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Oil and Gas


Summer 2016

A Passion for Surface Treatments

Asset Integrity Special

Emery Hill Media Ltd. © 2016


Business Information. Industry Solutions.

Das Additiv. Drilling Additives with an Attitude

THINK BIG. Size does matter. ROSEN maintains the industry’s most comprehensive technology portfolio, from hardware to software, as well as the largest tool fleet. Meaning more flexibility for you.

Oil & Gas


Summer 2016

A little bit on Africa:


CEO Matthew Patten Managing Editor Simon Milliere Publishing Director Edward Findlay Commercial Director & Advertising Enquiries Nicholas Parker Technical Director and Website Valters Skrupskis Office Assistants Janet Elseberg Mylene Daugan Contributing Journalist Emma Patten Business Development Executives Luigi Palasco Market Researchers Mylene Miguel Kiefer Reddy Melissa Phanjoo Jesse Wiafe Dasol Moon

Emery Hill Media Dalton House 60 Winsor Avenue London SW19 2RR Tel: +44 203 239 1581

ne of the most interesting oil producing regions in the world is sub Saharan Africa, particularly West Africa. Now obviously since the downturn in oil prices things have not been so hot in some places in the region. One of the problems is (much like Brazil) many places in West Africa, such as Gabon, Angola and Cameroon, have oil beneath the pre salt layer. Getting to this oil is not only hard, it’s quite expensive. The cost of producing a barrel of oil is Angola for example, is much higher than say, Saudi Arabia. The latest numbers I’ve seen coming from Rystad Energy have a barrel of Angolan oil at $35 US, as a Saudi barrel is near $10. It’s easy to see the difference and how these low oil prices can hurt some much more than others. Aside from that though, one of the main problems arising from Africa these days is coming out of Nigeria, and it doesn’t have much to do with the price of oil, or does it? You may or may not have heard of The Niger Delta Avengers (NDA). They are not a comic book, but a militant group in Nigeria’s Niger Delta. The group publicly announced their existence in March 2016. The NDA have attacked oil producing facilities in the delta, causing the shutdown of oil terminals and a fall in Nigeria’s oil production to its lowest level in twenty years. The attacks caused Nigeria to fall behind Angola as Africa’s largest oil producer. The reduced oil output has hampered the Nigerian economy and destroyed its budget, since Nigeria depends on the oil industry for nearly all its government revenues. The NDA’s declared aims are to create a sovereign state in the Niger Delta and have threatened to disrupt Nigeria’s economy if their aims are not met. The group have criticised the President of Nigeria, Muhammadu Buhari, for having never visited the delta and his detention of the Biafran independence activist Nnamdi Kanu. This seems to be a serious problem, with the the Financial Times reporting that”: “Nigeria’s oil-producing delta on the brink. Nigeria’s oil-producing Niger delta is sliding back into turmoil, with profound ramifications for national cohesion. The latest insurgent group to emerge from the region has succeeded in cutting oil production by between a quarter and a third for much of this year. Attacks on critical pipeline infrastructure continue.”1 Militants have blasted an oil pipeline belonging to the Shell Petroleum Development Company (SPDC) in Batan community in Warri South West Local Government area of Delta State. This is becoming a recurring theme and one that one must pause and think of before investing in the region. With that said this issue has given rise to Angola suddenly being the number one oil producer in Africa. • 1 . html#axzz4Ex7X2jFZ Please enjoy the Summer 2016 edition of Oil and Gas Innovation. Yours Sincerely,

Simon Milliere Managing Editor

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CONTENTS COVER STORIES & SPECIALS A Passion for Surface Solutions



Oil and Gas Innovation has an exclusive Q&A with treatment specialist Oerlikon Metco. OM is expanding their product and services which are offered to the oil and gas industry, along with an acquisition of another service facility.

Das Additiv.


German company K+S KALI’s oil drilling professionals know about the importance of using performance enhancing additives when formulating your water based drilling fluids. We sit down with the team to discover when to use such additives and how these superior products provide maximum inhibition and borehole stability.

WORLD INDUSTRY NEWS Asia Pacific MENA North America Europe South America

14 16 19 20 24




Pipeline Cleaning: the Smart Way

ROSEN explains why optimal flow is the single most important prerequisite for efficient pipeline operation. However, there are many factors which may seriously impact the continuous transportation of the medium in any pipeline, several of them being related to the accumulation of inherent deposits and debris.

These Birds Can Really Move


OHT is a highly experienced heavy transport vessel operator built on Norway’s long and proud heritage in the shipping industry and as a leading maritime nation.

30 BP Estimates All Remaining Horizon 64 Big Data Bottleneck to Be Tackled.. Liabilities




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CONTENTS The Great Valley Intersect


Case Study: During the early winter months of 2015 Precise Crossings of Spruce Grove, Alberta contracted Prime Horizontal to assist in the completion of a 1,000 meter crossing of the Brazeau River in Drayton Valley.


EXPLORATION & PRODUCTION Aluminium Extruded Solutions


Sapa AS explains how Sapa’s aluminium extrusions provide the ideal solutions for living quarters, gratings, handrails, decking, stair towers, helidecks, climate shields and alike.

Poor Hole Cleaning? Stuck Pipe?


C&W UK talk about stuck pipe as the drillers nightmare that stalks and haunts most drilling campaigns. Issues such as this can be among the costliest unplanned drilling events that can occur to an Operator.

Converting Drilling Waste to Valuable Products


The downside of drilling oil and gas wells is that it generates hazardous waste, it is not surprising that the treatment of drilling waste is climbing up on the agenda of various stake holders.



PROCESSING Recycling v Landfill – Know Your Options


The downturn in oil prices has caused many refiners to look at areas of the business where efficiency could be increased and / or savings made. London Chemical & Resources Ltd helps readers find a way.

Offshore Reeling Cables for Maritime Use HEALTH, SAFETY, QUALITY & ENVIRONMENT Exclusive Interview



OGI sits down with ELLHAMMER AS to discuss their different products and services such as their ejectors and fire pumps to help out offshore and maritime companies.


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Special Report: A Passion for Surface Solutions In this special we speak with Oerlikon Metco who is a leading surface solutions provider with a global presence. OM is constantly expanding their product and services which are offered to the oil and gas industry. Along with an acquisition of their latest service facility, which provides customers with proven surface solutions for oil and gas applications, OM expanded its Thermal Spray (HVOF & Spray and Fuse), Laser Cladding and Laser Heat treating process offering in the North American market. OGI: Could you start by explaining Oerlikon Metco’s credentials and experience in terms of the applications of your products and services in the Oil and Gas sector? Could you tell our readers the breadth of your experience, how long the company has been active, and its worldwide reach? OM: We are a global leader in providing solutions to wear and corrosion problems. Our coating solutions have been addressing wear and corrosion issues in challenging applications for over 80 years. Leading companies confidently specify our coatings in critical applications in many fault intolerant industries such as Aerospace, defence, power generation, Semiconductor manufacturing and the oil and gas industry. Oerlikon Metco, together with Oerlikon Balzers, belongs to the Surface Solutions Segment of the Switzerland based Oerlikon Group. OGI: Oerlikon Metco has a few different product lines, which are of course applicable to various industrial sectors. As far as the applications of your solutions, which sectors within the oil and gas industry do you primarily help? OM: We offer a broad range of materials for

number of processes such as Thermal Spray, Laser Cladding, Weld Overlay, Additive Manufacturing, Brazing and others. Our equipment offering covers Thermal spray and laser cladding components and complete

systems. Within the Oil and Gas market our coatings address issues related to pumps, shafts, valves, hydraulic rods, buckets, screens, slurry transport, downhole tools, wear restoration and others. OGI: What are the main products and services offered to the industry by Oerlikon Metco? OM: A broad range of materials, coating equipment, technologies, coating services and know-how needed for next generation surface solutions. For the O&G market we typically offer materials and technologies for hardchrome replacement, hardbanding, overlays, wear, corrosion and impact resistant coatings. OGI: What are the advantages of having Metco as your coatings partner? OM: We are a full service provider. We combine our application know-how and development teams with our extensive materials, equipment and service portfolio to ensure the right coating is applied to meet your surface problem. Our global footprint ensures a rapid deployment of solutions throughout your supply chain.

Reduce replacement costs by using wear- and abrasion resistant carbide materials


We enhance surfaces that bring benefits to customers through a uniquely broad range of surface technologies, equipment, materials,

Increased drilling uptime and protection against slurry erosion and erosion for PDC and tricone drill bits

services, specialized machining services and components. The surface technologies such as Thermal Spray and Laser Cladding improve the performance and increase efficiency and reliability. OM serves industries such as aviation, power generation, automotive, oil & gas, industrial and other specialized markets and operates a dynamically growing network of more than 40 sites in EMEA, Americas and Asia Pacific. OGI: There can be many problems oil and gas companies face that are the result of corrosion, wear and tear, extreme temperature etc. Not all problems are “one size fits all” or turnkey. Can you elaborate on Metco’s flexibility in the application of its coating to almost any problem, and moreover Metco’s ability to find the perfect solution? OM: Over the past 80 years OM has developed 1000’s of tailored coatings to meet the specific surface challenges of our customers. We couple our extensive materials and process portfolio with the experience of our application development teams to ensure the best coating is selected, developed or tailored to meet the individual requirements for a specific problem. OGI: Are there any new products / services which are being brought to market recently? If so could you kindly elaborate on what these are and what they do specifically? OM: To meet the ever increasing demands of the oil and gas market OM is continually developing new products and processes. Recently we have launched a series of Laser cladding, PTA and hardfacing materials. Standard products are continually being improved and we are always working with key industry players to develop products that will meet tomorrow’s challenges.

OGI: Finally, Oerlikon Metco has worked with many industry players around the world. Could you enlighten our readers of a particular case study where you helped a client with your solutions? OM: The Oil and Gas industry uses valves in critical applications for both subsea and surface applications. Very often, valves are designed to operate in extremely severe environments, with gas-tight, metal-to-metal sealing that must maintain very high pressures. Failure of a valve can result in catastrophic harm to workers and the environment as well

as lost production and potentially expensive repair and clean-up operations. As part of their engineered design, BEL Valves (United Kingdom) routinely utilizes thermal sprayed tungsten carbide coatings to ensure proper sealing. Operating conditions are becoming ever more challenging within oil and gas production. As such, BEL Valves employs best practice solutions and engineers their valves to very exacting standards to ensure the valves are safe, reliable and fit for purpose. Their designs provide solutions to their customers’ demands for current and future surface and subsea applications. To fulfil this promise to their customers, BEL Valves turned to OM to improve their products and the reliability of their production processes. While the company has long applied tungsten carbide coatings using liquid-fuel HVOF (High Velocity Oxy Fuel) to their valves, they tested Oerlikon Metco’s WokaStar-610 spray gun and compared the coating results to the TAFA JP5220 spray gun that BEL Valves currently uses. BEL Valves’ conclusions The WokaStar-610 produced a superior coating to that of the JP-5220. The benefits of using the WokaStar-610 include reduced consumable usage and potential increased gun component life. As a direct consequence of these promising test results, BEL Valves intends to continue to evaluate the suitability of the WokaStar-610 spray gun for their processing requirements, with further trials currently under discussion. OGI: Thank you for your time. • If you would like to know about how Oerlikon Metco can help your operations please visit:

Protect components against high chloride mud and acidic and alkaline environments



Das Additiv. The Low Down About Drilling Additives Straight From the Pros

German company K+S KALI’s oil drilling professionals know about the importance of using performance enhancing additives when formulating your water based drilling fluids. We sit down with the team to discover when to use such additives and how these superior products provide maximum inhibition and borehole stability. The companies additives line, the k-Drill is a strong package of German quality products which compliment their reliable services.


OGI: Could you start by explaining K+S KALI’s credentials and experience in the Oil and Gas sector? Could you tell our readers the breadth of the company’s experience, how long it’s been active, and its worldwide reach? K+S KALI: The K+S Group is an international mining company whose roots and expertise in geology extend back over 125 years. K+S KALI GmbH, a member of the Group, has been supplying the oil and gas industry with potassium chloride and potassium sulphate since as early as the 1960s. In doing so, we were already contributing to large oil companies in their early years of expansion, both directly and through partners. With the introduction of the k-Drill® product line and brand in 2011, we were again able to increase the significance of this field considerably. We created a unit within the Industrial Products sales division that is solely concerned with the demands of the oil and gas industry and serving them as our client. The k-Drill® brand embodies the high standard of quality associated with “made in Germany” and underpins the fact that the commodity sector also offers premium products. We are continuously improving our products, the packaging and our services to meet the increasingly complex challenges of the industry. With the k-Drill® product line, K+S KALI GmbH is today represented across the globe in both direct business as well as by distributors in national and international service companies, premix and drilling mud manufacturers as well as oil and gas companies. OGI: K+S KALI has a few different product lines, which are of course applicable to various sectors. What solutions do you provide the oil and gas industry? K+S KALI: The k-Drill® product line currently focuses on providing high-quality and technically pure potassium chloride and potassium sulphate to the oil and gas industry. We supply products that are highly compatible in universal applications as an additive to formulate drill-in, completion, fracturing and

Interview with Oliver Riemann, Enrique Tonagel and Dr. Martin Görth (LTR), responsible for the Oil Drilling Business within the K+S Group.

workover fluids. k-Drill® C9 in particular is our top-grade certified potassium chloride and with its guaranteed 99% KCl content, it offers the highest degree of industrial purity on the market. This product is especially valued in the formulation of completion fluids. Our customers keep on telling us that it is important to use reliable high-quality chemicals, particularly in times of low oil prices, in order to avoid production losses or even non-productive time. OGI: Could you explain to our reader the potential problems that can be associated with drilling in shale formations? K+S KALI: Shale makes up the majority of drilled formations and causes the most borehole instability. Shale ranges from clayrich to shaly siltstone. The characteristics these different types of shale have in common are extremely low permeability and a high amount of clay minerals. More than 75% of drilled

formations worldwide are shale formations. The excess drilling cost associated with shale instability is reported to be over half a billion US dollars per year. The causes of shale instability are both mechanical and chemical. Shale/fluid interaction, for example, must take into account a number of things like capillary pressure, osmotic pressure, pressure diffusion and borehole fluid invasion into shale. Also, hydration and dispersion of clay tends to expand the clay structure. K-Drill® C6, C9 and S7 are products that provide potassium ions to inhibit clay swelling and to prevent these kinds of borehole instability issues. OGI: What should Shale producers look out for in relation to clay swelling and fines migration? K+S KALI: K+S KALI GmbH has extensive experience with ion exchange in argillaceous soil and formations not only from a geological perspective, but also as a manufacturer of fertilizer. Potassium chloride is added to the mud as a source of potassium ions and that stabilizes reactive clays. This is called base ion exchange. So the potassium ion enters the clay structure and replaces the calcium, magnesium or sodium ions that are present in the clay crystal. The clay structure also has a tendency to contract because the ionic radius of the potassium ion is smaller than the other ions. So that reduces expansion when clay is hydrated, for example. OGI: What is the primary functions of the K-Drill line? K+S KALI: With the k-Drill® product line, we currently offer both chloridic and sulphidic products that provide K+ ions for the formulation of drill-in, completion, fracturing and workover fluids.

The high level of logistics competence guarantees fast, dependable and flexible delivery to the customers worldwide.

