OGV Energy - Issue 37 - The Decommissioning Issue by OGV Energy

OCTOBER AUGUST 2020 2020

UKâ&#x20AC;&#x2122;s No.

ENERGY SECTOR

PUBLICATION

THE DECOMMISSIONING ISSUE

FOSSIL FUELS

Colour code #222a68

North Sea Oil & Gas Review and Analytics

DECOMMISSIONING

Oil & gas decom challenges and opportunities

PROJECTS MAP

Featuring: John Lawrie - Bilfinger Salamis - Decom North Sea Legasea - J+S Subsea - Bureau Veritas - GDI QHSE Aberdeen - Xergy

CONTRACT AWARDS

INNOVATION

REGIONAL REVIEWS

How to use technology to stay agile in the changing business environment

Middle East, Europe, US, Australia

DECOM FOCUS INNOVATION & TECH

OIL-PRICE

OPEC revises down oil demand forecast for second month in a row

GREEN ENERGY ON THE MOVE OPINION EVENTS LEGAL

GREEN ENERGY

North Sea energy transition could generate 200,000 jobs

WELL-SAFE PROTECTOR ACQUISITION BOLSTERS BESPOKE DECOMMISSIONING FLEET AND CREATES 100 NEW JOBS

www.wellsafesolutions.com

Read on page 4

BILFINGER SALAMIS UK

YOUR DECOMMISSIONING PARTNER. –––––– Bilfinger Salamis UK works with operators on late life and decommissioning projects to provide a single-source support interface, delivering significant cost savings, enhanced technical expertise and improved efficiency during pre and postcessation of production. ■ Rigging and Mechanical Services - Rigging and Lifting - LOLER Lifting Plans - Deck Crew/ Material Controllers - Minor Modifications ■ Access Support - Rope Access - Scaffolding / Underdeck Systems - Habitat Systems

www.salamis.bilfinger.com

■ Industrial Cleaning/NORM - HP/UHP Water Jetting - NORM Management / Removal - Chemical Cleaning / Treatment - Cold Cutting - Vessel Management - FPSO Cargo Tank Maintenance - Vacuum Transfer Systems ■ Asbestos Management - Surveys and Training - Management and Removal

■ Inspection - Conventional and Advanced NDT - Paint Systems Inspection - Insulation Inspection and Removal - Weld Inspection - UAV Inspection ■ Late Life Repairs - Blasting / Painting - Composite Wraps - Passive Fire Protection

CONTENTS

FOSSIL FUELS

7 UK North Sea Oil & Gas Review 10 Rystad Analytics 13 UKCS Status Report

REGIONAL REVIEWS

20 Middle East 22 Europe 24 US 25 Australia

DECOMMISSIONING FOCUS

26 Oil & gas decom challenges and opportunities 28 Bureau Veritas: The future is now for decommissioning 29 Decom North Sea: Decommissioning update

30 John Lawrie: An opportunity not to WASTE 31 Legasea: Planes, trains & automobiles (and oil & gas too) 32 Bilfingerâ&#x20AC;&#x2122;s Core Crew knowledge is key to decommissioning success 33 J+S with their Legacy Locker: a circular economy approach to the decommissioning model

INNOVATION ZONE 34 Proteus: How to use technology to stay agile in the changing business environment 36 OMMICA: Mitigating the Operator's financial burden in challenging times

GREEN ENERGY

38 UK looks to cut new build costs in Nuclear by almost a third by 2030 39 North Sea energy transition could generate 200,000 jobs 40 Engie and ArianeGroup announce collaboration to develop renewable liquid hydrogen

EVERY MONTH

4 Cover Partner: Well-Safe Solutions 14 EIC: World Project Maps 18 Contract Awards 42 Ducatus Partners: On the Move 44 Opinion: Subsea Innovation and the Energy Transition 47 Traveleads: Events 49 Broadies: Legal and Finance 50 Company News: Covid-19 risk assessments and return to work planning

KENNY DOOLEY MAIN EDITOR Following the latest guidance from the various governments around the UK we once again find ourselves in a situation that will make it difficult to make any serious long-term plans for the supply chain. At OGV Energy however, we are delighted to have recently launched the "OGV Community" which is a new cost-effective subscription service that increases brand exposure for our clients and brings marketing and business development opportunities. A few weeks ago we held our first online OGV Community event that provided some positivity around internationalising and diversifying your business, identifying opportunities for growth and funding guidance that will help organisations to continue to win work and where possible create new jobs.

SCAN THE QR CODES WITH THE OGV APP

Our cover partner this month is Well-Safe Solutions who have recently strengthened their position in the decommissioning market through the acquisition of a new asset.

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The rest of this monthâ&#x20AC;&#x2122;s magazine features our regular reviews of the Energy sector in the North Sea, Europe, the Middle East, the US and Australasia along with industry analysis and project updates from Rystad Energy and the EIC as well as a look at Xergy's new workforce solutions platform "Proteus".

OGVENERGY

@OGVENERGY

Our theme this month is on Decommissioning, a sector which is filled with promise if it can find some forward momentum to start executing projects. We also hear from other parties in this space including John Lawrie, J & S Subsea, Legasea, Bureau Veritas and Bilfinger.

Thanks again to our readers for all of their support during these challenging times and if myself or the OGV Energy team can help in any way, be that to have a chat, offer any advice or an introduction then please get in touch. @OGVENERGY

VIEW THE OGV MAGAZINE ONLINE AT www.oilandgasvisionjobs.com/magazine

COVER PARTNER

By Matt Jenkins – COO at Well-Safe Solutions

WELL-SAFE SOLUTIONS Three years of progress Well-Safe Solutions launched in August 2017 with a clear vision “To be the trusted well decommissioning service partner of choice”

ince then, we have steadily built towards that vision with a business model that allows complete flexibility to operators needing to plan or execute their well decommissioning projects. What we have now added, is real scale to our capabilities as a Tier 1 decommissioning contractor. We can design, plan, and execute platform, subsea or land wells using our unique assets, hugely experienced on/offshore teams, deep knowledge of local/international regulations and our intelligence about all the latest available downhole technology. So, what makes us unique and different from traditional drilling contractors, engineering houses or operators? We can break this down into 3 key areas: deep experience, unique equipment, and commercial flexibility. If we take the Well-Safe Guardian, our semisubmersible P&A rig as an example, what makes this different to other equivalent units or those that are newer?

Significant Experience The Guardian has a long history of successful operations in the North Sea - As a 700 series unit, she is a proven North Sea workhorse and has drilled, completed or worked-over 100+ wells and is recognised as a stable and reliable MODU for all year operations. In the last year, we have completed a refurbishment and upgrade program worth a substantial amount and she is now ready to go to work. We have hand-picked our crew from the industry who have P&A pedigree. Drilling contractors are now scrapping experienced P&A rigs in favour of newer and more automated units, something we think reduces efficiency and adds cost. We have selected many of our crew from those units to retain their experience for Well-Safe and our customers. Our subsea engineers, toolpushers and deck crew all know what it takes to run the most efficient P&A operations.

Unique Equipment We have invested heavily in the rig mooring system to improve reliability and reduce downtime. This includes all gypsies, fairleads and anchor winches being replaced or overhauled. We also have a unique commercial solution to improve rig move efficiency speed. This was a considerable investment by Well-Safe. The moonpool systems have been completely revitalised with a new bridge crane system and associated hydraulics which allows Well-Safe to offer fixed price operations in our busiest area of the rig. We have modified the skidding system to be simpler, more reliable and fit for the extensive BOP/xmas tree/SIL operations that will be performed. We have re-installed a Well-Safe Guardian optimisation of the past with the tree skidding system allowing up to 4 xmas trees to be sat on the starboard main deck at once – this reduces weather downtime and increases batching efficiency.

Commercial Flexibility We own the asset and are in complete control of our performance therefore we can offer a unique commercial solution which ties us into our actual performance and de-links Well-Safe from the traditional Drilling Rig market. We commit to being better value than a traditional drilling contractor in all areas. However, it is when our bespoke assets are combined with our well engineering team that the unique value drivers can be added to maximum effect. Our engineering team are currently executing projects for clients globally as our 500+ wells of P&A experience is highly valuable in the planning and engineering phases of a project. We can show examples of Well-Safe designs that save operators over £10mm over a typical campaign simply by showing why P&A is different to drilling and completion operations. We have executed over 20 large engineering projects in the last 2 years, ranging from: Subsea portfolios of >50 subsea wells, providing the operator with costs/time estimates, outlining the risks and opportunities based on our experience of over 500 P&A operations amongst our team.

It is when our bespoke assets are combined with our well engineering team that the unique value drivers can be added to maximum effect.

Despite only being 3 years old, we have completed our first multi-well, multi-operator campaign where we worked on 14 wells over 12 months. This project will continue in 2021 and we will complete the remaining 21 wells on 2 platforms and a subsea centre.

The next stage for Well-Safe Solutions is focused on 2 areas: Add the Subsea Intervention Lubricator (SIL) and Dive System to the Well-Safe Guardian to further improve the capability in the North Sea Complete the delivery of the Well-Safe Protector to our fleet, our newly acquired Jack-Up unit, which is currently being modified with bespoke P&A additions. With the Energy Transition now top of government and major operator agenda, Well-Safe are perfectly placed to play a major part in the next phase of the oil and gas industry and our capabilities will add significant value to operators and regulators alike.

Complete platform well decommissioning strategies up to 5 years ahead of operations start-up, including subsurface isolation designs, rig/P&A unit execution costs and Asset Retirement Obligations (A.R.O.) estimates. Over 150 well screening projects to allow operators to budget their well abandonment liabilities at a country or overall company level.

For more information visit www.wellsafesolutions.com

www.ogvenergy.co.uk I October 2020

OGV ENERGY

Editorial

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Advertising

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Journalists

Tsvetana Paraskova Loren Steffy Andy Hogan Katie Milne

Design

Ben Mckay Fara West

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CONTRIBUTORS

OUR PARTNERS

TRAVEL MANAGEMENT PARTNER Award-winning travel management company with a business model designed to save its customers time and money. They provide access to travel industry rates and exclusive discounts. Take advantage of their unbeatable cost saving options.

LOGISTICS PARTNER Leading provider of logistics services to this industry, offering its customers airfreight, road freight, sea freight, project forwarding, customs compliance, training and consultancy, packing, crating, lashing & securing services warehousing, distribution, freight management, rig relocation and mobilisation services and offshore logistics.

Disclaimer: The views and opinions published within editorials and advertisements in this OGV Energy Publication are not those of our editor or company. Whilst we have made every effort to ensure the legitimacy of the content, OGV Energy cannot accept any responsibility for errors and mistakes.

www.forssea-robotics.fr

NAMAKA

SAFET Y

MANAGEMEN T SERVICES

Namaka Subseasâ&#x20AC;&#x2122; safety management services for offshore operations including diving and ROV offers clients cost and time saving processes delivered using a simple yet effective three (3) phase structure.

PHASE Phase 1 will include performing a gap analysis of the clients management systems to identify their operational capabilities and determine any gaps that exist within the organisation.

PHASE

Phase 2 will consist of the development of an action plan to provide a solution for any gaps and requirements identified and will involve the engagement of all stakeholders within the organisation.

Phase 3 will be the implementation of the plan developed in phase 2 with the support of our advisors through to project completion.

Client Benefits It is our aim to take the knowledge and experience gained by our personnel over the years, to provide both technical and operational support to our clients within the subsea industry. We will provide the client with the required expertise to support their operations and projects with the onus of improving safety and efficiency, ensuring the client can secure a competitive advantage within the industry.

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24 7 Available 24 hours a day 365 days of the year for normal operations and emergency requirement support.

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FOSSIL FUELS

OCTOBER

UK North Sea Oil & Gas Review By Tsvetana Paraskova

The past month in the UK oil and gas industry featured the current state and the future of the UK licensing regime, roadmaps for an integrated offshore industry, the road to net zero, and a number of operational updates and contracts from companies active on the UK Continental Shelf.

Early in September the UK government said it was launching a review of its policy on the future UK offshore oil and gas licensing regime, as part of the wider aim of achieving net zero emissions by 2050. “While we have decarbonised our economy faster than any other major country over the past two decades, the oil and gas sector will continue to be needed for the foreseeable future as we move toward net zero carbon emissions by 2050,” Business and Energy Secretary Alok Sharma said. “Our review into future oil and gas licensing rounds will ensure we are able to meet our net zero target, while protecting jobs across the country as part of our plan to build back better with a greener, cleaner economy,” Sharma added.

Continues >

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www.prodrill-ers.com

FOSSIL FUELS “Progress against an ambitious industry roadmap was confirmed by representative body OGUK, noting it as further evidence that the UK sector is embracing change,” it said.

OGUK, the leading offshore industry body, embraced the review as “an opportunity to shine a light on how the sector is changing to support the country’s climate ambitions while still ensuring it contributes to the UK’s ongoing security of energy supply.”

In a new report, UKCS Data & Digital Maturity Survey 2020, OGUK and its partners in the survey found that the oil and gas industry is still relatively immature in its digital transformation journey, based on the age of digital transformation programmes.

“Working with governments, regulators and through sensible debate, we can protect jobs and affordability while being ultimately accountable for the emissions associated with the oil and gas we use,” OGUK Chief Executive Deirdre Michie said.

“Although many organisations have many years’ experience in deploying digital technology, full digital transformation requires a holistic approach that also encompasses data, innovation, people and culture,” the report said.

The Oil and Gas Authority (OGA) announced on 3 September it had offered for award 113 licence areas over 260 blocks or part-blocks in mature producing areas close to existing infrastructure, to 65 companies in the 32nd Offshore Licensing Round. As previously announced, the OGA will take a temporary pause from annual licence round activity and will not run a licence round in what would have been the 2020/21 period. Responding to the OGA’s latest licensing round, OGUK’s supply chain and operations director Katy Heidenreich said: “At a time when companies face huge pressures it is encouraging that our basin continues to demonstrate its attractiveness to a wide range of companies. This is a crucial element in unlocking the new investment that will help continue to meet UK energy needs and sustain jobs across our sector.” Consultancy Wood Mackenzie sees a positive sign that there is still appetite for UK North Sea acreage from many companies of different sizes and backgrounds. “It keeps the buzz alive following a recent renaissance in North Sea exploration performance,” said Romana Adamcikova, Senior Research Analyst, North Sea Upstream at WoodMac. Despite portfolio rationalisation among majors, BP, Shell, Total, and Equinor were active in the licensing round, but private equity-backed firms “were the real driving force with Chrysaor picking up the largest number of licences, beefing up acreage around existing hubs such as Britannia,” Adamcikova noted. The OGA said on 10 September in its new report on the UK oil and gas reserves and resources that remaining recoverable petroleum resources in the UKCS remain in the range 10 to 20 billion barrels or more of oil equivalent (boe), including discovered and undiscovered petroleum resources. “The OGA believes that maximising the economic recovery of the UK’s remaining oil and gas need not be in conflict with the energy transition and that the industry has the skills, technology and capital to help unlock the solutions required to help the UK achieve net zero,” the authority said. Despite recent challenges in the industry brought about by the pandemic and the resulting oil price crash, OGUK’s Roadmap 2035 toward a low-carbon future of the UK offshore industry has made progress, the association said.

www.ogvenergy.co.uk I October 2020

One of the key conclusions from the survey was that organisations need to ensure focus on innovation and culture alongside data and technology in order to make progress with a largely sceptical workforce.

Despite recent challenges in the industry brought about by the pandemic and the resulting oil price crash, OGUK’s Roadmap 2035 toward a low-carbon future of the UK offshore industry has made progress

A study for industry body Scottish Renewables showed at the end of August that 80% of Scottish oil and gas workers have considered that their careers could be impacted by actions to fight climate change. More than three-quarters, 77%, of workers polled are positive about retraining to join the renewable energy industry. Rystad Energy estimated in an analysis that the cost of removing a steel platform in the North Sea, excluding subsea infrastructure, is above twice the cost of the same task in Southeast Asia. Removal of a platform located in 60 meters of water with four piles, a topside weight of 1,500 tonnes and a jacket weight of 800 tonnes would cost US$22.35 million in the North Sea, more than twice compared to US$9.08 million in Southeast Asia, chiefly due to higher spread rates and more challenging weather conditions. In another analysis, Rystad Energy said in midSeptember that electrification of oil and gas platforms would help the UK toward achieving its net-zero emissions goal by 2050. Rystad Energy’s emissions data have shown that UK emissions from oil and gas production in the North Sea are the highest among the region’s producers. UK oil and gas production is set to peak at 2.09 million boe in 2035, up by about 25% from the 1.64 million boe expected for 2020. Yet, in order to reach its emission target, the UK will have to work to decarbonise production by electrifying its infrastructure via renewable sources of energy, shifting away from gas turbines and diesel generators on offshore platforms, Rystad Energy reckons. “There is significant room for improvement when it comes to reducing carbon intensity on the UKCS. We already see that priorities are shifting toward greener solutions from both sides of the decision-making process, and many operators and investors are now including an additional carbon cost in their capital allocation decisions,” said Rystad Energy’s upstream analyst Olga Savenkova. Wood Mackenzie said in a study of the upstream assets of the supermajors ExxonMobil, Shell, Chevron, BP, and Total that BP has the most defensive portfolio with its large domestic gas assets keeping it steady across fluctuating prices. BP also retains the most value in a low-price scenario, according to WoodMac.

