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A d v a n c i n g R e s e r v o i r P e r f o r m a n c e
Baker Hughes Unlocks the Value of Your Deepwater Reservoirs
Take advantage of our deepwater experience and advanced,
field-proven solutions for drilling, evaluation, completions,
production, HP/HT, flow assurance, and much more.
Contact us today to start lowering your risks and raising
the value of your deepwater reservoirs.
www.bakerhughes.com/deepwater
©20
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CarsBak_OGFJ_1011 1 10/18/10 10:55 AM
North Rankin A Platform, North West Shelf Venture – Courtesy of Woodside
November 2010 Oil & Gas Financial Journal • www.ogfj.com 3November 2010 Oil & Gas Financial Journal • www.ogfj.com 3
This sponsored supplement was produced byFocus Reports. Project Director: Jessica SantosPereira. Editorial Coordinator: Manuel Felipe B.Mendoza. For exclusive interviews and moreinfo, please log onto www.energy.focusreports.netor write to [email protected]
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The best view overlooking the energy world these days is from
the land down under. A long time mining giant, the growth of
Australia’s petroleum industry is now adding a preponderant
dimension to its international energy standing. With more than $200 bil-
lion worth of projects to exploit over 400 Tcf of gas, the eyes and resources
of the oil and gas world are being drawn to Australia’s free-market, OECD
environment. Domestic industry and foreign investors, meanwhile, need
only look north to energy hungry Asia for steady long-term demand that
has helped Australia avoid an economic downturn and positioned it, as the
IMF described, at the “forefront of the global recovery.”
4 www.ogfj.com•Oil & Gas Financial JournalNovember 2010
Despite the favorable outlook, 2010 has presented new chal-
lenges to the industry. Fallout from a proposed “super profits”
resources tax spiraled into a mid-year prime minister change and
subsequent federal elections, but still leaves industry yearning for
fiscal certainty; Deepwater Horizon has heightened safety con-
cerns, particularly as liquefied natural gas carries industry further
offshore; and the infrastructure demands of prospective proj-
ects have exposed a looming labor shortage. Australia has the
resources below the ground to grow into an energy powerhouse.
How it surmounts the above ground risks go equally far in deter-
mining its success.
Gas is the biggest game in townWhile a country of Australia’s continental size is no stranger to big
proportions, its plethora of “mega” liquefied natural gas (LNG)
projects planned for the next 10 years are breaking new grounds
for global oil and gas. Geoscience Australia – an entity of the Fed-
eral Department of Resources,
Energy and Tourism (RET) – esti-
mates conventional gas reserves
off western basins to be 164 Tcf
with as much as 250 Tcf of coal
seam gas (CSG) assets in the
eastern states of Queensland and
New South Wales.
Belinda Robinson, chief execu-
tive of the Australian Petroleum
Production & Exploration Asso-
ciation (APPEA) whose member
companies represent 98% of
Australia’s oil and gas, estimates
reserves-to-production to be in
excess of 250 years. “Taking into
account the other energy sources
we have, it is an indisputable
statement to say that we are an
energy superpower,” she asserts.
LNG is forecasted to be Aus-
tralia’s fastest growing energy
export over the next two decades.
Twenty-one years after the first
LNG cargo delivery from Austra-
lia’s flagship Northwest Shelf Ven-
ture (NWSV), there are over $200
billion worth of LNG projects in
the planning phases, with final
investment decision (FID) immi-
nent for many of them. By 2015
Australian LNG exports could
exceed 40 million tons per year
as Chevron’s Gorgon Gas Project
and Woodside Petroleum’s Pluto
Project come onstream. Beyond
2015, up to 10 other projects
could make Australia the world’s
second largest LNG exporter.
Along the way Australia will be
home to cutting edge develop-
ments: the first conversion of
CSG-to-LNG; the first application of floating LNG technology; and
the world’s largest carbon capture and sequestration project.
The proliferation of Australian natural gas projects coincides
with declining levels of domestic crude oil production. Australia’s
oil production has been steadily declining since 2000 leading to a
$16 billion trade deficit in crude oil, refined products, and lique-
fied petroleum gas. Geoscience estimates the deficit could reach
$30 billion by 2015 with net imports of liquid fuels as high as ¾
of consumption by 2030 in the absence of a major new discovery.
“The outlook for oil is not too good,” says Robinson. The oil
reserves-to-consumption ratio is less than 10 years. The upside
is that there is still the prospect of a major new discovery. Only
20% of our sedimentary basins have been explored. But barring a
major discovery, the outlook for oil in Australia is very grim.”
Meanwhile, gas production continues to grow to meet both
domestic and export demand reinforcing its importance to the
energy mix.
Gas reserves and resources
Source: APPEA
AUSTRALIA3P113 + Tcf*
2P61 + Tcf*
2P7 + Tcf
Resourcepotential
12 Tcf
CSGResource potential
250 + Tcf*
Belinda Robinson, Chief Executive, APPEA
Dr. Clinton Foster, Chief of Petroleum and Marine Division, Geoscience Australia
Hon. Martin Ferguson, Minister for Resources and Energy, Minister for Tourism - Federal Government of Australia
6 www.ogfj.com•Oil & Gas Financial JournalNovember 2010
The wild and gaseous westGas in Australia is segmented between onshore CSG assets in the
east and predominantly offshore deposits in Western Australia
(WA) and the Northern Territory. While a palpable excitement is
sweeping both markets, the offshore projects out west that are
stimulating innovation and strengthening marine services suggest
that the right time and right place for gas is today in WA.
“Seventy percent of Australia’s oil and gas is off the Western
Australian coast,” says Colin Barnett, the premier of Western Aus-
tralia. “The industry is dominated by WA. Of the three major reser-
voirs off the coast of WA – the Carnarvon, Browse, and Bonaparte
Basins – only the Carnarvon has been relatively explored.”