However, in the near future, we are planning on broadening our product range around the k-Drill® brand and including new products in


High purity raw material from natural resources in Germany.

our portfolio that are based on K+S’s mineral expertise. Bentonite, which we ourselves use in mining, would be an example of that kind of product expansion. With every project, we generally check whether that project could yield new products that are interesting for the oil and gas industry and are a good fit for the k-Drill® brand in the future. The brand itself stands for our values and the promise to offer high-quality products and first-class service to meet the specific and high demands of the oil and gas industry at any given time. OGI: Could you explain K+S KALI’s quality management system, and what potential clients should expect working with your company? K+S KALI: K+S KALI GmbH currently supplies k-Drill® products to the projects of large international and national service companies as well as premix and drilling mud manufacturers around the world. Reliability of delivery, product quality and after-sales service as well as complaint management are only a few of the strengths we distinguish ourselves with from other suppliers. And our highly pure products are certified according to ISO. Continuous monitoring of product quality from the raw materials in our mines to the loading of the finished product guarantees our high standards of quality. In


doing so, we rely on standardized electronic sampling, sensor-based analyses during the production process, our own laboratories and independent third-party monitoring. Every time a product is loaded for shipping, we take retention samples and store these for up to one year. K+S Group is a company that is listed on the German stock market and follows the German Corporate Governance Code, which in turn provides the basis for the structure of management and control within the company. Compliance and reliability are the core values of our company and daily activities. And this allows us to guarantee our customers that, with us as a partner, they won’t experience any unpleasant surprises. “No thrill. Just drill!” OGI: Finally, could you enlighten our readers of a particular case study where K+S KALI helped a client with its solutions? K+S KALI: When it comes to solving geological problems, there is a lot of expertise on the market, both within the K+S Group as well as outside of it. But in the course of developing k-Drill® products, we faced the challenge of manufacturing a particular product quality that meets the highest purity and solubility standards, is dry, free-flowing, practically odorless and does not cause any unwanted foaming when being dissolved or

any other unwanted side effects for that matter. Together with our R&D department and in close co-operation with our customers, we tested several thousand organic and inorganic conditioning agents until we found the most suitable formulation. This also contributed to the work safety of our customers. HSE regulations are becoming increasingly important. So in that context, it is important that our products are not only effective during a process, but also that those products are neither harmful nor damaging to workers when they handle them. We owe these success stories to the k-Drill® brand and we’re looking forward to developing products further under this brand name in the years and decades to come so that we can continue to be a reliable partner for the oil and gas industry and for the crews on the rigs as well. •

K+S KALI GmbH Phone +49 561 9301 2374· Fax +49 561 9301 2226 Web: E-mail:


ExxonMobil to Acquire InterOil in Transaction Worth More Than $2.5 Billion


xxon Mobil Corporation and InterOil Corporation today announced an agreed transaction worth more than $2.5 billion, under which ExxonMobil will acquire all of the outstanding shares of InterOil (the ExxonMobil Transaction). “This agreement will enable ExxonMobil to create value for the shareholders of both companies and the people of Papua New Guinea,” said Rex W. Tillerson, chairman and chief executive officer of Exxon Mobil Corporation. “InterOil’s resources will enhance ExxonMobil’s already successful business in Papua New Guinea and bolster the company’s strong position in liquefied natural gas.” InterOil Chairman Chris Finlayson said, “Our board of directors thoroughly reviewed the ExxonMobil transaction and concluded that it delivers superior value to InterOil shareholders. They will also benefit from their interest in ExxonMobil’s diverse asset base and dividend stream.” Under the terms of the agreement with ExxonMobil, InterOil shareholders will receive: -- A payment of $45.00 per share of InterOil, paid in ExxonMobil shares, at closing. The number of ExxonMobil shares paid per share of InterOil will be calculated based on the volume weighted average price (VWAP) of ExxonMobil shares over a measuring period of 10 days ending shortly before the closing date (Share Consideration). -- A Contingent Resource Payment (CRP), which will be an additional cash payment of $7.07 per share for each trillion cubic feet equivalent (tcfe) gross resource certification of the Elk-Antelope field above 6.2 tcfe, up to a maximum of 10 tcfe. The CRP will be paid on the completion of the interim certification process in accordance with the Share Purchase Agreement with Total SA, which will include the Antelope-7 appraisal well, scheduled to be drilled later in 2016. The CRP will not be

transferrable and will not be listed on any exchange. Compelling Benefits of the Transaction When concluded, this transaction will give ExxonMobil access to InterOil’s resource base, which includes interests in six licenses in Papua New Guinea covering about four million acres, including PRL 15. The Elk-Antelope field in PRL 15 is the anchor field for the proposed Papua LNG project. ExxonMobil’s more than 40 years of experience in the global LNG business enables it to efficiently link complex elements such as resource development, pipelines, liquefaction plants, shipping and regasification terminals, which it has demonstrated through the PNG LNG project, working closely with co-venturers, national, provincial and local governments, and local communities. ExxonMobil will bring to bear its industry-leading performance and strong commitment to excellence as it grows its business in Papua New Guinea. The PNG LNG project, the first of its kind in the country, was developed by ExxonMobil in challenging conditions on budget and ahead of schedule and is now exceeding production design capacity, demonstrating the company’s leadership in project management and operations. ExxonMobil will work with co-venturers and the government to evaluate processing of gas from the Elk-Antelope field by expanding the PNG LNG project. This would take advantage of synergies offered by expansion of an existing project to realize time and cost reductions that would benefit the PNG Treasury, the government’s holding in Oil Search, other shareholders and landowners. The ExxonMobil Transaction will be implemented by way of a court-approved plan of arrangement under the Business Corporations Act (Yukon) and will require the approval of at least 66 2/3 percent of the votes cast by InterOil shareholders at a special meeting expected to take place in September, 2016. In addition to InterOil shareholder and court approvals, the ExxonMobil Transaction is also subject to other customary conditions. Subject to obtaining the aforementioned approvals and satisfaction of closing conditions, the ExxonMobil Transaction is expected to close in September, 2016. •

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MHI: Joint Development of Japan’s First AntiExplosive Remotely Operated Mobile Robot


itsubishi Heavy Industries, Ltd. (Headquarters: Minato-ku, Tokyo, President and CEO: Shunichi Miyanaga, hereinafter MHI) and Chiba Institute of Technology (Headquarters: Minato-ku, Tokyo, Board Chairman: Osamu Setokuma, hereinafter CIT) have jointly developed the remotely operated “Sakura No. 2 (anti-explosive model)” robot that features greatly reduced risk of electrical spark or heat creation that can cause explosions or fire when inflammable gas is present. It is the first mobile robot in Japan that can be remotely operated either wirelessly or by wire to be officially certified as anti-explosive. Applications and demand will be developed for safe and efficient data collection, inspection and light work in environments that require equipment to be anti-explosive such as tunnel accidents and petrochemical plants. The robot is based on the “Sakura No. 2” robot developed by CIT that has built up experience in applications such as accident resolution support activities in nuclear power plants, and the advanced anti-explosive design has been realized by utilizing MHI’s broad technical capabilities in industrial fields. It received outsourcing support and assistance from the “Project to develop systems to handle the social challenges of infrastructure maintenance management and renewal” *1 of The New Energy and Industrial Technology Development Organization (NEDO) and passed the anti-explosive model inspection of the Technology Institution of Industrial Safety (TIIS) in Japan. Further, it is planned to obtain anti-explosive certification based on the ATEX Directive that is widely adopted in Europe and around the world. In order to make the robot anti-explosive, the pressure resistant anti-explosive casing that houses components such as the lithium ion batteries and BMS (battery management system) and the casing for the electrical parts such as the motor and controller have a higher internal pressure than the external atmosphere, giving a two-fold internal pressure plus pressure resistant anti-explosive protection. This means that inflammable gases cannot penetrate to the interior of the casing due to the pressure difference, and if the casing internal pressure drops, for example if the casing is damaged, this is detected and the power supply is cut off. Since the batteries for storing electricity are protected by a pressure resistant anti-explosive casing that was jointly developed by IDEC Corporation (Headquarters: Yodogawa-ku, Osaka, Chairman & CEO: Toshi K. Funaki), the risk of igniting gas due to electrical sparks or heat has been greatly reduced. Due to its advanced anti-explosive design the robot can operate in highly explosive and diffusible hydrogen gas, and can be used in zone 1 hazardous areas *2. It is hoped that the robot can be used in many situations in addition to applications such as methane gas spouts during excavation and tunnel accidents with a high risk of ignition or explosion due to vehicle fuel leaks. In future, the deterioration of much social infrastructure that was built after the high growth period and industrial infrastructure such as oil refining plants, chemical plants and power plants will accelerate, increasing the risk of damage to people and society. Therefore, needs are growing for robots that can carry out investigations of abnormalities and perform light work for emergency inspections and rapid recovery at the time of disasters, as well as for preventing and limiting disasters. There is also a trend toward using robots in applications such as new oil field facilities or oil and chemical related facilities to carry out work such as inspections at low cost and with high precision in places that are hard for humans to work in such as working at height or in confined areas. In addition to making efforts to arouse needs from all sides on the occasion of the development of the Sakura No. 2 robot (anti-explosive model), MHI and CIT will strive to further expand applications and reveal potential needs, with initiatives such as developing an antiexplosive robot arm and a self-driving robot. •

Yokogawa Wins Major Refinery Control Systems Order From S-Oil Corporation


okogawa Electric Corporation announces that its subsidiary, Yokogawa Electric Korea, has received an order to deliver control systems for a new plant that S-Oil Corporation, a Korean oil & gas subsidiary of Saudi Aramco, plans to build at its Onsan refinery complex in the city of Ulsan. The control systems are for a residue fluid catalytic cracker (RFCC)* and auxiliary facilities that will produce mainly polypropylene and propylene oxides. The Onsan refinery complex has a capacity of 669,000 barrels of oil per day and produces a variety of fuels, lubricants, and petrochemical products. S-Oil plans to expand its operations by collecting residue oils from this complex and processing them in the RFCC unit to produce polypropylene and other valuable petrochemicals. With this new unit, S-Oil plans to increase its production of high-octane gasoline and targets the annual production of 405,000 tons of polypropylene and 300,000 tons of propylene oxides. This is one of the largest oil refinery expansion projects currently underway in South Korea. For this new facility, Yokogawa Electric Korea will deliver CENTUM® VP integrated production control systems, ProSafe®-RS safety instrumented systems, Plant Resource Manager (PRM®) field device management software packages, and other products, and will be responsible for the engineering, installation, and commissioning of these systems and the training of plant operators. This is Yokogawa’s first control systems order from S-Oil. Yokogawa believes that it was able to win this order thanks to its successful track record in delivering RFCC control systems in South Korea, the high reliability and long-term stability that its products have demonstrated at oil and petrochemical plants all over the world, and the excellent engineering capabilities of Yokogawa Electric Korea. Yokogawa will continue to offer high value-added solutions to help its customers improve their competitiveness. * A facility that uses catalysts to convert residue oils into high-octane gasoline, light oil, and other products •


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June OPEC Output of 32.73 Mil. Barrels of Crude per Day, Highest Since Aug. 2008: S&P Global Platts


il production from the Organization of the Petroleum Exporting Countries (OPEC) crude oil output surged 300,000 barrels per day (b/d) in June, close to an eight-year high of 32.73 million b/d, as production in Nigeria and Libya tentatively recovered along with steady increases for Saudi Arabia and Iran, according to an S&P Global Platts survey of OPEC and oil industry officials. “OPEC’s 300,000-barrel-per-day output rise in June, boosted by fragile recoveries in Libya and Nigeria, and the unrelenting rise in Iran and the increase in Saudi Arabia, sends a strong message over its unwavering market share strategy,” says Eklavya Gupte, senior editor for S&P Global Platts. “If the situation persists, the case for a return to some kind of production cap may gain traction.” Venezuela acted as a check on the overall level though, as the crisis-hit country’s production continues to hit fresh lows. The bloc’s top producer, Saudi Arabia, increased its output further to produce an average 10.33 million b/d in June in order to meet domestic demand. Last summer, Saudi Arabia produced as much as 10.45 million b/d. A spike in air-conditioning demand has traditionally boosted the volume of crude burned directly in the kingdom’s power plants during the summer months. In addition, domestic refining also picked up. The sharp increase in OPEC’s June production affirms a continuation of its market share strategy. Meanwhile, OPEC added a new member in July, Gabon, and next month Nigeria’s Mohammed Barkindo will take over as the group’s secretary general. This comes at a critical juncture for OPEC, after a spate of infighting and disagreements. Analysts said these two decisions which were taken at the June meeting could lay the groundwork for future cooperation on bigger issues. NIGERIAN OUTPUT REBOUNDS The largest rise in output came from Nigeria, where production rose 150,000 b/d to 1.57 million b/d, due largely to the return of its largest export grade, Qua Iboe, as production and exports resumed at the end of May. Nigerian production hit 30-year lows in May as militancy continued in the country’s oil rich Niger Delta. The situation remains volatile. Barely 10 days after a 30-day ceasefire deal with the Nigerian government, militants claimed a round of fresh attacks in the Niger Delta at the start of July, marking a major setback after weeks of respite. Libyan oil production rose 60,000 b/d to 310,000 b/d in June as exports from the eastern port of Marsa el-Hariga resumed in late May after a three-week blockade caused by a dispute between the country’s two rival national oil company factions. The North African country’s production remains less than a quarter of its 1.6 million b/d production capacity, but in early July Libya’s National Oil Corp. (NOC) agreed to unify its rival administrations under one management structure, a positive step for the country’s beleaguered oil sector. Analysts, however, said production could only see a sustained increase if the new national unity government unites with several other factions to reopen the country’s two largest oil terminals -- the 340,000 b/d Es-Sider and 220,000 b/d Ras Lanuf facilities. IRAN CLAWS BACK MARKET SHARE Iranian output in June climbed to 3.63 million b/d, its highest since June 2011, and very close to pre-sanctions levels, according to Platts OPEC survey data. Iran’s oil output rise has been swift since sanctions were lifted on January 16, increasing 740,000 b/d compared with December 2015. The Persian Gulf producer has been reclaiming its market share and broadening its customer base. Polish refiner Grupa Lotos bought a one-off test purchase of 2 million barrels of Iranian light crude recently, and Europe has returned as a key destination for Iranian crude. Iran has also been gradually increasing its exports to key Asian buyers like India, China, Japan and South Korea. Japan’s oil imports from Iran are currently more than 300,000 b/d --similar to pre-sanctions levels.


VENEZUELA OUTPUT PLUMMETS The decline in Venezuelan crude output accelerated further, with production falling 120,000 b/d in June to 2.15 million b/d, the lowest since February 2003, S&P Global Platts data showed. An internal stateowned PDVSA report seen by S&P Global Platts also showed a steep fall in oil output. The fall has been attributed to a lack of investment, high costs, accumulated debts with oil field service providers, reduced drilling activity and the deterioration of physical infrastructure at extra heavy crude upgraders. Analysts also said Venezuela’s oil sector continues to see power rationing, which is exacerbating the output decline. There seems little hope of a recovery in Venezuelan crude production any time soon, analysts added. The other country to observe a fall in production was Iraq, as output dropped 20,000 b/d to 4.23 million b/d, due to a fall in its southern exports. OPEC will hold its next ministerial meeting on November 30 in Vienna. For output numbers by country, click on this S&P Global Platts OPEC Production Table. You may be prompted for a cost-free, onetime-only log-in registration. •

June OPEC Output of 32.73 Mil. Barrels of Crude per Day, Highest Since Aug. 2008

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Oil production from the Organization of the Petroleum Exporting Countries (OPEC) crude oil output surged 300,000 barrels per day (b/d) in June, close to an eight-year high of 32.73 million b/d, as production in Nigeria and Libya tentatively recovered along with steady increases for Saudi Arabia and Iran, according to an S&P Global Platts survey of OPEC and oil industry officials. “OPEC’s 300,000-barrel-per-day output rise in June, boosted by fragile recoveries in Libya and Nigeria, and the unrelenting rise in Iran and the increase in Saudi Arabia, sends a strong message over its unwavering market share strategy,” says Eklavya Gupte, senior editor for S&P Global Platts. “If the situation persists, the case for a return to some kind of production cap may gain traction.” The largest rise in output came from Nigeria, where production rose 150,000 b/d to 1.57 million b/d, due largely to the return of its largest export grade, Qua Iboe, as production and exports resumed at the end of May. Nigerian production hit 30-year lows in May as militancy continued in the country’s oil rich Niger Delta. The situation remains volatile. Barely 10 days after a 30-day ceasefire deal with the Nigerian government, militants claimed a round of fresh attacks in the Niger Delta at the start of July, marking a major setback after weeks of respite. Libyan oil production rose 60,000 b/d to 310,000 b/d in June as exports from the eastern port of Marsa el-Hariga resumed in late May after a three-week blockade caused by a dispute between the country’s two rival national oil company factions. The North African country’s production remains less than a quarter of its 1.6 million b/d production capacity, but in early July Libya’s National Oil Corp. (NOC) agreed to unify its rival administrations under one management structure, a positive step for the country’s beleaguered oil sector. Analysts, however, said production could only see a sustained increase if the new national unity government unites with several other factions to reopen the country’s two largest oil terminals -- the 340,000 b/d Es-Sider and 220,000 b/d Ras Lanuf facilities. Iranian output in June climbed to 3.63 million b/d, its highest since June 2011, and very close to pre-sanctions levels, according to Platts OPEC survey data. Iran’s oil output rise has been swift since sanctions were lifted on January 16, increasing 740,000 b/d compared with December 2015. The Persian Gulf producer has been reclaiming its market share and broadening its customer base. Polish refiner Grupa Lotos bought a one-off test purchase of 2 million barrels of Iranian light crude recently, and Europe has returned as a key destination for Iranian crude. Iran has also been gradually increasing its exports to key Asian buyers like India, China, Japan and South Korea. Japan’s oil imports from Iran are currently more than 300,000 b/d --similar to presanctions levels. The decline in Venezuelan crude output accelerated further, with production falling 120,000 b/d in June to 2.15 million b/d, the lowest since February 2003, S&P Global Platts data showed. An internal state-owned PDVSA report seen by S&P Global Platts also showed a steep fall in oil output. The fall has been attributed to a lack of investment, high costs, accumulated debts with oil field service providers, reduced drilling activity and the deterioration of physical infrastructure at extra heavy crude upgraders. Analysts also said Venezuela’s oil sector continues to see power rationing, which is exacerbating the output decline. •

