OGV Energy - Issue 32 - May 2020

MAY 2020

OGV ENERGY THE LEADING ENERGY SECTOR

PUBLICATION

TECHNOLOGY

How can technology help during difficult times?

SECURE REMOTE WORKING

Five key questions you must ask your video meetings provider

FLOW BATTERIES

The future of energy storage?

MIDDLE EAST OIL & GAS CRISIS

Coronavirus and OPEC Drama

FOSSIL FUELS North Sea Oil & Gas Review Contracts and Analytics

REGIONAL REVIEWS Middle East, Europe, US & Mexico

TECHNOLOGY FOCUS Tools, Software and News

GREEN ENERGY Are carbon reduction targets achievable?

INNOVATION Methane monitoring Flow Batteries Remote drilling training

PROJECTS MAP ON THE MOVE EVENTS LEGAL

THE ENERGY SECTOR

WILL PREVAIL COVID-19 Legasea, the ideal cost-effective solution during difficult times.

The alternative route for recovered subsea production systems.

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ANALYTICS & PROJECT

UPDATES

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Scalable energy storage on the seabed using Lithium-ion battery technology State-of-the art modular energy storage for reliable and uninterrupted power to subsea assets

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Restore power quickly to wells with electrical supply issues 02.

Power with marine renewables for emission free tie-backs and clean energy systems 03.

Large scale battery systems for resident subsea vehicles

CONTENTS

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FOSSIL FUELS

7 UK North Sea Oil & Gas Review 10 Contract Awards 14 Rystad Analytics 17 UKCS Status Report

SPECIAL FEATURES

18 Will the Coronavirus kill the oil industry?

REGIONAL REVIEWS 7

18

22 Middle East

20

24 Europe 27 US 28 Mexico

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TECHNOLOGY FOCUS

31

30 Kaseum: Electro-mechanical downhole tools 30 Intelligent Plant: Real-time process alarm & event data 31 Starleaf: Secure remote working

32 Arnlea: Improving inspections with Intrinsix 33 EC-OG: Set to accelerate subsea clean energy growth

GREEN ENERGY

34 SSE: Delivering 40GW of offshore wind by 2030 36 Could a focus on repairs lead to a

lasting COVID-19 impact?

36

INNOVATION ZONE

38

38 Field testing of methane monitoring technologies

39 Flow Batteries: The future of energy storage?

41 Web-based software to train drillers remotely

EVERY MONTH 4 Cover Partner: Legasea 20 World Project Maps

42 On the Move 45 Events 46 Legal and Finance

LOREN STEFFY GUEST EDITOR

T

imes once again are tough in the oil and gas industry. The combination of weak commodity prices and the demand destruction from the global COVID-19 pandemic have put the industry in an unprecedented squeeze. How difficult is the situation?

In Texas, fiercely independent oil producers are asking the government for help.

As OGV was going to press, OPEC members and Russia brokered a deal designed to cut worldwide production by a staggering 9.7 million barrels a day. Will the agreement hold? And if so, will it be enough?

A global supply glut remains, and until the lockdowns and stay-at-home orders ease and people and goods start moving again, working through that oversupply is likely to be a slow process. Investors have grown wary of the energy business, especially in the U.S., and the easy money is unlikely to return.

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What’s more, restarting the economy will require a wave of policy initiatives around the world, and at least some of those policies may require a reduction in burning fewer fossil fuels. In Europe, climate change concerns have been driving policy for years, and now, the rest of the world may follow suit. In China, for example, the weaker demand has led to more competition among energy sources, and wind and solar energy now account for 20 percent of the country’s installed generation, compared with 2 percent a decade ago. During the first two months of this year, wind power increased by 1 percent and solar by 12 percent, indicating that renewables may claim a bigger portion of the mix as the country recovers, according to a recent report by IHS Markit.

Regardless of how the industry recovers, however, it’s safe to assume that things won’t be the same.

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COVER PARTNER

Advertising Feature

Reasons to be positive

The idea behind Legasea was first conceived amidst the green shoots of recovery following the worst downturn to hit the energy sector in a generation.

Despite facing a series of hurdles along the way, as is with start-up companies, they have continued to move forward, whilst remaining optimistic.

Reasons to be positive Founding a fledgeling business during the worst downturn to have hit the energy sector in a generation might have seemed brave, or even foolhardy, but operating in such a challenging environment has built resilience in our team that has long been a feature throughout our industry.

Despite facing up against a series of hurdles along the way with start-up companies, we have continued to move forward whilst remaining optimistic.

Although the world could have never anticipated everything the past few months have has thrown at us, even making the future seem uncertain at times, there are many reasons to remain positive.

Vaccines The World Health Organisation (WHO) has now added three more contenders to its running growing list of coronavirus vaccines in human trials bringing the total to six. The team at the Jenner Institute, part of the University of Oxford, are confident that they will be producing a million doses, along with proof that it is safe and effective, by September – just four months away.

As the country looks set to begin its sixth week under lockdown, a vaccine could be fundamental in helping to ease the measures and gradually returning to normal life.

www.ogvenergy.co.uk I May 2020

We are all fighting on the same side As Bill Gates suggested recently, this crisis is like a world war, except in this case, we’re all on the same side. Limiting the spread, while minimising the damage to global economies and wellbeing, will eventually come about as a result of everyone working together. Already, we have seen many examples of people from different countries coming together to fight this battle. During World War II, an amazing amount of innovation helped to end the war faster.

For the oil and gas industry, this will be the same with the pandemic. We will get through this because we stuck together as an industry and as a community.

The innovation, and the pioneering spirit of the energy sector, will also see us through the current crisis stronger than ever before.

This is temporary

Legasea offer an alternative route for recovered subsea production systems, and take liability and ownership for the equipment, making it safe, clean and disassembling it to its component parts. Reusable parts are then used to fulfil the demand for urgent spares when crucial production is at risk during routine preventative maintenance or, simply, when a failure is encountered subsea.

It is important to recognise that this pandemic will be over at some point in the future and life will return to something resembling normality. The outbreak has been best summarised by two key phrases:; ‘flatten the curve’ and ‘reach the peak,’ which have been repeated on an almost daily basis. There are many positive indications that all many of the measures implemented to date are working, and we are passing the peak. Whilst the fall in world global energy use demand is unprecedented in both speed and depth beyond all other major events of the last century; there is a growing push desire to lift the lockdown and get the economy back on track.

As the world recovers, energy demands will increase, and our industry will, once again, be vital for economic growth. It’s time for us to stay positive, pull together as an industry and support one another for the next stage of this all-important fight.

To find out more about Legasea’s range of services, please see visit www.legasealtd.com

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Journalists

Tsvetana Paraskova Loren Steffy Boris Ivanov Neil Ford Dalia de León

Design

Georgie Riddle Lisa Thompson

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FOSSIL FUELS

7

APRIL

UK North Sea Oil & Gas Review

By Tsvetana Paraskova

Over the past month, the key theme in the UK North Sea industry was the coronavirus pandemic, its direct impact on UK offshore oil and gas operations, and the impact of the oil price crash on the future of the North Sea oil and gas sector.

Following the price collapse in early March – driven by the flop in global oil demand and the break-up of the OPEC+ production cut deal – companies operating in the UK North Sea rushed to cut budgets, investments, and operational costs.

Industry associations started to warn about the difficult times ahead for the UK offshore industry and its supply chain.

“The combination of the global economic impact of the continued spread of the coronavirus, the most dramatic fall in oil price in almost 30 years and a halving of gas prices is driving an increasingly fragile outlook for the UK’s offshore oil and gas sector. Severe pressures are already building across the sector’s supply chain, with the pressures expected FOSSIL FUELS to significantly SPONSORED BY undermine the industry’s businesses, jobs and contribution to the economy,’’ industry association OGUK said in March.

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OGUK published its ‘Business Outlook 2020: Markets & Investment’ report, which says that the current low prices of oil and gas will impact the revenues of all companies operating in the UK Continental Shelf (UKCS). As many of those E&P firms will be looking to preserve cash at oil in the $30s, the supply chain companies will feel the downturn almost immediately because of the lower offshore activity.

both workers and companies is very welcome. It is now crucial to ensure companies can easily and rapidly access this money as for many businesses and individuals cash flow is now vital,” said Deirdre Michie, Chief Executive of OGUK. Industry body Subsea UK said in April that the underwater engineering industry is exploring ways in which it can transfer its expertise to help support the national effort to tackle the coronavirus pandemic. According to Subsea UK, engineering companies have the relevant products and manufacturing expertise, particularly in breathing apparatus and life support equipment, valves, and control systems, to answer the call for help from the UK and Scottish Governments.

“This comes at a time when many areas of the supply chain are already facing fundamental financial challenges, in light of significantly reduced revenue and margins in recent years. There is limited scope for many companies to absorb further cost reductions,” OGUK’s report said.

Apart from responding to the calls for help, Subsea UK is also “working closely with organisations, such as OGUK and the OGA, to inform Government of the specific economic challenges facing the sector and to seek clarity for subsea businesses on the measures in place to support them and on the guidance for them in continuing with critical operations,” said Neil Gordon, Subsea UK chief executive.

Capital investment in the UKCS is likely to drop by 2030% this year compared to the £5.5 billion investment in 2019. The number of wells drilled in 2020 could drop by more than one-third compared to previous expectations of around 140 wells, when forecasts had factored in oil prices at $60-65.

The North Sea faces mass project deferrals, as many upstream projects are being reassessed at $30 oil, Wood Mackenzie said in early April.

The supply chain will suffer as E&P firms defer projects and slash investment and activity, OGUK said.

The current situation “is likely to result in a higher number of consolidations and insolvencies in the market,” noting that access to finance across the industry in the coming months will be crucial.

“It is important that the government works closely with our industry, as with others, to help weather the current pressures to ensure that they do not result in permanent damage to the UK’s capabilities,” OGUK said in its report.

According to a Rystad Energy impact analysis, some 20% of Europe’s mid- and small-sized oilfield service companies, or more than 200 firms, the vast majority in the UK and Norway, are set to become insolvent as purchases on the oilfield services market are set to drop by US$5 billion this year compared to 2019. Most of the lost purchases, or US$4.5 billion, are expected to hit Norway and Britain, mainly within the segments of MMO, drilling rigs, and well services, according to Rystad.

The largest offshore trade union Unite welcomed a new agreement covering offshore workers. Unite has worked with the Offshore Contractors Association (OCA) and other trade unions to agree a Supplementary Project Agreement (SPA) to the Offshore Contractors Partnership Agreement (OCPA). The SPA agreement will ensure Unite members at risk of redundancy or lay off, and those recently made redundant can benefit from the UK government coronavirus job retention scheme, the union said at the end of March.

Offshore union RMT called for urgent action to protect Britain’s energy supply chain from collapse.

“The UK Government must agree a new offshore oil and gas industrial strategy with the offshore unions and industry in order to prevent catastrophic job losses and skills shortages especially in Scotland from the combined impact of collapsing oil prices and COVID-19,” RMT General Secretary Mick Cash said.

The North Sea can survive at $30 oil in the short term, as 95% of onstream production is still ‘in the money’ at US$30 a barrel oil According to Neivan Boroujerdi, Principal Analyst, North Sea Upstream, at WoodMac.

The North Sea can survive at $30 oil in the short term, as 95% of onstream production is still ‘in the money’ at US$30 a barrel oil, according to Neivan Boroujerdi, Principal Analyst, North Sea Upstream, at WoodMac. “But longer-term, investment is required. If the industry goes into harvest mode, a premature end is inevitable,” Boroujerdi noted.

According to an analysis from Westwood Energy Group, if oil prices stay below $27 per barrel through the end of 2020, production in the UKCS will not be generating enough revenue to cover both operating costs and the planned capital expenditure this year. Operators have already deferred the final investment decisions (FIDs) for several projects in the UK North Sea, Westwood analysts said.

Companies operating in the UK North Sea have already announced CapEx cuts and project deferrals. Supermajors BP and Shell slashed capital spending plans for this year, targeting to preserve cash and protect their balance sheets and dividends.

Other operators also announced project-specific deferrals and/ or CapEx reductions to cope with the oil price collapse.

EnQuest said in March that its updated working assumption is not to re-start production at the Heather and Thistle/Deveron fields.

In the 2019 results announcement in April, EnQuest’s chief executive Amjad Bseisu said: “Given the prevailing low oil price environment, we have taken decisive action to lower our cost base, targeting $190 million of operating cost savings in 2020, equating to unit operating expenses of c.$15/Boe. With these significant cost reductions, cash flow breakeven is estimated at c.$33/Boe in 2020.”

INEOS FPS informed its customers that it would delay the scheduled maintenance of the Forties Pipeline System, originally planned for June 2020, to the spring of 2021.

OGUK welcomed the UK Government’s action to help workers and companies who are hit by the triple impact of COVID-19, the oil price crash, and the lowest gas prices in the last ten years.

“The decision has been taken in the face of the ongoing Government restrictions due to the Coronavirus pandemic and in the interests of providing clarity to its customers and the UK Oil and Gas Industry,” the company said in early April.

“In that context the strong response from the UK Government and their clear determination to support

Due to the delay, Rystad Energy raised its North Sea oil production forecast by 330,000 bpd to 2.96 million bpd for

www.ogvenergy.co.uk I May 2020

UK North Sea Oil & Gas Review

BRENT OIL PRICES OVER THE YEARS April Review

1

YEAR AGO

- BRENT OIL PRICE 2019 - $71.32 Weir Oil and Gas introduced a new intelligent valve system which can operate remotely and control SPM’s back pressure. All-Flo Pump became part of the PSG (Pump Solutions Group) within Dover’s Fluid division.

5 June 2020 and by 190,000 bpd to 3.04 million bpd for July 2020, expecting several hundred thousands of extra barrels to add to the already oversupplied market every day.

Due to the oil price crash, Cairn Energy announced significant reductions and deferrals in the 2020 programme, representing an overall 23% reduction in capital expenditure this year. Planned 2020 CapEx on the UK producing assets is expected to be below US$45 million, reduced from the original forecast of US$65 million as a result of cost savings identified and the deferral of certain activities planned for the Catcher fields, Cairn said.

including by deferring the Fotla exploration well, reducing activities on the Jacky decommissioning programme and the Hurricane development.

“With the abrupt emergence over recent weeks of a more challenging macroeconomic environment, it is clear that we need to accelerate our on-going efforts to further reduce the breakeven cost of our assets and our nearterm investment programmes,” CEO Les Thomas said.