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UK North Sea Oil & Gas Review In company news Premier Oil said in its H1 results release in August that its operated Tolmount development is on track to deliver first gas in the second quarter of next year, despite the fact that the development schedule was impacted by COVID-19 delays. On September 15, Premier Oil confirmed press reports it had been in talks with a number of third parties, including Chrysaor, regarding alternative forms of transactions to secure the long-term refinancing of its debt facilities. Egdon Resources plc completed in late August the farm-in agreement with Shell for two offshore licences containing the Resolution and Endeavour gas discoveries, under which Shell gets 70% interest and operatorship of the licences. The acquisition of a marine 3D seismic survey of the licences is planned in the first quarter of 2021. Ithaca Energy reported strong production with limited disruption from COVID-19 in the first half of 2020. This year’s production is expected to be at the top end of the 63,000-68,000 boe/d guidance range. Ithaca Energy’s parent company Delek Group said a few days later that “it is holding discussions with third parties to assess the possibility of a merger of Ithaca with an international energy company, as part of a process to turn Ithaca into a public company.” Independent Oil and Gas plc said in its H1 results release that the development of Phase 1 of its Core Project in the UK Southern North Sea maintains the schedule towards first gas target of Q3 2021. “Besides signing major contracts with leading contractors and consolidating our strong partnership with CalEnergy Resources, we secured clear government endorsement for Phase 1,” IOG chief executive Andrew Hockey said. Independent global completions service company Tendeka and diagnostic specialists TGT have partnered for an ‘industry-first’ solution to combat sand control failures in wells.

sand production issues, to ultimately maintain asset integrity and extend the product life of the asset,” Paul Lynch, Advanced Completions Director at Tendeka, said. Serica Energy said in an investor presentation on 10 September that it continues to seek new acquisition opportunities to add further value by building on operating efficiencies, reducing cost, exploiting synergies and managing risk. Hurricane Energy announced on 11 September that a Technical Review resulted in significant reductions in reserves and resources of its West of Shetland assets. The review also showed that the Lancaster field is more complex than previously thought. Independent Oil & Gas plc confirmed on the same day that it is considering a possible allshare offer for the entire issued and to be issued share capital of Deltic Energy. Petrofac’s Engineering and Production Services (EPS) business announced on 15 September the award of a multi-million dollar Integrated Services Contract with Ithaca Energy. Under a new fiveyear deal, Petrofac will integrate operations, maintenance, engineering, construction, and onshore and offshore technical support across Ithaca’s North Sea operated asset base. Controls technology provider Proserv Controls unveiled in September two new facilities in Mussafah, Abu Dhabi, and in Cumbernauld, near Glasgow, as is looks to boost its global service operations. The new site in Cumbernauld will be Proserv’s Service Centre of Excellence for Measurement and replaces its location in Coatbridge. Full-service unmanned aviation company Flylogix has entered into a strategic partnership with SeekOps Inc. for offshore remote methane sensing and data interpretation in the UKCS. “Integrating SeekOps’ world-class methane sensor with our UAVs offers energy companies the opportunity to transform how they conduct emissions monitoring in remote locations and realise significant benefits to cost, safety and the environment,” Flylogix executive chairman Charles Tavner said.

“We believe this is the first time a specialised, integrated tool can fully understand and fix

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BRENT OIL PRICES OVER THE YEARS October review

YEAR AGO

- BRENT OIL PRICE 2019 - $59.71 Concerns increased about China’s economy, which slowed to 6% year-over-year growth in the third quarter, the slowest growth in 271/2 years. Many outside observers of China’s economy have noted for years that GDP numbers are likely inflated due to the nature of China’s economic reporting systems.

YEARS AGO

- BRENT OIL PRICE 2015 - $48.43 Chief executives of 10 of the world’s biggest oil and gas companies have pledged their support for an "effective" deal to fight global warming. Between them producing 20 per cent of the world’s oil and gas, backed an agreement to limit global warming to 2 degrees Celsius above pre-industrial levels.

YEARS AGO

- BRENT OIL PRICE 2010 - $82.67 Licensing of oil and gas exploration in UK waters has been cut back by the UK government in its bid to ensure protection of marine wildlife. The Obama administration lifted its temporary ban on deep-water exploratory oil and gas drilling, which was imposed after the explosion of the Deepwater Horizon oil rig in the Gulf of Mexico. Announcing the decision on 12 October 2010, it said that new safety measures were in place.

FOSSIL FUELS

Conducted by Craig Jamieson and Oddmund FĂ¸re @ Rystad Energy

Service Market Drivers Greenfield project sanctioning

Database version: Rystad Energy Databases September 2020 Review

Sanctioning year (2016 - 2022)

Year (2016 - 2022)

RYSTAD ANALYTICS

SPONSORED BY

Rystad offer global and regional tools tailored specifically for in-depth analysis of the upstream, oilfield service, energy markets and renewable energy industry. The consistency of data is a result of our systematic research by combining publicly available information and Rystad Energyâ&#x20AC;&#x2122;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 October 2020

Database version: Rystad Energy Databases September 2020 Review

Rystad Analytics

Offshore Rig Market Analysis Global overview of current status

Colour code #222a68

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 Fleet current stats

FOSSIL FUELS sponsored by

FOSSIL FUELS

Conducted by Craig Jamieson and Oddmund FĂ¸re @ Rystad Energy

Database version: Rystad Energy Databases September 2020 Review

Offshore Rig Market Analysis Utilisation

Colour code #222a68

PROUD TO BE IN PARTNERSHIP WITH

Offshore Rig Market Analysis Contract backlog

www.ogvenergy.co.uk I October 2020

view rystad analytics on our APP

Date Generated: 24-07-2020 Date generated 18 September 2020

Decommissioning Projects OPERATOR

(Fields)

A PETROLEUM UK HOLDINGS

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PLORATION n - Miller)

RICA STORAGE HOLDINGS

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C LIMITED ick/Blackbird)

NTERNATIONAL an - Banff and Kyle - Strathspey)

SAOR HOLDINGS ster CM - Murdoch - CMS - MacCulloch)

PETROLEUM E&P dson)

NORTH SEA ooner)

K LIMITED Dotty - Little Dotty - Dawn - Hewett)

EST PLC a and Galia - Heather and Broom) S INDUSTRIES endish)

A ENERGY y)

UNE E&P ke - Juliet)

NCO OIL & GAS nevere - TYNE - Pickerill - AMETHYST)

IER OIL PLC

tington - Balmoral - Rita & Hunter - Caledonia)

OL SINOPEC RESOURCES an - Buchan - Beatrice - Fulmar)

ROSE ENERGY e Bravo - East Brae)

L DUTCH SHELL nt - Atlantic and Cromarty - Curlew - Goldeneye)

T ENERGY

th Morecambe)

Discovery Projects

RIS ENERGY LTD

ot)

SEY OIL AND GAS PLC

enn - Verbier )

RIS ENERGY LTD

ot)

MIER OIL PLC

lmount East)

AL UPSTREAM UK LIMITED

dradour Royal Sovereign)

A EUROPA B.V.

arding North)

d contact details, follow the link roject-pathямБnder

UKCS Status Report

WORLD PROJECTS

WORLD PROJECTS MAP 1

Aker Solutions has been awarded a FEED contract for the Mero-3 FPSO's topsides. Aker has already started work on the topsides for the unit that will be able to process 180,000 bbl/d of crude and 12 MMcf/d of gas.

OCTOBER 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

BRAZIL Petrobras US$3.5bn

COTE D’IVOIRE Foxtrot International US$315mn

SOUTH KOREA KNOC US$300mn

RUSSIA - LUKoil US$500mn

TRINIDAD & TOBAGO NewGen Energy Ltd US$200mn

Foxtrot International and partners aim by the end of 2022 to have drilled three new wells at a cost of $215 million and spend $100 million for the construction of new onshore processing facilities and pipelines to supply gas to two new power stations.

Agreements have been signed with Doosan Heavy Industries & Construction for the supply of wind turbines for the project as well as with Hyundai Heavy Industries for the construction of the floating foundations. KNOC has also announced that additional agreements will be signed with POSCO and LS Cable & System in September 2020.

Lummus Technology through its Novolen business has been awarded a contract by Lukoil NNOS for a petrochemical facility in Kstovo, Russia. Lummus’ scope includes the technology license for a 500 kta polypropylene unit as well as basic design engineering, training and services, and catalyst supply.

io consulting (io) has been awarded a contract for a bankable feasibility study (BFS) by NewGen Energy Limited (NewGen) to support development of the project. Along with other activities, io will undertake a technical due diligence assessment which will identify, evaluate and explore commercially available electrolysis technologies to determine the optimum technology and supporting facilities required to progress to the next project stage.

www.ogvenergy.co.uk I October 2020

WORLD PROJECTS

03 15

4 7 6

8 5

1 9

CHINA CNOOC US$500mn est.

OneSubsea has been awarded an EPC contract for the supply of an integrated subsea production and processing system for the Lufeng 22-1 field. The contract, valued at $143 million, includes subsea trees, an integrated boosting and manifold system, a unified control system, an integrated power-control umbilical, a virtual flow metering solution, and estimated services. Ningbo Orient Cable (NBO) has been awarded a contract to supply to the high voltage umbilical for the project.

FRANCE Ailes Marines S.A.S US$2.6bn

UAE ADNOC US$260mn

AUSTRALIA Infinite Blue Energy US$300mn

Eiffage Métal and Engie Solutions have been chosen for the manufacture the project's offshore substation. Eiffage Métal will be in charge of the engineering and construction of the upper part of the substation, housing the transformers and electrical equipment as well as the fabrication of the foundation.

ADNOC has awarded contracts to upgrade the Main Oil Line and crude receiving facilities at the Jebel Dhanna Terminal. CPECC will replace the two MOLs, and Target Engineering will upgrade the crude receiving facilities at the terminal.

Phase one work for the project will be carried out by Xodus Group. Xodus’ Perth-based team will deliver a preliminary environmental impact assessment (EIA) and environmental impact identification (ENVID) as well as ad hoc environmental support, including stakeholder consultation.

WORLD PROJECTS SPONSORED BY

www.the-eic.com

CONTRACT AWARDS Petrofac expands support for Ithaca Energy

In a new five-year deal, Petrofac will integrate operations, maintenance, engineering, construction, and onshore and offshore technical support across Ithaca’s North Sea operated asset base. The contract extends Petrofac’s existing working relationship with Ithaca, as well as the duration and breadth of services it provides for the Alba, Captain, Erskine and FPF-1 assets, building on the operations, engineering and support services it has been providing since 2011. Having expanded its in-house capabilities, Ithaca will assume Safety Case responsibility for the FPF-1 asset, whilst Petrofac continues to provide all services and 96 offshore team members for the asset under the new contract. Commenting, Nick Shorten, Managing Director for Petrofac’s EPS business in the Western Hemisphere, said: “Now more than ever, it is vital that operators can have confidence in the supply chain to generate value for them. We’re achieving this for our clients by combining our integrated approach with the latest digital technology to drive efficiencies and increase productivity. “Ithaca’s decision to expand our service provision demonstrates its confidence in our ability to provide integrated support services that enhance operational effectiveness. We look forward to building on our long-standing working relationship by supporting our client to maximise the value of its assets.”

Bill Dunnett, Chief Executive Officer, Ithaca Energy, said: “The breadth of this agreement is an excellent example of the long-standing collaboration between Ithaca Energy and Petrofac, which is designed to realise economies of scale, maximising the value and potential of our assets. “It provides the opportunity to drive further efficiencies and leverage our in-house capabilities through the transfer of the FPF-1 duty holder. Our continued strong partnership with Petrofac is key in delivering safe, simplified and streamlined operations.”

Aker Solutions wins North Sea extension with ConocoPhillips The previous agreement was made in February 2016 and it was for a period of five years. The contract value will be determined by future call-offs for maintenance and modifications work and could range between NOK 300 million ($33.3 million) and NOK 700 million ($77.6 million) per year. The range does not represent a minimum or maximum amount and is subject to change, the company explained. “We look forward to delivering new projects and services to one of the largest maintenance and modifications portfolios offshore Norway”, said Kjetel Digre, chief executive officer of Aker Solutions.

Norwegian oilfield services provider Aker Solutions has secured a threeyear contract extension to an existing framework agreement for maintenance and modifications work at ConocoPhillips’ North Sea fields.

www.ogvenergy.co.uk I October 2020

Aker Solutions said it will continue as ConocoPhillips’ main supplier of maintenance and modifications work offshore Norway. The agreement runs from January 2021 until the end of 2023.

The work will be managed and executed by the company’s office in Stavanger and fabrication yard in Egersund. The agreement will also provide work for the company’s offshore employees. The contract will be booked as order intake in the third quarter of 2020.

CONTRACT AWARDS International growth sees pipeline specialist STATS Group post £5.6 million profit The company’s success in recent years of internationalising its business continued, with 85% of revenues derived from projects executed outside of the UK, a rise of 5% on 2018.

Pipeline technology specialist STATS (UK) Ltd generated revenues of £39.1 million and EBITDA earnings of £5.6 million according to its annual accounts as at 31 December 2019. Despite the impact of the Covid-19 pandemic and the fall in the price of oil, STATS said it was confident its 2020 performance and activity levels would be broadly consistent with those of 2019. While revenues dropped by 10%, down from £43.4 million, the accounts noted that the largest ever contract completed by STATS, for a major Abu Dhabi client, had made a significant contribution to its 2018 results. Based in Kintore, near Aberdeen, STATS principal activity is the provision of pressurised pipeline isolation, hot tapping and plugging services to the global oil, gas and petrochemical industries.

Milestone achievements in 2019 included increasing its market presence in the US where revenues grew by 176% on the previous year, completing a major isolation campaign in Malaysia, and progress on long term contracts in the Norwegian North Sea and Nigeria. Diversification away from a rental-only model of the company’s patented isolation tools to include product sales had found particular success in Canada and the Middle East, while there was strong demand for the group’s Type Approved mechanical pipe connectors in the UK oil and gas sector. Relocating to larger facilities in Canada had allowed the ramping up of the in-house design and manufacture of pipeline fittings to North American clients, while a move to larger premises in the United Arab Emirates and the opening of a new operational site in Oman had strengthened STATS presence in the Middle East. In addition, a Memorandum of Understanding with Sakhalin Energy Investment Company and INTRA was signed in 2019 for a long-term frame agreement

covering isolation works in Russia. STATS Group Chief Executive Officer, Leigh Howarth, said: “As Covid-19 evolved into a global pandemic during the early part of 2020, this had an impact on our trading performance. Not surprisingly, several significant contracts which had been a long time in planning were postponed by our clients until later this year or 2021, but on the positive side there is healthy programme of work ahead of us. “The response from our staff across all our global locations in dealing with the changed environment was outstanding. The introduction of new working practices has allowed us to continue delivering our services and, encouragingly, secure new work. As a result, and notwithstanding the impact of Covid-19 and the resulting lower demand for oil and the subsequent drop in price, we are optimistic that activity levels in 2020 will be broadly consistent with those of 2019.” The group’s pre-tax profits for 2019 were £0.2 million compared to £2.5 million in 2018, while EBITDA earnings decreased from £7.6 million in 2018 to £5.6 million. Investment continues in to research and development activities relating to STATS’s proprietary technology products and to secure patents and trademarks where appropriate.

Dolphin Drilling pens $83 million contract with major Mexican operator Dolphin Drilling announced it has signed an US$83 million contract with PEMEX. The deal will see the North Sea drilling pioneer’s Blackford Dolphin rig utilised in Mexico for the duration of the work, which is expected to last around 15 months. The Blackford Dolphin is currently being prepared for the journey from the North Sea to Mexico ahead of the commencement of operations in October. Bjørnar Iversen, CEO of Dolphin Drilling, said: “Our ability to mobilise the asset quickly and our excellent operational and safety performance were key to us winning the contract. Blackford Dolphin is one of the most efficient moored

semi-submersibles on the market, providing a reduction of the CO2 emissions associated with drilling due its low fuel consumption and high drilling performance. “Our alliance with PEMEX demonstrates how we can add value to operators located anywhere in the world, and I am looking forward to us continuing our global growth in the years to come, and see Mexico as a strategically important market for our moored semi-submersibles.” Dolphin Drilling is celebrating its 55th year in operation this year and is one of the leading contractors in the industry.

