until recently because, although it allows higher bandwidth communication than many other satcom bands, it has long been considered susceptible to signal attenuation under rainy conditions. www.oilreviewafrica.com

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However, greater availability of Ka spectrum and some success in overcoming its rain fade limitations are making it much more popular.

Unlike many of its competitors, O3b is a medium earth orbit service. That means more satellites need to be launched because they are closer to earth but it also reduces call latency (or delay). This is another part of the wishlist of the modern oilfield. Simon Maher, vice-president — Enterprise, O3b Networks Ltd, explained: “The primary challenge we're hearing back from the customer base today is latency.”

Of course, once you solve that problem you then raise the expectations of customers even further. For example, the reduced latency and higher capacity that O3b will offer allows some new communications opportunities, specifically enablement of ERP (enterprise resource planning) applications. These, Maher argued, “just don't work over a geosynchronous satellite today because of the round-trip latency.” Videoconferencing, the ability to send and receive high definition video from, for example, helmet cameras and the guarantee of reliable data communications to and from the shore are going to be further enhanced by O3b, he said. So too is crew morale.

Which brings us back to where we began. While just having basic contact was once enough for the needs of the crew, that scenario is also changing. Denari expands on the increasingly important — and these days often legally enforced — employee care aspect. “Once the network link is deployed, we are able to create a real-time collaboration environment, using video, telepresence and telemedicine.” he said. “Employee wellbeing is a crucial aspect. Telemedicine helps for remote diagnosis and stabilisation in case of accident or injury, but telepresence and video also provide a ‘connected’ environment for the workers at a remote location, which is very important from a morale standpoint.”

In short, limited internet access — or no access at all — will deter people

ICT

A medium earth orbit service

Unlike many of its competitors, O3b is a medium earth orbit service.

from going offshore, at a time when most of us are used to having our smartphones and tablets with them for work or fun. They are part of our everyday lives.

Technology drives demand. More sensors, more iPads, more seismic data and more healthcare possibilities all, in their very different ways, put pressure on telecommunications services. Fibre networks can usually cope. But if your rig or vessel is kilometres off the coast of Nigeria, Brazil, Scotland or Australia, you may wonder whether satellites are up to the job. That’s what we’ll discuss in part two of this article. ■

Once you solve that problem you then raise the expectations of customers even further.

www.oilreviewafrica.com

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ICT

Proserve unveils game-challenging technology for subsea intelligence and PROSERVE HAS UNVEILED a game-changing technology for subsea control monitoring communications, reinforcing the company’s rapidlyexpanding subsea capabilities and world-class engineering expertise.

The Artemis 2G (A2G) subsea electronics module is a next generation controls and communications tool that uniquely frees operators from the constraints of an existing brownfield umbilical by finding additional signal capacity to enable a costeffective field upgrade or extension. In addition, A2G offers high-speed, copper-based, multi-drop networks as a viable alternative to fibre optic infrastructures within the subsea production system.

A2G maximises flexibility and optimises functionality providing more powerful communications and instrument support. Furthermore, it increases accessibility for remote usage through its webpage interface from subsea to the desktop, and provides advanced configuration and diagnostics to deliver unparalleled adaptable communications.

Proserv’s A2G has been developed as an evolution of the company’s suite of subsea control modules and is fully compliant with the latest ISO 13628 part 6, API 17F and Subsea Instrumentation Interface Standardisation. A2G can be used to coexist with existing networks, is fully back

Proserv’s next generation Artemis 2G (A2G) offers a game changer for subsea intelligence.

compatible with all existing technology and does not require any proprietary software for remote configuration and support.

Alan Peek, Proserv’s vice-president for subsea

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