OGV Energy - Issue 33 - June 2020

JUNE 2020

UK’s No. ENERGY SECTOR

1

PUBLICATION

THE ASSET INTEGRITY ISSUE

FOSSIL FUELS North Sea Oil & Gas Review Contracts and Analytics

REGIONAL REVIEWS Middle East, Europe & US

ASSET INTEGRITY FOCUS

Working under COVID-19 Harnesing historical data Reducing operational costs

GREEN ENERGY Hydrogen and wind energy reaching new levels

INNOVATION & TECH Diving systems integrity Geothermal energy Making the right HPHT choices Water tratment technology

PROJECTS MAP ON THE MOVE

ASSET INTEGRITY

The key to safe and efficient oil & gas operations

EVENTS LEGAL

OIL-PRICE

New OPEC+ deal to rebalance the oversupplied oil market

GEOTHERMAL ENERGY

Emissions-free geothermal power to be a significant global energy source

NET-ZERO

Renewables will continue to grow rapidly to meet the UK’s target

Read page 4

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ASTM Steels: B7, B7M, B16,B8M, L7, L7M, ASTM A193/A320 A193/A320 Alloy Stainless Steels: B8, B8C, B8T L43 (Class 1 and Class 2), B6 ASTM A193/A320 Stainless Steels: B8, B8C, B8M, B8T (Class 18M/8MA, and Class8T/8TA 2), B6 ASTM A194 Heavy Hex Nuts: 2H, 2HM, 6, 7, 7M, 8/8A, 8C/8CA,

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CONTENTS

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FOSSIL FUELS

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

REGIONAL REVIEWS

22 Middle East 24 Europe 27 US

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30

ASSET INTEGRITY

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30 PIM: Will the Coronavirus pandemic have 30 a lasting impact on the way we work?

31

31 Repsol Sinopec / OGA: Greater production 31 efficiency process alarm & event data

32

32 Bureau Veritas: Digital twinning 33 Imrandd: From analysis to action 34 ICR: unlocking the value of historical data

GREEN ENERGY 36 DNV GL: Hydrogen, central to oil & gas 36 industry decarbonisation

38 Siemens Gamesa: turbine capacities smash 6 MW 39 Spain to push for net-zero by 2050

INNOVATION ZONE 36

40 Namaka Subsea: Assisting with the integrity of diving systems

41

41 Eavor's Eavor-Loop: Emissions-free geothermal energy 42 Aquaterra: Making the right HPHT choices 43 Pure Water: Bespoke water treatment technology

EVERY MONTH 4 Cover Partner: GDI 18 Good News Stories 20 World Project Maps

44 On the Move 49 Events 50 Legal and Finance

KENNY DOOLEY MAIN EDITOR

T

he past three months have seen nothing but turbulence for the oil, gas and energy sector as a whole. A few weeks ago we released the second episode in our "OGV Insights" podcast series which directly addresses how the supply chain can weather the perfect storm of the commodity pricing crash and the global COVID-19 pandemic, so be sure and look it up. It looks at the pitfalls, areas around the world to focus on and the market opportunities in digitalisation.

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As the global lockdowns begin to ease and people and goods start to move again and we begin to slowly work through the oversupply of oil, for many the plan will be to look at how they continue to be relevant and remain part of the industry going forward, looking at adapting, innovating and developing new products, services and technologies. Unfortunately, there is no getting away from the impending large reduction in headcount globally and the impact this will have on the sector and more importantly the many experienced professionals that will be affected.

We are seeing the world change before our eyes on a daily basis, both in our working and personal life and foundations are already being laid to emerge stronger and with a more diverse and resilient industry for the future. At OGV Energy we look forward to embracing this change and continuing to provide you with products and services that can help facilitate productive communication and are here to listen or assist in any way we can.

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COVER PARTNER

Advertising Feature

GDi continues to disrupt convention Established in 2016 and based at Queen’s Road, Aberdeen, GDi provides technology-led survey, engineering, fabrication, construction, and inspection services to the energy industry.

GDi’s growth and success has been underpinned by its track-record of innovation. Its asset visualisation software, GDi Vision, leverages the data gathered via laser scanning to provide ultra-efficient and value-adding engineering, visualisation, and inspection technologies; ultimately, removing cost and inefficiencies from conventional approaches, whilst improving accuracy and quality.

GDi has two active projects with the Oil and Gas Technology Centre (OGTC), which was formed in February 2017 as part of the Aberdeen City Region Deal, supported by the UK and Scottish Governments.

The centre aims to support projects which will help reduce costs for the North Sea and create a “culture of innovation” in the north-east of Scotland. It has since co-invested £140m in more than 230 projects; working in close partnership

www.ogvenergy.co.uk I June 2020

The two active GDi projects have already created a material change in how operators manage their assets.

Gareth McIntyre, Director at GDi, explained: “As a result of our development work with the OGTC and three operator industry partners, we are delivering digital twin and inspection technologies to the oil and gas industry. We now have the ability, through utilising our first-in-kind technology, to conduct remote inspections of equipment; delivering a step-change in efficiencies and quality. Data collected via laser scanning is vital for engineering purposes; whether it is small repairs, or large projects and modifications.

Led by founder and Managing Director, Gianni Brooke, and Directors Gareth McIntyre and Karl Green, the senior team possesses more than 60 years’ industry experience across design, engineering, inspection, and integrity management.

The company – which has tripled in size over the past two years – was born within the last significant downturn through a pioneering approach to engineering repairs and modifications. GDi’s drive for efficiencies continues to disrupt the conventional approaches within the engineering and, more recently, inspection/integrity management sectors.

with industry, government, and academia to accelerate new technology solutions to market.

GDi utilises the latest laser scanning technology to rapidly capture vast amounts of valuable engineering data and HD photography. Our bespoke workflows and decades of experience have led us to execute some of the largest survey workscopes within the oil & gas industry, thus delivering maximum value to the end user.

“Now, utilising our technology, this data can be used to ascertain equipment condition offering a game-changing approach to asset management.

The technology was deployed through our unique and innovative solution, GDi Vision. By implementing this novel approach, we can reduce overall inspection costs by up to 25%, whilst increasing quality and assisting asset owners to manage risk.”

GDi’s unique positioning allows it to stand out from the conventional laser scanning and engineering service providers. This technology-led approach is delivering solutions which enhance visualisation, optimise design/engineering, and offer a unique and powerful inspection technology.

Gareth McIntyre added: “When combined with GDi’s unique engineering capability for repairs and modifications, the value proposition is significant.

“With increasing numbers of new clients and contract awards in the pipeline, we will continue to solidify our value proposition in the North Sea whilst expanding into other territories and sectors. Our next steps will be to continue to invest in our technology and deliver value across industries and sectors.”

For more information visit www.globaldi.co.uk

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FOSSIL FUELS

7

JUNE

UK North Sea Oil & Gas Review

By Tsvetana Paraskova

The COVID-19 pandemic and its impact on the UK offshore oil and gas industry continued to be the main topic and concern in the sector over the past month.

In late April, OGUK, the leading representative body for the UK’s offshore oil and gas industry, warned that up to 30,000 jobs could be lost in the industry due to the lowest oil and gas prices in more than a decade.

The association called for the transition to net-zero to be put at the heart of recovery plans.

“It is now more crucial than ever that the UK and Scottish governments continue to work closely with industry to ensure we navigate the current challenges and are as well placed as possible to meet future demand and accelerate the development of the industrial capability to deliver a net-zero future. Any loss in capabilities across the energy supply chain will impede the UK’s ability to achieve these ambitions in the most efficient and effective way and risk losing the opportunity to be world leaders in net-zero management,” Michael Tholen, Sustainability Director, OGUK, said in OGUK’s Business Outlook 2020: Security of Supply report.

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Another part of OGUK’s Business Outlook 2020 report, Activity and Supply Chain, calls for urgent action to protect energy security, jobs, and energy regions. OGUK has asked governments and regulators to support a three-stage framework to support the sector in dealing with the immediate crisis while positioning it to play a key role in the UK’s transition to a net-zero future.

On May 6, the OGA unveiled its strategy to back netzero in a move aimed to support the oil and gas sector to reduce greenhouse gas emissions and encourage progress on carbon capture and storage (CCS) and hydrogen projects.

“The OGA believes that maximising economic recovery of oil and gas need not be in conflict with the transition to net-zero and that the industry has the skills, technology and capital to help unlock solutions required to help the UK achieve the net-zero target. However, the OGA takes the view that industry should go considerably faster and farther in reducing its own carbon footprint, or risk losing its social licence to operate,” the authority said.

If action to support the offshore oil and gas industry fails, the UK energy sector could lose up to 30,000 jobs over the next year and a half, OGUK warned.

“Only by concerted action across industry and governments can we begin to mitigate such damage,” the industry body noted.

OGUK responded to OGA’s proposed strategy to support net-zero, with OGUK’s Sustainability Director, Mike Tholen, saying:

“These may be the most difficult times that any of us have faced, personally, operationally and economically, but our industry has a track record of resilience and working through challenges as they arise and I have no doubt that we will do this again,” OGUK Chief Executive Deirdre Michie said in the foreword to the report.

In May, OGUK welcomed the Chancellor’s announcement to extend the furlough scheme through October, with Michie saying: “The added flexibility of the scheme is welcome as it provides a vital lifeline to thousands of workers in our industry whose skills and capabilities we need now and in the future as we transition to net-zero.”

Oil and gas exploration, as well as project sanctioning in the UK North Sea, will take a hit as Brent oil prices slumped to $20 a barrel in April, but the industry will likely avoid devastation and shutins because “operators will want to keep facilities running even at a loss and get the profit back when oil prices recover, assuming that it is cheaper to run the facility at a loss than to shut it down and restart it later,” Rystad Energy said in an analysis in mid-April.

But final investment decisions (FDIs) and exploration will suffer because operators will be much more cautious in their future spending plans amid higher uncertainty as to when the market will recover, according to Rystad Energy.

In the UK, brownfield spending on maintenance, modification and operations (MMO) contractors is set to drop by 35% to US$2.9 billion this year—the lowest level seen since at least 1990, Rystad said in May. “In the UK there has been no direct communication about potential start-up delays at new field developments, but we may see delays to 2021 for BP’s Vorlich and Shell’s Fram projects,” the energy intelligence firm said.

At the end of April, the Oil and Gas Authority (OGA) published its first-ever Inclusion Report to support improved diversity and inclusion practices.

“The OGA is aware that, in the immediate term, protecting staff and businesses is the industry’s main priority, but as the report explains, inclusion can be one of the enabling behaviours that can support individuals and organisations in navigating the future, engaging staff, and fostering innovation, particularly as the industry works towards the UK’s net-zero ambitions,” the authority said, days before it unveiled its strategy to support the ambition.

www.ogvenergy.co.uk I June 2020

“It will need joint action between government and industry to accelerate progress to the next stage where our sector is in a unique position to lead in the development of Carbon Capture Usage and Storage and ensuring a healthy oil and gas industry allows us to build a strong base from which to build capacity and skills for energy sources of the future.”

The OGA believes that maximising economic recovery of oil and gas need not be in conflict with the transition to Net-Zero and that the industry has the skills.

In company news, Cluff Natural Resources announced plans to change its name to Deltic Energy Plc, subject to shareholder approval, to symbolise its transition into a more operational phase in its development. Despite the COVID-19 challenges and the low oil prices, the company continues to believe that the UK benefits from a top quartile fiscal and regulatory regime, making it one of the most attractive areas in which to do business and invest.

PGS said in April that its seismic vessel Ramform Tethys was about to start a 3D Multi-Client survey offshore East Shetland in UKCS waters, with the first data expected in the third quarter of 2020.

Serica Energy said on 23 April that it had reduced combined field operating costs per boe by 30% to US$12.60 per boe in 2019.

Mitch Flegg, Serica’s CEO said, commenting on the 2019 results and outlook for 2020: “We entered 2020 in an extremely robust financial position with no borrowings, a decreasing cost profile, an increasing cash position and limited decommissioning obligations. This provides the flexibility to meet the challenges the industry faces in the short term and pursue growth opportunities. In view of the Company’s strong position, the Board has decided to recommend a maiden dividend this year.”

Maersk Drilling is taking steps to adapt its offshore crew pool as the pandemic and the low oil price hit offshore drilling, the company said on 24 April.

Maersk Drilling expects that consultations with trade unions will lead to a total of 250-300 redundancies in the North Sea crew pool in the UK, Denmark, and Norway.

Ithaca Energy said on 29 April that its production is expected to be around 90% of the initial guidance of 70,000 to 75,000 boepd, reflecting minimum offshore manning due to the COVID-19 pandemic. The company is also cutting its 2020 capital and operating expenditures by some US$200 million compared to initial guidance.

Premier Oil announced that the Court of Session in Edinburgh had approved the creditor schemes of arrangement required to implement the proposed UK North Sea Acquisitions.

UK North Sea Oil & Gas Review

BRENT OIL PRICES OVER THE YEARS May Review

1

YEAR AGO

- BRENT OIL PRICE 2019 - $64.22 BP sold Gulf of Suez oil concessions in Egypt to Dragon Oil, a Dubai based company. Mexico’s energy production aims to become selfsufficient resulting in starting an oil refinery construction for $7.7 billion. Lukoil steadily evolved in the Caspian Sea, constructing facilities at Vladimir Filanovsky, Yury Korchagin and Rakushechnoye fields.

Independent Oil and Gas plc announced on 1 May that the OGA had approved the Core Project Phase 1 Field Development Plan for its gas project in the UK Southern North Sea. The project targets a gross 2P peak production rate of 140 MMcfe/d, or around 24,000 Boe/d.

Talon Petroleum continues efforts for farm-outs on the Skymoos, Rocket, and Vantage prospects in the UK North Sea. “Despite the challenging macroeconomic and workplace environment due to the COVID-19 pandemic, the level of engagement and interest with interested parties remains strong,” the company said, but noted that timing remains fluid.

Equipment and dive system company Orca Oceanic systems Ltd (OOS) said it had secured 3 significant contract awards in April, adding in excesses of £1.75 million to the company’s order backlog for 2020.

US$18.5/boe, through careful management of Opex. No major CapEx is planned for Anasuria in 2020, the company said.

Jersey Oil and Gas announced on 6 May it had signed a Joint Integrated Studies Agreement for the Greater Buchan Area (GBA) between neighbouring field operators to undertake and complete technical and commercial evaluation studies for a collaborative development of the wider GBA. The wider area contains discovered oil and gas resources of over 200 million barrels of oil equivalent.

Petrofac secured in early May two three-year renewals in the UK, worth a combined total of more than US$100 million.

A week later, the company "It is a monumental also secured a three-year achievement by the OOS team extension to its existing maintenance contract during these exceptionally and a new four-year difficult trading conditions metering contract to secure 3 highly significant with BP.

5

YEARS AGO

- BRENT OIL PRICE 2015 - $61.48 ASCO Group signed its first contract with OMV to supply base services in the Norwegian Sea and Barents Sea. The expansion of the market in UAE was significant as the National Drilling Company bought 14 new rigs worth $543 million.

10

YEARS AGO

contracts”

Subsea 7 was awarded a contract from Independent Oil and Gas (IOG) for the Blythe and Vulcan Satellites field development, located in the UK sector of the southern North Sea. Project management and detailed engineering has already started at Subsea 7’s office in Aberdeen, and offshore activities are scheduled to begin this year.

Said Mike Masson, OOS’s Managing Director.

“It is a monumental achievement by the OOS team during these exceptionally difficult trading conditions to secure 3 highly significant contracts,” said Mike Masson, OOS’s Managing Director.

Awilco Drilling and Petrofac have agreed to delay the start of the Plug & Abandonment programme on Rubie and Renee until 25th May 2020, Awilco Drilling said early in May. Hibiscus Petroleum announced on 4 May that it would aim to cut the Unit Production Costs at Anasuria in the North Sea to

SSI Energy, a provider of medical and technical personnel to the energy industry, has entered into a partnership with CHC, a global helicopter service company specialising in providing travel to remote and challenging locations, to offer turnkey solutions in response to the energy industry’s requirements during the Covid-19 crisis.

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- BRENT OIL PRICE 2010 - $74.76 The cost of cleaning up the oil spillage in the Gulf of Mexico was estimated to run into billions of dollars, according to BP estimates.

Central Asia Oil plays a huge role in global energy security and was in the process of being negotiated between going East or West.

FOSSIL FUELS

CONTRACT AWARDS

www.ogvenergy.co.uk I June 2020

Contract Awards

Oceaneering wins significant asset integrity scope in the Middle East Oceaneering has been awarded a considerable asset integrity contract from a major operator based in Dubai, UAE. The award includes the provision of general and advanced non-destructive testing (NDT) and fabric maintenance inspection services across the operator’s onshore and offshore facilities in the Middle East.

Oceaneering has made significant improvements to inspection enactment throughout the contract, including the introduction of more efficient and effective NDT methodologies. Additionally, the company has ensured all technicians are rope access trained at Oceaneering’s accredited facility, which has helped to reduce scheduling and costs for the operator.