The offshore oil and gas reserves today in WA have been com-
pared to the same stage of development as the Gulf of Mexico
30 years ago, a comment brought to the premier’s attention on
an April 2010 visit to Texas. Perth, consequently, has drawn ref-
erences as the “mini-Houston” given its landscape of superma-
jors and multinational contractors. “What is happening here is of
world significance,” Barnett adds. “The sizes of the gas fields that
have been and will continue to be discovered are large by interna-
tional standards and certainly large by Gulf of Mexico standards.
The significance of the gas reserves here is their proximity to the
expanding markets of Asia.”
Where to find the majorsAttractive linkages to Asia and a stable political environment have
drawn substantial investment from the world’s major oil and gas
companies. Commitments vary from Shell and Chevron with over
100 years in Australia to GDF Suez and Petrobras, both relative
newcomers. But the message is clear: Australia is a high priority
market for global growth strategies.
Shell, a founding member of the NWSV, projects half of its
global output to come from gas by 2012. “Globally Shell produces
over 18 million tons of LNG per year,” says Ann Pickard, country
chair of Shell in Australia. “By 2020 we will
add another 15 million tons per year, more
than half of which will come from Austra-
lia. Australia is critical in terms of Shell’s
growth in the LNG marketplace.”
Underpinning Shell’s projections are its
25% equity in the Gorgon Gas Project and
a joint venture (JV) with PetroChina which
will acquire Australian junior and CSG rich
Arrow Energy for LNG developments in
Queensland. Shell is also pioneering float-
ing LNG technology through 100% equity
in the Prelude Project and 27% partici-
pation in Sunrise LNG. Prelude is widely
expected to be the first successful dem-
onstration of floating LNG. “Prelude will
open up a whole new ‘game’ in terms of
Hon. Colin Barnett, Premier of Western Australia
Ann Pickard, Country Chair, Shell in Australia
Seiya Ito, Managing Director, Inpex Australia
Jeff Dowling, Oil & Gas Leader Oceania, Ernst & Young
Fig. 1: Historical Australian oil and gas production
Source: APPEA
600
Liquids (oil, condensate, LPG) (mmbls) Gas (sales gas, LNG) (bcf)
800
1000
1200
1400
1600
1800
2000
300
mm
bls
bcf
250
200
150
100
50
0
19931994
19951996
19971998
19992000
20012002
20032004
20052006
20072008
2009
Our mission is a sourceof pride each and every day:responding to today’s needs whileshaping the world of tomorrow.
gdfsuez.com
Throughout the world, the men and women at GDF SUEZ focus their businesses on responsible growth
to take up today’s major energy and environmental challenges: meeting energy needs, fighting against
climate change, ensuring the security of supply for our customers and maximizing the use of resources.
In the Timor Sea off the coast of Australia, we are leading the development of the Bonaparte LNG project
in a partnership with Santos. Our aim: to extract natural gas from three fields, and liquefy it in a floating LNG
plant for ease of storage and transport. Our close collaboration with our Australian partner reflects our
commitment to ensuring a reliable supply of liquefied natural gas to the Asia-Pacific region.
© P
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-FR
AN
ÇO
IS G
RO
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AN
. A
GE
NC
E M
AR
C P
RA
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IN.
CarsGdf_OGFJ_1011 1 10/18/10 11:41 AMNovember 2010 Oil & Gas Financial Journal • www.ogfj.com 7
access to stranded gas reserves,” Pickard adds. “It will also be
the first of several FLNG facilities. Our plan is to design one and
build many.”
Given that the French were the original pioneers of the LNG
trade launching the first shipment from Algiers to Britain in 1964, it
is only fitting that GDF Suez, the industry giant in integrated LNG
projects, has invested in offshore gas’s hottest market. In January
2010 GDF Suez finalized an agreement to purchase a 60% share in
three gas fields in the Bonaparte Basin. Already present in Austra-
lia through the waste and water businesses, the Bonaparte LNG JV
with Santos, owner of the fields’ remaining 40%, represents GDF
Suez’s first move into the Australian energy sector.
“Bonaparte LNG is a strategic project for us,” say Jean-François
Letellier, managing director of GDF Suez Bonaparte. “It adds a
major component to the natural gas value chain of GDF Suez while
reinforcing our position as a world leader in LNG.”
Bonaparte LNG is an integrated project whose purpose is to
build a floating liquefaction plant with 2 million tons per annum
capacity in the Timor Sea. Final investment decision is expected
by 2014. “We consider integrated projects as key to accessing
competitive LNG resources,” Letellier adds. “Australia provides
the opportunity to have an LNG
project with exploration, produc-
tion, liquefaction, shipping, and
marketing all together. LNG is
becoming a global market and an
LNG leader such as GDF Suez has
to be present in the Asia-Pacific
market.”
While the French pioneered
the LNG trade, many would argue
that LNG today is very much an
Asian industry in both production
and consumption. Limited natural resource endowments have
made Japan, South Korea, and Taiwan big customers of Pacific
Basin LNG. China and India, of course, are growing consum-
ers. Japan in particular – only 16% energy self-sufficient and the
world’s largest LNG importer – has a strong presence in Austra-
lia to address critical energy security needs. Osaka Gas, Tokyo
Gas, and Kansai Electric all hold minority interests and long-term
purchase agreements in Australian LNG projects. Japan Australia
LNG Pty Ltd (MIMI) is a founding partner of the NWSV.
Jean-François Letellier, General Manager, GDF SUEZ Bonaparte
8 www.ogfj.com•Oil & Gas Financial JournalNovember 2010
In the right place at the right time
www.metgasco.com.au
CarsMet_OGFJ_1011 1 10/18/10 11:06 AM
The face of Japan in upstream Australia, however, is INPEX.
In the late 1980s INPEX targeted Australia as the next stop in its
international diversification. A joint exploration block with BHP
Billiton yielded ten years of successful oil production allowing for
more aggressive growth in Australia. The result was WA-285-P.