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Total, Tullow Oil, ExxonMobil, BP plc, Ministry of Energy and Mineral Development - Uganda, Oando Energy Resources, Petroguin-EP, Petrosen, Pluspetrol, Eni Spa, Maersk Olie OG Gas A/S, FirstEnergy Capital LLP, Ministry of Petroleum, Energy & Mines - Mauritania, Agence de Gestion et de Coopération entre la Guinée-Bissau et le Sénégal, ONGC Videsh, Ministry of Mines & Petroleum - Ethiopia, PetroSA, Impact Oil & Gas, Bureau of Energy Resources / U.S. Department of State, Galp Energia, Richmond Energy Partners, SacOil Holdings, Lekoil, Shoreline Natural Resources, Moni Pulo Ltd, Rhino Resources, Petroleum Agency SA, JOGMEC, Velocys, Kalahari GeoEnergy Ltd, United Hydrocarbon International, FAR Limited, Shell International Exploration and Production, NVentures, Kosmos Energy, Mirabaud Securities, Stellar Energy Advisors, Moyes & Co, Orient Energy Review, Ghana Oil & Gas Service Providers Association, Gulf Reservoir Modeling Technology, University of the Witwatersrand, International Trade & Development - UK, Danvic Petroleum International Corp, Sonangol, International Energy Solutions, Preng & Associates, Sound Oil, Monetizing Gas Africa Inc., Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), Petroleum Training and Education Fund (PetroFund), Allen & Overy LLP, Engen Oil, Africa Fortesa Corp, Geological Bureau (Union des Comoros), T5 Oil & Gas, Ministry of Energy and Mines - Eritrea, Ambit Energy Corporation, Woodside Energy, OMV, Oil & Energy Services Ltd, South African National Energy Association, Tower Resources, CGG, Makerere University, ACAS Law, Ophir Energy plc, Manokore Attorneys, Fugro N.V., CMS Cameron Mckenna, African Institute of Petroleum, Svenska Petroleum Exploration, Africa Oil+Gas Report, Africa Oil Corp, Mitsui & Co, Ministry of Mines & Energy - Namibia, Petrolin Group, Instituto Nacional de Petróleo - Moçambique, ONHYM - Morocco, Upstream Oil & Gas Newspaper, Ministry of Energy and Petroleum - Kenya, Discover Exploration, RPS Energy, PGS, Ministry of Hydrocarobons - Republic of the Congo, Presidency of Mines and Petroleum - Madagascar, NAMCOR, Seplat, Aker Solutions, Subsea 7, Noble Energy, CNBC-TV Africa, ITE Group plc, Global Pacific & Partners

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Frames Completed HIPPS for Pemex Lakach Deepwater Gas Field

Frames, supplier of oil & gas solutions and certified HIPPS integrator, together with their partner Mokveld, completed two High Integrity Pressure Protection Systems (HIPPS) for the Pemex Lakach field Gas Collection Station. It concerns one of the first ever certified HIPPS in Mexico. The contract for the HIPPS is assigned to Frames by the Mexican construction company Arendal that has been awarded to construct the gas collection plant for the Lakach field. To minimize on-site installation activities and to prevent installation errors on a system as critical as HIPPS, Frames designed a completely integrated skid mounted solution. This modular design reduces the number of interfaces and simplifies the certification of the HIPPS. Each SIL3 certified HIPPS package consists of two Mokveld pneumatically actuated axial valves, pressure transmitters with interlocking manifold and a programmable logic solver (PLC). Since the skids are located in a hazardous area, the logic solver is installed in an explosion proof cabinet complete with HMI. All the other equipment is also rated for use in a potentially explosive atmosphere. To make sure that the HIPPS has high availability, a pneumatic buffer vessel is installed on each skid and the actuators are provided with passive fire protection. Thomas de Wolf, Product Manager at Frames Flow Control & Safeguarding stated: “Together with our customer, Mokveld and other supply chain partners we were able to design and build the optimal solution for this project. Due to this cooperation, we were able to deliver the skids on time and to the full satisfaction of the customer and certifying authority (TÜV).” As one of the only certified HIPPS integrators in the world, Frames

is ideally suited to integrate a complex HIPPS package without any hassle for the customer. Arendal recognized the added value of Frames’ Functional Safety Management System that ensures the entire process of integration is performed in accordance with the IEC-61511 standard. The HIPPS protects the Gas Collection Station against high pressure in case of a pressure control valve failure. A HIPPS plays a crucial role in site safety. By automatically bringing dangerous processes to a predictable safe state within a defined safety time, the HIPPS protects the site personnel, general public, and environment as well as valuable production assets. At Frames, we provide the vital link between the well and pipeline. Together we design, deliver and construct separation & processing equipment, control & safeguarding systems as well as modules and total plants for the international oil and gas market. With our offering we are active in the onshore and offshore segments. Frames Flow Control and Safeguarding, a family member of Frames, offers a full range of flow control and safeguarding solutions, from customized products to field services. We are able to design and supply a wide range of control systems and processes. From hydraulic systems, to safety instrumented systems, chemical injection, valve automation center, automation and wellsite packages. We are a company with more than 20 years of experience in the energy industry building, with execution you can trust, pipelines, industrial plants, electromechanical works, heavy civil works, horizontal directional drilling, and fiber optics networks for the growth of society. Our value proposition is the incorporation of market knowledge and human capital contribution with the implementation of sophisticated systems and tools. Our philosophy has built a Mexican company with the technical capacity to undertake specialized projects. •

Offshore Dialogue

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OGA Awards Contracts for Second £20m UK Seismic Campaign The OGA has awarded contracts for the second UK Government funded £20 million seismic campaign to promote underexplored areas of UK Continental Shelf (UKCS) PGS and WesternGeco have been awarded the contracts to acquire seismic data from the East Shetland Platform and South West Britain respectively. The programme is anticipated to collect between 10,000 and 15,000 km of new seismic data from under-explored frontier areas. The acquisition is due to begin in July, subject to receiving the relevant environmental approvals, and will be supplemented by selective reprocessing of legacy seismic datasets. Acquisition is expected to be completed during Q4 2016 and released to industry in Q2 2017, mirroring the 2015 seismic programme which saw more than 40,000 line km of new and reprocessed data successfully released to industry earlier this year. The seismic acquisition programme forms part of a package of measures designed to support the oil and gas sector, announced by the Prime Minister David Cameron earlier this year. The areas were selected following engagement with industry and endorsed by the MER UK Exploration Board. Gunther Newcombe, OGA Director of Exploration and Production, said: “The seismic acquisition programme is a critical part of OGA’s plan to revitalise exploration. Last year’s programme, which covered the Rockall Trough and Mid-North Sea High areas, sparked significant interest in these frontier areas of the UKCS with more than 3,000 downloads of the standard seismic data packages. Studies of these areas are being carried out which will provide valuable insight into their potential ahead of the 29th Offshore Licensing Round which we hope to announce imminently, subject to completion of the Strategic Environmental Assessment. “The 2016 programme is focusing on under-explored frontier areas where no substantial seismic has been acquired in decades. It is expected these areas will be made available for licensing in the 31st Frontier Licensing Round which will be held in 2018. “The UKCS is in a unique position having recovered more than 43 billion boe to-date, yet up to 20 billion boe still remains. The challenge is now for industry to increase exploration drilling in the UKCS and work with OGA to meet our shared target of 50 Exploration & Appraisal wells per year by 2021.” PGS vessel the Nordic Explorer is scheduled to carry out seismic surveys across the East Shetland Platform which includes the East Orkney Basin, East Fair Isle Basin and Dutch Bank Basin. WesternGeco vessel WG Magellan is scheduled to carry out seismic surveys around South West Britain, including; the Celtic Sea, Western English Channel, Bristol Channel, St George’s Channel and the Irish Sea. Thorbjørn Rekdal, Regional President Marine Contract Europe, PGS said: “We are pleased the OGA awarded one of the contracts to PGS which shows confidence in our ability to deliver high quality data in an efficient and timely manner. The survey will be acquired with GeoStreamer.” Patrick Legh-Smith, WesternGeco Vice President Marine said: “We are delighted to be a part of the UK government’s initiative to drive growth in the country’s oil and gas sector. This award leverages our experience in frontier exploration acquisition and builds on the work done by WesternGeco during the first UK seismic campaign in 2015. The survey shall be completed using Q-Marine* point-receiver seismic technology with broadband techniques for enhanced imaging.” •

Oil and Gas Discovery South of the Brage Field in the North Sea


aroe Petroleum Norge AS, operator of production licence 740, has concluded the drilling of wildcat well 31/7-1 and appraisal well 31/7-1 A. 31/7-1 proved oil and gas and 31/7-1 A delineated the discovery. The wells were drilled 13 kilometres south of the Brage field in the North Sea. The primary exploration target for the wells was to prove and delineate petroleum in Middle Jurassic reservoir rocks (the Fensfjord formation). The secondary exploration target was also in Middle Jurassic reservoir rocks (the Brent group) and the third exploration target was in the Lower Jurassic (the Cook formation and the Statfjord group). 31/7-1 encountered a gas column of about 18 metres and an oil column of about 21 metres in sandstone in the Middle Jurassic Fensfjord formation. Reservoir quality is good. Well 31/7-1 A, which delineated the discovery, encountered a gas column of 6 metres and an oil column of 25 metres at levels equivalent to those of the discovery well. The secondary and third exploration targets were dry. Preliminary estimates indicate that the size of the discovery is between 6.8 and 12.7 million standard cubic metres (Sm3) of recoverable oil equivalents. The wells were not formation-tested, but extensive data acquisition and sampling have been carried out. The licensees will assess tie-in of the discovery to existing infrastructure on the Brage field. The wells are the first and second exploration wells in production licence 740, which was awarded in APA 2013. Well 31/7-1 was drilled to a vertical depth of 2750 metres below the sea surface, and was terminated in the Statfjord group in the Lower Jurassic. Well 31/7-1A was drilled to a vertical depth of 2270 metres below the sea surface, and was terminated in the Fensfjord formation in the Middle Jurassic. Water depth at the site is 140 metres. The wells will now be permanently plugged and abandoned. The wells were drilled by the Transocean Arctic drilling facility, which will now drill wildcat well 36/7-4 in production licence 636 in the North Sea, where ENGIE E&P Norge AS is the operator. •


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Aker Solutions ASA: Second-Quarter Results 2016


ker Solutions delivered on major projects globally in the second quarter as operational improvements supported margins amid a slowdown for the oil and gas industry. The company won NOK 3.4 billion in orders in the period, including a contract of more than NOK 1 billion to deliver its longest-ever umbilicals system at the Zohr gas field offshore Egypt and an order from Idemitsu Oil and Gas for front end engineering design at the Sao Vang and Dai Nguyet developments offshore Vietnam. In Norway, the company secured an engineering framework agreement with Lundin and MMO contracts with Statoil and Kværner. Aker Solutions saw continued interest in its front end engineering capabilities, receiving 29 study awards for projects in Norway, Australia, Asia Pacific and West Africa.

In Subsea, Aker Solutions targets a move over time toward peer-group margins and a return on average capital employed (ROACE) of 20-25 percent in the medium term. The ROACE in the second quarter was 10 percent and 15 percent excluding special items. Margins in Field Design are expected to gradually improve, with the biggest movement in MMO. The company expects to at least maintain its market share in all business areas. Aker Solutions is a global provider of products, systems and services to the oil and gas industry. Its engineering, design and technology bring discoveries into production and maximize recovery. The company employs approximately 13,000 people in about 20 countries. •

The order backlog was NOK 35 billion at the end of the quarter, of which almost two-thirds were for projects outside Norway. Finances were robust, with a liquidity buffer of 7.9 billion kroner at the end of the period. Net debt fell to NOK 1.3 billion from NOK 1.8 billion a year earlier. There was good progress on a goal to boost cost-efficiency across the business by at least 30 percent amid a broader effort to streamline operations and strengthen competitiveness. The plan is to achieve annual cost savings of minimum NOK 9 billion by the end of next year, based on the 2015 cost base and work volumes. The company expects a quarter of this target to be achieved this year and for improvements to accelerate next year. “In the shadow of extensive industry challenges, we continued to deliver on operational improvements and our streamlining process,” said Luis Araujo, chief executive officer of Aker Solutions. “We have maintained steady margins and delivered strong execution. Our healthy backlog and solid finances will stand us well now and when the market recovers.” Revenue fell to NOK 7 billion in the quarter from NOK 8 billion a year earlier as the oil-services market slowed and some projects neared completion. Earnings before interest and taxes (EBIT) were NOK 319 million compared with NOK 376 million a year earlier. The EBIT margin was 4.6 percent versus 4.7 percent a year earlier. The company had NOK 77 million in special items, mainly from costs of restructuring and impairments. The margin excluding special items was 5.7 percent. Aker Solutions has two reporting segments: Subsea and Field Design. Subsea revenue fell to NOK 4.3 billion in the quarter from NOK 4.8 billion a year earlier. The EBIT margin narrowed to 4.6 percent from 7.1 percent, impacted by higher depreciation and lower subsea services demand. The margin excluding special items was 6 percent. Revenue in Field Design, which consists of MMO and Engineering, dropped to NOK 2.7 billion in the quarter from NOK 3.3 billion a year earlier. The decline was led by MMO, where some major projects neared completion and volumes contributing to revenue were small from other projects still in their start-up phase. The EBIT margin widened to 5.5 percent in the quarter from 4.9 percent a year earlier, helped by good progress on projects. The margin excluding special items was 6.1 percent. Outlook The markets are challenging and projects are being postponed across the industry. But cost cuts are driving down break-even costs, which may allow some major developments to be sanctioned in the next 12-18 months. While offshore Norway is largely expected to remain subdued, there are signs that the region may start to see a gradual recovery from 2017. Aker Solutions’ greatest growth potential is outside of Norway, where the company has been expanding. Tendering activity remains steady and totals about NOK 35 billion. Aker Solutions is well-placed in key growth regions of the global deepwater and subsea markets to provide the capabilities and technology to tackle the challenges of lowering costs and improving recovery rates.


Wood Group Awarded Subsea Master Service Agreement Extension by Apache


ood Group has been awarded an extension to its master service agreement (MSA) contract with Apache Corporation in the North Sea. Wood Group will continue to deliver subsea engineering and consultancy services, in support of Apache’s routine operation and maintenance works, as well as detailed engineering for future subsea developments across its entire North Sea portfolio; the Forties and Beryl areas, Scottish Area Gas Evacuation (SAGE) pipeline and the onshore SAGE facility at St Fergus. Effective immediately, the contract includes two one-year extension options. Wood Group has held this service agreement with Apache since 2012 and supported on a number of key projects in the North Sea, including the Forties Subsea Isolation Valves (SSIV) project, the Aviat development and most recently the Ness Nevis development. Robin Watson, Wood Group chief executive said: “The extension of this contract to provide our technical solutions support across Apache’s North Sea portfolio is testament to our strong, collaborative working relationship with Apache and their confidence in our high standard of service delivery. We look forward to bringing Wood Group’s breadth of subsea consultancy and detailed engineering knowledge and expertise to support this key client in enhancing and optimising their current assets and effectively delivering future subsea developments in the North Sea.” Wood Group is an international energy services company with around $6bn sales and operating in more than 50 countries. The Group is built on Core Values and has three businesses - Wood Group PSN, Wood Group Kenny and Wood Group Mustang - providing a range of engineering, production support and maintenance management services to the oil & gas, and power generation industries worldwide. •

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Another System in Lula Field Is the Eighth in the Santos Basin Pre-Salt


etrobras announces the start-up of the Lula Central production system with the interconnection of the first production well (8-LL81D-RJS) to FPSO Cidade de Saquarema, on July 8, and the production stabilization at around 30,000 barrels per day (bpd) on July 11. Located in Lula field, Santos Basin, off the coast of Rio de Janeiro, this is the tenth large definitive production system operating in the pre-salt layer. The complete scope of the Lula Central project includes 18 wells: 9 production and 9 injection. FPSO Cidade de Saquarema is capable of processing 150,000 barrels of oil and compressing up to 6 million m³ of gas per day and is anchored at a water depth of 2,120 meters. The vessel left the Brasa shipyard in Niterói on May 22 towards the current location, around 300 km off the coast of Rio de Janeiro. It was converted from a very large crude carrier (VLCC) at the CXG shipyard in China. Nine of its modules were manufactured in Brazil, where work was also completed to integrate them with the processing plant. Lula Central is the second system to start up this year and will contribute to the company’s production growth. This project is part of the company’s efforts to achieve its annual target of 2.145 million bpd of oil in Brazil. This system joins the nine already operating in the pre-salt layer of the Santos and Campos basins, which were responsible for record production in the fields operated by Petrobras in this province (1.24 million boed) and contributed to the company’s record output of oil and gas in Brazil (2.70 million boed), both achieved in June, as reported to the markets yesterday. The systems operating in the pre-salt are as follows: Lula Pilot - FPSO Cidade de Angra dos Reis; Lula Nordeste Pilot - FPSO Cidade de Paraty; Lula, Iracema Sul Area - FPSO Cidade de Mangaratiba; Lula, Iracema Norte Area - FPSO Cidade de Itaguaí; Lula Alto - FPSO Cidade de Maricá; Sapinhoá Pilot - FPSO Cidade de São Paulo; Sapinhoá Norte - FPSO Cidade de Ilhabela; and Parque das Baleias - FPSO Cidade de Anchieta and P-58. Petrobras’ eleventh large pre-salt system is due to come on line in the third quarter of this year, in Lapa field, Santos Basin, through the installation of FPSO Cidade de Caraguatatuba. The Lula Central area is located within the BM-S-11 concession block. It is operated by Petrobras (which holds a 65% stake), in partnership with Royal Dutch Shell plc subsidiary BG E&P Brasil (25%) and Petrogal Brasil (10%). •

Leniency Agreement signed between Brazilian Authorities, Petrobras and SBM Offshore


io de Janeiro, July 15, 2016 – Petróleo Brasileiro S.A. – Petrobras announces that today, together with the Ministry of Transparency, Oversight and Control (Ministério da Transparência, Fiscalização e Controle – “MTFC”), the Public Prosecutor’s Office (Ministério Público Federal – “MPF”), the General Counsel for the Republic (Advocacia Geral da União – “AGU”) and SBM Offshore, it signed a leniency agreement through which the Dutch company will pay compensation of US$341.8 million (approximately R$1.12 billion), as follows: US$328.2 million to Petrobras and US$13.6 million to the Brazilian government. The agreement is the outcome of a negotiation process that began in March 2015. Petrobras will receive US$149.2 million, in three installments. The first, US$129.2 million, will be paid as soon as the agreement comes into effect. The second and third, US$10 million each, will be paid 12 and 24 months after the agreement was signed. The other US$179 million represents the nominal value to be deducted from future payments owed by Petrobras to SBM based on prevailing contracts. Following this agreement, SBM will be able to participate in public tenders under way and future procurement processes. The company will have to pass through all the compliance filters and controls to which Petrobras suppliers are subject. This is an important milestone in the set of measures being taken to ensure that Petrobras is compensated for losses it has suffered. The total sum covered by the new agreement includes the amount already received by Petrobras, to compensate for damages, worth around R$310 million, arranged through plea bargain agreements. •





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ALL ABOUT THROUGHPUT Pipeline Cleaning: the Smart Way to Efficiency, by ROSEN.