The competitively tendered contract includes integrity and inspection services for around 85 offshore platforms spread across five producing fields, as well as call-off onshore inspection management and NDT work for one of the operator’s gas plants, gas control station, LNG jetty, and an onshore supply base. The three-year contract (with two, one-year options) encompasses onshore and offshore NDT, inspection, and onshore and offshore fabric maintenance.

Gregory Boyle, Asset Integrity Regional Manager, Middle East, at Oceaneering, said:

Oceaneering has provided the client with efficient inspection and integrity support for the past five years. The original scope included the up-man and mobilisation of 40 personnel, with the team currently sitting at around 100.

“We’re proud to continue our strong relationship with this operator and we will continue to focus on providing safe, cost-efficient integrity, fabric maintenance, and inspection solutions that optimise our customer’s operations.

“Our track record for delivery and our resolute commitment to safety over the last five years has significantly contributed to us being awarded the new scope. We look forward to enhancing our existing service provision to add further value and to working with them to adopt the latest technologies and introduce digitised inspection capabilities.”

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FOSSIL FUELS ASCO Secures 21 million NOK to develop the Norwegian Base in Hammerfest Efficiency improvements include streamlining freight flow for sea-based transport and logistics chains, placing the company in a more competitive position for sea transport for the seafood, aquaculture, fishing, consumer goods and oil and gas industries.

Global supply chain company, ASCO has received 21 million NOK (£1.6m) from The Norwegian Coastal Administration as it plans to develop and digitise its base in Leirvika, part of its Hammerfest supply base.

The grant builds on a development project to create efficient and environmentally friendly ports at the Risavika Offshore Terminal in Tananger, Rogaland, which is operated by ASCO which is an operator for a number of offshore bases in Norway and a leading global player.

Work is well underway, and the Hammerfest terminal will be operational during 2020 and be the new logistics starting point in the region.

The investment will evolve the terminal digitally transforming it for smart technology, which will also be applied to ASCO’s Hammerfest base. Logistics for the region are also to be streamlined through the terminal and operations will receive digital infrastructure with electronic data capture, saving on time and money. Vessels will be better utilised enabling more goods to be transferred from road to sea reducing emissions.

ASCO Hammerfest Base Manager, Tom Eirik Lysmen Jakobsen said: “When the Base in Leirvika is completed and we have implemented solutions around efficiency and digitalisation, it will provide significant benefits to customers and we believe that it opens up the use of the terminal to new industries. It’s about getting the right equipment at the right time with 100% control, which will save a lot of time and resources for our customers.”

Also commenting, ASCO Norge AS, Chief Digital Innovation Officer, Christopher Hoftun said: “The efficiency gains will offer time savings, estimated at 80% for trucks and 20 % for vessels, which emphasise that this will also provide an environmental benefit. The vessels will have a shorter lay time at the quay resulting in less noise and CO2 emissions.”

Penspen wins engineering contract with Target Engineering offshore Abu Dhabi Penspen, a leading global provider of engineering and project management services to the energy industry, has been awarded a contract by Target Engineering Construction Co LLC for slug catcher replacement support on a project on Zirku Island in UAE. The Penspen contract is for work on the island’s Satah slug catcher replacement project. The project’s objective is to replace the existing slug catchers at the Zirku Satah plant, which is operated by ADNOC Offshore, with new ones cladded with a corrosion-resistant nickel superalloy. It will also include modifications to associated pipelines, instrumentation and control systems, electrical, civil and structural works.

Penspen will carry out detailed engineering services. The scope of work for the company includes a review of processes, loss

prevention/technical safety, mechanical, piping, instrumentation and control, civil and structural, electrical and corrosion/materials.

ADNOC Offshore operates the Upper Zakum (UZ), Lower Zakum (LZ), Umm Shaif, Nasr, Umm Lulu & SARB, Satah and Umm Al Dalkh (UAD) offshore oil fields, located in the Arabian Gulf. It also operates oil and gas processing plants on Zirku and Das islands.

Neale Carter, Penspen’s Executive Vice President for the Middle East, Africa and Asia Pacific Regions, said: “This project continues our support for the Satah field and Zirku Island developments and will enhance our established position as a valued engineering services provider in the Middle East.

“We would also hope that it would lead to further support to ADNOC Offshore in the future.”

Penspen has been providing engineering, project management, asset management and integrity services to the oil and gas industry worldwide for 65 years. Originally founded in the UK in 1954 as Spencer & Partners, the company has now grown to include over 1,000 engineers, with major offices in London, Bristol, Newcastle, Houston, Mexico, Abu Dhabi, and Bangkok.

PD&MS secures three-year contract with Spirit Energy Leading international engineering and design specialists PD&MS Group has been awarded a new three-year contract with options for a further three-year extension with Spirit Energy. The deal, worth an undisclosed multimillion-pound sum, will see the Aberdeen headquartered firm deliver complex modifications for the E&P business.

The Engineering, procurement, construction and commissioning firm has worked with the operator since 2018, providing decommissioning support in the Morecambe Bay area. Building on this existing relationship,

www.ogvenergy.co.uk I June 2020

the new contract will see PD&MS carrying out campaigns both onshore and offshore in the execution of Spirit Energy’s complex modifications delivery strategy.

PD&MS vice president of operations and projects, Liam O’Neil said: “We’re delighted to have secured this contract with a key strategic and forward-thinking client.

We’ve had a number of significant successes as a collective team over the last two years, and we’re looking forward to supporting Spirit Energy to achieve their overarching objectives.

Contract Awards Petrofac Secures New BP Contracts according to Petrofac. Under the agreement, Petrofac will continue to harness digital technology to drive improvements and increase efficiencies for BP, the company stated.

As part of the maintenance agreement, Petrofac said it will continue to provide campaign inspection and maintenance services on BP’s North Sea assets. Petrofac outlined that it has supported many of these assets for the last decade.

Petrofac revealed that BP has awarded the company a new four-year metering contract and a three-year extension to its existing maintenance contract.

“We are proud to build on our long-standing relationship with BP, who have been an early adopter of our digital execution processes,” Nick Shorten, the Managing Director of Petrofac Engineering and Production Services, West, said in a company statement.

The metering services contract includes on and offshore consulting and support services,

Earlier this month, Petrofac revealed that its Engineering & Production Services business

had been awarded two three-year renewals in the UK worth a combined total of more than $100 million. The awards were gained under a competitive tender process with an “international oil company”, according to Petrofac.

Last month, Petrofac announced that was taking decisive actions to improve its cost competitiveness and protect the long-term health of its business. These actions included salary reductions, staff cuts and furloughs.

The measures are expected to reduce overhead and project support costs by at least $100 million this year.

Petrofac designs, builds, manages and maintains infrastructure for the energy industries, according to its website. The company, which is based in St Helier, Jersey, was established in 1981 and is headed by Group Chief Executive Ayman Asfari, who first joined Petrofac in 1991.

Second DeNovo contract win for Aquaterra Energy Aquaterra Energy, a leader in global offshore engineering solutions, has been awarded the FEED (Front End Engineering and Design) contract by DeNovo Energy for a second Sea Swift platform to be located in the Zandolie field, off of the west coast of Trinidad & Tobago.

The award follows on from Aquaterra Energy’s successful design, build and installation of its Sea Swift conductor supported platform (CSP) for DeNovo Energy’s first west-coast field development, Iguana, in 2018. That platform was designed and delivered in 10 months. Since then, the Iguana structure has safely produced an average of 80 mmscf of natural gas – recording uptime of 100% in 2020 so far.

The latest project will see Aquaterra Energy apply modifications to the existing Iguana platform, conduct a review of the pipeline infrastructure and design a new single well CSP in 20m water depth destined for Zandolie. This platform is expected to be lighter and smaller than the Iguana structure and will be engineered for drilling and installation via a jack-up rig.

Together these measures will significantly reduce project costs.

Addressing the scope of the project, Stewart Maxwell, Technical Director at Aquaterra Energy stated, “Similar to the Iguana platform, we will seek to provide a design and development solution that will enable DeNovo Energy to maximise fabrication opportunities in-country.

We’re thrilled to be partnering with DeNovo on this FEED for a second Sea Swift CSP solution”.

The company is proud to have created multiple efficiencies across the DeNovo Iguana operations through intelligent engineering. “We are ready to take that experience and apply it to the Zandolie project to deliver a lighter, smaller platform designed with the environment in mind”, says Maxwell. “It’s extremely encouraging to still see projects such as this moving ahead in the current, low oil price climate. If an operator is considering a new platform installation, now is the time to progress. Even with this market uncertainty, overall project costs have been reduced, which should be a factor in any decision.”

in platform integrity. The simplified design, reduced steel requirement and focus on using available infrastructure and fabrication facilities keep initial expenditure low, but also mitigate the risks of escalating project costs. The platform offers a low-risk, low-cost route to reduce time to first oil or gas production resulting in lower capital investment – without a compromise on the overall safety of the structure. The work for DeNovo Energy is expected to be completed in Q3 2020.

Sea Swift is a minimum-facility offshore platform, that utilises innovative structural configurations to reduce the overall footprint of the facility, whilst ensuring the highest standard

Awilco Drilling Rig Contracted by Serica for Rhum-3 Serica Energy plc is pleased to announce that it has entered into a contract for the provision of a drilling rig for the intervention work on the Rhum-3 (“R3”) well on behalf of the Rhum partners.

The work will be carried out using the Awilco Drilling’s WilPhoenix, a 3rd-Generation, Enhanced Pacesetter, harsh-environment, mid-water, semi-submersible drilling rig. It is expected that operations will commence in the 4th quarter of 2020 and last approximately 70 days.

The work programme will involve recovering debris left in the well by the previous operator and removing an obstruction that is believed to be in place across parts of the downhole completion. The well will then be re-completed and put into production. R3 is already connected to the subsea production infrastructure.

Serica has assessed the potential for COVID-19 related matters to impact the availability of equipment and or personnel and has determined that there are currently no related issues that will prevent the execution of this project.

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Conducted by Craig Jamieson and Oddmund Føre @ Rystad Energy

Service Market Drivers Greenfield project sanctioning

Database version: Rystad Energy Databases June 2020

Sacntioning year (2016 - 2022)

Year (2016 - 2022)

Year (2016 - 2022)

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The consistency of data is a result of our systematic research by combining publicly available information and Rystad Energy’s estimates and models.

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 June 2020

Database version: Rystad Energy Databases June 2020

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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 Fleet current stats

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Conducted by Craig Jamieson and Oddmund Føre @ Rystad Energy

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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

www.ogvenergy.co.uk I June 2020

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P

Decommissioning Projects

Current (Fields)

OPERATOR

P EXPLORATION (Don - Miller)

(Cheviot) CNOOC LIMITED (Ettrick/Blackbird)BP EXPLORATION

Decommissioning Projects (Fields)

UK HOLDINGS

CNR INTERNATIONAL (Vorlich (Ninian - Banff and Kyle fields)

- ETAP ) DANA PETROLEUM E&P CHRYSAOR HOLDINGS (Caister CM - Murdoch - CMS - MacCulloch) (Platypus)

DANA PETROLEUM E&P ENQUEST (Hudson)

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

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

(Utgard) ENQUEST PLC (EnQuest Producer) FAIRFIELD

ENERGY LIMITED INDUSTRIES (Darwin - Skye)

NEOS (Cavendish)

NEPTUNE E&P (Minke - Juliet)

HIBISCUS PETROLEUM (Marigold & Sunflower)

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

PREMIER OIL PLC

(Lancaster)

ENERGY

(Huntington - Balmoral - Rita & Hunter - Caledonia) INDEPENDENT OIL AND

GAS SINOPEC RESOURCES (Southwark - Blythe - Elgood)

REPSOL (Tartan - Buchan - Beatrice - Fulmar)

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

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

(Captain)

SPIRIT ENERGY

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

TAQA EUROPA B.V

(Seagull)

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

(Perth) WALDORF PRODUCTION (Renee / Rubie)

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

EQUINOR ASA PING PETROLEUM LIMITED (Peik - Bressay - Rosebank - Frigg - Mariner East) (Avalon) HURRICANE ENERGY PREMIER (Lincoln, Warwick)

PHARIS (Pilot)

OIL PLC - Tolmount - Solan) ENERGY (Catcher LTD

REPSOL SINOPEC RESOURCES

JERSEY OIL AND GAS PLC (Glenn)

(Tain - Montrose)

ROYAL DUTCH TOTAL UPSTREAM UK LIMITED (Edradour Royal Sovereign) (Gannet

TAQA EUROPA

(Harding North)

SHELL

D Pipeline Replacement Project - Arran B.V. Jackdaw - Penguin Area - Fram)

SERICA ENERGY (Columbus)

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

(Suilven - Tornado - Cambo)

WHALSAY ENERGY (Bentley) WINTERSHALL B.V. (Sillimanite)

OPERATOR

CENTRICA STORAGE HOLDINGS (Rough) CNOOC LIMITED (Ettrick/Blackbird)

CNR INTERNATIONAL (Ninian - Banff and Kyle fields)

CHRYSAOR HOLDINGS (Caister CM - Murdoch - CMS - MacCulloch)

DANA PETROLEUM E&P (Hudson) DNO NORTH SEA (Schooner)

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

ENQUEST PLC (EnQuest Producer) INEOS INDUSTRIES (Cavendish)

NEPTUNE E&P (Minke - Juliet)

PERENCO OIL & GAS (Guinevere - TYNE - Pickerill) PREMIER OIL PLC

(Huntington - Balmoral - Rita & Hunter - Caledonia)

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

ROCKROSE ENERGY (Brae Bravo - East Brae)

ROYAL DUTCH SHELL (Various - Brent - Atlantic and Cromarty - Curlew - Goldeneye) 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 EQUINOR ASA (Peik - Bressay - Rosebank - Frigg - Mariner East) HURRICANE ENERGY (Lincoln, Warwick)

PHARIS ENERGY LTD (Pilot)

JERSEY OIL AND GAS PLC

CNOOC LIMITED

TOTAL UPSTREAM UK LIMITED

ENQUEST PLC

TAQA EUROPA B.V.

(Eagle)

(Fields)

BP EXPLORATION (Don - Miller)

BP EXPLORATION (Murlach - Clair South) (Blackhorse)

17

Date Generated: 13-03-2020

Projects

OPERATOR

CENTRICA STORAGE HOLDINGS ALPHA PETROLEUM (Rough)

DNO NORTH SEA (Schooner)

UKCS Status Report

ATHFINDER - UKCS Status Report Date Generated: Date generated 15 13-03-2020 May 2020

(Glenn)

(Edradour Royal Sovereign) (Harding North)

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

s w e n d o o s e G i stor

We at OGV Energy, could not ignore the magnified sense of community spirit we have witnessed during our time in lockdown. Without a doubt, some of the most positive stories we have seen during these times are of communities around the country (and the world) helping others at any given opportunity, particularly within the Energy sector. We have pulled together some fantastic efforts made by businesses within the Aberdeen and surrounding areas to show how the Energy sector is giving back to its communities, and to the NHS.

Cyberhawk Innovations

Craig International

Atkins

Atkins

EV

Wood

BP

Taken the opportunity to utilise 3D printing to help save lives and keep healthcare workers safe. In a short time, the team have designed and manufactured a number of visor frames using the 3D printer. These frames then have the elastic and visor screen added to complete the protective visor. These will protect the healthcare workers caring for patients with the Covid-19 virus.

Wood joined the efforts along side many of their peers and customers to assist in addressing the critical shortages of PPE across the globe, particularly for medical masks. The team in Norway have partnered with Fieldmade AS in Bergen and Stavanger to 3D print and distribute face shields.

BP have funded the supply of free fuel to four air ambulances in England and Wales, as they continue their life saving charity work during the Covid-19 crisis. They will continue to fuel emergency service road vehicles across the UK and will look for more ways to support through this global pandemic.

With this, they are contributing their share to their suppliers target of distributing over 300,000 protective visors to the National Health Service in the UK. Medical Professionals are confirming this can help save lives, and they are proud to do everything they can to help.

Cyberhawk Innovations Cleared out their store of safety glasses to provide to their local hospital. They also repurposed their 3D printer to make visors available to the NHS.

www.ogvenergy.co.uk I June 2020

Whittaker Group Fabricated 40off life support monitor stands, in aluminium & stainless steel for ARI within a week. Whittaker Group call for all local supply chains to support their NHS trusts in whatever way they can.

NEW FEATURE North East- Rig out (Aberdeen) Ltd Delivered 50 faceshields, 60 FFP3 masks, 500 shoe covers and 300 aprons, for the front line ward use in NHS Grampian.

Worley The Rosenberg Worley team has depleted their equipment department and network to donate filter masks, protective suits and medical gloves in support of Stavanger University Hospital’s ongoing efforts to treat Covid-19 patients.