Better known as the Ichthys field, it is one of Australia’s largest gas
fields with an estimated 12.6 TcF of gas and an expected operat-
ing life in excess of 40 years. Ichthys’s 527 million barrels of con-
densate makes it the largest petroleum liquids discovery in Austra-
lia since 1966. Joint venturing with Total to glean LNG expertise,
the ambitious field development plans call for one of the world’s
largest offshore central processing facilities and an 885km pipeline
to an LNG facility in the Northern Territory city of Darwin.
Ichthys will engender unprecedented engineering challenges
as well as usher in what managing director Seiya Ito describes a
“new beginning” for INPEX in Australia. “We have been success-
ful as an exploration operator. It is now time for us to shift into a
developing operator and ultimately a production operator. Ich-
thys is an asset that we will grow with towards these new stages
of the company.”
The new paradigm for Australian energyUnequivocally, the project that brings Australia to center stage
is Gorgon LNG, operated by Chevron with Shell and ExxonMobil
holding 25% interests, respectively. Superlatives abound for the
$43 billion resource investment, the single largest in Australia’s his-
tory. Gorgon is estimated to produce 15 million tons of LNG per
year – 8% of current global capacity – every year over its projected
40 year lifespan. “One project; 8% of global capacity. By any mea-
sure, that’s huge,” emphasized Geroge L. Kirkland, Chevron Cor-
poration’s executive vice president of Global Upstream and Gas,
at Gorgon’s FID ceremony in September 2009. According to ACIL
Tasman, an economic consultancy, Gorgon will boost Australian
GDP by A$64 billion and generate government revenues of A$40
billion over its first 30 years. It will also create 10,000 jobs during
peak construction and 3,500 more throughout the project’s life.
Gorgon’s gas processing plant will be developed on Barrow
Island, an A-class nature reserve located 56km off Western Austra-
lia’s coast. As part of its environmental stewardship, Gorgon will
host the world’s largest carbon capture and sequestration project.
Gorgon’s externalities can be felt here and now in Australia in the
way that project planning is categorically elevating the environ-
mental standards and shaping the strategic directions of compa-
nies throughout the entire Australian oil and gas value chain.
An appetite for explorationJust how untapped Australia’s offshore basins are can now come to
light after a change in regulatory framework that has made specula-
tive surveying a growing business in Australia.
In 2007 Australia increased the time under which speculative
survey data becomes public domain from five to 15 years, a move
that is drawing the attention of the world’s top geophysics com-
panies. In practice, oil companies picking up relinquished blocks
could have waited until data became public rather than pay for new
data sets. “Essentially you only got one big ‘bite at the cherry,’”
explains Tony Weatherall, VP geomarket director Australia, New
Zealand and PNG. Weatherall chaired the International Associa-
Oil 36%
0 10 20 30 40 50 60 70 80 90 100%
Black coal 26%
Natural gas 22%
Brown coal 11%
Renewables 5%
Fig. 2: Share of primary energyconsumption, 2007-2008 (%)
Source: ABARE
November 2010 Oil & Gas Financial Journal • www.ogfj.com 9
tion for Geophysical Contractors
for two years which lobbied hard
for the government to change the
regulation. As a result, he com-
ments, “the regulatory change
altered the landscape of seismic in
Australia, probably forever.”
Results of the change are evi-
dent. There were no speculative
surveys shot in Australia after 2002
with Veritas (before the merger
with CGG) being the last to shoot
in 2D. Since 2007 CGGVeritas has shot at least 3,000km of specula-
tive surveys by Weatherall’s estimates.
Boasting the largest fleet in the world amongst geophysics com-
panies and with seven vessels in Asia-Pacific, the goal for CGGVeri-
tas is to bring its first vessel back into Australia since 2008. “We are
certainly going to grow both proprietary and speculative surveys in
Australia,” he asserts. I would like to be shooting surveys up in the
Tony Weatherall, VP Geomarket Director Australia, New Zealand and PNG, CGGVeritas
Australians awoke on June 24 to the surprising headlines of a new prime minister in office. Julia Gillard replaced Kevin Rudd as head of the Labor Party and prime minister of Australia in a swift change of leadership that capped off a precipitous fall in Rudd’s domestic approval ratings. Gillard has since called federal elec-tions and on September 7, 2010 was elected prime minister on her own mandate following Australia’s first hung parliament since World War II.
Rudd’s demise was largely blamed on two factors: first, his decision to delay legislation on an emissions trading plan known as the Carbon Pollution Reduction Scheme (CPRS) until 2013. Having labeled climate change “the greatest moral challenge of our generation,” his abandonment of the CPRS in exchange for budget-balancing issues ahead of federal elections damaged opinions on his principles and eradicated support from climate change advocates.
Second, and more unsettling for the resources industry, was his proposal of a resources “super profits” tax (RSPT) in April. The rancorous debate that ensued between industry and government for two months eventually cost Rudd his job. The debate cen-tered on the rate at which government defined “super-profits.” Any profits above 6% – equivalent to the long-term government bond rate – would be taxed at an additional 40%.
While the RSPT would not have affected offshore projects, it would have drastically altered the economics of onshore develop-ments, including major CSG projects in the works. Also damag-ing was the tax’s retrospective component to apply to existing projects for which investment decisions had already been made. Equally alarming was the absence of consultation between indus-try and government prior to the tax’s proposal. From a macro perspective, Australia’s stable, low-risk environment that had
attracted so much foreign investment had been compromised. Australian “sovereign risk” became an issue.
Since assuming leadership, Gillard has rescinded the RSPT, proposed variations of existing petroleum rent taxes, and opened more transparent communications channels with industry. As of the writing of this publication, no final decision has been reached concerning reforms to the fiscal regime. Below are comments from industry leaders voicing their opinions and concern over the original RSPT.