Optimal flow is the single most important prerequisite for efficient pipeline operation. However, there are many factors which may seriously impact the continuous transportation of the medium in any pipeline, several of them being related to the accumulation of inherent deposits and debris. Not only does this cause a severe loss of throughput, it may also lead to damage by abrasion or encourage corrosion under deposits. Therefore, a routine cleaning program is crucial for maintaining pipeline efficiency, and may avoid costly repair or restoration work in the future.


eavy buildup of solids, such as scale or waxy paraffin, can drastically affect pipeline efficiency and requires effective cleaning solutions. Typically, a fluid will transport small particles at the same speed and in the same direction as it is going itself. However, in a pipeline, the shear strain on the product near the pipe wall moves the particles towards the pipe wall, where it then builds up. While the flow of the fluid within the pipeline will always continue to some extent, the internal diameter will be reduced—with severe consequences for the operator. For example, in a 12’’ pipeline, a smooth layer of deposit that decreases the internal diameter of a pipeline by only five percent can cause a ten-percent loss of throughput, and requires an increase of pressure by roughly thirty percent in order to re-establish constant flow. By contrast, an equally thick but uneven layer of deposit can reduce the throughput by thirty-five percent

Effects on efficiency in a 12” pipeline.


and requires a pressure increase of approximately 140 percent. In addition to the reduction of flow, dirty pipeline surfaces may also cause severe damage to the pipe material. Build up may prohibit corrosion inhibitors from being applied consistently, and, even worse, liquids may gather underneath deposits and directly cause corrosion and pipe thinning. The effectiveness of a single cleaning run becomes clear when you consider the following example of a six-inch crude oil pipeline whose performance was significantly improved by ROSEN: This line is approximately six miles long and sees, on average, a production of 9,000 to 11,000 barrels per day. With crude oil continuously flowing, paraffin accumulates very quickly on the inner wall of the pipeline, which increases flow resistance, pressure requirement, and pump system electricity use. The cleaning run, for which a six-inch dual

brush disc tool was used, collected and pushed out a total of nearly fifteen pounds of paraffin and liquids. This led to an increase of throughput by an average of 4,000 barrels a day, optimizing efficiency by up to fortyfive percent. Furthermore, it allowed for a considerable reduction of pressure and electricity use. As we can see from the case above, it does not necessarily take a large amount of debris to perceptibly reduce the flow in pipelines. Even small irregularities on the inside of the pipe wall and debris accumulations can impact the flow regime, increase friction, and thereby intensify flow resistance. Consequently, more pumping power is required to assure optimal flow, making the pipeline much less efficient. Most often, however, the amount of debris collected during one cleaning run is much higher. This is particularly the case with crudeoil pipelines that throughout their course

Routine maintenance is crucial for efficient operation and lifecycle extension.

undergo a significant temperature drop as wax starts to precipitate at a temperature of just above 50 °C. Merely one millimeter (0.039”) of wax deposited over twenty kilometers (12.5 miles) of a 20” pipeline equates to a volume of 31 m3 (1094 ft3) of wax, which would make a solid plug of nearly 160 meters (525 ft). Since such a plug is very likely to get stuck, stopping not only the cleaning tool but also the entire production, its formation must be prevented by all means. Therefore, it is crucial to define the correct cleaning program for each individual pipeline. Besides the frequency of cleaning runs, this also includes the appropriate configuration of the cleaning tool. When choosing the right cleaning tool, considering the amount of product bypass and how it can be created is essential, as bypass is an important instrument to increase cleaning efficiency: Bypassing oil

will dissolve wax in front of the tool and aid in transportation of the debris from the line by moving it ahead as a slurry. In combination with high density pencil ring brushes, wax can thus be efficiently removed from pipelines. In case large amounts of dust are expected, bypass can cause turbulences ahead of the tool, keeping the loose debris moving and flushing it away. Bypass can be realized through several possibilities, comprising ports or plugs, usage of sleeves or hole flanges (instead of blind flanges), and spider noses. The spider nose is a bypass system that utilizes the pressure behind the tool so that product is able to pass through the tool body to a multi-directional outlet. As it passes through the spider nose, severe turbulence is created ahead of the tool, keeping the particles agitated and moving, thus avoiding accumulation of debris. This strongly

decreases the likelihood of the tool getting stuck. In general, the tool’s bypass rate should be such that the transport of solids is faster than their accumulation in front of the tool. Considering the facts above, it is evident that cleaning is a vital component of the integrity management of pipeline networks, and is necessary at every stage throughout the lifecycle of any pipeline. Failure to clean a pipeline at regular intervals may affect the efficiency, safety, and reliability of the entire network. More importantly, it may result in damages that reduce its lifespan and make expensive repairs inevitable. The most cost effective way to ensure the efficiency of a pipeline is to choose the most appropriate maintenance program. For this, it is important to understand the line as a whole including the system’s geometry, types of debris to be removed, and medium being transported. Only then can the best cleaning program be selected. Additional support through tracking and data collection during the cleaning process will also allow for better diagnostic feedback of the cleaning progress and effectiveness. •

The ROSEN Group

The drastic effects of black powder deposits.

Web: Oil and Gas: global/solutions/industry-casestudies/oil-gas.html



These Birds Can Really Move. Heavy Transport & More. OFFSHORE HEAVY TRANSPORT (OHT) OHT is a highly experienced heavy transport vessel operator built on Norway’s long and proud heritage in the shipping industry and as a leading maritime nation. The company has executed hundreds of successful transports on behalf of its customers and has transported jack-up rigs for the majority of rig-owners worldwide. In addition, the company has increased its customer base in Asia, transporting all types of oversized cargoes for large infrastructure projects.


HT is a company fully integrated with in-house operations, engineering, technical and commercial management. Short lines of communication, a flat decision making structure-, and nonbureaucratic structure have all been integral to OHT’s success. Prior to project execution, careful planning is performed in order to achieve a safe operation. Each cargo requires thorough studies of technical details to translate the result of theoretical calculations into practical solutions on board. The engineers are involved in the whole project process together with the chartering- and operation teams, and keep close communication with the customer, the loadmasters, and the ship captains Direct and open feedback from the customers is very important for OHT in order to improve in all areas. Positive comments like the following from a recent customer, provide strong motivation for the organization to continue striving for excellence: “It is always a pleasure working with OHT professionals! Thanks to the entire OHT Team for your efforts and we look forward to cooperate with you in the near future”.

Seajacks Scylla on Osprey – Korea to Europe.

Albatross-Dual Jackup-Corpus Christi-2016.

SEAJACKS SCYLLA TRANSPORTED BY OHT OSPREY HEAVYLIFT VESSEL Seajacks Scylla, the world’s largest and most advanced offshore wind farm installation vessel, was safely transported by OHT from South Korea mid December 2015 with discharge in Europe mid February 2016. Loading of the vessel took place using the float-on method whereby the heavylift vessel’s main deck submerged about 8,5 m to allow Seajacks Scylla to be floated over the deck of OHT Osprey. Once safely in position, the heavylift vessel was de-ballasted, thus lifting the more than 23,000t cargo out of the water. The voyage was a 14,039 nautical miles journey passing the Cape of Good Hope. The company offered the most attractive and reliable solution for the Scylla transportation without having previously worked on any of their projects. Torgeir Ramstad, CEO in OHT, personally attended the loading of the vessel in Korea. “It was a hugely impressive sight to see our vessel lift Scylla, which is almost 24,000 tonnes out of the water with almost no effort at all. Scylla is wider than our own transportation vessel, so it looked like David lifting Goliath,” Mr. Ramstad states.


One of the key factors in winning this business was the close relationship OHT achieved with the client. In an industry that is often content to simply make the occasional phone call, OHT are always prepared to go through formal and informal meetings with the clients to ensure that they acquire a complete understanding of their needs.

OHT Vessel Albatross.

The Zourite jack up barge to La Reunion The world’s largest offshore overhead travel crane, mounted on the Zourite jack-up barge, was transported by the OHT vessel, Hawk, from Gdynia in Poland March 2016. Hawk sailed with the cargo West of Africa, passing the Good Hope and discharged Zourite in Reunion Port, located East of Madagascar, May 2016. The crane will be used in construction of a 5,400 m bridge for a new offshore highway connecting Saint Denis - the administrative capital of La Réunion - with La Possession. It replaces the existing coastal road, which is exposed to falling rocks and flooding from swells and tropical storms. In 1999-2000 OHT took delivery of two of the largest semi-submersible vehicles in the market at the time. These vessels were designed and developed in Norway by the Company’s own teams, but were ultimately acquired by a competitor, the largest operator in the heavy transport segment. It took time for OHT to recover, but in 2006 the first of the current fleet was delivered, the converted heavy lift vessel, Eagle. Subsequently, the Falcon, Osprey and Hawk followed suit in quick succession. The latest addition to join the OHT fleet, Albatross, previously a shuttle tanker, was operative from July 2015. Zourite on Hawk – Poland to Reunion Port.

The five open deck semi-submersible heavy lift carriers dry-tow offshore drilling rigs (both jack-ups and semi-submersible rigs), dredging equipment, modules and practically any other oversized floating and non-floating cargoes up to 40000 tons.

Future market In the current depressed market for oil & gas, OHT will continue to build on its strengths to ensure that customers get a tailored, professional and friendly experience when supporting them in their challenging assignments. Combined with the focus on non-oil & gas activities and the company’s extremely strong balance sheet, this will take OHT through the current slump and enable strategic initiatives that could propel the company into a leading position in new segments. OHT’s headquarters are located in Oslo, with satellite offices in Singapore, Busan, Shanghai and Houston. Niels Heldre, General ManagerAmericas, established the Company’s office in Houston in 2015 and represents North-, Central and South America. “Our customers really appreciate that we are present and closely following up our projects with them”, Niels pinpoints. Houston is the world capital of the oil and gas industry and the host of several events as well as having the biggest cluster of clients and potential clients in the industry. •

Offshore Heavy Transport AS (OHT) Phone: Email: Web:

+47 21 01 34 50



Big Data Bottleneck to Be Tackled at SPE Intelligent Energy 2016 Delegates at SPE Intelligent Energy 2016 will hear about a collaborative venture between academic institutions and industry partners which aims to help oil and gas operators collect and interpret surges of real-time big data generated by oilfields and plants more efficiently. As companies seek smarter ways to handle the influx of complex data, joint industry projects (JIPs) are exploring ways of saving time, money and energy through shared goals. Optique, a fouryear JIP initiated by The University of Oslo, exploits recent advances in semantic technologies, in which the meaning of data is explicitly represented as part of the data model.

The aim is to develop a software platform to provide end-users with flexible, comprehensive and timely access to large and complex industrial data sets – in processing petabytes of well data, for example – by making computers adopt the language users understand and are familiar with. The project has received backing from Statoil, DNV GL, German engineering group Siemens, and Fluid Operations, a German provider

of innovative cloud and data management solutions. The €13.8 million programme launched in December 2012 with €9.7m of European Union funding.

allowing geoscientists to retrieve data from existing, legacy data sources using queries that are written in their language and not the computer’s language.

Dr David Cameron, Coordinator of the SIRIUS Centre for Research-Based Innovation at The University of Oslo, said: “The biggest challenge of big data in oil and gas is accessing and integrating the wide variety of data spread over silo applications. This can be solved by

“Getting quick and cheap access to data is the bottleneck in applying analytics in oil and gas. Our engineers and geoscientists deserve better, faster and more intuitive ways of finding and exploring data.” The Optique team expects its approach to reduce turnaround time for information requests from days to minutes, while also advancing to data sets whose size and complexity is beyond the reach of existing technologies. The vision is that by 2020, Optique methods and technology will be incorporated into mainstream information management products delivered by trusted vendors. The theme of SPE Intelligent Energy 2016, which will be held at Aberdeen Exhibition and Conference Centre (AECC) from 6-8 September, is ‘New Horizons: Intelligent Energy in a Changing World’. Visitors from around the world are expected to gather in Europe’s energy capital as the latest smart technologies and IE solutions are showcased at the seventh edition of the biennial event. As at previous events, the 2016 conference will be produced by SPE and will comprise of a three-day technical programme with an expected 75 papers covering topics including technology, integrated operations, workflow examples and solutions, leadership, cybersecurity and big data. The exhibition, organised by Reed Exhibitions, will showcase new and developing technologies and expertise by leading operators, service companies and technology providers. SPE Intelligent Energy 2014 was held in Utrecht, the Netherlands and themed ‘Aspirations and Accomplishments’. It provoked vibrant debate as industry professionals from 35 countries, including 600 conference delegates, participated in panel discussions, special sessions and interactive Q&As. Delegates considered the growing importance of digital energy in increasing asset value while improving health, safety and environmental performance. •


HARD WORKING ENGINEERS We have turned things around before. No matter what the oil price is: The world needs energy. It is at times like these new technology and new processes see the light of day. Together we have turned things around before – by innovating, reducing costs, and working in a smarter way. We are all adjusting once again, to make sure we can succeed in the new market reality. And we know we can do what it takes. Now is the time to get together and prepare for the future. ONS 2016 provides you with the latest insights, the new technology – and future business opportunities. This is the place to be. Welcome to the leading energy meeting place. New conference feature: Build your competence at our new Technical Sessions!


Ocean Signal and AMI Marine Announce New Partnership Two leading UK maritime companies combine specialist knowledge and background to collaborate on new product development for commercial vessels Communication and safety at sea specialist Ocean Signal and leading manufacturer of marine electronic equipment AMI Marine have formed a new partnership to collaborate on product development for the large commercial vessel sector.


ombining the specialist knowledge and extensive technical background of two of the UK’s most experienced marine companies, the cooperation facilitates a unique capability to incorporate the latest technology within new solutions to fulfil demand for next generation, mandated equipment. The new product will be launched later this year and is primarily for commercial vessels of 3000gt and over which are required to meet recent IMO equipment regulations. Targeting supply to OEMs, as well as commercial ship owners and operators, the collaborative project will enable the integration of the technology behind Ocean Signal’s range of GMDSS and safety equipment with AMI Marine’s years of experience in VDR (Voyage Data Recorder) system design. Alan Wrigley, managing director of Ocean Signal, said: “We are very pleased to announce this exciting new collaboration between Ocean Signal and AMI Marine. The partnership brings together two highly successful British companies which have already established themselves as global marine industry leaders due to their dedication and individual attributes. It provides a unique opportunity to combine a huge amount of different experience, knowledge and technical expertise to develop an innovative, reliable and cost effective solution for commercial OEMs and vessel owners and operators who need to meet the latest IMO mandates. We look forward to launching the new product in the coming months.” Martin Cox, sales director at AMI Marine, added: “It is really great to work with a company of the calibre of Ocean Signal and I am confident that both parties will bring significant skills and benefits to this collaboration. This project is part of AMI’s continued evolution as we maintain our focus on developing quality products and further strengthen our ability to adapt and provide bespoke solutions for our customers.” Both companies have built up a global reputation for engineering excellence and innovation by developing devices and adapting technology to lead the way in their specific fields. The exceptional engineering team at Ocean Signal use one of Europe’s best marine communication research and development facilities in Margate to design industry-leading safety devices featuring superior operational


and battery life, compact size and simple operating controls, for both the commercial and leisure sectors. Ocean Signal recently launched the M100/100X MSLD (Maritime Survivor Locating Device) with AIS and 121.5MHz homing beacon for the professional marine market, adding to its GMDSS product range including the E100G EPIRB, S100 SART and V100 VHF. Its innovative rescueME portfolio features the award-winning MOB1 man overboard device, the PLB1 personal locator beacon and the EPIRB1. Specialising in interfaces, repeaters, VDRs, advanced docking systems and alarm systems, Southampton-based AMI Marine was one of the first companies in the world to move from electro-mechanical to solid state electronics interfacing solutions and eliminated the necessity for moving parts by converting data using microchip technology. In 2000, AMI offered a VDR - a system which collects data to enable accident investigators to review procedures, instructions and communications in the moments before an incident and help to identify the cause of any accident - before the systems were mandated for commercial vessels, and has since worked with manufacturers such as Kelvin Hughes. AMI continues to evolve after 20 years in business with its growing portfolio of VDRs and docking systems and further new projects in the pipeline. AMI and Ocean Signal will be at this year’s SMM in Hamburg from 6th to 9th September (Hall B Stand 605). Communication and safety at sea specialist Ocean Signal™ is dedicated to providing the

technology and quality of product that will set industry standards. Ocean Signal’s rescueME range of products, which includes the rescueME PLB1, the rescueME MOB1, the rescueME EPIRB1, the rescueME EDF1 electronic distress flare and AIS Alarm Box, and SafeSea range of GMDSS products, including the E100 and E100G EPIRB, S100 SART and V100 handheld VHF radio, as well as the M100 and M100X professional MSLD, provide both recreational and commercial mariners with simple to use, compact and affordable life-saving solutions. All products are engineered by a highly experienced team of marine electronics professionals. Ocean Signal products are trusted by high-profile sailors, rowers and powerboat racing teams. By providing vital safety and communication devices, the company has sponsored the 16-man crew of Triton with rescueME MOB1s in the 2015 Rolex Sydney Hobart Yacht Race, record-breaking sailor Andrea Mura in the single-handed OSTAR race, Mini Transat 2015 solo sailor Lizzy Foreman, Atlantic rowing duo Ocean Valour and Venture Cup offshore powerboat race team Cinzano. Safety and communication products from Ocean Signal offer exceptional value, meeting or exceeding international technical and safety standards. Careful design and innovation provides commercial shipping, fishing and recreational users the confidence that their Ocean Signal equipment will work to, and beyond, their expectations when it is needed •


The Great Valley Intersect Article by C. Joseph, J.Teer, & S. Teer, Prime Horizontal Group of companies.

