Oil and Gas Innovation Winter 2015

Winter 2015

Business Information. Industry Solutions.

THE BIG SAFETY ISSUE: EXCLUSIVE INTERVIEW WITH EXXONMOBIL VIBRATION CONTROL WHY IT MATTERS HOW DROPPING OIL PRICES ARE AFFECTING THE SECTOR

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EMERY HILL MEDIA © 2015

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Winter 2015

www.oilandgasinnovation.co.uk

Business Information. Industry Solutions.

Winter 2015

FROM THE EDITOR

CEO Matthew Patten

few thoughts as we head into 2015 on the state of our industry. Wow, the last year was pretty wild ride for the Oil and Gas Industry, let alone world politics. Let’s speak politics first. We saw the annexation of Crimea but Russia, pro-Russian separatists igniting an insurgency in eastern Ukraine, US and European sanctions on Russia, The rise of ISIS and their essential annexation of large swaths of Iraq and Syria, their entering into the black oil market, protest and political battles in North America over the keystone pipeline and on and on. As for the industry, one would think this sort of unrest around the world would equal a jittery trading environment which would result in a rising of oil prices due to untamed speculation. The opposite happened. And as many in the world mourn the passing of the Saudi King, Abdullah, many are left wondering has the dropping oil price finally reached its bottom?

It’s possible yes. But first let’s go back in time a little and discuss how we got here in the first place. Back in July 2008 when the price of Brent Crude was at $145 per barrel all the bulls on the market would not stop ranting and raving about “peak oil” and how “we are running out”. This of course drove the price up to ridiculous levels which only set the world up for a colossal bubble burst which seen the value of oil wiped down to On December 23, 2008, WTI crude oil spot price fell to US$30.28 a barrel, the lowest since the financial crisis of 2007–2010 began. The price sharply rebounded after the crisis and rose to $82 a barrel in 2009.

So what has happened this time around, since the price started falling in June 2014? With all this instability in the world, there is one factor which is overshadowing war and strife in oil producing regions: US Shale. Yes the US Shale boom has finally turned on us.

Daniel Yergen, the Pulitzer Prize-winning American author, speaker, and economic researcher puts it plainly in his latest New York Times Piece, “Quietly, though, an unconventional oil and gas revolution was beginning to pick up speed in the United States. It yoked together two technologies: hydraulic fracturing and horizontal drilling. The impact was measured first in the rapidly growing production of shale gas, which now makes up about half of total American gas. This “shale gale” catapulted the United States ahead of Russia to become the world’s No. 1 gas producer.

Then around 2010, the same technologies started to be seriously applied to the search for oil. The results were phenomenal. By the end of 2014, oil production in the United States was 80 percent higher than it had been in 2008. The increase of 4.1 million barrels per day was greater than the output of every single OPEC country but Saudi Arabia.”

It’s not hard to imagine that this shift in international oil relations’ impact in the marketplace. It has been one of shock and negativity. But we have been before and we will be here once again someday. At the time of this writing the oil price has stabilized at around 50$ for a couple for weeks now, and yes of course it could go lower. But it can only get so low and then it will shoot back up as history has shown us time and time again. So sit back and relax, the market just has to accommodate a new reality which is the USA is now contending for the top oil producer spot.

A

Managing Editor Simon Milliere

EMERY HILL MEDIA © 2015

Publishing Director Edward Findlay edward@oilandgasinnovation.co.uk Commercial Director & Advertising Enquiries Nicholas Parker nparker@oilandgasinnovation.co.uk Technical Director and Website Valters Skrupskis web@oilandgasinnovation.co.uk Office Assistants Janet Elseberg admin@oilandgasinnovation.co.uk Mylene Daugan mylene@oilandgasinnovation.co.uk Contributing Journalist Emma Patten Business Development Executives Luigi Palasco Paolo Trania Smahane Makrini Anastaysia Fillapelli Market Researchers Carmen Domingo Nick Pacini Melissa Phanjoo Jesse Wiafe Dasol Moon

Please Enjoy The Winter 2105 Edition of Oil and Gas Innovation.

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Yours Sincerely,

Simon Milliere Managing Editor

CONTENTS COVER STORIES & SPECIALS Exclusive Interview with ExxonMobil

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Oil & Gas Innovation’s Edward Findlay presents a comprehensive interview with ExxonMobil’s and EMEA marketing specialist, Ayman Ali. We also discuss their safety initiatives with regards to their industrial lubricants.

Health and Safety Winter Special

INDUSTRY NEWS

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14 South America 16 Asia Pacfic 19 MENA 20 Russia and CIS 22 Africa 25 North America

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EXPLORATION & PRODUCTION Transformer for Hazardous Areas

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NieuweWeme groep and Wesemann decided to cooperate on the EX market with containerized integrated solutions. The result is an interesting and challenging set of solutions for electrical power in hazardous areas.

Petrobras Becomes Largest Oil Producer Among Publicly Traded Companies

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A new power rising in South America, but how will low oil prices combined with increasingly difficult to produce, deep sea oil factor in this new reality?

GE and McDermott Team Up

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60

48

We deal with new reports from the UK’s HSE on the massive cost of slips and falls in the workplace, and get expert analysis and a possible solution on the subject by editorial contributors’ CableSafe. We explore leadership consulting with our regular contributors ACORN Coaching.

Europe

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“A definitive congress & exhibition for the industry and this year the participation list seems to be even more expansive. As a regionally strategic port that's about to triple its capacity for liquid storage we're delighted to be a part of this year's show.”

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CONTENTS MIDSTREAM & PIPELINES

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The Importance of Keeping Your Acoustics Under Control

Emma Patten sits down with the Vibratec Akustikprodukter CEO, Mr Svante Hagerstrand on the effects of vibration control on the shipping, offshore, oil and gas industries.

Protect Assets from Corrosion Regardless of Shape, Movement or Complex Design?

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Regular contributor Oxifree UK explains to readers why corrosion is, within most engineers divisions, a perpetual problem which is fundamentally, a losing fight with no end other than expense. These problems are dramatically increased within the oil and gas industry.

Harsh Measures for Harsh Pipeline Environments

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Oil and Gas Innovation’s Emma Patten interviews Pipeshield’s Technical Director, Peter Keel, on the importance of subsea protection systems for pipelines and cables. Their particular protection and stabilisation systems involve mattresses which can withstand the sometimes harsh subsea environmental conditions.

Oil Price Collapse Impacts LNG

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Unexpected failure of equipment is a problem in any major industry, often resulting in costly delays and downtime. Surface finishing techniques are proven to extend the life of components and ensure optimum operating performance and should be considered explains, Curtiss-Wright Surface Technologies.

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PROCESSING Case Study on Falling Film Evaporation

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Bronswerk Heat Transfer, provides us with a case study helping one of their customers integrate a new process and cost saving mechanism into their new factory.

MORE

Upcoming Events

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Key oil and gas events from around the globe.

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HEALTH AND SAFETY SPECIAL

ExxonMobil’s EMEA Executive on How Quality Lubricants Can Make Your Operations Safer, and the Definition of Total Cost of Ownership A short while ago ExxonMobil released a five point plan to help oil and gas operators optimise operational efficiency and enhance safety. To gain more knowledge on this endeavour we conducted an interview with a gentleman from ExxonMobil, Ayman Ali, who is the marketing advisor for ExxonMobil for Europe, Middle East and Africa (EMEA). One of the topics that was discussed was ExxonMobil’s line of industrial lubricants. And it’s with these products combined with ExxonMobil’s Total Cost of Ownership (TCO) that one of the world’s leading oil and gas producers can sell products and services that simultaneously increases efficiency while also increasing safety. Our Publishing Director Edward Findlay spoke to Mr Ali back at the end of November, just fresh back from ADIPEC. Findlay: So just to start out can you tell me how long you have been at ExxonMobil and what you do there?

Mr Ali: I have been with the company for twenty years. I am responsible for oil and gas marketing for Europe, Africa and the Middle East. I am also responsible for the domestic marine and oil analysis program.

Findlay: From a marketing perspective in the EMEA regions, what does ExxonMobil actually market? Is it strictly business to consumer marketing or does ExxonMobil offer business to business solutions to the oil and gas industry as well?

Mr Ali: Yes we have a number of different business units at ExxonMobil. For example we have an upstream company, and a downstream related company. And these companies have their sub companies. I come from the downstream business, and that includes lubricants and it also includes refineries and refining. So ExxonMobil is involved in many of these operations and we simply market fuels and lubricants. For example, the filling stations you may see in some countries, this is one branch of fuels. I say this because we also sell industrial fuels to factories, to companies and to consumers.

We have a similar business model with lubricants and that’s where I come from. So we market lubricants to all sectors and that includes passenger vehicles, commercial vehicles, marine, industrial and aviation.

Across all sectors we have a full range of products for each one of those sectors. My job is to promote our brands, our businesses across

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Europe, North Africa and the Middle East. I also deal with customers and prospects and deal with distributors, as we have a large network of distributors.

A recent press release by ExxonMobil outlined a 5 point plan with the aim of helping operators increase efficiency and enhance safety: As the energy exploration and production industry finds itself under increasing pressure to reduce costs and safeguard its workers, operators have had to invest in a multitude of measures to avoid the financial and safety impact of non-productive time (NPT).

Industry estimates have placed NPT costs to drilling contractors at between US$100 million and US$150 million annually .

To help address the industry’s primary concerns and contribute towards optimum efficiency and safety, ExxonMobil Fuels & Lubricants has harnessed almost 50 years’ industry-leading experience developing synthetic lubricants to create a framework of five practical tips. The five-point plan offers lubrication product and service recommendations that can potentially help towards reduction or elimination of equipment failure and unscheduled shutdowns, thereby enhancing worker safety, even in the most severe conditions.

Conduct oil condition monitoring As part of routine maintenance, the “health” of the lubricant and the equipment itself should be regularly checked. By trending oil analysis data it is possible to proactively address undesirable conditions before they

result in equipment downtime. ExxonMobil offers Signum, a proprietary oil analysis programme, which sends maintenance professionals expert oil analysis assessments to identify potential issues, lists possible causes and recommends corrective actions.

Choose synthetic lubricants over mineral oils While, lubricants may represent a small percentage of an oil and gas firm’s operating costs, simply upgrading to a higher performing lubricant can have a significant impact on long-term maintenance costs. Advancements in lubricant technology, especially when it comes to fully-synthetic based products, has seen significant breakthroughs including extending equipment life, oil drain intervals and improving the overall energy efficiency of equipment.

Streamline your lubricant inventory Maintaining equipment with advanced highcapacity lubricants can reduce the number of products which must be purchased, stored and applied to machinery. This means fewer purchases and simplified maintenance. The Mobil SHC 600 Series of circulating and gear oils, for example, are recommended for use in 1,800 applications by more than 500 major equipment builders.

Store and handle lubricants correctly Specialist lubricants for oil and gas operations are formulated to satisfy very specific kinds of service. If not handled and stored properly, they can deteriorate or become contaminated and provide inadequate lubrication or become waste. Good storage and handling practice

includes correct unloading procedures and use of a single, designated storage area (to avoid inventory management difficulties). Storage should be away from heaters, cold areas and areas of varying temperatures cycles.

“

The total cost of ownership: How much in the drum and how much does it cost over a whole year, over five years. How much does it cost changing oil all those times?

How much does it cost overall and so forth.

To dig deeper into the information provided us by ExxonMobil, we spoke more to Mr Ali, who goes on to explain ExxonMobil’s role in the marketplace, his role in the EMEA marketing department and firmly makes the connection for us between ExxonMobil’s industrial lubricants and how they can both increase efficiency and safety simultaneously.

Findlay: Now I know a bit about industrial lubricants, I didn’t realize ExxonMobil had such an extensive product line in this field.

Now in terms of the actual industrial lubricant market for the areas you are responsible for, does ExxonMobil have a pretty good idea where it sits amongst its competition from a business development standpoint? For example, who are the major players in industrial lubricants and how is ExxonMobil faring in competition with them?

Mr Ali: This is definitely part of our job in the marketing department. We know how our competition is faring, we know our position in the marketplace. We hold an edge in branding, and also hold an edge in quality assurance and reliability. In relation to the article you previously published, our message is now advancing productivity and when talking oil and gas, safety definitely comes first. Health safety, environment and productivity are the main focus of our lubricants in the oil and gas sector. So coming from this background, we definitely keep an eye on what other products are doing in the market at the moment.

Edward: A lot of my readers who are in the downstream sector would be interested in how your lubricants actually help with factors such as safety. Could you elaborate for us please?

I see that ExxonMobil is putting quite an emphasis on safety, as a primary function for your lubricants.

Mr Ali: Yes sure, we touch on safety in different areas. We do believe that lubricants can help in respect to safety, I can illustrate a few examples to simplify it. To run lubricants in equipment our customers have our crews working directly with the equipment, especially when it comes to synthetics. Our Synthetics perform differently than other conventional lubricants.

Now our synthetics last longer than

conventional lubricants, and we have a long record of proof of performance with our customers which proves that, all over Africa and the Middle East. This in turn minimizes contact with the equipment.

Interaction with the equipment can be really dangerous; in many areas and in many cases people get hurt by having direct contact with the equipment. I have a lot of experience in the field, and that makes one realize that safety on a rig or factory floor is paramount when dealing with equipment. When you can control, or rather minimize the amount of changes to the equipment, such as a turbine for example, then you minimize the activity that goes with changing the oil. Using an ExxonMobil synthetic means longer change intervals, less oil changes, less exposure to safety concerning activities.

Findlay: Yes I understand what you are saying.

Because of the performance and efficiency of using an ExxonMobil lubricant less changeovers have to happen, and therefore less accidents.

Mr Ali: Slipping is one issue, and then less

Ayman Ali, EMEA Marketing

Bearings exposure to machinery. If you are familiar with offshore operations, this is a big problem.

Moving big drums of oil or other types of packages on board the rigs or production platforms, operators would like to do much less of that type of work, if possible.

Findlay: Sometimes companies as large as ExxonMobil have the benefit of offering lower prices due to factors such as economies of scale. From a marketing perspective does ExxonMobil offer its lubricant products at competitive prices, or does the company tend to focus on the reliability and efficiency of the ExxonMobil lubricant product? Can you elaborate on that?