“Oil and gas is a long term investment. Long term investments need long term certainty. There are enough risks in the business through exploration, development, and oil prices without having to put regulatory and tax risk into it.” – Brent Steedman, partner, oil & gas KPMG
“Investment dollars go where the resources are and where regimes are stable. Australia is blessed with enormous resources, which is good news. But any sort of unexpected change in the tax regime discourages investment because people will wait and see what develops.” – Ann Pickard, country chair, Shell in Australia
“If the return on your investment is 6% and you are going to pay excess tax on anything above that, why don’t you just buy government bonds and sit home and watch television? One thing I know about resources is that it attracts particular sorts of inves-tors who are willing to take risks. It is a risky business and people expect a better than 6% return to be compensated for the risk.” – Norman Moore, Minister of Mines, Petroleum, Fisheries and Electoral Affairs, Government of Western Australia
“A really important point for us is trust and confidence. In Qatar, once we agree on things they don’t get changed. We do not go and do funny things and ruin the market for ourselves.” – Faisal Al Suwaidi, CEO of Qatargas
CPRS & RSPT: politically charged acronyms
CGGVeritas geologist offshore
10 www.ogfj.com•Oil & Gas Financial JournalNovember 2010
Browse Basin and in the Northern Territory. The other growth here
is obviously processing. We have a very strong depth processing
team here and we get a lot of work from Australia.”
If you build it they will come LNG projects pushing the industry further offshore are stimulating
a new generation of marine services. New ships break grounds in
size and design and the importance of supply bases are becom-
ing more apparent to address logistical challenges. Despite being
entirely within Australian waters, the northwest’s offshore gas
fields are equidistant from the industrial hubs of Singapore and
Perth. The competition amongst supply bases can very well see
Singaporean marine yards servicing Australian offshore projects.
WA’s response for infrastructure in support of local industry is
the Australian Marine Complex (AMC). Located 20km south of
Perth the AMC is an industrial cluster of manufacturing, fabrication,
and assembly services for the marine, defense, oil and gas, and
resource industries. Earlier this year the AMC commissioned WA’s
first floating dry dock which will prove critical in servicing upcoming
projects. “We are expecting about 80 vessels to be on the North-
west Shelf over the next few years,” says AMC general manager
Mike Bailey. “A lot of those vessels will be running to and from this
facility. All of them will need repair, maintenance, and dockings.”
In the early 1970s, after a decade of unsuccessful drilling, a small independent Australian company struck 50 TcF of gas off WA to form the basis of the NWSV. While offshore gas might be the big-gest game in town, don’t tell that to Australia’s junior E&P compa-nies actively drilling onshore with the hopes of becoming the next Woodside Petroleum.
“Australian investors like betting on small stocks to see a little bit of exploration luck and watch our share price go up tenfold. They invest in a small company to see it become the next Wood-side,” says Russell Langusch, managing director of Orion Petro-leum with exploration assets in New South Wales. Juniors in Aus-tralia work as scouting agents in a sense for the bigger players whose attention is diverted to offshore basins or, in the case of CSG, liquefaction facility planning. Strategies range as to how to draw the attention of larger farm-in partners. “We generally look at assets that are impaired in some way,” says Langusch. “We would look for assets that companies have walked away from that have been too technically hard to commercialize. That is the edge we can bring – the technical ability to rescue assets that have been suspended rather than a prime A-grade asset.”
A company like Central Petroleum leans on its size by boast-ing the largest acreage package in Australia, predominantly in the Northern Territory’s Amadeus Basin; certainly attractive farm-in potential for anyone. “Independent assessments have given
us estimations of a viable exploration target of over 600 billion tons of coal above 1,000 meters that might be developed either through underground coal gasification or coal-to-liquid proces-sor,” says managing director John Heugh.
Historically, the Cooper Basin has been the main onshore region for hydrocarbon production. As such, it is very crowded with companies looking to leverage off neighboring petroleum plays. “Almost every block in the Cooper Basin has been awarded,” says Mike Scott, managing director of Cooper Energy. “In our portfo-lio we probably have three to four years of prospects left and then we will have to replace those exploration blocks with new acreage. We are active overseas precisely for that reason.”
The game changer for juniors in Australia could most likely be CSG – just ask junior CSG specialist Metgasco. David Johnson, managing director, describes Metgasco’s acreage position as “similar to that of Queensland Gas Company at the time it was taken over by BG.” Convenient for Metgasco, estimates cite the Bowen-Surat-Clarence Moreton system in eastern Australia to be a major gas producing province for a considerable period of time. “Translating gas in place to reserves and extracting gas commer-cially is an ongoing process that we are now in the middle of.” It is a discussion that would certainly be of interest to a larger company, given the CSG-to-LNG infrastructure planning amongst a consortia of supermajors.
A piece of the pie for everyone
Central Petroleum LimitedABN 72 083 254 308
John Heugh Managing Director
Phone : +61 8 9474 1444
Email : [email protected]
Website : http : //www.centralpetroleum.com.au
• Prospective for oil, gas, condensate, helium, coal
• Surrounds producing fields
• Conventional, unconventional plus UGC, CTL, GTL, LNG potential
• JORC “Exploration Target” over one trillion tonnes coal
2• 270,000km (70 million acres) c. 1/2 the size of Texas
Texas Queensland
New South Wales
Victoria
Tas.
Western
Australia
South
Australia
Northern
Tertiary
CarsCen_OGFJ_1011 1 10/18/10 10:09 AM
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November 2010 Oil & Gas Financial Journal • www.ogfj.com 11
The AMC’s most iconic representation and greatest asset is its
Common User Facility (CUF). Bailey characterizes its enabling role
as a form of “industrial empowerment.” The CUF exists to provide
Australian based businesses with access to
large scale industrial infrastructure. The
CUF was initially funded by $100 million and
$80 million from State and Federal Govern-
ment, respectively, which enabled the con-
struction of wharves, fabrication halls, and a
protected harbor.
“Our role is to enable a company to do
projects that they could not undertake with
just their facilities by giving them that virtual
capacity increase,” says Bailey. “Whereas
they could fabricate something up to 200
tons in their workshop, our role is to give
them the ability to make a module of 2,000
tons. We want to see projects coming to
WA that can and should be done here. We
are very biased in that sense.”