In brighter news, Neptune Energy said in the middle of March that an encouraging hydrocarbon discovery had been made at the Isabella exploration well in the UK Central North Sea. At the end March, the company In response to Covid-19 confirmed that at the Seagull and the market slump, project, construction of the John Wood Group PLC topside is expected to begin this year and production said it would cut salaries, remains on schedule for headcount, CapEx, and start-up in the second other overhead costs, while half of 2021. At Cygnus, the board withdrew its preparation work for a recommendation to pay the tenth infill well on the field proposed 2019 is ongoing ahead of possible drilling in 2021. final dividend.

Siccar Point Energy E&P and its joint venture partner, Shell UK, announced the deferral of the planned sanction date for the Cambo project to 2021 in light of the unprecedented worldwide macroeconomic dislocation resulting from Covid-19.

Siccar Point and Shell UK had been planning to bring the project to an FID in the third quarter of 2020.

Petrofac’s response to the market conditions include reducing overhead and project support costs by at least US$100 million in 2020 and by up to US$200 million in 2021, in addition to reducing CapEx by 40% and suspending the 2019 final dividend.

Ithaca Energy cut its 2020 capital expenditure by 50% to around $120 million,

Unity, the provider of well integrity technology, services and engineering solutions, said in March it was awarded a three-year multi-million-pound contract by Spirit Energy to maintain wellhead equipment across twelve platforms in the East Irish Sea, Southern North Sea, and the Dutch sector of the North Sea. Spirit Energy announced that it had boosted production from two North Sea fields following successful drilling campaigns. First gas from the new C6 well at Spirit Energy’s Chiswick field was achieved in March, and first oil from a new production well at the Chestnut field was also achieved in March.

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YEARS AGO

- BRENT OIL PRICE 2015 - $64.08 During this period the price was slowly raising and Subsea 7 made a $300 million contract for the Maria field development. Meanwhile, the Russian gas company Gazprom started a 3D seismic survey for the Barents Sea sector.

Welltec and Shell signed a collaboration deal to improve and further develop new technologies for global application in the industry.

10

YEARS AGO

- BRENT OIL PRICE 2010 - $75.95 Statoil has offered Seadrill a new five-year, $712 million contract for the use of the West Venture rig on the Norwegian Continental Shelf. Crude oil futures hit 18-month highs in early May, with expectations for an accelerating economic recovery spurring financial and commodity markets ahead and strengthening oil demand.

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CONTRACT AWARDS Fugro has secured an initial 3-year contract with Well-Safe Solutions, a UKbased offshore well decommissioning service provider. Fugro will deliver their integrated marine-based solution onboard the Well-Safe Guardian, Well-Safe Solutions’ bespoke semisubmersible unit for executing subsea well decommissioning work.

The contract award gives Fugro responsibility for supplying and supporting remotely operated vehicle (ROV) services, rig positioning and remote operations. Expert support will come from Fugro’s remote operations centre in Aberdeen, Scotland: remote access via the onshore team will reduce the number of Fugro personnel required onboard the Well-Safe Guardian asset to improve efficiency and maximise safety.

www.ogvenergy.co.uk I April 2020

Fugro secures remote operations contract on Well-Safe’s Guardian rig

Kevin Chambers, Fugro’s ROV Service Line Director, said: “I am delighted to announce this contract award with Well-Safe Solutions. Our teams’ skills and experience in plug and abandonment and the decommissioning of offshore wells perfectly complement the expertise of Well-Safe Solutions. We will also add value through our extensive knowledge of marine asset integrity.”

Phil Milton, Well-Safe Solutions’ Chief Executive Officer, said: “Following an extensive tender process, we are pleased to award this contract to Fugro for ROV, rig positioning and remote operations. The capabilities of their offering will enable Well-Safe Solutions to maximise overall operational efficiency and delivery for our clients at a costeffective rate, while maintaining close commercial alignment.”

Contract Awards

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FOSSIL FUELS Subsea 7 awarded contract offshore US Gulf of Mexico Project management and engineering will commence immediately at Subsea 7’s offices in Houston, Texas. Fabrication of the flowlines and risers will take place at Subsea 7’s spool-base in Ingleside, Texas, with offshore operations anticipated to occur in 2022 and 2023.

Craig Broussard, Vice President for Subsea 7 US, said,

Subsea 7 announced the award of contracts

by Chevron U.S.A Inc. for subsea installation services related to the Anchor field, located in the Green Canyon area of the Gulf of Mexico.

The Anchor field is approximately 140 miles off the coast of Louisiana.

Subsea 7’s scope of work includes project management, engineering, procurement, construction and installation of the SURF components including, but not limited to, the production flowlines, risers, umbilicals, flying leads, jumpers, and associated appurtenances.

“We are honored to be selected by Chevron for the SURF installation scope on the Anchor project. We look forward to building on the collaborative relationship with Chevron to deliver a best-in-class project. The combination of the SURF scope for Subsea 7 and the ongoing subsea equipment delivery by OneSubsea, will allow the Subsea Integration Alliance to work in partnership with Chevron to unlock the value of an integrated approach to project optimisation.”

Worley Wins Chevron Contract Extension Chevron Australia Pty Ltd. has awarded Worley a two-year extension to its services contract for Australian assets, Worley reported.

First awarded in 2013, the contract covers engineering and procurement services to support the Gorgon LNG project, a major commercial-scale carbon dioxide injection facility, the Wheatstone LNG project and other Chevron assets in Australia, Worley noted in a written statement to the Australian Stock Exchange.

Saipem Awarded $150 Synthetic Rubber Facility Contract A consortium of Italian oil field services company Saipem and Egypt-based Petrojet has been awarded a $150 million contract

by Egyptian Ethylene & Derivatives Co. (Ethydco) for the country’s first polybutadiene-producing facility with annual production capacity of 36,000 metric tonnes.

Polybutadiene is a synthetic rubber with a high resistance to wear and is used in the manufacture of tires, which consumes about 70% of all global production.

The consortium would be jointly responsible for “detailed engineering design, procurement and supply of equipment and materials, construction, pre-commissioning, commissioning up to successful start-up and performance testing,” Saipem said in a press statement.

www.ogvenergy.co.uk I May 2020

The scope of work of the new plant comprises one production train of Low Cis Butadiene Rubber and related facilities, the statement said.“After successful completion of the fast-track Zohr project, this award confirms Saipem as a partner of choice to support the sustainable development of Egypt,” the statement quoted Maurizio Coratella, Chief Operating Officer of the Saipem Onshore E&C Division as saying.

Mid-month, the company had issued a press statement announcing the withdrawal of its 2020 guidance noting that “the intensification of the uncertainty caused by the development of the pandemic might cause a sharp demand contraction and consequently a delay of some projects.”

“As Australia’s leading energy services company, we are pleased to continue to support Chevron’s Australian operations through bringing Worley’s global expertise and capability in the hydrocarbons and energy sectors,” commented Worley CEO Chris Ashton.

According to Worley, the services under the contract typically include delivering brownfield modification projects and operational support. The firm added that it will continue to execute services from its Perth office, supported by Worley’s integrated delivery offices in India.

Contract Awards Double SNS Campaign Win for Rever Offshore The £multi-million contract, which was awarded by Perenco UK Ltd as part of the larger Southern Hub Area Redevelopment Project (SHARP), comprises two campaigns which will take place over the course of the next 18 months and see Rever install a rigid riser and complete the pipeline tie-in diverting production from the Leman AC Platform to the Leman AP Platform, in addition to conducting pre-commissioning work.

Rever Offshore, a leading subsea project delivery and execution provider to the offshore energy industry, has announced a major contract win, based in the Southern North Sea.

The work scope includes the design and fabrication of the riser, riser hang-off arrangement, platform leg clamps, topside and subsea spool installation and subsea tie-in - plus installation, pre-commissioning engineering and topside support work to tie-in the platform piping infrastructure.

Engineering work commences with immediate

effect, with the first offshore phase taking place in Q3 2020.

Barry Macleod, Rever Offshore CEO, commented: “This contract award represents the latest development in our long-standing relationship with Perenco UK Ltd. I am particularly pleased that in addition to the installation, tie-in and pre-commissioning work taking place later this year and in 2021, this project also allows us to showcase our significant engineering and fabrication capabilities from the outset.

“Whilst these are challenging times for us all, it is of paramount importance to ensure that this initial stage is carried out as safely and efficiently as ever; the well-being of all parties involved is, of course, our top priority.”

ODE awarded contract to help implement findings of GASSCO’s gas terminals integrity review Independent operations and engineering services company Offshore Design Engineering (ODE) has been awarded a new contract with GASSCO AS to work on the findings of its gas terminals review.

The project is the latest in a three-year relationship between London-headquartered ODE and Norwegian operator GASSCO, which is responsible for safe and efficient gas transportation from the Norwegian Continental Shelf to mainland Europe and the UK. GASSCO’s infrastructure includes export processing plants, gas receiving terminals and an 8,300km network of pipelines and offshore platforms.

A company with an exemplary record in safety performance, GASSCO undertook Barrier Integrity Reviews (BIR) across all its European gas terminals to assess existing facility conditions against its high-performance standards. The contract will see ODE work with GASSCO to align solutions and co-ordinate implementation plans based on these initial reviews, and is scheduled to last approximately nine months.

Despite the current Covid-19 pandemic impacting operations around the world, ODE’s work for GASSCO will commence immediately, with the project being initiated and coordinated while remote working is in effect for ODE employees.

With offices in London, Aberdeen and Great Yarmouth, ODE supplies a range of services, including engineering and asset management, to oil and gas and renewables companies around the world. A frame agreement has seen the company provide engineering support to GASSCO since 2017.

GASSCO Project Manager Dag Olav Saeverud said: “ODE has been awarded a technical service contract, and this reflects our past working experiences, the company’s knowledge of our assets, and its capabilities to meet our expectations.”

ODE Project Manager Chris Lomax said: “This key contract award is a great opportunity for ODE to once again support and build on our relationship with GASSCO. I am delighted our technical capabilities, asset familiarity, and track record played a part in us securing this latest phase of work with a valued client.

“The contract demonstrates our client’s continued trust and faith in us, our technical skills, and our ability to successfully deliver and complete critical projects to the highest possible standard.”

THREE60 ENERGY awarded Spirit Energy contract THREE60 ENERGY, through its Step Change Engineering division, has been awarded an engineering and support services contract to provide minor modification and repair services for Spirit Energy’s UKCS assets.

Spirit Energy is a hugely important client to us, both in the UK and Norway, and our shared values of agility, collaboration and innovation will ensure aligned successful delivery for both parties.”

THREE60 ENERGY has secured this contract following successful delivery of previous modifications. The contract cements the existing relationship and includes engineering, design, procurement, fabrication and site activities. The contract runs for an initial three-year period and includes two, one-year extension options.

Since its inception, THREE60 ENERGY has built a global service offering that supports the whole asset life cycle.

Commenting on the award, CEO of THREE60 ENERGY, Walter Thain, said: “We are delighted to have been selected by Spirit Energy to provide these services for their UK portfolio and it’s great to see our track-record being recognised.

The company has established a sound-track record, and its team of multi-disciplined technical experts now serve the world’s major oilfield operators.

Its services include subsurface, wells delivery, engineering, construction and commissioning and operations management services.

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Conducted by Craig Jamieson and Oddmund Føre @ Rystad Energy

Service Market Drivers Greenfield project sanctioning

Database version: Rystad Energy Databases April 2020

Sacntioning year (2016 - 2022)

Year (2016 - 2022)

Year (2016 - 2022)

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Our analysts gather data from company reports, investor presentations and press releases, governmental sources, as well as public institutions such as IEA, OPEC, USGS, and NPD.

www.ogvenergy.co.uk I May 2020

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16

FOSSIL FUELS

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Rystad Analytics Database version: Rystad Energy Databases April 2020

Offshore Rig Market Analysis Utilisation

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PROUD TO BE IN PARTNERSHIP WITH

OGV Energy is delighted to be working in partnership with global energy knowledge house, Rystad Energy, to bring industry insights and analytic detail to our readers in Oil & Gas. As the sector continues to digitise operations on a project and company basis, this high-level monthly data aims to provide key information in context from an industrywide perspective and demonstrate the technology available for those seeking deeper insights to enhance strategic planning and development.

Offshore Rig Market Analysis Contract backlog

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P

Decommissioning Projects

Current (Fields)

OPERATOR

P EXPLORATION (Don - Miller) ALPHA

OPERATOR

Decommissioning Projects (Fields)

PETROLEUM UK HOLDINGS

(Cheviot)

BP EXPLORATION - Vorlich - ETAP ) DANA PETROLEUM E&P ONOCOPHILLIPS

ANA PETROLEUM E&P ENQUEST (Hudson)

PLC (Sullum Voe Terminal -Thistle - Magnus and SVT All Assets - Ninian to STV Pipeline - All UKCS)

NI UK LIMITED EQUINOR ASA (Big Dotty - Little Dotty - Dawn - Hewett)

NEOS INDUSTRIES (Darwin (Cavendish)

EPTUNE E&P (Minke - Juliet)

- Skye)

REMIER OIL PLC (Lancaster)

ENQUEST PLC (EnQuest Producer - Heather) INEOS INDUSTRIES (Cavendish)

Blythe - Elgood)

INEOS INDUSTRIES OCKROSE ENERGY (Brae Bravo - East(Breagh) Brae)

NEPTUNE E&P (Minke - Juliet)

OYAL DUTCH SHELL ITHACA ENERGY INC. (Various - Brent - Atlantic and Cromarty - Curlew - Goldeneye)

(Captain)

PERENCO OIL & GAS (Guinevere - TYNE - Pickerill)

(Ensign - South NEPTUNE Morecambe - Audrey E&P- Annabel - Ann & Alison Markham - York - Trees)

(Seagull)

PREMIER OIL PLC

AQA EUROPA B.V

PARKMEAD GROUP PLC (Eider - Tern - North Cormorant - Cormorant Alpha)

(Glamis - Huntington - Balmoral - Rita & Hunter - Caledonia)

WALDORF PRODUCTION (Perth) (Renee / Rubie)

PERENCO OIL & GAS Discovery&Projects (Leman Indefatigable - Wollaston)

ERSEY OIL AND PING GAS PLC PETROLEUM (Glenn) (Avalon)

LIMITED

OIL PLC AQA EUROPA B.V (Catcher - Tolmount - Solan)

SINOPEC RESOURCES

OTAL UPSTREAM UK LIMITED (Tain - Montrose) (Edradour Royal Sovereign)

ROYAL DUTCH SHELL URRICANE ENERGY (Lincoln, Warwick) (Gannet D Pipeline Replacement

HARIS ENERGY LTD (Pilot)

Jackdaw - Penguin Area - Fram)