Mr Ali: Rather than saying selling on performance, I would say we sell on benefits.

Price is not equal to quality, and I don’t just mean with lubricants. I mean I see it in everything everywhere. I buy everything for myself and for my family and a cheap price can reflect the poor quality of that item you are purchasing. But before delving into this answer, Edward, I would clarify that I never equate the price of something to the overall quality of the product. There a lot of things that you buy in a drum, or a bottle of oil. Much more than the product itself. When you buy a product from ExxonMobil, you are buying the experience behind it. What you get in return is more than a drum of oil, or synthetics. You get people advising on how to increase efficiency with our product, you buy after sales services, you buy all the hours of training sessions, research and development that goes into that product. Now let’s look into the product. Many products can do the job, but the question is, how well do they perform? For instance, for lubrication, you need to think, okay will it do

“

When you buy a product you buy the experience behind it, you buy people advising on how to better do things, you buy services, you buy training sessions and development for your crew and so forth.

the job? Yes. How long did it take? How much did it cost me overall? How efficient was the application, and how did the machinery work with this lubricant, how good was the turbine?

And then you think, how much does it cost me overall, when I use this oil? This is what we call, total cost of ownership. So we have a very clear

concept that we market with the products, with the service which we call TCO. And this is what we expect and need our customers to think of before buying lubricants.

The total cost of ownership: How much is in a drum and how much does it cost to use this product over a whole year, over five years.

How much does it cost changing oil all those times? How much does it cost overall and so forth. For instance, let’s say you take a certain amount of time, like one year, and you use an oil which can be used for one year, opposed to an oil which needs to be changed three times in a year. Simply if the first oil is three times more expensive, it’s still much better to use this oil and because you will not expose your people to dangerous machinery as much, and you become more efficient. You take this time out only once a year, you change your machinery less. So this is what we call, to answer your question, total cost of ownership.

Findlay: I see so you’re saying that ExxonMobil provides a high quality product, which saves capital over the medium to long term?

Mr Ali: And service, the total cost of ownership and all that goes behind a drum of oil.

Findlay: Excellent. Ayman, it was very nice to meet you and thank you for your time and insight with this very informative chat.

Lubricated bearings

Mr Ali: My pleasure Edward, and I thank you for your time and interest.

This interview was conducted between Oil and Gas Innovation’s Publishing Director, Edward Findlay and ExxonMobil’s Oil & Gas Marketing Advisor for Europe, Africa and the Middle East. For more information contact ExxonMobil Lubricants and Petroleum Specialties at: TechDeskEurope@exxonmobil.com or visit: www.mobilindustrial.com

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INDUSTRY NEWS: EUROPE

First oil from the Bøyla field Lundin Petroleum AB (Lundin Petroleum) is pleased to announce that first oil from the Bøyla field has been achieved.

The Bøyla field commenced production on 19 January 2015. The Bøyla field, located on PL340 in the Norwegian sector of the North Sea, is a subsea tie-back to the Alvheim field where Lundin Petroleum has a 15 percent non-operated interest.

The Bøyla field is estimated to contain gross reserves of 23 million barrels of oil equivalents and is expected to produce at a gross peak rate of approximately 20,000 barrels of oil equivalent per day (boepd) once the second production well has been completed, although the plateau rate is expected to be somewhat lower. The drilling operations on the second production well were suspended in late 2014 and the Transocean Winner semi-submersible rig will return to complete the well during the second quarter of 2015 with startup of this well expected by mid-year 2015.

The production facility for the Bøyla field is the Alvheim FPSO which is owned by the Alvheim field partners. In addition to the Alvheim and Bøyla fields, the Volund and Vilje fields are also producing to the Alvheim FPSO. Ashley Heppenstall, President & CEO of Lundin Petroleum comments; “With the successful start-up of the Bøyla field on the 19th January 2015 Lundin Petroleum has now successfully brought onstream two of the four development projects which collectively are forecast to bring Lundin Petroleum’s production level to more than 75,000 boepd by the end of 2015. The two ongoing development projects, Bertam offshore Malaysia and Edvard Grieg offshore Norway, continue to progress according to plan and are scheduled to achieve first oil in the second and fourth quarters of 2015 respectively.”

Lundin Norway AS, a wholly owned subsidiary of Lundin Petroleum, has a 15 percent interest in PL340.

Det norske oljeselskap ASA is the operator of PL340 and has a 65 percent interest and Core Energy AS has a 20 percent interest.

Aker Solutions Wins Engineering Contract for Johan Sverdrup On behalf of the Johan Sverdrup partnership Statoil will today sign a detail engineering contract for the Johan Sverdrup development with Aker Solutions. Worth NOK 4.5 billion the contract includes engineering and procurement management (EPma) until the scheduled production start in 2019. The contract includes engineering and procurement management for the riser and processing platform topsides for the Johan Sverdrup field, phase one, in addition to hook-up work and gangways for the entire field.

Aker Solutions has so far been responsible for the front-end engineering of all four platforms that constitute the field centre, a contract signed at the end of 2013.

“In light of the Johan Sverdrup project’s ambitious progress plan having competent cooperation partners that share our goals is essential.

Through the front-end engineering phase several hundred Statoil employees have been stationed at Aker Solutions. Together we have formed the basis for a seamless transition to detail engineering which will ensure a cost-effective progress plan,” says Arne Sigve Nylund, Statoil’s executive vice president for Development and Production Norway. “The Johan Sverdrup field development is of great importance, not just to Statoil and our partners, but also to the supply industry and society. At plateau, the production from this field will account for 25% of the combined production on the Norwegian continental shelf. Although the prospects for the future of the field are very good maintaining the right focus on costs both in the construction and operations phase is essential,” Nylund concludes. Targeted efforts have been made to cut costs and improve the efficiency of the deliveries. We are therefore pleased to see that Norwegian suppliers are competitive and that we can sign this contract with Aker Solutions. They have started their own improvement work and their deliveries on our integrated cooperation at Sverdrup are progressing well. This is an important contract for the project, and our expectations for the implementation are high”, says Margareth Øvrum, Statoil’s executive vice president for Technology, Projects and Drilling. “As the EPma supplier Aker Solutions gets a key role in the Johan Sverdrup project, and is thus an important contributor to a successful project. We look forward to a close and good partnership,” she ends.

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Bilfinger Salamis UK Awarded Contracts worth over £100m Lundin Petroleum AB (Lundin Petroleum) is pleased to announce that first oil from the Bøyla field has been achieved. The Bøyla field commenced production on 19 January 2015. The Bøyla field, located on PL340 in the Norwegian sector of the North Sea, is a subsea tie-back to the Alvheim field where Lundin Petroleum has a 15 percent non-operated interest. The Bøyla field is estimated to contain gross reserves of 23 million barrels of oil equivalents and is expected to produce at a gross peak rate of approximately 20,000 barrels of oil equivalent per day (boepd) once the second production well has been completed, although the plateau rate is expected to be somewhat lower. The drilling operations on the second production well were suspended in late 2014 and the Transocean Winner semi-submersible rig will return to complete the well during the second quarter of 2015 with startup of this well expected by mid-year 2015. The production facility for the Bøyla field is the Alvheim FPSO which is owned by the Alvheim field partners. In addition to the Alvheim and Bøyla fields, the Volund and Vilje fields are also producing to the Alvheim FPSO. Ashley Heppenstall, President & CEO of Lundin Petroleum comments: “With the successful start-up of the Bøyla field on the 19th January 2015 Lundin Petroleum has now successfully brought onstream two of the four development projects which collectively are forecast to bring Lundin Petroleum’s production level to more than 75,000 boepd by the end of 2015. The two ongoing development projects, Bertam offshore Malaysia and Edvard Grieg offshore Norway, continue to progress according to plan and are scheduled to achieve first oil in the second and fourth quarters of 2015 respectively.” Lundin Norway AS, a wholly owned subsidiary of Lundin Petroleum, has a 15 percent interest in PL340. Det norske oljeselskap ASA is the operator of PL340 and has a 65 percent interest and Core Energy AS has a 20 percent interest.

Bilfinger Salamis UK Awarded Contracts worth over £100m Energy services firm Bilfinger Salamis UK, part of the world renowned Bilfinger Group has secured new business with a combined total value of over £100million. Bilfinger Salamis UK, which specialises in UKCS activities from its head office in Aberdeen, has been awarded the contracts from clients including Apache and Taqa Bratani in the last three months. The company, part of Bilfinger’s Oil and Gas division, will be handling extensive inspection and maintenance activities for these customers.

The services to be provided include offshore inspection enactment including conventional and advanced NDT; scaffolding access; rope access, coating; insulation; specialist cleaning; asbestos work; norm removal, and passive fire protection. The contract received from Taqa is for a period of 5 years, with 2 x 1 year extension options, and includes work on all of TAQA’s UK assets - Harding, Tern, Cormorant Alpha, Eider, and North Cormorant. Bilfinger Salamis UK has worked directly with TAQA providing inspection services since the operator become duty holder of its UK assets in 2009.

The contract with Apache is a 3 year extension, with 2x 1 year options, and encompasses the Beryl A and Beryl B assets. “With these new contracts, Bilfinger is continuing to reinforce its market position in offshore maintenance and life extension services on platforms operating on the UK continental shelf. They testify to the trust which the UK oil and gas industry is placing in the experience and skills of our offshore specialists,” says Graham Hayward, Managing Director at Bilfinger Salamis.

Mr Hayward added that, “the reputation that we have in the market today is the result of our ability to meet the highest possible requirements with respect to the breadth and quality of our integrated services together with our excellent safety standards.

“Looking forward, we will be continuing to reinforce our personnel resources in order to make full use of the potential offered by these contracts to our customers’ satisfaction.”

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INDUSTRY NEWS: NORTH AMERICA

Canada Still Open for Business and Ready to Deliver on LNG Projects With current oil prices in a slump and LNG pricing likely to remain squeezed for the next few months, further pressure has been heaped on Canadian LNG project investors to move decisively towards Final Investment Decision (FID), or risk losing out completely to their United States rivals. British Columbia in particular has driven an ambitious and upbeat message, but before any project reaches FID a formidable array of investors, stakeholders and lenders will need convincing that any such projects are economically robust and rewarding.

Ultimately, delivering competitively-priced projects will come down to a collaboration of will between the engineering, procurement and construction (EPC) firms and the operators who commission these teams to deliver. Recent months have witnessed many key Canadian LNG front-end engineering and design (FEED) contracts being awarded to the world’s leading EPCs, with a great volume of subsidiary work (such as construction management and project execution) being awarded on both the west and the east coasts of the country, as urgency to move projects forward ramps up. Many leading firms including Chicago Bridge & Iron (CB&I), Fluor, Foster Wheeler, JGC, Linde and Saipem have won major contract awards and other such as KBR, Samsung and Technip await key bid decisions for lead roles in Canadian project delivery.

Both leading EPC firms and companies interested in becoming supply chain vendors on the construction of these projects are helping to drive awareness of innovation and advancement in LNG technology at the Canada LNG Export Conference & Exhibition, where the inaugural ‘Centre of Operational and Technical Excellence’ will be dedicated to delivering knowledge, education and awareness of technological innovations. The ‘Centre of Operational and Technical Excellence’ will provide a platform for global industry experts to showcase latest developments in: LNG Project Management Lifecycle, Pipeline Infrastructure and LNG & Gas Carrier operations and technology, to an audience of Canadian LNG proponents, developers and industry stakeholders.

Madalena Comments on Argentina Oil Prices and Provides a 2015 Capital Budget Update Madalena Energy Inc. provides the following comments on recent changes to regulated Argentina oil prices and updates its 2015 Capital Budget as outlined below.

REGULATED ARGENTINA OIL PRICE MARKET In Argentina, oil prices are set by the government for product sold into the domestic oil market, which is where Madalena sells the oil from its Argentine operations. For many years Argentina’s domestic oil prices were well below the Brent oil benchmark price. Since May 2014, oil prices in Argentina have remained above USD $83 per barrel while Brent oil prices have sharply declined from USD $115 per barrel to USD $53 per barrel. The regulators in Argentina have set January 2015 oil pricing at approximately USD $77 per barrel for Medanito crude quality oil compared to the December 2014 posted price of approximately USD $83.90 per barrel of oil. The USD $77 posted Medanito crude oil price in Argentina for January 2015 is approximately 37% higher than the comparative period Brent price of USD $56 per barrel.

MADALENA 2015 CAPITAL BUDGET Madalena’s board approved a 2015 Capital Budget of up to CDN $48 million as press released on December 15, 2014. This 2015 Budget was based on USD $80 per barrel Medanito oil pricing. Each dollar change in oil price in Argentina represents approximately +/- CDN $1 million to the full year funds flow of the Company. Given the changes to the commodity price environment, Madalena plans to defer CDN $3.6 million of budgeted capital expenditures between Argentina and Canada. With approximately 90% of the Company’s oil production priced relative to Argentina’s regulated oil prices, the Company continues to be well positioned and expects to fully fund the 2015 capital program with funds generated from operations and existing working capital. Madalena also expects to end 2015 with positive working capital Management and the Board will continue to monitor its political, market and commodity price environment, with a view to protecting Madalena’s financial position in the context of its contractual and regulatory obligations.

Madalena is an independent, Canadian-based, international and domestic upstream oil and gas company whose focus is on exploration, development and production of crude oil, natural gas liquids and natural gas in Argentina.

INDUSTRY NEWS: S. AMERICA

GE Oil & Gas Awarded 13-Year Contract to Provide Long-Term Services for Peru LNG Plant GE Oil & Gas (NYSE: GE) today announced it has been awarded a long-term contractual service agreement (CSA) through General Electric International Peru to support the PERU LNG S.R.L liquefied natural gas (LNG) facility in Pampa Melchorita, Peru, approximately 100 miles south of Lima. The facility is South America’s LNG production plant. The new CSA agreement will cover the plant’s services requirements for 13 years.

Open since June 2010, the plant has an estimated annual production capacity of 4.4 million tons of LNG. The complex also consists of two storage tanks—each with a capacity of 130,000 cubic meters of LNG, a marine terminal and a supply pipeline. The LNG plant is owned by PERU LNG S.R.L., a company sponsored by Hunt Oil Company, SK Innovation, Shell and Marubeni.