Subsea 7 awarded contract extensions in Brazil Seven Waves, Seven Rio and Seven Cruzeiro will operate at a new day-rate with effect from 1 August 2020 and their firm contract periods will now end in Q2 2022, Q3 2022 and Q4 2022 respectively. Seven Sun will complete its current contract in Q2 2022 at its prevailing day-rate.

Subsea 7 announced an agreement with Petrobras to extend by one year the current long-term day-rate contracts for three pipelay support vessels (PLSVs) operating offshore Brazil.

The extensions have a combined value of approximately USD 155 million, net of agreed reductions to the current day-rates, and increase the backlog relating to the four Brazilian PLSVs to USD 493 million at 31 August 2020.

Marcelo Xavier, Vice-President Brazil, said: "These contract extensions reflect our long-standing relationship with Petrobras and desire by both parties to reach a mutually beneficial solution in these challenging times. We remain focused on performing safely and to a high standard for our valued client.”

CONTRACT AWARDS

GDi Vision

www.ogvenergy.co.uk I October 2020

CONTRACT AWARD

Serica and GDi create a Digital Twin of the Bruce Platforms Serica Energy, operator of the UK North Sea Bruce, Keith and Rhum fields, has contracted Aberdeen based energy services company GDi to create a digital twin of its Bruce platforms and facilities. A full laser scan of the Bruce platforms is almost complete and GDi will use its software, GDi Vision, to create a high density virtual platform that can be utilised by people onshore to do a number of tasks normally performed offshore. For example it can be used to inspect for corrosion, wear and tear and to design new or replacement parts or repairs. It will also help with planning future work, being able to visualise what needs to go where, saving time and improving accuracy, especially in hard to reach areas. During the COVID-19 restrictions on bedspace and travel, it is even more beneficial to cut down on the requirements for people to go offshore, saving time, money and reducing risk. Overall, this technology has been proven to cut down on inspection and manpower costs by up to 25%, whilst improving accuracy and reducing operator error. Gareth McIntyre director at GDi, said: “Working with Serica Energy is a fantastic opportunity for us to deliver our services to a forward-looking client, as well as highlighting the full range of capabilities held by the GDi team in this specialist arena. “GDi has benefited from healthy demand for its services, which demonstrates our value proposition and a shift of focus from UCKS operators as they embrace new technologies. The ability for GDi to rapidly deploy our turnkey solutions has allowed our clients and industry partners to quickly realise value. We firmly believe our commitment to providing innovative technology-led solutions has been pivotal in our ability to attract and retain leading energy industry businesses, such as Serica Energy.” Clara Altobell, VP ESG and Business Innovation said: “We are only scratching the surface as to what this technology can offer. We are really excited to see where it can take us, with inspection, fabric maintenance, training and future design.”

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By Tsvetana Paraskova

MIDDLE Energy Review EAST

The biggest oil and gas companies in the Middle East announced reorganisations, new discoveries, and new deals while the Organisation of the Petroleum Exporting Countries (OPEC), led by the major Middle Eastern oil producers, warned that global oil demand would likely drop this year more than previously feared.

Saudi Arabia chafes at quota laggards at OPEC+ meeting

OPEC revises down oil demand forecast for second month in a row

Saudi Arabia – which has pushed for all OPEC+ members to start complying with their oil production quotas and stop overproducing – criticised the non-compliant participants in the deal at the meeting of the OPEC+ Joint Ministerial Monitoring Committee (JMMC) on 17 September.

Over the past month, OPEC once again revised down its estimates for global oil demand for 2020—the second consecutive downward revision because of still high risks about economies and demand due to the pandemic. In its Monthly Oil Market Report (MOMR) for September, the organisation lowered again its estimates for global oil demand for both 2020 and 2021. This year’s global oil demand forecast was cut by 400,000 barrels per day (bpd), and now OPEC sees demand averaging 90.2 million, lower by 9.5 million bpd compared to 2019. In the August report, OPEC had forecast oil demand declining by 9.1 million bpd in 2020 year over year. “Risks remain elevated and skewed to the downside, particularly in relation to the development of COVID-19 infection cases and potential vaccines. Furthermore, the speed of recovery in economic activities and oil demand growth potential in Other Asian countries, including India, remain uncertain,” OPEC said in its report in September. Next year will not see the return of oil demand to pre-crisis levels, according to the cartel which expects demand rising by 6.6 million bpd compared to 2020. OPEC’s demand forecast for 2020 was also lowered by 400,000 bpd compared to the report in August. The world’s largest oil exporter, Saudi Arabia, also signalled recently that the global oil demand recovery is faltering. In early September, the Saudi oil giant Aramco cut the official selling prices (OSPs) of its crude oil going to Asia in October, which analysts saw as a clear sign that Saudi Aramco sees weak fuel demand in the near term. Saudi Arabia lowered the price of its flagship Arab Light crude grade to Asia in October by more than expected, sending a signal to the market that it does not see strong fuel demand in the coming month and that refineries do not have much incentive to buy crude amid weak refining margins.

www.ogvenergy.co.uk I October 2020

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.

Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, said at the start of the meeting, in apparent reference to the laggards in compliance: “Attempts to outsmart the market will not succeed and are counterproductive when we have the eyes, and the technology, of the world upon us.”

Next year will not see the return of oil demand to precrisis levels, according to the cartel which expects demand rising by 6.6 million bpd compared to 2020.

“Full compliance is not an act of charity,” and “repeated promises that are not carried through in a timely fashion may have temporary positive impact, but if these are not delivered, they can come back to bite us all,” the most influential energy minister in OPEC said, adding that “the market can’t be fooled continually.” OPEC itself issued a toned-down press release saying that the JMMC focuses on market stability and full conformity. The Committee reviewed the crude oil production data for August 2020 and found that combined, OPEC and non-OPEC countries part of the pact achieved a compliance rate of 102% in August 2020, including Mexico as per the secondary sources. “The JMMC reiterated the critical importance of adhering to full conformity and compensating overproduced volumes as soon as possible,” the committee said. At the same time, the JMMC extended the period in which non-compliant members should compensate for prior overproduction from the end of September through the end of December 2020. The laggards in compliance have pledged that they would fully compensate for their overproduction. “This is vital for the ongoing rebalancing efforts and helping deliver longterm oil market stability,” OPEC said, and noted, as other organisations did, that the recovery from the crisis has not been equal around the world. “The JMMC observed that the recovery has not been even across the world and an increase in COVID-19 cases has appeared in some countries. In the current environment, the JMMC emphasised the importance of being pro-active and pre-emptive and recommended that participating countries should be willing to take further necessary measures when needed,” the committee said. At the end of the JMMC meeting, Saudi Arabia’s Prince Abdulaziz bin Salman had a warning for oil speculators and traders, too. “Anyone who thinks they will get a word from me on what we will do next, is absolutely living in a La La Land... I’m going to make sure whoever gambles on this market will be ouching like hell,” he said.

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Middle East Largest oil, gas firms in Middle East announce deals, discoveries Meanwhile, Saudi Aramco announced at the end of August the establishment of an integrated Corporate Development organisation to optimise the company’s portfolio. The organisation, which became operational on 13 September, will be aimed at strengthening Aramco’s resilience, agility, and ability to respond to changing market dynamics. “The Corporate Development organisation will focus on growth opportunities as we further sharpen and strengthen our strategic focus to optimise our portfolio and, in doing so, maximise value for our shareholders,” Saudi Aramco’s President and chief executive Amin Nasser said. A few days later, Saudi Arabia announced it had discovered two new oil and gas fields in the Kingdom’s north. The Abraq al-Toloul oil field has a flow rate of 3,189 bpd of Arab Light and 3.5 million cubic feet of natural gas, while the Hadabat al Hajara gas field has a daily production rate of 16 million cubic feet of natural gas and 1,944 bpd of condensate—a type of ultra-light oil, the Energy Minister, Prince Abdulaziz bin Salman, said.

UAE promises to compensate for overproduction in August The United Arab Emirates (UAE), typically an ally of the Saudis in ‘leading by example’ in the oil production cuts, emerged as one of the least compliant OPEC+ producers in August. The energy minister of the UAE, Suhail Al Mazrouei, admitted that his country breached its oil production quota in August by 100,000 bpd, but promised to compensate for the overproduction. “While the UAE’s production increased to 2.693 mb/d in August, measures have been taken to compensate for this temporary increase due to peak summer electricity demand in the UAE, which required an increase in oil production and associated gas,” Al Mazrouei said on 1 September.

Saudi Arabia announced it has discovered two new oil and gas fields in the Kingdom’s north.

In the UAE, ADNOC announced in early September that its subsidiary ADNOC Onshore awarded two Engineering, Procurement, and Construction (EPC) contracts to upgrade two Main Oil Lines and crude receiving facilities at the Jebel Dhanna Terminal in the Emirate of Abu Dhabi. The contracts have a combined value of around US$245 million (899.9 million UAE dirham) and were awarded to China Petroleum Pipeline Engineering Company Limited – Abu Dhabi and Abu Dhabi-based Target Engineering Construction Co. “The EPC contracts awarded by ADNOC Onshore will increase the capacity of the two main oil lines and upgrade the Jebel Dhanna Terminal to enable it to receive Upper Zakum and Non-System crude for delivery to the Ruwais Refinery West project,” said Yaser Saeed Almazrouei, Executive Director of ADNOC’s Upstream Directorate.

“The UAE remains fully committed to the OPEC+ agreement, as illustrated in June when we cut an additional 100,000 bopd from our agreed quota,” he added. In further steps to ensure compliance going forward, the minister said that “Abu Dhabi National Oil Company (ADNOC) has notified its term customers that a 30% nomination cut will be applied to all grades in October.” ADNOC is also set to reduce supplies for November by 25%, according to a statement seen by Bloomberg.

Abdulaziz bin Salman Al-Saud

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By Tsvetana Paraskova

Europe

Energy Review

Innovative offshore logistics operations, the UK and European Union’s paths to net zero, and green energy commitments from major oil and gas firms were the highlights of the past month in European energy.

Oil & Gas Norway’s Equinor completed the world’s first logistics operation with a drone to an offshore installation. In this operation, a drone flew a 3D-printed part for the lifeboat system from the Mongstad base to the Troll A platform in the North Sea. “Drones could reinforce safety, boost production efficiency and contribute to lower CO2 emissions from Norwegian oil and gas. Drones will also play a role as we shape new energy solutions on the Norwegian shelf,” Arne Sigve Nylund, Equinor’s executive vice president for Development and Production Norway, said in a statement. Norway reduced its oil production in July by 120,000 barrels per day (bpd) to 1,739,000 bpd, as part of its plan to contribute to a faster stabilisation of the oil market with cuts in its production from 1 June until 31 December 2020, the Ministry of Petroleum said at the end of August. Maersk Drilling set in the middle of September an ambitious climate target as part of its overall sustainability strategy. Maersk Drilling will aim to reduce the intensity of carbon dioxide (CO2) emissions from its drilling operations by 50% by 2030. “Our contribution to a sustainable energy future is to significantly reduce emissions from our operations and to explore ways to store CO2,” CEO Jørn Madsen said.

www.ogvenergy.co.uk I October 2020

Scotland’s ports and harbours can tap into the huge potential created by the development of offshore wind in the future.

Renewables Consultancy Wood Mackenzie published in September a report, ‘Closing the Gap: Technology for a Net Zero North Sea’, for the Oil & Gas Technology Centre (OGTC) and with support from Chrysaor and the Scottish Government. The report concluded that maximising the opportunities to innovate across the renewable and fossil fuel sectors could create more than 200,000 jobs across the UK and contribute more than £2.5 trillion to the nation’s economy by 2050. It would also create a diversified energy sector, support a new generation of highly skilled jobs and open up exciting export potential. This vision could be realised with new investments of £430 billion, including in oil and gas platform electrification, optimised and standardised floating offshore wind designs, innovative hydrogen technologies to improve blue and green hydrogen production and yield, and new solutions to cut the costs of carbon capture and storage (CCS). “We need to digitise our offshore energy sector and solve big challenges like energy storage, infrastructure redeployment, transmission systems and cost-competitive floating wind structures. By doing this, we can create strategic advantage and valuable export opportunities,” said Colette Cohen, CEO at OGTC.

Scotland’s government announced in early September £1.6 billion funding to low carbon energy to secure a just transition to a net zero economy, including a £100-million Green Jobs Fund, investment in heat and energy efficiency and industrial decarbonisation. At the end of August the UK recorded a record-high share of wind power in its electricity generation, the National Grid said. On 26 August, wind power made up 59.9%, or 14.2 GW, of Britain’s electricity demand. “Renewables are breaking records faster than anyone expected, and this new wind record is a clear signal of the future of our energy system,” RenewableUK’s Director of Strategic Communications Luke Clark said, commenting on the record. The UK currently has wind energy capacity of 24 GW – 10.4 GW offshore and 13.6 GW onshore – and last year provided 20% of UK power, according to RenewableUK.

In carbon capture and storage, Europe could see US$35 billion in development spending through 2035, with most capacity coming in the UK, Rystad Energy said in a report in early September. Nearly Opportunities to 80% of the expected installed innovate across the capacity of CCS projects is set to come from UK projects in the renewable and fossil North Sea, Rystad reckons.

fuel sectors could create more than 200,000 jobs across the UK

The Crown Estate reported in the middle of September a profit of £345 million for the financial year 2019/20, up by 0.4% compared to 2018/19, driven by continued growth in fully operational offshore wind farms. Earlier in September, Crown Estate Scotland published a new report examining how Scotland’s ports and harbours can tap into the huge potential created by the development of offshore wind in the future. The key finding of the research, carried out by technical consultants Arup, was that Scotland has good technical capability to support offshore wind port functions in some, but not all locations. “Scotland has fantastic port facilities as well as some of the best offshore energy resources in the world; making sure these two are successfully aligned can help us take a giant leap towards our Net Zero commitments, and help to build a green economic recovery for Scotland,” said Colin Palmer, Director of Marine for Crown Estate Scotland.

The Offshore Wind Industry Council (OWIC) and the Offshore Renewable Energy (ORE) Catapult reviewed the opportunities of green hydrogen production in the UK in a report in early September. According to the report, the development of an indigenous green hydrogen industry could generate £320 billion for the UK economy and sustain up to 120,000 jobs by 2050. The UK has the right level of offshore wind capacity potential, and a strong industrial base, combined with world-leading academic research, to develop a sustainable, low-cost green hydrogen industry, one that produces hydrogen without CO2 emissions from electrolysis of water, the report found.

The European Commission presented on the 17th of September its plan to reduce EU greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels. “The energy system will be at the heart of this effort. We will build on the success story of the European renewables sector, look at all the tools at our disposal to increase our energy efficiency and lay a firm foundation for a greener Europe,” Kadri Simson, Commissioner for Energy, said in a statement.

Europe

Equinor signed at the end of August Agreements for Lease (AfL) with The Crown Estate for two offshore wind farm extensions in the UK— Sheringham Extension and Dudgeon Extension—which are set to double the size of Equinor’s total capacity from its Norfolk operations to over 1,400 MW, enough to power over 1.5 million homes.

Green Company News bp announced in early September a partnership with the city of Aberdeen under which bp will serve the citizens of Aberdeen as a strategic planning and technical advisor, helping to shape solutions for the city’s net zero path. “Working in partnership with the Aberdeen City Council, we’ll explore opportunities like accelerating the adoption of electric and hydrogen-powered city vehicles, energy efficiency programs for buildings and circular economy,” William Lin, Executive Vice President, Regions, Cities and Solutions at bp, said. bp also announced in September its debut in offshore wind, via a new strategic partnership with Equinor. bp will buy a 50% interest in Equinor’s Empire Wind and Beacon Wind assets in the United States for US$1.1 billion. The assets have the potential to power more than 2 million homes in the US.

Working in partnership with the Aberdeen City Council, bp will explore opportunities like accelerating the adoption of electric and hydrogen-powered city vehicles.

Another major oil firm, Total, via its subsidiary Saft, created a joint venture with Groupe PSA/ Opel named Automotive Cells Company (ACC), which will develop and manufacture high-performance batteries for the automotive industry from 2023. The JV plans mass production at two ‘gigafactories’ in Europe, in Douvrin, France, and Kaiserslautern, Germany. “Our ambition is to leverage the recognised expertise of our subsidiary SAFT in batteries and the industrial know-how of our partner PSA to meet the strong growth of electric vehicles in Europe,” Total’s chairman Patrick Pouyanné said. Italy-based energy infrastructure providers Snam and Saipem signed an agreement to start working together on new energy transition technologies, from green hydrogen to capturing and reusing CO2, with the aim of fighting climate change and contributing to the launch of the hydrogen market, supporting the European Commission’s Hydrogen Strategy.