A second piece of vital infrastructure for
servicing Northwest Shelf projects is the Dampier Supply Base
that is owned by Mermaid Marine Australia, the country’s largest
marine services provider for offshore oil and gas. A stand alone
Common User Facility - Australian Marine Complex
12 www.ogfj.com•Oil & Gas Financial JournalNovember 2010
Orion Petroleum Limited
An Ambitious
Australian Exploration Company
��7 onshore exploration licences
��Conventional plus CSG potential
��Prospect sizes to multi – tcf targets
� Always looking for new growth opportunities
Suite 303, Level 3, 10 Bridge Street
Sydney NSW 2000 Australia
T: +61 2 9254 9000 E: o�[email protected]
W: www.orionpetroleum.com.au
CarsOri_OGFJ_1011 1 10/18/10 11:39 AM
$100 million asset, managing director & CEO Jeff Weber also con-
siders it Mermaid’s single biggest competitive advantage. “Peo-
ple often underestimate the challenges of operating vessels in the
northwest compared to Singapore where, if a vessel encounters
a problem there are 20-30 suppliers to help at any time. It is a
tremendous asset for a region where it is hard to operate because
of minimal infrastructure and scarce supplies.”
Mermaid’s core business continues to be the provision of sup-
port vessels and has invested over $100 million in fleet renew-
als over the last five years. Utilizing its vessels for pipelay sup-
port on the Pluto Project not only insulated the organization from
the financial crisis, but triggered growth in 2008-2009. But with
Gorgon and other projects approaching production, supply base
operations are becoming increasingly important. Since 2002 Mer-
maid’s operations have shifted from 95% vessels and 5% supply
base to 70% and 30% this year. “You can move boats around to
meet the market. But with a supply base it creates a ‘build and
they will come’ type scenario,” he adds.
As projects and customers come, Weber sees a host of exter-
nalities driving business. “You get to know your clients very early
on in the cycle. If you are doing offshore work, the first thing that
you do is get an office and a warehouse to store your gear. By
the time a client needs a vessel to begin their offshore work we
already have an established relationship with them.”
Exposure to long-term contracts was particularly beneficial to
Australian marine service companies during the crisis. With Gor-
gon reaching FID in September 2009, losses carried into the cri-
sis years were quickly recouped, if not, evaded altogether. Andy
Cowan, QHSE manager at Bhagwan Marine, light-heartedly com-
ments, “what financial crisis?”
Founded in 1998 with just one ship, Bhagwan Marine has flour-
ished over the past 12 years into the owner and operator of a
fleet of over 35 vessels. Its newest addition will be a custom built
landing craft – the Bhagwan Shaker – to service Barrow Island; the
Shaker’s sister ship, appropriately named the Bhagwan Mover, has
already been in operation for Gorgon for the past 12 months. In
addition to obvious revenues, servicing Gorgon has provided an
immediate opportunity to exploit the strength of Bhagwan’s ves-
sels while positioning it for future growth. “This is a niche market
and there are not many companies dealing in the port services
out to and around Barrow Island, which is largely shallow water,”
explains Cowan.
Made in AustralasiaConstruction of the AMC’s floating dry dock and the Bhagwan
Shaker was done by Strategic Marine, Australia’s largest builder
for oil and gas industry supply boats. Strategic Marine leans on
a rich tradition of shipbuilding born out of WA. Chairman Mark
Newbold explains that WA developed a commercial expertise in
building aluminium boats before anyone else. “There were a num-
ber of companies in WA that became exporters and a host of rea-
sonable sized yards that became experts. We are now exporting
the technology that we developed over the years.”
TSmarine Havila Harmony at work offshore Western Australia
14 www.ogfj.com•Oil & Gas Financial JournalNovember 2010
Adapting to the economics of the industry, Strategic Marine
has exported its capabilities to its four shipyards in Australia,
Singapore, Vietnam, and Mexico. While proximity to Asia allows
operators to satisfy a hungry commodity demand, Australian man-
ufacturers and fabricators benefit from cost-competitive labor and
resources. Globalization and the fully developed Asian supply
chain have shifted industry dynamics forcing Australian manufac-
turers and fabricators to adjust their strategies. John Sheridan,
CEO of AusGroup, the largest fabricator in WA, explains that
“what typically comes local is schedule-critical or a product that
is price insensitive.” Fully developed project modularizations,
meanwhile, are sourced in Asia.
Strategic Marine has followed suit by developing niche spe-
cialties for its Asian yards. “Singapore is very much a special-
ist aluminium yard that is quite mature in its development and is
producing high quality work. The Vietnamese yard has opened
up quite a bit of business for us because of its steel capabilities,”
says Newbold. The Vietnam yard also played an integral role in
the construction and assembly of the AMC’s floating dry dock.
The Australian yard, meanwhile, being located within the AMC, is
shifting more into marine services repair and maintenance mindful
of the future demands of the Northwest Shelf.
Global content, local continentWhile State supported projects such as the AMC provide an
important impetus for industrial development, the synergies from
mature oil and gas provinces are proving equally beneficial in fos-
tering service sector growth. The talent and resources that have
made Aberdeen and Stavanger centers of subsea excellence are
CarsAMC_OGFJ_1011 1 10/18/10 10:08 AMCarsBha_OGFJ_1011 1 10/18/10 11:37 AM
Bhagwan Mover at Barrow Island
November 2010 Oil & Gas Financial Journal • www.ogfj.com 15
now gravitating to Perth. From executive
managers to new global headquarters, WA
oil and gas services are becoming a truly
global mosaic, with a North Sea twist.
Perhaps no greater testament to Austra-
lia leveraging, and ultimately overtaking,
North Sea activity is TSmarine, a subsea
contractor specializing in integrated life
of field services. TSmarine was founded in
Aberdeen in 2004. The Perth office, which
began in 2006 from a Woodside contract,
quickly established itself as one of the best
performing centers and completed a man-
agement buyout of the parent company in
November 2009.