SERICA ENERGY (Columbus)

s and contact details, follow the link SICCAR POINT ENERGY m/project-pathfinder

(Suilven - Tornado - Cambo)

TAQA EUROPA B.V. (Harding North)

TOTAL UPSTREAM UK LIMITED (Edradour - Glenlivet) WHALSAY ENERGY (Bentley) WHALSAY ENERGY (Sillimanite)

REPSOL SINOPEC RESOURCES (Tartan - Buchan - Beatrice - Fulmar)

ROCKROSE ENERGY (Brae Bravo - East Brae)

ROYAL DUTCH SHELL (Various - Brent - Atlantic and Cromarty - Curlew - Goldeneye)

HARIS ENERGY LTD PREMIER (Pilot) (Harding North) REPSOL

CONOCOPHILLIPS (Caister CM - Murdoch - CMS - MacCulloch)

ENI UK LIMITED (Big Dotty - Little Dotty - Dawn - Hewett)

(Glamis - Huntington - Balmoral - Rita & OIL HunterAND - Caledonia) INDEPENDENT GAS

PIRIT ENERGY

CNR INTERNATIONAL (Ninian)

DNO NORTH SEA (Schooner)

ENERGY

EPSOL SINOPEC RESOURCES (Southwark (Tartan - Buchan - Beatrice - Fulmar)

ALPHA PETROLEUM UK HOLDINGS (Wenlock)

DANA PETROLEUM E&P (Hudson)

LIMITED

HIBISCUS PETROLEUM (Marigold & Sunflower)

ERENCO OIL & GAS HURRICANE (Guinevere - TYNE - Pickerill)

(Fields)

CNOOC LIMITED (Ettrick/Blackbird)

(Caister CM - Murdoch - CMS - MacCulloch) (Platypus)

(Utgard) NQUEST PLC (EnQuest Producer - Heather) ENERGY FAIRFIELD

OPERATOR

BP EXPLORATION (Don - Miller)

NR INTERNATIONAL (Alligin (Ninian)

NO NORTH SEA (Schooner)

17

Date Generated: 24-04-2020

Projects

LPHA PETROLEUM UK HOLDINGS (Wenlock)

NOOC LIMITED (Ettrick/Blackbird)

UKCS Status Report

ATHFINDER - UKCS Status Report Generated: 24-04-2020 DateDate generated 24 April 2020

Project - Arran -

SPIRIT ENERGY

(Ensign - South Morecambe - Audrey - Annabel - Ann & Alison Markham - York - Trees)

TAQA EUROPA B.V

(Eider - Tern - North Cormorant - Cormorant Alpha) WALDORF PRODUCTION (Renee / Rubie)

Discovery Projects JERSEY OIL AND GAS PLC (Glenn) PHARIS ENERGY LTD (Pilot) TAQA EUROPA B.V (Harding North)

TOTAL UPSTREAM UK LIMITED (Edradour Royal Sovereign) HURRICANE ENERGY (Lincoln, Warwick) PHARIS ENERGY LTD (Pilot)

For additional project summaries, locations and contact details, follow the link www.oilandgasvisionjobs.com/project-pathfinder

18

SPECIAL FEATURE

By Boris Ivanov

Will the Coronavirus Kill the Oil Industry?

As Coronavirus lockdowns continue to spread around the world, the oil industry faces more disruption to demand and supply chains, with many margins and prices already collapsing.

By mid-March, crude prices were down to 30%, sparking a selloff in crude oil.

W

ith travel and broader economic activity across the world restricted, demand for transport fossil fuels has dropped.

This reduction in demand is particularly notable in China, the world’s largest energy consumer, which last year accounted for more than 80% of global oil demand. Industrial output and electricity demand and in the country has been functioning at levels far below their usual rate, with coal consumption at powerplants down 36% and the countries’ oil refining capacity reduced by 34%.

www.ogvenergy.co.uk I May 2020

For the oil market, the consequence of this reduced demand has been particularly marked, resulting in a twofold challenge, a drop in oil’s value and a consequential price war.

The biggest issue for the industry came earlier in March when the Organisation of the Petroleum Exporting Countries (OPEC) and ten other oil-producing countries failed to come to an agreement on stable production levels. With Russia unwilling to accept a production cut of more than 1 million barrels per day (bpd) to

offset falling demand, oil prices plunged to a multiyear low. By mid-March, crude prices were down to 30%, sparking a selloff in crude oil.

With the short-term situation proving fluid as governments around the world initiate several control measures, there is still a great amount of uncertainty on what the full impact of the virus might be for the oil industry and how things will develop. For instance, many are uncertain as to whether Saudi Arabia will continue with its voluntary cut of 400,000 bpd.

Coronavirus What is certain however is that the oil industry has survived many periods of hardship including the 2008 financial crash and will survive this latest ‘Black Swan’ event.

Many in the industry are confident in their ability to weather market volatility as they had done in previous low-price storms in 2008 and 2016. However, producers and supply chains have had to adapt.

In response to strained demand, some oil-producing countries like Saudi Arabia, Iraq and Nigeria have opted to sell crude oil at discounted rates and several oil companies are scaling down on their exploration, production and new projects budget. Oil majors like Royal Dutch Shell and Chevron are taking immediate steps to ensure they are well-positioned for the eventual economic recovery and are significantly reducing their capital spending plan and suspending share repurchases to prioritise long term value and protect dividends.

Goldman Sachs said in a research note published on 30 March, that global oil demand has fallen 25% in the wake of the Coronavirus. They added that “Not only is this the largest economic shock of our lifetimes, but carbon-based industries like oil sit in the cross-hairs as they have historically served as the cornerstone of social interactions and globalisation, the prevention of which are the main defence against the virus”.

It is clear now that the crisis has revealed certain truths about international cooperation, governance, and the energy system.

Companies and oil industry bodies are calling for governments across the world to put measures in place to support their respective oil industries. In the United States, there has already been a focus on mobilising stimulus funding to purchase crude oil for the Strategic Petroleum Reserve to help prop up the countries’ gas and oil producers.

Likewise, industry trade unions in the UK met with Scotland’s energy minister to discuss future proof plans for the industry’s skilled workers operating in the North Sea. Such initiatives should help protect the industry and safeguard its workers during this period of uncertainty.

With Saudi Arabia pumping record levels of crude from April, which could lead to further price falls for global oil markets as demand for energy continues to fall, countries must work together on proposed market solutions.

The OPEC / non-OPEC agreement to cut production, achieved in mid-April with the support of the USA, sends a positive signal and marks the end of the Russia /Saudi Arabia price war. Yet with the deal not due to take effect until the beginning of May, stocks continue to build and the market remains oversupplied.

A key question for many analysts and companies affected is whether the size of the cuts agreed will be enough and in time to improve global oil balances to support prices above current levels.

In the longer term, many are looking towards the likely resurgence of oil demand in 2021. Once the outbreak is controlled, the global economy, particularly China and India, is expected to rebound at a notable rate. As a result, global oil demand could double or triple to make up for the lost demand.

The oil industry is resilient and well-positioned to withstand this challenging environment and weather market volatility.

For oil companies, the priority is to put the health and safety of their staff and customers first and ensure the safety of their business operations.

While it is simply too early to tell the energy outlook for the future as a result of the Covid-19 influence, the world will move beyond this and the business case for streamlining operations and investing in resilience planning will be reinforced and widely accepted.

19

WORLD PROJECTS

20

WORLD PROJECTS MAP

1

Anchor uHPHT Field Development, Phase 1 - Aker Solutions has signed a 20-year master agreement to provide 24-km of 20,000 psi dynamic steel-tube and power umbilicals and distribution equipment for the project. The agreement includes the delivery of engineering, design and manufacturing of umbilicals. The work also involves service and installation support.

Meanwhile, Transocean will supply a specialised semi-submersible drilling rig, the Deepwater Titan for the project on a five-year contract.

APRIL 2020

The EIC delivers high-value market intelligence through its online energy project database, and via a global network of staff to provide qualified regional insight. Along with practical assistance and facilitation services, the EIC’s access to information keeps members one step ahead of the competition in a demanding global marketplace. The EIC is the leading Trade Association providing dedicated services to help members understand, identify and pursue business opportunities globally. The EIC is renowned for excellence in the provision of services that unlock opportunities for its members, helping the supply chain to win business across the globe.

WORLD PROJECTS SPONSORED BY

2

USA Chevron US$5.7bn

3

4

CHINA Zhejiang Petrochemical US$12.9bn

AUSTRALIAWSP US$5.9bn

USA - US Wind Inc US$1.6bn

Honeywell UOP has been awarded a contract from Zhejiang Petrochemical Co. Ltd. to provide four Honeywell UOP Polybed™ pressure swing adsorption units to supply high-purity hydrogen for the second phase of an integrated refining and petrochemical complex in Zhoushan, Zhejiang Province.

WSP has secured a contract for the front-end engineering design (FEED) work scope of the onshore transmission infrastructure. Subsea investigations for the project have commenced and aerial bird surveys are underway. This project will be Australia’s first and largest offshore wind project with a capacity of 2000MW.

Star of the South Offshore Wind Farm - US Wind Inc. is in discussion with local and international banks to secure financing for the Maryland Offshore Wind Farm project, with talks at an advanced stage. The developer is seeking up to US$1.6bn, with an 80:20 debt-to-equity ratio to move forward with the project.

www.ogvenergy.co.uk I May 2020

5 MOZAMBIQUE Electricidade de Moçambique (EdM) US$550mn Sociedade Nacional de Transporte de Energia has invited bids for three separate tenders on the project. The first tender is for the EPC of 400 kV airinsulated switchgear (AIS); the second tender is for the EPC of over 400 kV power transformers, and line and bus reactors; the third tender is for the EPC of the static var compensator (SVC)/ synchronous compensator (STATCOM)/ hybrid STATCOM.

WORLD PROJECTS

4

7

8

1

03 21

2

6

9

5

3

6

QATAR Qatargas US$355mn

North Field Expansion (NFE) Project - Qatargas has issued an EPC tender for the North Field Sustainability Project Phase 2, which is part of wider North Field Expansion program. Bids for the EPC package, worth an estimated US$1.5 to $2bn, are expected to be submitted by June 2020. Offshore EPC contractors thought to have received the tender document include McDermott international, Saipem, Hyundai Heavy Industries, and a consortium of TechnipFMC and Malaysia Marine and Heavy Engineering (MMHE). The scope includes at least four wellhead platforms and one additional jacket, nine riser platforms, one bridge-supported platform, bridges connecting riser platforms, clad subsea pipelines and subsea power cables.

7

8

9

IRAQ ADNOC Offshore US$1.2bn

ISRAEL Energean Oil & Gas US$1.6bn

UGANDA TOTAL US$2.2bn

Target Engineering, a wholly-owned subsidiary of Arabtec Holding, has been awarded a US$22.9m EPC plus commissioning contract

by ADNOC Offshore to carry out the engineering, procurement, construction and commissioning works for the replacement of existing slug catchers at the Satah Plant on Zirku Island.

Tanin and Karish Gas Field Development - Energean maintains the project will see first gas in 1H 2021, despite the Covid-19 pandemic.

Following a report on the Karish North field, the total independently verified gross 2P reserves and 2C resources in the Karish and Tanin leases (Energean 70%) are now 3.5 Tcf of gas (98.6 Bcm) and 82 MMboe of liquids.

Novatek reaffirms that the start-up date for the first train remains unchanged despite the current market volatility.

It is understood the nuclear-powered container carrier Sevmorput completed unloading materials and equipment under the Arctic LNG 2 project on April 4, 2020. It had delivered over 20,000 freight tons of general cargo to the Utrenneye field on March 22, 2020.

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22

REGIONAL REVIEWS

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By Tsvetana Paraskova

Middle East Oil & Gas amid Coronavirus Crisis and OPEC+ Drama

At Craig International, procurement isn’t just about processes, products and numbers. We promote a culture of ownership among our people, who are trusted to get on with the job on your behalf. We’re proud of how we serve clients. We’re always looking for new ways to add value and routinely introduce new technological solutions to make service delivery even simpler, smoother, faster. When it comes to procurement, we get it. Adding value, innovation and efficiency at every turn in your supply chain.

In one of the most dramatic and strangest months in the history of global energy markets, the Middle East took centre stage among all regions in the world while oil and gas investors and analysts were looking with apprehension how the global spread of COVID-19 was shutting down entire nations and industries, decimating oil and gas demand.

Thanks to the huge oil and gas reserves of producers that are core to the Organisation of the Petroleum Exporting Countries (OPEC), the Middle East has always been under the spotlight.

But over the past month, the actions of the largest oil producers in the Middle East – most of all OPEC’s top producer and the world’s largest oil exporter, Saudi Arabia – combined with the coronavirus pandemic that swept through the world to create a perfect storm for global oil and gas markets, plunging the energy industry into its second major downturn in five years.

Global oil demand has tumbled as billions of people went into lockdown, and analysts expect that oil demand loss could reach as much as 30 million barrels per day (bpd) in April and May—or a 30% plunge compared to the world’s oil consumption prior to the COVID-19 outbreak.

The OPEC+ Collapse OPEC+, the group of OPEC and non-OPEC producers led by Saudi Arabia and Russia, respectively, was scheduled to hold a regular meeting in early March to discuss how it would proceed with its pact to cut production which was expiring on March 31. The coronavirus pandemic, however, totally upended previous forecasts about global oil demand growth and producers scrambled to assess future oil supply policies in a world of declining demand.

OPEC’s de facto leader Saudi Arabia, the biggest oil producer in the Middle East, argued that the OPEC+ coalition should make deeper cuts in response to slowing oil demand. The leader of the non-OPEC nations in the pact, Russia, for its part, argued that the demand loss is impossible to predict and the OPEC+ group should leave the pact and cuts as-in until June before taking any decision.

OPEC recommended a collective OPEC+ production cut of 1.5 million barrels per day until the end of 2020.

But Russia refused to join those deeper cuts and Saudi Arabia and Russia were, for a month, rivals that even used media to accuse each other of breaking up the OPEC+ alliance which had managed supply for more than three years hoping to prop up oil prices.

The collapse of the OPEC+ deal in early March and Saudi Arabia’s statements in the following days that it would boost production significantly and sell its crude oil at deep discounts added to the demand worries in the pandemic to send international oil prices into a tailspin. On March 9, oil prices plunged by 25%, the worst one-day crash since 1991.

The market was spooked by the double supply-demand shock and oil companies from the U.S. shale patch to Europe’s supermajors to independent oil explorers in the North Sea started announcing significant capital expenditure (CapEx) and cost cuts. The oil industry, which had just adapted to $50 oil after a lot of cost cuts in the 2015-2016 downturn, found itself aligning investments and costs to $30 a barrel Brent oil.

www.ogvenergy.co.uk I May 2020

Middle East

23

Middle Eastern Economies Suffer in the Price Crash Analysts immediately turned their attention to the first collateral victims of the Saudi-Russian oil price war—U.S. shale, Canada’s oil sands industry, and the UK’s offshore oil and gas sector.