Under the new CSA, GE Oil & Gas will cover all major maintenance requirements (including parts, repairs and field services) for the plant’s liquefaction train, which is comprised of GE 7EA units and compressors along with associated auxiliaries. The CSA also will cover the site’s power generation equipment that consists of three GE LM2500+ aeroderivative gas turbine-generators and auxiliaries. In addition to major maintenance, GE Oil & Gas also will provide a resident support team to assist with all aspects of maintenance on GE equipment as well as a Predictivity package for remote equipment monitoring. After the PERU LNG production facility began operating in 2010, another vendor had served as the original CSA provider before PERU LNG decided to switch to GE Oil & Gas. “We are pleased to sign this new CSA with GE because the original equipment manufacturer will provide the parts and repair services as well as the technical expertise of GE’s resident team of field engineers to help ensure the optimal reliability and potential increased availability of our LNG production facility,” said Igor Salazar, general manager of PERU LNG S.R.L. “This most recent win for GE Oil & Gas is a testament to our focus, commitment, understanding and strong local and regional capabilities,” said Edgardo Torres, GE Oil & Gas’ region leader for turbomachinery services, Latin America.

Petrobras’ Refineries Save Enough Energy to Supply a City of 630,000 Inhabitants for a Year Over the years, Petrobras has taken measures in its refineries to improve their energy efficiency. In the last five years, despite the growing complexity of its refineries to meet new fuel quality specifications, these initiatives have resulted in an energy saving representing approximately 2.5 million barrels of oil equivalent per year, or 15,000 terajoules per year – equivalent to enough electricity to supply a Brazilian city of 630,000 inhabitants for one year.

This result represents a reduction in the energy intensity of Petrobras’ refining operations of approximately 5.2%, leading to an estimated decline in carbon dioxide emissions of around 3,000 metric tons per day. Besides generating financial benefits, the energy optimization efforts at Petrobras’ refineries have had a positive impact on the environment, as they are the company’s main way of cutting its greenhouse gas emissions.

The main actions include optimizations of electricity and steam generation and distribution systems, improvements to the power performance of various energy consuming systems, such as furnaces and boilers, and the investigation and implementation of energy efficiency operational and investment opportunities. These actions demonstrate Petrobras’ determination to achieve cost reductions and continuous improvement in the energy performance of its operations, while also reflecting its commitment to social and environmental responsibility.

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INDUSTRY NEWS: ASIA PACIFIC

Four New LNG Carriers to Feature Wärtsilä’s LNG Reliquefaction and Gas Handling Systems

A series of four LNG carriers being built by the Hudong-Zhongua Shipbuilding yard in China will feature Wärtsilä LNG reliquefaction plants and gas handling systems. The ships are owned by Bermuda based Teekay Corporation, China LNG Shipping (CLNG), CNOOC Energy Technology Co of China, and BW Gas of Norway. The contracts with Wärtsilä were issued by Hudong-Zhonghua Shipbuilding and were signed during the fourth quarter. The award of these contracts is a significant breakthrough into the Chinese market for Wärtsilä LNG reliquefaction plants and gas handling systems for LNG carriers, while at the same time emphasising the company’s position as the market leader in supplying these solutions. The Wärtsilä solutions will provide the owners with both economic and technical benefits. The reliquefaction plant will reliquefy 70% of the boil-off gas from the ships’ LNG cargo and return it to the cargo tanks, while the balance is fed by the gas handling system to the engines for propulsion purposes. The system is pre-fabricated in skid modules for easy onboard installation and hook-up. It can be stopped when the cargo pumps are in operation, thereby reducing the need for extra generator capacity. No extra personnel are required for operation and maintenance.

Wärtsilä is the market leader in cargo handling technology for LNG carriers and has an extensive reference base with 35 systems already in operation, and a total of eight new systems to be delivered to customers in China, South Korea and Japan. Wärtsilä is also the only company able to offer solutions throughout the entire gas handling chain and to cater for all types of carriers, from the smallest size LPG carriers for coastal transport to the largest LNG carriers. The company’s solutions cover everything from loading the gas at the terminal to keeping it safe during freight and unloading it at the final destination.

Wärtsilä’s products all comply with the IMO’s recommendations and regulations.

For both the LNG reliquefaction plant and gas handling system, Wärtsilä will provide engineering support, system responsibility and associated process guarantees. “Wärtsilä was selected because we were able to offer the best technical solution with the lowest capital and operational expenditures. Our in-house know-how and experience is unmatched in the industry, which is why the leading gas carrying operators consistently opt for Wärtsilä’s state-of-the-art solutions,” says Mr Timo Koponen, Vice President, Flow and Gas Solutions, Wärtsilä Ship Power.

Chevron and SK LNG Trading Sign Gorgon LNG Supply Agreement Chevron Corporation today announced its Australian subsidiaries have signed a binding Sales and Purchase Agreement (SPA) with SK LNG Trading Pte Ltd (SK). Under the SPA, SK LNG Trading, which is part of a leading industrial conglomerate in South Korea, will receive 4.15 million tons of LNG over a fiveyear period starting in 2017. During the time of this agreement, over 75 percent of Chevron’s equity LNG from Gorgon will be committed to customers in Asia.

“This agreement is an important step in the commercialization of Chevron’s significant natural gas holdings in Australia,” said Pierre Breber, president, Chevron Gas and Midstream. “As Chevron continues to grow into one of the world’s largest LNG suppliers, this SPA represents further progress and diversification of our sales portfolio.We are pleased with the opportunity to supply LNG to SK and look forward to building lasting relationships with our customers in the region as the Gorgon and Wheatstone projects move into operations,” said Roy Krzywosinski, managing director, Chevron Australia. “SK joins our existing strong LNG customer base and demonstrates the Chevron-led Gorgon and Wheatstone projects are well-placed to meet the growing demand for natural gas in the Asia-Pacific region.”

Chevron is 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 million metric tons per year of LNG. The project also includes a domestic gas plant. Chevron is one of the world’s leading integrated energy companies, with 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 and distributes 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. Chevron is based in San Ramon, Calif.

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INDUSTRY NEWS: MENA

Crescent Petroleum CEO Majid Jafar calls for “Arab Stabilization Plan” at World Economic Forum Annual Meeting in Davos Majid Jafar, CEO of Crescent Petroleum, calls for leaders at this year’s Annual Meeting of the World Economic Forum in Davos to put economic stability in the Middle East on top of the agenda. Speaking on the “Arab World Context” session on the first morning of the Summit, Majid Jafar says: “The Arab Spring has now clearly turned into a winter of discontent. In parallel with all the political efforts, we need quick and urgent economic action to address the issue of high youth unemployment in the Middle East and North Africa Region (MENA) Region. Insufficient economic growth in the region has led to massive youth unemployment, in some areas more than 60%. This is turning into a demographic timebomb.”

“The recent fall in the oil price is also a warning that the region cannot be over-reliant on energy resources for GDP growth. We must create longterm sustainable economic growth. Employing our youth is the key to unlocking our true natural resource. We cannot achieve political stability without economic stability,” he adds. Jafar’s comments are backed up by the annual World Economic Forum Outlook on the Global Agenda 2014 Report, which cites persistent youth unemployment as the number one challenge for the region in the year to come, ahead of managing political transitions and societal tensions. High levels of youth unemployment and a mismatch between education and the skills required by employers have led to a vicious circle, where economies stagnate and there is an over-reliance on extracted commodities. One scheme that Jafar suggests could tackle the over-dependence on oil and the high youth unemployment in the region is the Arab Stabilization Plan (ASP). The ASP is a policy initiative for a regional framework to promote infrastructure investment and create jobs. The proposal, which takes its inspiration from the US-led Marshal Plan to re-build post-war Europe, would prioritise infrastructure projects on a national level and boost economic growth in countries such as Egypt, Jordan, Yemen, and Tunisia. Investment would come mainly from within the Arab world such as the Gulf countries, and the private sector.

“The MENA Region is currently going through changes that are unprecedented in the last century. In many cases the region has failed to build national identities let alone a regional one, failed to build inclusive and stable institutions, and above all failed to build private-sector driven competitive economies. There is capital, but the region needs a focused multinational effort to create regional trust and direct it into long-term infrastructure investments. This will create employment and sustain economic competitiveness,” Majid Jafar concludes.

EPC in OIL & GAS 9-12 March 2015 | Kuala Lumpur, Malaysia

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rg a L g n i nies v a p o r s gas com t p c e m I oj jor oil and r P EPCthering ocf ma A ga ia Pacifi s in A

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INDUSTRY NEWS: RUSSIA & CIS

Andrey Kruglov, Deputy Chairman of the Management Committee, Head of the Department for Finance and Economics of Gazprom Talks Sanctions What influence may anti-Russian sanctions have on Gazprom Group’s financial standing?

It’s true that in the third quarter of 2014 the USA, the EU and a number of states supporting them introduced sanctions imposing considerable restrictions on a number of major Russian companies, considering the access to traditional finance sources as well as services and technologies required for implementing complex engineering projects (deep-water drilling, Arctic shelf operations, shale oil reserves development). The introduced financial sanctions do not apply to Gazprom, but they affected our subsidiary Gazprom Neft. As I’ve already mentioned, Gazprom was the first among Russian issuers to place a Eurobond issue after the introduction of sanctions. I’d like to point it out that the main sponsor of the issue was a major American bank J.P. Morgan; moreover, 77 per cent of end Eurobonds buyers were represented by the US and UK investment foundations.

In order to prevent the negative consequences of financial sanctions our subsidiary Gazprom Neft is engaged in attracting financing from domestic sources and from capital markets of the countries that did not endorse the sanctions.

The success of this activity is confirmed by the allocation of credit by Sberbank and Russian Agricultural Bank to Gazprom Neft in the third quarter of 2014. Thus, in September Gazprom Neft signed an agreement for a longterm borrowing from Russian Agricultural Bank worth RUB 30 billion with an interest rate of 11.90 per cent and a maturity period in 2019. The same month the company attracted long-term borrowings worth RUB 22.5 billion and RUB 12.5 billion with the interest rates of 11.98 and 12.08 per cent respectively with a maturity period in 2019.

In order to reduce the negative effect of sanctions regarding the access to services and technologies needed for complex engineering projects, Gazprom Group is in search of suppliers of the said services and technologies in the countries that do not endorse the sanctions. It is worth mentioning that the revenues from the projects directly affected by the sanctions do not have any considerable influence on the Group’s financial results. In the meantime, having a substantial reserve of its own production capacities, Gazprom may put off the deadlines of such projects that would not lead to any significant financial complications. The Company regularly assesses the possible effect from the introduction of sanctions and currently it does not expect them to substantially influence Gazprom Group’s financial results.

Andrey Kruglov on Profitability What are Gazprom Group’s cost saving plans?

Gazprom is using a comprehensive approach to cost control which includes cost optimization at the budgeting stage, execution of the cost reduction program including performance indicators of competitive procurement of goods, works and services, implementation of cost optimization plans on separate lines of business, measures to comply with Russian President’s orders on reducing costs of acquired goods (works, services) per unit of product by at least 10 per cent a year over three years. The said activity is not confined to the scope of the main gas business. All subsidiary companies, including the biggest ones – Gazprom Neft and Gazprom Energoholding, are required to run their own cost optimization programs. The procurement management activity can serve as an example of setting cost optimization targets, where our goal is restraining prices for purchased materials and equipment needed by the Company, at the level of at least 20 per cent lower than the price growth rates forecasted by the Russian Ministry of Economic Development for the respective industries.

Will Gazprom see its profitability go up or down?

Gazprom is nowadays one of the leaders in terms of profitability among the world’s energy majors. According to the IFRS statement for the last completed fiscal year, in 2013 the EBITDA profitability was 38 per cent and net profit – 22 per cent. As a comparison, at the leading US oil and gas company ExxonMobil these figures were 17 and 7 per cent respectively, at the leading Russian oil company Rosneft – 28 and 17 per cent.

In the near future a number of negative external factors will exert pressure on Gazprom’s profitability margins like, for instance, lower prices for oil and petroleum products and, as a consequence, reduction of export gas prices linked to oil, a considerable slowdown of regulated gas prices in the domestic market, foreign currency translation losses due to the decline in the ruble, as well as underpayment of gas supplies by Naftogaz of Ukraine.

Later on, Gazprom’s profitability in the medium term will depend on external factors, including the oil and gas price behaviour on the key markets as well as the state regulation of the industry.

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INDUSTRY NEWS: AFRICA

Eni Obtained a Three-Year Extension on the Exploration Period of Block 15/06 in Angola Eni obtained a three-year extension from the Angolan authorities to the exploration period of the prolific Block 15/06, located in Angola’s offshore, approximately 350 kilometers north-west of the capital Luanda and 130 kilometers east of Soyo town. The original exploration period expired in November 2014 and Eni requested an extension in order to complete the exploration activities already identified: the three-year plan envisages the drilling of three wells and 1,000 square kilometers of 3D seismic. Should the exploration activities be successful, any new discoveries can be developed quickly using existing production facilities.

The extension also includes an area adjacent to the block 15/06 which covers the discovery of Reco-Reco, estimated to be about 100 million barrels of oil in place. Synergies with existing infrastructure will enable production in this area to begin quickly. “The extension of the exploration period of Block 15/06, which includes the Reco-Reco discovery, recognizes Eni’s ability to successfully fulfil the role of operator, one which requires both technological innovation and a high level of operational efficiency. Furthermore, it marks an additional success for Eni in Angola‘, CEO Claudio Descalzi said.

In Block 15/06, acquired in 2006 following an international bid round, Eni has drilled 24 exploration and appraisal wells, discovering over 3 billion barrels of oil in place and 850 million barrels of reserves. On November 30 last year Eni started production at the West Hub Development Project, relative to block 15/06, just 4 years after the declaration of commercial discovery. Block 15/06 also includes the East Hub Development Project, which is already under development and is expected to start production in 2017. In 2014, Eni also discovered Ochigufu, with an estimated 300 million of barrels of oil in place, which will be linked to the West Hub in record time by 2017.