As chief executive John Edwards
explains, “There was a period of nearly two
years when this office was funding the head
office which was in pretty bad financial
shape. We decided that the best way to
ring-fence what we had and make sure that
our success continued was to buy the busi-
ness from the parent company. That also
gave the parent company the needed cash
to resolve their financial issues.” Shortly
after finalizing the deal the Aberdeen head
office shut down. To complete the circle,
TSmarine plans to reopen an office in Aber-
deen on the back of a service contract.
CarsMer_OGFJ_1011 1 10/18/10 11:44 AM
The Mermaid Voyager Berthed alongside the Mermaid Marine multi user wharf facility in Dampier
The technical challenges of subsea field
developments are creating a market for life
of field service providers. TSmarine, how-
ever, explains Edwards, is quite different
from other subsea construction companies.
“We focus most of our activities around
the well. In addition to our rigless inter-
vention capabilities we can do all the low
margin work for a drill rig typically done by
them because no one else has the technol-
ogy to do so. In our business any activity
close to the well is the highest margin work
that we can do because of its value for oil
companies.”
TSmarine’s integrated capabilities
afforded by its vessels and ROVs were a
serendipitous surprise for Woodside when
fulfilling its first contract. Essentially TSma-
rine’s services exceeded their original
mandate. “We did not just do well inter-
vention: we were the first company in this
region to install and run a Christmas tree
thereby freeing the drill rig to fulfil its real
value of actually drilling; we installed flow
bases, tied trees into each other with jump-
16 www.ogfj.com•Oil & Gas Financial JournalNovember 2010
ers, and installed drilling conductors. It is
not typical that a company has all of those
services under one roof,” says Edwards.
Scotland’s North Sea neighbors and fel-
low experts in offshore services, the Nor-
wegians, are also finding a comfortable
home in Australia with multinational com-
panies steadily increasing their presence to
grow alongside major operators. Subsea
specialist Acergy made the full leap into
Australia in 2006 with the establishment
of a permanent office in Perth. “The scale
and complexity of the LNG projects com-
ing to market over the next few years are of
great interest to a company like Acergy,”
says Darren Cormell, managing director of
Acergy Australia.
Well equipped with world class technol-
ogy, Cormell considers Acergy’s greatest
growth driver in Australia to be its human
assets of strong local talent that leverages
the resources of a global corporation. “The
Acergy model is around having the right
mix of local knowledge that is backed by a
global consistency,” he explains. “We have
been building a local track record over the
past several years to understand the local
issues. You back that up with a company
that understands how to deliver very large
CarsStr_OGFJ_1011 1 10/18/10 10:16 AM
CTC Marine RT1 Rock Trencher
November 2010 Oil & Gas Financial Journal • www.ogfj.com 17
projects and I think it is a model for success.”
Acergy has been strategically building its portfolio of assets to
support its local talent. SapuraAcergy, a JV between Acergy and
SapuraCres, commands the Sapura 3000, a regionally based vessel
with leading capabilities in heavy lift and deep end pipelay. A pro-
posed combination with Subsea 7, currently awaiting regulatory
approval, will see an enlarged global fleet of 42 vessels with the
full spectrum of pipelay capabilities, several of which would likely
be bound for Australia. According to Cormell, “the enlarged fleet
will have the opportunity to make more vessels resident in certain
parts of the world. As Australia becomes an ever increasing part
of the world, it is likely that we will look to optimize the fleet to
make them as attractive as possible in the region.”
With over 20 years experience providing mooring solutions to
the harsh conditions of the North Sea, Norwegian incorporated
Viking Moorings now brings its suite of offerings to Australian
waters. “In Australia we have not had the high caliber technical
mooring solutions that we have now,” explains Perth branch man-
ager Trond Watland. “We have introduced different methods for
semisubmersible rig mooring such as fiber ropes which are new to
Australia.”
A premium on safety has placed a strong emphasis on expert
training. With the training still sourced from Norway, Viking Moor-
ings embodies North Sea-Australian knowledge transfer. “Training
people in anchor handling, fiber rope management and being able
to certify, qualify, and repair on deck is a trait that the Australian
market does not yet have, so most of our training has come out
of Stavanger,” Watland explains. “We have an all-Australian crew
in Karratha and Dampier that is being trained by Viking Moorings
staff that has come in from Norway. Everyone on that crew are the
only ones who can do what they do in Australia. It is a valuable
input that is coming into our workforce.”
When combining North Sea know how with Asian manufactur-
ing and a strong local industrial base, the oil and gas sector’s orga-
nization has a truly multinational
dimension. As Christian Lange,
CEO of Neptune Marine Services,
argues, “I am intolerant of people
saying that Australia lacks the tech-
nology or expertise as the Gulf of
Mexico or North Sea. Australia
has a fantastic education system
and most of the industry here have
either come from those regions or
have worked there and repatriated.
In many cases we lead the charge.”
Structured for successMajor multinationals with established expertise in their fields are
finding that success in Australia comes as much from their corpo-
rate structuring as from their product offerings. Oilfield services
giant Baker Hughes, for example, is comfortable accepting the
challenges of Australia with the backing of an internationally inno-
vative body of work. “A priority is to focus on more deepwater
and high-temperature reservoirs, aligning with the work under-
taken by major operators in the area. Most of the high-tech infra-
structure required is very familiar to Baker Hughes,” says manag-
ing director Bernie Kelly.
The biggest difference, however, for Baker Hughes in Australia
has been the efficiencies generated from their geomarket model,
developed over one year ago, which shifted vice-presidents to
regions and consolidated the management of various product
lines.
Historically, Baker Hughes’ product lines were managed sepa-
rately and entered the market at different times to coincide with
stages of clients’ oilfield production. “In Australasia, we inherited
seven different offices and five different sites,” says Kelly. “One
of the areas we are focusing on is consolidation of our separate
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Project-driven solutions and
specialist technology for subsea
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A M E M B E R O F
TRICOMARINEG R O U P
A D E P T A T A D A P T I N G
CarsCTC_OGFJ_1011 1 10/18/10 11:35 AM
Mark Newbold, Chairman, Strategic Marine
November 2010 Oil & Gas Financial Journal • www.ogfj.com 19
operational bases, which were the result of our previous
divisional approach, to provide improved efficiencies to
customers.” New efficiencies now ready Baker Hughes
to capitalize on both the offshore and CSG segments of
the Australian market.