But the major Middle Eastern oil and gas producers are also suffering at such low oil prices despite their proverbial low-cost production costs. Crashing oil prices mean lower oil revenues for the petro-states in the region, where the budgets of all oil producers are heavily dependent on the money the countries make by selling their crude oil and natural gas overseas.

The coronavirus reached the Middle East in March and economies in the region began to scramble to avert the triple shock of COVID-19, plummeting demand for their key export – oil, and oil prices much, much lower than their budget break-evens. Oil producers in the Middle East will see their budget deficits widen and their oil and gas revenues plunge this year, analysts say. Some are well-equipped and better prepared to weather the storm than others, according to experts.

Middle East NOCs are in a Better Position To Emerge Stronger from the Downturn The national oil companies (NOCs) in the Middle East are set to defer some projects and reduce expenditures at $30 oil which saps the sovereign wealth funds.

According to an update note by the Institute of International Finance (IIF) from the end of March, if oil prices average $40 per barrel this year, the nine oil exporters in the Middle East and North Africa (MENA) would see their hydrocarbon earnings drop by US$192 billion, or 11% of GDP, in 2020.

However, “Relative to the rest of the world, the Middle East should come out of the crisis in a stronger position,” Ian Thom, Research Director, Middle East Upstream, at Wood Mackenzie, wrote in an editorial in mid-April.

“Consequently, the cumulative current account balance would shift from a surplus of $65 billion in 2019 to a deficit of $67 billion in 2020, and the fiscal deficit would widen from 2.9% of GDP to 9.1%,” said IIF Chief Economist Garbis Iradian and Associate Economist Jonah Rosenthal.

Fitch Ratings expects the double price collapsecoronavirus shock to put downward pressure on the sovereign ratings of Middle East and Africa oil exporters.

In the MEA region, Qatar has the lowest break-even price –the oil price required to balance the government budget, all else being equal – at $55 a barrel Brent.

Bahrain’s break-even price is $96 per barrel, Saudi Arabia’s is $91, Oman’s - $82 a barrel, Kuwait’s breakeven stands at $68 per barrel, and Abu Dhabi’s is $65 a barrel, Fitch Ratings has estimated.

According to Moody’s, the most vulnerable sovereigns in the price crash are Middle Eastern producers Oman, Bahrain, and Iraq, because of their limited capacity to adjust to the shock. Qatar and Saudi Arabia are in stronger fiscal positions, while robust sovereign balance sheets will support Qatar and the United Arab Emirates, and, to a lesser extent, Kuwait and Saudi Arabia.

“Vital income from hydrocarbon exports could fall for key producer economies, dealing a heavy blow to spending on essential services,” the International Energy Agency (IEA) warned in the middle of March.

“Even among the countries of the Gulf Cooperation Council, some of which still have a degree of financial cushioning against worsening market conditions, fiscal deficits are now projected to reach 10%-12% of GDP this year, implying additional financing needs of around USD 150 billion to USD 170 billion,” the IEA said in early April, describing the current events in the oil industry as “a shock like no other in its history.”

“Over the past decade, the Middle East has been eclipsed

by US tight oil and shale gas. But now, the region is setting itself up for the longer term as the premier supplier of oil,” Thom said.

Oil producers in the Middle East will see their budget deficits widen and their oil and gas revenues plunge this year, analysts say.

Despite the expected CapEx cuts from the NOCs in the Middle East, these companies will fare better than their international oil major rivals, according to WoodMac. NOCs are likely to reduce CapEx by 10-20 percent compared to the average 25-percent CapEx cuts for the rest of the world.

“The region’s share of global CapEx is steadily increasing and this will reinforce its role as the leading global energy supplier,” WoodMac’s Thom says.

OPEC+ Revisited While NOCs and IOCs are preparing to operate at $30 oil, the OPEC+ group drew up a new production cut agreement, after political pressure and intervention from US President Donald Trump. OPEC+ decided to voluntarily cut a collective 9.7 million bpd of its total production in May and June, and shared a timetable for gradual easing of the cuts and oil supply management until April 2022.

Despite the fact that the new agreement was described as ‘historic’ by the media and the main participants — including Saudi Arabia and Russia – the market and analysts say that the deal came too little too late to prevent a massive oversupply and will, therefore, do little to support oil prices.

The actions of OPEC+ and G20 to reduce the glut “should help bring the oil industry back from the brink of an even more serious situation than it currently faces,” the International Energy Agency (IEA) said in its Oil Market Report in April. But it also warned that the huge overhang on the market could overwhelm global storage capacity by the middle of 2020, saying that “Never before has the oil industry come this close to testing its logistics capacity to the limit.”

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24

REGIONAL REVIEWS Norway’s Oil & Gas Exploration Activity Slows Down

By Tsvetana Paraskova

European Energy Review The spreading coronavirus pandemic was the underlying theme in Europe’s energy sector this past month. European oil and gas companies, as well as associations of the renewable energy industry, scrambled to assess the impact of COVID-19 on their operations, cash flows, and future projects.

Oil supermajors slashed capital expenditures as oil prices plunged by 50% in one month amid continuous demand destruction in the pandemic and the more-than-a-month-long price war between Saudi Arabia and Russia. The pandemic did not spare the clean energy sector, either.

Associations and analysts now see wind and solar installations slowing down this year, compared to earlier projections of another bumper year in 2020.

Despite a more pessimistic outlook on renewables, some major projects in alternative energy in Europe have moved forward in recent weeks.

Europe-based Oil Majors Slash Spending as Prices Crash Following the oil price crash in early March, the oil and gas supermajors based in Europe rushed to announce capital spending cuts to protect balance sheets and dividends.

In January 2020, companies operating on the Norwegian Continental Shelf (NCS) planned to drill 50 exploration wells, but at least 10 wells have been postponed due to the uncertainty in the industry and the cuts in exploration spending across the board.

“What we’re seeing now, is both exploration wells being postponed and delays/cancellations of geophysical mapping. As of today, it appears that around 10 exploration wells will be postponed, meaning that there will be about 40 exploration wells in 2020. However, we can’t rule out further changes in this area in the future,” said NPD Director General Ingrid Sølvberg.

Referring to fields in operation, Sølvberg noted that wells were being postponed because of the price crash and/or because staffing offshore is reduced due to the coronavirus pandemic.

“There is a risk of several of these wells not being drilled later, which could mean a risk of losing resources,” Sølvberg says.

Production offshore Norway is being maintained for now, but fewer wells drilled, both exploration and on fields in operation, could impact future oil and gas production in Norway if oil prices stay lower for longer, NPD warned.

CapEx. In 2021, Eni expects to cut CapEx by 30-35% compared to previous guidance.

Royal Dutch Shell announced reduction of its 2020 cash capital expenditure (CapEx) to US$20 billion or below from a previously projected level of around US$25 billion. Shell also targets to cut its underlying operating costs by US$3-4 billion annually over the next 12 months compared to 2019 levels. The group also warned it would book post-tax impairment charges in the range of US$400-800 million in Q1, as a result of changes to its oil price outlook for this year.

Aker BP updated its investment programme, cutting exploration spending by 20% in 2020, with further significant reductions planned for 2021-22. The company operating mainly offshore Norway put on hold non-sanctioned field development projects. For 2020, this would be CapEx reduction of 20% compared to previous guidance, while for 2021-22 the initial estimate is a reduction in capital spend of US$1-2 billion.

BP is cutting 2020 organic CapEx to US$12 billion, which is 25% below its prior full-year guidance. The supermajor is cutting US$1 billion in the upstream sector, mainly in short-cycle onshore activity in the U.S. shale patch. BP expects to take a non-cash, nonoperating charge of around $1 billion in Q1. While BP is responding to the new ‘lower-for-longer’ oil prices with CapEx and cost cuts, the company’s response “will not include making any bp staff redundant over the next 3 months,’’ chief executive Bernard Looney said in a LinkedIn post at the end of March.

Norway’s Equinor suspended it share buyback programme until further notice, cut its 2020 organic CapEx by 20% from US$10-11 billion to around US$8.5 billion, reduced exploration activity this year from US$1.4 billion to around US$1 billion, and cut operating costs for 2020 by around US$700 million compared to original estimates.

Italy’s Eni responds to the sharp drop in commodity prices and the pandemic by reducing CapEx for 2020 by around 2 billion euros (US$2.19 billion / £1.74 billion), equal to 25% of the previously planned

France’s Total cut organic CapEx by more than 20%, to less than US$15 billion this year and suspended its share repurchase programme.

www.ogvenergy.co.uk I May 2020

Due to the oil price collapse and low natural gas prices, exploration activity offshore Norway will not be as high as companies had prepared for just a couple of months ago, the Norwegian Petroleum Directorate (NPD) said in an update in early April.

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Europe Renewable Projects Go Ahead As Industry Assesses Virus Impact

Europe continues to be a global leader in tidal energy installations, with European tidal stream projects generating 50% more electricity in 2019 than the year before, statistics released by Ocean Energy Europe showed. European tidal stream capacity continued to increase in 2019, reaching 27.7 MW cumulatively – almost four times as much as the rest of the world, according to the statistics.

Companies, including oil and gas majors, announced projects in alternative energies despite the high uncertainty about the impact of the COVID-19 pandemic on the global energy sector and its supply chain.

France’s Total, for example, signed an agreement with developer Simply Blue Energy to buy 80% in the pioneering floating wind project Erebus in the Celtic Sea, in Wales. This makes Total one of the first movers in this technology in the UK, the world’s largest offshore wind market, the French group said.

“With its entry into floating offshore wind, Total confirms its ambition to contribute to the development of renewable energy worldwide. Floating offshore wind is an extremely promising and technical segment where Total brings its extensive expertise in offshore operations & maintenance,” Total’s chairman and chief executive Patrick Pouyanné said.

In Scotland, two consortia have recently won £1 million for projects that aim to bring down the cost of wave power.

According to a Rystad Energy analysis, the growth in newly commissioned solar and wind projects globally expected before the coronavirus pandemic will now be wiped out for 2020 and cut by a further 10% in 2021.

In Europe, over 20 GW of solar capacity was expected before the coronacrisis, and while foreign exchange issues for projects in Europe are less of an immediate concern, they could take centre stage if the Euro falls further. Strict travel restrictions across Europe have halted some projects under construction, Rystad Energy said.

In Belgium, offshore wind energy generation set a new record in the winter, between November 2019 and March 2020, said the Belgian Offshore Platform (BOP), a nonprofit association of investors and owners of wind farms in the Belgian part of the North Sea. This past winter, the six wind farms in the Belgian section of the North Sea produced an average of 639 gigawatt-hours (GWh) of electricity per month, which is 45% higher than the average for the rest of the year, the association said.

“As one of the world’s leading producers of electricity from renewables, we have an ambitious goal: we want to be carbon neutral by 2040. We are making very good progress,” said Dr Rolf Martin Schmitz, chief executive of RWE AG. Uniper and Siemens Gas and Power entered into a cooperation agreement to develop projects on the decarbonisation of power generation and promoting sector coupling. One focus of the planned cooperation is the production and use of green hydrogen, that is, hydrogen produced from renewable energy sources.

Energy company innogy took the final investment decision (FID) for the construction of a 342 megawatt (MW) wind farm 35 kilometres north of the island of Heligoland, paving the way for its third German offshore project Kaskasi.

“Offshore wind is an important pillar to reach Germany’s climate protection goals by supplying green electricity from a reliable source,” said Christoph Radke, COO Renewables at innogy.

Europe as a whole remains the world’s largest market for offshore wind, accounting for 59% of new installations globally in 2019, the Global Wind Energy Council (GWEC) said in a report at the end of March.

Despite a decline in Germany’s wind market, Europe still saw 30% annual growth in its onshore wind market, driven by strong growth in Spain, Sweden, and Greece, according to the report.

In Scotland, two consortia have recently won £1 million for projects that aim to bring down the cost of wave power, Wave Energy Scotland said at the end of March. The two teams – one led by consultant engineers Arup and the other by rope and mooring specialists Tension Technology International – have each secured funding from Wave Energy Scotland (WES) to demonstrate the potential of new applications of materials to bring down the cost of wave power.

While projects are being announced, associations and analysts are trying to estimate how the coronavirus pandemic will impact the alternative energies supply chains.

Another major, Equinor, will work to develop a floating solar project together with Italian oilfield services and engineering group Saipem. The companies have recently signed a cooperation agreement to develop a floating solar panel park technological solution for near-coastal applications.

In Germany, RWE plans to add more than 4 GW of wind and solar power by 2022, thanks to net investments of 5 billion euro (US$5.47 billion / £4.36 billion).

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The association WindEurope warned of delays in new project development.

Europe as a whole remains the world’s largest market for offshore wind, accounting for 59% of new installations globally in 2019.

“With COVID-19 we are likely to see delays in the development of new wind farm projects which could cause developers to miss the deployment deadlines in countries’ auction systems and face financial penalties. Governments should be flexible on how they apply their rules. And if ongoing auctions are undersubscribed because developers can’t bid in time, governments should award what they can and auction the non-awarded volumes at a later stage,” WindEurope CEO Giles Dickson said.

Major European wind markets, such as Spain, France, and Italy, could be hit harder than the rest of Europe because of the strict lockdown measures in these countries severely affected by the coronavirus pandemic, Dan Shreve, Head of Global Wind Energy Research at Wood Mackenzie, said at the end of March.

WoodMac now expects total global wind power additions at 73 GW this year, down by 4.9 GW compared to its previous projections.

In the longer term, however, the global wind power market will rebound, Wood Mackenzie said in a report. Global wind power capacity additions are expected at an annual average of 77 GW between 2020 and 2029—or growth of 112% in installed capacity, according to WoodMac. In Europe, compliance with the EU’s energy and climate targets for 2030 is set to drive the addition of 225 GW in Europe through 2029.

“Land constraints in mature countries will push a quarter of Europe’s growth offshore, where the sector will comprise 32% of additions in Western Europe and 43% of additions in Northern Europe from 2020 to 2029,” said Luke Lewandowski, Wood Mackenzie Research Director.

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By Loren Steffy

U.S. producers swallow their pride and ask for government aid

Caught among the price war between OPEC and Russia, the declining oil demand as a result of the global coronavirus pandemic and mounting pressure from investors, the U.S. oil industry cried uncle. Uncle Sam, that is.