Drayton Valley 1,000 m Intersect, Alberta, Canada. During the early winter months of 2015 Precise Crossings of Spruce Grove, Alberta contracted Prime Horizontal to assist in the completion of a 1,000 meter crossing of the Brazeau River in Drayton Valley. Due to the tough ground conditions, an intersect was decided as the best solution for completion.


rayton Valley is located on Highway 22, or what’s locally known as the Cowboy Trail, some 80 miles southwest of Edmonton, Alberta. The historic Cowboy Trail features horseback trail rides, farm and ranch vacations, guest ranches, western themed attractions, accommodations, adventures, historic sites and western themed shopping. The valley is surrounded by Brazeau County, known for its vast oil fields located between the Pembina River and the North Saskatchewan River, just to paint a picture of the jobsite environment. The owner of the pipeline for the project was Tourmaline Oil Corp, a Canadian intermediate crude oil, natural gas exploration, and Production Company. Precise Crossings filled the roll of trenchless contractor, utilizing their 40+ years of experience in the Horizontal Directional Drilling industry. The project’s consulting engineer, planning, and supervision was undertaken by CCI Inc., a leading expert in Horizontal Directional Drilling (HDD), Open-Cut and MicroTunneling methods since 2004. Prime Horizontal was selected for the project due to extensive knowledge of wireline guidance and horizontal intersects along with demonstrated ability to surmount the obstacles that were expected when carrying out a drilled

The frozen mud pit on entry side.

crossing of the Brazeau River.

One obstacle was ground conditions, which Prime Horizontal’s Rotating Magnet Ranging included variations of gravel and sand on both system being set up just behind the tricone drill entry and exit side. This formation contributes bit. to difficult fluid control, troublesome steering and poor hole sustainability. The project managers, based on their local knowledge of the potential difficulties and prior to commencing work, both for the planning stage and practical contracting purposes, carried out ground investigation works to best identify the formations to be drilled for planning purposes. Geotechnical holes were drilled on both entry and exit sides showing the depths of the gravel seams. To help alleviate the ground condition issues on the entry side, 25 meters of casing was required, and on the exit side 45 meters of casing was used. The difference in length was due to the exit side elevation being substantially higher. The casing would prevent the flow of returns and constant working of the drill string from disturbing layers of sand and gravel resulting in potential hole collapse and increased annular pressures. It also does not allow the assembly to deviate from the already drilled hole when tripping in and out.


In addition to casing, Precise Crossings proposed doing the installation with two smaller rigs and performing an intersect in order to manage fluid pressures more effectively. Smaller rigs using smaller mud motors require less mud volume and pressure to drill than their larger counterparts, resulting in their choice for this project. A drilled intersect allows two smaller rigs to span the length of the same crossing in an acceptable time frame. Maintaining drilling fluid returns for the overall distance of the entire bore is made simpler since only half of the total distance is required from each side. Overall fluid velocity remains higher, annular pressure stays lower thus formation cuttings stay suspended in each hole.

The Rig is in place and the centralizer casing is being lined up.

The rigs that were utilized on both entry and exit side were American Augers DD-110 rigs. Precise Crossings had a custom made mud system with Derrick Hyperpool Shakers and Gardner Denver mud pumps on each end of the intersect. The Down Hole Assembly was a 7 7/8” Tricone TCI bit on a 4 ¾” mud motor. The pipe pulled was an 8” steel product line. The ParaTrack-2 AC Guidance system with the Rotating Magnet Ranging System was chosen and used to intersect the two drills. Rotating Magnet guidance was used because the project timeframe was rushed and needed to have the best chance of intersecting on the first attempt as road bans were imminent and moving heavy equipment would not be possible if intersect operations took too long. The ParaTrack-2 Rotating Magnet Ranging System offers ranging accuracy that is unparalleled by other passive magnetic downhole ranging products. A beautiful day for the pipe pull!

Results from the RMRS system can be well modeled with up to 40 meters of separation, where Passive Magnetic systems struggle beyond 4 meters. At close range the RMRS resolution is more enhanced, supplying operators with better data to make more accurate steering decisions. The rig on exit side was mobilized first and drilled 480m of the pilot hole, and then reamed

up to 14 inches in diameter. While reaming was taking place on the exit side, the entry side rig started drilling their pilot hole towards the exit side. Upon completion of the exit side reaming, the rotating magnet was tripped into the exit side to begin the intersect procedure. The entry side drilled up to the end of the exit sides bore at about the halfway point of the crossing. On March 8th the first ranging passby was completed showing a lateral separation of only one meter and another meter vertically. The gap was closed over the course of 60 meters in a 12 hour shift and intersection was accomplished at around noon on March 9th. Once the intersect was performed, both rigs tripped out of the hole and the entry side began forward reaming to 14 inches in preparation to pull pipe. Precise Crossings mobilized on February 6th, consequently completing the pilot on March 9th, hence the pipe was pulled on March 14th, thus making this project a success. Prime Horizontal was mobilized for guidance of the exit side on the 28th of February; intersect operations commenced on the 8th of March and successfully concluded on the 9th of March, 2015. •

Prime Horizontal Inc New Iberia, LA 70560 U.S.A. T: +1 337-359-9061



Aluminium Extruded Solutions For the Offshore Industry By Sapa AS. In fact, aluminium is just one third of the weight of steel, with far lower maintenance costs. So it’s the ideal material for many kinds of applications, especially where minimizing weight is important. Sapa’s aluminium extrusions provide the ideal solutions for living quarters, gratings, handrails, decking, stair towers, helidecks, climate shields and alike. As well as offering a lightweight alternative to steel, aluminium is durable, strong and highly corrosion resistant. It’s also very versatile, adapts easily into any design, and offers a smooth surface finish. Extruded aluminium – the lightweight material with many benefits

Sapa’s marine-grade extrusions.

Extruded aluminium profiles are used as components in buildings, transport, machinery, industrial and domestic equipment and millions of other applications – and their popularity is increasing rapidly, as more industries discover their benefits. Today aluminium is commonly used in marine applications and gaining more and more ground in offshore structures, due to its convincing material properties. Significantly lighter than steel, but without sacrificing strength, aluminium can also improve structural quality and efficiency. It can cope with heavy loads and hostile environments, and the unique qualities of extruded component design provide exceptionally high torsion resistance. In areas where special fire classes (such as A60) are required, protective materials, including mineral wool or ceramic fibres are being applied. Sapa assesses each project to provide the most appropriate solution to specific needs – and even with additional insulation weight,

aluminium is still far lighter than steel.

for installation and decommissioning.

In offshore oil & gas, weight saving is one of the levers to reduce cost. It has a direct impact on transportation cost as well as cost and time

Low-maintenance aluminium: perfect for the marine and offshore environment Sapa develops aluminium solutions specifically to meet the challenges of offshore and marine constructions. They work with clients to create and supply machined, pre-assembled and finished components to their precise requirements, using deep knowledge in the extrusion technology and proven welding techniques. Aluminium forms a natural oxide layer that protects the material from corrosion, and can be further enhanced by adding surface treatment. The required maintenance frequency and related cost for aluminium structures is much lower than for steel structures. Because of this reduced need for maintenance and the afore mentioned reduced weight, aluminium parts and components have a considerably longer lifetime and lower environmental impact than steel applications (e.g. less painting, less removing of old paint as well as less transported kilograms, easy to decommission and recycle at end of lifetime).

5083 alloy extrusions eliminate the costs associated with welding and fabricating cut plate with stiffeners.

Sapa’s global R&D teams work closely with its customers to support their development processes. They enhance product development

through material substitution and solutions that combine aluminium with other materials.

Strong, durable, low-maintenance, light aluminium solutions for the offshore industry.

Especially to meet the specific demands of the harsh offshore environment Sapa is continuously enhancing its portfolio of marine alloys. 5083 Marine Grade Extrusions and FSW Joined Panels approved by major class societies Using its extrusion technology for 5083 marine-grade extrusions, alongside the Friction Stir Welding (FSW) techniques, Sapa helps customers improve the quality and construction efficiency of their offshore constructions. Combining both the extrusion and the friction stir welding process Sapa is able to deliver marine-graded extruded panels. The 5083 series alloys meet stringent technical requirements and are the materials of choice for any kind of structural hull applications. The marine & offshore extrusions excel in corrosion resistance in a salt-water environment and therefore are particularly suited for applications in the waterline area. Furthermore the 5083 series alloys have a better base material to post weld strength ratio than 6000 series. This results in a general higher weldability and better predictable post weld strength. Friction Stir Welding (FSW) is the first choice joining extruded components into large panels as the extruded sections maintain their flatness throughout the FSW process. So Sapa friction stir welds and machines some of the longest and widest aluminium panels in the world, and joins them into larger panels,

without sacrificing strength, yet maintaining superior tolerances.

higher proportion of the original mechanical properties than other forms of welding.

FSW joins flush metal surfaces through the effects of a rotary tool, pressure and heat. No filling is needed. Friction Stir Welding generates less heat and therefore less distortion than traditional welding and it maintains a

Combining 5083 alloy extrusions and the FSW technique eliminates the costs associated with welding and fabricating cut plate with stiffeners which results in reduced production time and labour requirements. The reduced metal distortion allows for tighter tolerances of flatness in wide assemblies. The final marine-certified product (extrusion and FSW), eliminates the need for additional welding quality checks on the panels. The panels are certified by all major class societies, like DNV-GL and ABS, which saves time for the testing and allows material to be fitted seamlessly into customer’s production process. The profiles and panel sizes available from Sapa are amongst the biggest in the world and of impressive sizes: • Decking profiles up to 320mm wide. • Structural profiles with a CCD (circumscribing circle diameter) up to 90mm. • Friction stir welded panels up to 18,000mm long x 3,500mm wide. At the upcoming SMM in Hamburg, 6-9 September (hall B8, booth 207) and the Offshore Energy in Amsterdam 25-26 October (hall 1, booth 154) Sapa will exhibit a few of the latest developments for offshore and marine applications. Visitors are welcome to talk to Sapa’s experts and learn more about the opportunities solutions based on aluminium extrusions are providing. • You can find out more at:

Aluminium extrusions are the ideal material for the harsh offshore environment.



Poor Hole Cleaning? Stuck Pipe? There is a Solution! Stuck pipe is the drillers nightmare that stalks and haunts most drilling campaigns. Sticking a drilling BHA and subsequent loss of tools, hole footage and potentially jeopardizing well objectives, is THE costliest unplanned drilling event that can occur to an Operator. It still tops the table of costly NPT events ahead of items such as Well Control incidents, waiting on weather (WOW), lost circulation, equipment failures and rig associated problems. The cost to the industry is estimated at several billions $USD per year.


ver the past 30 years, wells have become more advanced and ambitious and as a result stuck pipe and hole problems have become more prevalent. The root cause of most stuck pipe incidents is Poor Hole Cleaning. This is the root cause for more than half of all incidents world wide.

drilling BHA. This tool is highly innovative and gives the Operator the opportunity to thoroughly engineer an enhanced Hole Cleaning programme using IDT’s SplitFlow software and functions of the ICIRC tool, maximizing Annular Velocity at all times.

In 2008, Gordon Hunter, an experienced Drilling Manager having spent his career with Shell, BP, Total and a host of other Operators as a consultant, decided to work on a solution to this perennial problem. He teamed up with Cutting & Wear, the renowned engineering company based in Sheffield in the UK, and together they formed a company: Intelligent Drilling Tools (IDT). The remit was to develop intelligent downhole tools that would directly tackle the issues of poor Hole Cleaning and Stuck drilling tools.

1. Closed – all the drilling fluid flow goes directly through the tool and to the BHA and Bit.

Good hole cleaning is all about maximizing Annular Velocity. The ICIRC tool, in its final stages of testing, is an electronic, multi position Circulating Valve that is installed as part of the

Electronics system demonstration.

The ICIRC has three positions:

2. Intermediate – This is an Open position that can be Nozzled to allow a certain amount of the flow to be diverted into the Annulus, bypassing the BHA. This can be engineered using IDT’s SplitFlow software to allow the minimum flow requirement to power MWD / RSS / Motor / Bit hydraulics etc., and the remainder out to the annulus. This maximizes Annular Velocity for a given surface pressure. 3. Full Open – this position opens up a Total Flow Area (TFA) of over 4 in2 allowing

Actuator motor assembly.

maximum flowrate to the annulus for the highest Annular Velocity at the lowest surface pressure. In addition, if Lost Circulation Material (LCM) is pumped, a ball valve closes off the bore to ensure that the Drilling tools and Bit do not become blocked by the LCM material. The full closure is optional. The tool is not activated by drop balls or darts or any other type of mechanism delivered from surface through the drillpipe. The ICIRC is electronic and intelligent. It is activated by “Downlinking” from surface, sending a coded signal to the tool via a pattern of pumps on/off and specific RPM according to a function map. The ICIRC reads the signals and shifts to the particular position requested. This offers tremendous advantages to the Operator: • The tool can be positioned anywhere in the BHA and remains throughbore at all times because there are no balls or darts dropped (apart from Full Open position when the

throughbore shutoff is activated which is optional). • It can be used in high inclination to horizontal wells as there are no balls or darts to be dropped or pumped down • There is no waiting time for balls or darts to land on their seats. • Downlinking is fast and reliable.

Testing downlink protocols at Cutting & Wear flow loop facilities.

AVOS or Annular Velocity Optimisation Service is a service being developed by IDT where our engineers will analyse the Operator’s well and BHA design and recommend ICIRC compatible settings to maintain optimum Annular velocity throughout the well profile. IDT have developed the mechanics, electronics and battery package to withstand even the toughest downhole environments. This has been fully simulated in testing on our specific vibration rig. In addition, all components have been heat cycled to military standards, and the tools materials spec and manufacturing process has been independently certified to NS2 standards. In addition to the stand alone ICIRC tool, IDT have developed the IDISC tool which is an electronic, intelligent BHA Disconnect tool installed in the BHA with an integrated ICIRC valve. This offers the Operator the same features and benefits of the ICIRC tool but with the addition of a unique and innovative disconnect mechanism should the BHA become stuck and the Operator wants to recover the drillstring. The IDISC has a number of safety protocols that must be met before the tool switches into a position where it can be given a final command to disconnect. Like the ICIRC, it is fully electronic and intelligent, sensing its environment and detecting whether or not it thinks it is stuck. The software that controls the IDISC is fully customisable to ensure the inbuilt protocols

are fully matched to the Operator’s well conditions. The remit of IDT has always been to provide innovative and quality downhole tools that are intelligent and do not rely on surface intervention such as balls and darts. The ICIRC and IDISC and their support services such as AVOS provide a new approach to an old problem. The IDT engineering team is not new to downhole drilling technology. As Cutting & Wear, they have a proud track record going back to the 90’s, designing and building the first Variable Gauge Stabilizers (VGS), 2nd generation VGS, Whipstocks and multilateral technology. The parent company, Cutting& Wear are market leaders in hardfacing technology selling into a global market.