“The partnership also fits our strategy perfectly. It’s helping us pivot into becoming a truly integrated energy company, whilst also taking a significant step towards our aim of having developed 50GW of #renewables by 2030,” bp chief executive Bernard Looney said. Montrose Port Authority and SSE Renewables finalised plans in September for the operations and maintenance base for Seagreen offshore wind farm, after extensive consultation with the local community and other port users. The 1,075 MW Seagreen project, 27 kilometres off the coast of Angus, is a £3-billion joint venture between SSE Renewables and Total, and will be Scotland’s single largest source of renewable energy, providing a significant contribution to Scotland’s net-zero ambition and enough clean, renewable energy to power 1.3 million homes.

Equinor signed at the end of August Agreements for Lease (AfL) with The Crown Estate for two offshore wind farm extensions in the UK.

Norwegian subsea contractor Ocean Installer and Norway’s ship builder Vard have partnered to develop one of the world’s most advanced turbine installation vessels for offshore wind. The new vessel will be able to install future giant wind turbines offshore. “We will jointly be developing one of the world’s most advanced vessels for installation of future offshore wind turbines, which are too large for the existing turbine installation fleet,” said Erik Haakonsholm, General Manager of Vard Group Offshore & Specialised Vessels.

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By Loren Steffy By Loren Steffy

Part of the U.S. Burns, Part Floods, as Exxon Mobil Doubles Down on Fossil Fuels

America’s biggest oil company is in big trouble, and its struggle reflects a widening gap in the U.S. oil patch over how quickly the country will shift from fossil fuels to renewables.

Of course, Exxon could benefit from its steadfast commitment to fossil fuels if oil demand surges in the as the COVID-19 pandemic subsidies, or if the current increase in renewables investments fail to produce results. But the company is increasingly becoming an outsider among the majors, many of whom, like Shell and BP, have announced large investments in renewables projects this year. Woods has been dismissive of those moves, which remain a small percentage of those companies’ overall capital investment. This summer has intensified the pressure on oil companies as a string of natural disasters has ravaged the U.S. Wildfires burned hundreds of thousands of acres up and down the West Coast, It’s been a rough year for Exxon Mobil, fueled by record heat and dry winds. Meanwhile, which reported back-to-back quarterly one of the most active hurricane seasons losses and which in August was on record played out in the Atlantic. By late September, Tropical Storm Beta was approaching ousted from the Dow Jones Industrial the Texas coast, named for the second letter of Average, America’s preeminent the Greek alphabet because the National stock market index, after Weather Serviced had already used all the names on its list for the being a member for year. Earlier, Hurricane Sally almost a century. dumped record amounts of The company’s financial rain on Florida and Alabama Now, analysts predict the situation has worried just weeks after Hurricane company will lose more investors, and it’s Laura slammed into than $1 billion this year, a Louisiana with catastrophic compounded by the far cry from the $46 billion winds. profit it booked in 2008—at the time a record for any U.S. company.

seeming reluctance of Exxon management’s to change direction.

The company’s financial situation has worried investors, and it’s compounded by the seeming reluctance of Exxon management’s to change direction. Chief executive Darren Woods launched a ambitious $230 billion spending plan two years ago aimed at boosting production by 1 million barrels a day by 2025. Yet production has inched up only slightly since 2018.

Scientists say we are entering a new era of large-scale— and more frequent—climate disasters, and they’re advancing more quickly. Pressure from voters and stakeholders is likely to intensify in the form of stricter regulation and candidates that will be less sympathetic to the industry.

It has cut $10 billion, or about 30%, of its capital spending for the year and slowed down projects around the globe. It has also been borrowing to avoid cutting its dividend to shareholders, which has long been seen inside and outside the company as sacrosanct.

Companies such as Google have pledged to use only carbon-free energy sources by 2030, and Amazon has made similar pledge for 2040. Such policies, as they spread, could have a profound effect on demand. BP, which itself has pledged to eliminate or offset all emissions by 2050, has predicted global oil demand could fall by as much as 80% in the next 30 years. Bank of America has forecast peak demand in a decade.

So far, Exxon has not announced layoffs, even as other U.S. majors have shed about 35,000 jobs. But the company has said it will stop matching contributions to employees’ 401k retirement plans in October, and it will undergo a sweeping review of its workforce, which could lead to job cuts in the future.

Against this backdrop, Exxon’s continued allegiance to fossil fuel development seems out of step. But it’s a more immediate threat— the current prices for those fuels—that’s behind most of the company’s financial struggles. Abundant domestic production from shale plays has driven down prices for the entire industry, but those

www.ogvenergy.co.uk I October 2020

declines came after Exxon, under former CEO Rex Tillerson, paid $30 billion in 2010 for XTO Energy, a major shale producer. At the time, natural gas prices were near a 10-year high. Exxon’s plans to expand production in fields such as the Permian Basin of West Texas have been curtailed by the pandemic. It also has made big bets in areas such as the Arctic, where the Trump administration recently signed an executive order allowing drilling in the Arctic National Wildlife Refuge’s 1.56 millionacre coastal plain. The area is home to polar bears, caribou herds, Arctic foxes and some 200 species of birds, and environmental groups in mid-September wrote to Exxon and other oil companies warning against leasing the land. Some 250 environmental and indigenous groups, representing about 27 million members, warned Joe Biden Woods and the CEOs of other key Arctic drillers, including Chevron, ConocoPhillips and Hilcorp Energy, of a “major public backlash” and longlasting reputational damage for any company that drills in the region.

The letters follow a major lobbying campaign that convinced five of the six largest U.S. banks to eschew financing for any fossil fuel development in the Arctic. As the Arctic dispute rages, the cost for renewables development continues to decline. The price tag for a new utility-scale solar farm in the U.S. fell by 50% from 2013 to 2018, while the cost of new wind installations dropped by 27%, according to the U.S. Department of Energy. Prices for combined-cycle natural gas generating plants dropped 13% during the same period. The declines represent lower costs for solar panels, generating equipment and construction expenses. Wind, solar and natural gas-powered plants accounted for more than 98% of the new generating capacity added to the U.S. electricity grid in 2018. The trends, in other words, are moving against U.S. producers, many of whom have been slow to address climate change. As smoke from West Coast wildfires blanketed much of the country in September, as Beta bore down on Texas with two months left in hurricane season and as climate issues took on a bigger role in heading towards November’s presidential election, they may be running out of time. Exxon’s financial struggles, while prominent, may be just the beginning.

AUSTRALIA

“The View from Down Under” By Andy Hogan

MEMBERS FEED

In a catch up with Cairn this week DQ were told that they are planning to drill the Diadem prospect in the UK next year. Planning and tendering is expected to take place in 2020 into 2021 with the activity placed toward the end on 2021. A decision on whether to drill another well in Mexico next year will be made in the next few months with the agreement of partners ENI. Decision Expected Q3 2020. Suriname activity Is in the pipeline but drilling is a long way off possibly 2022 so interim activity will likely only involve 3D Seismic acquisition and evaluation. Cairn also sold their interests in senegal giving a large return to shareholders and leaveing them in a strong cash position.

Geothermal Power provider Kengen has engaged with suppliers ahead of drilling 12 Geothermal wells in Ethiopia. There are two Scopes out to tender right now one for OGCT and another for Casing. This is a phased development with a significant approved budget and further tenders are expected to follow. Phase I comprises the purchase of drilling rigs while Phase II is for the provision of drilling services. KenGen is supplying about 30% of the components of Phase II. Good opportunity and timing to engage with Kengen ahead of future drilling services tenders.

Focus on decommissioning this month, Helix reported to be bringing the Q7000 DP3 well intervention vessel to SE Australia to work for Cooper Energy at the end of 2021, they have several wells to P&A on the Basker Gummy Manta field offshore Gippsland. Other opportunities no doubt being looked at for the vessel which is expected to mobilise from West Africa.

Tender for decommissioning for the Tui field in New Zealand is eagerly awaited, the New Zealand Ministry of Business, Innovation and Employment will be issuing the ITT presumably once they have the Project Management team on seat. OMV New Zealand are believed to have a few old subsea wells to decommission.

For further information or for an introduction contact DQ Offshore at info@dqoffshore.com

the field over 2021 / 22. US$1bn had been earmarked for this. Tenders had been issued for various aspects of the decommissioning programme over 2019. The new owners have decided there is life in the field and will drill three wells in 2021, pushing estimated decommissioning of the field out to 2024.

The Northern Endeavour Task Force (NETF) based in Canberra has responsibility for Corallina / Laminaria fields after the liquidation of Northern Oil and Gas Australia in late 2019, it is likely decommissioning will be the forward plan and issuance of procurement documents is awaited. Santos, ENI and Woodside are all planning for decommissioning over coming years, many of which will be subsea. Over the course of a recent decommissioning webinar, NOPSEMA revealed there are circa 240 offshore wells ready for P&A. The Bayu Undan field in the Timor Sea passed from ConocoPhillips to Santos ownership in mid-2020. ConocoPhillips had been well down the stage of planning to decommission

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Join the OGV Community and take part in our second monthly forum in October discussing the theme: Decommissioning Our second online membership forum will be on October 22nd at 2pm and will be chaired by Douglas Mundie Managing Director, Assured Process Management Ltd. We will be discussing various themes around "Decommissioning" and will host members of the "OGV Community" as part of the panel that will communicate their views on this topic, alongside influential members of the Decommissioning sector.

OVER THE LAST MONTH WE HAVE SEEN A NUMBER OF NEW SIGN-UPS TO THE OGV COMMUNITY

DECOMMISSIONING ZONE

By Tsvetana Paraskova

OIL & GAS DECOMMISSIONING:

CHALLENGES

OPPORTUNITIES

As oil and gas fields around the world mature, the industry faces increased work in decommissioning—the safe plugging and abandonment of wells and the removal of the platforms that have reached the end of their productive life. In the North Sea, one of the world’s most mature offshore production basins, decommissioning will be a major industrial challenge, as well as opportunity for the UK industry, over the next decades. There are hundreds of platforms, millions of tonnes of infrastructure, and thousands of wells that will need plug & abandonment (P&A), removal, and recycling in the coming years. Decommissioning is a costly business but costs have been declining in recent years. Moreover, this segment of the oil and gas value chain represents an opportunity of innovation, increased cooperation in the supply chain and operators, and development of first-class skills and capabilities within the oil and gas industry in the UK. Decommissioning could provide more opportunities for work to skilled offshore workers and the supply chain that have fallen on hard times since the latest oil price crash, which resulted in slashed capital expenditure (capex) plans of operators for drilling new wells. The global pool of decommissioning projects could reach as much as US$42 billion through 2024, Rystad Energy has estimated.

“A protracted low price environment can potentially motivate operators to leverage low contract prices and commit to their asset retirement obligations, thus spurring decommissioning activity in the Northwest Europe region. This will also provide welcome opportunities for contractors in an otherwise gloomy oilfield services market,” said Sumit Yadev, energy service analyst at Rystad Energy.

Decommissioning costs vary because of different climate, regulations, and locations.

The UK North Sea is set to dominate the global decommissioning work and spend over the next five years. So far, only about 15% of North Sea assets have been decommissioned. Rystad Energy expects an average of 23 assets to cease production every year in the coming five years.

www.ogvenergy.co.uk I October 2020

The UK is set to lead the way with nearly 80% of total estimated expenditure on Northwest European decommissioning in the next five years, followed by Norway with 14% and Denmark with 4%. The pool of removal projects in the North Sea region for the period through 2024 is estimated at about US$17 billion, Rystad Energy says.

DECOMMISSIONING ZONE

“While decommissioning is becoming a pressing concern for North Sea operators, the prevailing low-price environment presents an opportunity for driving down costs. For instance, after the oil price slump of 2014, rig and vessel rates declined by 30% to 40%. We expect rig and vessel rates to exhibit a downward trend this time as well, with declines likely lasting until 2022,” Yadev noted.

Decommissioning costs vary because of different climate, regulations, and locations . A recent study from Rystad Energy showed that the cost of removing a steel platform in the North Sea, excluding subsea infrastructure, is more than twice the cost of the same removal task in Southeast Asia. The removal of a steel platform, located in 60 meters of water with four piles, a topside weight of 1,500 tonnes and a jacket weight of 800 tonnes would cost US$22.35 million in the North Sea, compared to US$9.08 million in Southeast Asia, mostly because of the higher spread rates and weather conditions which can represent a significant operational challenge. “The removal cost per platform can also vary within the same region depending on the time and scale of the decommissioning campaign. Removing multiple facilities at the same time can help optimise costs by spreading the mobilisation and demobilisation costs across different assets,” said Sara Sottilotta, energy service analyst in Rystad Energy. For the UK, the Oil and Gas Authority (OGA) has estimated that total UK offshore oil and gas decommissioning dropped by a further 2% on a like-for-like basis to £48 billion in 2019. The OGA’s latest annual report UKCS Decommissioning Cost Estimate 2020 showed that estimated decommissioning costs have been reduced by 19% since the OGA began benchmarking in 2017.

The OGA’s 2017 baseline estimate was £59.7 billion, while industry and government have a shared objective to reduce decommissioning costs by at least 35% compared to the 2017 baseline, or to levels below £39 billion.

The 2% cost reduction on a like-for-like basis in 2019, building on the 17% achieved in 2017/2018, was driven by minor improvement in planning and execution practices, which helped reduce the estimated cost of platform and subsea infrastructure removals in the northern North Sea (NNS) and central North Sea (CNS) and reduced cost risk associated with estimating uncertainties. Estimated decommissioning costs remain at £51 billion in 2020, the OGA said. “Looking ahead, there’s more to be done to drive costs down safely and sustainably. We’ve seen how performance can be improved when learning and good practice are shared,” said Pauline Innes, Head of Decommissioning at the OGA. “Notwithstanding this success, the next 16% of cost reductions will need behaviours and approaches beyond those to-date, with aligned/incentivised commercial models routinely adopted, and cost-effective outcomes achieved regardless of which operator is contracting the work,” Innes noted. The UK’s leading offshore industry body, OGUK, commented on the report, with Joe Leask, decommissioning manager at OGUK, saying: “While significant progress has been made over the years, new ways of working will be critical to ensure we stimulate activity in the supply chain, keep skills and infrastructure in the UK, and meet our savings target.”

There will be a lot of decommissioning work in the future, since as many as 470 installations will need to be decommissioned in the UK North Sea over the next 30 to 40 years, according to estimates from Wood Mackenzie. By 2029, more than £17 billion will be spent on decommissioning in the UK– twice the decommissioning spend of any other country, Romana Adamcikova, Senior Research Analyst, North Sea Upstream at WoodMac, said in late February. The decommissioning sector could be critical to maintaining activity in the UK North Sea and maintain essential skills after the pandemic-driven crisis, Scotland’s Just Transition Commission said in the recent report Advice for a Green Recovery. “Focusing in particular on plugging and abandonment activity (where much of the value in decommissioning lies) would result in the creation of immediate jobs throughout the whole supply chain. Decommissioning has no impact on emissions but conserves capacity in the short-term and provides a skills bridge as we develop our capability and supply chain through the energy transition,” the JTC said. “Decommissioning could act as a bridge for workers displaced in recent months who could play a key role in these emerging energy industries and new manufacturing opportunities. Decommissioning would be available to particularly hard hit groups such as offshore drillers,” according to the report.

DECOMMISSIONING ZONE

The future is now for DECOMMISSIONING

Sustained lower oil prices, further impacted by the COVID-19 pandemic, have placed decommissioning firmly on the plans for operators and service companies in the oil and gas industry.

n many parts of the world, decommissioning is increasingly seen as a normal part of business, sitting alongside exploration, new field development and in-field investment. The opportunities in decommissioning are significant. The emerging global decommissioning market has been valued at $85billion (£67billion)*. Key locations include offshore North America, Latin America, South East Asia, Africa and North Asia. However it is in Europe – specifically the North Sea – where decommissioning spend is expected to be greatest in the years ahead.

Veristar AIM3D

The services are provided by Bureau Veritas and Bureau Veritas Solutions Marine & Offshore (BV Solutions M&O), which was established two years ago as an independent organisation from BV’s classification and certification activities. BV Solutions M&O brings together services and people from different domains within Bureau Veritas to create an international, proactive and dedicated capability, offering value to clients through technical services and solutions. The decommissioning offering has been created as a holistic collation of all services that can be utilised in a project. The range of services available extend from environmental impact assessments through to structural integrity studies, lifting plans, stakeholder management, downstream waste management assurances, safety case management of change, monitoring of recycling processes and everything in between. Specific services are also pertinent to floating assets provides and decommissioning yards.