Last month, as pressure on the industry intensified and prices for West Texas Intermediate crude — which have tumbled 60% so far this year — slipped below $20 a barrel, the industry, which had long criticised government subsidies for renewables and biofuels, suddenly changed its tone and asked the federal government for help.

Independent producers urged the Trump administration to enact import tariffs on foreign oil, a measure opposed by the majors and refiners. President Trump responded in his own particular idiom, tweeting that he expected an agreement between the Saudis and the Russians to curtail production by 10 million barrels. The Energy Department proposed spending $3 billion in stimulus funds to buy 30 million barrels of crude for the Strategic Petroleum Reserve from small and mid-sized producers, but Democrats blocked the move, calling it “a bailout for Big Oil.” Meanwhile, the Texas Railroad Commission, which regulates oil and gas production in the biggest oil-producing state, agreed to hold hearings on enacting production quotas, an authority it hasn’t exercised in five decades.

More than 90 speakers, mostly from the industry, signed up to speak at the first hearing on April 14.

“If the Texas Railroad Commission does not regulate long term, we will disappear as an industry,” said Scott Sheffield, CEO of Pioneer Natural Resources, a major independent producer. Sheffield discounted any notion from his fellow executives of seeking free-market solutions to the current crisis. “That’s a joke. I haven’t seen a free market in 35 years as CEO.” Matt Gallagher, the CEO of Parsley Energy, writing in the Houston Chronicle, said his company slashed its 2020 capital budget by 40% and urged other companies to voluntarily cut production.

Larger companies took similar measures.

Chevron, for example, halved its spending for U.S. shale production and slashed 2020 capital spending by 20%, or $4 billion.

Marathon Oil, a large independent producer, also said it will cut spending by 20%.

Among the hardest hit of U.S. producers is Occidental Petroleum, which paid $37 billion last year to acquire Anadarko Petroleum in a deal that saddled the company with $38 billion in debt just months before prices began to crater. In March, Oxy reduced its dividend to shareholders for the first time in 30 years and slashed spending by a third.

The company followed that news a few weeks later by announcing a second round of cuts — $2.5 billion from its capital budget and $600 million from its operating budget — and reduced pay for employees by 30%.

Senior executives took bigger pay cuts, and CEO Vicki Hollub saw her pay slashed by more than 80%.

Service companies, as they typically do, led the layoffs in response to the price rout.

Even after a tentative deal among OPEC members and Russia, Baker Hughes said it would write down $15 billion in assets and cut capital spending by 20%. Schlumberger announced several weeks earlier it would reduce its budget by 30%, which would include restructuring, pay cuts and layoffs. Halliburton, meanwhile, previously announced it would furlough 3,500 workers in Houston and 400 in Oklahoma. Dozens of smaller players followed suit. Whiting Petroleum, which once traded as high as $150 a share, filed for bankruptcy in late March.

The price drop and the coronavirus response accentuated a bigger program in the industry: mounting debt. For years, many independent producers have overspent their cash flow, drilling new wells with cheap capital from private equity investors. In the past decade, the industry amassed some $400 billion in high-interest debt. That flow of easy money began to dry up before the pandemic. Last year, oil stocks began falling as investors demanded profitability over market share.

In the Permian Basin, the prolific engine for surging U.S. crude production, the slowdown is slow to arrive. In mid-April, 40 companies, mostly independent producers, in one week filed for permits to drill 110 new wells in the region. And companies continue to seek permits in other shale formations as well.

After several years of production increases, the U.S. Energy Information Administration now forecasts a decline of 183,000 barrels a day in May. Sheffield, the Pioneer CEO, predicted output ultimately could drop by as much as 2 million barrels.

The production declines likely mean that America’s transition to net oil exporter will be short-lived. In recent months, the U.S. exported more oil than it imported, but economists predict that will change as production falls. The biggest U.S. refineries still import heavy crude, rather than using the light, sweet crude produced from the country’s shale formations.

As oil and gas usage plunged in the first four months of the year, there are signs of other shifts in the U.S. energy sector. Coal use fell more than 13% in 2019, the most in 65 years, as coal-fired power plants shut down nationwide. The U.S. used 596 million tons compared with 688 million tons in 2018, and the EIA predicts coal consumption will continue to decline, dropping to 517 million tons this year. Coal has faced mounting competition from cleaner generating fuels, primarily natural gas, wind and solar power.

As the dirtiest fossil fuel, coal also is under pressure from policymakers concerned about climate change. Two of the most populous states, New York and California, have mandated a transition to clean energy.

Meanwhile, in the Oil Patch, the reality of a major bust is setting in. Some industry veterans are comparing the current crisis to the 1980s, but increasingly, it’s looking like the 1930s, when overproduction by American companies forced the government to intervene to control output and support prices to keep the industry afloat. So far, though, the industry is finding little sympathy from state or federal regulators.

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REGIONAL REVIEWS

By Dalia de León

Mexican Energy Review Neither the oil price war, nor the global pandemic of COVID-19 has changed the course of the energy policy that President Andrés Manuel López Obrador established for the country. With a strong ideology focused on energy sovereignty, the strengthening of Pemex, the increase in oil refining capacity, the rehabilitation of existing refineries, and the construction of the Dos Bocas refinery continue to be proposed as the way forward.

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ligned with an energy sovereignty ideology, President Andrés Manuel López Obrador has based his national development strategy on Petróleos Mexicanos (PEMEX), which is one of the main axes of his government. However, the state-owned enterprise is one of the most indebted oil companies in the world, according to international rating agencies such as Moody’s and Fitch. Besides, for a decade, it has faced a sharp drop in its production levels of hydrocarbons, especially crude oil. López Obrador undertook a strategy to rescue Pemex with a formula that consists of increasing the injection of public resources and restricting the participation of private capital. Likewise, it has presented projects highly dependent on hydrocarbons, such as the combined cycle projects in Yucatan, and the construction of the Dos Bocas Refinery in Tabasco, which will have an investment of US$ 8 billion. According to the calculations of the government, Dos Bocas will avoid the import of fossil energy resources, which is expected to boost the political and economic independence that the President is seeking.

In 2019, the international trade war between China and the US, in addition to the changes made to the legal framework of the energy market promoted by the current administration, caused an increase in nervousness and uncertainty among investors. In this way, the drop in GDP and the fragility of Pemex marked the first year of government. Coupled with this, is the current crisis caused by the COVID-19 outbreak, which impacted the country at a critical moment since the pandemic was announced not even two weeks after Pemex reported losses of US$ 18 billion in 2019 due to the decrease in sales and in crude oil production.

Given the devastating drop in oil prices caused by the current crisis, OPEC proposed a historic multilateral deal to lower global oil production at 10 MMb /d, a measurement that would apply for May and June, with the expectation of maintaining low levels of extraction for two years.

Negotiations between energy ministers had been fluid until Mexico’s representation team, led by Rocio Nahle, Ministry of Energy, refused to reduce national production by 23 percent, equivalent to quit production of 400 Mb/d.

www.ogvenergy.co.uk I May 2020

Through a Twitter post, Rocio Nahle announced, “In the agreement to stabilise the price of oil at the @OPECSecretariat, Mexico has proposed a reduction of 100Mb/d over the next two months. From 1,781MMb/d of production we reported in March 2020, we will decrease it to 1,681MMb/d,” which is far less than the target proposed by the group. This statement made OPEC consider not to include Mexico in the agreement, which would have caused great harm to the position of the country within the group of oil-producing countries.

“Mexico can and should join the international community in stabilising the oil market,” said Aldo Flores Quiroga, who served as former Mexican deputy oil minister from 2016 to 2018 in the OPEC deals negotiations.

“The production cut is both necessary and possible. It’s the responsible thing to do domestically and internationally,” he added.

“Mexico can and should join the international community in stabilising the oil market" said Aldo Flores Quiroga

Given this, the President of the US, Donald Trump, said that he would produce fewer barrels of oil to help Mexico comply with OPEC’s agreement to curb the drop in prices, support that Mexico will repay in the future.

Donald Trump explained in a press conference that “this means reducing US production, it is a large amount (of barrels) for Mexico, but for us, it is little.”

Bad news for PEMEX continues. On April 18th, Fitch Ratings announced that it reduced the long-term international ratings in foreign and local currency for PEMEX and the Federal Electricity Commission (CFE). For Fitch, this decision “reflects the direct link of these companies with the sovereign ratings of Mexico.” In the specific case of Pemex, its credit rating fell from “BB” to “BB-,” while CFE went from “BBB” to “BBB-,” the outlook for both changed from stable to negative.

According to Fitch, PEMEX has “limited flexibility to face the challenges of the industry, given the high tax burden on its income, the high levels of debt, the increasing costs of extracting crude oil and the high need for investment in maintaining production and replenishing reserves.” It also ensures that “the corporate governance of the state company is weak, as the government constantly interferes in changes in strategy, financing, and administration.”

As previously mentioned, the country’s current energy policy has generated that even though Mexico has great potential in internationally competitive renewable energy sources, its energy matrix is based mainly on hydrocarbons. In this scenario, the drop in oil prices has highlighted the weaknesses of the energy transition in Mexico. “Energy sovereignty is completely desirable, but currently energy sovereignty will be renewable, or it will not be, since it will not be through oil and we cannot have sovereignty over electricity generation with gas because we do not have enough,” highlighted Pablo Ramírez, climate and energy expert at Greenpeace Mexico.

According to UNDP-Mexico, the national GHG emission made during electricity and heat production line is derived from the consumption of fossil fuels by the Federal Electricity Commission (CFE), the Independent Power Producers (PIE), and the power plants of self-sufficiency. Regarding this topic, the Ministry of Energy (SENER) points out that “In this sense, the fuels used to produce electricity by these entities are mineral coal, fuel oil, diesel, and natural gas.”

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Mexico Both private producers and CFE are responsible for GHG emissions; therefore, both actors should play a central role in the gradual but effective solution to reduce GHGs. One of CFE’s alternatives in this matter is to begin a reconversion of its plants and carry out a process of promoting and adopting electricity generation technologies that use renewable energy sources. This transition process was slowed down by the public auctions cancellations, as well as by the changes in the regulatory framework related to the issuance of Clean Energy Certificates (CELs).

of national and international companies have detected the enormous potential of Mexico in terms of renewable energy generation and, under different risk and income schemes, have adopted options for buying and selling energy among privates.

Under schemes such as Power Purchase Agreements (PPA), Distributed Generation, and Merchant Projects, the energy industry has promoted the development of the clean energy sector. In terms of financing PPAs, at the moment there is a shortage of off-takers with a high credit rating to sign the long-term agreements, due to the fact that most of these agents already have signed contracts. Therefore, generally, off-takers have an interest in signing shortterm contracts.

Companies are looking for alternatives in the electricity market.

However, the Mexican renewable energy market is not based on just one scheme. On the contrary, companies are looking for alternatives in the electricity market. “As project developers are adjusting to the emerging policies of the current administration, growth in renewable energy will continue,” said Calixto Mateos, managing director of the North American Development Bank. Following this trend, a wide range

Likewise, German-Mexican Energy Partnership affirms that opening to different mechanisms than Long-Term Auctions (SLP) implies that generators and suppliers must identify new schemes for project development. According to data published by the National Commission for Energy Control

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(CENACE), the SLP process attracted an investment of US $ 8.6 billion in both wind and solar energy, reaching competitive prices with a weighted average rate of US$ 43 / MWh in the first SLP, decreasing by 30 percent in the second SLP to reach US$ 33 / MWh and falling by 40 percent in the third SLP with prices of US$ 20 / MWh. As far as today, Mexico has more than 260 clean energy plants, which represent 30 percent of the installed capacity; however, it represents 21 percent of the total national generation. To achieve the goal of 35 percent clean generation by 2024 is necessary to generate an additional 68 MWh. On the other hand, the investment costs of solar and wind projects have decreased thanks to developments in technology and its availability.

So far, although the supply chain in both solar and wind depends on imports from China and Spain, the stock of existing spare parts in Mexico is vast, and the current lockdown caused by COVID-19 has not had a drastic impact on the operations of EPC companies or in the O&M processes of the country’s photovoltaic parks and wind farms. Meanwhile, Víctor Ramírez, spokesman for the Mexico, Climate and Energy Platform, recommended to those companies that are quoting the installation of photovoltaic equipment, to do it in dollars and not Mexican pesos, to avoid economic losses due to the pesos volatility.

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he Mexican Oil & Gas sector is now open to International companies following the Energy reform of 2013, previously it was a state monopoly by PEMEX. There are great opportunities for the international supply chain to support their existing clients and win new work with up and coming Mexican supply chain.

Whittaker have been in Mexico since 2009, working from our 12-acre, base in Ciudad Del Carmen, Campeche. C.D del Carmen is the hub for offshore operations in Mexico.

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challenging times with COVID-19 pandemic and a low oil price. Countries such as Mexico with lower operating & production costs may recover and survive these challenges a little better than the higher cost basins.

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TECHNOLOGY FOCUS

New thinking new technology...

Kaseum develop a new range of electro-mechanical downhole tools designed to improve setting and unsetting of plugs and packers and provide a single run multiple-hole punching system.

INTELLIGENT PLANT LTD. published their latest tool which allows decisions to be made on real-time process and Alarm & Event data in Microsoft Power Automate.

K-Set K-Set is a unique electro-mechanical downhole setting tool, capable of delivering up to 90,000 lbs of linear force which can be used to set, or un-set, plugs and packers in a wide range of tubing and casing sizes. K-Set is suitable for use on any conveyance electric line and coiled tubing.

K-Punch K-Punch is a modular hole punching tool combinable with K-Set and can be configured to punch single or multiple, oriented holes in a single run. K-Punch can punch holes in a range of tubing and casing sizes from 2-7/8” to 9-5/8”.

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his simple connector can bring real-time process values as well as Alarm and Event (A&E) data together in Power Automate from many different types of industrial historians. Seamlessly integrate plant and corporate data, streamline tasks and share with any colleague on any device, enabling faster, better, real-time decision making.

Data historians are used throughout industry for masslong term storage of time series data.There are a number of Historians on the market with varying popularity but one thing they tend to have in common is their lack of integration options to popular business-level tools such as Microsoft Power Automate. As such, this valuable Operational data is often inaccessible to the business making cross-data analysis with commercial data difficult. Often companies have to develop custom applications which are expensive, difficult to support and can sometimes lead to security issues.