The engineering challenge in both these tools was to develop the mechanics, electronics and software technology that would result in very high reliability under the severest of downhole conditions. The electronics engineers started with a clean slate, other than a remit that quality and functionality was paramount. The end result is an elegant and innovative electronics, sensors and power package that is functional, compact, fully programmable and built to exceptionally high standards. There was an investment in a purpose-built “clean room” for tool assembly that is fully air conditioned and constructed with bespoke tooling and lifting equipment. This ensures that when the tools are assembled efficiently and tested, there is no dust or dirt that could contaminate the electronics or the mechanics. The current tools are rated to a temperature of 150°C, and there are 200°C tools on the drawing board. Current nominal sizes are 8” with 6” tools to follow shortly. We must also acknowledge the support of the EU’s Horizon 2020 program for assistance in part funding the development of this technology. • If you would like more information on how Cutting & Wear can help your organization, please contact: Cutting & Wear Resistant Developments Ltd Web: Tel: +44 (0) 114 2578085 Intelligent Drilling Tools Web:

ICIRC & IDISC tools in an Optimised BHA

Email: Tel: +44 (0)114 257 2989



Converting Drilling Waste to Valuable Products: Environmental Friendly and Cost Efficient The downside of drilling oil and gas wells is that it generates hazardous waste. A massive amount of drilling waste i.e. drill cuttings, comes out of the bore hole and as the well drilling gets more and more sophisticated due to the use of special synthetic drilling fluids which drives costs up and, increasing waste volumes due to directional drilling relative to vertical drilling, it is not surprising that the treatment of drilling waste is climbing up on the agenda of various stake holders. With the downturn in the industry there is an obvious focus on reducing and avoiding costs.


the drill cuttings which meets environmental legislations, recovers the valuable drilling fluids and reduces logistics and disposal costs.

The TCC Solution

The end result of the TCC process are base oils, which are of high quality and are suitable for re-use as a virgin oil, and the mineral part that may be subjected to recycling and be used in various applications (e.g. in road construction, concrete or cement production, asphalt). The TCC is used both on land and offshore.

till, in many parts of the world, due to different legislations, rather unsophisticated solutions are being applied. The drill cuttings are not treated but dumped in a disposal well or landfilled. When drill cuttings are treated, either by a centrifuge or a vertical dryer the treated solids, still containing quite some of the hazardous drilling fluids, are skipped and shipped to landfills. Numerous countries and states have already or are now implementing stringent legislation related to drill cuttings. Total petroleum hydrocarbons (TPH) in solids, emissions and landfill restrictions are watched closely and the industry perception is that taking care about drill cuttings becomes more and more expensive while the desire is to reduce the costs. The Thermomechanical Cuttings Cleaner (TCC), developed by Thermtech, is an advanced thermal desorption solution to treat


The TCC technology is based on the converting of kinetic energy into thermal energy by creating friction in a Thermtech developed process mill. This process leads to the evaporation of volatile substances, including base oils. Thermtech’s technology ensures the reduction of the contents of oil derivative substances which means that extremely high ecological standards are met, allowing the reduction of drilling waste stockpiles or reinjection of waste products into the ground.

The TCC characteristics The TCC technology has unique characteristics which are the consequence of generating heat through friction. A major differentiator compared to any thermal technology is the extreme short retention time of the waste in the TCC unit which not only results in recovered oil that is comparable to newly created base oils but also in a high processing capacity in a small footprint. A very important effect of the friction process is that it allows for full temperature control meaning temperature stability and the possibility to adjust temperatures immediately when needed to achieve an optimum operation result. The TCC is the only thermal system currently used offshore, in contrast to a variety of indirect methods such as rotary kiln, hot oil units, microwave and induction thermal systems that are either used on land or in development stage Bottom right: Stationary TCC. Below: Mobile TCC for offshore operations.

One example of successes One of Thermtech customers, SAR AS the Stavanger based international waste management company, is successfully operating a TCC plant in Kuwait to handle the cuttings from Kuwait Oil Company. Daily, approximately 100 metric tons of oily cuttings are being treated, the recovered base oil is reused by Kuwait Oil Company in new mud and the cleaned solids only contain in average 0.1% oil. Similar results are being achieved in various places around the world, for example, in Baku where the drilling waste management company AA Services is processing the cuttings for BP. Current market With almost 60 TCC units in operation in the world, the TCC is the most applied technology for treatment of oily drilling waste. Leading oilfield service companies either have a manufacturing license to produce their own TCC units, or acquire complete solution directly from Thermtech. Due to the crisis in the oil industry many drilling projects are either postponed or cancelled, but with almost 1,500 rigs still active, there is a need for a higher penetration of advanced cuttings treatment instead of re-injection, bioremediation, incineration and landfill. Oil companies must be prepared to have a holistic view, looking at the real costs and the environmental impact and then make a profound decision. Keeping the technology ahead To be prepared for the future and to secure the leading technology position, Thermtech continues to improve the TCC by perceiving future requirements as well as implementing recommendations made by its customers

based on several hundreds of thousands operational hours and to perform technology development related activities together with assigned partners. Examples of challenges currently being addressed are waste heat recovery, the polishing of the solids to reduce the TPH to below 0.02%, expert software solutions to allow for an intelligent/automatic control and full remote operation, increase in

Above: Thermtech modular mobile TCC unit capacity, and even a higher modularity of the system to respond to the lay-out and footprint requirements. Other application areas Although today most TCC units are treating drill cuttings, the same technology can be applied in almost any waste with volatile liquid, oil contaminated or not, as long as there is a certain minimum solid content in the waste. One can think about the treatment of tank bottom sludges containing crude oils or cleaning up pits which would require a TCC unit that can process a feed at 400-500˚C compared to treating drill cuttings which requires a process temperature in the range of 250-300˚C. But also industrial bio sludges coming from biological water treatment processes, municipal waste and liquid waste streams from agricultural, food and mineral processes can be treated and dried in a TCC. To demonstrate feasibility, Thermtech has recently opened a new test centre in Norway. A laboratory scale TCC unit is installed and tests can be performed or if required the unit can be shipped to any location. •

Thermtech AS Phone: +47 55 60 40 60 Email: Web:



SSAB Introduces Strenx 700 OME Performance Steel Which Meets ABS, DNV-GL and Lloyds Register Classification Rules StrenxTM 700 OME from SSAB provides the offshore industry with new opportunities to save weight and reduce welding costs.


he dual-certified Strenx 700 OME meets the standard requirements of ABS AB EQ70 / DNV-GL NVE 690 / LR EH69. In addition to the class approvals, SSAB has taken the workshop properties to a new level for this category of steels by also certifying the steel according to Strenx guarantees. Strenx 700 OME / ABS AB EQ70 Strenx 700 OME / DNV-GL NVE 690 Strenx 700 OME / LR EH 69 Strenx guarantees represents SSAB’s ambition of enhancing our promise of workshop properties by offering exceptionally strict tolerances with regard to thickness tolerance, flatness tolerance and formability. The consistency in mechanical properties throughout the plate and from batch to batch is also something that characterizes Strenx performance steels. The improved tolerances and consistency also enable Strenx 700 OME to be used in cold formed profiles providing excellent production efficiency. Strenx 700 OME guarantees the mechanical properties in the Z direction and can be ordered in compliance with the requirements of Z15, Z25, or Z35. Strenx 700 OME is an exceptionally clean steel that is guaranteed to meet the EN 10160 E1S1 standard regarding impurities and porosity with the option to meet higher requirements in extra critical applications. The cleanness in combination with lean composition makes Strenx 700 OME easy to weld with retained properties. By using Strenx 700 OME in offshore and marine structures there is a potential to save 30% on weight in comparison with a standard EH36 or S355 plate. Reducing the thickness can also save 50% in welding costs and in many cases will also reduce handling and installation costs. The following applications are just some examples of how companies benefit from using Strenx 700 OME: Gear racks and chords and pylons for jack-up legs and lift boats Marine and offshore cranes and lifting devices Pipe and cable-laying equipment Ice breaking zones in hulls of service ships and ice breakers Protection plates for subsea equipment Green energy power plants as wave and tidal generators. •


For further information, please contact: Joakim Nyström

Christopher Gasper

Key Segment Manager – Energy & Offshore

General Manager SSAB Americas

SSAB Special Steels

SSAB Special Steels Americas

M +46730892119

M +1 (251) 408-7948







tm Come see thewill Strenx 700 OMEofatStrenx ONS:700 Meet SSAB in hall 4, OTC Houston see the launch OME, SSAB’s new stand 453 offshore classed high-strength steel.

Reducing the thickness can also save 50% in welding cost and potentially reduce handling and installation costs.

SSAB has taken the workshop properties to a new level for this type of steel. Strenx 700 OME meets the classification rules of ABS AB EQ70. It is also covered by Strenx guarantees, ensuring stricter tolerances than standard for consistency, thickness, weldability and formability.

Strenx 700 OME can be supplied classified as ABS AB EQ70 up to 130 mm, DNV NVE 690 up to 80 mm, Lloyds Register EH69 up to 80 mm.

By using Strenx 700 OME in offshore and marine structures there is a potential to save 30% weight compared to a normal EH36 or S355 plate.

Step up in offshore performance SSAB stand no. 4117 at OTC in Houston Stop by at stand 453 at ONS in Stavanger Norwaysand andcollect collect your free ticket for our “Innovating Offshore” technical seminar being held 21 June in Houston.


UKOG Announces Upgrade to Portland Oil in Place, Horse Hill-1 Discovery, Weald Basin UK Oil & Gas Investments PLC (LSE AIM/ISDX: UKOG) announces that a new petrophysical analysis by Nutech, incorporating the findings of the successful Horse Hill-1 (“HH-1”) flow test, demonstrates a threefold increase in calculated total oil in place (OIP) per square mile at the HH-1 well within the Upper Portland pay zone. As reported in May 2015 a total Horse Hill Portland P50 OIP of 21 million barrels (“MMbbl”) was calculated utilising Nutech’s petrophysical analyses. Nutech’s May 2015 evaluation assigned a Portland OIP value of 7.7 MMbbl per square mile at the HH-1 well. Nutech’s current evaluation upgrades the Portland OIP at HH-1 to 22.9 MMbbl per square mile, a 200% increase


s previously announced the final HH-1 Portland test flowed at a constrained stable dry oil rate of 323 barrels of oil per day (“bopd”). The Portland was produced at maximum pump capacity and showed no clear indication of depletion. It is likely that the rate can be further increased using a higher capacity downhole pump during the next planned test. As previously stated by the Company, the calculated OIP per square mile should not be construed as recoverable resources, contingent or prospective resources or reserves. HH-1 Discovery Company Interest




The HH-1 well is located within onshore exploration Licence PEDL137, on the northern side of the Weald Basin near Gatwick Airport. PEDL246 lies adjacent to and immediately to the east of PEDL137 (“the Licences”). UKOG owns a 27.3% interest in the Licences, which are operated by Horse Hill Developments Ltd. Background Nutech’s Report (“Report”) details that the production of dry oil from the Portland, with little or no observed water production, required a rethink of the pre-flow test petrophysical model. Prior to the flow test, interpretations suggested that water would likely be produced along with oil, as is seen in Portland reservoirs in nearby producing oil fields. The revised model fully incorporates well test observations and measurements. From a similar review of the petrophysical response within the Kimmeridge Limestones, the Report concludes that the well test results reinforce Nutech’s and the Company’s expectations regarding the significant volumes of OIP seen at the HH-1 well. As previously reported in April and June 2015, the overall Kimmeridge and Jurassic shale and limestone sequence is calculated to contain an OIP of 158 MMbbl per square mile at the HH-1 well and P50 9,245 MMbbl over the 55 square miles of the Licences. Horse Hill Future Plans The revised petrophysical model will be used to update Xodus’ 2015 estimates of the total


OIP contained within the mapped Horse Hill Portland oil accumulation. This will include an estimate of Contingent Resources net to the Company and will be reported in due course.

calibrate these studies will be acquired during the further planned extended flow tests.

The Operator has also informed the Company that the flow test data analysis undertaken by Nutech and Xodus provides the necessary technical encouragement to engage Barton Wilmore Ltd, one of the UK’s leading planning and environmental assessment practitioners, to prepare and submit a planning application to Surrey County Council (“SCC”), and to assist with obtaining necessary permissions from the Environment Agency (“EA”), for a significant appraisal programme at Horse Hill.

“The record breaking flow test results and revised Nutech analysis gives us key new technical insight into the oil bearing Portland reservoir. More importantly than the simple increase in Portland oil in the ground, these learnings have significant positive implications for potential recovery factors and for future commercial viability. The economic potential of the Portland looks increasingly positive.

The applications will seek permission to conduct a programme consisting of the production flow testing of 3 Kimmeridge Limestone zones plus the overlying Portland over a total flow period of up to 360 days, plus two further appraisal/development wells and the acquisition of 3D seismic data. A public consultation and engagement process related to the planning application is scheduled to take place, leading to an application to SCC and the EA. Engineering studies to examine the range of possible flow rates from a planned horizontal sidetrack well are ongoing. Data to further

Stephen Sanderson, UKOG’s Chairman, commented:


The validation of Nutech’s Kimmeridge evaluation by the flow tests also underscore the Company’s expectation that significant volumes of oil lie in the ground within the licence and can be brought to the surface at commercial rates. We will work closely with Barton Willmore and others to ensure the necessary applications for regulatory consents are submitted. The granting of these permissions is the next key step to enable us to move the Horse Hill Portland and Kimmeridge projects forwards towards early monetisation. We look forward to the conclusion of the regulatory consent cycle and eagerly await the start of planned long term flow testing.” •


Knuckle, Ram Luffing, Kingpost, Slew Bearing and Telescopic Pedestal Cranes

Overhead/Gantry Cranes

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‘A’ Frames

Launch & Recovery Systems

Active Heave Compensation Systems

CONTACT DETAILS PROTEA SP. Z O.O. ul. Galaktyczna 30A 80-299 Gdansk, Poland

Tel: +48 58 348 00 04


GE Technology to Power One of the World’s Largest Crane Vessels Solid partnerships and reliable technologies are needed to realize bold goals and surmount herculean challenges. Recently, such a partnership was forged between GE (NYSE: GE) and Sembcorp Marine to realize one of the most challenging offshore projects in recent times—Heerema’s new Semi-Submersible Crane Vessel. Based on a recently signed deal between GE’s Marine Solutions business and Sembcorp Marine, GE is set to provide technology that will be at the heart of the operations of Heerema’s new SSCV Sleipnir. At 220 meters long and 102 meters wide, Sleipnir is to become the world’s largest crane vessel. It will be equipped with two cranes, each boasting a lifting capacity of 10,000 tons, and will be used for offshore construction and heavy lifting.


o enable smooth operations onboard the vessel, GE is set to provide the electrical part of the power and propulsion system including 12 sets of 8-megawatt (MW) generators, eight units of 5.5-MW propulsion motors, medium-voltage switchboards, transformers and MV7000 drives. The power generated from the system will position and propel the vessel and provide electricity to the vessel’s onboard systems. Overcoming various technical challenges, the solution provided by GE has been conceived from the ground up to meet requirements specific to this project. As a result, the entire power system is designed for fault tolerance in accordance with Lloyds Register’s Rules (DP AAA). While being more compact than standard solutions, GE’s solution has advanced sensors built in to help operators monitor the health of each piece of equipment in real time and signal possible malfunctions. Together, these measures result in a compact, yet highly sophisticated solution, which facilitates operations while helping to minimize downtime and increase availability. Commenting on the deal, Martijn Wijdeveld, senior project manager, Heerema Offshore Services, said, “To power our newest SSCV, we wanted to collaborate with some of the best in business. In GE, we have found a partner that brings considerable experience and know-how into the project. We’re confident that their technology onboard our vessel will facilitate reliable operations.” Mr. William Gu Wei Guang, head of Sembcorp Marine Rigs & Floaters, said, “To build this mammoth vessel for Heerema, we’re happy to be partnering with GE. We look forward to working with GE in installing highquality and best-in-class solutions onboard the vessel.” “We’re excited to be working on this project with Heerema,” said Tim Schweikert, president & CEO, GE’s Marine Solutions business. “Building a SSCV of such proportions comes with its own set of challenges. With our deep technical expertise, we’re confident of tackling these challenges and delivering a high-quality solution to enable flawless operations of the


vessel. We also believe that this project will strengthen the relationship between GE, Heerema and Sembcorp Marine.” GE leveraged its widespread diverse supply chain to source its scope of supply for this project, with the generators, switchboards, motors and variable frequency drives from various countries in Europe. The delivery plan of GE’s scope of supply is spread between September 2016 and May 2017, with the vessel scheduled to be commissioned by December 2018. About GE GE (NYSE: GE) is the world’s Digital Industrial Company, transforming industry with software-defined machines and solutions that are connected, responsive and predictive. GE is organized around a global exchange of

knowledge, the “GE Store,” through which each business shares and accesses the same technology, markets, structure and intellect. Each invention further fuels innovation and application across our industrial sectors. With people, services, technology and scale, GE delivers better outcomes for customers by speaking the language of industry. About GE’s Marine Solutions GE’s Marine Solutions is dedicated to power and propulsion systems for customers in the workboat, merchant, offshore and naval industries. Smart engineering coupled with software analytics, we provide customers with data-driven efficiency. Connecting the physical and digital worlds, GE helps power, propel, position and predict the marine industry for operational excellence. •




Chevron and ENN Sign Gorgon LNG Agreement Chevron Corporation (NYSE:CVX) today announced that its Australian subsidiaries have signed a non-binding Heads of Agreement (HoA) with ENN LNG Trading Company Limited (ENN) for the delivery of liquefied natural gas (LNG) to China from the Chevron-operated Gorgon natural gas project in Australia. When the deal is finalized, ENN is expected to receive up to 0.5 million metric tons per annum (MTPA) of LNG over 10 years, with deliveries starting in 2018 or the first half of 2019.