Eni is operator of Block 15/06 with a 35% stake and Sonangol EP is the concessionaire. The other partners in the joint venture are Sonangol Pesquisa e Produção (35%), SSI Fifteen Limited (25%) and Falcon Oil Holding Angola SA (5%). Angola is a key country to Eni’s strategy of organic growth. The Company has been present in Angola since 1980 with an average daily production last year of about 90,000 barrels of oil equivalent.

Panalpina Expands Africa Footprint International freight forwarding and logistics company, Panalpina, has opened two new bases in Morocco and Kenya. The offices in Casablanca and Nairobi became fully operational in January, and support Panalpina’s growth strategy for the region. In both economies, opportunities for growth exist predominantly in the energy and infrastructure sectors. Panalpina has established its own offices in Morocco and Kenya, giving customers in these expanding economies a single point of contact, and direct access to the company’s global network and services in air freight, ocean freight and logistics.

“Expanding our global presence is part of Panalpina’s overall strategy, especially in growth economies such as Morocco and Kenya,” says Peter Triebel, Panalpina’s regional CEO for the Middle East, Africa and CIS (MEAC). “With strong prospects in the two countries, especially in the energy and infrastructure sectors, establishing a formal presence is an important part of our long-term market growth and customer satisfaction objectives.” Global customers, especially those operating in the energy sector, often require a local presence to achieve integrated, end-to-end solutions. With the know-how Panalpina has amassed from its other global operations, it is well placed to implement its world class processes in these new markets.

Morocco: gateway to West Africa With a population of 33 million, and an ever-strengthening economy, Morocco offers Panalpina several business opportunities in key industries such as energy, automotive, aerospace and healthcare. Morocco has many onshore wind farms and has emerged in recent years as a leader in the region’s wind power generation. Investment in solar power technology, such as the Noor-Ouarzazate Solar Complex, is helping Morocco reduce its dependence on fossil fuels and meet its growing energy demand. In addition, hydro and coal fired power plants are being constructed, expanded or modernized. Industrial free trade and logistics zones have brought foreign investment and employment to the northern region of Morocco. In particular, car manufacturers and their suppliers have established a significant presence there. “Morocco has great business potential; in future the country will serve as a gateway to Mauretania on the West African coast, and to the inland African countries of Mali, Burkina Faso and Niger,” explains Maxime van Geenberghe, Panalpina’s new managing director in Morocco.

Kenya: gateway to East Africa Kenya’s 45 million strong population continues to benefit from growth and investment in the oil and gas, telecommunications, perishables, chemical and healthcare sectors. The discovery of major oil resources in northern Kenya has brought a host of leading oil companies into the region. As Panalpina holds service agreements with many of these companies, the Nairobi office will cater to their increasing local requirements.

The construction of a mega-port in the northern coastal city of Lamu also reinforces the need for on-the-ground support, as the building of roads, a rail link and a pipeline will soon be underway. Nairobi’s airport already serves as a regional hub for East Africa. “Kenya is East Africa’s largest economy and a gateway to the region, especially Uganda and Rwanda,” notes the country’s managing director Juergen Paliko. “With the Nairobi office in place, Panalpina is now able to take a more focused approach to cultivating local business and also trade lanes from the Middle East and Asia into Kenya.”

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E&P

NieuweWeme Groep and Wesemann Together Team Up in Hazardous Areas New Product Developments for Transformers in Containerized Solutions NieuweWeme groep and Wesemann decided to cooperate on the EX market with containerized integrated solutions. The result is an interesting and challenging set of solutions for electrical power in hazardous areas.

Installing power transformers in a container cannot be considered as challenging or new. The conclusion for installing containers in hazardous areas is practically the same. But, when both technologies and experiences are put together we can discuss a very interesting portable and compact solution for rough environments.

Challenges

W

hen designing a power transformer quite some different influences have to be taken into account.

Obviously the required input and output voltages determine part of the transformer design. It is obvious that a high voltage power transformer will require a completely different type of isolation then a low voltage transformer.

The same applies to the amount of required power. Should a dry type transformer be used or does the customer prefer an oil immersed transformer. But the challenges faced during the design of a containerized solution are many more.

Weight and volume of the equipment determine the size of the container. Should there be a need for an emergency power system or additional backup time during power black or brown out then this needs to be calculated as required space in the container as well.

The weight of the container with all installed equipment will have its influence on the

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foundation locally and on the transport to the designated location. Temperature issues inside and outside the container have their influence on the design of the system. The maximum ambient temperature will influence the type of climate management system inside the container. Next to the value of the maximum ambient temperature the maximum generated heat and even more important the maximum heat dissipation of the container determine the size of the transformer as well.

Hazardous areas

The environment where the system will operate has its own sometimes rigid demands.

Sand storms or dust clouds, extreme cold outside temperatures with ice covering the container demand a different approach. In some cases customers require a protective perimeter around the system with barbed wire when the equipment needs protection against wild animals or local aggression. It can be useful to design the system for use underground to protect it from external influences.

We have the experience, challenge us to show you we can take care of bringing power to your project!

Extreme environments

The containerized solutions from NieuweWeme groep and Wesemann comply with the international requirements for hazardous areas, in other words zone 1 and zone 2. The international standard for equipment in hazardous areas is IEC60079.

Obviously the containerized systems can also be built for areas where dust explosion may occur. NieuweWeme and Wesemann work as partners when it comes to supplying containerized EX power solutions.

This article is presented for you on behalf of Wesemann BV, Netherlands.

If you would like to know more about our products and services please contact us at: sales@wesemannn.nl or by telephone at: +31 10 286 20 00

E&P

Petrobras Becomes Largest Oil Producer Among Publicly Traded Companies In the third quarter of 2014, Petrobras surpassed ExxonMobil’s oil production, and is now the largest producer of liquid hydrocarbons among its publicly traded peers. Considering oil and natural gas, the company is now fourth in the ranking. In the first nine months of 2014, Petrobras also saw the biggest increase in oil production, in both percentage and absolute terms. In fact, during the year, Petrobras and ConocoPhillips were the only publicly traded companies to record an increase in oil production – 3.3% in the case of Petrobras, and 1.5% in ConocoPhillips’ case.

I

n the first 11 months of 2014, Petrobras’ average output grew by 4.5% from the same period of the previous year.

Between January and November 2014, its monthly volume expanded by more than 10%. Furthermore, in December the company announced the following daily production records: • Own oil production: 2.286 million barrels per day (bpd) on December 21, 2014.

• Operated production in Brazil, including the share operated by the company for its partners: 2.470 million bpd on December 21, 2014.

25,000 barrels per day (bpd). Petrobras is currently producing average flows of 20,000 bpd in the pre-salt layer. Some wells in the Santos Basin Pre-Salt Cluster have attained flows of more than 30,000 bpd, making projects more economical. For example, this high productivity has enabled the pilot production units of the FPSO Cidade de São Paulo (a ship-platform operating in Sapinhoá field) and FPSO Cidade de Paraty (deplyed in Lula field) to reach their maximum production capacity, of 120,000 bpd, using just four production wells connected to each one.

• Operated production in the pre-salt layer: 700,000 bpd on December 16, 2014. In addition, in 2014 Petrobras expanded its oil processing capacity by more than 500,000 bpd, with the start-up of four new stationary production facilities. This volume will gradually be incorporated into production, guaranteeing that the company will continue to increase its oil and gas output in 2015.

Petrobras - Pre-salt is economically viable With regard to the article entitled “Petróleo desaba e já é ameaça ao pré-sal” (Oil price collapses and now threatens pre-salt), published today (January 6) in the newspaper O Globo, Petrobras clarifies that it is expanding its oil and natural gas production capacity in the Brazilian pre-salt layer in an economically viable manner. The company announces that the break-even price (the minimum oil price at which production is economicallyviable) planned at the moment when its pre-salt production projects were approved was around US$45 per barrel, including taxes and not including natural gas transportation infrastructure spending. Inclusion of the latter spending may raise the total figure by US$5 to US$7 per barrel.

Furthermore, the stated break-even price assumes a well flow of between 15,000 and

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This calculation presumes that all the projects’ expenditure (investment, operating costs and taxes) is associated with the price level of inputs prevailing at the time the projects were approved. It is important to highlight, however, that the costs of goods and services suppliers have historically been correlated with oil prices in the international market. When there is a significant decline as in the current case of the

oil price level, this is accompanied, not always immediately, by a fall in costs in relevant parts of the goods and services sector. The effect of this reduction partially offsets the loss of revenue caused by the drop in oil prices.

It is also noteworthy that investment decisions in exploration and production projects – especially deep-water ones – are based on scenarios that incorporate a long-term view, not only of prices, but also all the other inputs and costs of projects.

High productivity – Pre-salt’s enormous potential can be seen in the high productivity of wells in operation. On December 16, for example, oil production in the fields operated by the company in the pre-salt province of the Santos and Campos basins reached a record of 700,000 bpd, using just 34 production wells connected to 12 different platforms – including eight producing exclusively in the pre-salt layer. This volume was reached just eight years after the first oil discovery in this province, in 2006, and only six months after the company broke through the 500,000 bpd mark, in July.

The company’s pre-salt performance has been supported by the results obtained by its strategic Well Cost Reduction Program (PRC-Poço) and Subsea System Cost Reduction Program (PRC-Sub). These programs are part of initiatives that have incorporated continuous improvements to reduce well drilling times and costs, and the costs of submarine facilities for exploration and production projects, helping to further improve the economic competitiveness of presalt projects. One example of the enhanced productivity achieved since 2010 is the reduction of around 60% in well construction time in the Lula and Sapinhoá fields, both in the Santos Basin Pre-Salt Cluster.

CAMO Release Service Pack 2014 for the Unscrambler X Multivariate Data Analysis and Design of Experiments Software.

CAMO Software today announced the launch of Service Pack 2014 for their all-in-one Multivariate Data Analysis (MVA) and Design of Experiments (DoE) software, The Unscrambler® X.

T

he Unscrambler® X is used by engineers, scientists, researchers and data analysts across R&D, Quality Control and Production departments in a range of industrial sectors as well as academia and research. This Service Pack continues CAMO’s tradition of delivering advanced multivariate data analysis software that is easy to use and offers exceptional data visualization. The software includes exploratory data analysis, regression and classification methods, predictive modeling, design of experiments and descriptive statistics.

The Unscrambler® X Service Pack 2014 offers several new features, including, for example, faster convergence of methods, new and improved plots and a new and improved

recalculate menu. Other key improvements include calculation of exact Q-residual limits for better outlier detection, Kennard-Stone sample selection augmented to achieve more uniform distribution of responses, better audit trail, bias and slope correction, and simplified matrix reshaping options based on category variable. Service Pack 2014 is available for download from 5th December, and current users of The Unscrambler® X 10.3 are encouraged to install it.

A free 30-day trial version of The Unscrambler® X 10.3, including Service Pack 2014, is available for download from www.camo.com.

About CAMO Software Founded in 1984, CAMO Software is a leader

in Multivariate Data Analysis and Design of Experiments solutions for the life sciences, agriculture, food, manufacturing, resources, energy and technology sectors. More than 25,000 engineers, scientists and analysts in 3,000 organizations use The Unscrambler® X software range to explore large, complex data sets and better understand processes in R&D, engineering, production and quality control.

Our solutions work with scientific instruments and a wide range of automation and control systems, enhancing their analytical capabilities with advanced multivariate methods. For more information please visit www.camo.com or contact CAMO Software’s Jostein R. Hareide, Director, OEM & Marketing.

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E&P

GE and McDermott Team Up to Launch io Oil & Gas Consulting GE Oil & Gas and McDermott International, Inc. today launched io oil & gas consulting, a new independent venture to transform the development of front-end solutions for offshore fields. io aims to deliver greater certainty into the design and planning of the offshore oil and gas field and overhaul the current operator-contractor relationship. io will leverage the knowledge of the contractor community through its parents’ expertise to better guide offshore projects at the development stage. Its scope will range through portfolio evaluation, exploration and planning support, appraisal and feasibility, conceptual engineering and FEED to the final investment decision. Furthermore, unlike any other consultancy in the market today, io will consider the full field as one system with the technical insight to develop every aspect of the front-end solution.

L

orenzo Simonelli, President & CEO of GE Oil & Gas said: “GE is proud to support io oil & gas consulting. We feel the venture is a natural extension of our mission to help customers solve the world’s toughest energy challenges. As a world leader in advanced technologies and services within the oil and gas industry, GE will lend its domain expertise in subsea production systems that will see the new venture devise technically advanced and robust solutions, especially in new deep-water developments.”

David Dickson, President and Chief Executive Officer, McDermott said: “io has the right endto-end DNA and brings a new style of free thinking that we expect will drive change in how projects are brought to market. Focused on its clients’ priorities, io offers unique value through broad and comprehensive field development expertise. As a leading offshore engineering and construction contractor, McDermott is proud to support io through its depth of technical knowledge, experience and access to the right knowledge for engineering, procurement, construction and installation services, and specialist construction equipment.” io is a GE Oil & Gas and McDermott venture but its independent operating model will ensure it provides the impartial advice that energy companies are seeking, while benefiting from having access to specialist resources to assist in the technical and commercial validation of its work. io is headed by Chief Executive Officer Dan Jackson, an industry pioneer who has a track record of successfully starting and developing engineering consultancy businesses in the offshore sector. Joining him are Mark Dixon,

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Chief Technology Officer, with over 20 years in the offshore oil and gas sector including extensive start-up experience; Tony McAloon, Chief Operating Officer, with a 35-year track record of business governance experience in the industry; and Oliver Dixon, Chief Financial Officer, with 15 years of experience driving companies’ growth strategies.

Dan Jackson said: “The launch of io represents a significant development that will challenge the way our industry operates. io combines industry expertise and powerful thinking to deliver greater certainty of costs and schedule to offshore field developments. The heritage and depth of experience from these two great

parents allows the best talent in the market to come together and offer something new to operators during current challenging market conditions.

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MIDSTREAM & PIPELINES

Do You Have Your Acoustics Under Control?