Intelligent Plant developed the Industrial App Store which enables interaction with all the different historian data through a unified API. At the start of April 2020 Intelligent Plant released an official, Microsoft certified Industrial App Store connector for Power Automate. No more hefty SQL queries or Excel document interrogations with no easy real-time update option or complicated architecture solutions, simply install Industrial App Store connect and out of the box you will be able to connect to Aspentech IP.21, OSIsoft PI, Honeywell Dynamo, Siemens and many more via OPC DA & HDA. This allows our customers to bring data from various sources into Microsoft Automate flows to deliver insights that weren’t possible before. Real-time updates prompt money-saving decisions by engineers that also increase plant safety and efficiency.

More information at www.intelligentplant.com

TECHNOLOGY FOCUS

Advertisement Feature

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STARLEAF - SECURE REMOTE WORKING Five key questions you must ask your video meetings provider.

As the world moves to remote working, organisations of all sizes are choosing video meetings to improve collaboration and help people work (and be part of the team) from wherever they are.

But as the use of video meetings has grown, so have concerns about the security of the solutions in use.

Most organisations need, and expect, secure remote working solutions. Whether it’s a healthcare or financial organisation using video meetings with their service users, or internal comms between offices, your data is important, and private.

There are two ways to secure technology solutions: build and then secure, or secure by design.

At StarLeaf, we’ve built our video meeting products with security at the core, not as an afterthought. And here are 5 questions to ask of your provider, to see if they have too.

The switch to working from home or remotely has changed our lives in a number of ways. The daily commute is now measured in seconds rather than minutes, and our work outfit has shifted from smart casual to casual. But being away from colleagues creates challenges for communication, collaboration and the feeling of community, which is why organisations of all sizes are using video meetings to overcome these hurdles.

1

Is the meeting securely encrypted?

It’s important that meeting data is encrypted, both in transit and at rest, using the latest approved cryptographic methods. This not only includes media streams from video calls, but also recordings and instant messages shared between participants. But security should extend to before the meeting begins. Check that meeting IDs are random and only live when the meeting is live to prevent unwelcome guests. All privacy and meeting controls should be simple to allow users with any level of technical expertise to use video calls securely.

As the use of video meetings has grown, so have concerns about the security of the solutions in use.

But as the use of video meetings has grown, so have concerns about the security of the solutions in use. StarLeaf believe that video conferencing should replicate the office environment as much as possible, and just as you’d want your emails and face-to-face conversations at work to be private, you should rightly expect the same of video calls at home. Whether it’s a healthcare or financial organisation using video meetings with their service users, or internal communications between offices, your data is important, and private.

This is why at StarLeaf, we put security at the core of our product. We know that customers value data privacy and a secure connection. If you’re looking for a video conferencing provider for your business, here are five questions you should ask to see if security is the foundation of their service too.

2

Who owns and runs the platform and services?

If your video conference provider uses a third-party platform, they won’t have as much control of their service. Those who manage their own platform end-to-end can mitigate against, identify and respond to risks more quickly and effectively, providing a more secure experience for users.

3

What SLA is available, and is it backed by a guarantee?

4

Where will my data be held, and how will it be used?

Data privacy has risen up the agenda in recent years, and people are naturally concerned about where their data is stored and how it is shared.

Data protection laws vary greatly between regions, which means that data jurisdiction matters. Can your service provider assure you that your data will remain under your control, and in your territory?

You also need to make sure that your provider is transparent about other ways your data may be used. Check whether your provider shares your data with external organisations - it’s important to know who has access to your personal data, and where.

What security certification does the provider hold?

In some sectors, complex certification names are used to bamboozle. But in the security arena, they mean that customers can be sure their data is being kept secure. The industry leading security certification is ISO/IEC 27001, and service providers certified to this level have to maintain and abide by a set of very strict policies in order to retain the certification.

This level of certification should give customers confidence that the provider is committed to the highest operational standards for people, processes, suppliers and IT systems, and to transparency in the way they run and secure their solution.

Platform ownership also has a knock-on effect on service reliability. Most video providers offer 99.9% uptime, without guarantee, which could mean over 8 hours of possible downtime a year. Can you imagine what it would mean for your business if your communications were out all day?

Although we expect many things to return to ‘normal’ when the risks from the coronavirus pandemic recede, we expect people will choose to spend more time working from home or remotely than before the crisis. The shorter commute and more comfortable work attire are just two of the many benefits the public are learning about working remotely.

Owning our own platform means StarLeaf can offer an industry leading 99.999% uptime guarantee, which equates to a maximum of 5.5 minutes unplanned downtime in a year. This gives peace of mind to customers that they can rely on us.

So as the trend of remote working grows, it’s important that you have the right tools in place now for your teams to communicate safely and securely.

Video conferencing has the potential to allow your business to operate seamlessly, whether you’re in the office, at a remote site or in your living room.

Try StarLeaf for free today at starleaf.com/ogv

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TECHNOLOGY FOCUS

INTRINSIX: Power for your people Arnlea’s Intrinsix software, and IntrinsixEX specifically, is a powerful tool for your people. Here we discuss in more detail its benefits and the value it brings to oil & gas, LNG and other energy businesses, and for other sectors where electrical inspections are critical.

easily, freeing up your inspection team to carry out Ex inspections quickly and easily, in a productive, open frame of mind. Typically, their efficiency improves 150%. Tasks are easy to assign and complete, bringing more interest to the role and higher job satisfaction, factors that are known to contribute to your employees’ commitment to your business and health and wellbeing.

IntrinsixEX uses auto-ID mobile technology to increase compliance and decrease costs in your Ex inspections and maintenance activities. Compliant with IEC 60079 standards and ATEX directives, its benefits can be usefully divided into financial, deployment, user and HSEQ themes to fully appreciate the value IntrinsixEX brings to each partner business that uses it.

HSEQ Health & Safety are key drivers for any business, none more so than in our industry.

By eploying IntrinsixEX, and using it as expected, you’re already ensuring that you or your own client is inspecting hazardous equipment, anything subject to ATEX regulations, in the correct manner.

Our software supports your own HSEQ protocols and ensures that you properly adhere to ATEX because that is how it’s been designed. This also ensures you’re conducting Ex inspections as safely as possible. IntrinsixEX integrates easily with SAP and Maximo, and so it will create inspection reports, management information and an audit trail for any single inspector or piece of equipment. This gives you additional Health & Safety reporting, as required.

User Intrinsix software has been designed with the end user in mind. Working on Windows or Android devices, the latest versions operate via a user-friendly interface, that has been designed with the user experience in mind. This makes training on the software straightforward. It also creates a sense of familiarity with the software quickly and

www.ogvenergy.co.uk I May 2020

Deployment As the Ex inspection software of choice in the North Sea, we work closely will all our clients to create bespoke solutions that suit each particular customer’s own requirements.

IntrinsixEX allows more inspections to be performed more quickly, which means that you can reduce the number of inspectors you need offshore at any one time.

This brings additional financial and HSEQ benefits. Reducing the number of overall people offshore improves health & safety and also improves the use of both resources and budget.

With a single central location for all data-inputting and recording, teams of people can access that data rapidly. Reporting is uniform and consistent and ultimately that leads to enhanced operational decision-making that assists with driving more value into the business and the reduction of costs.

If we were to summarise the benefits of IntrinsixEX to any oil and gas operator or their partners, it has to come down to its ability to deliver greater safety and lower costs for the asset where its deployed.

As the Ex inspection software of choice in the North Sea, we work closely will all our clients to create bespoke solutions that suit each particular customer’s own requirements. Our software is flexible enough to be tailored to integrate with the systems you need and deliver the critical processes you value.

Financial The investment in IntrinsixEX improves operational efficiency at all levels of the Ex inspection process. Each inspection period is reduced by up to 50% as a direct result of Arnlea’s in-built Risk-Based Inspection (RBI) strategy. This means your people can be used for other areas of responsibility, bringing additional cost-savings offshore. Equipment is maintained or repaired much more quickly than otherwise, allowing for fewer faults to develop.

To find out more: • head over to our website www.arnlea.com to book a demo or download our brochure • send an email to info@arnlea. com requesting more information • call +44 1224 620000 and you’ll be put through to someone who can help you

TECHNOLOGY FOCUS

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EC-OG set to accelerate subsea clean energy growth with investment from Par Equity Subsea clean energy specialists EC-OG have received £1.6m from an investment consortium led by Par Equity.

EC-OG will use the funds to support its growth plans, which focus on the exploitation of its innovative Halo battery storage system designed for subsea applications.

The investment will create up to 40 jobs in Aberdeen over the next 12 months.

Halo is a modular and scalable Lithium-ion battery storage system designed specifically for the demanding subsea environment. By providing a reliable and uninterrupted power source located directly at the point of use, Halo can reduce reliance on subsea umbilical cables and offer a solution to a number of challenges encountered by subsea operators. Some of these applications include: • As a remedial power source of brownfield assets suffering from electrical supply problems, such as low IR or subsea connector failure.

• Powering offshore assets as part of a clean energy system, integrating Halo energy storage with marine renewable energy or other remote power systems ideal for long-distance tie-backs and new field extensions.

• A fully rechargeable battery system for resident subsea vehicles, helping to reduce the financial and environmental costs of offshore inspection, repair and maintenance activities.

partnership with the British Business Bank.

The funds were allocated as part of the Regional Angel Programme, a £75m programme to support some of the fastest growing technology companies across the Scotland, Northern Ireland and the North of England and is designed to provide early stage capital to smaller businesses with high growth potential.

Richard Knox, Managing Director of EC-OG commented: “This investment comes at a perfect time for EC-OG as we prepare for widespread commercialisation. In particular, the sharp drop in the price of oil means our target customers are increasingly looking for new technology to cut costs, which is a key selling point for us.

“Par Equity has understood the capability of the EC-OG team, and the technology, to enable a transition to clean, cost competitive energy in the emerging subsea clean energy market.

The new funds will allow us to accelerate scale-up of our automated battery manufacturing capability, significantly reduce the time from order to deployment and ensure we maintain excellent service support as the business grows.”

Par Equity, a venture capital firm based in Edinburgh that specialises in investing in innovative technology companies, was joined by existing investors, Orchard Venture Capital and Scottish Investment Bank. Simmons Energy, a division of Piper Sandler, acted as exclusive corporate finance adviser to EC-OG throughout the investment process and will continue to support it with future corporate activity.

In preparation for the expected growth in the use of large-scale subsea energy storage technology, EC-OG has recently undertaken a significant upgrade of its battery manufacturing capabilities at its Aberdeen facility. CNC battery “In particular, the cell welding equipment and automated battery module sharp drop in the test systems have been price of oil means our installed, enabling a target customers are significant reduction in the increasingly looking for lead time of the Halo energy new technology to cut system whilst maintaining costs, which is a key high levels of quality & selling point for us.” reliability.

The investment deal between in EC-OG and Par Equity is the first that has made since Par Equity’s recent

RICHARD KNOX

EC-OG joins Par’s portfolio of nearly 40 companies, which includes emerging stars such as Current Health, a leading Edinburgh-based remote-patient monitoring platform; BrainwaveBank, the Belfast-based creator of a wearable headset device for EEG brain scanning that measures the mechanisms underpinning neurological disorders and therapies; and NPT, a Middlesbrough-based cleantech company with a patented process to convert nonfood plant residue into biofuels and chemicals.

Paul Munn, Managing Partner of Par Equity said: “We are delighted that EC-OG is our first investment as a fund manager in the Regional Angel Programme. Par Equity is committed to seeking out and supporting the very best in high-growth technology start-ups.

Our recent tie-up with the British Business Bank and our wider access to funds through our EIS Fund, Private Investor Network and the Scottish Investment Bank, gives us a breadth of firepower for our portfolio.

EC-OG have invested more than three years into the design and capability of their Halo battery storage system, building it alongside their prospective customers. We’re confident that they will be successful in their growth ambitions and I am delighted that Par Equity can provide the capital they need to turn them into reality.”

Advisers on the deal include Harper Macleod, Simmons Energy, Stronachs, Philip Hare Associates, Burness Paull, Macroberts and Johnston Carmichael.

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GREEN ENERGY

GREEN ENERGY ZONE SPONSORED BY

Could a focus on repairs lead to a lasting COVID-19 impact?

Here at Xodus we have charged into 2020 with a true sense of determination and pride. I’m incredibly excited that most of our work utilises skills from across the business; from offshore wind supply chain experts to commercial analysists (and many more!). We know this works and that it adds value for clients. But we also know that this approach is fit for purpose in a world where the focus is on a broad energy mix and meets increasing demand. We are leading and guiding our Clients through the energy transition, and working together to deliver a responsible energy future.

Peter Tipler Renewables Director, Xodus Group

By Neil Ford

As the supply chain is deeply affected by COVID-19 restrictions and worker availability, energy operators are adapting to the situation in order to maximise asset availability.

Lockdowns globally have delayed a number of new projects however existing wind farms must continue to operate to ensure security of supply.

Due to COVID-19 restrictions and sustained distancing measure Europe’s wind operators are prioritising reactive maintenance that could heavily impact asset performance moving forward.

www.ogvenergy.co.uk I May January-February 2020 2020

for BWE, the German Wind Energy Association, said.

School closures have prevented some employees from leaving home while travel restrictions have curbed the transfer of staff across longer distances, Keil said.

With remote working at an all-time high, wind operators with advanced analytics and remote capabilities could have an advantage.

In most of Europe, only “essential” workers are allowed Operators are having to optimise their limited resources to go to work, prompting wind operators to focus on “After several tough and new measures that balance safety against reactive turbine repairs and reduce scheduled, years, the sun may costs could have a lasting impact if waves preventative maintenance activities. of lockdowns or self-distancing are finally be ready to implemented in the coming years.

In Spain, where strict lockdowns shine again on the UK stopped wind power offshore market,” Audun manufacturing and severely Employers should carry Martinsen, head of curbed outside work, O&M out risk assessments for oilfield services research workers have concentrated Rystad teams Energy and UK health and safety group on corrective tasks and localatservice SafetyOn has published guidance postponing many preventative “strictly” limit the number for wind site workers to allow maintenance tasks, Alberto of staff working together, safe working practices during the Cena, Technical Advisor at pandemic. Many of these could be the Spanish Wind Energy the guidelines said. prolonged long after the crisis as a Association (AEE), said. new normal of self-distancing sets in.

Key activities have included Employers should carry out risk assessments the replacement of Insulated Gate for local service teams and “strictly” limit the and Bipolar Transistors (IGBTs), electric number of staff working together, the guidelines said. switchgears and gearbox dismantling, typically requiring cranes, Cena said.

When multiple teams are on site, working hours should be staggered and workers must be nominated tooling Vattenfall, an operator of onshore and offshore times and restricted to defined workspaces, it said. wind farms, has identified its key workers necessary “to maintain essential turbine operations and critical “Persons should not share vehicles, where suitable functions,” a spokesperson for the company told distancing cannot be achieved,” it said.