“This is one more step in the development of our Australian gas business and our global LNG portfolio,” said Mike Wirth, executive vice president, Chevron Midstream and Development. “It also represents further progress with new LNG buyers in China who are poised to transform the LNG landscape in that country.” “As first LNG production from the Gorgon Project draws near, we welcome ENN as a new customer,” said Roy Krzywosinski, managing director, Chevron Australia. “This deal shows the competitiveness of LNG supply from Chevron’s Australian projects.” As Chevron continues to grow into one of the world’s largest LNG suppliers, this HOA follows the recently announced non-binding LNG supply HoA with China Huadian Green Energy Co., Ltd. ENN LNG Trading Company Limited is one of the subsidiaries of ENN Energy Holdings Ltd., which is one of the largest natural gas distribution companies in China. ENN Energy Holdings Ltd. operates in 146 cities across 17 provinces and autonomous regions, with over 11.3 million residential and 52 thousand industrial/commercial customers. ENN’s Zhoushan LNG receiving terminal is being constructed and expected to be in operation by 2018. The Gorgon Project is a joint venture of the Australian subsidiaries of Chevron (47.3 percent), ExxonMobil (25 percent), Shell (25 percent), Osaka Gas (1.25 percent), Tokyo Gas (1 percent) and Chubu Electric Power (0.417 percent). The Gorgon Project combines the development of the Gorgon Field and the nearby Jansz-Io Field. Facilities being built on Barrow Island include an LNG facility with three processing units capable of producing 15.6 MTPA of LNG, a carbon dioxide injection project and a domestic gas plant. Chevron’s subsidiaries in Australia are also developing the Wheatstone Project as an LNG and domestic gas operation near Onslow, in the Pilbara region of Western Australia. The project’s initial capacity is expected to be 8.9 MTPA of LNG. Chevron Corporation is one of the world’s leading integrated energy companies. Through its subsidiaries that conduct

business worldwide, the company is involved in virtually every facet of the energy industry. Chevron explores for, produces and transports crude oil and natural gas; refines, markets anddistributes transportation fuels and

lubricants; manufactures and sells petrochemical products; generates power and produces geothermal energy; and develops the energy resources of the future, including biofuels. •






Society of Petroleum Engineers

Annual Technical Conference and Exhibition

26–28 September 2016 • Dubai World Trade Centre • Dubai, UAE •

Society of Petroleum Engineers

Annual Technical Conference and Exhibition 26–28 September 2016 Dubai World Trade Centre Dubai, UAE

Channelling knowledge. Connecting the world.

See you in

26–28 September 2016

Updates after 3 September 2015 may not be reflected



Advanced Asset Integrity Management Solution - ABS Group Continues Innovation in Offshore Markets ABS Group has announced the release of a new offshore Asset Integrity Management (AIM) service focused on driving operational reliability, efficiency and profitability for asset owners and operators. The AIM services are delivered by a newly dedicated offshore business division using a pragmatic Return on Investment (ROI) centric approach. The unique and proprietary AIM methodology and tools, which include specific offerings from strategic partner American Bureau of Shipping, provide companies with the possibility and resources to improve production uptime while simultaneously reducing OPEX costs. These AIM services and tools address Structural and Mechanical Integrity, Risk Based Inspection, Equipment Reliability, Maintenance programs and Control System Integrity as part of an integrated management framework. “The needs of our clients are at the core of this development, and our focus on ROI demonstrates how our services can positively impact performance in the short, medium and long term,” said ABS Group Offshore Senior Vice President Rob MacArthur. “The reaction from the market has been extremely positive and illustrates ABS Group’s ability to provide client-focused solutions tied to our customers’ business objectives.” These projects begin with a comprehensive AIM assessment that is designed for customers to assess the true condition of their assets and provide an ROI justified roadmap for sequential implementation of best practice AIM systems, processes, programs and methods. This methodology is based on the highly successful ABS Group Enterprise Asset Management framework being applied in solutions with customers across asset intensive industries. MacArthur added, “For an international offshore operator, our AIM assessment was used to streamline operations, reducing their maintenance department backlog hours by 40% through the implementation of a streamlined maintenance and scheduling plan.” “This is an important milestone for ABS Group,” ABS Group CEO Todd Grove said. “The approach, and the strategic alliance with American Bureau of Shipping, demonstrates our ability to support class services and apply performance-improving and risk mitigation services. We are confident that our diverse understanding of the global offshore markets, and our experienced and dedicated employees will help to improve performance, reliability and mitigate risk for our offshore clients.” Our global best-practice Reliability Program can be customized across industry verticals to fit your company’s unique needs, whether to optimize performance and reliability for existing workflows or develop an implementation plan that maximizes the value of your asset and process utilization. ABS through its operating subsidiaries, provides a range of technical solutions to support •



Identifying the Integrity Need – Focusing the Innovation Barriers to Innovation Innovation is typically perceived as high end technology or analysis used to push boundaries. When considering this in the context of Through-Life Engineering and Asset Management, the risks of such innovation tend to be outweighed by the short term benefits.


ore often, the greatest gains from innovation come from taking control of the basics of engineering. If a framework can be used to identify what the end-user needs and what constraints must be designed within, then an opportunity exists to target innovation and maximise benefit through design, technology, organisation or analysis.

The Through-Life approach considers all the key pillars of asset management with clear line of sight back to strategic objectives: Strategies & Planning; Decision-Making; Life Cycle Activities; Asset Information; Organisation & People; Risk & Review.

In an ideal world there would be limitless resources and no time constraints, enabling every element of a system to be methodically optimised - thus maximising its overall potential and assuring asset integrity throughlife. However, in the real world there are financial, technological, and availability constraints that will apply across existing assets, future investments, and support planning.

Opportunities for technology, or analysis innovation, arise because the process enables the Asset Management specialist to truly distance themselves from potential solutions, and to work with the subject matter experts to define the problem in such a way that it doesn’t unduly influence the solution. In doing so, they can ask the fundamental “stupid” questions that ultimately lead to a novel resolution. Putting the need first helps focus the innovation. In fact, such questions can often lead to other problems being realised in advance, avoiding negative implications later in the life of the system.

Optimisation to maximise availability and minimise cost can only be achieved through a clear understanding of an end-user need (not design specification), the risks of unplanned events, and the ways in which design performance is affected by external and internal influences throughout the system’s lifecycle. A combination of specialist knowledge and experience enables a design team to develop risk based mitigation strategies, and to deliver the appropriate, underpinning analysis that provides that understanding.

Why MMI? MMI Engineering employs highly qualified professionals with experience in all stages of the system lifecycle - from design, construction, commissioning and operations, through to decommissioning and disposal. Our staff have experience from individual equipment decisions, to advising regulatory bodies on legislation - across multiple sectors. We bring the right practice to bear from cross sector understanding on how to manage and support assets to optimise integrity. •

Through-Life Approach

To discuss how a Through-Life approach can benefit your organisation, please contact:

Why Through-Life

A co-ordinated approach to managing and operating assets is needed. Utilising a Through-Life Engineering approach involves standing back and understanding the whole problem across all disciplines and constraints identifying end-user need rather than focusing solely on individual elements and potential solutions. From this grounded understanding, solutions can be managed to ensure that they deliver fit-for-purpose solutions to time, quality and cost – whilst still providing the space for designers to innovate - incorporating only those innovations that satisfy the enduser need at all stages Through-Life.

MMI Engineering Ltd. Tim Ingram +44 (0) 1925 230655 Alex Bond +44 (0) 7568 115208



BOEM Announces Updated Financial Assurance and Risk Management Requirements for Offshore Leases The Bureau of Ocean Energy Management (BOEM) today notified companies holding oil and gas leases in federal waters that it is updating financial assurance and risk management requirements to ensure that U.S. taxpayers never have to pay for decommissioning and removing a company’s offshore production facilities. BOEM’s Notice to Lessees and Operators (NTL) details improved procedures to determine a lessee’s ability to carry out its lease obligations -primarily the decommissioning of Outer Continental Shelf (OCS) facilities -- and whether to require lessees to furnish additional financial assurance. “BOEM’s goal is to modernize its approach to risk management in a way that better aligns with the realities of the industry and protects the U.S. government and taxpayers from risk in a manner that isn’t overly burdensome to the oil and gas industry,” said BOEM Director Abigail Ross Hopper. “By implementing these changes, we will create comprehensive procedures to decrease risks to taxpayers while providing industry flexibility to negotiate adaptive solutions and use tailored financial plans to meet their financial assurance requirements.” All OCS leases require that when decommissioning, the company must remove all facilities and restore the site to its prelease state. Due in part to the industry’s move into deepwater areas in the Gulf of Mexico, decommissioning costs have risen significantly. Moreover, as existing infrastructure ages, larger companies are transferring older facilities to smaller or less experienced companies. Current estimated routine decommissioning liabilities in the OCS are approximately $40 billion. The NTL replaces NTL No. 2008-N07 and provides updated procedures for requiring additional financial security for oil and gas or sulphur leases. The revised NTL will provide updated criteria for determining a lessee’s ability to self-insure its OCS liabilities based on the lessee’s financial capacity and financial strength. It also provides new methods and additional flexibility for lessees to meet their additional financial security requirements through a tailored plan. The guidance and clarification will apply to all BOEM regions and planning areas. In addition to lease holders, the NTL also applies to right of use and easement holders. “BOEM’s financial assurance regulations need to take into account current industry practices,” Hopper said. “We must ensure the U.S. taxpayer never pays to decommission an OCS facility and that the environment is protected. Managing risk in the early stages of a lease will provide lessees negotiated solutions that improve business certainty and leverage existing company strengths.” BOEM will work with all lessees, both large


and smaller individual lessees, to develop an approach that works best for the government and for each company while focusing on the highest risk properties first. The intent is to examine each company individually, assess its total financial assurance needs and then work with the company to determine the best financial assurance instrument(s) for its individual needs. After today’s publication, BOEM is providing a 60-day grace period before the NTL is implemented. BOEM will focus first on those properties that pose the highest risk to the government, namely, properties for which there is only one leaseholder responsible for decommissioning. Those leaseholders will have 60 days, from the date of an order requiring additional financial security, to comply.

financial plan to BOEM, which will permit the use of forms of financial security other than surety bonds and pledges of treasury securities and allow companies to phase in funding of the additional security.

Additionally, for all other holdings, lessees will have 120 days from the date they receive an order to provide additional security, if required. Alternatively, lessees can provide a tailored

The Bureau of Ocean Energy Management (BOEM) manages development of U.S. Outer Continental Shelf energy and mineral resources in an environmentally and economically responsible way. •

BOEM has engaged in a significant amount of outreach since the announcement of the proposed guidance on September 22, 2015, holding a bonding workshop, a financial assurance forum and many meetings with individual companies and industry associations. BOEM extended the initial 45day comment period by two weeks in response to industry’s request for additional time to provide comments. The updated guidance is within the parameters of BOEM’s existing regulations so it was not necessary to propose a new rule.


Recycling v Landfill – Know Your Options The downturn in oil prices has caused many refiners to look at areas of the business where efficiency could be increased and / or savings made.


ne of the areas under scrutiny is catalyst turnaround, including the loading of the new catalyst, discharge and recycling of the spent catalyst. The recycling of spent catalyst is an area that for a long period of time had kept a very low profile. Metal prices were favourable and although returns were small in comparison to earnings from oil production, the spent material had a positive value, buyers were readily available and the disposal of the spent catalyst was not a cause for concern. However the importance of environmentally sound recycling options has grown significantly in recent years due to the pressure both legislatively and environmentally. National and international requirements for spent catalyst generators have forced refiners to comply with increasingly restrictive legislation. This situation has now been exacerbated by the downturn in the metal markets worldwide. For example, from 2003 until 2013 the price of Molybdenum, the main metal of value in HDS catalyst, remained above $10 per lb, peaking at over $45 per lb in 2004. But since the end of 2013 the price has fallen to below $ 5 per lb and despite the recent recovery to above $8 per lb the future remains unclear. The major usage for Molybdenum is in the steel industry and due to the downturn in the steel market, particularly in China, supply far outstrips demand and until the industry recovers prices are likely to remain low. At these low prices we have recently witnessed a number of spent catalyst recycling facilities being unable to make a profit and choosing to exit the market. In some cases the decision has been to mothball their facilities in the hope of re-entering the market at a later date but others have been forced into permanent closure. Spent catalyst has gone from being an easily traded by-product to something of little or no value leaving refiners with fewer and fewer options and even having to consider landfill rather than recycling. In our opinion there should only be one answer - recycling. In a world of declining natural resources, sustainable resource management through recycling must be the chosen path wherever possible. We understand that landfilling what in most cases is a classified hazardous waste, may in the short term save some costs but it can also have a negative impact on the industry, particularly if an acceptable recycling alternative is available. But how can the refiner make an informed decision if


they are not in possession of all the facts required to make the decision and do not have the necessary know-how to act upon it? We believe that the solution is to partner with a company whose business is not oil refining but is in recycling and who have the knowledge, experience and understanding required. We at London Chemicals & Resources Ltd have over 10 years’ experience of offering generators of spent catalyst customised solutions for their spent catalyst. By looking at each case on an individual basis and taking into account key factors such as geographical location, chemical analysis, material classification, corporate requirements, packing and shipping requirements, an informed decision can then be made regarding the best possible recycling route. For example, if we take the case of a 500 M/T parcel of HDS catalyst arising from a refinery in North America we can assume that

the material is classified as K-List hazardous waste. The options available to the generator include landfill / processing at a facility in the USA / pre-processing in USA prior to export / pre-processing / processing outside USA but within OECD. We would look for the best available recycling option that while being commercially competitive was also environmentally sound. There are many generators that up until now would rather landfill within the USA rather than export but we feel that the refiners should not ignore this route to recycling. Under the auspices of the United Nations Environment Programme, controls are already in place within the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal to allow recycling to take place anywhere within the OECD subject to pre-informed consent between the exporting and importing countries. Knowing

how to work within this legislation is the key to opening up alternative recycling solutions outside of the USA. One of our preferred recycling partners is Full Yield Industry Co Ltd (FYI) in Taiwan who, founded in 1981, were pioneers in recovering metals from spent catalyst generated at oil refineries. Having remained in operation through the highs and very lows of the metal markets they have achieved an enviable reputation in the global recycling market.

Typical Production Process

Full Yield’s high purity chemicals are consumed in a processing route consisting of thermal treatment followed by a wet metallurgical process. The system has been designed to be environmentally friendly and wherever possible feed materials are 100% recycled. They have been successfully audited by some of the world’s best known oil refiners. The final products being high purity chemicals consumed in many industries including the production of batteries, fertilisers, special alloys and the production of new catalyst thereby completing the recycling loop. London Chemicals & Resources Ltd can offer the following to generators of spent catalyst: •

Customised recycling solutions for spent catalyst

• Commercially competitive options with an emphasis on environmentally sound management •

All logistics / transportation can be arranged ex the generators facility

A thorough knowledge of international legislation for the movement of hazardous and non- hazardous waste

Recycling at fully licenced facilities.