OGI’s Emma Patten sits down with the Vibratec Akustikprodukter CEO, Mr Svante Hagerstrand on the effects of vibration control on the shipping, offshore, oil and gas industries. Vibratec is one of the leading authorities on noise and vibration control and reduction, and fill readers in on the solution to this problem faced by many offshore companies.

OGI: Could you start by explaining Vibratec Akustikprodukter’s credentials and experience in the field of field of shock, vibration and noise reduction? We understand you are one of the world leaders in the field. Could you tell our readers the breadth of your experience, how long you have been active, and your worldwide reach?

Vibration isolator for an offshore turbo compressor getting the final touch.

Hagerstrand: Vibratec was founded in 1988 by a man named Lennart Söderman. So in the beginning it was just one man and the activities were mainly for marine applications such as vibration isolation of engines and exhaust pipes. Mr Söderman had a focus on engineered solutions using only the best available products; this means he strongly disliked rubber and only used all metal isolators. All the way from the start Vibratec has been a provider of solutions and not a supplier of products – and in the process always focused on long term functionality and quality. Today we are 30 employees following this original principle. We do measurements, design and have our own in-house manufacturing facility trying to have control of all stages in the process.

We have not done much marketing, but our reputation has gradually spread. It has shown that our concept – not compromising on quality and engineering - is well suited for offshore where durability, safety and quality is essential. So nowadays the offshore sector is one of our most important markets where we supply to Siemens, Dresser-Rand, MAN, GE etc.

I myself started in 1998 as an engineer – by then we where 5 people. I took over as CEO in 2007 and today we are 4 companies (Norway, Denmark, Sweden, Estonia), and we have agents in different parts of the world.

OGI: We understand that Vibratec’s solutions are applicable to multiple industries. Could you elaborate on the problems many companies face in the offshore and marine environment with respect to vibration and noise? And further, if left unchecked, what are the potential medium and long term adverse effects to not dealing with this problem directly?

Hagerstrand: In the offshore environment, the major problems associated with vibration come from sources such as generator sets, compressors, pipes and pumps. The vibrations can be harmful to equipment and personnel but can also be transmitted and radiate as structure borne noise in cabins etc. To isolate the source of the vibration is always preferable, and doing it correctly from the beginning is always easier and cheaper than to adjust an existing problem. In some cases complete

structures such as accommodation modules have to be put on anti-vibration mounts.

Fatigue in steel structures, welds, bolts etc are common effects from long term exposure to vibrations. If vital components break on an offshore platform this can in worst case cause production disturbances meaning a substantial loss. For the people working in this environment vibrations can indeed also be harmful, but normally the high noise levels are the problem, not the vibrations. Hearing loss,

“

...the major problems associated with vibration come from sources such as generator sets, compressors, pipes and pumps.

CEO Svante Hägerstrand receives the Roslagen, Sweden “Company of the Year 2014” award.

”

communication misses, sleeping problems are for instance non-wanted effects of noise.

OGI: So if a company is experiencing these sorts of situations, clearly you can see that this is a problem worth investing in. What sort of solutions can Vibratec provide for a company, both offshore and onshore (with pipe systems)? Where would the shock isolation and vibration control be applied and what would be the immediate and medium term effects of such a solution?

Hagerstrand: Vibration isolation is basically done by introducing an elastic part – an isolator or anti-vibration mount (AVM) – between the vibrating source and the structure. The softer this isolator the better vibration isolation – roughly speaking. The characteristics of the isolator must be engineered based on disturbing frequencies and ground stiffness but also take into account different loads from storm, waves, inclinations and accidental explosions. Also environmental aspects such as temperature changes, exposure to salt, oil, gasses etc must be taken into account.

Isolating a vibration source mean less structure borne noise, which also lead to lower noise levels. The noise source itself, however, will continue to radiate noise (in fact this noise may increase a bit when a machine is elastically suspended). So for isolation of airborne noise this has to be done with a noise hood or enclosure.

To come with a solution, the more information we have about the problem the easier it is for us to give a proposal. In many cases we have to find out the input ourselves by making a visit to the ship or platform and do measurements.

OGI: Many companies have systems that may be quite complex and varied between the different projects. When dealing with a solution provider such as Vibratec, our readers usually question whether a company could provide a tailor or bespoke solution to their problem. Does Vibratec provide a customised solution, and if so could you elaborate on how the process works before and after implementation?

Hagerstrand: Indeed, the problem looks different every time. When it comes to offshore anti-vibration mounts or noise enclosures these are always tailor made for the application.

The input and requirements differs as well as the environmental conditions in different parts of the world. There are also different standards that have to be fulfilled.

As we are relatively small and we have our own work shop we have short communication paths between the engineers and the production.

And the engineers working with design and calculations are the same persons that have the direct contact with the client – I would say we are very quick to come with technical proposals or do adaptations. And this is something that is highly valued by the offshore clients.

Another quite common application is elastic suspension of exhaust pipes. Here we have a range of standard components and products and we try to make use of these as much as

possible. Here our job is rather to choose the correct products and propose how and where to install them to make the complete pipe suspension work – thermal expansion is an important factor to take into account.

OGI: Finally, could you provide our readers with one example or case study where Vibratec’s products and services helped a client?

Hagerstrand: We are right now doing a project on the platform “Island Innovator” in the Northern Sea. The new platform had been in operation barely a year when we were asked to investigate the reasons for the severe vibrations on board. We did measurements on-board and proposed a number of interventions starting with replacing the complete suspension of the exhaust pipes from the 6 diesel generators.

The existing suspension had some fix connections (so called acoustic bridging) and the rest of the pipe hangers where in rubber where some rubber parts had already cracked or melted due to the heat from the pipe. Right now we have Vibratec-staff on the platform exchanging the rubber mounts to all-metal isolators in acid proof stainless steel. We work around the clock two 12h shifts exchanging one pipe at a time. In fact you can gradually experience a decrease in vibration levels for each mount that is exchanged.

Earlier in 2014 on another platform, Edward Grieg, our investigation showed that air borne noise from a compressor was the main problem. In this case we designed a noise enclosure and air intake silencers completely customised to the compressor in question.

With our measurement equipment we are able to make insertion loss measurements on the final ready-made enclosure before it’s delivered and installed. So we can guarantee the function, and we do not have to rely on lab measurements on single panels (which normally is a bit too optimistic).

OGI: Thank you Mr Hagerstrand.

This interview was conducted by Oil and Gas Innovation’s Emma Patten - Investigative Journalist and Vibratec Akustikprodukter’s Group Head, Svante Hägerstrand. For more information contact Vibratec Akustikprodukter at: info@vibratec.se or visit: http://vibratec.se/ Phone: +46 176 20 78 80

All metal isolators for offshore pipe support.

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MIDSTREAM & PIPELINES

Statoil Awards Contracts for Services at Seven Coastal Bases Statoil has awarded the service contracts for seven bases for the company in Norway. These contracts have been awarded to NorSea Group AS, Saga Fjordbase AS and Asco Norge AS. The contracts awarded include terminal and warehouse services as well as storage and pipeline handling. “These contracts, which will involve a long-term cooperation with the chosen suppliers, will result in great savings for Statoil’s logistical operations. Logistics represent some 10% of our field costs and making base operations more efficient is essential for extending the lifetime of the fields we operate,” says Astrid Sørensen, SVP for operations in Statoil.

T

he contracts, which in total are valued at roughly NOK 5 billion over a 10-year period, will therefore ensure a high level of activity and value creation over a lengthy period.

“Services at all seven bases in Norway have for the first time been subject to tender at the same time, and it has been good to see many companies making bids. The results of the tender establish the basis for safe and efficient operations at Statoil’s coastal bases in the years ahead,” adds Sørensen.

NorSea Group AS has been awarded the contract for terminal and warehouse services, plus storage and pipeline handling, at Dusavik in Rogaland, Kristiansund in Møre and Romsdal and Hammerfest in Finnmark, as well as terminal and warehouse services at Mongstad and Ågotnes in Hordaland and warehouse services, plus storage and handling of pipelines in Florø in Sogn and Fjordane.

Saga Fjordbase AS has landed the contract for terminal services at Florø in Sogn and Fjordane, while Asco Norge AS has been awarded the contract for terminal and warehouse services, plus storage and pipeline handling, at Sandnessjøen in Nordland.

“In addition, Statoil is taking several steps to increase the efficiency of the logistics chain between the coastal bases and our offshore installations. We will be achieving considerable economies of scale and synergies by introducing new sailing schedules for the supply of our offshore installations and a

34

greater degree of specialisation at the different bases in the forthcoming contract period. The aim is to ensure long-term activity and value creation on the Norwegian continental shelf.”

The contracts will have a duration of six years and will start up on 1 July 2015. They also include options for an extension of two plus two more years, so that they will have a duration of 10 years should all the options be exercised. “During the second half of 2014 we

completed a thorough bid process in which price, quality and technical competency were carefully evaluated. The bid process gave participants the opportunity to offer their services. Statoil and the industry are in a situation where we have to reduce our costs and increase operational efficiency. These new base contracts will make a significant contribution here,” says Jon Arnt Jacobsen, SVP for the supply chain.

MIDSTREAM & PIPELINES

What If There Was a Way to Protect Assets from Corrosion Regardless of Shape, Movement or Complex Design?

Corrosion is, within most engineers divisions, a perpetual problem which is fundamentally, a losing fight with no end other than expense. These problems are dramatically increased within the oil and gas industry.

U

nfortunately, corrosion and the predatory degradation of vital components is every engineer’s problem and nightmare, and the cost of dealing with this relentless issue ends up swallowing up large portions of budgetary constraints, which should be set aside for development, forward momentum and investment. From seized gate valves to galvanic instigated corrosion on flanges and piping joints, corrosion is every oil and gas network employees problem and unlike the utilities giants or the DNO’s that haphazardly throw money around at problems and have the ability to deal with reactive maintenance as and when required, the offshore engineering companies within the whole of the UK must try to plan and

Before protect their assets in order to try to ensure reinvestment in the future. With continual firefighting against corrosion, corroded assets,

“

Oxifree is a corrosion prevention system, ...that WILL preserve the life of assets for over 20 years.

”

stuck valves and leaking pipe joints, annual budgets set aside for development are cut by 36% instantly as to deal with the repairs and ensure the network does not fail.

What if there was a way to protect assets from corrosion regardless of shape, movement or complex design? What if there was a way to coat and forget assets and not worry about them for 20+ years? What if there was a way to plan for the future and safeguard funds for development, for jobs and for the future?

If there were a way to apply a simple coating to assets, to complete valve units, to flanges and pipe supports, that offers 20+ years of fit and forget solution; if there were a way to arrest any degradation / further degradation of aging assets that still function with NO surface preparation or to protect new installations and guarantee that in 20 years’ time they will still look and function like new, would you take it?

Would you invest in a method that is proven to work, and will slash maintenance and contractor fees? Can the water companies in this current era in the UK afford not to?

There is a solution that provides all of the above and more; there is a solution used within the mining industry, utilities, the oil and gas production industry, food production industry and in the civil engineering industry that has the ability to save millions of pounds to the supplier. Pound for pound is a pittance compared to costly maintenance, repair and replacement, all with a simple Planned Preventative Maintenance (PPM) schedule and that product is Oxifree.

Oxifree is a corrosion prevention system, that forms exactly to the substrate, with a built in corrosion inhibiting agent, that does not adhere, does not leave a sticky or messy residue and that WILL preserve the life of assets for over 20 years. This encapsulation method is pure and simple as it sounds; it is a plastic polymer that is heated to melting point via a purposely designed hopper, then pump fed through a heated hose and through a heated gun directly onto the substrate as a jet of liquid.

This liquid cools instantly and forms directly around any shape and form to create a naturally impervious cocoon around the substrate. This plastic has impregnated inhibitor oil within the polymeric compound, which is designed to bleed onto the surface of the substrate actively creating a barrier to prevent any capillary action of moisture and electrolytic particles, thus actively preventing corrosion rather than delay it. Being an oil secreting After Coating

polymer, these plasticised methods do not adhere to the substrate and can easily be removed, better still, the formed plastic coating can simply be cut and pulled away and re-melted for reuse, Oxifree IS recyclable and re-useable. Oxifree is the way to safeguard assets and IS THE asset life extension solution.

Over the past years, Oxifree UK, as a company and brand, have grown at a steady rate. With the past 12 months being the most significant

growth period, we are now in such a strong and proven position that a host of super-major oil and gas giants opt for Oxifree as direct contractors. Recently, the likes of Total Oil, BP, Chevron, Talisman, ConocoPhillips, SSE and Interconnector have seen the benefits of Oxifree and all of these clients, present and future, are fully geared up to reap the financial rewards of asset integrity protection and preventative maintenance techniques; that are designed to save the end user money and

reduce the impact on the environment associated with manufacture of costly metalwork.�

Speaking about the future plans of Oxifree UK, Richard Woodward, Operations Manager of Oxifree UK remarked by saying: “Everyone employed by, and involved with, Oxifree UK have the same goal; to make Oxifree a household brand within all variants and aspects of engineering. In the short term this will involve further work, communication and education within the oil and gas market and all manner of engineering industries to enable businesses to see the benefits they can obtain, particularly in regard to finances and environmental concerns, by committing to prolong existing assets, rather than buy new.

Our long term goals are to extend our services throughout Europe and grow the Oxifree brand throughout the world.�

Oxifree UK Limited Telephone number: +44 (0) 330 330 0004 Website: www.oxifree.co.uk Email: info@oxifree.co.uk

MIDSTREAM & PIPELINES

Enhanced Bakken Supply Chain Initiative Launched by Williston Economic Development Williston Economic Development announces the Enhanced Bakken Supply Chain Initiative.

The initiative aims to reduce costs and increase efficiencies for Bakken operators while expanding manufacturing and logistics business development in the Bakken region.

“The oil and gas operators in the Williston Basin face a higher break-even crude price due to higher costs and inefficiencies in the Bakken supply chain,” stated Shawn Wenko, Executive Director of Williston Economic Development. “On the other hand, we have regional manufacturers and logistics companies that can serve the oil and gas industry in a way that reduces costs and turn-around times as this market begins to mature.”

T

o kick off the initiative, Williston Economic Development has partnered with DAWA Solutions Group to produce the 1st Annual Manufacturing and Logistics Conference (ManLog) March 25-26, 2015 in Williston, North Dakota.