Bernard Looney BP CEO and Helge Lund BP Chairman

Jon Gill Making training videos for NHS Tayside as they prepare exiting staff and a wave of other workers who will be drafted in to support the Covid-19 response effort.

Donating 20% of their salaries for the rest of the year to mental health charities.

Bernard said, why mental health? It is something that affects us all. Everyone is dealing with something in life. And with the virus – it is amplified. Not everyone will be infected – but everyone is affected.

Stress, fear, anxiety, isolation. This is a mental health crisis as well.

Donated safety glasses to the emergence theatres at ARI.

Orca Oceanic Systems Sourced well needed supplies in the Aberdeen area and donated these essentials to those most in need.

Ducatus Partners

Unveils new ventilator system to support global battle against Covid-19.

Atkins Mike Atkins- graduate mechanical engineer at Atkins was able to bring home their office 3D printer to print face shields components for the NHS.

Help OGV Energy to support the energy industries in creating a knowledge pool that is invaluable, and can save hours, days or even weeks of delay when faced with a unique situation.

With the involvement of you and the industry we can provide deliver this information in an easy to source platform free for everyone.

With over 350,000 industry experts visiting on a monthly basis, let us support you in putting your questions to the industry and the experts.

What’s the thoughts on doing remote distance learning and assessing to maintains social distancing. Obviously where possible and only for key certification and competency verification?

Asked by Alan

Craig International

JFD

OGV FORUMS

19

Offering executive coaching sessions to their clients over the next 60 days.

The coaches at Ducatus Partners are all fully qualified and highly experienced in supporting and partnering leaders through difficult periods of transition.

Want to be featured?

If you know a company that has gone above and beyond to help the community during this time and would like the opportunity to feature in our next 'Good News Stories', please email your content for consideration to newsdesk@ogvenergy.co.uk.

A question regarding air lift: I have a ridgid pipe (dredge pipe) from the surface down to the bottom at approx 150 m depth. What happens if I insert the pressurised air at, let say, 25 meters depth!?

Will I get an equivalent suction down at the bottom, 150 m depth, as if the pipe would have been just 25 meter down and the air insert also at 25 meters!?

I have worked a lot with air lifts at shallow waters so I know the principle. People though, who claims they know, tells me it does not work, and I can’t understand why it should not work!?

Asked by Peter Lindberg

We are updating the Kick Tolerance section of our well control manuals and I would like to know your thoughts on acceptable kick tolerance thresholds by hole size... I'm hoping this forum can help me.

Asked by ADE

Join the conversation www.oilandgasvision jobs.com/forum

WORLD PROJECTS

20

WORLD PROJECTS MAP 1

The offshore site investigations will be supported by Curtin University’s Centre for Marine Science and Technology for marine mammals in the project area and Deakin University on the seabird, seabed biodiversity and fish surveys.

JUNE 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

AUSTRALIA Offshore Energy US$5.9bn

3

4

5

CHINA PetroChina US$100mn

NIGERIANLNG US$4.5bn

POLAND - PKN Orlen US$2.3bn

BRAZIL Oil Group US$300mn

PetroChina has made a giant gas find at the Pengtan-1 well, southwestern China’s Sichuan basin, which flowed 1.22 million cubic metres of gas during testing in early May 2020. The Pengtan structure, which covers 1,200 sq km in the central Sichuan basin has the potential to hold more than a trillion cubic metres of gas in place.

Nigeria LNG has signed the engineering, procurement and construction (EPC) contract for Train 7. Nigeria LNG had previously announced that it would award the EPC to a consortium including Saipem, Chiyoda and Daewoo.

Saipem said the overall value of the contract was above $4 billion, with its share at roughly $2.7 billion.

PKN Orlen has purchased a license and basic engineering design package from Badger Licensing for an isopropyl alcohol (IPA) unit as part of a wider program to expand phenol production capacity at its facility in Plock. Basic engineering design work on the IPA unit, including auxiliary systems and ancillary infrastructure, and the launch of a selection process for a general contractor are planned.

Oil Group has signed a Memorandum of Understanding with Porto do Açu for the development of a 20,000b/d modular refinery at the Açu port complex. The project is understood to be in the environmental licensing stage and CapEx is estimated at US$300 million. French companies Entrepose and Axens will oversee the project's design and engineering.

www.ogvenergy.co.uk I June 2020

WORLD PROJECTS

03 21

8 4

2

7

9

3

6

5

1

6

MALAYSIA Petronas US$800mn

Samsung Engineering has been awarded an LoA by Sarawak Shell for the basic engineering design (FEED) of an onshore gas plant for the Rosmari-Marjoram development. The contract award is worth around $5 million and is for a facility with the capacity to process 800 MMcf/d of gas. Samsung will also be carrying out the EPC budget calculations.

7

8

9

QATAR North Oil Company US$2bn

NORWAY Aker BP US$120mn

MEXICO Repsol US$1bn

NOC has kicked off pre-qualification for four key EPC packages for the Gallaf 3 project. Offshore packages 5,6,7 and 8 have been offered by NOC as components of the Gallaf 3 development, involving substantial offshore fabrication work.

Aker BP is planning to invest NOK 1.2 billion ($120 million) into the development of the Graasel discovery. FID is planned for Q3 2020, with first oil expected a year later. The development will utilise existing infrastructure at the Tilje and Skarv BC east templates, most likely the re-use of one producer and one water injector.

Repsol has made two significant offshore oil discoveries in Polok-1 and Chinwol-1 exploration wells in Block 29 in the Salina Basin. Both wells confirmed high quality reservoirs with excellent properties, encountering net oil pay of 200 metres and 150 metres respectively.

Repsol is reportedly considering the use of an FPSO in the development of the Polok and Chinwol discoveries.

WORLD PROJECTS SPONSORED BY

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By Tsvetana Paraskova

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.

Middle East Energy Review The Middle East region, home to a large part of global oil and gas reserves and production, is currently experiencing a double-blow of the COVID-19 pandemic and low oil prices.

The biggest oil producers in the region have pledged to reduce their crude oil production as part of a new OPEC+ deal to rebalance the oversupplied oil market. But the crash in oil prices and the uncertain recovery in global oil demand and international oil prices are straining the finances and government budgets of the oil-exporting nations in the Middle East, most of which are either members of OPEC or are part of the broader OPEC+ coalition.

OPEC+ Deal and additional pledges to support market recovery Producers in the Middle East have started to show that they are really trying to tighten the oil market since the OPEC+ deal entered into force.

Under the agreement, the OPEC+ group has promised to cut combined oil production by 9.7 million barrels per day (bpd) in May and June, and then ease those collective cuts to 7.7 million bpd for the rest of the year.

Saudi Arabia, which has to reduce its oil output to 8.5 million bpd in May and June, said that its energy ministry had ordered Saudi Aramco to reduce its crude oil production for June by an extra voluntary amount of 1 million bpd, in addition to the reduction the Kingdom pledged in the OPEC+ deal in April. Saudi Arabia’s oil production in June is set to be around 7.5 million bpd, while OPEC’s top producer is said to have also started to tighten its supply to the market by allocating lower volumes than some buyers in Asia had nominated for June.

OPEC’s fourth-largest producer, Kuwait, said in April that it had already started to reduce crude oil supply to international markets “sensing a responsibility responding to market conditions,” Kuwait’s Oil Minister Khaled Al-Fadhel told the official state Kuwait News Agency (KUNA).

time around, Iraq is reiterating its commitment to the cuts, signaling that it could pull off better compliance now that low oil prices are severely battering its budget income, the vast majority of which comes from oil export revenues.

their production out of a sense of shared responsibility,” Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, and Russia’s Energy Minister Alexander Novak said in the joint statement.

Saudi Arabia and Kuwait will suspend crude oil production from the Al-Khafji oil field they jointly operate for a month beginning on June 1, Abdullah Al-Sumaiti, the acting CEO of Kuwait Gulf Oil Company (KGOC), told Kuwait’s official KUNA news agency on 21 May.

“We are also pleased with the recent signs of improvements in economic and market indicators, especially the growth in oil demand and the ease in concerns about storage limits as various countries around the globe begin to emerge from their stringent lockdowns,” the ministers noted.

Kuwait, as well as OPEC’s third-biggest producer, the United Arab Emirates (UAE), have also pledged deeper cuts than their shares of the reductions in the OPEC+ agreement.

Two weeks into the new OPEC+ deal, its leaders Saudi Arabia and Russia issued a statement, saying that “Our two nations remain firmly committed to achieving the goal of market stability and expediting the rebalancing of the oil market. We are confident that our partners within OPEC+ are fully aligned with our goals and they will comply with the OPEC+ agreement.”

Iraq, the second-largest oil producer in OPEC after Saudi Arabia, has always struggled to comply with the cuts in the previous deals. This

“We would like to especially commend the efforts of responsible producers around the world who have willingly adjusted

www.ogvenergy.co.uk I June 2020

A few days later, Sultan Ahmed Al Jaber, UAE Minister of State and Group CEO of the Abu Dhabi National Oil Company (ADNOC), said that signs were already emerging that oil markets had tightened in recent weeks and would rebalance over time.

“The OPEC-plus agreement, voluntary cuts outside OPEC-plus plus, and production shut-ins are working together to start to rebalance the market,” Al Jaber said.

Middle East

The economic toll of COVID-19 and low oil prices While major oil producers in the Middle East pledge support and actions to accelerate the market rebalancing, their economies and oil revenues suffer from the low oil prices. Saudi Arabia, for example, introduced ‘tough’ austerity measures, as its Finance Minister Mohammad Aljadaan said. The Kingdom triples the value added tax (VAT) to 15 =% from 5% beginning in July 2020 and will discontinue the cost-ofliving allowance as of June 2020. For Saudi Arabia, “the first economic shock was the unprecedented decline in oil demand, which led to lower oil prices and a sharp decline in oil revenue that represents a main source of public revenue for the state budget,” Aljadaan said.

Three weeks after the announcement of the austerity measures, Moody’s changed the outlook on Saudi Arabia to ‘negative’ from ‘stable’, to reflect “increased downside risks to Saudi Arabia's fiscal strength stemming from

the severe shock to global oil demand and prices triggered by the coronavirus pandemic, and from the uncertainty regarding the degree to which the government will be able to offset its oil revenue losses and stabilise its debt burden and assets in the medium term.”

The price collapse will raise the Kingdom’s debt and erode its fiscal buffers, Moody’s said, but noted that it kept its A1 rating on Saudi Arabia because the country’s fiscal and foreign currency buffers remain large, albeit materially lower than a few years ago.

“The government’s vulnerability to oil price declines is balanced by the sovereign’s very large hydrocarbon reserves and low extraction costs, which support economic resiliency even in a low oil price environment,” according to Moody’s.

The economic outlook for the Middle East, North Africa, Afghanistan, and Pakistan (MENAP) oil exporters has weakened significantly with the pandemic and sharp

decline in oil prices, the International Monetary Fund (IMF) said in its Regional Economic Outlook Update in April.

Oil prices at below $30 a barrel could result in more than US$230 billion in lost annual revenue across MENAP oil exporters, placing significant strains on fiscal and external balances. Some countries such as Bahrain, Iraq, and Oman could see a rapid depletion of their fiscal buffers, the IMF warned.

“The current crisis has brought the region’s vulnerability to oil price volatility into sharp focus and underscored the need for fiscal adjustment over the medium term,” the IMF said.

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REGIONAL REVIEWS “Although we are now no longer a shareholder in Lundin, we continue to consider the company a strong partner on the Norwegian Continental Shelf,” said Lars Christian Bacher, Chief Financial Officer of Equinor.

By Tsvetana Paraskova

European Energy Review The COVID-19 pandemic and its effect on the energy sector continued to be the main topic in Europe’s energy industry this month.

Europe’s major oil and gas firms reported lower profits for the first quarter, due to the crash in oil prices. Some supermajors even cut their dividends to protect their balance sheets and boost their resilience during these challenging times for the global oil and gas sector.

A couple of days later, Equinor reported a loss for the first quarter of 2020, due to the low commodity prices in the period. Due to market uncertainties, governmentimposed production curtailments, and Equinor’s value over volume approach, Equinor suspended further production guidance for 2020.

“Our values and strategy remain firm, and we are committed to develop Equinor as a broad energy company. It is a sound business strategy to ensure competitiveness and drive change towards a low carbon future, based on a strong commitment to value creation for our shareholders,” Equinor’s President and CEO Eldar Sætre said.

Another European major, Shell, slashed its dividend by 66%, starting this quarter—the first dividend cut at Shell since World War II – due to “the continued deterioration in the macroeconomic outlook and the significant mid and long-term uncertainty,” CEO Ben van Beurden said.

Two weeks before that announcement, Shell had said that it would aim to be a net-zero emissions energy business by 2050 or sooner.

Despite significantly reduced profits and high uncertainty about the near-term prospects of the oil and gas business, Europe’s major oil firms reaffirmed their previous commitments to achieve net-zero carbon emissions by 2050 or sooner.

“Society, and our customers, expect nothing less,” van Beurden said.

In renewable energy, major firms advanced and agreed many European projects in solar, wind, and wave power and green hydrogen applications, while the UK marked its longest run of coal-free power generation since before the start of the Industrial Revolution.

BP, like other majors, also reported lower profits for Q1, but it didn’t cut its dividend, despite CEO Bernard Looney admitting that “Our industry has been hit by supply and demand shocks on a scale never seen before.”

Oil & Gas

independent basis and with Norwegian interests at heart,” minister Bru noted.

Western Europe’s largest oil producer, The cuts apply for Norwegian oil production Norway, will cut its oil production under and some fields are exempt from the a government decision, “to contribute regulation, including gas and condensate to a faster stabilisation of the oil market fields, trans-boundary fields, and mature compared to letting the rebalancing take fields that are in a late tail phase, the place only though the market mechanism.”

Norwegian Petroleum Directorate (NPD) Norway, which is not part of the OPEC+ said in a statement. group of producers, decided nevertheless to contribute to the global Norway also announced a production cuts in order to package of measures to help speed up the market support the oil and gas rebalancing. Norwegian "We are proposing industry and the oil production will be supply chain. cut by 250,000 barrels temporary targeted per day in June and by changes to the taxation “We are proposing 134,000 barrels per system to make it temporary targeted day in the second half changes to the taxation of 2020. This cut is possible to carry out system to make it based on a reference planned projects." possible to carry out production of 1,859,000 Said Prime Minister planned projects. In barrels of oil per day.

Erna Solberg addition, we are proposing a Norway will also delay green restructuring package,” the start-up of production said Prime Minister Erna Solberg. of several fields until 2021.

The total Norwegian production in Again in Norway, the top oil-producing firm December 2020 will be 300,000 bpd less Equinor announced a cut in dividends, the than originally planned by the companies, first supermajor to do so after the price while the regulation will cease by the end crash. Equinor is slashing its cash dividend of this year, Minister of Petroleum and for the first quarter of 2020 by 67%, to Energy, Tina Bru, said.

US$0.09 per share, compared to the fourth quarter of 2019. The Norwegian major “The decision by the Norwegian also divested its entire minority stake in Government to reduce Norwegian Lundin Petroleum. oil production has been made on an

www.ogvenergy.co.uk I June 2020

“We are determined to perform with purpose and remain committed to delivering our net-zero ambition,” Looney said in the Q1 results release.

France’s Total SA, like BP, also kept its dividend untouched, and announced a new climate ambition, committing to become a net-zero emission company for all its European businesses by 2050—the latest European major to commit to net-zero.

Spain’s Repsol – the first company to announce a net-zero ambition in December 2019 – reaffirmed its commitment “to leading the energy transition that was made even before the current exceptional global context” when reporting Q1 results.

According to a recent report from Transition Pathway Initiative (TPI) – an investor initiative backed by over US$19 trillion of global capital – Shell and Eni are the leaders in the race of European oil majors to achieve net-zero emissions. Shell and Eni now have the most ambitious emissions-reduction plans among the companies Total, Shell, BP, Repsol, and Eni, TPI said in its analysis, but noted that “despite these commitments, none of the companies are aligned yet with ‘net-zero’ or 1.5° C pathways.”

Europe Renewable energy and projects to cut carbon emissions

25

Neptune Energy said in April that Dutch energy infrastructure company Gasunie would join as a new partner on the PosHYdon pilot, the world’s first offshore green hydrogen project.

Oil and gas majors have also recently announced initiatives in alternative energies and projects for carbon dioxide capture and storage.

In the UK, the developers of the world’s largest offshore wind farm, Dogger Bank, plan to build a new Operations and Maintenance (O&M) Base at the Port of Tyne. Equinor and SSE Renewables, the two companies behind the Dogger Bank development, announced the new multi-million pound facility, which includes both office space and a warehouse and which will be the onshore base for Equinor’s teams ensuring the efficient operation of the wind farm. The Dogger Bank Wind Farm is estimated to trigger a total capital investment of around £9 billion between 2020 and 2026 and will be able to generate around 5% of the UK’s electricity needs, according to Equinor.