New Energy Update. Otherwise, staff have been working from home using remote technology to Service teams should avoid visiting service centres and limit disruption. equipment stores where possible, the guidelines said.

If required, tools and material collection should take Location and family responsibilities are also limiting place outdoors. the supply of workers, Frederick Keil, press officer

Safety first

GREEN ENERGY “Clearly this may be more problematic in the current climate due to social distancing requirements, so I wouldn’t be surprised if the team sizes reduce temporarily, whilst the number of days on each turbine may potentially increase accordingly,” he said.

According to SafetyOn, cleaning becomes part of the job. The first and last person to arrive at a turbine or substation should disinfect all frequently touched surfaces, such as door handles and handrails, it said.

The stricter guidelines will increase costs and operators will need to find ways to become more efficient with on-site staff.

“Scheduled maintenance is typically covered under a fixed price arrangement,” Redfern noted.

“Therefore, I expect any additional costs due to extra staffing or subsequent catch-up effort will either need to be swallowed by service providers or claimed through force majeure arrangements,” he said.

Spares supply On April 20, leading turbine supplier Vestas announced they will lay off 400 employees by stopping technology projects and prioritising deliveries in 2020 due to the COVID-19 pandemic.

Earlier this month, Vestas suspended its 2020 financial outlook due to ongoing coronavirus disruptions. Factory closures and travel restrictions have impacted Vestas’ manufacturing, supply chain and installation activities, the company said.

The stricter guidelines will increase costs and operators will need to find ways to become more efficient with on-site staff.

Offshore O&M often involves larger teams to reduce vessel trips and this creates greater staffing challenges, Redfern said.

In northern Europe, the scheduled maintenance season has just begun, leaving operators little time to test new procedures.

Scheduled maintenance might typically include around four technicians, working in parallel and spread out across the tower, yaw deck, nacelle and other areas, Redfern said.

Orsted’s installed offshore asset base remained fully operational at “normal availability rates” and construction projects were progressing according to plan, Henrik Poulsen, CEO, said.

“There is a risk that key suppliers get delayed and that our own personnel are constrained by the travel restrictions put in place in many countries, but so far we have been able to find solutions to the challenges,” he said.

“This may over time impact the availability of our wind farms but we see no Covid-19 related impact on availability so far,” he said.

Long battle Experts predict that many parts of Europe and the US will require lockdowns of varying severity for months and a second major COVID-19 spike in the winter would cause further pain.

Prolonged factory shutdowns and worker restrictions would make it harder for operators to avoid profit-sapping downtimes and higher costs, experts warn.

Operators would be forced to delay more maintenance activities.

In Europe, wind factory closures have been confined to Spain and Italy, the two countries hardest hit by the COVID outbreak. In Spain, Siemens Gamesa, Vestas, Nordex and GE Renewable Energy recently reopened 15 manufacturing facilities after a strict two-week lockdown was loosened April 13. Three factories in Italy owned by smaller suppliers remained closed as at April 22.

Offshore exposure

Leading offshore operator Orsted has split up its on-site teams to reduce the potential for infection and is allowing as many workers as possible to work from home, the company said March 25.

Prolonged international travel restrictions could hamper the manning of O&M vessels, Poulsen warned.

“We’re in a period of high uncertainty and by making a strategic decision on our product portfolio and reduce complexity, we sustain our competitiveness in the future and ensure we can adjust quickly to COVID-19 challenges,” Henrik Andersen, President and CEO of Vestas, said in a statement.

Vestas factories in China have returned to normal operation and the company will use this capacity where possible to mitigate challenges in other parts of the world, the company said.

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“The postponement of preventive maintenance could affect future operation of the plants if faults are not detected in advance,” Cena noted.

Upgrading of minor components could also be delayed, depriving operators of the performance benefits of improved components.

Scheduled retrofits-- upgrading of minor components-- could also be delayed, depriving operators of the performance benefits of improved components, Redfern said.

GREEN ENERGY ZONE SPONSORED BY

Implementation of larger repowering projects would likely mirror the new build market, where project progress currently depends on regional lockdowns and supply chain availability, he added.

“I would expect the same to be true of repowering, especially if contractors are already mobilised for the work,” he said.

www.xodusgroup.com

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By Shelley Milne

Government actions need to be taken to ensure the energy industry can cope whilst working towards meeting targets.

Delivering 40GW of offshore wind by 2030

SSE Renewables (SSER) has supported an increase to the UK’s offshore wind ambition for some time and welcomed the manifesto commitment by the new UK Government to increase that target to 40GW by 2030.

With COVID disrupting the energy sector, will these targets still be achievable?

S

SE Renewables has called for a series of “enabling” offshore wind policy actions from the UK government, warning that a “business as usual” approach will not deliver 40GW of installed capacity by 2030 The developer said an increase in “capabilities and cooperation” across government departments is needed to allow annual deployment rates hit up to 4GW from 2025 to reach the goal, which is based on a Conservative manifesto promise and up from last year’s 30GW sector deal vision

GREEN ENERGY ZONE SPONSORED BY

Annual Contract for Difference rounds, more regular and increased seabed leasing volumes and a strategy for floating technology are among the recommendations in the blueprint.

SSE also called for the removal of barriers to the consenting process, reform of the electricity market design and finding a more efficient way to develop grid infrastructure, which will be needed to integrate new offshore wind capacity SSE also called for deeper cross-departmental collaboration and resources to mitigate aviation radar constraints, strategic investment to support the development of the supply chain in the UK and geographical diversity of the wind fleet

www.xodusgroup.com

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INNOVATION ZONE

INNOVATION ZONE

SPONSORED BY

FIELD TESTING OF METHANE MONITORING TECHNOLOGIES

Innovation plays a role in every economy, and many UK firms remain unaware of the full range of Government incentives available to them in support of their product or service developments. Leyton is Europe’s largest R&D Tax Consultancy, having assisted over 8,000 UK clients and returned over £500million in reliefs and incentives. The challenges and opportunities faced within Oil & Gas mean that now, firms are thinking differently and are continually improving their products and services. Leyton is proud to have returned over £35million in R&D Tax Relief, R&D Allowances, Patent Box Relief and Grant Funding to our Oil & Gas and supply chain clients.

Over 1000 sites in Texas and New Mexico have been used to conduct field trials of a number of emerging methane detection technologies, including satellite and aerial surveillance monitoring to further reduce methane emissions.

T

he field tests conducted by ExxonMobil are evaluating a range of next generation detection technologies and scalability of that in addition to satellites use drones, planes, helicopters, ground-based mobile and fixed-position sensors.

All technologies and deployment methods will be used to detect leaks and identify potential solutions that can be shared with other oil and gas operators.

“By testing the most promising methane detection technologies in a field environment, we are providing viable solutions that can be adopted by other producers to detect and reduce methane emissions,” said Staale Gjervik, Senior Vice President of unconventional at ExxonMobil. “We are applying scientific rigour and taking aggressive steps to find commercially scalable and affordable solutions for all operators.”

The technologies are being validated by a combination of field observations, optical gas imaging cameras and portable methane detection instruments. ExxonMobil is also comparing measurements to downwind emissions observations using technology

by Aerodyne Research that enables holistic measurement of site emissions.

“We are already seeing the benefits of some of these technologies,” said Gjervik. “Through the trials, we have discovered methane sources that would otherwise not have been detected as efficiently or quickly under the current methods prescribed by regulations.

The company is committed to immediately investigating and fixing methane emissions that are detected during the trial.”

www.ogvenergy.co.uk I May 2020

As of year-end 2019, the company has reduced emissions by nearly 20% in its US unconventional operations compared to 2016 levels.

The field trials build upon ExxonMobil’s previously announced emission reduction initiatives. As of year-end 2019, the company has reduced emissions by nearly 20% in its US unconventional operations compared to 2016 levels, and the company remains on track to meet its corporate-wide commitments to reduce methane emissions by 15% and reduce flaring by 25% by year-end 2020. ExxonMobil’s successful voluntary methane management programme includes structured leak detection and repair protocols, prioritised replacement of high-bleed pneumatic devices, technology enhancements to infrastructure and substantial data gathering and research.

ExxonMobil las month introduced a model framework for industry-wide methane regulations and urged stakeholders, policymakers and governments to develop comprehensive, enhanced rules to reduce emissions in all phases of production.

Since 2000, ExxonMobil has invested nearly US$10 billion in projects to research, develop and deploy lower-emission energy solutions.

The company also continues to expand collaborative efforts with more than 80 universities around the world to explore nextgeneration energy technologies.

FLOW BATTERIES: THE FUTURE OF ENERGY STORAGE? Flow batteries with longer lives than lithium-ion batteries could be the solution for the energy storage.

INNOVATION ZONE

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A recent report confirmed there is over 70 MW/250 MWh redox flow battery storage capacity deployed to date, in medium to large-scale projects. This is expected to rapidly increase due to the batteries' fast response time, scalability, and not least, their much easier recyclability than lithium-ion batteries.

The flow systems works though dozens of different types of flow batteries, only about 10 to 12 specific chemistries appear ready for commercial applications. All operating on the same basic principle of incorporating liquid electrolyte to function as a source of direct current (DC) electricity that runs through an inverter for conversion to alternating current (AC) power.

Benefits: Demonstrated 10,000-plus battery cycles with little or no loss of storage capacity.

Ramp rates ranging from milliseconds for discharge if pumps are running, to a few seconds if pumps are not.

F

low batteries, also called redox flow batteries, are a type of hybrid between a battery and a fuel cell.

In a redox flow battery, catholyte and anolyte are stored in separate tanks, and pumps are used to circulate the fluids into a cell stack with electrodes separated by a thin membrane. This membrane permits ion exchange between the anolyte and catholyte to produce electricity.

The power produced is dependent on the surface area of the electrodes, while the storage duration is a function of the electrolyte volume.

For some technologies, the power and energy can be scaled independently, allowing for an easily customisable battery. In a hybrid flow battery, electroactive material is deposited on the surface of the electrode during the charge cycle and then dissolved back into the electrolyte solution during discharge. For hybrid technologies, the storage duration is a function of both the electrolyte volume and the electrode surface area. While most hybrid technologies can achieve durations of six to 12 hours, power and energy are not fully decoupled.

Flow batteries can be configured as both a single tank, usually for smaller applications, or as a dual tank, usually on a larger footprint.

The single-tank systems typically feature zinc or other metal batteries, while dual-tank systems require electrolyte comprised of saltwater, iron, vanadium, or other minerals.

Flow battery system designs change depending on the application and project size. Behind-the-meter

Recharge rates for flow batteries also are reasonably fast. commercial systems are commonly kilowatt-scale packaged units that can fit into a typical utility room. For distribution applications in the 1-MW to 5-MW range, containerised and/or modular solutions exist with varying levels of scalability depending on the storage duration requirements. Utilityscale designs in development may have millions of gallons of electrolyte storage, so the industry is trending toward large quantities of stack modules headered together and piped to large, field-erected tanks.

Power stacks and balance-of-system components, such as piping, pumps, seals, cooling systems, and control instrumentation, require more routine maintenance than lithium-Ion configurations. However, if routine maintenance guidelines are followed, flow battery performance should not degrade within the project lifetime.

When the operations and maintenance (O&M) costs are compared to lithium-ion capacity augmentation costs required to offset performance degradation, flow battery annual costs are less expensive.

With life spans reaching as much as 30 years, depending on the electrolyte chemistry, flow batteries may provide unrivalled cost versus other emerging storage technologies on the market.

Dependent on tank configurations, flow batteries can discharge and recharge simultaneously, providing power capacity or voltage support almost indefinitely. Applications where multiple charge/discharge cycles are required each day, flow batteries are available within milliseconds as loads dictate and they can quickly recharge from a variety of available power sources.

Wide temperature ranges for operation and standby modes compared to lithium-ion options.

Little or no fire hazard.

Chemistries that pose limited human health risk due to exposures.

Easy scale-up of capacity by adding electrolyte volume (although that may involve more tanks and piping).

Best suited to longer discharge durations of six hours or more in megawatt-scale power increments.

Barriers to Overcome Lithium-ion technologies are dominating the storage market however as renewable energy market penetration increases, more owners are looking at longer-duration storage assets.

Costs are declining for both lithium-ion and flow battery technologies, and it is difficult to predict where and when the prices will settle.

With today’s technology, lithium-ion unit costs ($/kWh) generally flatten out beyond 4-hour storage durations because of the essential addition of higher quantities of the same batteries. However, flow battery unit costs continue to decline as the storage duration increases to eight to 12 hours. The power modules for a 4-hour system are the same for a 12-hour system, so the incremental cost of adding duration/energy to a flow battery is tied to the addition of electrolyte to the system.

INNOVATION ZONE SPONSORED BY

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INNOVATION ZONE

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WEB-BASED SOFTWARE TO TRAIN DRILLERS REMOTELY

Leading simulator developer and manufacturer, Drilling Systems, has launched a web-based version of its world-leading, well control simulation software following successful trials with Louisiana State University (LSU).

LSU students try out new cloud-based drilling simulator

LSU

was looking for a way to continue delivering high-quality academic instruction to its drilling and well control students during the current coronavirus outbreak and worked closely with leading simulator manufacturer, Drilling Systems, to develop a solution.

“LSU is currently working very hard to provide the best academic environment possible to our students during the current coronavirus pandemic, and we are very grateful to Drilling Systems for supporting us during this period.

The students have been surprised and Drilling Systems adapted its tried-andpleased to be able to operate remotely tested well control training software into using Drilling Systems’ new cloud-based a cloud-hosted product to enable remote well control software, which has allowed well control learning for the very first time. us to continue teaching our well control Accessed through a web browser via course even after the semester went to tablet, laptop or desktop computer online instruction only. The results from anywhere in the world, this have exceeded our expectations, innovation allowed LSU to and we can see this solution Following LSU’s create virtual classrooms positively impacting wellwhere students could control training even successful trials, develop and fine-tune well after the stay-at-home Drilling Systems has control skills remotely, directives are relaxed.“ now launched its new overseen by an instructor. cloud-based learning well Clive Battisby, director control software online Drilling Systems’ well of simulator operations under the product control software has been for 3T Energy Group, said: name ‘iDrillSIM’. developed over many years “Coronavirus is a fastand is traditionally used within moving situation and the classroom training simulators industry needs to act quickly to provide an ultra-realistic learning to adapt to this changing and experience, which mirrors drilling and well challenging environment. At a time when control operations in the field. people are simply unable to go into training centres or attend universities and colleges, Using scenario-based training models we wanted to develop a solution which and realistic graphics, the software takes can help support well control training and human factors and emergency response ensure the industry maintains its high into account to develop a person’s drilling safety standards. and well control skills and create someone who is ‘industry-ready.’