Some 43% of the $85billion global a true, as is, four-dimensional decommissioning spend will be made in the North Sea. As a mature picture of an asset’s condition basin, the region leads the way Driving down the costs of decommissioning instantly, everywhere on any in decommissioning knowledge, skills and expertise. Performance The adoption of advanced technologies such as digital twinning platform or device, at standards are unequaled and the UK’s will support the industry’s focus on lowering decommissioning any time. decommissioning work breakdown costs. The company’s Veristar AIM3D system within normal structure (WBS) guidelines set a global asset operations improves visibility and understanding of the performance framework that many other asset, allowing operators to make the right choices faster to improve countries follow. The world is looking to the UK efficiency, safety, integrity, performance, return on investment and carbon for capability and competency. footprint reduction. In a recent overview of UK North Sea decommissioning, global consultancy group Wood Mackenzie predicted 90% of operator spend will be on abandonment expenditure versus just 10% on capital expenditure by 2029. That timeframe could be shortened due to the impact of COVID-19 and this year’s oil price crash as assets reach the end of their economic viability earlier. In the UK, there is a Government target to reduce the cost of decommissioning by 35%. A 19% reduction has been reported from 2017 and 2020.

Research from Bureau Veritas suggests Veristar AIM3D could save between 9% and 15% on total decommissioning project costs. Data which has been shared with the UK industry regulator the Oil and Gas Authority, shows Veristar AIM3D could save operators 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.

Global support, local solutions

Support from the experts For Bureau Veritas, a world leader in testing, inspection and certification services, decommissioning has been a strategic part of the business for many years. The company was providing a range of services for clients long before the industry defined them as ‘decommissioning’. Today, the company provides a comprehensive decommissioning offering to clients across the project life-cycle – an end-to-end compliance solution from the planning phase right through to shutdown, removal and monitoring – around the globe.

www.ogvenergy.co.uk I October 2020

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

However, different regions in the world require their own, bespoke decommissioning solutions. The regulatory environment and maturity of the individual markets will have a bearing on the services required. For example, the North Sea is a highly regulated and mature market focusing on reducing the cost of decommissioning for operators and the UK taxpayer, while in Brazil, which will make up 11% of global decommissioning spend, decommissioning regulations only came into force in April 2020. The Brazilian market is therefore focused on navigating theses new regulations and starting decommissioning. Decommissioning in the US, which is predicted to make up 13% of global spend, is regulated by the Bureau of Safety and Environmental Enforcement (BSEE). The country also has a ‘rigs to reefs’ program administered by the National Oceananic and Atmospheric Administration (NOAA) that saves a significant portion

Bureau Veritas assist their clients throughout the lifetime of their assets, products and infrastructure, helping them assure quality, reduce costs, increase productivity and foster a more responsible, sustainable culture.

Find out more at: www.bureauveritas.co.uk

Decommissioning Update

DECOM NORTH SEA

In common with just about every industrial sector, decommissioning has felt the effects wrought by the global pandemic of the past six months. Whilst we have experienced challenges, there has also been positivity; this column aims to give you a brief insight into those.

Programme Visibility

of decommissioning costs, although 50% of savings must be returned to specific environmental programs. In South East Asia, which will see 12% of global spend, operators are fully responsible for the funding of decommissioning, and while COVID-19 and the 2020 price crash have caused a slow down in decommissioning, work is expected to increase next year. In many cases, Bureau Veritas has supported governments in the creation of regulations, providing a unique understanding of local requirements. The strength of the Bureau Veritas global network, combined with a deep understanding of local market maturity and regulations, ensures clients receive bespoke solutions to meet their needs – wherever they are.

Delivering decommissioning success Recent examples of the diverse range of successful decommissioning projects undertaken by the company include a feasibility study for the Port of Dundee, certification of a new facility to ISO30k standard at a shipyard in Malaysia, verification and sampling for major North Sea decommissioning projects and marine assurance support for a multitude of projects including a recent North Sea floating production, storage and offloading vessel (FPSO). In the Gulf of Mexico, MatthewsDaniel, a Bureau Veritas group company and a global leader in loss adjusting and marine services, has been involved in the removal of many assets since 1992 and has undertaken a number of notable industry firsts. These include the first ever decommissioning and reefing of a spar (Red Hawk: the world’s only cell spar) and the installation and decommissioning of the Independence Hub (the deepest installation in the world at the time).

Conclusion From receiving limited attention just a few years ago, decommissioning has a very real presence in the market – as are the business opportunities available. To understand these and the unique challenges decommissioning presents, partnering with a specialist that thoroughly understands this niche sector from nearly 200 years of global and local experience can only serve to strengthen businesses offering.

Currently, the biggest challenge facing the sector is deferral of projects. This is not unique to the COVID-19 landscape – it’s something that is part and parcel of decommissioning activity. However, right now there is the added pressure of a Supply Chain which, in some cases, is scaling back its operations. With that in mind, it must maximise its reduced resources and it seems obvious that a greater visibility of operators’ plans goes a long way to helping achieve that. There is work going on to ensure that the Supply Chain has sight of the most robust, complete information possible in order to make the most informed decisions when it comes to tendering for work and assigning resources. The Oil & Gas Pathfinder is a perfect example of this. Whilst there are varying levels of detail submitted, it does provide useful information around decommissioning programmes and equally can instil some confidence in the Supply Chain that work is on-going and upcoming on the UKCS.

International Connections It has long been said that the UK has the ability to become a decommissioning centre of excellence, exporting its knowledge and skills to other basins overseas. This still holds true, but it’s doubtful if any of us would have expected a global lockdown on travel to actually facilitate this. Decom North Sea has helped its members make significant headway both in Brunei (working alongside SDI) and Malaysia (in partnership with Petronas) and where we’re seeing real success is when the relationships are built not just at CEO or Head of Decommissioning level, but also with Technical Authorities and engineering; those who our Supply Chain will find it most relevant to meet, and vice versa. The effects of COVID-19 have made access to these individuals far easier. Equally, online communication has made it far cheaper and faster to make the right connections. The hope is that this way of working continues well into the future, regardless of travel restrictions, as it allows SMEs to extract much more value out of their international business development activity.

Faith in the Future As some of you reading this will know, Decom North Sea - in conjunction with Aberdeen Harbour Board - was due to host a live event next month, followed by another in November (jointly hosted with the National Hyperbaric Centre). Due to the increase in restrictions, we have made the decision to postpone these events, but we think it is incredibly important to share with you that both hosts, together with almost all event sponsors and exhibitors have rolled their support over until when they take place in early 2021. That in itself indicates a positive future for our sector, and we look forward to seeing you then.

DECOMMISSIONING ZONE

30 02

An opportunity NOT TO WASTE What happens to the waste metal left over following the decommissioning of large-scale offshore structures? Who takes responsibility for it and where does it go? And, why should we care?

ou’d be forgiven if you hadn’t heard of a circular economy, but it won’t be through the lack of John Lawrie shouting about it. For those of you still in the dark, a circular economy is one whereby the material, products or goods that are currently in circulation are kept in use for longer, either through reuse, re-purpose or recycling. Nobody wants to see anything put to waste these days, and rightly so. Take our domestic bins for example; we used to throw all household waste out in the same bin and not think twice about it. But now, we have one bin for recyclable materials, one bin for food recycling and maybe even another bin for garden waste, as well as the general waste bin we throw everything else into. If we take such good care of separating these items out so they can be handled appropriately, are we doing the same with our industrial sized waste materials? The answer is, we are. Or at least, John Lawrie is. Our concern, however, is just how much value is being placed on those final steps in the decommissioning process. Once the structure has come onshore, is that the last thought anyone gives to it? We think it is vitally important that our customers understand the importance of managing this sort of waste effectively, efficiently and ethically, and knowing exactly where the material will end up. John Lawrie’s expertise lies in the dismantling of large oilfield, subsea and industrial infrastructure having been carrying out such work for more than 20 years. Dismantling these structures is one step in the process, the second is what to do with it once it has been dismantled.

Our primary objective is to maximise reuse, repurpose and recycling so that we can minimise disposal. Our aim is zero to landfill and so, to this end, our processing methods result in high recovery and recycling rates for a wide range of materials, in many cases up to 100%.

www.ogvenergy.co.uk I October 2020

Our first response to managing the dismantling of these sorts of structures is what can be reused – can any part of the material be reused for the same purpose again. The likelihood in these sorts of scenarios is no, but it is always our first thought.

recycled into new steel products. By shipping our processed scrap direct to European steel mills for smelting, we provide an end-to-end closed loop service in accordance with client and regulatory requirements.

It’s a win, win.

The second thing we consider is, can any of this material be re-purposed for a different use. Our oil and gas clients get the assurance For example, we supply redundant of safe and ethical onshore anchor chain or wire rope from management of their waste metal decommissioning projects to the and redundant steel tubulars European aquaculture industry from quayside to re-purpose Our aim is zero to landfill for use as weights and or recycling, and our piling ballasts for fish pens. clients get a quick supply and so, to this end, our of the size and length of processing methods result in Our main re-purposing, steel tubulars they require high recovery and recycling however, is that of pulled for their construction steel tubulars. Once these projects. Both get the rates for a wide range of pipes are no longer required sustainability reporting of materials, in many cases by our operator and tier saving up to 0.96 tonnes 1 clients, we guarantee to of CO2 emissions for every up to 100%. purchase them in any quantity tonne of steel pipe re-purposed. and from any global location, bringing them into our yards for Our message is simple, if you work with cleaning and processing and then supply them to the UK and European construction and John Lawrie, we provide the assurance that civil engineering industries as an alternative to your waste metal is managed efficiently, concrete piles. ethically and responsibly with the material always going straight to the end user. And for those pipes that we receive that are We ensure reuse or re-purpose wherever not fit for re-purpose, we have the facilities to possible, or if that’s not a viable option we process the material ready for recycling to be process the material ready for recycling, made into new products. We handle around shipping it directly to European steel mills to 200,000 tonnes of waste metal every year be smelted and made into new products. which is sorted and sheared ready to be

John Lawrie is an industrial metals reuse, repurpose and recycling specialist. We create value and support our clients as they work towards net zero through a circular economy approach.

Find out more at: www.johnlawrie.com

DECOMMISSIONING ZONE The circular economy is an alternative to the outdated linear economy (make, use and dispose) where resources remain in use, whilst maintaining their value, for as long as possible. This consists of more than just recycling; it involves an assessment of the entire life cycle of any process, creating and optimising value by reconsidering what might be seen as waste, or a system loss, and identifying opportunities to keep products and materials in use. Circular economy principles have been embraced by many industries, and an opportunity now exists for the oil and gas sector to take advantage of its many environmental and economic benefits.

Planes, Trains & Automobiles

(AND OIL & GAS TOO)

Planes

tunnels below. The warm air is then used to heat water, which is then pumped to buildings in the neighbourhood through a network of underground pipes, making it possible for waste energy to lead to a sustainable heating solution.

Commercial airliners will typically be in service for around 20-25 years. During that time, each airplane will fly an average of 25 million miles – the equivalent of circumnavigating planet earth 1,000 times, with some long-haul aircraft clocking up more than 60 million miles.

The Greater London Authority (GLA) have estimated that there is enough heat wasted in London to meet 38% of the city’s heating requirements. With implementation of further, district heating networks this could rise to 63% of demand by 2050. Passengers also benefit from cooler tube trains, whilst the population as a whole benefit from lower carbon emissions and improved air quality.

The Aircraft Fleet Recycling Association (ARFA) estimates that over the next 20 years, 12,000 airplanes will be decommissioned. Today, 85% to 90% of the content of retiring aircraft is reused or recycled. Between 40% and 50% of the weight of dismantled aircraft is reused to help keep other aircraft airborne. The remaining unserviceable material is re-purposed, disposed of or recycled, and returned to the supply chain as raw materials.

Automobiles

ARFA is working with 72 companies, such as manufacturers of aircraft and engines, component suppliers and operators, to establish best practice for aircraft reuse and recycling. Collectively, these organisations process over 150 aircraft, and reclaim 30,000 tonnes of aluminium every year. Manufacturers are also ensuring new aircraft are designed, not only for a long, safe and efficient life, but also for end-oflife opportunities.

Trains The commissioning of a new energy centre has now been finalised, which is turning waste heat from the London Underground’s Northern Line into heating and hot water for more than 1,350 homes, a school and two leisure centres in Islington. The Bunhill 2 Energy Centre is considered to be the ‘first of its kind in the world’, and it is located on the site of the disused City Road Underground station, which closed in 1922 due to low passenger numbers. The energy centre houses a large underground fan, which pulls warm air from the Northern line

Renault was the first major auto manufacturer to directly invest in circular economy processes, and this has become an economic success. Renault Environment, formed in 2008, maintains control over the flow of automotive waste materials and parts, and coordinates a large share of the group’s circular economy activities. Renault reuses the parts coming from its ELVs (end-of-life vehicles) and this service assists customers whose vehicles would not economically repairable using only new parts. The company also reconditions and re-manufactures using these parts, undergoing strict industrial processes. 15,000 engines and 18,000 gearboxes are recovered annually throughout Europe. More than 50% of the engine components, and more than 70% of the gearbox components, are refurbished to produce parts guaranteed to perform just as well as new ones, whilst the average price is 40% lower. Any remaining materials, with no reuse opportunity, are recycled in foundries to produce new parts. These processes now represent more than €500 million in revenue each year for Renault, demonstrating that the circular economy can have significant economic advantages for organisations, in addition to the environmental benefits.

Legasea promotes sustainability and reuse, its ethos is one of a Circular Economy, taking one company’s waste and restoring it to be of value elsewhere.

Find out more at: www.legasealtd.com

Oil & Gas Since its incorporation in 2018, Aberdeenshirebased start-up Legasea has grown from a concept into a fast-growing business, that is leading the oil and gas sector in how it manages waste. Having recognised that a linear system is no longer a viable or sustainable option, Legasea utilises a circular economy system, which sees one company’s waste being refurbished and reused elsewhere. Specialising in production systems and controls, and offering a range of electrical, hydraulic and mechanical engineering systems, Legasea operates across a wide range of markets, including subsea oil and gas production, drilling, topsides, and renewables. The company’s key objective is to act in a sustainable manner, and their overall strategy is to provide a ‘shore to store’ service to the oil and gas industry, taking equipment that is no longer required, and finding routes to refurbish, recertify, re-manufacture and reuse it, keeping as many components as possible in use. Excess oil and gas equipment is typically produced to be held as a contingency backup, and it is then routinely scrapped, without being used, due to of the bespoke nature of the equipment. However, Legasea recognises the value of the component parts of these assemblies. Re-purposing them is both a costeffective, and environmentally friendly, solution which is conducive to the circular ethos that they are promoting within the oil and gas industry.

DECOMMISSIONING ZONE

Bilfinger’s core crew knowledge is key to decommissioning success “If you’ve lived in your house for over 10 years, you know all the nooks and crannies and any previous repair jobs or defects. With late life assets and decommissioning, the same is true, and having experienced, asset-familiar teams working on these assets is critical to the safe, efficient preparation for heavy lift and removal.”

ccording to Bilfinger Salamis UK Managing Director Sandy Bonner it’s this core crew knowledge of many of the North Sea’s ageing assets, combined with over four decades experience in maintenance, industrial cleaning and inspection that means the company is well placed for the decommissioning market.

“At Bilfinger, we’ve developed our decommissioning capability over many years, both offshore and onshore. Our clients range from operators, heavy lift companies and engineering contractors. No two projects are the same, as we have extensive capability including surveying, engineering, inspection, specialist cleaning, asbestos management, welding, hot and cold cutting, rigging and lifting. “By offering single-source skilled teams we can deliver significant cost savings, enhanced technical expertise and improved efficiency during pre and postcessation of production.”

Headquartered in Aberdeen, with offices in Great Yarmouth, Groningen and Esbjerg, the company has a strong pan-North Sea Bilfinger has built a infrastructure and logistics capability, strong track record over and skilled personnel recent decades, on over 70 UK work delivering late life sites and offshore and decommission installations.

preparation scopes.

“As an incumbent services contractor we can effectively support our clients as they move into late life phases on their assets. Our teams’ diverse skills are tailored to the lifecycle of an asset,” said Mr Bonner. An active member of Decom North Sea, Bilfinger has built a strong track record over recent decades years, delivering late life and decommission preparation scopes for clients including Altera, CNRI, TAQA, ConocoPhillips and Total. “It’s a natural fit for us. We’ve been working in the North Sea since 1973. If you look at some of the most recent assets to enter the decommissioning

phase, such as the Ninian North, the Audreys, the Tyra and the Banff FPSO, our clients recognise that Bilfinger can to provide a wide variety of skilled tradespeople and can draw on their specialist knowledge to ensure safe dismantling of these assets.” In particular, the company has seen a lot of activity from their Southern North Sea base, last summer with the decommissioning of several satellite assets. “Our team in Great Yarmouth has been heavily involved in decommissioning, as well as some ‘industry-first’ projects,” said Mr Bonner. A collaborative approach with several heavy lift companies means Bilfinger’s clients have access to an extensive service range for topsides preparation and removal. “Last year we were also involved in a major campaign with a heavy-lift partner to carry out preparatory work for the consecutive decommissioning of two offshore assets in the Southern North Sea. We carried out in-depth site surveys to aid strategic planning of the lift, including design, fabrication and installation of aids underdeck to allow final cut of the topside and jacket. Bilfinger removed risers, umbilicals and flow lines as well as structural steelwork as required by our client to allow ease of access while maintaining structural integrity. Working from a walk-to-work vessel, we also installed lifting padeyes and trunnions for the subsequent heavy lift. Our engineers also provided full welding inspection, and caisson lowering, as well as NORM monitoring throughout. The use of our rope access-trained multi-skilled teams minimised the personnel required on-board and maximised efficiency.”