Shell Nederland, Eneco, and the port of Rotterdam are working on a project to create a green hydrogen hub in the port of Rotterdam. Shell aims to produce green hydrogen using green electricity from wind power.

Shell and Eneco, with their joint venture CrossWind, are participating in the tender for an offshore wind farm come from the Hollandse Kust (noord), Eneco said in early May. “The energy transition calls for guts, boldness, and action,” says Marjan van Loon, President-Director of Shell Nederland.

Total is boosting research into Carbon Capture, Utilisation and Storage (CCUS) technologies, after signing a multi-year partnership deal with UK start-up Cambridge Quantum Computing (CQC) to explore quantum algorithms to improve CO2 capture. Total looks to be a major player in CCUS and it currently invests up to 10% of its annual research and development effort in this area.

Also in the UK, record solar power generation with sunny weather in April helped the country to reach its longest coal-free period since pre-industrial times, the Solar Trade Association said at the end of April.

Total, together with Equinor and Shell, decided in mid-May to invest in the Northern Lights project in Norway’s first exploitation licence for CO2 storage on the Norwegian Continental Shelf.

“Renewables will continue to grow rapidly to meet the UK’s target of net-zero emissions; offshore wind alone will generate over 30% of UK power by 2030,” RenewableUK's Deputy Chief Executive Melanie Onn said, commenting on the new record for the longest period of generating electricity without burning coal.

“Development of CCS projects will also represent new activities and industrial opportunities for Norwegian and European industries,” says Anders Opedal, executive vice president for Technology, Projects & Drilling at Equinor.

“Alongside other low-cost options like onshore wind, there are huge opportunities for innovative technologies like marine energy, floating wind, battery storage and renewable hydrogen to accelerate the UK’s transition to net-zero,” Onn added.

“Renewables will continue to grow rapidly to meet the UK’s target of netzero emissions; offshore wind alone will generate over 30% of UK power by 2030.”

RenewableUK's Deputy Chief Executive Melanie Onn said

France has recently announced an ambition to raise power generation from renewables, and this new plan will make France Europe’s fourth-largest offshore wind producer in 2030, behind the UK, Germany, and the Netherlands, Rystad Energy said in an analysis in early May. In wave and tidal energy, new pilot projects were announced in Scotland and Wales.

French companies SABELLA and HydroQuest, as well as Spanish developer Magallanes, said they aimed to deploy their devices on a commercial scale at the Morlais project in the Crown Estate-designated zone off the coast of Anglesey, north Wales.

The European Marine Energy Centre (EMEC), based in Orkney, Scotland, has signed an agreement with Marine Energy Wales to provide further support to the Marine Energy Test Area (META) in Pembrokeshire, Wales.

Wave energy developer Bombora has teamed up with the Offshore Renewable Energy (ORE) Catapult’s Marine Energy Engineering Centre of Excellence (MEECE) in Wales to launch a cutting-edge floating wave technology research project.

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By Loren Steffy

U.S. Oil Producers face existential threat amid unprecedented demand decline

The U.S. oil industry is in a slump the likes of which it hasn’t seen in 100 years, and many in the industry are wondering if there will be any coming back from the bust this time.

In just a few months, the industry became the second-smallest segment of the Standard & Poor’s 500 Index, with its weighting down 80% during the past decade. While the COVID-19 pandemic has raised concerns about how quickly demand will recover, the industry’s biggest concern is that investors — who have increasingly become disenchanted with fossil fuels in general and producers’ recent poor performance in particular — may never return.

The oil prices in the past month and the flow of capital out of the business have raised the concern that, as one industry executive recently told CNBC, “we will disappear as an industry.”

Oilfield services company Weatherford International, which emerged from bankruptcy protection just months ago, is already back in the red. The company lost $966 million in the first three months of the year.

The losses extend to the majors as well.

Exxon Mobil reported its first quarterly loss in more than 30 years. Exxon, Chevron and ConocoPhillips plan to cut production by as much as 660,000 barrels a day by the end of June.

Producers that have managed to stave off bankruptcy have begun voluntarily shutting in production, especially in the prolific Permian Basin of West Texas. Last month, the Texas Railroad Commission, which regulates the state’s oil and gas industry, voted against implementing production controls, a power it hasn’t used since the early 1970s. It considered the action at the behest of several large Permian producers.

The symbol of just how bad things have gotten came in late April, when prices for West Texas Intermediate crude, the U.S. benchmark, "We are seeing a briefly dropped to negative $38 level of demand a barrel. It started the year destruction and oil industry above $60. The negative downturn that in the past pricing only lasted for a occurred over a period of few hours, but WTI has never traded for less than years now happening over zero, and the psychological a period of days." impact what happened Railroad Commissioner Monday continues to cast a Ryan Sitton said pall over the market.

The nationwide lockdown in response to the coronavirus pandemic has gutted oil demand, which some forecasters predicted would decline globally by as much as 29 million barrels a day. In the U.S., producers are pumping 2 million barrels a day more oil from the ground than our refineries are processing (even though U.S. refiners don’t all process oil from U.S. fields).

Gasoline is selling for less than it has in more than a decade. Typically, low prices at the pump stimulate the economy, but stay-at-home orders have kept most cars in the garage.

In the short term, bankruptcies are rising.

Chesapeake Energy, stumbling under a $9 billion debt load, recently agreed to prepay $25 million in incentive compensation to 21 top executives to keep them at the company while it prepares a bankruptcy filing. Whiting Petroleum and Diamond Offshore Drilling made similar moves last month ahead of their bankruptcies.

While producers are racing to turn off the pumps in West Texas, in the Gulf of Mexico companies are pulling back as well, a more significant sign that U.S. producers expect a lengthy bust.

He noted that tens — and perhaps hundreds — of thousands of jobs could be at stake. “Eventually, those jobs will come back, but they may not come back in the state of Texas and the United States.”

With little help coming from the state, producers may be at a disadvantage in Washington, too. Republican senators from several oilproducing states have claimed that big banks, which are administering federal stimulus loans to businesses, are “discriminating” against fossil fuel producers. In a letter to President Trump, three dozen lawmakers urged the administration to take action against big banks that have decided to limit lending to oil and gas companies. The lawmakers claim the banks are bowing to pressure from environmentalists who want the banks to divest of fossil fuel interests.

Not everyone in the Hemisphere, though, is cutting back. Mexico is doubling down, boosting spending for new wells, using new technology to increase production from ageing fields,

overhauling six refineries and spending $8 billion to build a new one. President Andrés Manuel López Obrador cut federal spending last year and has been reluctant to boost stimulus programs in the wake of the COVID-19 pandemic. Instead, he’s pouring resources in the state-owned oil company, Petróleos Mexicanos, in hopes that it will become the engine of economic recovery for the nation. The idea, the president said is to “save Pemex in order to save Mexico.” Pemex plans to boost spending this year to $11 billion from $10.8 billion last year and will drill 423 wells — double that of 2019.

Undaunted by the price decline, British petrochemical giant Ineos is moving ahead with the plans to begin fracking two wells in the Austin Chalk formation in central Texas.

Ineos bought tens of thousands of acres from a Houston energy company last year and recently filed for permits to drill two horizonal wells. Ineos had previously planned a shale play in the British Isles, but abandoned the project last year amid environmental concerns and began looking for opportunities in the U.S. Meanwhile, the pandemic is helping renewable energy make inroads. The U.S. is on track to produce more electricity from renewables than coal this year for the first time on record. The milestone represents a dramatic change from just a decade ago, when more than half of all U.S. electricity was generated with coal. Utilities have retired hundreds of coal plants as the price of renewables have declined significantly — 40% for wind and 80% for solar — during that time.

Now, the virus outbreak has resulted in a decline in electricity demand, which has accelerated the shuttering of coal plants because they often cost more to operate than renewables or generating plants powered by natural gas.

As bleak as the outlook may seem, some shale producers are already girding for a comeback.

Diamondback Energy, which recently announced it would curb production by as much as 15% and laid off most of its fracking crews for the rest of the quarter, said it’s ready to complete wells that were drilled but not fracked as soon as prices return to the $30 a barrel level. Another producer, Parsley Energy, said at $30, it could return wells to production in a week or two.

By mid-May, with the expiration of the June WTI contract looming, prices rallied to $31.74 a barrel. President Trump tweeted “OIL (ENERGY) IS BACK!!!!” In the U.S. Oil Patch, hope seems to flow more readily than oil these days.

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ASSET INTEGRITY

By Tsvetana Paraskova

Asset Integrity: The key to safe and efficient oil & gas operations

Over the next five years, digitalisation and the use of the Internet of Things (IoT) in the energy sector is set to jump.

www.ogvenergy.co.uk I June 2020

ASSET INTEGRITY The oil price crash in the COVID-19 pandemic has created a challenging environment for the oil and gas industry. The current crisis brings uncertainty about investments in the sector in the near term as oil prices languish at their lowest levels in several years.

Although imminent exploration and production (E&P) investments have been slashed amid the major uncertainties about market recovery, oil and gas operators and contractors have one certain investment in any price environment.

This is to maintain the asset integrity of their facilities and operations in order to ensure safe, reliable, and efficient workflow and production at times of social distancing and market uncertainties.

in terms of share prices and market capitalisation, even if the oilfield services industry was hit the worst by the price collapse and the pandemic, Rystad Energy said in an analysis in May. “In a nutshell, our analysis indicates that companies with exposure to EPCI, facility leasing, maintenance and inspection services, SURF or subsea equipment have been less punished by investors, who have prioritised limiting their exposure to well services, drillers, acquisition contract seismic and the North American market,“ Rystad Energy senior energy service analyst Binny Bagga said.

Regardless of where oil and gas prices are, asset integrity and asset management continue to be firm commitments by asset operators and their contractors.

Inspection, risk assessment, process and people safety, safety-critical maintenance, and asset performance optimisation continue to be on every company’s priority list during these challenging times for the industry and for the world as a whole.

Regardless of the price of oil and gas, producers and their supply chain providers work 24/7 to ensure the asset integrity of oil and gas platforms, pipelines, and refineries.

But asset integrity is the most important part of every producing and/or operating asset in the energy sector—asset integrity management makes sure that platforms, refineries, or pipelines are designed, built, installed, operated, maintained, and inspected according to the highest industry standards, for safe and reliable operations.

During the oil price crash, oilfield services firms with large exposure to maintenance and inspection are some of the least impacted

Italy’s Eni has a digital transformation plan, whose goals include improving the safety of people and increasing asset security and integrity, alongside improving efficiency and increasing decarbonisation efforts.

“Eni’s digital transformation is currently based fundamentally on asset integrity and security, which is why innovation and digitalisation play a key role in our business model and help us to look to the future with our sights more firmly set on a circular economy-based model,” Eni’s Chief Digital Officer, Luigi Lusuriello, says.

Most recently, Wood and National Energy Resources Australia (NERA) announced in early May a new partnership to develop and deliver an AI-based solution for the inspection of critical industrial equipment, particularly for subsea oil and gas infrastructure.

Asset Integrity remains crucial in any oil & gas price environment

Asset integrity management doesn’t receive much media attention, pushed back by headline-grabbing ‘unprecedented’, ‘crisis’, ‘crash’, ‘slash’, and other nouns, adjectives, and verbs to describe the ongoing challenges in the oil and gas sector.

Like Equinor, UK’s BP is also using digital twin technology to optimise production, connect people and data, and, crucially, save precious engineering time. BP first rolled out the APEX digital twin at its operations in the North Sea, because some of the supermajor’s most complex production systems are offshore the UK. After the pilot in the North Sea, BP’s production teams in other parts of the world have also started using the digital twin technology.

“Digital transformation is a virtuous circle: people improve technologies and technologies improve people’s performance,’’ Lusuriello notes.

Asset integrity management (AIM) and asset integrity management systems (AIMS) are indispensable parts of every operation in the energy sector, securing the safe and efficient work of the assets during their lifetime, and the safe decommissioning after that.

Maintenance, inspection, and monitoring of operational facilities onshore and offshore continue even if the drilling of new wells has grounded to a halt as E&P firms pull back on capital expenditure (CapEx) to weather the oil price rout.

“We have invested in digital solutions, and these new ways of working are already saving months in the execution stage,” says Anders Opedal, Executive Vice President for Technology, Projects and Drilling (TPD) at Equinor.

“It is fantastic to see that the energy industry is embracing new ways of solving problems,” said Azad Hessamodini, strategy and development president of Wood’s Technical Consulting Solutions business.

Digitalisation rising Even before the pandemic, the oil and gas sector had started to embrace digitalisation as a means to protect people in harsh environments and help asset management and integrity. Major oil firms in the world have already adopted digital twins to monitor and control offshore assets in remote areas while workers are safely using virtual reality, augmented reality, or dynamic 3D printed models superimposed on the actual platform or other facility to perform the checks and see if everything runs and works as smoothly as planned.

Norway’s Equinor, for example, uses digital twin technology in the construction of Johan Sverdrup Phase 2—one of the largest projects on the Norwegian Continental Shelf (NCS) which is expected to produce around 25% of Norway’s total oil output once it reaches peak production.

In the COVID-19 pandemic, demand for remote inspection of offshore oil and gas assets has surged, according to testing, inspection, and certification services provider Bureau Veritas, which reported a 900% surge in demand for remote inspection of offshore assets.

“Since the start of this year demand has greatly increased. It is no longer a want but a need,” says Paul Shrieve, Vice President Offshore & Services at Bureau Veritas.

Over the next five years, digitalisation and the use of the Internet of Things (IoT) in the energy sector is set to jump.

According to a May 2020 report from MarketsandMarkets, the global market of the Internet of Things (IoT) in the energy industry is expected to jump to US$35.2 billion by 2025, up from US$20.2 billion in 2020, at a compound annual growth rate (CAGR) of 11.8% over the next five years.

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ASSET INTEGRITY

Will the coronavirus pandemic have a lasting impact on the way we work?

Kirsty Ross, PIM’s HR Manager

In the 12-month period from January to December 2019 the Office for National Statistics reports that an estimated 1.7million people worked mainly from home, a mere 5% of the workforce. Another 1% of the total workforce reported working in the same grounds or building as their home. Fast forward to the middle of May 2020 and, as we continue to adhere to government guidelines, and stay at home to stay safe and to protect the NHS, the world of work has changed beyond all recognition.

We have all been asked, where possible, to work from home and, where remote working isn’t an option, non-essential businesses have closed. As I write this PIM has transitioned from having our onshore teams either in our or our clients’ offices to working from home.

Thanks to the available technology and a great IT team, PIM’s transition has been smooth and we are able to connect virtually and maintain the office environment while delivering our services to our clients. The team as a whole is responding well to working remotely while adapting to this new norm which also sees our schools closed.

Once we come out the other side of the coronavirus pandemic it will be extremely interesting to see what long-lasting effects this experience has on the world of work. Surely such a shift in our daily lives cannot pass without leaving its mark?

www.ogvenergy.co.uk I June 2020

At PIM, we have always focused on having the right person in the right post and have been open to employees having different working solutions from the ‘norm’.

While the percentage of the workforce which can effectively work from home differs according to industry sector with some industries and types of work within each sector lending themselves to home working more easily, it has been clearly demonstrated that with the right technology and infrastructure in place home working is possible on a greater scale than previously thought. It follows that companies which have previously been reluctant to embrace remote and/or flexible working are likely to find that this approach will be challenged by employees wishing to continue this way of working.

At PIM, we have always focused on having the right person in the right post and have been open to employees having different working solutions from the ‘norm’. As a company, we have found this to be a very successful approach. It has meant that we have been able to access talent which would have been unavailable to us if we had insisted on the traditional office-based, nine to five scenario. This makes the company richer as a whole and opens up a broader talent pool when it comes to recruitment.

It may be hard to see at the moment, but I think there will be positives that come out of this strangest of situations and, hopefully, in the world of work a more open attitude to flexibility and home working will be one of them.

For more information visit pim-ltd.com

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31

By Graeme Forbes

Challenging energy landscape forges route to greater production efficiency The UK Continental Shelf (UKCS) is better-placed to “weather the storm” caused by the twin threat of Covid-19 and falling commodity prices than it has been during previous downturns, according to a leading industry task group.

The group has subsequently identified various areas of improvement and highlighted progress made over the past three years towards achieving these goals, with visible results recorded across a number of different aspects – including production increases within the past year.

Further, a reduction in plant losses in the UKCS may be attributed to the improvements made as a result of the task group’s roadmap.

Adam Sheikh, VP Business Projects at Repsol Sinopec, who has led the Asset Integrity Task Group since its inception, commented: “Significant progress has been made across all the areas identified on the roadmap for improvement in 2019, such as testing alternative insulation material, retro-fitting inspection sensors, and the development of analytical software to name a few.

“In addition, the task group has written joint industry papers on UKCS best practice for topics such as ‘risk-based inspection’ and ‘performing maintenance on live pressure equipment’. We have then followed up on how operators use the outputs of best practice papers.