• Certificates of recycling / consumption •

An experienced, multilingual and knowledgeable team • Total transparency with the option to visit / audit the recycling facilities Before oil refiners make a decision regarding the disposal of spent catalyst we urge them to look at all the available options and to choose recycling wherever possible. For further information please contact:

London Chemical & Resources Limited General: +44 (0)20 7183 0651 or +44 (0)20 7987 7600 Direct - Paul Mcdonald: +44 (0)20 7042 1158



MagneGas Announces Successful Test Results from the Processing of Septic Water Waste MagneGas Corporation (“MagneGas” or the “Company”) (MNGA) a leading technology company that counts among its inventions a patented process that converts renewable and waste liquids into MagneGas2® fuel, announced today that the successful results of its recent testing of its developmental wastewater sterilization equipment have moved the Company a step closer to entering the septic water treatment market. In June and July, the Company deployed its 50 KW mobile sterilization system at a Florida septic wastewater treatment facility. Initial results of the processed samples analyzed by an independent laboratory indicate significant reductions in pathogens. Additionally, these preliminary results are indicating reductions in Nitrogen, Phosphorus, and Potassium. MagneGas will continue to test at this facility during the next few weeks and will be providing a final report to the waste treatment facility, based on the analysis of the independent laboratory, by the end of August. The Florida Department of Environmental Protection estimates that 1/3 of Florida residents use septic systems for disposal of their wastewater. Septic waste is generally collected and treated by privately owned corporations. The Company believes that the barriers to entering this market will be lower than the municipal government owned sewage treatment facilities. Further information regarding this market can be found at this link: facts.htm Ermanno Santilli, CEO of MagneGas Corporation stated: “We are pleased with the progress our recent testing has shown. The Company has been developing equipment


to sell to waste processing facilities for some time. We are steadily moving closer to actively entering this market. In Florida alone, one third of all residents use a septic system for disposal of their wastewater. There are significant challenges faced by the corporations

retained to treat this waste and we believe MagneGas has a better alternative. To that end, we will continue to pursue this market through additional testing, collaboration and marketing.” MagneGas® Corporation (MNGA). The Company owns a patented process that converts various renewable and waste liquids into hydrogen based fuels. These fuels can be used as a replacement to natural gas or for metal cutting. The Company’s testing has shown the fuels are faster, cleaner and more productive than other alternatives on the market. They are also cost effective and safe to use with little changeover costs. The Company currently sells MagneGas2® into the metal working market as a replacement to acetylene. The MagneGas2®fuel production systems can be set-up locally using various types of feedstock. The Company believes this flexibility can give them an advantage as fuels can be manufactured on site from raw materials found locally and eliminates the time and expense of shipping to the specific end user location. The Company is planning to sell the equipment or establish joint ventures with third parties to construct these supply facilities. The Company also sells equipment for the sterilization of bio-contaminated liquid waste for various industrial and agricultural markets. •

Student optimising operation of a bioethanol pilot plant

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DR 750 P Offshore Reeling Cable for Maritime Use Cable manufacturer SAB Bröckskes presents a new marine cable for the market. According to the manufacturer it is a DNV-GL approved reeling cable, called DR 750 P offshore, with applications for ships and also for offshore use. The robust construction with reference to the international standard IEC 60092 for ship cables is appropriate for reeling applications with high mechanical stress. The DNV-GL approval in addition to the excellent mechanical characteristics offer highest reliability in application. Notable characteristics of the cables are: • Flame retardant and self- extinguishing. • Halogen free acc. to IEC 60754-1. • Oil and chemical resistant. • MUD resistant. • Weather resistant. • Reduced outer diameter. • Low cable weight . • Suitable for winding stress at low temperatures. • High reeling and unreeling strength. • DNV-GL certificate-no. TAE 0000002 Application fields Possible application fields of the DR 750 P Offshore are offshore cranes, deck machines, working platforms, lifts, lifting and conveyor technique on ships and offshore facilities. The SAB cable has already proven itself in practise with extreme environmental conditions. Due to its oil and chemical resistance this robust cable has already been used, for example, in engine operated rail bound transport vehicles on oil producing ships. Not at least due to the prevailing extreme environmental and weather conditions in its worldwide application, the DR 750 P offshore is especially appropriate because of the extremely robust construction. Within a temperature range between -40°Cup to + 60°C under dry and damp


climatic conditions, the cable can be used for many marine applications. Special solutions for special applications The production possibilities of SAB not only cover basic types of cables with standard dimensions, but also special cables which are designed according the individual requirements of the customer. Cable manufacturer SAB Bröckskes is a worldwide leading manufacturer of cables and wires, cable harnessing and temperature measuring techniques. More than 60 years of experience in cable manufacturing as well as in temperature measuring techniques have propelled the company from a one man business to a company with almost 500 staff members. The strength of SAB Bröckskes is not only the manufacturing of standard cables

CEO_Peter Bröckskes and Sabine Bröckskes-Wetten

but also the construction of special items. Every year SAB manufactures more than 1500 special cables on customer´s request. For more information on how SAB Bröckskes can help you with your operations please get in contact with us. •

SAB Bröckskes GmbH & Co. KG

Sacir Adrovic Tel. +49 2162/898146


California Announces Major Regulatory Proposal to Improve Safety at Oil Refineries The Department of Industrial Relations (DIR), the Governor’s Office of Emergency Services (Cal OES) and the California Environmental Protection Agency (CalEPA) today announced a landmark set of regulations to strengthen workplace and environmental safety at oil refineries across the state. The regulatory proposals are intended to make California refineries safer both for workers and surrounding communities. The two regulations implement key recommendations of the Governor’s Interagency Working Group on Refinery Safety, and are the result of a multi-year effort, including extensive consultation with workers, industry, NGOs, and communities, following a serious chemical release and fire at Chevron’s Richmond oil refinery in August 2012. “The proposed regulations will put into place new strategies to prevent major incidents at refineries, and to protect refinery workers and surrounding communities from exposure to health and safety risks,” said David M. Lanier, Secretary of the Labor and Workforce Development Agency. The proposal includes two complementary regulations – one overhauling Cal/OSHA worker safety regulations as they apply to refineries and another strengthening the California Accidental Release Prevention program (CalARP) regulations designed to prevent the accidental release of hazardous substances that could harm public health and the environment. DIR, Cal OES, and CalEPA have collaborated to ensure that the two regulations are aligned. “These regulations will make refineries safer neighbors and employers. Refinery workers, community and environmental organizations, and industry leaders worked with us to develop requirements that are practical and effective,” said Matthew Rodriquez, California Secretary for Environmental Protection.The proposed regulations incorporate the most advanced principles of safer engineering and management, as well as attention to the human and organizational elements of safety. Key features of the proposed regulations include: •Increased employer accountability for the

mechanical integrity of refinery equipment •Requirements to adopt inherently safer designs and systems, to the greatest extent feasible; •Increased employee involvement in all aspects of the safety and prevention program; •Periodic workplace safety culture assessments to evaluate whether management is appropriately emphasizing safety over production pressures; •Authority for refinery personnel to shut down a unit if needed in the event of an unsafe condition or emergency and provisions for anonymous reporting of safety hazards; •Requirements for investigations to determine root causes of any incidents that do occur and develop interim and permanent corrective measures in response; and •Annual public reporting of refinery safety metrics. Major incidents at oil and gas refineries pose a significant risk to refinery workers and nearby communities while costing Californians an average of $800 million a year in disruption to fuel supplies. “The proposed amendments to the California Process Safety Management program and Accidental Release Prevention program are significant improvements that will strengthen protections for workers, communities and the environment, based on lessons learned and best practices,” said Vanessa Allen Sutherland,

Chairperson of the U.S. Chemical Safety Board. “We look forward to seeing the final regulations implemented, and we hope that they prove to be a model for refinery worker protection and public safety for the rest of the country.” Cal OES and DIR’s Occupational Standards Board will provide a minimum of 45 days to solicit comment on the proposed regulations. A public hearing on the Process Safety Management regulation will be held in Sacramento on September 15; a public hearing on the CalARP regulation has not yet been scheduled. Following a serious chemical release and fire at Chevron’s Richmond oil refinery in August 2012, Governor Edmund G. Brown Jr. called for an Interagency Working Group to examine ways to improve public and worker safety through enhanced oversight of refineries, and to strengthen emergency preparedness in anticipation of any future incident. The Working Group consisted of participants from 13 agencies and departments, as well as the Governor’s office. Over an eight-month period, the Working Group met with industry, labor, community, environmental, academic, local emergency response and other stakeholders. It also worked closely with the Contra Costa County Health Services Hazardous Materials Division, which implements an industrial safety ordinance that served as a model for the proposed refinery safety regulations. In February 2014 the Working Group issued a final report with recommendations to improve safety practices at refineries and develop more reliable and effective emergency response plans. The proposed regulations implement one of four key recommendations of the final report. California now has an Interagency Refinery Task Force, headed by CalEPA with participation from DIR, its division Cal/ OSHA, and 11 other federal, state, and local agencies and departments. The task force works collaboratively to achieve the highest possible level of safety for refinery workers and local communities, and prepare for and effectively respond to emergencies if they occur. •



Tradition and Innovation Ellehammer A/S manufactures products with a quality second to none. Having the right tools is a prerequisite for developing maritime products of the highest quality. But we refer not only to physical tools. To Ellehammer, the ability in ensuring that customers world wide, receive exactly the product that solves their problem, is also – to a great extent, a tool. Without compromising on quality and safety the Ellehammer solutions have proven their value for decades. We delve into the Ellehammer solutions in this exclusive Q&A. OGI: Could you start by explaining Ellehammer A/S’s credentials and experience in the Oil and Gas sector? Could you tell our readers the width of the company’s experience, how long it’s been active, and its worldwide reach? Ellehammer: Ellehammer was an inventor and entrepreneur, famous for his many patents and production of iconic motorcycles, cars and engine-powered aircrafts. Ellehammer became famous in 1906 for being the first European to fly an engine-powered aircraft. In 1920 Ellehammer created a pump system to be mounted on a Ford A. The pump was mounted on the car in no time and used the horsepower of the car for pumping. The pump became a great success. This was the first time Ellehammer worked with pump systems and it laid the foundation of the Ellehammer A/S as we know it today. Ejectors and Fire Water Pumps are the two core product lines of Ellehammer today. Ejectors target the maritime and industry sectors and the fire water pumps target offshore as well as onshore applications. Ellehammer today is an agile engineering company with a dedicated customer focus that strives to be successful by understanding and fulfilling

their customer´s needs. In addition to the ejectors and fire water pumps Ellehammer have produced gensets (generators) and foam equipment for firefighting for many years. Ellehammer

Has placed a significant footprint in the marine and offshore industry and for decades we have sold our solutions to some of the world’s biggest owners, operators, EPC´s and shipyards. For details please refer to our website. OGI: Ellehammer AS has various product lines, which are of course applicable to different sectors within the industry. What are your main solutions for the oil and gas industry? Ellehammer: For the oil and gas industry it is mainly the fire water pumps. Fire water pumps are installed on fso, fpso, lng, flng, platforms etc. Solutions we have supplied for 50 years now. OGI: Could you explain to our reader what different types of fire pumps you supply, and what are the applications of each? Ellehammer: The typical capacity requests from our clients are for various pumps in the


Ejectors and fire water pumps are the two core product lines of Ellehammer today.

specter from 30–3000 m3/h at a pressure on up to 150 mWC. Our system is normally equipped with two pumps: a main pump and a feeding pump. The main pump will be driven by a diesel engine or an electrical motor, and the feeding pump will be hydraulic driven. The electrical motor driven solutions are normally offered at capacities between 30–800 m3/h whereas higher capacities are normally fulfilled by a diesel driven solution.

Typical ship deck.

Ellehammer can also deliver fire water pumps with caisson pumps. This is a solution where the feeding pump and main pump are substituted by a deep well pump/cassion pump. However with the current cost focus in the industry - driven by the low oil price, the majority of Ellehammer´s customers prefer a solution with a main pump and a feeding pump, reducing overall investment costs. The pumps which are used for offshore applications comply to NFPA20 and class rules, sometimes also API610. OGI: Installation of fire pumps could be a headache for some operators, eating up a lot of man hours. How can a client avoid this working with Ellehammer AS? Ellehammer: The installation and commissioning process is managed by Ellehammer service staff. Preparation is key to reduce both the installation and commissioning time. Installation guidelines and part lists are provided by Ellehammer. Furthermore Ellehammer supervises during the installation process which normally is carried out by local staff. It is crucial that the right material is available for a smooth installation process and the necessary skilled resources are allocated. The commissioning process however, is

carried out by the Ellehammer service team. The Ellehammer service team comes with an extensive knowledge about fire pumps in general and of course the specific fire pump in particular. The Ellehammer service team cooperates with one of the operator´s commissioning manager and finally achieves the approval from the class society. OGI: Important issue with pumps is their durability and reliability under intense conditions, such as on ships. Could you elaborate on how Ellehammer helps companies with extending the pump lifecycle? Ellehammer: Fire pumps and Emergency fire

pumps (back-up pumps) are rarely in operation (luckily enough!). It is normal that a company would run the fire pumps for half an hour every week to prove their durability. As such, they are not maintenance demanding. The only items to replace at standard maintenance could be hydraulic components - meaning filters, change of oil and fluids etc. OGI: Finally, could you enlighten our readers of a particular case study where Ellehammer A/S helped a customer with your solutions? Ellehammer: Ellehammer has many solutions around the world. As one example, a client actually wanted to place the fire pump on deck; however that meant that there would be a need for some kind of shelter to protect the fire pump. After several technical meetings and discussions, it was agreed that we would install the complete fire water pump in a standard 20’ container. Everything was built inside the container - except of course the feeding pump. The solution was successfully installed on a FPSO and the containerized system is now a part of Ellehammer standard solutions. We can proudly say that we have been providing this solution to several clients. We have also added the opportunity to choose this solution as a “Caisson Solution”, where the container actually is a hydraulic power pack and can be used for any solution where there is a need for hydraulic pressure. Another example, when we were contacted with a demand for a fire water pump which had to work under very extreme conditions. Air temperatures ranging from minus 52OC to plus 35OC, - and with water temperatures close to 0OC. This was quite challenging, but we found a successful solution, to the satisfaction of both our client and ourselves. Would you like to know more about how Ellehammer A/S can help your operations? Please visit: Phone: +45 4345505

Fire fighting foam.



BP Estimates All Remaining Material Deepwater Horizon Liabilities BP announced today that following significant progress in resolving outstanding claims arising from the 2010 Deepwater Horizon accident and oil spill, it can now reliably estimate all of its remaining material liabilities in connection with the incident. As a result, taking into account this estimate together with other positive tax adjustments, BP expects to take an after-tax non-operating charge of around $2.5 billion in its second quarter 2016 results. This charge is expected to include a pre-tax non-operating charge associated with the oil spill of around $5.2 billion. This would bring the total cumulative pre-tax charge relating to the Deepwater Horizon incident to $61.6 billion or $44.0 billion after tax. BP believes that any further outstanding Deepwater Horizon-related claims not covered by this additional charge will not have a material impact on the Group’s financial performance. It will deal with remaining claims in the ordinary course of business. Brian Gilvary, BP chief financial officer said: “Over the past few months we’ve made significant progress resolving outstanding Deepwater Horizon claims and today we can estimate all the material liabilities remaining from the incident. Importantly, we have a clear plan for managing these costs and it provides our investors with certainty going forward.” Gilvary reconfirmed that BP expects continue to use proceeds of divestments meet Deepwater Horizon commitments line with the financial framework laid out previous quarters.

to to in in

A year ago, BP reached agreements to settle outstanding federal, state and local government claims arising from Deepwater Horizon. In the months since, BP has made much further

progress in resolving outstanding claims arising from the incident. PSC settlement - the Court and the Deepwater Horizon Court Supervised Settlement Program

have been progressing the remaining economic and property damage claims relating to the 2012 Plaintiffs’ Steering Committee (PSC) settlement, including through simplified and accelerated procedures for processing certain claims. Today’s announced charge includes the estimated cost of settling all outstanding business and economic loss claims under that settlement, which are expected to be paid by 2019. Opt-out and excluded claims - there has also been significant progress in resolving economic loss and property damage claims from individuals and businesses that either opted out of the PSC settlement and/or were excluded from that settlement. In February 2016, the US federal district court estimated that there were more than 85,000 valid optout and excluded economic loss plaintiffs. The vast majority of these claims have since been settled or dismissed as an order of the court today confirms. An estimate of the cost of the remaining claims, expected to be paid by the end of 2016, is also included in this charge.


Securities litigation - in June, BP announced a $175 million settlement of claims from a class of post-explosion ADS purchasers in the MDL 2185 securities litigation, payable during 2016 - 2017. This cost is also included in today’s announced charge. •



Offshore Northern Seas 29th August – 01 September Stavanger – Norway 27th SMM 6 - 9 Sept 2016 Hamburg Germany KIOGE 4 – 7 Oct 2016 Almaty, KZ. MANGYSTAU OIL & GAS 8 – 10 Nov 2016 Aktau, KZ OSEA 2016 International Conference 29 Nov – 2 Dec 2016/17 Marina Bay Sands, Singapore 22nd World Petroleum Congress Turkey 09-13th July 2017 ADIPEC 2016 7-10 November 2016 Abu Dhabi, UAE Oil Sands Trade Show 2016 Fort McMurray, Canada 13-14th September Offshore Technology Conference 1-4 May 2017 Houston, Texas, USA Offshore Europe 2017 5-8th Septermber 2017 Aberdeen, UK


Rio Oil & Gas 24-26th October Rio de Janeiro, Brazil FPSO World Congress 2016 20-21 September 2016 Marina Bay Sands, Singapore Middle East Petrotech 2016 26-29th September Bahrain International Exhibition & Convention Centre, Bahrain FPSO & FLNG Asia 2016 20-21 September Shanghai, China

23rd Africa Oil Week Oct 31st - Nov 4th Cape Town, South Africa FPSO Europe Congress 2017 21-22 Feb 2017 London, UK http://https// Gastech Conference & Exhibition 2017 April 4th to 7th

Ocean Business 2017 Apr 4 - Apr 6 National Oceanography Centre, Southampton, UK Asia Oil & Gas Conference (AOGC) 2017 May 7 - May 9 KL, Malaysia Asia Petroleum Geoscience Conference & Exhibition (APGCE) 2017 Nov 20 - Nov 21 KL, Malaysia


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Oil and Gas Innovation Summer 2016  

The leading international voice on the Oil and Gas Industry

Oil and Gas Innovation Summer 2016  

The leading international voice on the Oil and Gas Industry