The energy industry utilizes high volumes of commodities and an array of specialty tools and equipment; however, the majority of these products is located hundreds of miles away and is costly to source and transport.

ManLog will bring regional businesses closer to the Oil Patch together with the oil and gas industry to understand the industry and explore mutually beneficial business development opportunities.

ManLog will bring together manufacturers, machinists, suppliers, commodity sources, manufacturer’s reps, logistics companies and other stakeholders with the energy industry to explore these opportunities.

“One of our goals in 2015 is to help more of our regional manufacturing firms get connected to the oil and gas industry,” said Wenko. “Given the magnitude and expected duration of this $30 billion industry, now is the time to grow and diversify our economy throughout the region.”

The Enhanced Bakken Supply Chain initiative reaches far beyond the Williston Basin into the greater region. “We fully recognize the labor and other challenges facing manufacturing in the Williston basin,” explains Jeff Zarling, President of DAWA Solutions Group. “While we may need to make widgets in Wahpeton, it is important to own the supply chain in Williston. The well-head is where the problems exist, the relationships are built, and the solutions are developed.”

“We need to start connecting those dots with

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regional manufacturers that can deliver more cost-effective products and services. The end result is a win-win with reduced costs for operators and economic development and diversification for companies and communities throughout the region,” added Zarling. “At a time when our regional Ag manufacturers are facing a downturn, the oil and gas industry represents an opportunity to diversify their markets.”

opportunities that exist in value-added energy business development. North Dakota’s oil and gas production provides significant feedstock for value-added energy development or downstream opportunities such as LNG processing, fertilizer production, petro-chemical plants and others.

ManLog will feature informative presentations, industry related panel discussions, product and opportunity exploration, networking opportunities, and a trade show.

Beyond opportunities in the product and service supply chain that serves the oil and gas operators, the conference will explore Stanley, ND.

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Market Reporting Consulting Events

MIDSTREAM & PIPELINES

Harsh Measures for Harsh Pipeline Environments Oil and Gas Innovation’s Emma Patten interviews Pipeshield’s Technical Director, Peter Keel, on the importance of subsea protection systems for pipelines and cables. Their particular protection and stabilisation systems involve mattresses which can withstand the sometimes harsh subsea environmental conditions.

Emma: Could you start by explaining Pipeshield’s credentials and experience in terms of protection of pipelines for the Oil and Gas sector? Could you tell our readers the breadth of your experience, how long you have been active, and your worldwide reach?

medium and long term. From your experience what are some other factors which can lead to the damage of pipelines and subsea cables over a period of time? And what would the potential impacts be if some sort of rupture of significant damage were to occur?

Peter: Pipeshield has been trading for 15 years and the directors were previously involved in similar activities for many years before that. Thus the directors have over 50 years of combined experience working with subsea protection systems and ideas starting with simple structures and mattress designs and we have subsequently designed many different schemes and structures to accommodate a wide variety of protection and stabilisation issues. We have provided solutions in a range of water depths from ultra-deep water i.e. over 1000m to protecting lines in shallow and tidal areas.

Peter: Damage to pipelines can be attributed to many things some are in the control of the designer and some are due to understanding the site conditions. Mechanical damage to pipelines is the main area where we become involved and damage can occur from dropped objects, fishing activities, anchor damage or movement from environmental conditions.

Many of our solutions have been individually assessed to provide cost efficient methods of protection where systems in other materials would be much more expensive. Additionally we keep a stock of standard products to permit a rapid response to clients who require BiFlex mattresses immediately for offshore work. We provide many alternative ideas to solve pipeline protection issues whether they are for support systems for freespan issues or providing pipeline crossings arrangements or impact protection systems. Many of these schemes are specifically designed as each application is different as soil conditions, wave loading, protection requirements etc. are never the same from project to project.

Emma: One issue contractors, grouting and pipe laying companies repeatedly run into is uncertainty of conditions on the sea bed when working in subsea environments. Many times they will refer to mapping, geographical and software firms to help them out when initially laying cable and/or pipe. But this does not necessarily guarantee pipe integrity over the

Soil conditions are most onerous when they are either too soft or too hard. Over rocky terrain pipelines may suffer from unacceptable freespans and either fabric formwork support systems or a simpler pre packed grout bag placement may be applicable. In very soft soils there is always a danger of the line sinking into the soil when for reasons of expansion allowance or cooling etc. the lines need to be kept above the seabed.

Mattress support is an ideal solution as the effective bearing pressures are very low and thus mattresses can be placed on extremely soft soils yet still provide a durable support platform. For the design case, rupture of the pipeline and the consequences of this is not an

option and thus the design or the protection system ensures that such damage by impact or excessive movement is prevented by the use of Pipeshield products.

Of course in the event of catastrophic failure the operator must have plans in place to shut down the line and instigate repair work.

Existing mattress of reinforced concrete protection systems can easily be removed as our protection systems are all gravity based.

Emma: The subsea environment can be quite a difficult and hazardous environment to operate in, not to mention the varying designs of individual subsea pipeline networks. One gets the feeling that a turnkey solution will not always be optimal for every different challenge out there. Could you explain if and how Pipeshield can tailor solutions for each individual case, if a bespoke solution is needed?

Clients often have predetermined ideas on how they wish to solve a protection or stabilisation issue. We try to devise a scheme that encompasses a practical and economic solution that may or may not be in line with the client’s thinking. Our experience in providing many types of subsea protection issues permits us to offer either conventional solutions or innovative ideas based on previous schemes.

One example was an issue with a jacket structure that had suffered from scour around the mudmats and because the piles were through leg piles and welded at the top. The base of the jacket started to sway due to the annulus tolerance between jacket leg and pile (this phenomenon is known as a bell Mattress production ready for delivery to NPCC for a Qatar Petroleum project

Hibernia cover unit

“

Many of our solutions have been individually assessed to provide cost efficient methods of protection where systems in other materials would be much more expensive.

”

ringing effect). The client had tried a number of schemes to prevent the movement and spent quite a large sum of money and eventually asked us if we could provide a solution. Our idea was to design and fabricate special fabric formwork bags that could be placed under the scour holes at each mudmat and inflate with grout such that a plug was formed. This would permit grout to be pumped into the pile / leg annulus. To prove the system a full scale trial was carried out which proved successful. The subsea operation was then successfully carried out such that after just one of the legs being grouted the jacket movement had stopped.

Emma: Finally, it is well known that Pipeshield has completed projects for many industry players around the world with your client list including the likes of Shell, Halliburton, McDermott and ExxonMobil to name a few. Could you enlighten our readers of a particular case study where you helped a client with your products, for example your concrete mattresses?

Case studies for pipeline protection include a dropped object protection system on the Hibernia project to protect two lines from damage from a dropped container. The impact requirement was quite onerous being over 200kJ and the design assessed how the container would impact the structures. The protection consisted on a number on units butted together on the seabed to provide

continuous protection from an object accidently dropped from the platform.

We were awarded a project by Allseas to design and manufacture 9m long Uni-flex mattresses for the Gorgon and Jansz LNG project.

In total we provided over 600 mattresses to support and stabilise the gas import lines to ensure that they were adequately supported over soft soils including Bi-Flex mattresses for crossing supports.

The work was carried out in Malaysia and the mattresses were barge transported to the field. This proved to be significantly cheaper than manufacturing in Australia. In addition to the mattress manufacture a number of tests were carried out to assess frictional resistance between the pipeline and the mattresses. Trials were also undertaken to assess the degradation of the mattress rope to assess for both subsea and in air exposure to confirm assumptions of rope durability.

A recently completed project comprised 744 Bi-Flex mattresses all at 450mm thick to provide cable stabilisation for NPCC for a Qatar Petroleum project in the Middle East.

The mattress weights varied from 6.6T to over 22 T and the application was to provide intermittent covering for a series of cables for a number of Sensor Tower Platforms to ensure cable stability. The project was very fast track carried out in the UAE and required night shift work and careful co-ordination to be able to manufacture many units per day and to be able to stack and store ready for batch shipment.

This interview was conducted by Oil and Gas Innovation’s Emma Patten - Investigative Journalist and Pipeshield’s Peter Keel Technical Director. For more information contact Pipeshield at: info@pipeshield.com or visit www.pipeshield.com

LNG

Oil Price Collapse Impacts LNG, Will Spur Transaction Activity After more than three years of US$100-110 per barrel oil, prices collapsed by nearly 50 percent in late 2014 as the market lost its “manager” after OPEC refused to cut production. Combined with modest oil demand growth since 2010, restored production in countries like Libya and Iraq and the huge increase of US light tight oil production, OPEC’s decision has contributed to a massive supply/demand imbalance and the resulting price drop. The sharp decline in prices has also impacted global gas markets, as oil-linked LNG has fallen to levels on par with hypothetical US LNG export prices.

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ive years ago, “the worry was ‘peak oil’ and whether or not we’d have enough oil supply, but now the concern is ‘peak demand’,” said Deborah Byers, the Oil & Gas Leader for Ernst & Young LLP in the US. “Unless there is an unexpected change in the supply/demand balance, a substantial oil surplus — and hence low oil prices — could continue through the first half of 2015.”

Oil The IEA expects oil demand growth to be lower in 2014 — less than 0.8 percent or less than 1 million barrels per day. Growth in 2015 is expected to be only slightly higher. At the same time, the IEA forecasts continued strong gains in non-OPEC oil production, primarily led by the Americas. Based on current forecasts of oil demand and non-OPEC supply, in the first half of 2015, the market is expected to need substantially less than 30+ million barrels per day of crude from OPEC, the amount the cartel has been producing and vowed to keep producing. If OPEC holds to its vow and continues to produce more than 30 million barrels per day and there are no unexpected supply outages, the market could see a surplus of as much as 1.5-2 million barrels per day in the first half of 2015. By the second half of the year, the price collapse is expected to cause US production growth to slow somewhat, but critically, not to reverse. Seasonal demand increases will also play a factor in the slightly improving supply/demand fundamentals.

Gas Although US natural gas prices have weakened less than oil prices, they are still declining due to continued high production, weak early-winter demand, relatively high gas storage levels and the decline in NGL prices.

As a result of their link to oil prices, global gas prices also declined in Q4. Most notably, the oil price collapse has minimized the advantage

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of spot-priced gas since oil-linked LNG trading prices are now essentially on par with hypothetical US LNG exports. “Despite the weakening price spread, US LNG projects are still very competitive due to their low capital costs and the supply is attractive for flexibility and diversity,” Byers said. “However, the LNG projects that don’t yet have contracts for their outbound gas will face much more pressure, as Asian buyers have less incentive to sign new contracts.”

Downstream Refining margins declined in Q4, except in Asia, though 2014 was a solid year overall.

Average annual margins across the globe were down slightly except in the US East and Gulf Coasts. Refiners in the US Midwest had another strong year; though their advantage lessened as transportation bottlenecks were removed. Notional cracking margins on a New York Mercantile Exchange 3-2-1 basis recovered to around $25 per barrel

during the year before sliding again in Q4.

Looking forward, refining margins are likely to come under pressure in Q1 2015 as more refining capacity comes on line amid high global inventories and with only modest oil demand growth. The expected narrowing US crude differentials will also limit some of the advantage to US refiners.

Oilfield services Monthly global rig counts are not yet reflecting low oil prices due to reporting time periods; though the US weekly rig counts are now starting to decline. Reductions in upstream spending will have little impact on short-term production, but should start to slow growth in US production. In 2015, capital expenditures may be cut as much as 20-25 percent as companies seek to keep debt levels under control and slow production growth. Upstream operators are expected to put significant pressure on oilfield services supplies to reduce costs. In response, oilfield services firms will fight to retain market share through both innovation and consolidation.

Transactions Global oil and gas transaction activity posted a solid fourth quarter and a big rebound for 2014 as total reported deal value rose 10 percent quarter over quarter and 67 percent year over year. However, total deal volume (i.e., the total number of deals) was down 39 percent in Q4 and down 20 percent for the year. Global upstream deals followed a similar trend as deal volumes and were down 22 percent during 2014, while upstream deal values rose 21

“

Refining margins declined in Q4, except in Asia, though 2014 was a solid year overall.

percent higher than the previous year.

Midstream transactions continued to dominate the space during Q4 with 19 deals in North America alone for a reported value of $56.6 billion. Oilfield services also had a very good Q4, powered by the Halliburton/Baker Hughes deal.

“Looking forward, the oil price collapse will spur increased transaction activity during 2015 for a couple of reasons,” said Mitch Fane, the Oil & Gas Transaction Advisory Services leader for Ernst & Young LLP in the US. “On one hand, upstream companies with strong balance sheets operating in low-cost basins will be well-positioned to not only weather the dip in prices, but also scoop up assets from those with less liquidity or more capital intensive assets. At the same time, companies across the O&G segment will be pressured to review and reshape their portfolios to optimize capital and create higher returns.”

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PROCESSING

Case Study on Falling Film Evaporation: The Most Efficient Energy Optimisation for Exothermal Processes Bronswerk Heat Transfer, provides us with a case study helping one of their customers integrate a new process and cost saving mechanism into their new factory. Essentially the heat given off of the old factory was too cold to be used in a way where it could be recycled back into the process cycle and therefore cut down on process demand for external heat. A three stage solution was applied in this situation and the details are in this special report.

Background After their “old” factory was well past its service life, one of our customers decided to renew it. The plan was not to make the new factory a copy/paste of the old factory but to incorporate new understanding into the process technology. Moreover, the integral energy management had to be optimised.

In the old factory, extra heat was added to the “production process” and cooled off in a cooling tower together with the exothermal heat from the process. However, the temperature of the released heat was simply too low to still be useful.

In the new factory, it was decided to raise the temperature of the process so that the released heat could be usefully applied, that heat now being used to create “vacuum steam”.

Steam compression then produces a higher pressure and temperature so that the steam can be incorporated in the process cycle. This reduces the process demand for external heat, and much less heat has to be removed by means of cooling towers.

“

The decision to use steam generators based on the falling film principle results in equipment with the highest possible steam pressure and therefore a good investment.

”

exchanger there is also a separation tank.