Adam Sheikh, VP Business Projects at Repsol Sinopec

The new spirit of collaboration borne out of the 2014 oil price-crash has created the conditions where operators have come together to exchange knowledge, share examples of best practice, and discuss challenges faced; all geared towards ensuring a sustainable future for the North Sea. Established in 2017, the Asset Integrity Task Group – a subgroup of the MER UK Asset Stewardship Task Force – began with the aim of driving improvements in asset integrity across all UKCS facilities, through reducing hydrocarbon losses and, thereby, extending the life of the entire basin.

The task group, which meets quarterly, examines how MER activity impacts on efficiency, and provides a platform for meaningful cross-industry collaboration; bringing together industry experts and specialists from operators, contracting companies, and other major stakeholders; including, the Oil and Gas Authority (OGA), the Oil & Gas Technology Centre, Oil & Gas UK (OGUK), the Energy Institute, and Step Change in Safety.

As part of its annual ‘Tier Zero’ meeting for industry leaders, the OGA announced that production efficiency on the UKCS had improved for the seventh consecutive year, reaching 80% in 2019. The latest analysis showed a five-percentage point increase on the previous year, driven by a 34% reduction in production losses compared with 2018, which represented 50million barrels of oil equivalent (boe).

Scott Robertson, Director of Operations at the Oil and Gas Authority and Co-Chair of the MER UK Asset Stewardship Task Force, said: “At 80%, production efficiency in the UKCS has risen by 15 percentage points compared to 2014.

Achieving this target means that the basin is in a much-improved position to weather the current storm and, as a result, better prepared to adapt to whatever comes next.

“This target was achieved along with our community of integrity managers, especially those within the Asset Integrity Task Group.

Fantastic progress has been made since it was first introduced, with the number of parties willing to join, share success stories, and find problems to common challenges faced continually rising.

“This further reduction in production losses over the past 12 months is a significant achievement.

While production efficiency has gradually increased since 2013, it remains a continuous journey and we are not resting on our laurels.”

In 2019, the Asset Integrity Task Group developed and published a roadmap which aims to reduce loss of containment (LOC) events, planned integrity losses by 20%, and unplanned integrity losses by 60% in the UKCS.

“The cross-industry collaborative approach has made these visible results across key areas of asset integrity possible.”

Over the next three months, the task group is planning a change of leadership. Adam Sheikh will hand-over to Shell’s Paul Jackson and Matthew Blackburn from the Health and Safety Executive.

Under the direction of the new leadership, the task group will continue to identify areas for improvements, cross-collaboration, and best practice for the UKCS industry.

Scott Robertson added: “The impact of Covid-19 and the industry’s ability to effectively man offshore is a concern and one that needs to be carefully managed to ensure safety remains the highest priority, whilst efforts to keep on top of safety-critical maintenance must continue with a laser-like focus.

Scott Robertson, Director of Operations at OGA

“The wider MER cultural changes have created the right framework to allow the asset integrity group to perform an effective role. It is encouraging to see industry leaders and operators, among others, coming together and prepared to share key learnings and experiences.

“Further adoption of new technologies – as set out in the road map, will, in turn, allow for increased efficiencies in the UKCS and have undoubtedly had a positive contribution on overall integrity losses to date.”

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ASSET INTEGRITY

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Digital twinning delivers trust and value in reducing operating costs

The oil and gas industry is currently enduring one of the most challenging periods in its history. The impact of the COVID-19 pandemic significantly accelerated an existing decline in global demand for hydrocarbons, resulting in the lowest oil prices for 30 years. This has left the industry facing the dual challenge of ensuring successful and safe working conditions and practices for employees while maintaining the economic viability of assets.

How can you maintain, or even raise, safety standards and address maintenance challenges while reducing cost?

One solution is the growing adoption and recognition of the benefits of digital twinning i.e. the creation of a mirror image of an asset to support integrity management.

At the forefront of this cultural change is Bureau Veritas, a world leader in testing, inspection and certification services, which has created a proven and ‘boxed’ digital twinning and smart data management system that is already helping to generate significant reductions in unit operating costs and capital expenditure.

The company’s Veristar AIM3D system, developed in partnership with Dassault Systèmes, has revolutionised asset management, providing a true, as is, four-dimensional picture of an asset’s condition instantly, everywhere on any platform or device, at any time.

Veristar AIM3D combines a digital twin of any marine or offshore asset with smart data. It improves visibility and understanding of the asset, allowing operators to make the right 2/5 choices faster to improve efficiency, safety, integrity, performance, return on investment and carbon footprint reduction.

Benefits for the supply chain include: the provision of a mirror image of an asset which everyone can view and estimate against the ‘as it is’ information; mitigation of inconsistency across tenders; the elimination of additional cost due to access and egress issues on site; a compilation of accurate engineering work packs with minimal 3/5 requirement for site visits; more fixed-price certainty, and time and opportunities to evaluate alternative scenarios, approaches and technologies.

From a safety perspective, digital twinning enables virtual simulation to run hazardous activity without: a physical presence and thereby eliminate or mitigate risks; familiarisation with an asset prior to the mobilisation of personnel; the laydown and storage of plant and equipment offshore; links into Permit to Work (PTW) systems and the simulation of access and egress from hazardous operations for personnel. In the UK, a run-down of the safety case through visualisation could reduce the requirement for the Health and Safety Executive to make on-site visits.

By providing a visualisation of risks through simulation and respective mitigation, digital twinning can provide insurers and underwriters with a better understanding of the risks and control measures being taken. Indeed, insurers have suggested such increased visibility could remove a zero from the cost of premiums.

Veritas

Bureau discovered that by using its digital twin and smart data system, operatorscould save between 9% and 15% on total decommissioning project costs.

The digital twin, linked to a comprehensive asset integrity management database and collaborative platform that will interface with any system the asset owner has - and is specifically designed not to replace existing infrastructure, can be accessed by all personnel. The model, which provides a 360º view, is constantly updated throughout the asset’s life. Any changes made within the systems it interfaces with, is immediately reflected in the VAIM3D twin. Through its integral Project Management module capability it allows shutdowns and turnarounds to be optimised, significantly reducing planning time, and it allows the preparation of maintenance and modification workpacks, to be done remotely. It assists in the execution of and preparation of maintenance and inspection reports and the results are automatically visualised in the twin to reflect the asset’s real condition.

Furthermore, it helps operators anticipate issues, easing the move toward predictive asset management, bringing with it reductions in operational costs, inspections, maintenance and repairs. Bureau Veritas with one of their clients has estimated digital twining is reducing hull maintenance costs (OPEX) by 25% over five years.

Bureau Veritas discovered that by using its digital twin and smart data system, operators could save between 9% and 15% on total decommissioning project costs. Data from the company, which was shared with the UK industry regulator the Oil and Gas Authority, showed operators could save in excess of £2 million on project costs for assets with topsides of 10,000 tonnes, increasing to more than £8.5 million for assets with topsides up to 40,000 tonnes.

Furthermore, following several months of data gathering and refining, it was identified that savings from 9% to more than 30% could be made from a range of individual decommissioning activities including topsides and jacket removal, subsea infrastructure, facilities de-energising, operator costs, onshore recycling and site remediation and monitoring.

Bureau Veritas has identified a total of 54 North Sea assets with topsides of 10,000 - 40,000 tonnes that would benefit from using a digital twinning system to gain direct savings in decommissioning. It has also identified 35 assets of fewer than 10,000 tonnes 4/5 that would benefit from the use of a digital twin in late-life operations through to decommissioning phases.

With the benefits of a digital twin system well established in cutting maintenance costs, maintaining safety and performance and extending asset life, Bureau Veritas then considered its benefits for the decommissioning sector.

With decommissioning a hard cost on a balance sheet, the need for efficiencies and cost reduction is clear, as outlined in the Oil and Gas Authority’s Decommissioning Strategy. The results from Bureau Veritas indicate digital twinning could save millions of pounds in overall project costs and enable operators to make smarter, more cost-effective choices.

It was assessed that the value from digital twinning would be realised across a range of spheres including environmental, societal, wells, the asset and regulatory requirements. Digital twinning was identified as a method of improving the definition of work scope, the quality of proposals and execution efficiency while lowering estimated and actual costs.

As the industry recoils from the double blow of COVID-19 and a low commodity price, digital twinning is a trusted and proven way to reduce unit operating costs. Its importance has elevated from a ‘want’ to a ‘need’ for the industry.

www.ogvenergy.co.uk I June 2020

For more information visit marine-offshore.bureauveritas.com

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FROM ANALYSIS TO ACTION: Why integrity data analytics is key to developing vital new ways of working.

Faced with a continued pressure on oil price, manning restriction due to COVID 19 and no way of knowing how long this will all last; integrity, operations and asset managers are having to quickly find sustainable new ways of working to ensure continued safe, profitable operations. With a multitude of difficult decisions to be made and ever more limited resources, many are defining the optimum course of action by making use of both data already collected and the rapidly changing data gathered every day.

How do you navigate in an ocean of data?

Back in 2014, The HSE report on Asset Ageing and Life Extension (KP4) noted; “The KP4 programme found a need for better data collection and trending to improve predictions of equipment residual life to support ALE decision-making, and to facilitate proactive equipment maintenance”. Since 2014, the industry has certainly taken great strides in data collection, with drones collecting visual data and inspectors using tablet reporting all now quite normal. Additionally, as sensor data starts to pour in, the volume of data stored has become vast. This shouldn’t really be a surprise, data collection is what the industry already did: Images were gathered, readings taken, reports written and databases populated (sometimes) and as technology improved more images were gathered and more readings were taken and stored, faster and more accurately than ever before. However, unlike data collection, data analytics wasn’t previously part of day to day operations and until relatively recently remained far less familiar. Consequently, knowing how to improve trending and prediction was much less obvious. Nevertheless, as the concept of analytics becomes something that people are comfortable with and the benefits are realised across different sectors, it’s clear the adoption of analytics isn’t something that should happen over time but something that must happen now.

Addressing complexity to create efficiency.

Due to the way modern inspection, reporting and data storage technologies have been “organically” adopted over time; things have, inadvertently, been made more complex.

Integrity related data is often relatively unstructured and stored in many different

formats and locations making it difficult for engineers to have a ‘full picture’ of the integrity of an asset’s components. This has an impact on the decision making and risk management processes related to inspection, maintenance and integrity management. Integrity related data may be held in multiple databases, Excel spreadsheets, PI, and historical reports with varying levels of quality and accuracy.

It is therefore difficult (or even impossible) for an engineer, using conventional means, to view all relevant data in a manner which allows even basic correlation and trending to support decisions relating to integrity and direct resource appropriately.

Without the tools to sort, cleanse, analyse and visualise data, many integrity departments have been left with no choice but do their best to collate and relate this data manually. Trying to cope with the sheer scale of this task is no doubt the biggest obstacle to interpretation. It can frequently result in the omission of relevant information, as there is often no unified framework for viewing the data.

Despite these difficulties and limitations, every effort still must be made to make best use of what’s available. However, in addition to being somewhat ineffective, manual effort is time-consuming and costly. For some large assets, annual onshore integrity costs may be in excess of £1m, with potentially 40% of this cost attributed to managing the data that’s been gathered.

Because of these challenges, business and safety-critical decisions may be made with incomplete, incorrect, or poorly understood data. Ultimately meaning: • Failure patterns and genuine anomalies are not identified, leading to preventable failures.

• Data trending remains the goal but not the reality.

• Inspections are carried out which do not add value, incurring costs and reducing the resources available for higher priority scopes.

So, what’s changed?

Advanced analytics using new statistical methods and rapidly improving computing power to spot patterns among thousands of variables in continual changing process conditions are now becoming more accepted across the industry.

In areas such as exploration & drilling, reliability and even shipping & transportation, the use of analytics to improve efficiency and profitability are becoming common.

At IMRANDD we’ve built our operations and service around the belief that integrity management should be no different. We understood that advanced analytics are particularly effective in environments that involve huge amounts of data and highly complex and variable operating conditions—that is, the same environment that integrity departments must contend with every day. Since our foundation in 2016 we’ve pioneered the use of data science in integrity management bringing completely new approaches and tools to the market, including AIDA© our Advanced Integrity Data Analytics software which helps cleanse, condition, trend and visualise inspection data in way that previously simply hasn’t been possible.

With the majority of our team having an Oil & Gas operator background we’ve leveraged our extensive domain knowledge to ensure that we use our analytics capability to develop tools that clearly add value and are easily deployed, providing unique solutions to common problems.

Building on our analytics tools we’ve created a planning and resource optimisation solution that considers budgetary and physical constraints.

We’ve also developed ‘RBI+’, our software that ensures knowledge management and auditability are built into the RBI process.

Meeting the demands of today while preparing for tomorrow.

In recent years we’ve successfully proven that analytics can be used effectively to better understand ageing, changing processes and degradation patterns across an asset, alerting operators to potential threats they may not know exist now, as well as those that will arise months and years into the future. In turn, this insight has been used to respond effectively, optimising plans for both today’s constraints and tomorrows challenges.

For more information on how to best leverage integrity data please visit imrandd.com

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ASSET INTEGRITY

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Data Migration:

unlocking the value of historical data The quality of data, how it is stored, and the automation of business systems can have a huge impact on decision-making and sustainable success, especially in the oil and gas industry.

William McLean is Director of Omni Integrity Limited, an ICR company

Data Mining - extracting essential data quickly

The importance of data Data is becoming increasingly valuable to operators, as a means for operational efficiency and risk mitigation, throughout the industry and the emergence of technologies such as machine learning and advanced analytics show how it is possible to interrogate data and bring to light some interesting opportunities, perhaps missed using traditional analysis techniques. To extract as much value from such assessments, technology will be dependent on historical data records to provide an empirical foundation in which data models can be built and interpreted. A challenge in the oil and gas industry is the sheer volume of data available and the incompatible formats that make such analyses difficult to undertake.

Storage of data Historically, methods of processing and storing data have made it difficult to access, as it is often stored in different formats, (e.g. Word, Excel or a database structure), and locations. This makes the data extremely difficult to collate and process for a meaningful review to be carried out.

What are the advantages of data transition?

Data transition is the process of migrating historical data, from various formats, into a centralised digital database. The advantages of carrying out a data transition exercise is to provide an easily accessible data platform, where the data is prepared in a suitable format to allow deep analysis to be carried out. This can uncover immediate areas for optimisation and establish asset-specific degradation models for transitioning the asset to a predictive maintenance and/ or prognostics health management working model.

Although the task of transferring disparate data into a central, accessible form appears challenging, the reality is that - if completed correctly - it can be straightforward and cause minimal disruption to operations.

www.ogvenergy.co.uk I June 2020

The most efficient and accurate method for migrating historical data is data mining. By writing specific data codes it is possible to automatically extract (mine) the required key information from millions, (or in some cases, billions), of sources of integrity data, by extracting the data that is relevant and useful.

Importantly, this data is stored remotely and securely in the cloud - and in a raw data format that allows for advanced technologies to be applied to the datasets.

William McLean, Director of Omni Integrity Limited (Omni), (an ICR company), explains the importance of data migration and storage and how it can be the first step to unlocking valuable information that can optimise asset inspection, maintenance and repair.

Data migration offers an opportunity to harness the power of automation and advanced data storage to create an exceptional data resource that has the power to make a tangible impact within the oil & gas industry.

The solution Omni has developed a data migration solution in partnership with the University of Strathclyde that enables the rapid extraction of historical data records into a centralised data platform.

The data is then processed through machine learning analytics to build degradation models for all systems and circuits and providing operators with the foundations for adopting predictive maintenance strategies. The aim is to increase clients’ efficiency when monitoring asset integrity, reducing the time required for data reconciliation and cleansing.

Omni’s proprietary design protocols have been devised to fully integrate with the latest technologies including cloud computing, automation, ‘Internet of things’ (IoT) and predictive analytics; setting the foundation for the development of full Prognostics Health Management (PMH) capabilities for real-time monitoring and visualisation of assets.

For more information visit icr-world.com

STATS GROUP ®

ASSET INTEGRITY

Managing Pressure, Minimising Risk

BISEP® Temporary Line Plugging

Tecno Plug® Non-intrusive Inline Isolation

The BISEP ® offers significant safety advantages over traditional line stop technology, the hydraulically activated dual seals provide leak-tight isolation of live, pressurised pipelines.

The Tecno Plug® provides fail-safe double block and bleed isolation of pressurised pipelines while the system remains live and at operating pressure.

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GREEN ENERGY

GREEN ENERGY ZONE SPONSORED BY

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.

Hydrogen central to oil & gas industry decarbonisation as expectations for market growth surge - DNV GL research

• Half (52%) of senior oil and gas professionals expect hydrogen to be a significant part of the energy mix by 2030, according to a new DNV GL report • The time is right to begin scaling the hydrogen economy, despite recent oil market shocks. A fifth (21%) of industry leaders say their companies have already entered the hydrogen market • Greater industry and government collaboration is needed to enable market growth. Immediate focus areas are proving safety, developing infrastructure, scaling carbon capture and storage technology and incentivising value chains through policy.