Mr Bonner said Bilfinger are likely to see more decommissioning opportunities linked to decarbonisation efforts from oil and gas operators as part of the energy transition. “Removal of structures isn’t the only option, with repurposing of legacy infrastructure providing further opportunities.”

www.ogvenergy.co.uk I October 2020

Leading industrial services provider Bilfinger enhances the efficiency of assets, ensures a high level of availability and reduces maintenance costs.

Find out more at: www.salamis.bilfinger.com

DECOMMISSIONING ZONE

J+S with their Legacy Locker:

a circular Economy approach to the decommissioning model J+S has emerged in 2020 from a management buyout of the Subsea Engineering Division of Systems Engineering and Assessment Limited, a Cohort business. The team at J+S have provided subsea engineering solutions to the Oil & Gas and Renewable Energy sectors for over 20 years and as part of the buyout chose to return to an updated version of the J+S brand name they have previously been known as. Legacy Locker in the future

he existing management team of Executive Chairman Matt Blair, Business Development Director Simon Smith and Engineering Director James Morris have stayed with the company while new Managing Director Phil Reid has re-joined the team having previously worked for the company. J+S is leading the way in the Oil & Gas industry to optimise the value of existing, unwanted capital equipment and combat the downturn in the offshore market. J+S is committed to adjusting economic, social and environmental behaviours to build a resourceful and sustainable future. To support this goal and to avoid large quantities of fully functional equipment simply being scrapped, J+S has developed their Legacy Locker service over the past 5 years in order to realise the economic value of refurbishing existing unwanted capital equipment and provide better options to their customers.

So what is Legacy Locker? It is a repository of all the spares needed to maintain production It is a store of new and used parts owned and held by J+S It also acts a notional store of parts made available by our clients It is an engineering service to test, refurbish and recertify or reverse engineer obsolete items It is a brokerage service for higher value items owned by Oil & Gas service companies It gives the option to buy, sell and trade your unwanted stock or refurbish and recertify existing stock It is an option for decommissioned equipment other than scrap

How does Legacy locker work? J+S identified that there has been a shortage of critical components that often have a long lead time. Initially the Legacy Locker started by identifying the types of components that our customers have used previously and would like to have available off the shelf and a lot of these components were found to be common across the industry such as hydraulic couplers and electrical subsea connectors which could take up to 26 weeks to order brand new. Budgets were set aside in order to make sure that these vital components could be held in stock. With the step up in decommissioning activities through the later life of subsea assets it was identified that a lot of equipment coming back from offshore for scrappage had the components required as part of the assemblies as well as spares packages on the shelf that were no longer required. With J+S having extensive experience in the refurbishment and recertification of existing equipment, this provided an avenue to reclaim some of these parts and provide our clients both with a new avenue to dispose of their unwanted equipment and feed a future source of similar equipment for when it is actually required. J+S has supported a number of our clients buying their unwanted stock and giving them options for their urgent operational requirements On 2 fields in the last year alone, the Legacy Locker has given our clients the ability to keep their production going by having the necessary components available to regain lost control.

Going forwards Legacy Locker has and will continue to evolve with greater stocks of used and new equipment being made available to promote reuse and the wider circular economy. In order to further this, decommissioning and metal recycling specialists, John Lawrie, and Subsea Engineering equipment re-use and refurbishing experts, J+S will work together in order to enhance the recovery and re-use of subsea control equipment. With full approval from the producer of the material, operational teams from John Lawrie and J+S will be able to identify and recover subsea equipment and materials from future decommissioning projects suitable for refurbishment, recertification and resupply through the J+S Legacy Locker service. Speaking on behalf of John Lawrie Julian Foley commented: “The circular economy is at the heart of what John Lawrie does so this gives us a real opportunity to increase the amount and type of materials that can be re-used by oil and gas operators in order to support their ongoing operations, as well as helping to meet their net zero and sustainability goals.” Matt Blair, Executive Chairman, J+S, added “This arrangement with John Lawrie will give us access to both unused spares and serviceable decommissioned equipment that previously would have gone directly to recycling. Working with our clients on our Legacy Locker service has highlighted this issue. Now, together with John Lawrie, we can ensure that subsea equipment is reused whenever possible, while the remainder is recycled through Lawrie’s SEPA registered sites.”

If you have spares equipment that is not required or a decommissioning project coming up that includes controls systems please feel free to contact the team to see how J+S can give you another option info@jands.co.uk

J+S provides proactive, responsive and cost-effective solutions for design, engineering, operational support and maintenance of subsea equipment, primarily related to the Subsea Production Control market.

Find out more at: www.jands.co.uk

INNOVATION ZONE

PROTEUS

How to use technology to stay agile in the changing business environment The world has changed. It is now incumbent on business leaders to use technology to manage their workforce and help their organisations stay agile amidst a changing landscape.

Introducing Proteus Proteus is a cloud-based software platform, made up of 4 key modules; Proteus OS, The Marketplace, The Gateway and Xchange.

roteus was not developed with a global pandemic in mind, however as we see most industries engaged in a race to the bottom to try and secure enough orders to see them through the next crucial year, we believe Proteus is a major part of the solution. Proteus was originally designed with the future of the energy industry in mind. A future that would allow companies to be competitive in a world of declining oil and gas prices and through a transition into renewable energy, which has traditionally operated with lower salaries and lower margins. We looked at the key drivers across a number of businesses and put in place measures to improve every aspect that was underperforming. The outcome of this was Proteus, a revolutionary new product, aimed at digitally transforming a business and putting real improvements onto the bottom line. Our best estimates were that companies would be slow to adopt these changes, as some of it requires a different mindset, particularly in moving to a more variable cost resourcing model. However, the global pandemic that has pushed many companies to the brink, has accelerated this change to the top of every companies in-tray. Proteus is not a nice to have, it is a must have for most companies now.

www.ogvenergy.co.uk I October 2020

The Operating System Proteus has, at its heart, a business operating system, Proteus OS. Proteus OS is often referred to as an â&#x20AC;&#x2DC;ERP systemâ&#x20AC;&#x2122;, however we have tried to avoid using this term due to the bad press they get, particularly from employees on the coal face who have to use them. Most ERP systems are designed with a 20/80 user base. i.e. they are designed for the needs of 20% of the business with the remaining 80% forced to use features that add zero value. The use of spreadsheets for all workflows from pricing to completing timesheets is a result of this 20/80. Proteus aims to flip this to provide solutions that the 80% need. Proteus OS sits at the centre of your key day-today workflows. Configurable to the needs of your company structure and industry, this is where you manage client work leveraging team collaboration with shared databases, templates and files. There are three key modules that all use the same data sets ensuring 100% consistency and accuracy across the full project lifecycle: Proposals, Projects and Invoicing. The Marketplace A new way of accessing or finding talent. The Marketplace offers a database of rated skilled professionals that companies can use to search for rated talent, post projects, engage freelancers, invoice and pay all through a single, simple-to-use interface and wallet system. This makes finding and engaging team members simple, fast, efficient and offers huge savings as it costs less than traditional recruitment routes. Using the Proteus OS platform, project onboarding is quick and seamless. Freelancers can invoice automatically and companies can manage payments in line with contracts. Proteus is integrated with online payment gateway Mangopay to facilitate rapid and seamless payment between companies and freelancers.

The Gateway The Gateway provides staff or freelancer team members with instant access to leading industry software on a PAYG basis. This cloud-based model allows you to access the software when you need it, wherever you need it. Optimised for the job, you no longer need to worry about onboarding expensive, heavy-duty tools which end up under-utilised. Xchange: Xchange is Proteusâ&#x20AC;&#x2122; global technical forum where you can exchange questions for answers. Based on the concept of a social feed, you can post technical or project-based queries, drawing on the wealth of knowledge held by other companies and freelancers. Collaborating with experts, you can focus your posts on specific topics and industry verticals. By actively participating in discussions, you can become recognised within your field of expertise, generating future work opportunities and networks.

Not just a nice to have

The genie is out of the bottle

Proteus is founded on making everything simple and consistent to drive tangible business efficiencies through every aspect of the business. Too many systems promise the world and deliver nothing other than an expensive overhead; with Proteus the ROI is directly measurable. For example, our modelling conservatively indicates companies can reduce as much as 75% of the cost developing proposals, 50% of project management administration costs as well as minimise debtor days. These concrete savings can make the difference between running a profitable project and running negative EBITDA.

Perhaps one of the most relevant benefits Proteus offers is not the one we originally focussed on as a key selling point. But the genie is well and truly out of the bottle. Recent lockdowns have precipitated a successful move to remote-working, demonstrating that the traditional 100% in-office model is no longer legitimate.

Poor utilisation in a company erodes value faster than any other component. Proteus tackles this problem in two ways; firstly by ensuring that all metrics are tracked accurately, giving project managers real time visibility and therefore the information to make accurate decisions. Secondly, through The Marketplace and The Gateway moves certain components of a company's fixed costs into variable costs and therefore maximises utilisation. The Marketplace focuses on the utilisation of people and The Gateway focuses on the utilisation of software.

There is now an expectation from both the workforce and management for at least a measure of remote working to remain for the foreseeable future. Proteus offers the perfect online environment for companies working with remote teams, removing all physical barriers. Users can share files and knowledge within the same platform, working fluidly across multiple projects. Remote teams can expand and contract quickly and easily with experts being either onboarded or outsourced to other external projects within minutes.

Hard-wired to help a company closely manage margins, Proteus offers a number of overhead benefit savings. From reducing waste such as office space and the associated cost that comes with this, to allowing a company to expand and contract fluidly and cost-efficiently, Proteus enables a leaner infrastructure model. An example of this is software utilisation. Engineers working on OEM projects deploy specialised, expensive software that is typically used less than 30% as utilisation is driven by working hours. In addition, it is common for software to not be billed on a project. With Proteus this cannot happen as the engineering software is integrated with the project management system. A user cannot run the software without entering the correct project code and the runtime is then tracked. Services are bought by clients looking for a predictable, high quality of content or output. A move to a fluid, contracted workforce makes this consistency in quality harder to control and therefore is time-intensive. Proteus generates deliverables that are always consistent, whether documents are created by temporary outsourced freelancers or by senior managers. Single-entry data allows control over how the platform is used by the workforce and form-led processes and templated document creation ensure content meets desired standards. 100% accuracy is achieved through inbuilt cost controls and approvals meaning risk is managed efficiently. Operating in low-margin environments, it has become more important than ever for managers to maintain a real-time view on team workflows. However, disparate legacy tools and siloed teams working across multiple offices has made it difficult to get immediate and accurate oversight. Proteus changes this paradigm by bringing everything into one place. Instant, real-time data via in-built dashboards provides visibility across offices and departments.

Internally, weâ&#x20AC;&#x2122;ve discussed at length why the oil and gas services sector has not traditionally embraced the remote working paradigm. A valid answer is the industry is driven by productivity which is typically best achieved in a monitored environment. By tracking all workflows through easy timesheeting and resource management, Proteus allows teams not only to closely manage, but to increase INNOVATION ZONE productivity. Easily accessible SPONSORED BY databases for contacts, contracts and end-to-end projects greatly simplify the tasks of storing, retrieving and working with varied data while also enormously expanding the capabilities of information sharing and reporting. Templated deliverables make the tasks of creating, editing, storing and sharing documents www.leyton.com much more efficient. Business continuity is enabled through zero product downtime.

INNOVATION ZONE

OMMICA

Mitigating the Operator's financial burden in challenging times

Life in the oil industry is a daily tussle between human ingenuity and the forces of nature requiring the application of science on many different fronts.

ne fascinating front is Oil and Gas Production Chemistry which attempts to control not only the output from an oil well but also the way in which oil, gas and water are separated, their preparation for shipment to the refinery, while allowing for flexible processing. Production chemistry ultimately affects the quality of the oil and its suitability to refineries which is reflected in the price per barrel paid to the producer.

The Polluter Pays Refineries across the world have strict maximum levels for the amount of methanol and other chemical contaminants that they will accept in the crude oil and regularly issue penalties to producers who supply contaminated oil with more than 15 - 50 parts per million methanol. The Forties Pipeline System in Scotland for example issues a penalty of almost £4,000 per 1,000 litres of methanol contained in the crude oil.

Flow Assurance is an area of production chemistry which relates to the interactions which occur between the fluids In many cases the refinery will refuse flowing from the well during the a cargo of crude oil leaving the production process. If flow producer who, in turn, would and chemical interactions have to search for a refinery OMMICA enables are not properly handled that would accept their an unskilled operator it can result in pipeline cargo with high levels of blockages, leading to methanol. This will result in to gain accurate results millions of GBP lost a reduced price per barrel within the hour, achieving in production and for the cargo - perhaps as effective management of remediation costs. much as $3 to $5 per barrel Chemicals are often which at today’s Brent crude oil prior to its export injected at or near the crude price is approximately to the refinery or point wellhead to prevent 10% of the value. For a of sale. potential issues such as tanker consignment this can hydrate blockage which is one amount to $4 or $5 million of of the most expensive problems lost income. affecting production apparatus or Managing the Problem pipelines. Unintended Consequences Hydrates are generally easily prevented by injecting an inhibitor (antifreeze) into the flow to ensure that they cannot form. However, if this chemical is still present in the crude oil when it reaches the refinery for processing this is bad news. Just small amounts, normally parts per million of methanol or glycol, can cause damage at the catalysts and contaminate the effluent water treatment plant at the refinery.

www.ogvenergy.co.uk I October 2020

Methanol is not generally used by oil producers during normal production. It is only needed when wells are shut in. This gives operators some control of the amount of methanol present and how to manage the amount that enters their export pipelines or transport vessels. They do this by blending portions of high methanol content crude with zero methanol content crude in the pipeline for export or in the cargo tanker before it leaves the oil installation. This helps them avoid penalties from the refiners adding significant cost savings.

To demonstrate that their cargo is within specification, the operator needs to be able to establish the amount of methanol present in the crude oil as quickly as possible on arrival at the platform or cargo vessel. Complex test equipment, normally used by an onshore laboratory are required, however, these may be found 100 miles from shore and can take weeks to obtain a result if samples are required to be sent away for analysis. Therefore, a means of quickly and cost-effectively analysing methanol levels on location offers significant benefit. This is where OMMICA comes in - a clever example of the appliance of science. Duncan Baillie, Business Development Manager said “OMMICA is a compact easy-to-use field chemical analysis kit which was developed specifically to speed up production analysis. This enables producers to get information on their contamination levels fast resulting in them getting the best commercial outcome for their oil production. It does in minutes what would otherwise take days or weeks. The analysis is carried out by the client and provides a simple indicator on the condition of their cargo.” OMMICA is the only methanol analysis kit developed for use in an offshore environment. It enables an unskilled operator to gain accurate results within the hour, achieving effective management of crude oil prior to its export to the refinery or point of sale. The ability to manage the crude in this way assures the seller/buyer of the quality of the crude and can assist in commanding a higher price per barrel. Now that is good news in the current climate of COVID-19 and low oil price!

For more information contact: Duncan Ballie, Business Development Manager Email : duncan.ballie@ommica.com

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GREEN ENERGY

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Part of the water cooling system at Hinkley Point C. (Source REUTERS/Peter Nicholls)

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

Peter Tipler Renewables Director, Xodus Group

UK looks to cut new build costs in Nuclear by almost a third by 2030 A Nuclear Industry Institute (NIA) report outlines how to cut new build costs by 30% over the next 10 years, as industry heads warn the negative perception of nuclear means expensive financing.

The British government’s Nuclear Sector Deal used Hinkley Point C (HPC) strike price of £92.50/ MWh as a baseline for the cost reduction and put together the New Build Cost Reduction Working Group to find a way to achieve this goal. In a break down of HPC’s EPR reactors, which EDF adapted from similar technology in France for Britain, two thirds (£62/MWh) of the cost to the consumer came from financing the build, of which more than half (£36/MWh) was used to cover the project’s risk premium.