“Deep water and high temperature reservoirs are the
areas in which there is a lot of exploration to come. The
level of tools that we are going to run down in Austra-
lia are becoming much more high-tech than we have
seen historically. We can export our learnings here to
other areas,” says Kelly. The immediate impact of Baker
Hughes’s offshore reservoir services will be complimented
by future growth in the CSG arena by
way of its September 2009 acquisition
of BJ Services and its large CSG port-
folio. Notes Kelly, “Baker Hughes will
be reassessing its strategy in servicing
CSG, leveraging the synergies gained
with BJ Services’ customer base, infra-
structure and expertise.”
Integration, meanwhile, is the
defining feature of professional ser-
vices giant Ernst & Young throughout
Asia-Pacific. Just as major operators
have set up regional centers for value
chain operations, Ernst & Young has
replicated its approach by establish-
ing hubs of expertise for its practices:
an upstream business in WA and
Queensland; a trading business in Sin-
gapore; and a specialist service busi-
ness to support buyers in Beijing. The
result, as Perth’s managing partner
and oil and gas sector leader Jeff Dowling notes is that,
“of the ‘Big Four,’ Ernst & Young is the only firm that is
financially integrated throughout the whole Asia-Pacific
region.”
“Shell is a very good example of this,” he adds. “Shell
has relocated its upstream business in Oceania to Perth.
They also have a trading hub in Singapore and they are
interfacing with customers in Beijing. All of the global
majors are doing the same and we are replicating our
business model accordingly. We have evolved into three
hubs with oil and gas specialists across our disciplines in
those three areas to provide a seamless service between
the producers, buyers, traders, and support services.”
Darren Cormell, Managing Director Australia & New Zealand, Acergy
Acergy Team working Offshore
Christian Lange, CEO, Neptune Marine Services
Acer_OGFJ_1011 1 10/14/10 5:03 PM
20 www.ogfj.com•Oil & Gas Financial JournalNovember 2010
Innovation down underThe subsea systems for the Gorgon Proj-
ect in the heart of the Northwest Shelf face
combinations of high pressure, high tem-
perature, and corrosive product. “One of
the biggest challenges is the deep water
element, and especially the continental
shelf. It is effectively a subsea cliff 100km
offshore across which you need to install
a pipeline,” explains Phil Brown, director
& performance team leader of J P Kenny
Perth.
“The environmental conditions there
are possibly more challenging than any
other place in the world,” he adds.
“The cyclones generated in the area are
extremely powerful. You have a num-
ber of other interesting features like the
solitons – giant subsea rolling waves that
are within the water column – which you
would not encounter in many other parts
of the world. Adding the extreme tides,
currents, and cyclones all together, it is a
tremendous metocean design challenge.”
Responding to these challenges, J P
Kenny has applied its FEED expertise on
some of the biggest and most difficult
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CarsVik_OGFJ_1011 1 10/18/10 10:11 AM
Viking Moorings personnel in action on prelay vessel
November 2010 Oil & Gas Financial Journal • www.ogfj.com 21
subsea projects in Australia: Gorgon upstream development in
partnership with Technip; subsea development for the Julimar
Project, Apache’s largest ever gas project; and INPEX’s Ichthys
Project. “We have always had a focus on optimizing and eliminat-
ing the layers of design conservatism that have
historically existed,” says Brown. “We have also
expanded that philosophy into other design fea-
tures such as lateral buckling, for example.” All
of this has branded J P Kenny Perth an emerg-
ing center of excellence amongst it global offices
for pipeline stability. Considering Wood Group
Kenny’s global presence and identity as the spe-
cialist of its kind in the world, the Perth office’s
recognition speaks to the degree of difficulty of
subsea Australia.
Adding another dimension to subsea pipelines
is the difficulty in their design, yet the ease in
which they can be altered, even scrapped, from a project’s plans.
Eric Jas, managing director of Atteris, a design engineering com-
pany, cites that despite the difficulty of pipeline engineering, “it
doesn’t seem to me that offshore pipelines between a field and
an onshore treatment facility are at the top of a developer’s list.
A lot of the focus from an engineering and developing point of
view is at the field itself – wells, platform, onshore plants and the
marine facilities to export LNG. The pipeline is often seen as the
detail that connects the two. It is not underesti-
mated infrastructure, but normally where we put
the pipeline on the seabed depends on where the
plant will be built.”
In April Woodside announced plans to develop
its Sunrise Field with a floating LNG facility rather
than a pipeline to either East Timor or the North-
ern Territory. “That is how easily a pipeline can
be eliminated on paper,” asserts Jas. Several
large projects are currently in the planning phase
for pipeline design, construction, and first gas.
Those whole views could easily change over the
next year, Jas believes.
Meanwhile, for those pipeline projects that do go ahead, the
northwest’s seabed poses considerable challenges. Brown char-
acterizes its unconsolidated limestone materials at the top and
hard rock beneath as very difficult foundations for installing big
CarsJpk_OGFJ_1011 1 10/18/10 10:48 AM
Phil Brown, Director and Perfor-mance Team Leader - J P Kenny
22 www.ogfj.com•Oil & Gas Financial JournalNovember 2010
platforms or trenching pipelines.
“There is significant variability
from calcarenites and limestone
to deep sand,” agrees Marcus
Hemsted, technical sales man-
ager of CTC Marine. “There are
not a lot of trenching machines
capable of burying trunk lines in
these seabed conditions in the
current marketplace.”
Recognizing this void, CTC
Marine established a local pres-
ence in Perth in 2008 to grow its Australian operations bringing
with it cutting edge technology that is customized for the North-
west Shelf. Operating one of the biggest trenching fleets in the
world, the specific feather in the asset cap of CTC Marine is RT-1,
a potential game changing technology for large diameter subsea
pipeline stabilization. Weighing over 200 tons and capable of
trenching pipes up to 1.5 meters in diameter, Hemsted described
RT-1 as the biggest mechanical subsea pipeline trencher in the
world. “With 2.3 megawatts of trenching power she is the most
powerful mechanical rock trencher in the world. RT-1 is the pre-
mier reason for CTC Marine’s increasing presence in Australia,”
he comments.