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

O

slo, Norway – 14 May 2020: A new report reveals that hydrogen has surged up the priority list of many oil and gas organisations, taking a primary position in the sector’s decarbonisation efforts.

A fifth (21%) of senior oil and gas industry professionals say their organisation is already actively entering the hydrogen market, according to a new report published by DNV GL, the technical advisor to the sector. The proportion intending to invest in the hydrogen economy doubled from 20% to 42% in the year leading up to the Coronavirusinduced oil price crash.

Heading for Hydrogen draws on a survey of more than 1,000 senior oil and gas professionals and in-depth interviews with industry executives. The report suggests that recent shifts in the industry’s investment priorities are unlikely to affect the sector’s long-term efforts to reduce carbon emissions.

DNV GL found a significant rise in those reporting that their organisation is actively adapting to a less carbon-intensive energy mix – up from 44% for 2018 to 60% for 2020. Carbon-free hydrogen production, transmission and distribution is now widely recognised as a central component to the oil and gas industry’s decarbonisation efforts.

“Hydrogen is in the spotlight as the energy transition moves at pace – and rightly so. But to realise its potential, both governments and industry will need to make bold decisions,” said Liv A. Hovem, CEO, DNV GL – Oil & Gas. “The challenge now is not in the ambition, but in changing the timeline: from hydrogen on the horizon, to hydrogen in our homes, businesses, and transport systems.”

Peter Tipler Renewables Director, Xodus Group

More than half of respondents to DNV GL’s research in Asia-Pacific (56%), the Middle East & North Africa (54%) and Europe (53%) agree that hydrogen will be a significant part of the energy mix within 10 years.

North America (40%) and Latin America (37%) are only a little behind.

The success of a hydrogen energy economy is closely aligned with the future of natural gas, renewable energy, and carbon capture and storage (CCS) technology, according to Heading for Hydrogen.

While hydrogen gas produced from renewable energy (green hydrogen) is the industry’s ultimate destination, analysis shows that the sector can only realistically scale up to large volumes and infrastructure with carbon-free hydrogen produced from fossil fuels combined with CCS technology (blue hydrogen).

DNV GL’s 2019 Energy Transition Outlook, a forecast of world energy demand and supply, predicts that natural gas will become the world’s largest energy source in the mid2020s, accounting for nearly 30% of the global energy supply in 2050. Natural gas and hydrogen can play similar roles within the global energy system, and the synergies between them – in application and infrastructure – will drive the hydrogen economy.

However, Heading for Hydrogen points to political, economic, and technical complexity in scaling the hydrogen economy.

“To progress to the stage where societies and industry can enjoy the benefits of hydrogen at scale, all stakeholders will need immediate focus on proving safety, enabling infrastructure, scaling carbon capture and storage technology and incentivising value chains through policy,” said Hovem.

GREEN ENERGY

37

Liv A. Hovem, CEO, DNV GL

DNV GL is involved in projects spanning all four of these enabling factors, including: • The Hy4Heat programme in the UK, which aims to establish whether it is technically possible, safe, and convenient to replace methane with hydrogen in residential and commercial areas. Tests on three specially constructed houses are proving the safety case for a switch from natural gas to hydrogen in a domestic setting at DNV GL’s Spadeadam Testing and Research site – the world’s first comprehensive hydrogen testing facility.

• A project run by Dutch gas and power networks operator Stedin demonstrating that zero-carbon hydrogen could help to decarbonise heating in a residential apartment block near Rotterdam, the Netherlands.

• A full-scale demonstration project, initiated

by Gassnova, in which DNV GL qualified carbon capture technology developed by Aker Solutions, at Norcem’s cement plant in Brevik, Norway. DNV GL qualifies and verifies CCS technology and projects in accordance with DNV GL recommended practices and international standards.

• DNV GL supports governments with technical and market analysis to provide a knowledge base for decisions regarding national strategy and policy measures.

GREEN ENERGY ZONE SPONSORED BY

www.xodusgroup.com

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GREEN ENERGY

Siemens Gamesa turbine capacities smash 6 MW

Siemens Gamesa will install wind turbines in Sweden that operate up to 6.6 MW but wider deployment and larger units will require transport and permitting solutions.

L

arger turbine units are driving down-wind power costs, unlocking new opportunities in a post-subsidy market. As a thirst for lower-cost drives turbine capacities higher, three recent deals in Sweden have pushed turbine capacities into new territory. In December, Siemens Gamesa signed a deal to supply 35 of its 5.8-155 turbines to Foresight Group’s 231 MW Skaftasen project in central Sweden. Foresight acquired the project from developer Arise in 2019.

The turbines have a rated capacity of 5.8 MW and will operate with flexible power rating of 6.6 MW, a capacity only previously seen on offshore projects.

Since the Skaftasen deal, Siemens Gamesa has agreed to supply similar turbines to Eurowinds' Knostad project and Renewable Energy Systems' (RES) Rodene project, also in Sweden.

Siemens Gamesa's latest turbine platform uses the largest rotor diameters on the market, at 155 meters and 170 m, boosting performance in high, medium or low wind conditions. Based on a wind speed of 8 m/s, the SG 5.8-155 turbine increases annual energy production (AEP) by 20% compared with SG 4.5-145. At wind speeds of 7 m/s the SG 5.8-170 boosts AEP by more than 32%.

Larger, higher efficiency turbines increase performance by accessing untapped wind resources and reducing cost per MW installed.

However, a sharp rise in turbine capacities brings fresh design, transport logistics and permitting challenges. The potential for future turbine sizes will depend on how companies mitigate these risks.

“There is an incredible amount of ingenuity in the industry," Enrique Pedrosa, Chief Regions Officer for Siemens Gamesa's Onshore business unit. Siemens Gamesa is the largest supplier of offshore turbines and its offshore team is already working on rotor diamaters longer than 200 m, Pedrosa said. "The real question is how much blades can grow to make the higher energy production worth more than the costs increases," he said.

Higher winds Wind turbine costs have fallen sharply over the last decade and project partners face further cost pressures as the industry develops.

“As the world shifts towards unsubsidised renewables there is a clear need for projects to be viable on their own economic basis,” Daniel Cambridge, Senior Investment Manager, Foresight Group, said. “Turbine installation costs typically make up the lions’

share of CapEx, and can have a material bearing on whether a project will reach the final investment decision stage,” he said. Taller towers have a profound impact on project economics, particularly for moderate wind areas, the US National Renewable Energy Laboratory (NREL) said in a report last year.

Eurowinds' Knostad project is located in an area of forest and will feature tower heights of 115 m with rotor lengths of 170 m. Siemens Gamesa offers tower heights up to 165 m. An increase in tower height from 80 m to 160 m raises the average wind speed by 1.0 to 1.5 meters per second (m/s), NREL said in its report. Median capacity factors rise by 2 to 4% between 80 m and 110 m and climb by 2 to 4% from 110 m to 140 m and a further 1% from 140 m to 160 m, it said.

Taller tower heights could reduce capital costs to "less than $500/kW for low specific power turbines and potentially as low as $200/kW, particularly for higher specific power turbine configurations,” NREL said.

Tailored turbines To boost the capacity of commercial turbines, designers must minimise the cost impact along the full length of the supply chain. Incremental cost increases include "new components, supply chain development, logistics,” Pedrosa said.

Longer lifespans are also key to minimising costs and larger capacities put greater pressure on plant reliability. Suppliers of key components such as gearboxes are upgrading products to accommodate higher loads and adapting designs to improve maintenance efficiency.

Turbine developers have also introduced more flexibility into their designs to provide a more tailored solution for operators. Siemens Gamesa's 170 m model is designed for low and medium wind conditions and the 155 m model for medium and high wind conditions. For RES' Rodene project, Siemens Gamesa will supply two different tower heights.

For the Skaftasen project, the turbines will be delivered in cold climate version, capable of withstanding -40°C and operating at temperatures as low as -30°C. Siemens Gamesa has signed a 30-year full-service agreement with the owner.

www.ogvenergy.co.uk I June 2020

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Spain to push for net-zero by 2050

Spain's cabinet has approved an ambitious draft climate law targeting net-zero emissions "no later than" 2050, which it estimates will generate over â‚Ź200bn investment, create up to 350,000 new jobs, and boost the country's economic growth by 1.8% over the next decade.

T

he draft law, which parliament must still approve, follows the Spanish government's declaration of a climate emergency earlier this year. The government hopes the enshrine the legislation in statute by the end of the year, enabling the delivery of a sweeping set of plans to rapidly decarbonise the country's economy.

Once approved, the law would ban all new coal, oil and gas extraction projects with immediate effect, as well as end direct fossil fuel subsidies, while setting a course for a 100% renewable electricity system by 2050.

All new road vehicles would also need to be zero emission by 2040, with the draft law including measures to implement low emission zones in urban areas and facilitate walking, cycling, and greater use of public transport.

is at least 70% renewable, and harness energy efficiency improvements to cut overall energy consumption by 35%.

"This text puts the fight against climate change and the energy transition at the heart of the actions of public administrations," said Spain's Minister for Ecological Transition and Demographic Challenge, Teresa Ribera. "It is our project as a country, and one that takes responsibility for our present, our health, our quality of life, our model of prosperity and, above all, our future."

The Spanish government said its strategy for building a netzero economy by 2050 put it in line with the goals of the Paris Agreement, as well as the EU Green Deal proposed by the European Commission, which would see Europe become the world's first net-zero continent by 2050.

Following a similar model to that of the UK's Committee on Climate Change, Spain's climate law seeks to establish an expert advisory committee to make policy recommendations, coordinate regional activity, and evaluate progress against the 2050 net-zero goal.

The draft legislation has also sought to take account of the widespread disruption wrought by the global Covid-19 pandemic, and proposes a new Committee for Reconstruction which would assess and decide on state bailout packages for struggling industries, including the country's large car manufacturing sector.

It also sets out interim targets for 2030 to reduce emissions by 23% from 1990 levels, double the percentage of renewables to 35-42% ensure electricity generation

Ribera indicated that Spain's efforts to drive the coronavirus recovery would take climate change and the shift to a net-zero economy into account.

GREEN ENERGY ZONE SPONSORED BY

www.xodusgroup.com

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INNOVATION ZONE

INNOVATION ZONE

SPONSORED BY

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.

NAMS, ASSISTING WITH THE INTEGRITY OF DIVING SYSTEMS

Ensuring the integrity of an asset is key to maximising its lifespan while getting the best performance for any successful operation, but when the asset is required for life support, integrity is critical.

The paperless system will distribute work orders between teams of technicians across all operating sites with work instruction following the requirements of IMCA D018 Code of Practice for The Initial and Periodic Examination, Testing and Certification of Diving Plant and Equipment as well as the original equipment manufactures recommended maintenance.

A diving system onboard a diving support vessel will require anywhere between 1500 to 3000+ maintenance tasks a year based on system type, regional legislation & guidance, classification, client requirements and original equipment manufacturers recommendations. Furthermore, technician competencies, project coordination, maintenance coordination, management of critical spares, must also documented.

And as technologies grows, so does the requirement to understand and maintain automated processes. Then finally, there will be the audits, which require the auditors to review all documentation and survey the equipment against industry guidance & legislation, all of which can be a minefield.

So why is the integrity of a diving system so important? Well, that is simple, it is the life support system keeping the divers alive. Living within a hyperbaric chamber for up to 28 days and working at depths of exceeding 200m undersea, even the smallest of system failures can be detrimental to diver safety. Diving is inherently a dangerous profession without even considering the risks associated with lack of competence and incorrect maintenance, so why take the risk?

www.ogvenergy.co.uk I June 2020

With all this in mind, Namaka Subsea have created the first Diving Asset Content Management System (CMS), NAMS. The cloud-based systems has been designed to reduce the administrative tasks associated with dive system management while offering a simple solution to all your maintenance operations.

The application has been designed with international diving equipment guidance procedures which allows the system to coordinate inspection and preventative maintenance operations.

NAMS will the produce reports based on the inspection and maintenance results, notifying teams of task workloads forthcoming and completed, spares and critical spares alerts, equipment failure alerts all while automatically logging and updating the associated IMCA DESIGN document. The project management tool will allow you to schedule maintenance periods before diving operations, informing you of maintenance required during project schedules and required manhours. The application is not just limited to Diving Equipment, but can also be used to manage maintenance requirements for Marine & ROV assets.

The application is the first Diving Asset CMS of its kind not only coordinating equipment maintenance but offering reduced administration tasks for dive teams, compliance with international diving equipment requirements and project management scheduling.

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INNOVATION ZONE

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EAVOR TECHNOLOGY BREAKS GROUND WITH GEOTHERMAL TECHNOLOGY

Eavor’s technology, known as “Eavor-Loop (TM)” captures geothermal energy to produce steady and dependable heat and electrical power without emissions of any kind. Unlike traditional geothermal power plants, an Eavor-Loop™ works at drilling depths which have geologically common parameters and characteristics; enabling implementation almost anywhere in the world. This technology represents the opportunity to transform the world’s energy stack, redefine how energy is produced and address climate change.

“Eavor’s innovative technological solution has been built, developed and demonstrated upon the foundations of the world-renowned drilling industry and energy services sector in Western Canada; together considered to be the “Silicon Valley” of energy services.

The net result is that the Eavor-Loop (TM) solution is now poised to provide a uniquely scalable source of emissionsfree baseload power to the world.” – John Redfern, President and CEO, Eavor Technologies Inc. The Eavor-Lite (TM) demonstration project broke ground on August 2nd, 2019, when two Precision Drilling rigs commenced simultaneous operations in Clearwater County, Alberta. As part of the world’s first drilling program, multilateral horizontal drilling intersections were made safely and successfully on September 1st & 11th, 2019. The drilling phase was completed on-time and on-budget on September 16th, 2019, 46 days after it began. Construction of the surface facilities and pipeline began on October 1st.

On December 3rd, 2019 the facility was commissioned and then switched to “thermosiphon mode” on the morning of December 4th, 2019. The flow rate and temperature have remained steady and consistent since then.

Several demonstrations have shown witness that the Eavor technology that will power the world’s first fully functioning closed-loop energy extraction system: Eavor-Loop™.

Eavor Technologies Inc. has several key vendor partners including Precision Drilling, contributing partner Shell International Exploration and Production, via its New Energies Research & Technology program, as well as our financial partner; Vickers Venture Partners.

Eavor has also received a total of $8.7 million in grant funding from the Government of Canada and Government of Alberta via SDTC, NRCan, AI and ERA.

The Eavor-Lite (TM) demonstration was designed to prove out 3 key categories of intellectual property: Drilling and intersecting a multilateral Eavor-Loop (TM) Complete the system using Rock-Pipe (TM) technology and pressure test Validate thermodynamic performance and demonstrate thermosiphon

The Eavor-Loop™ technology harnesses the Earth’s natural heat kilometres underground to be used at surface for heating or electricity generation.

While the geothermal energy production is not new, Eavor’s technology is highly scalable and holds the promise to be a significant global energy source which does not have the intermittency issues of traditional renewable power systems.

The Eavor-Lite (TM) demonstration project is designed to showcase Eavor’s unique and proprietary design elements. The demonstration project began drilling in early August and tests the technology at near-commercial scale. The facility, now complete, serves as a testbed and proxy for commercial Eavor-Loop (TM) implementations globally.

INNOVATION ZONE SPONSORED BY

www.leyton.com

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INNOVATION ZONE Finding a ‘keeper’

PRESSURE POINT: MAKING THE RIGHT HPHT CHOICES

High pressure, high temperature (HPHT) developments offer new opportunities in mature basins – but they invariably pose safety, technical, cost and environmental challenges.

Ben Cannell, Innovation Director at Aquaterra Energy, looks at how North Sea operators might take the heat out of the process…

Having understandably focused on less complex developments since the oil price downturn of 2014, positions had started to change during the stabilisation of 2019.

Recent market uncertainty means that operators already developing or looking to develop HHPT wells need more certainty than ever that they can cost-effectively handle technical challenges.

Over the past year, we have seen an increase in the number and frequency of operators engaging with us as they assess their exploration and appraisal options in HPHT conditions. Of course, as the North Sea adjusts to the lower oil price, we expect to see some HPHT developments to be progressed and others put on hold.

However, UK government departments and industry organisations remain keen to push HPHT developments, and there is certainly a prize to pursue. The Culzean HPHT development, which began production in June 2019, is just one example: the largest gas project to be sanctioned in the UK in the past 25 years, it targets total recoverable reserves of up to 300million barrel of oil equivalent.

Defining HPHT The definition of HPHT is not fully defined within the industry: it’s conventionally classified by a well pressure level of over 10,000psi, with an ‘extreme’ bracket of over 15,000psi.

However, the complexities are often essentially the same in any HPHT endeavour – and should perhaps prompt operators to fully assess all their options before deciding on their optimum drilling strategy.

www.ogvenergy.co.uk I June 2020

There has been a succession of larger-scale HPHT developments in the UKCS over the past decade or so in which the initial exploration and appraisal wells, drilled in conventional fashion from a jack-up rig, were subsequently discarded despite revealing a viable prospect, as the concept of converting an HPHT exploration well into a producer is compromised by technical issues, such as the commonplace failure of mudline hangar systems, as the extreme pressures and temperatures impose very high loads on the systems.