In that tank, a water level is maintained that is replenished by a supply of fresh water, resulting in the separation of steam and water.

The water level is kept above the top of the pipe plate of the steam generator, and because the tank and the heat exchanger function as communicating vessels the pipes are filled with water. The water in the pipes evaporates due to the heat supplied by the hot medium, so that the weight of the water column in the pipes reduces, causing it to rise. The mixture of steam and water flows into the separation tank, the water flows downward and the steam flows out through a connection at the top of the tank.

The Thermosyphon Reboiler

The Situation The product of the exothermal process enters at a temperature of 110˚C and must be cooled down to 90˚C. On the one hand, the steam pressure in the steam generator is set as high as possible to achieve the steam condition that requires the least possible driving power from the compressor. On the other hand, excessive steam pressure would produce too small a temperature difference between the heat source and the steam, which would result in a much larger required heat transfer surface so that the heat exchangers would become too expensive. Moreover, the process medium has a high viscosity, which results in the wall heat transfer of this medium to be low. That is why it is important to find an evaporation temperature as close as possible to 90˚C, but with sufficient driving force to realise an efficient design in terms of size and price - the search for optimisation.

Three solutions were studied to establish how steam can be generated in the most efficient way.

1: The Thermosyphon Reboiler This is a vertical heat exchanger with the viscous process medium on the outside of the pipes, and the water/steam mixture inside; see drawing. Alongside the vertical heat

Kettle Type Reboiler The big problem with the principle in this situation is “boiling point suppression”. For example, take an evaporation temperature of 84˚C with a corresponding evaporation pressure of 0.556 bar. The vertical pipe length is 6 metres. This 6 metres of extra water column produces a pressure at the bottom of the pipes of approx. 1.156 bar, with a corresponding evaporation temperature of 113˚C! As a consequence, the water does not boil in a large part of the pipes, but takes place only though a low heat transfer coefficient. This adverse boiling suppression gives rise to a far from optimal heat transfer process and eliminates this solution.

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2: The Kettle Type Reboiler

T

he advantage of this solution is that no individual separation tank is necessary; see drawing (previous page). The shell has a much larger diameter than the bundle (the diameter of this bundle is approximately 2 metres), creating an area of steam above the bundle with natural separation of steam and water. The horizontal body includes a water level that is maintained at a few centimetres above the pipe bundle.

Here, too, the consequence is boiling point suppression. Due to the level of liquid, the water pressure in the bottom pipes of the bundle is much higher than the 0.556 bar, with the result that the water here does not evaporate, resulting in boiling suppression.

The highly viscous medium now runs through the pipes and would lead to a very low heat transfer coefficient because of the low Reynolds number. The use of turbulence promoters in the pipes somewhat eases this problem. However, the adverse boiling suppression means that this solution must also be eliminated.

3: Falling Film Evaporation This solution creates a situation in which no liquid level is maintained over the bundle and no boiling suppression can take place. This solution also involves a vertical heat exchanger with evaporating water in the pipes.

VAPOR OUT

Falling Film Evaporation

LIQUID IN

VAPOR OUT This condensate flows downward from the top of the pipes as a thin film. On the way down, part of the water evaporates and is led upward as steam (against the current of the falling water). Due to the thin water film, the heat transfer

The plan was not to make the new factory a copy/paste of the old factory but to incorporate new understanding into the process technology.

Diagrams courtesy of Bronswerk BV

LIQUID IN

coefficient to the water is very high! The nonevaporated water exits the pipes at the bottom and falls into the bottom tank. Replenishment condensate is also pumped into this tank. A fixed water level is maintained in the tank; this level controls the supply of fresh condensate.

From this bottom tank, excess water is led to the top of the pipe plate, where a special header ensures that every pipe is supplied with sufficient water and that this water is evenly distributed over the pipe wall.

To compensate for the inferior heat transfer coefficient of the product, low-finned pipes are used on the outside of the pipes thus the heattransfer surface is increased by roughly a factor of three by creating a threaded profile on the pipes.

The solution is a perfect example of simplicity and robustness. It is controlled by means of two quantities. One involves the level in the bottom tank: this level directly controls a valve for the supply of the fresh condensate, a simple and effective solution.

In addition, it is important that enough water is sent to the top of the pipe plate but also that the water level is not too high. The pump is adjusted so that enough excess water is pumped upward. If the formation of steam reduces (for example, because the process is running on a lower capacity), an overflow pipe is installed in the top tank so that the level can never become too high.

Conclusion: The decision to use steam generators based on the falling film principle results in equipment with the highest possible steam pressure and therefore a good investment. This is the best possible economic balance between CAPEX and OPEX.

Falling Film

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For more information about Bronswerk Heat Transfer products and services, please e-mail info@bronswerk.com or call: +31 33 24 72 500.

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HEALTH AND SAFETY SPECIAL

Energy: Commission sets out new safety standards for offshore oil and gas operations Brussels – 27 October. The likelihood of a major offshore accident in European waters remains unacceptably high. With a stringent safety regime it is possible to bring the risk of such an accident down to the absolute minimum. Damage done to the environment and coastal economies can be significantly reduced if an effective emergency response plan is put in place beforehand. This is why the European Commission has proposed today a new law which will ensure that European offshore oil and gas production will respect the world’s highest safety, health and environmental standards everywhere in the EU.

E

nergy Commissioner Günther Oettinger said: “Today, most oil and gas in Europe is produced offshore, often in harsh geographical and geological conditions.

Given our growing energy demand, we will need all the oil and gas from beneath our seas. But we need to prevent accidents like Deepwater Horizon in the Gulf of Mexico from happening. Securing best industry practices in all our offshore operations is an undisputable must. Today’s proposal is a crucial step forward towards safer offshore activities to the benefit of our citizens and our environment”.

Environment Commissioner Janez Potočnik said: “We have learnt our lessons from last year’s Deepwater Horizon accident. Today’s proposed regulation will help us prevent such future crises from happening in all marine waters which fall under EU Member States’ jurisdiction. This safety update is good news for the environment, but it’s also good news for business which will be able to deploy its operations in a predictable framework. There is ample evidence from past accidents that prevention is better than cure.”

The new draft regulation sets clear rules that cover the whole lifecycle of all exploration and production activities from design to the final removal of an oil or gas installation.

Under the control of the National regulatory authorities, European industry will have to assess and further improve safety standards for offshore operations on a regular basis.

This new approach will lead to a European risk assessment that upgrades continuously by taking into account new technology, new know-how and new risks. It introduces requirements for effective prevention and response of a major accident: Licensing The licensing authorities in the Member States will have to make sure that only operators with sufficient technical and financial capacities necessary to control the safety of offshore activities and environmental protection are allowed to explore for, and

48

produce oil and gas in EU waters.

Independent verifiers The technical solutions presented by the operator that are critical for safety on the installation need to be verified by an independent third party prior to and periodically after the installation starts into operation.

Obligatory ex ante emergency planning Companies will have to prepare a Major Hazard Report for their installation, containing a risk assessment and an emergency response plan before exploration or production begins. These reports will need to be submitted to national authorities who will give a go-ahead if satisfied.

Inspections Independent national Competent Authorities responsible for the safety of installations, who will verify the provisions for safety, environmental protection and emergency preparedness of rigs and platforms and the operations conducted on them. If an operator does not respect the minimum standards, the competent authority will take enforcement action and/or impose penalties; ultimately, the operator will have to stop his drilling or production operations if he fails to comply.

Transparency Comparable information will be made available to citizens about the standards of performance of the industry and the activities of the national competent authorities.

This will be published on their websites.

Emergency Response Companies will prepare emergency response plans based on their rig or platform risk assessments and keep resources at hand to be able to put them into operation when necessary. Member States will likewise take full account of these plans when they compile national emergency plans. The plans will be periodically tested by the industry and national authorities.

Liability Oil and gas companies will be fully liable for environmental damages caused to the protected marine species and natural habitat.

For damage to waters, the geographical zone

will be extended to cover all EU marine waters including the exclusive economic zone (up to about 370 km from the coast) and the continental shelf where the coastal Member State exercises jurisdiction. For water damage, the present EU legal framework for environmental liability is restricted to territorial waters (about 22 km offshore).

International The Commission will work with its international partners to promote the implementation of highest safety standards across the world.

EU Offshore Authorities Group Offshore inspectors of Member States will work together to ensure effective sharing of best practices and contribute to developing and improving safety standards.

The offshore industry in different Member States operates to different environmental, health and safety standards. To date EU legislation does not cover all the aspects of the offshore oil and gas industry and national legislation is very different between Member States. Despite action by some Member States to reform their systems after disasters in the North Sea in the 1980s there is still a significant risk of severe accidents in the EU. Past events show that at least 14 major offshore disasters – such as well blow-outs and total loss of production platforms - have occurred around the world in the last 30 years, 5 of them in the last 10 years. Possible consequences of a major accident are extreme. They include loss of lives, major environmental damage, and collateral damage to coastal and marine livelihoods. In financial terms, as we have seen, an event on the scale of the Gulf of Mexico disaster can cause damages of Euro 30 billion.

In conjunction to this legislative proposal, the Commission is putting forward a proposal for the EU to accede to a Protocol of the Barcelona Convention that protects the Mediterranean against pollution from offshore exploration and exploitation activities.

HEALTH & SAFETY SPECIAL

Slips, Trips & Falls Cost the Around £800M per Year According to the HSE The Health and Safety Executive (HSE) is Britain’s national regulator for workplace health and safety. It works to prevent death, injury and ill-health to those at work and those affected by work activities. Slip, trip and fall incidents in the workplace cost 40 workers their lives last year and cost society an estimated £800 million each year, the Health and Safety Executive (HSE) warned today as it launched a hard-hitting campaign.

H

SE figures show that slips and trips are the most common cause of major workplace injury in Britain. More workplace deaths are triggered by falls from height than any other cause, according to official statistics.

In addition to 40 fatalities, there were over 15,000 major injuries to workers, as well as over 30,000 workers having to take over three days off work.

As well as the tragic human cost, preventable slips, trips and falls are having a serious financial impact on the UK. HSE estimates that the combined financial costs incurred by society as a whole is around £800million a year, at a time when both businesses and individuals are struggling financially during the current recession.

In response, HSE is launching a new phase of its Shattered Lives campaign, aimed at reducing slips, trips and falls in the workplace.

The hard hitting campaign involves raising

“Every one of the 40 deaths caused by slips, trips and falls preventable.“ awareness of the impact of slips, trips and falls in the workplace and direct people to the new Shattered Lives website (www.hse.gov. uk/shatteredlives) for practical advice and guidance.

The campaign is targeted at those sectors were there are a high number of slips, trips and falls incidents each year, specifically, health and social care, education, food manufacturing, food retail, catering and hospitality, building and plant maintenance, and construction.

On the new campaign website, people will be able to find out information on how they can easily, and cost effectively, reduce the risk of slips, trips and falls in the workplace, and see what other organisations, such as Sainsbury’s and First Line Digital, have done. Included on the site is an online tool (STEP) and a work at height access equipment toolkit (WAIT).

Advice ranges from how to deal with spills and other slip risks, to the importance of using ladders correctly to reduce the risk of falling from height.

Peter Brown, Head of the HSE’s Work and Environment Division, said: “These figures highlight the very real and serious nature of preventable slip, trip and fall incidents in the workplace. Slips, trips and falls might sound funny but they shatter the lives of thousands of British workers ever year.

“Making improvements doesn’t need to cost the earth and we are encouraging people to visit the Shattered Lives website, where they will be able to get simple and cost effective solutions to help manage slips, trips and falls hazards in their workplace.” Brendan Barber, TUC General Secretary, said: “Every one of the 40 deaths caused by slips, trips and falls preventable. The key is proper risk assessment and control measures as highlighted by the HSE. Unions will warmly welcome this practical hard-hitting campaign and will be raising the issue with employers wherever and wherever they can.”

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SLIPS & TRIPS

Safety Is Paramount in Any Work Environment, Let Alone the Oil and Gas Industry. Our Partner’s CableSafe Help Us a Look at Some Housekeeping Measures That Can Be Taken to Help Improve Safety and Your Bottom Line.

Slips, trips and falls account for 25% of workplace liability accidents (HSENI Annual Report), while 95% of major slips and trips result in broken bones, and they can also be the initial cause for a range of other accident types such as falls from height. Using the 80/20 rule, the main focus should be to reduce these common accidents. Let’s look at common causes of workplace accidents, and find some quick, free or low costly solutions to prevent this unnecessary evil..

Preventing Slips

S

lips often happen due to wet or slippery floors. Wet and slippery floors can sometimes be easily tackled by small adjustments in the work environment. For example, a change in the cleaning regime proved one company to reduce its slips by 80%.

Think small adjustments; choose a convenient time to clean the floors when most employees are behind their desks, workstations or worksites in the field, rather than cleaning floors at 7:45 am, just before all employees arrive to work, or just before the shift change.

Have a door mat for all entry points, it’s cheap and effective.

regimes. Keeping the workplace clean and organized is the clear prevention message in this chapter. Are there any trip hazards in corridors and walkways or in the entire industrial work environment? Think of tripping hazards such as cables, tools, hoses, boxes, pallets, or other objects that could cause a potential tripping accident. Removing these hazards can be done by tying them up next to the walkways, or re-routing these items away from the walk spaces.

hooks are designed to improve safety on the work floor and allow for decent object and cable protection against wear and tear.

Keeping walkways and work areas free of dangerous obstructions is key to safety and good housekeeping.

Checking Your Walkways Check for suitable walkways - Are they in the right place? Are they being used? Are they available for use? What tasks are taking place Trips and falls can be avoided

Simple slip prevention includes using the correct type of slip-resistant footwear.

Remember, if footwear is supplied as personal protective equipment (PPE), it must be supplied free of charge to employees. The decision to involve the affected employees in choosing the right shoes, will help the employees understand the issues and will promote positive change. Also, consider age and construction of buildings, whether there is evidence of leaking roofs, if walkways are exposed to the elements, or whether there is a potential for water, mud, ice or other substance build-up.

The most important factor in slip accident prevention is to have decent grip at all times. In a food industry plant this method reduced slipping accidents up to 60%. Having arrangements for routine cleaning and dealing with accidental spills is normal practice in every company. Where floors cannot be kept clean and dry, again, slip-resistant footwear can prevent accidents.