By Paul Day

Reducing construction risk and capital cost would be key to meeting the goal, the group said. Meanwhile, another recent study showed how the industry needed to be mindful that first-of-a-kind (FOAK) projects were always going to be more expensive than nth-of-akind (NOAK) while high level industry heads asked how governments and investors in liberalised energy markets could finda way to ease perceived financial risk.

The cost of risk Financing costs take up nearly two thirds of any nuclear project’s final price for consumers and developers, and governments and stakeholders are looking at various models that might help shrink that cost. Financing costs, in a liberalised market, are directly linked to risk and confidence, and it is partly this that has kept lending prices sky high. The OECD’s Nuclear Energy Agency report “Unlocking Reductions in the Construction Costs of Nuclear: A Practical Guide for Stakeholders,” found that stakeholder and public confidence in the ability of the nuclear industry to build new projects had been eroded. “The perception that new nuclear plants carry high project risk dissuades investors and has further reduced the ability of countries to attract financing for future projects. These issues are not present in countries that have been building plants continuously,” the report said. In countries with a constant churn of nuclear build, experienced project organisations and well-established supply chains meant projects are on time and on budget, it said.

(Source: Nuclear Industry Institute)

“This suggests that the challenges experienced by many FOAK projects are not inherent to the nuclear technology itself but rather depend on the conditions in which projects are being delivered and on the interactions among the various project participants involved,” the report found. Source: www.heraldscotland.com

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

GREEN ENERGY North Sea energy transition could generate 200,000 jobs The finding comes from a report that looks to map out a way forward for the key offshore energy sector, which is in the eye of a storm. The plunge in oil and gas prices triggered by the coronavirus crisis and growing concerns about climate change have left the oil and gas industry in turmoil. Thousands of jobs have been lost this year as oil and gas firms have slashed investment in the North Sea, causing pain across the supply chain. The downturn has intensified the challenges facing what is seen as a mature basin. However, the report by the Wood Mackenzie energy consultancy for the Oil & Gas Technology Centre (OGTC) found the North Sea oil and gas industry could play a leading role in the UK’s drive to achieve net zero carbon emissions by 2050. Expertise developed in the North Sea combined with the advantages offered by Scotland’s geography could help speed the development and implementation of renewables technologies that help transform the area into a world-leading integrated energy centre.

More than 200,000 jobs could be created across the UK by 2050 if the potential of the North Sea to support the transition to a clean energy system is maximised, experts have said.

“This report underlines how the United Kingdom Continental Shelf (UKCS) can be redeveloped into a decarbonised, integrated energy system; one that can optimise the offshore sector’s economic value and deliver a secure supply of affordable energy.” Energy minister Paul Wheelhouse said the system envisaged in the report could help Scotland and the UK meet the emissions reductions targets set by their governments on the timescales required, while also supporting Europe’s decarbonisation. Scotland aims to achieve net zero by 2045. Source: www.reutersevents.com

The report noted there could be strong overseas demand for low carbon technologies, products and expertise. However, it also underlined the scale of the challenge that the energy transition will involve. Around £430 billion investment will be required, along with incentives and support from governments. Much faster progress will need to be made in key areas such as hydrogen fuel production and carbon capture and storage. “Reimagining the North Sea as an integrated energy system is essential for the UK and Scotland to achieve their net-zero ambitions,” said OGTC chief executive Colette Cohen. “But we need to invest now to close the gap on the key technologies needed to make this ambition a reality.” The OGTC was founded to support the development of technologies that could help the North Sea industry fight back amid the deep slump triggered by the oil price plunge from 2014 to 2016.

The report highlights areas in which investment must be stepped up to ensure these are developed and deployed at the required pace.

Renewables technologies could in turn help to cut the emissions associated with oil and gas production and boost the competitiveness of the industry, which will remain important for years.

“The North Sea is at the heart of the UK economy. This won’t change, but our energy ecosystem will,” said Malcolm Forbes-Cable, vice president, upstream consulting at Edinburgh-based Wood Mackenzie.

Mr Wheelhouse said the skills, expertise and infrastructure of the oil and gas sector and its supply chain would be vital in unlocking the opportunities presented by the energy transition.

The technologies that Wood Mackenzie reckons have the most potential in terms of decarbonisation include offshore wind, using fixed and floating platforms, hydrogen fuel production and carbon capture, storage and usage.

The resulting surge in offshore activity could generate huge amounts of business for sectors such as construction and manufacturing.

The 200,000 jobs that could be created would be more than the 150,000 supported across the North Sea supply chain before the coronavirus crisis erupted.

By Mark Williamson

It said the report produced by Wood Mackenzie provided a comprehensive roadmap setting out the critical technologies needed to deliver an integrated net-zero energy system on the UKCS.

These include offshore wind farms and hydrogen production networks, which could effectively create fuel from seawater. Depleted North Sea fields could be employed in carbon capture, storage and usage (CCUS) projects that may have a huge impact on emissions.

The report found innovation in the renewables and fossil fuel sectors could generate £2.5 trillion value for the UK economy over the next 30 years.

Renewables technologies could in turn help to cut the emissions associated with oil and gas production and boost the competitiveness of the industry, which will remain important for years.

For example, new electrolysis technologies must be developed to reduce the cost of producing what is known as green hydrogen from seawater. Technologies that could be used to help reduce the emissions associate with oil and gas production in the North Sea include the electrification of oil and gas platforms. The report, called “Closing the Gap: Technology for a Net Zero North Sea”, was produced with support from the Scottish Government and the Chrysaor oil and gas firm. This bought a $3 billion North Sea portfolio from Shell in 2017. Chrysaor chief executive Phil Kirk said: “The oil and gas industry in the UK has all of the competence, innovation and resources to deliver the engineering and technical solutions to fulfil the energy transition. As an industry, we are experts in solving problems and safely engineering solutions.”

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www.xodusgroup.com

GREEN ENERGY

Engie and ArianeGroup announce collaboration to develop renewable liquid hydrogen By Robin Whitlock

Engie and ArianeGroup have just announced the signing of a cooperation agreement in the field of renewable liquid hydrogen to speed up the decarbonisation of heavy-duty and long-distance transportation.

Renewable liquid hydrogen is being developed by a number of companies as a zero-emissions alternative to fossil fuels and an answer to the specific storage and endurance requirements of sectors such as maritime and rail transport and aviation. Engie and ArianeGroup will therefore leverage their expertise and cutting-edge technologies in hydrogen to: Develop and test optimised liquefaction technology with the development of a hydrogen liquefier at ArianeGroup's industrial facility in Vernon (France); Develop a range of products and services on the liquid hydrogen line, primarily for maritime and inland waterway applications. ArianeGroup has been developing expertise in liquid hydrogen-based propulsion systems and related ground facilities for more than forty years. The company employs over a thousand staff in France and Germany who work daily on hydrogen technologies. The company also operates Europe's largest hydrogen test centre at its facility in Vernon, France. “Thanks to the Ariane launch vehicles, ArianeGroup is one of the few companies in the world to have sound expertise in systems and solutions based on liquid hydrogen” said AndréHubert Roussel, ArianeGroup CEO. “We are honoured to have been chosen by Engie to take up this challenge with them. At a time when hydrogen is playing a key role in

the recovery plans of France and Germany and for the European Green Deal, we are looking forward to working on concrete projects with our industrial partners, local authorities and institutional stakeholders. The ongoing innovations in the launcher sector, such as the Prometheus ultra-low cost launcher engine, will further increase ArianeGroup's ability to make 100% -European hydrogen technologies and solutions accessible to all.” Claire Waysand, Engie’s interim CEO added that renewable hydrogen is a vital component of the energy mix and is one of the key industrial tools that will help us bring about the transition over to carbon neutrality. France's recovery plan firmly supports the development of hydrogen, and the European Green Deal evidences the crucial role that it will play in the energy transition. The aim of the programme is to develop technological solutions to achieve sustainable use of liquid hydrogen and provide innovative, integrated solutions to clients in the heavy-duty and long-distance transportation sector. Engie is already involved in the development of renewable hydrogen-based solutions for intensive transport. The Group is working with global mining leader Anglo American to develop the first hydrogen-powered mine haul truck. The company was also the first to fuel Alstom's regional passenger train with renewable hydrogen during tests in the Netherlands. In countries with a constant churn of nuclear build, experienced project organisations and well-established supply chains meant projects are on time and on budget, it said. “This suggests that the challenges experienced by many FOAK projects are not inherent to the nuclear technology itself but rather depend on the conditions in which projects are being delivered and on the interactions among the various project participants involved,” the report found. Source: www.renewableenergymagazine.com

Poland pledges $40 billion for new nuclear; CNL, Kairos to jointly develop SMR By Nuclear Energy Insider

Poland plans to build six new nuclear power units by 2040 through investment of some $40 billion, the Polish Climate Minister Michal Kurtyka said in September.

Source: www.reutersevents.com

www.ogvenergy.co.uk I October 2020

The plan, which forms part of an updated “Poland’s Energy Policy until 2040”, is based on three pillars; a just transition, zero-emission energy system and good air quality, the government said in a statement. "The conclusions of the reports from the IPCC (International Panel on Climate Change) and IEA (International Energy Agency) clearly show the significant potential of nuclear energy to achieve measurable and radical reductions in greenhouse gas emissions on a global scale," said the climate minister during a World Nuclear Association discussion panel. In 2033, the first nuclear unit, with a capacity of 1-1-6 GWe, will begin operation and five more units of a total capacity of 6-9 GWe will follow, according to the plan. The plan will create some 300,000 new jobs in the country, with around 60,000 directly linked to nuclear energy, the minister said during the WNA panel. The minister also said that his ministry is talking to the Japanese Atomic Energy Agency to build a high-temperature, gas cooled research reactor which would form part of a hydrogen production plan.

Hydrogen production as a by-product of nuclear power generation can help develop an alternative income stream for generators aiming to cut costs for nuclear power plants. “We see that a hydrogen economy can play an important role in the coming years, especially here in the European Union, and we are working hand-in-hand with other European countries as well as with the European Commission to build a hydrogen sector with industry and partners in Poland,” Kurtyka said.

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www.ducatuspartners.com oil joining this movement; Lime Rock, Encap and Riverstone have all launched clean energy funds.

ON THE MOVE The oil and gas industry’s ‘green makeover’ has been a much publicised transition in recent years, with the majors largely spearheading the discussion concerning this turnaround. Elsewhere in the value chain, energy private equity firms have too shifted their focus, albeit a little more quietly than big oil. In 2019 just $9.7 billion in capital was raised by funds targeting fossil fuel deals, the weakest figure this decade, which reached a high of $48.1 billion. Meanwhile, renewables funds raised last year totaled $11 billion, triple the amount seen in 2010. Whilst the risk attached to cyclical nature of the industry is an influential factor, the trends point to this being a pivot of interest rather than a price induced pause. Once a sector which growth capital investors typically shied away from, the transition towards lower carbon sources is now in motion. Major firms such as BlackRock have embraced this, as well as those historically entrenched in

The waterfall of societal, government and stakeholder pressures have also been a key accelerator in private equity’s appetite to shy away from emission heavy investments. Whilst the former factors have no doubt induced a proactive change in mindset, it is fair to assume that the scores of limited partners who have been keen to distance themselves from oil have fast tracked this move; since 2015, more than one thousand have voiced their intention to cut ties to fossil fuels.

Bill Dunnett

As the energy mix evolves so too does the capital which funds it, along with the investment teams which deploy and manage it. It will be interesting to observe how newcomers to renewables, as well as those who preserve in oil, fare beyond 2020 as their investments mature.

By Sean Buchan

Managing Partner - EMEA at Ducatus Partners

Girish Saligram

Ali Hassan Al-Kharari

Lundin Energy has made two executive appointments, naming Nick Walker as President and Chief Executive Officer of the business following Alex Schneiter’s decision to step-down from the position and serve the business in an advisory capacity. Nick has been Chief Operating Officer of the company for over five years and brings over 30 years' experience in the industry, serving in senior roles with companies including Africa Oil Corporation and Talisman Energy.

Nick Walker

Lundin Energy Announces Executive Appointments

In recent years, the viability of renewables has developed rapidly, removing previous barriers to entry and opening access to the broader investment community beyond venture capital firms. The technology supporting the low carbon sector has accelerated in commercial viability, leading to an increasing number of investors to bet more securely on the return of emerging companies in the clean energy value chain. Painting a picture of this is the increasing prevalence of venture capital to private equity exits; such deals have grown at a rate almost double to that of overall buyouts.

In addition to private equity redirecting capital deployment to cleaner power, firms have also aligned their human capital strategy towards this focus, bolstering capability in this relatively new territory through a number of different approaches. We have seen this play out over the past 24 months in our work to support private equity clients with such efforts; the targeted addition of expert advisors and operating partners, the build out of complete teams to lead specialised funds, as well as providing firms with a comprehensive understanding of the executive talent pool in line with their investment thesis through the execution of market mapping, creating a network of potential portfolio company leaders.

Ithaca Appoints New Chief Executive Officer

Ithaca Energy has appointed Bill Dunnett as the company’s new Chief Executive Officer. He succeeds Les Thomas who joined the business in 2013. Bill was most recently the Chief Executive Officer of Repsol-Sinopec Resources United Kingdom. He has a career in oil and gas spanning 35 years and has previously worked for companies such as Petrofac, Halliburton, Mobil North Sea and Shell. Bill has also served as the chair of the MER UK Technology Leadership Board and was a previously a board member of the industry body Oil & Gas UK and the Oil and Gas Technology Centre.

www.ogvenergy.co.uk I October 2020

Following this news, Lundin Energy has also announced that Daniel Fitzgerald will join as Chief Operating Officer. He was most recently the Chief Operating Officer of International Petroleum Corporation, a Lundin spin-off with assets in Malaysia, France and Canada, Prior to joining the group, Daniel worked for Shell’s upstream business in the United Kingdom in a range of asset and operational leadership positions.

Weatherford Appoints New Chief Executive Officer

Weatherford International has announced that Girish Saligram has been appointed as the company’s new President and Chief Executive Officer. Weatherford’s current Interim Chief, Karl Blanchard, will resume his role as Executive Vice President and Chief Operating Officer. Girish previously worked as the Chief Operating Officer of Exterran Corporation and prior to this as President Global Services for the business. He spent over 20 years with GE, working in senior roles across the company’s oil and gas, healthcare and downstream divisions.

Sparrows Group’s Appoints General Manager in Saudi Arabia

Sparrows Group has announced the appointment of Ali Hassan Al-Kharari to the new role of General Manager Saudi Arabia. In this role he will be tasked with driving Sparrows’ global diversification into the onshore industrial sector with a major focus on petrochemical, mining, rail and food manufacturing markets. Ali brings over 20 years’ oil and gas experience and was most recently Commercial Manager Special Projects at McDermott. He has also served in several senior technical and business development roles with Schlumberger in the Middle East.

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Tullow Oil Makes Board Appointment

Tullow Oil has announced the appointment of Mitch Ingram as Non-Executive Director. He has held senior positions in the 22 years he served with Occidental Petroleum and has also held leadership roles with BG Group and most recently Anadarko, where he was a member of the group’s executive committee.

Simon Maine

Ovo Appoints Corporate Affairs Director

Ovo, the independent British energy supplier, has appointed Simon Maine as its Director of Corporate Affairs. Simon joins the leadership team in the newly created role from Brunswick, where he led the power, renewables and new energy technologies practice. His client experience includes advising BP, Centrica, National Grid, Lightsource BP and the Energy Networks Association. Before Brunswick, Daniel worked with private equity firm Riverstone, where he worked on deals across energy sectors including exploration and production, midstream, energy services, power and alternative energy.

IOGP Names New Executive Director

the International Association of Oil & Gas Producers has named Iman Hill as Executive Director. She will succeed Gordon Ballard, who will step down from the position following a five year tenure. Iman brings over 30 years of oil and has experience and was most recently the Chief Operating Officer of Energean. Prior to this, she held senior roles with companies including Dana Gas, Sasol Petroleum, BG Group and Shell, working in a number of internationals postings across the Middle East, Africa, South America and Europe.

McDermott Names New Board Member

McDermott has announced that Andrew Gould has joined its board of directors. Andrew is the former Chairman and Chief Executive Officer of Schlumberger and spent 37 years with the business in a number of senior positions. He also has extensive non-executive experience having served as the Chairman of BG Group and on the board of Saudi Aramco and Rio Tinto. His current advisory roles include Occidental Petroleum and CSL Capital Management.

Andrew Gould

Mitch Ingram

Amy Andryszak

Richard Merrells

Ronny Bøhn

Gas Association Announces New Chief Executive Officer

The Interstate Natural Gas Association of America has announced the appointment of Amy Andryszak as the association’s new President and Chief Executive Officer. She will take over the role from the current interim incumbent, Alex Oehler. Amy brings over 15 years of experience in public policy work and a background in the energy industry.