“Our new cloud-hosted DrillSIM software is a game-changer for the oil and gas Karsten Thompson, LSU Craft & Hawkins sector and will transform the way people Department of Petroleum Engineering learn well control and keep skills fresh.

Chair, said: Our software has been developed and

fine-tuned over many years to create a highly realistic experience so that drilling crews can be fully prepared for real-life operations. Now the drilling and well control community will be able to access this learning online so they can practise drilling and well control operations from the comfort of their own home at a time that suits them.

“As well as cloud-based software, we have a range of other digital solutions including training apps and virtual reality programmes to help the industry through this difficult time and beyond.”

To find out more, please visit www.drillingsystems.com or contact +44 (0) 1202 582255

INNOVATION ZONE SPONSORED BY

www.leyton.com

42

Sponsored by

www.ducatuspartners.com The austerity felt across the oil and gas supply chain since 2014 has ensured an enduring focus on cost. Therefore, there is arguably some greater inbuilt resilience at an institutional and personal level. However, there are many more precarious liquidity positions with businesses not having had the benefit of a meaningful market upturn for over five years to help cushion the fall into this crisis.

ON THE MOVE

With far less in the tank, investors are responding very quickly in this current crisis to protect portfolio company cash whilst aiming to also maintain capacity to grow rapidly again when conditions do improve.

There are already increasing demands from investors to broaden boards for many of the same reasons, but perhaps not as aggressively as during the last downturn, as they are generally far more robust and engaged from previous periods of volatility.

Sean Buchan

Managing Partner - EMEA at Ducatus Partners

Very early during the 2014 oil and gas downturn, we witnessed a rapid and sustained increase in the demand for non-executive directors and executive chairs; this was particularly strong across private equity portfolio companies.

This time, we believe the demand for deep financial experience in new non-executive directors will be heightened as companies become more distressed far more rapidly. The line between non-executive and executive will become ever more blurred in a private

equity context. Directors will be required to fully commit with time and energy. Some investors have already shied away from the non-executive term all together, preferring an advisory or member title as although it has no meaning in law, it can suggest a more distant approach than is demanded. With many highly seasoned and energetic executives seeking board and advisory roles, there is also a clear opportunity for private investors to harness this talent for long term upside potential.

There will continue to be a sensible focus on diversity, not just of gender or ethnicity but also of industry background to cross fertilize best practice. In the medium term, beyond the crisis, hopefully there will also be more attention given to differing age profiles, so the voice of ever younger stakeholders begins to echo more loudly in the boardroom.

So, from a human capital perspective, expect to see some changes in the board room as an early response to this unprecedented crisis. The value gained from the right appointment can quite literally be measured in terms of business survival.

An acute need for more seasoned industry expertise to help navigate what was unchartered territory for many executives leading businesses at that time drove this primarily. The fall in oil price was steep and persistent; the 70% was one of the three biggest declines since World War II, and the longest lasting since the supplydriven collapse two decades earlier in 1986.

Many leaders were not well equipped to deal with the crash and there was concern around capacity to weather the storm. As such, more executive chairmen were put in place to drive action in a hands-on manner. There was a subtext to this of having someone inside the business ready to immediately parachute into the Chief Executive Officer seat should the need arise.

1

Donald Macleod

2

Neil Potter

3

Gary Paver

Edgewater Midstream Appoint New Chief Financial Officer

David Anders

1

Edgewater Midstream, the independent midstream company backed by EnCap Private Equity, have announced that David Anders has joined the company as Chief Financial Officer. He was previously with Bank of America’s Energy Investment Banking Group for over 17 years where he focused on the midstream sector. During his tenure, he led the evaluation, structuring and execution of mergers, acquisitions and divestitures as well as initial public offerings, follow-on equity offerings and debt offerings for public and private companies and partnerships. He brings substantial experience to support Edgewater’s strategy to target the acquisition and development of greenfield North American terminal, storage and pipeline projects.

Boskalis Makes Engineering Director Appointment

Boskalis, the global offshore contractor, have appointed Donald Macleod as Engineering Director. Donald joins from Highland Fuels, one of Scotland’s largest independent fuel distributors, where he was Managing Director.

Prior to this he spent over eight years with PDi, ultimately progressing to the role of Operations Director. He held a number of engineering positions during his earlier career with Balfour Beatty, Wood and Acergy.

www.ogvenergy.co.uk I May 2020

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ROVOP Appoint Chief Financial Officer

ROVOP, the subsea robotics company, have appointed Neil Potter as Chief Financial Officer. Prior to joining ROVOP, Neil was with TWMA as Chief Operating Officer from 2015 to 2020, initially joining the business as Finance Director in 2013.

He has also held finance leadership positions with companies including Dominion Gas, RB Farquhar and Buckingham Foods, with his early career spent with PwC.

3

ASCO Appoint New Chief Financial Officer

ASCO, the global integrated materials and logistics management company, has appointed Gary Paver as its new Group Chief Financial Officer.

Gary has over 25 years’ experience in oil and gas including roles with Halliburton, Petroleum Engineering Services and most recently as Senior Vice President, Finance for KCA Deutag.

ON THE MOVE

Content provided by Ducatus Partners

Saudi Aramco Makes Board Appointment

Antero Midstream Makes Board Appointment

Saudi Aramco has announced that Mark Weinberger will join the company’s board of directors, replacing Andrew Gould. Mark was the global Chairman and Chief Executive Officer of EY from 2013 to 2019. He was active in the World Economic Forum, as a member of its International Business Council and as a Global Steward for Economic Progress. He has also held several high-level posts in the U.S. Government, including as Assistant Secretary of the U.S. Department of Treasury under President George W. Bush and Member of the Social Security Advisory Board, under President Clinton. He served on Presidential advisory councils to President Trump and President Obama.

Mark currently serves as a Director on the boards of Johnson & Johnson and Metlife as well as being a member on several Boards of Trustees, including the United States Council for International Business.

He is a senior advisor to Stone Canyon Industries Holdings, JUST Capital, G100 and many organizations focusing on corporate governance and long-term value creation.

PDi Appoint Business Acquisition Director

Project Development International (PDi), part of the Tattva Group, has appointed Gavin Stevenson as its Business Acquisition Director. He brings over 30 years’ subsea and deepwater oil and gas experience, serving in a variety of senior technical and managerial positions in the engineering consultancy and project management services sectors including as United Kingdom Managing Director of Pegasus International, a role he held for six years. In this new role, Gavin will be responsible for strategic and operational business acquisition, leading PDi’s business development, marketing and tendering teams. He will be part of the leadership team that will drive PDi’s international growth plans and the expansion of its subsea design, project management and decommissioning services.

5

Antero Midstream have announced that Janine McArdle has been appointed to its board of directors, increasing the size of the board to nine directors. Janine has been an executive in the oil and gas industry for over 30 years with extensive experience in engineering, marketing, business development, finance and risk management.

Janine McArdle

She is the founder and Chief Executive Officer of Apex Strategies, a consultancy company providing advisory services to companies engaged in the midstream and downstream sectors of the energy industry. Prior to forming her own company, Janine was an executive officer at Apache for 13 years, serving in senior leadership positions across LNG and global oil and gas marketing.

Prior to Apache, Ms. McArdle served as President and Managing Director for Aquila and a Partner in Hesse Gas. She currently serves as a Director on the Santos board and previously served on the boards of Halcon Resources and the Intercontinental Exchange.

6

Kentech Announce Executive Change

Kentech have announced the appointment of John Gilley as Chief Executive Officer as Sarah Kent steps down from the role after the business took the decision to merge the roles of chief operating and executive officer. John previously served as Kentech’s Chief Operating Officer and has long been Sarah’s chosen successor after he has worked with the company for almost 20 years.

Mark Weinberger

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7

4

Gavin Stevenson

Whittaker Mexicana: New Country Manager

Anthony Childers joined Whittaker Group as Whittaker Mexicana Country Manager in February 2020. Anthony has over 20 years’ experience in the oil and gas industry starting with marine contracting in 2000 in Mexico. Following roles in Brazil, Angola, Mozambique, Ghana, USA. Portugal all with oil and gas service companies he is now back in Mexico after a position as country manager with Subsea 7.

His appointment reflects Whittaker’s shift to a broader fabrication and service package and a strategic decision to leverage the strengths of Whittaker’s businesses in Mexico and Scotland with a more integrated approach to overall management. Anthony has an MBA, a background in finance, performance and control, mixed with his experience of running large services companies gives Whittaker Mexicana a unique edge in this sector in Mexico. Anthony is a UK national originally from Shropshire, England.

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Sandy Esslemont

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John Gilley

Parker Drilling Appoints Chief Executive Officer

Parker Drilling have appointed a new Chief Executive Officer after going without one for nearly the entire first quarter. Sandy Esslemont has taken up the top executive mantle, filling a vacancy left when the former Chief Executive Gary Rich retired at the end of 2019. Sandy was previously Chief Executive Officer at Abrado, which he helped found in 2009. Sandy has held executive roles in oilfield services firms including Sensotran and Roxar where he was Chief Executive, as well as with Expro Group where he was President of the Americas region.

Anthony Childers

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The Future of Latin America Oil & Gas Digital Transformation Summit 3rd-4th - Rio de Janeiro, Brazil

P

OGV Transition 10th - Aberdeen, UK

Nigeria Oil & Gas Conference & Exhibition (NOG) 29th Jun - 2nd Jul - Abuja, Nigeria

All Energy 14th-15th - Glasgow, UK

JULY

LDC Gas Forums Mid-Continent Forum 14th-16th - Chicago, USA

Gas Indonesia Summit & Exhibition 27th-29th - Jakarta, Indonesia

OCTOBER

AUGUST

Expo Petro Trans 1st-3rd - Kassel, Germany

LDC Gas Forum 3rd-5th - Denver, USA

Energy Exports Conference 20th-21st - Aberdeen, UK

Roseland South Texas Oil and Gas Convention (TBA) - San Antonio, USA

Mexico Oil and Gas Summit 28th-29th - Mexico City, Mexico

Oil & Gas Kenya 13th-15th - Nairobi, Kenya

NOVEMBER

2020 IADC Advanced Rig Technology Conference & Exhibition 1st-2nd - Texas, USA World Heavy Oil Exhibition & Congress 1st-3rd - Muscat, Oman

1st-2nd - Aberdeen, UK Frankfurt Gas Forum 9th-10th - Kronberg, Germany JANUARY 2021

OGV Asset Integrity 29th-30th - Aberdeen, UK

SEPTEMBER

Future Oil & Gas

Executive Oil Conference & Expo 3rd-4th - Midland, USA

Fuels of the Future - International Conference on Renewable Mobility 18th-19th - Berlin, Germany Oil and Gas IOT Summit 20th-21st - Lisbon, Portugal European Gas Conference 25th - Vienna, Austria Energy Mexico Oil + Gas + Power - Expo & Congres 26th-28th - Mexico, America OGUK Exploration Conference 28th - London, UK FEBRUARY 2021 Middle East Refining Technology Conference 1st-3rd - Baharian Offshore Wind Executive Summit 2nd - Galveston, USA

Africa Oil Week 2nd-6th - Cape Town, South Africa

Sub Saharan Africa International Petroleum Exhibition and Conference 2nd-5th - Lagos, Nigeria

ADIPEC 2020 9th-12th - Abu Dhabi, UAE

Egypt Petroleum Show 9th-11th - Cairo, Egypt

Topsides 10th-11th - Aberdeen, UK

International Petroleum Week 23rd-251th - London, UK

For more information about all events visit www.ogvenergy.co.uk

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LEGAL & FINANCE In an industry where innovation is key, encouraging inventiveness could put oil and gas companies ahead of the curve. This is not restricted to patentable methods and machines. Encouraging employees more generally to get innovative can be critical to success in a fast-moving field.

Technology &

People-Led Innovation

By Cara McGlynn, Brodies LLP

The quick pace of technological advances means that cultivating a culture of creativity within an organisation can be key to getting ahead – something that the oil and gas sector knows all too well. A recent UK Supreme Court case raises some interesting questions as to when an employee should be compensated for their contributions and how organisations can encourage innovation.

Whilst employed by a subsidiary of Unilever, Professor Shanks invented technology which could be used in Glucose testing for diabetics. He did this at home using his daughter's toy microscope kit, but this was considered to fall within his employment.

Employers should be transparent, support ingenuity and recognise contributions.

Unilever was later granted various patents relating to the invention. It was not key technology for Unilever, but it licensed and eventually sold the patents, over time deriving a net benefit of approximately £24.3 million. Professor Shanks raised an action seeking compensation and after a 13-year court battle was awarded £2 million.

The decision here was very specific to the facts of the case and turned on an

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interpretation of Section 40 of the Patents Act 1977 - which provides that an employee may be compensated for their patented invention if the patent has provided an “outstanding benefit” (which is a very difficult test to meet) to the employer. However, this case highlights important considerations for both employers and employees.

This statutory compensation cannot be written out of an employment contact and indeed applies over and above any discretionary incentivisation schemes.

Employers should have processes in place for evaluating whether employees are eligible for such compensation and have transparent policies as to how this will be assessed.

Additionally, whilst the default position with employment is generally that the employer owns the intellectual property in any invention, it is best practice to also have this explicitly written into employment contracts to circumvent any grey areas. Even though Professor Shanks developed his invention at home, Unilever was the ultimate owner of the invention, as it was connected to his day job, working in the area of biosensors.

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The technology created by Professor Shanks is now used in most glucose testing products for diabetics. Unilever did not invest heavily in the testing kits. This was important in the context of assessing whether the invention had brought an outstanding benefit to Unilever. Unilever did not invest specifically in the invention and did not instruct Professor Shanks to do the work. Professor Shanks came up with the invention in his own time and using his own equipment. The benefit to Unilever was "outstanding" when compared with the level of investment.

Having built the invention of his own initiative, Professor Shanks demonstrates that peopleled innovation can have a significant impact on organisations. The case has a narrow application. If an employee invents something in the usual course of their employment and on the instructions of their employer, it will be very difficult for that employee to argue that the employer has enjoyed an outstanding benefit from the invention.

However, there are other reasons why an employer may wish to remunerate employees for innovation.

Employers should be transparent, support ingenuity and recognise contributions.

Bonus schemes and share options can serve as simple ways to incentivise and cultivate ingenuity. Not only can this ensure that employees know their value, but this recognition can lead to higher retention rates, discouraging employees from taking their ideas to competitors offering better remuneration. During this time in lockdown and with homeschooling, who knows what children's toys and games may be being used towards the next technological breakthrough.

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