An HPHT exploration well is an expensive business – broadly speaking, deploying a jack-up rig to drill a HPHT well today costs in the region of £70million and many times more for the same well using a semi-submersible – so it would make economic sense to find a viable way to make it a ‘keeper’. The question is: how? Say we’re talking about a well in the conventional HPHT range, with a pressure rating between 10,000psi and 15,000psi. rather than installing a mudline system with an exploration wellhead system at surface – and then making no further use of that investment once the drilling programme is complete – operators could look to install a subsea wellhead and deploy a subsea riser from a jack-up rig to facilitate the campaign.

Depending on the final production strategy, of course, the subsea well could then have a traditional subsea tree installed, or – as is far more common on HPHT developments – a surface tree could be installed. It’s worth bearing in mind that the tie-back of subsea wellheads to a platform jacket with a dry tree is a proven concept in the North Sea and elsewhere.

The appraisal option of subsea wellhead and jack-up facilitated riser wouldn’t necessarily be viable in every case, and would involve an additional smallscale outlay in elements such as casing programmes and cementing to support the UK government well’s eventual transition to departments and industry production. But it would have the potential to take organisations remain millions of pounds off the keen to push HPHT programme cost in the longer term. developments, and there is

certainly a prize to pursue

The strategic challenge for industry, therefore, is to consider moving beyond the status quo in the HPHT market and make the cost calculation of drilling the well with a subsea wellhead, which could then be converted and tied back to existing offshore infrastructure be that a wet tree if well bore pressure permits or the tie-back to a platform jacket in order to use a dry surface production tree.

The subsea riser/wellhead package of course eliminates the failure risks associated with the mudline hangar systems. In addition, managed pressure drilling (MPD) technology can be brought into play to offset other technical issues. Such surface systems, which in effect maintain a tighter more controlled drilling mud pressure, are pivotal in delivering safe well control especially where mud weight/well control/formation strength boundaries have narrow margins.

The technology has been commonly used on jack-ups for some years in conjunction with subsea drilling riser systems.

All component parts in the riser/wellhead solution also use metal-to-metal for gastight seals, addressing the risk of leaks; a key consideration as HPHT developments frequently take industry activity into ever more environmentally sensitive areas.

A WAVE OF GOOD BUSINESS SET FOR NAMIBIA

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Changing the industry’s mindset The proposition does call for something of a change in industry mindset, moving on from the default position of using semisubmersible rigs for developments in water depths up to 150m or throw away exploration and appraisal HPHT wells. However, the lower day rates for jack-up rigs, the loading gains they deliver and the metal to metal sealing increase commercial, environmental and technical gains of the package.

Some operators may still be unfamiliar with the concept of deploying subsea risers from jack-up rigs, and such a knowledge gap can naturally fuel uncertainty. Therein lies a challenge for the supply chain: to raise the profile of an alternative solution that could make ‘throwaway’ wells a thing of the past as well as marginal fields economic due to the reduced cost of using a jack up rather than a semi-submersible. Crucially some service companies are moving away from simple widgets or single products to a complete end-to-end solution to help operators with the HPHT subsea risers from analysis and planning through to seabed to surface interfacing, support and management.

Equally, the technological advances associated with HPHT riser systems have perhaps not yet been fully articulated.

Engagement between the operator community and the supply chain is key to ensuring the range of choices is fully understood.

At Aquaterra Energy, we want to be part of that process. It’s still a niche market, but we’re seeking to be at the forefront as we introduce to the market an HPHT subsea riser system that can work on wells up to 15,000psi.

Possessing back-up seal technology, the system will be qualified and ready for offshore deployment during the first half of 2020, complete with full end-to-end support.

Most jack-up well campaigns we have worked on to date have involved pressures of under 10,000psi but it’s undoubtedly a time of change. Whereas our subsea risers were previously used on wells less than 5,000psi, the new ‘normal’ is between 5,000 and 10,000psi.

Over the past year or so, however, we have experienced a marked rise in inquiries related to wells up to 15,000psi. It reinforces the earlier observation that operators are increasingly prepared to look at what’s left on their books, to consider opportunities in tougher territories – and to assess how best to go after them. However, the changing market landscape may mean that only the most economically viable wells can be pushed forward – which is why our approach is key.

The economics are often likely to position such projects in the ‘marginal’ category so forensic calculation of the options will always be pivotal. But if there is a viable way to turn an exploration or appraisal well into a ‘keeper’, perhaps HPHT developments can continue to progress during this lower oil price period.

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Pure Water International Ltd joins forces with Clean Water Wave to deliver bespoke Water Treatment Technology

Inverness-based Pure Water International (PWI), has announced it has formed a unique partnership with social enterprise Clean Water Wave (CWW) which will see the organisations combine their offerings to deliver bespoke containerised water treatment technology for use in UK, Namibia, Botswana and South Africa.

Pure Water International is a new innovative Scottish start-up made up of highly experienced design, fabrication and installation professionals with extensive experience overseas, particularly in African markets. The PWI team first met with CWW over two years ago when the company was testing its filter at an innovation test site in Bo’ness.

Clean Water Wave, which was cofounded in 2017 by Dr Stephanie Terreni Brown, created the CAFE (Clean Aqua For Everyone) water filtration system to deliver safe, clean clean water for up to 30 years using renewable energy and without the need for expensive chemicals.

David MacLennan, Global Managing Director of PWI, added: “We are thrilled to have secured the license to use CWW’s intellectual property in our manufacturing process. The CAFE filter is already unique, but combined with our offering we can bring a really impactful solution to communities most in need. Our collaboration will see us blending leading edge filtration capability with robust mechanical engineering arrangements, designed for export.”

Discussing the collaboration, Dale Barry, Global sales and Operations director for PWI, said: “I spent years in the geographies of Africa where CWW want to work, and when I saw the CAFE filter and the UKAS accredited lab results, I knew we could combine it with our own Containerised filter systems LEAF (Low Energy Aqua Filter) to create something really special for remote water treatment and process water purposes.

We decided to snap up some of CWW’s first release of licenses, and are delighted to have secured contracts in Namibia, Botswana and South Africa. A lot of technology is packed into the filter unit which we believe will benefit both low & high-income economies, and realise this technology has disruptive potential which is a fantastic thing for the global water sector.”

Commenting, Dr Stephanie Terreni Brown said: “Clean Water Wave was set up to carry out our mission to deliver clean, safe water to ten million people in ten years.

The team had worked in the field for

a decade prior to forming and were frustrated that it was often communities who could least afford safe water that paid the highest price, both financially and in poor health. After witnessing time and time again new infrastructure not treating water to high enough standards and/or being completely inappropriate for low-income community settings, we realised we needed to do something about it. So, using nearly ten years of research and development from across our different fields of expertise, we now have the CAFE water filtration system, a rock-solid technology that really works. Working in partnership with our licensee, PWI, we are rapidly moving forward to deliver on our mission.”

“The PWI team punches way above its weight in experience and international connections in the water and international Industrial sectors, and they are determined and ready to challenge traditionally accepted ways of treating water, proving there is another way. Not only do we plan to expand the application of PWI LEAF system to deliver clean water solution, but also to treat wastewater and polish industrial process and effluents in our licensed regions.”

Dr Stephanie Terreni Brown continued: “We are completely thrilled to be moving forward with PWI. The team stands to build a strong and vibrant business in Africa and we will do our utmost to support their efforts.”

Emile Smit, managing director of Nu-Trading Namibia, added: “We are delighted that PWI have chosen NU-Trading to act as the direct channel partner for PWI in the regions of Namibia and Botswana and we look forward to assisting PWI to realise its international ambitions and introduce new innovations to our region in the future.”

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www.ducatuspartners.com significant challenge ahead.

ON THE MOVE

Competency evaluation and organisational design

Changing needs of changing shareholders

The most responsive and resilient companies are continually evaluating their competencies and adapting their organisational structures accordingly.

This does not need to mean a complete overhaul of an organisation, but when faced with such a dramatic change in existential factors as we have today, significant changes may be required.

In the US in particular, an inevitable outcome of the current situation will be the equitisation of the tremendous amount of debt that was raised to develop assets in the sector. The equitisation of debt often creates a very fluid situation requiring Boards to adapt to changing strategies and demands of their shareholders, or future shareholders, at short notice.

The review of organisational design and competency will begin in the ranks of senior leaders – whether managerial or technical experts – in order to navigate through the challenges ahead.

Reductions in force may be happening alongside such redesigns. Redeployment of staff may provide a solution to some issues, but ultimately new talent may be required to complement existing capability within the organisation.

Human capital in times of restructuring

Interim leadership

For many of us, we will start to reemerge in the next few weeks into the outside world after weeks, if not months, of lockdown and isolation. For sure, the world has changed, and for those of us working in the various energy sectors we are starting to re-imagine many aspects of our industry.

Whilst we had started to see an uptick in bankruptcy filings by US E&P and oilfield services companies earlier this year, it is almost inevitable that these will surge through the remainder of 2020 and into 2021. Balance sheets structured for different assumptions of commodity prices, utilisation rates or capital spend will increasingly need to be rebuilt through various methods from forbearance and foreclosure to debt equitisation and asset sales.

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Many challenges facing our clients today require decisions to be taken with incomplete information.

Where leaders lack experience of stressed situations a cost-effective solution can be the addition of seasoned executives on an interim basis to compliment and boost existing experience and skill sets. This should be considered where the management of numerous external advisors such as law firms and financial restructuring advisors is reducing executive bandwidth.

During the 2015 downturn in the oil and gas industry, we witnessed a rapid increase in the demand for senior leaders to join companies across the industry. This was particularly prevalent in private equity portfolio companies where there was interest to add judgment around the boardroom table. In some cases, there was also a subtext with investors keen to create succession planning optionality.

However, such interim talent may also be required in specific areas of the business – to reinvigorate or refocus a particular business unit or asset team, or to augment a function, such as human resources or finance, which may be facing

In addition to taking Board seats in the company, new shareholders may want to overhaul the ranks of senior leaders. In the same way that interim leadership may be important to prepare a company as it goes into stressed situations, it can be equally important for companies preparing to exit.

The shorter investment horizon for shareholders that arises in these situations can lead to a fundamentally different dynamic between shareholders and management and achieving alignment will be paramount. There will continue to be a requirement for management to have operational excellence, but with a laser-focus on cost and a drive to divest assets or sell the business in order to maximise return (or minimise loss).

Summary Thanks to changes made after the last industry downtown, many Boards and senior leadership teams are more balanced and better equipped than in 2015, but significant challenges remain.

In a time of restructuring, superior human capital can make all the difference. Ducatus Partners can provide advice to all parties in these situations – from the identification of competencies within an organisation and any redesign or refocusing of the organisation to deliver a modified business plan, to the identification of new talent.

By Sean Buchan

Managing Partner - EMEA at Ducatus Partners

Advanced Energy Appoints Senior Vice President and Chief Human Resources Officer

Advanced Energy, the power and control technology company based in Denver, Colorado, has appointed Rory O’Byrne as Senior Vice President and Chief Human Resources Officer. Rory joins the company from Jonah Energy, where he was the Executive Vice President and Chief Human Resources Officer for five years. Prior to Jonah, he was the Senior Vice President and Chief Human Resources Officer at MRC Global. Rory also held senior human resource roles with BG Group, McDermott International, Hess Corporation, and BHP Billiton.

Rory O'Byrne

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Serinus Energy Appoints Chief Operating Officer

Andy O’Donovan has been appointed Chief Operating Officer by Serinus Energy in London. With a technical background in both geoscience and reservoir

www.ogvenergy.co.uk I June 2020

engineering, Andy has over 30 years in the upstream oil industry. Prior to Serinus, he spent more than two decades at BP, where he worked in regions including Vietnam, China, Angola and the North Sea. Andy’s past employers include Fairfield Energy, Dana Petroleum, and EnQuest.

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Andy O'Donovan

ON THE MOVE

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Smiths Group Appoints New Non-Executive Director Effective April 2nd the board of Smiths Group, the London based global technology group, has appointed Karin Hoeing as NonExecutive Director. Karin has been with BAE Systems since February 2018, serving as Executive Group Human Resource Director and Karin Hoeing Director of Health, Safety, and Environment. Prior to joining BAE, she spent over 20 years with Schlumberger. She was President of Wireline and was responsible for leading one of the company’s major international business divisions. Karin held numerous senior HR, marketing, technology and line management leadership positions across Europe, the Middle East and Asia during her tenure.

Mortel Wedel Jorgensen

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ADNOC Group Appoints Vice President Strategy and Excellence

Abu Dhabi National Oil Company (ADNOC) Group has appointed Morten Wedel Jorgensen as the Vice President of Strategy and Excellence. Morten will be leading strategy, corporate planning, and performance management functions for ADNOC in Abu Dhabi.

He previously served as the Head of Business Planning and Development at P&O Maritime Logistics and the Head of Strategy and Corporate Planning at Topaz Energy and Marine. Prior to Topaz, Morten was the Commercial Manager of Norway at Maersk Oil , where he spent over 15 years collectively.

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Unique Group Appoints Managing Director

Unique Group, the specialist and integrated engineering solutions provider, has appointed Garry Kidd as Managing Director for Onsite Engineering.

Garry joins Unique Group after four years as Vice President of Production Controls at Proserv. His 13 year career includes five years with Hydrasun. His past employers also include Weatherford and IMG Composites.

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Oil and Gas Technology Centre Makes New Board Appointment

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SSE Renewables Appoints Chief Information Officer

The UK-listed energy company, SSE Renewables, has appointed Angus Murray as Chief Information Officer in Perth. SSE is involved in the generation, transmission, distribution and supply of electricity, the production, storage, distribution and supply of gas and in the provision of energy-related services.

Angus joins the company after nearly six years with TAQA Global as the Head of Information Technology for Europe. He spent almost five years with AMEC before joining TAQA in September 2008. Angus will serve as the CIO for SSE Renewables, Thermals, and Energy Portfolio Management.

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Garry Kidd

Optilan Appoints Chief Executive Officer

Coventry-based communications and security technology integrator, Optilan, has appointed Bill Bayliss as the new Chief Executive Officer and Director.

Optilan is an integrator of technologies across communications and security solutions, targeting multiple industries including energy, critical national infrastructure, pipeline and rail. Bill has a strong track record of building and leading international companies in the sector. He succeeds founder Richard Buckland.

Prior to joining Optilan, Bill served as the Group CEO of ICR Integrity, the global maintenance and integrity company specialising in the oil and gas and power sectors. His past titles include Group CEO of Viking SeaTech in Aberdeen, COO of Topaz Energy and Marine in Dubai, and Vice President of Petrofac in Aberdeen.

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Gillian King

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Angus Murray

The Oil and Gas Technology Centre (OGTC) has appointed Gillian King as a new Board Member.

She is currently the Vice President of Europe, Russia, CIS & Sub-Sahara Africa for Tendeka. She has over 20 years of industry experience, with a 13 year tenure at Tendeka.

Prior to joining the company, Gillian involved in the commercialisation of expandable sand screens, swellable packers, and wireless intelligent completions whilst working at Weatherford. She is a member of the Society of Petroleum Engineers, is on the ICoTA (International Coiled Tubing Association) committee and is an active STEM Ambassador.

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Bill Bayliss

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COMPANY NEWS

Namaka Compliance ready to bridge the skills gap Namaka Compliance, a division of Namaka Subsea, is ready to help the industry bridge the skills gap in emerging markets.

Bridging the Skills Gap is the answer to managing talent in the international operational energy sector.

“Namaka Compliance will not only compliment Namaka Subsea current services, it brings a ranger of new services and products which will support the Oil & Gas while diversifying into additional markets”

Jamie Murphy, Operation Manager for Namaka Compliance, said “There is a real desire for new market infrastructures to have trained and local nationals, as IOC’s and EPC’s are now being held to account by governments to ensure that not only are projects completed but that human capacity is left behind afterwards.

The Bridging the Skills Gap programme removes that headaches from operating companies as we take the whole system from start to finish on ensuring the training is run to best international practice and that there’s a mentoring and competence programme that follow through” While the programme is in place all is controlled by ‘Athena’, a cloud-based Training & Competence Management System (TCMS), that allows the HR & HSE Management to ensure they can view their workforce’s competency schemes in realtime with confidence.

Namaka Compliance will deliver a variety of services through the entire spectrum of the energy industry, which entails of Training, Competency, Compliance and it’s real USP the Local Content programme which is a blended training programme called Bridging the Skills Gaps.

Bridging the Skills Gaps is aimed at emerging markets within Africa & South America as there is the potential for local nationals to be involved with establishing their new market infrastructures. Many major projects in developing countries have been completed by using the skill of expatriates, however, governments around the world are increasingly pushing for the use of local nationals.