Carbon Clean Appoints Project Executive

Carbon Clean, the carbon capture technology business, has named Richard Merrells as the company’s Vice President of Project Delivery. Richard brings more than 20 years experience, working in senior projects and operations roles with companies including Maersk Oil, Air Products, GlaxoSmithKline and BP.

Axxis Geo Solutions Names New CEO

Norwegian offshore survey specialist Axxis Geo Solutions have named as Chief Executive Officer. Ronny brings more than 20 years experience and joins from inApril where he was Chief Operating Officer.

Iman Hill

Hurricane Energy appoints new Chief Executive Officer

Hurricane Energy has appointed Antony Maris as a permanent replacement to the Chief Executive Officer role after founder Robert Trice exited in June. Antony brings over 35 years of experience and most recently spent 15 years with Asia and Middle East focused Pharos Energy.

Dana Petroleum Announces New Chief Executive Officer Dana Petroleum has announced the appointment of Jongwoo Kim as its new Chief Executive Officer. He joins from Dana’s owner Korea National Oil Corporation and replaces Yongwoo Kang who is returning to Korea to take up the role of senior executive Vice President for Exploration and Production with the business.

Jongwoo Kim

OPINION

By Moray Melhuish

Subsea Innovation and the Energy Transition Creating the future is a thankless task. Millions try and many fail – but true innovation inspires us, and even though we don’t always get it right, each step we take collectively as an industry is a step forward for us all.

he crucible of innovation within offshore energy has always been the oil and gas sector. With high budgets and great margins on one side of the scales and arduous conditions and significant consequences of failure on the other - this high risk/high reward environment has been many a successful entrepreneurs’ playground for decades.

Moray Melhuish

In 2020, the market shift has been dramatic. None of us foresaw the combined impact that the shale industry and COVID would have on the price of a barrel of oil, nor the shift of capital from oil & gas to offshore wind which resulted. The offshore oil & gas industry has been hit particularly hard by the downturn, but despite that, innovation persists and takes the sector forward. The Subsea sector in particular has always been quick to embrace technology and innovation, so what innovations do we see coming into the market, are they disruptive and can they support the energy transition? TechnipFMC The first disruptive subsea technology I’d like to consider comes from a stable with an impressive pedigree for innovation. When Schilling launched the 150HP HD in 2007, the industry took note immediately. Designed from the off to be a truly modular system, this was the first ROV system capable of 60-minute maintenance. Rather than repair a component on an ROV, a whole module was simply and quickly swapped out. In 2013 this design was scaled up to 250 HP, in the form of the UHD III, and for the first time an ROV had the integrated capability to close a BOP without having to rely on an underslung skid. The UHD III didn’t just find favour in oil and gas. Its massive thrust and impressive station keep facility meant that it soon found its way into vessels working in the Offshore Wind industry – not least onboard the industry-flagship Grand Canyon and NKT Victoria vessels. Seven years later the Schilling team – now part of TechnipFMC – have launched Gemini, a system with truly innovative features. Gemini builds on the technologies of the HD and UHD III, but crucially the system needs no human involvement to launch, recover or maintain. What’s more, an integrated carousel holds 30 tools, selected as required by automated manipulators using Machine Vision. This is designed to avoid pilot error and dead time while the ROV is launched and recovered for reconfiguration (which, in deep water, can take hours), and is designed for dives of up to 30 days at a time.

www.ogvenergy.co.uk I October 2020

Gemini ROV

Gemini builds on the technologies of the HD and UHD III, but crucially the system needs no human involvement to launch, recover or maintain.

As well as technical innovation, it’s also interesting to note the commercial basis on which Schilling ROV’s are now available. Previously available for sale to ROV service and subsea contractors only, the technology is now being provided direct to the end user as a service, with Shell being the launch client in the Gulf of Mexico, and other deep water producers sure to follow. Given the lack of demand for newbuild ROVs in the market, and the fact that TechnipFMC must be an approved supplier to every offshore oil & gas producer, this surely came about out of necessity – and to safeguard that ability to innovate for the future. TechnipFMC isn’t the only major contractor which has been producing some spectacular innovation of late. Just a few years back, Oceaneering gave the impression that they weren’t really interested in anything but the lowtech support of offshore drilling (and, to a lesser extent, offshore oil & gas contractors) with their fleet of powerful but unspectacular work class vehicles.

OPINION

Oceaneering Whether was necessary to counter the potential loss of market share to newcomers, or as a way to differentiate itself from the crowd, the reinvention of Oceaneering has been as dramatic as it has been impressive, with the launch of two innovative subsea systems in as many years. The first of these was ‘Liberty’, a battery powered, electric Work Class ROV in a box. Lowered to the seabed and left there, detached from the vessel, the system uses a tether to a surface buoy to enable communication to & from the vehicle, which can be remotely piloted from shore. The second was ‘Freedom’, a hybrid AUV / ROV, which incorporates the streamlined design typical of an AUV but with the vectored horizontal thrusters and vertical thrusters more commonly found in a work class ROV. Operating from a subsea base station, the goal is for ‘Freedom’ to be automated, through use of autonomous pipeline recognition software, however it can also be remotely piloted - but this time with no cable to its subsea base station, which is used to recharge the vehicle. Unlike AUV’s, ‘Freedom’ can deploy subsea tooling and has tooling change-out ports front and aft. The true disruption in all these systems is in their ability to reduce manning and vessel time offshore. The IMCA guidance for ROV personnel requires six crew offshore for 24-hour Work Class ROV operations. If we look at the ROV crew alone, by my calculation that’s a potential saving of £132,000 a month in crew costs. If we factor in the vessel, as the ROVSV is no longer required to be on site during operations, that is a potential saving of almost £1.5 Million a month to the project. There are also other more important savings to be had here – by reducing the number of personnel offshore, human risk and carbon footprint are also minimised. Commercial models Some interesting commercial questions arise from these unmanned systems. As with all innovation, with every opportunity there are challenges to be overcome. Innovation must be funded and rewarded with work or it will die – but the subsea business model needs to change for it to be a success. Can the clients for subsea services get their heads around paying for a service to be performed, rather than paying for the vehicle & crew day rates as well as personnel and equipment mobilisations and demobilisations? It will be interesting too, to see the commercial basis on which these vehicles are offered – how much of the cost savings are passed to the client in a bid for market share, and how much is retained as a reward for innovation – but that will be a corporate and commercial decision for each player.

Freedom ROV

The future It is not all bleak for ROV personnel though. The innovations in subsea vehicles, as impressive as they are, would seem to be designed to improve future economics in deep water oil & gas rather than transforming growth markets such as offshore wind. As highlighted by Rystad, CAPEX in Offshore Wind is set to overtake that of Oil & Gas in Europe by 2022 and Bloomberg NEF now predicts that Offshore Wind is set for a combined annual growth rate of 16% until 2030. The potential of this already booming market is causing many energy companies and their supply chains to refocus on renewables. But the Oil & Gas and Offshore Wind markets are not the same. There are always exceptions, but the typical Offshore Wind environment is shallower, with more turbulent flow, lower visibility and higher current than in Oil & Gas. At many sites where ROV’s are used the vehicle is only just subsea, with the vehicle also having to contend with wave action as it works.

Such subsea environmental conditions are draining on batteries. For offshore wind tasks, energy sapping dredge pumps and high bandwidth communications are often required too, particularly when the work These disruptive scope requires multiple high spec imaging sonars - for example technologies promise during Unexploded Ordinance (“UXO”) dredging operations a future with fewer or trenching. How a system with no umbilical to the surface would deal with the demands for power and bandwidth in such workers offshore, conditions remains to be seen. What’s more, the typically shallow lower project costs, conditions mean that launch and recovery times are much less lower risk and with than in deep water, so the benefits of having all tooling sub-sea are a reduced carbon greatly reduced.

Of equal interest is how IMCA (International footprint. Marine Contractors Association) will treat the Given the level of investment in the energy transition however, I have issue of remotely piloted vehicles which are no doubt that the offshore wind market will be in the cross hairs of operated from shore rather than from the vessel. companies like TechnipFMC and Oceaneering for future innovation. It will not The minimum crewing levels for Work Class ROVs are be long before we see features originally developed for these deep-water oil & gas there to protect safety and cannot be reduced without serious systems migrating into renewables, reducing not only the cost of deep-water oil & gas consideration. Perhaps a new category of system is required in production, but the cost of Offshore Wind too. the guidance, for a Remotely Piloted ROV? The response of other manufactures and owners of ‘Traditional’ ROV’s will be interesting too. Will we see a market for the retrofit of automated piloting to these systems and will these be provided by the manufacturers, or as a third-party upgrade?

These disruptive technologies promise a future with fewer workers offshore, lower project costs, lower risk and with a reduced carbon footprint, whichever industry they are applied to. The businesses which have created them should be applauded, encouraged, and supported as they perfect the technologies required.

Once these technologies gain a foothold in the market – and I believe they will, in oil & gas at least - there will eventually be a structural change in the market for industry personnel, with lower demand for ROV crew, training, competence and transportation just being the tip of the iceberg.

We all hope that the oil price recovery comes soon, but in the meantime it is essential for businesses, whether it’s the technology developers or their E&P sponsors, to continue to demonstrate innovation and leadership and to overcome the challenges faced by the industry and improve the future - for all associated with the offshore energy market.

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.

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. 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.

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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LEGAL & FINANCE

By Ross Gardiner, Solicitor at Brodies LLP

Artificial Intelligence:

the key to successful decommissioning in the North Sea? COVID-19, a low oil price and an industry facing increased environmental scrutiny has resulted in a turbulent 2020 for the oil and gas sector. As many North Sea fields reach maturity, stakeholders will be carefully considering their options including decommissioning and diversifying the energy mix. The National Decommissioning Centre (NDC) (a partnership between the University of Aberdeen, the Oil & Gas Technology Centre (OGTC), and industry) has said that efficient late-life management and decommissioning of assets is a "societal and economic necessity". Emerging tech and artificial intelligence (AI) can help achieve this. However, the contribution AI and new technology could have on decommissioning cannot be considered in isolation. The picture is complex, with a variety of issues at play. Technology, diversification and commercial innovation Successful use of AI requires investment, innovation and diversification. Recent developments have seen TAQA team up with Texo DSI for the use of drones in collecting data for maximising economic recovery in late life assets but also planning for decommissioning. Spirit Energy has been working with OGTC on the trialling of new tech for plugging and abandoning wells, and Neptune has also been making use of drone tech to generate 'walk-throughs' of the Cygnus platform for maintenance and inspection to be managed onshore. In another OGTC collaboration, CAN Group has diversified and developed a new data visualisation business stream predicted to achieve cost savings of around ÂŁ1.6million per year.

technologies to have significant impact. Entering into bespoke contracts, revising contracting principles or using framework agreements with call off capabilities as the tech is developed can all support innovation in a low-cost, efficient manner. Another approach could be overhauling the way decommissioning is managed in the North Sea. Lessons might be learned from an innovative Canadian model where liability for undertaking decommissioning work is transferred to a third party (making the actual decommissioning work more cost effective), before the decommissioned asset is sold back to the duty holder. Such a drastic change in the UK would of course require input and engagement with the regulator. Regulatory considerations

Over the last 18 months the OGTC, Opportunity North East and other industry bodies have launched various initiatives with the aim of promoting the use of new technologies in offshore operations and decommissioning. Operators are keen to engage, but more commercial innovation is required for these

Use of AI also needs to be compliant with regulatory requirements. Operators should engage with the Offshore Petroleum Regulator for Environment and Decommissioning through every stage of decommissioning. In addition, the Oil and Gas Authority's proposed revised strategy should be considered. This intends to reposition the "principal objective" of MER UK against the backdrop of the UK Government's commitment to achieve Net Zero

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by 2050. This, combined with the fluctuating oil price, may mean that a decommissioning boom is just around the corner. AI has the potential to significantly contribute to achieving cost efficiencies and Net Zero. Knowledge and skills development COVID-19 has also put energy transition into sharper focus. Recognising the importance of AI and new technology both for the economic recovery post-pandemic and longerterm economic sustainability, the Scottish Government recently commissioned a review in which education and talent were identified as being key to the success of the Scottish technology ecosystem. This theme can be readily applied to the oil and gas industry. There is a massive knowledge and skills base in the "North East corridor" to draw from, with decades of industry experience. This experience should be retained and embraced. Decommissioning is the perfect opportunity to springboard these skills into the energy transition. The Acorn CCS project at St Fergus involves the repurposing of the existing Goldeneye pipeline and the development of a CCS hub and is a current example of harnessing existing skills with new tech, all while taking the next step in energy diversity. Conclusion Considering the examples discussed, AI, while no silver bullet, certainly has the potential to drive cost-efficiencies in decommissioning while supporting energy transition and ultimately, the long-term sustainability of the industry.

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COMPANY NEWS

By Erica Kinmond, Head of Employment, Blackwood Partners LLP

COVID-19

Risk Assessments and Return to Work Planning

As non-essential offices in Scotland are expected to be given the green light to re-open imminently, many are busy working hard to ensure their offices are up to the required safety standards.

he office or workplace being returned to will be starkly different to the one that was left back in March, with employers looking to ensure that they and their employees, contractors and visitors feel safe and have a protocol to follow whilst in the workplace. Employers must, by Law, make sure that they have taken all the reasonably practicable steps to ensure that work environments and related tasks are safe and mitigate risk for their workforce (Health and Safety at Work Act). Employers are expected to achieve this by assessing hazards and risks, then providing appropriate control measures (Management of Health and Safety at Work Regulations). At QHSE Aberdeen Limited, we have seen that the Health & Safety Executive are making no exceptions to these requirements when it comes to Covid-19. It is so important that you, as an organisation, deal with the risks of coronavirus in the methodical manner that you would deal with any other risks to your business or people. Firstly, you will need to consider the

www.ogvenergy.co.uk I October 2020

potential harm to you, your business, your may have to change. You may need to find new employees, your contractors and even your ways of getting information across to these visitors. This could be the physical harm from people and making sure it is understood. contracting the virus, or the mental health harm caused through the stress of returning At QHSE Aberdeen Ltd we appreciate that the to the workplace after months of working recent pandemic a is a new phenomenon, from home or being on furlough. Then you and this can be overwhelming for a lot of will need to ensure the risks of these issues businesses. We have already worked with have been evaluated. What is the likelihood numerous businesses in Scotland to deliver a that employees, contractors and visitors bespoke Covid-19 Risk Assessment and return will succumb to this harm and if they were to work action plan, we also provide a follow to succumb, how severely would they be up assessment with a Certificate stating the affected? Next the organisation should be premises and staff have been assessed and the considering how it can reduce either the advice given is correctly being followed. The harm or the risk. We have already seen these feedback from these businesses in terms of control measures implemented, across other the reassurance it gave their workforce / clients sectors. We have seen that the checkout staff has been great to receive. in our local supermarkets are now behind a perspex window, we follow the line markings We know from our current clients that the as we walk round the store and we see Health & Safety Executive are actively that the tables in our favourite checking businesses to ensure they restaurants have now been have appropriately risk assessed moved further apart. However, and controlled Covid-19 threats though the control and risk and we want to make sure We want to help mitigation measures in your organisations are various premises may all prepared for that call or your business ensure be different, they have visit from the HSE. Donâ&#x20AC;&#x2122;t that you, your one thing in common; make the next newspaper they are the output of a headlines for all the wrong employees, contractors, comprehensive Covid-19 reasons! and your visitors are Risk Assessment. More importantly, we want working safely. Simply installing glass to help your business ensure shields at your reception and that you, your employees, moving desks further apart within contractors, and your visitors are your office, is not enough. This is a working safely, in a manner tailored holistic change to our working lives and specifically to your businessâ&#x20AC;&#x2122;s requirements. undoubtedly this will affect different people in different ways. There is no one size fits all QHSE Aberdeen assist organisations of all sizes approach, as businesses are going to have to and sectors in all Quality, Health & Safety and engage with their employees, contractors, and Environmental matters from developing basic risk visitors as part of a process. Organisations assessments & method statements to the full development, implementation and maintenance must have conversations with their staff to of Certified ISO Management Systems. make sure employees are comfortable with the new ways of working, remembering that some For our Customers, the key is to produce may struggle with the thought of returning consistent, profitable, high quality results to a new work environment. The new risks each time, operating as cost effectively as in the workplace and how the organisation possible, without compromising safety, intends to control them will also need to be security, sustainability or compliance. An ISO communicated to the workforce. Contractors Management System can help you do this and and visitors will need to know exactly what is can simply be defined as the way the business expected of them when they are on site, and is run by its managers. you will have to be aware of precisely what they expect of you and your organisation. For further information, please visit: These elements may have historically been www.qhseaberdeen.com communicated during your contractor/visitor or email info@qhseaberdeen.com induction processes, but even these processes

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