How to ‘Tackle’ Trips Trips are often caused by uneven floor surfaces and obstacles, or trip hazards. These can be prevented by design and good housekeeping

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Quick solutions to remove hazardous obstructions from the work floor vary, from tie-wraps, steel wires, welding anodes and ‘S’ shaped safety hooks. Cablesafe hooks are a simple product designed to suspend hoses, wires, cables and ropes. “Standard hooks are used by most of the major oil and gas companies, and enable employees to adhere to their housekeeping and safety policies.

According to Westmark, these hooks do not conduct electricity and are heat resistant; the

on the walkway? Are some tasks preventing the employee from seeing where he or she is going?

Lessons: Walkways must be safe to walk over at all times. Confronted with tasks carrying loads of tools or boxes in hand, employees should have the confidence that you and your co-workers have housekeeping elements embedded in their work operation. This can be done by well described company policies and procedures, which should be implemented

through company campaigns and brought into the company culture by training for all employees. . By keeping walkways safe and clean, employees’ experience free walkways with no clutter. Well-marked and obstructed repair sites will have better visibility during construction, maintenance or turnaround activities.

Do you already have enough policies and procedures, but still want to improve the bottom line by safe work attitude adjustment?

Try to apply a teach-by-example approach. For example, a refinery with many contractors, different job requirements and safety policies may pressure the workers to cut corners by not following these company guidelines and procedures. “Employees often work under high pressure, creating unsafe situations and unwanted costly accidents as a result,” says Lodewijk Westerbeek van Eerten, Director of Westmark BV, manufacturer of Cablesafe safety hooks. He explains that a turnaround manager at a refinery hired a low paid student for work place improvement. “They had this guy constantly walk around with a backpack full of hooks and let him try to find as many items as possible to hook up. Cheap, simple and effective, introducing this ‘improvementby-example, not requirement’ did not only provide an immediate result, but it had a positive influence in the way employees worked safer in an unobstructed work environment.”

Slips, trips and falls account for 25% of workplace liability accidents.

Keeping Walkways Safe and Clean At some sites, as well as over 30% of injuries are caused by slips, trips and falls. Industry statistics confirm this. The British Ceramics Confederation did research on this topic and found that when accidents happen, employees are absent from work. This puts pressure on families, costs money, and hurts the bottom line. Could all of this be avoided? Lost time injuries by slips, trips and falls are often simple prevent and can improve the companies’ incident ratings in the short term.

Housekeeping simply improves the workplace for others, who can in their turn dedicate time to focus on their core jobs and appreciate not having to sort their cables and hoses out in the end. A benefit is that hoses and cables do not wear as fast by passing traffic, resulting in fewer spills.

but it will significantly reduce the number of tripping points. Apply housekeeping to keep walk ways helps employees and contractors understand that your company applies high safety standards by tackling direct causes of the highest incident rate; slips, trips and falls.

areas clear of obstructions. Blunt objects in walkways should be well marked and have soft padding. Slips and trips are not only unpleasant, but are costly to the bottom line.

Use common sense to review risks. Discuss “What if ’s…”, and find low cost solutions.

Design and Maintenance of the Workplace Environment

It leaves us with the question; should housekeeping be an essential part of your safety department when it comes to preventing the most likely type of accidents on your work floor?

It is not just good enough to have a walkway; it must be kept clear, no obstructions and no trailing wires. Employees and cleaners need to have “see it, sort it” attitude to ensure these and other work areas are kept clear. Is the cleaning regime effective? Are there enough storage bins on the facility? Have you described this standard type of working in your company?

When assessing the quality of your safety regime, ask the following questions: Is the floor suitable and safe for the workers? Is it fitted correctly and properly maintained?

Are walkways wide enough and do they have no unexpected level differences? Are stairs suitable? Are solid handrails available at every stair case? Do environmental factors such as good lighting conditions also fall in the category of good housekeeping? Is there enough light for employees to identify hazards?

Lessons: Keep it clear, remove cables and hoses and work in a clean environment by suspending obstructions with tie-wraps or hooks from the work floor. This will not only improve the life-cycle of these tools and cables,

Lessons: Floor openings used for maintenance or repair should be well-marked. Make sure lighting is sufficient and that slopes, unbalanced variations in floor levels, and steps are clearly visible. Keep walkways and work

Improving Essential Housekeeping Elements

This article was Written by: Maurits F. Westerbeek van Eerten

CableSafe / Westmark BV +31.33.4614844 info@cablesafe.com http://www.cablesafe.com

HEALTH & SAFETY

Key Industry Sectors Are Facing a Worrying Shortfall in Leadership Capability as They Move into a Period of Activity following Recent Economic Challenges.

Understandably, many businesses ‘stripped out’, or froze their investment in, personnel as they sought to reduce overheads in the face of a declining, or at least static, balance sheet. In addition, following the much used mantra ‘more from less’ – much loved by budget-holders but in real terms ultimately limited by definition - leaders are being asked to manage more projects, and more reports, than previously, frequently against a backdrop of tighter budget and time constraints. The reduction of training and development budgets – a common money-saving strategy in times of downturn - compounds the problem.

P

lenty of theories exist that illustrate the changes in capability required as people move upwards. Of course additional skills are required. What is often unrecognized is that many previously essential skills must be left behind. Commonly those who have shown ‘technical’ expertise are promoted to management positions, requiring them to acquire additional people skills in personnel and stakeholder management whilst leaving behind much of the technical capability that has resulted in the promotion. Those moving from middle to senior management must acquire a deeper understanding of external sector trends and how to apply them to internal strategy. The appointee must be prepared to ‘transition’ – to change their outlook as well as their job description – and move on from earlier, often hard-won achievements. At all levels of promotion they will almost certainly need to be taught new skills, encouraged to leave surplus ones behind, and guided in this transition, if they are to progress as effective leaders.

The Ashridge Management Index (AMI) 2012/131, carried out by Ashridge Business School, found that many businesses are failing to future-proof their leadership teams: 48% of managers say their organisation is not doing enough to develop the next generation of leaders.

Viki Holton, Research Fellow at Ashridge Business School and the report’s co-author, says: “Talent management programmes and succession planning are essential. Without investment in developing the skills and experiences of younger managers it is hard to see how such organisations will continue to be successful. Businesses are at risk of holding back economic recovery by failing to do enough to develop the next generation of leaders.”

What’s the solution?

“I start with the premise that the function of leadership is to produce more leaders, not more followers.” - Ralph Nader Developing the leadership pipeline is a ‘long game’ that can – and must – start before the need arises. The requirement for new leaders is always on the horizon, and in the event businesses understandably want people who

We take time to understand your key issues. are ready to pick up the batons that are often suddenly dropped. The obvious place to look first is within, for people who know the business and demonstrate both the capability and the drive to succeed. Companies who invest in those who show leadership potential, consciously and strategically developing their skills, are in the strongest position to react as the business situation fluctuates.

“Leaders aren’t born, they are made. And they are made just like anything else, through hard work. And that’s the price we’ll have to pay to achieve that goal, or any goal.” - Vince Lombardi Leadership development programmes, often introduced by the HR function, can be excellent for identifying leadership potential.

They can and do play a useful role in creating

awareness of leadership styles and skills and create a common language within the business to develop understanding. The most effective ones are delivered within the organisational context, taking into account the business strategy, and designed with the purpose (to identify and nurture leadership potential) clearly in mind. They have the scope to work individually with delegates and their real time situations, with a strong element of personal analysis.

It is essential to have the active support of senior and middle management if these programmes are to truly nurture the leaders of the future in a sustainable way.

“Great leaders are not defined by the absence of weakness, but rather by the presence of clear strengths.” - John Zenger High potential personnel (in fact all personnel) benefit from 1:1 coaching that again works with real time situations and places high importance on personal analysis, supported by feedback from line managers and key stakeholders - given positively and with the future in mind. The coaching process, when done well in a supportive environment, creates a strong awareness of capability, clarity of aspirations and, crucially, enormous confidence to excel. Many senior managers have carried the habit of personal coaching with them as they have progressed to some of the most senior roles in their industries.

Debunking the myth ‘The most dangerous leadership myth is that leaders are born – that there is a genetic factor to leadership. That’s nonsense; in fact, the

References

opposite is true. Leaders are made rather than born.” – Warren Bennis What about those who believe that great leaders are born great? There are a few born leaders perhaps, but probably not as many as often believed. Most have slogged, studied, learned, invested their time, and consciously developed their practice. To battle the leadership deficit, to ensure that all leadership potential is nurtured, internal business culture actively promoted by management at the highest levels must play a key role in driving this process, and prioritise the ongoing enhancement of innate capability.

Or as the authors put it in their book “The Leadership Pipeline”2 “Organizations need leaders, but natural leaders are at least as rare as natural athletes.

And, even natural athletes need careful training and development — given that almost everyone is capable of developing some degree of athletic potential. Similarly, the right training and development program can help almost anyone cultivate some degree of leadership potential.

In fact, it can help a few people develop extraordinary leadership abilities. Ignoring leadership development is foolish, but at many

1: Dent, F., Holton, V. et al. (2013) The Ashridge Management Index (AMI) 2012/13, The Ashridge Business School, Available from: 2: Charan, R., Drotter, S. et al (2000) The Leadership Pipeline: How to Build the Leadership-Powered Company. San Francisco, Jossey-Bass 3: www.benchmarkrecruit.co.uk

companies, short-term priorities eclipse the long-term thinking needed to develop a good leadership pipeline.”

Summary

• Most companies don’t recognise the leadership shortfall until it causes them a problem. Consider well in advance at a strategic level whether you have the depth and breadth of skill within the company to meet future leadership needs.

• Review whether you have a working system in place to recognise leadership potential, that is supported at all levels and in practice.

• Consider what additional resource you need, internally or externally, to deliver targeted development for future leaders.

Developing a leadership pipeline requires advanced, strategic thinking at the highest levels of the organization, and must be actively supported and promoted ‘down the line’. A 2013 survey by UK-based recruitment agency Benchmark Recruit shows that 66% of people leave their jobs due to poor management3, at enormous financial and knowledge cost to the companies involved. In times when entire industry sectors are facing a shortfall in leadership pipeline, can you afford to ignore your potential?

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UPCOMING EVENTS 08 Mar – 11 Mar

MEOS 2015

Mar 25 – Mar 26

Oil & Gas Outlook North Sea

Bahrain International Exhibition & Convention Centre (BIECC), Building 158, Avenue 28, Sanabis, Block 410, Bahrain Organisers: Arabian Exhibition Management, Allworld Exhibitions, SPE & BECA Contact: aeminfo@batelco.com.bh www.aemallworld.com

Mercure Aberdeen Ardoe House Hotel and Spa, South Deeside Road Blairs, AB125YP Aberdeen, United Kingdom Organiser: Terrapinn Holdings Ltd Contact: enquiry.uk@terrapinn.com www.terrapinn.com

Mar 9 – Mar 12

Mar 26 – Mar 28

Myanmar Oil & Gas 2015

Traders Hotel and MCC, Yangon, Namibia Organisers: Fireworks Trade Media Pte Ltd & GiMA International Exhibition Group GmbH Contact: myamar@asiafireworks.com www.oilmyanmar.com 11 Mar – 13 Mar

Australasian Oil & Gas Expo 2015

Perth Convention Exhibition Centre, Cloisters Square, Perth Western 6850, Australia Organiser: Diversified Exhibitions Australia Contact: aog@divexhibitions.com.au www.aogexpo.com.au Mar 17 – Mar 19

STOCEXPO Europe 2015

Ahoy Rotterdam, Ahoy’-weg 10, 3084 BA Rotterdam, Netherlands Organisers: Stocexpo Ltd. & easyFairs Netherlands BV Contact: info@stocexpo.com www.stocexpo.com Mar 23 – Mar 25

Arctic Technology Conference 2015

Bella Center, Center Boulevard 5, DK-2300 Copenhagen S, Denmark Organizer: SPE (Society of Petroleum Engineers) Contact: awegener@aapg.org www.arctictechnologyconference.org

CIPE 2015

New China International Exhibition Center, No.88, Yuxiang Road, Tianzhu, Shunyi District, Beijing, China Organiser: Beijing Zhenwei Exhibition Co.,Ltd. Contact: cippe@china-zhenwei.com.cn www.cipe.com.cn/2015 Mar 26 – Mar 28

EXPEC 2015

New China International Exhibition Center, No.88, Yuxiang Road, Tianzhu, Shunyi District, Beijing, China Organiser: Beijing Zhenwei Exhibition Co.,Ltd. Contact: dl@zhenweiexpo.com www.expec.com.cn/2015 Mar 31 – Apr 02

Offshore Asia Conference & Exhibition 2015

Kuala Lumpur Convention Centre (KLCC), Kuala Lumpur City Centre, 50088 Kuala Lumpur, Malaysia Organiser: PennWell Conferences & Exhibitions Contact: Headquarters@PennWell.com www.powergenasia.com Apr 27 – Apr 29

Oil & Gas Expo East Africa 2015 KICC, Nairobi, Kenya Organiser: Expogroup Contact: jason@expogr.com www.expogr.com/kenyaoil/

Mar 25 – Mar 26

GIOGIE 2015

Sheraton Metechi Palace Hotel, 20 Telavi Street, Tbilisi, 0103, Georgia Organisers: Iteca Kavkasia, ITE Group Plc. & GiMA International Exhibition Group GmbH Contact: office@iteca.ge www.giogie.com

May 4 – May 7

Offshore Technology Conference Reliant Center – Houston, Houston, TX 77054, USA Organiser: SPE (Society of Petroleum Engineers) Contact: spedal@spe.org www.otcnet.org

For safe production in deep water, use Sandvik wire for critical wireline and welding applications

Sandvik has always strived to be at the cutting edge of materials technology by continually developing new materials, technologies and products that meet or exceed our customers’ expectations; from increasing productivity and improving performance to reducing environmental impact.

Health and safety are also integral parts of our business and are at the forefront of all activities within our operations.

This is one of the main reasons why we are currently a global, world-leading company, operating in 130 countries.

www.smt.sandvik.com