Namaka Compliance has developed a programme that involves local nationals being assessed by a 3-phase operation to ensure that they are not only trained but competent. Bridging the Skills Gap can be run from several people to several hundred in an area that will be conducive to enhance learning, whilst transferring skills from expatriates to local nationals.

All staff should be capable and competent in developing the necessary skill sets that allow them to fulfil key operational roles safely and provide bespoke skills training aimed at delivering focused development skills in conjunction with vocational centres as a partnership.

www.ogvenergy.co.uk I June 2020

Athena is an electronic-based Training & Competence Management System that allows for real-time viewing of candidates with the use of Ex Zone 1 rated technology, which enables tracking

by Clients of Candidates Competence Profiles and progression.

In addition to this Namaka Compliance also have the capability to upskill local companies to ensure that they can supply to international companies, as throughout the world prior to working for international companies they want to have assurance that the company operates to international standards such as 9001, 14001, 45001.

This is done through a series of workshops and interactions with mentoring so that the

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result is a local company able to operate at the same level as a respective expatriate company.

Namaka Compliance sees that with the current difficult market an opportunity to put together a service that is not only unique but creates an organisation that puts innovation at the forefront of whatever it does.

Although Namaka Compliance has been launched at time of uncertainty particularly when it comes to the Oil & Gas market Sandy Harper, Managing Director, added “Namaka Subsea began trading shortly before the 2014 downturn and as others retrenched the Team took the opportunity to build innovated and bespoke solutions for clients globally.

“Namaka Compliance will not only compliment Namaka Subsea current services, it brings a ranger of new services and products which will support the Oil & Gas while diversifying into additional markets”

COMPANY NEWS Companies in the energy sector have been hurtled into a whole new world by a force that is breathtaking in its speed and scale. In an industry that is all too familiar with cyclical ups and downs, slowmoving trends and occasional geopolitical anomalies, COVID-19 hit like a global wrecking ball. The pandemic has shattered nearly every economic assumption in almost every part of the world, and it happened practically overnight.

Successful energy companies meticulously develop their capital investment and asset maintenance plans to expand their markets (or enter new ones), improve efficiency and ensure regulatory compliance, all while maximising return on their invested capital. But suddenly the economic models that underpin that process – honed from decades of fine-tuning – are now more likely to raise questions than provide answers.

At best those models need massive, but perhaps only temporary, corrections. At worst they are completely useless. As office buildings sit empty, manufacturing plants run at reduced levels and airlines continue to cut capacity, forecasting demand for power, oil and gas is tricky. Will the world’s demand for energy return to normal or will there be a “new normal” at the end of the current situation? And in either eventuality, how long will it take to get there?

While the experts attempt to answer those questions, it’s a good time for energy companies to evaluate the current state of capital planning and project management processes relative to the construction of new assets, as well as maintenance of existing facilities. The current reduction in demand may open near-term opportunities to address upgrades to existing assets with less impact on supply. In this context, there are three key areas to explore.

Fund the right projects First, revisit the capital planning process itself.

It’s more important than ever to make sure you’re choosing the right projects to move forward through the pipeline. With economic assumptions changing rapidly, it’s critical to continually review and monitor your organisation’s strategic initiatives to ensure they still make sense, and that they’re well-aligned with the capital and maintenance projects that support them.

That includes reassessing previously approved projects, even if they are already underway. As strategic goals change, the ability to rapidly identify the right mix of projects to fund can make a significant difference in ROI. In the current environment, agility matters more than ever.

Focus on overall project risk Second, increase the focus on project-level risk assessment, which starts with scope. Getting the scope right is the most critical factor within the owner’s control to ensure predictable costs and

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Why Project Controls are Critical During Times of Economic Uncertainty

By Brad Barth, Chief Product Officer, InEight

schedules for capital and maintenance projects. It’s Implementing a systematic and proven work true that hiring the right engineers and contractors planning process can pay huge dividends in this can make or break a project, but those area. Advanced Work Packaging (AWP) is firms will (rightfully) manage their own one such approach that has become risk. While contract mechanisms quite common in the oil and gas can be used to spread cost sector, but is now spreading to Will the world’s and schedule risk across the other types of projects, and various project stakeholders, for very good reason. The demand for energy it’s the owner party who AWP process ensures owner, return to normal feels the strategic impact engineer and contractor of an unsuccessful project are all in sync, and that or will there be a the most. For that reason, engineering, procurement “new normal” at the identifying and managing and construction work are end of the current overall project risk is fully well orchestrated to drive within the owner’s domain. better field productivity and situation? project certainty. This is another It’s a good time to look at area of functionality we’re starting commercially available software to see included in construction project tools that help identify and quantify management solutions. project risk. Software vendors have started to make highly sophisticated risk assessment Plan, measure and adjust in real time technology available in the cloud as part of end-to-end project management solutions.

Fortunately, if your goal is to be an active member of These solutions combine artificial intelligence, the construction team, today’s cloud-based project actual experience from prior projects and management systems make it easier than ever. With human input to help evaluate risks on current minimal (or no) IT involvement required for setup, all and future projects. With a proper risk the major stakeholders in a project can collaborate assessment in place for each project before in real time and actively participate in time-critical – and during – construction, energy owner/ work-flows. Such systems provide everyone with operators can properly align funding sources a common repository of project scope and design and maximise return. documents, which minimises mistakes and re-work.

Keep all parties in sync Third, for both new construction and large maintenance projects, including shut-downs and turn-arounds, look for ways to be an active member of the construction team. Again, good contractors will manage the risks associated with their contract, which can minimise your cost exposure as the owner. But even so, the impacts felt by the owner from a project gone awry extend far beyond the cost of the project itself. There is an opportunity loss relative to the resources (financial and otherwise) that were dedicated to the project, and a loss of the expected benefits from that project, such as new revenue, increased profit or other strategic goals. Staying involved at a detail level during the construction stage is the owner’s responsibility in order to mitigate this risk.

They also provide current work progress status and visibility into issues as they surface to minimise delays, inefficiencies and miss-communications.

With the uncertainty ahead as the world deals with the unknown pace of recovery from the pandemic, owner/operators in the energy sector face new complexities when it comes to selecting, planning and executing construction projects. The good news is that the profession of project controls is already trained to deal with these complexities, with its inherent mantra of plan, measure and adjust. These principles have arguably been applied more successfully in the energy industry than in any other sector.

Combined with today’s powerful construction project management systems, which are easier than ever to implement and access thanks to the cloud, energy owners can successfully navigate through the most challenging economic climate.

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PEOPLE IN ENERGY

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C

olin, with more than 40 years’ experience in the sector, is safety technical authority while Caragh is now charged with driving the company’s innovation strategy following several years as a process and field development consultant. Xodus is supporting its clients to diversify as the transition presents new technical challenges and opportunities around producing low carbon energy responsibly.

Colin worked offshore throughout the 1980s and 1990s, a time where the safety culture changed significantly after years of reluctance. With the drive to lower carbon emissions also likely to require a significant change in mindset, the father and daughter duo shared their aspirations for learning lessons from the past and adopting new ways of thinking to enable transformation.

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How has the safety culture changed during your career and what were the drivers for change?

Culture shift?

Look close to home

Colin McWhirr and daughter, Caragh, have been with energy consultancy Xodus Group since it launched in 2005. They have witnessed significant change in the oil and gas industry throughout their careers and are preparing themselves for the next shift: energy transition.

Colin: Not putting it lightly, the early 1980s was a pretty dangerous time to be offshore, with a very high lost time injury rate and frequent hydrocarbon releases. I can recount many near-miss stories throughout that time, but it will come as no surprise that the major turning point for safety offshore came in the aftermath of the Piper Alpha disaster in 1988. Major accident understanding and hazard management has taken giant leaps forward due to the post-Piper safety case regime.

The industry is now far better Colin McWhirr and daughter, Caragh at hydrocarbon containment management and the lost time injury rate offshore has reduced by around a factor of 50. The permit to work systems and activity hazard management controls are vastly better, so there are now far fewer incidents related to permit control failures. The culture change within the industry has been transformational. It’s important that those lessons continue to be shared as we look to develop more novel ways of producing and responsibly storing energy.

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How is Xodus approaching the energy transition?

Caragh: It’s already embedded in the culture of Xodus to find smarter ways of doing things and we have a 15-year history in renewables which helps. We are helping our clients to evolve their business models. The future path for many producers is to continue doing what they do best – constructing and operating large-scale energy assets and we already see that pattern with huge diversification of portfolios into floating and fixed wind. In the role of innovation manager, I am exploring how software, products and technology initiatives can add value to the work we are delivering across the energy spectrum.

A dedicated focus on innovation allows me to invest time in developing strategy, identifying opportunities, generating and screening ideas and managing their development. I lead a core group from across the company to drive innovation, which is supported by Scottish Enterprise.

www.ogvenergy.co.uk I June 2020

What lessons can be learned from previous culture shifts?

Caragh: The changes in safety culture have not happened overnight, however, what has been proven is that our industry is dynamic and adaptable. The shift in safety required an overhaul of thinking and practice. The energy transition will be no different, but we can see through new investments and the drive for new solutions around Carbon Capture, Utilisation and Storage (CCUS) that the industry is up for the challenge.

Colin: Unlike safety, the global climate catastrophe is creeping up on us so we will not have an acute event to shock a culture change. We can already see younger people, in particular, being empowered to publicly demonstrate for the low carbon transition to be taken seriously and helping it to gain momentum. The energy industry has demonstrated the ingenuity to successfully manage change and it will be a key enabler for transformative initiatives to get off the ground.

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What impact will Covid-19 and the low oil price have on the energy transition?

Caragh: There is widespread acknowledgement that the industry must collectively address the climate emergency and low carbon targets and we’ve seen most producers give robust commitments for reducing emissions in recent months. The current pressures of the double whammy hit from the pandemic and oil price will have a dramatic effect on the sector and it’s anticipated that for some producers it will further encourage the diversification into lower carbon projects. This will no doubt include offshore wind and concentrating efforts on using existing infrastructure for hydrogen production and CCUS. There is a pool of talent and expertise within our basin that can’t be rivalled, so the hope is that roles and jobs can also be transitioned to support emerging low carbon projects and that the transformational and cost-reducing innovations will come from within our sector also.

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How do you encourage the next generation of engineers to consider a career in energy?

Caragh: We are working closely with schools and universities on STEM. We have taken on more than 30 graduates over the last twelve months and it is often the younger members of the team helping to drive low carbon initiatives internally. Having worked closely with many new recruits over the last couple of years, there is a real appreciation that the energy transition is not only going to be crucial to meet global climate change and sustainability objectives, but it will also ensure the commercial viability of the sector. It’s a major part of why they want to work for Xodus, and we want to channel that enthusiasm into our own procedures and in our support to the industry.

Colin: Championing low carbon energy is far from new for us. Our specialists have been working in offshore renewable energy since 1993 and have been instrumental in the world’s first full-scale tidal and floating wind projects. Developing our graduates, who can learn from the practical experience gained on some of those world-first projects and encouraging ideas through our innovation forum is central to success.

The best way to enable a culture shift is to invest time in developing people, sharing collective expertise and taking heed of past lessons.

TRAVEL PARTNER Going above and beyond to support a vital service At Traveleads, we pride ourselves on building partnerships with our clients. We work tirelessly to look after your best interests in a number of ways – all with the aim of saving you time, money and adding value through expert consultancy. Ultimately, we want to make life easier for our clients, with a huge focus on the welfare of their most valuable asset - their people.

Never more so than at a time like this.

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Supporting essential workers Our customers span a variety of sectors – from energy to medical services, manufacturing to sports teams. And whilst there is currently a global ban on the movement of people, the government has recognised the need to keep certain industries operating, meaning many still need to travel domestically and internationally. Whilst this may sound simple, it’s been a real complex challenge that our team has risen to.

Let’s look at the energy sector in particular, which like others is working from home where possible.

But with critical operations taking place up and down the country, on and offshore, there is no getting away from the fact that these essential workers need to travel; more than 12,000 UK staff are still working offshore, amounting to 40% of the total workforce across 147 offshore platforms.

With closed borders, reduced services and a myriad of other complications, our expert advice and continued support to keep them moving safely continues to be pivotal.

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Traveleads Sales Director Sally Cassidy explains: “Arranging domestic travel to and from Aberdeen, as well as international travel to key energy hubs around the globe, has certainly been interesting at times. With border and quarantine restrictions, as well as complex visa requirements, our team’s skills are being put to the test but despite the odds, they always go above and beyond. Making it work for the client is non-negotiable.”

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Communication and forward-thinking The Traveleads partnership ethos is stronger than ever. Our team of experts are fully conversant with all the latest travel updates, guiding our clients on the best options available and alternative solutions in response to rapidly changing flight schedules and wider travel restrictions. Regular communication and proactive support for all our clients has been vital. Firstly, to provide reassurance that measures are in place for safe travelling. Secondly, as their travel partner, we are working closely with them to fully understand re-entry and return to work plans, offering assistance to update travel policies and procedures with passenger safety at the forefront, whilst continuing to deliver the efficiencies our clients depend on.

Rystad

What the future looks like We know many of our energy clients are looking to resume travel as soon as is safe to do so and we stand ready to support them with this and the increasingly complex requirements that will no doubt continue. We continue to consult heavily, offering advice and knowledge even on speculative plans to support decision-making in a very challenging landscape.

As we look to the future, we recognise that welfare of travellers will be more important than ever and we’re already liaising with suppliers to ensure they’re putting in robust measures to uphold the highest possible standards as travel increases.

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We believe in delivering more than just travel management. We make our customers lives easier and this is proving to be invaluable at a time like this. So, whether our clients are travelling or not right now, we’re here.

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TRAVEL

For all enquiries visit www.traveleads.co.uk or contact Sally Cassidy on m. 07715 079 723 scassidy@traveleads.net

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LEGAL & FINANCE employees may not be working as frequently, may be relocated to new assets or facing significant periods of downtime. As with the structures themselves, employees can easily become rusty when not engaged on a regular basis. Similarly, over-familiarity can equally cause employees to lose focus so regular refresher training is also important.

By Laura Petrie, Legal Director, Brodies LLP

Asset Integrity is about more than infrastructure Asset integrity is a primary focus for the oil and gas industry. Whether it is the ongoing maintenance of infrastructure for producing assets or the management of historic field property awaiting decommissioning there is a continual requirement to be assessing the physical integrity of all structures used in operations.

However, while this is and should remain and direction of the work, a trusting relationship the key focus, the assets used in the between the operator and contractor will production of oil and gas go further than generate greater results. the simple steel and concrete structures.

When managing the integrity of assets, At the heart of a strong contractor relationship operators need to also have regard will be a flexible, well-scoped contract. for the more human elements of In order to achieve a properly asset management including collaborative contract it will be contractor relationships, necessary to step outside of employee engagement and At the heart of a standard terms or model-form management of external contracts and, in doing so, each strong contractor relationships, such as party should always ensure that the public perception of relationship will be a legal guidance is received at the environmental policies or earliest possible stage to ensure flexible, well-scoped the balance of corporate and the whole agreement works as contract. social responsibilities. intended.

Where contractors are engaged with on a collaborative basis, with the contractor taking the lead in managing and delivering the required outcome, operators will benefit from letting the contractor's experience and specialist knowledge dictate the delivery of the project. This typically leads to cost reductions and fewer delays.

Even where workscopes are managed on a cooperative basis, where the operator continues to control the overall management

BRENT vs WTI 1 YEAR

Employees are also a critical facet of managing asset integrity. They need clearly scoped roles and responsibilities, and to understand their criticality to ensuring the safe conduct of operations. This helps provide individuals with a sense of importance in their role and encourages teamwork and personal development. On a practical level, operators also need to have regard for the ongoing training of employees. This is especially important in the current circumstances where

WTI 1 MONTH

The conduct expected in carrying out day-today work and all ongoing training requirements should be a matter of clear and concise employment policies. Moreover, the legal requirement for employers to have a duty of care to their employees, both in terms of physical safety and mental wellbeing, means operators should regularly be reviewing such policies to ensure they are both up to date legally and also affirming that their human assets are well maintained.

As noted, asset integrity applies as much in relation to assets at the end of their life cycle as to those on producing fields. In considering the decommissioning of assets, operators must also have regard to their environmental obligations – both those required by law and also those that may arise as a result of public perception. As a greater number of decommissioning projects are undertaken, operators are likely to be held to greater public account regarding abandonment, their environmental policies and their balance of corporate and social responsibility.

Legally, this means ensuring that the position taken by an operator meets the regulatory requirements but also that in seeking to demonstrate the operator's own integrity in managing the assets, other legal requirements are not overlooked. It is always worthwhile to have any proposed public facing policy reviewed from a legal perspective before any external position is taken.

The primary focus in asset integrity is in maintaining the solidity of the physical structure but achieving full asset integrity requires consideration of issues across a much fuller spectrum.

BRENT 1 MONTH

AIDA

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Advanced Integrity Data Analytics

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