Traditionally pipeline stabilization in the Northwest Shelf has
been done by rock dumping – an expensive exercise that carries
environmental concerns. Using RT-1, CTC Marine’s technique to
bury pipelines is used in conjunction with dumping to minimize
the effect of rock. “In sum,” Hemsted concludes, “there is no
other hard ground trencher like the RT-1 at the moment that can
productively trench pipes as big as the ones she does in the hard
seabed.”
The local innovator turned global playerLocal innovation ultimately built a growing international business
in the case of Neptune Marine Services. What is today a broad-
based subsea engineering company providing a suite of life of
field services and bespoke engineering solutions across four con-
tinents, began with one proprietary technology. “Neptune was
incorporated in 2003 in order to develop our underwater welding
technology, NEPSYS®,” says Lange. As Neptune’s flagship tech-
nology, NEPSYS® was developed to provide a low-cost perma-
nent weld solution equal to dry weld standards that was believed
to be missing in the Australian market.
Lange joined Neptune in 2006 with the task of growing a busi-
ness out of the technology. “My goal was to build a service orga-
nization with the NEPSYS® technology as the key differentiator.
After spending six months reviewing the marketplace, I felt that
there was a role for a domestic Australian company that offered
our broad range of services; and that model could be expanded
to key offshore areas,” Lange explains. Neptune’s growth and the
development of a business from its technology has been largely
fuelled by international acquisitions. Today operators look to
Neptune for engineering prowess while construction companies
are supported by surveys, diving, ROVs, pipeline stabilization ser-
vices, and upfront engineering to support detailed design.
However, Neptune’s diverse capabilities often put them in
nebulous and unintended competition with traditional EPICs that
is consequently is reshaping the traditional EPIC model. Explains
Lange, “one thing that we that we need to address and contend
with is a lot of EPIC companies looking at us as competitors. We
have made the separation between ‘church and state’ so we very
clearly support them and do not compete with them on the con-
struction scope. That is not to say, however that they do not
compete with us. A lot of those companies are looking at various
life of field services – from seismic drilling to decommissioning –
which is our sweet spot.”
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CarsAtt_OGFJ_1011 1 10/18/10 10:06 AM
Eric Jas, Managing Director, Atteris
November 2010 Oil & Gas Financial Journal • www.ogfj.com 23
CSG, LNG, Gas Transmission complementingour Thailand and Western Australianbusiness.
- Marginal field development- Multi-discipline engineering- Turn-key control & safeguarding- Turn-key PIMS- Metering
www.plexalgroup.com
Expanding Regional Portfolio.Opening our Third Office - Brisbane
Australia.
CarsPle_OGFJ_1011 1 10/18/10 11:25 AM
Power of the peopleThe fiscal uncertainty that is still looming
as many LNG projects approach FID will
likely “change development timeframes
until people get a better handle on how to
bring these projects on,” predicts Dowling.
Fiscal uncertainty notwithstanding, project
timetables could be delayed on the basis
of another major industry concern: a labor
shortage. The construction boom for Aus-
tralian LNG projects is estimated to create
55,000 new jobs. Additionally, projects
moving into brownfield environments will
place an increasing need on local services
leaving many in the industry pondering
about how to fill labor needs.
“I am concerned as to the collective
plan of both industry and government to
be ready for this without driving inflation-
ary wage pressures, the flow on effect to
cost of living, and production target assur-
ance for the operating companies,” adds
Plexal Group CEO Steve Jones.
Construction for many LNG projects is
not scheduled to begin for another few
years so industry and government still have
the silver lining of time on their side. Rob-
inson points out that not all 55,000 jobs will
be created at once. “There is going to be
an elevation of a need for resources over
a much longer term. Fortunately we will
have time to work on mid-term and long-
term solutions,” notes Craig Follett, Aus-
tralasia regional director of Brunel Energy,
the global leader in white collar placement
and the Australian leader for blue collar
placement for the oil and gas industry.
However, time cannot breed compla-
cency. Follett highlights a three pronged
approach to address labor shortages.
“The longer term solution is the stimulus
of technically skilled people” to align stu-
dents’ technical directions with industry
requirements.
Second are apprenticeships programs
to transfer traditional heavy industry skills
into oil and gas spe-
cific needs such as
reservoir engineering
or drilling. Third, is
the continuous devel-
opment of Australia’s
supernumerary pro-
gram to team interna-
tional specialists with
local graduates and
accelerate the knowl-
edge program.
Australia’s 457 Visa is a process in place to
facilitate this type of transfer. “We even think
that you can cherry pick certain projects of
national significance and create a highway for
them whereby the immigration process is tai-
lored to match project requirements. That is
where government and industry need to align
their needs. If that highway is fabricated, Bru-
nel is ready to travel on it,” he adds.
A turning point in the industrial relations
challenge could very well be the new Labor
government. While still too early to tell,
Brunel believes that positive signals have
been sent regarding more active engage-
ment between industry and government
on this issue which could realistically inhibit
the full development of Australian oil and
gas.
Len Bunn, Executive Director; Steve Jones, CEO and Dean Paton, Executive Director, Plexal Group
24 www.ogfj.com•Oil & Gas Financial JournalNovember 2010
wants to perform as the best in the
world,” says Brendan Fitzgerald,
managing director and co-founder
of safety and risk engineering con-
sultancy Vanguard Solutions. In its
10 years of operations Vanguard
and its personnel have taken the
lead on safety engineering for
many of Australia’s largest projects
such as Woodside’s Chinguetti,
North Rankin B, and Pluto. “The
problem though is that sometimes
people become overly focused on the slips, trips, and falls part of
safety – which are easy to identify – rather than the management
and process risk.”
Any regulatory changes will add to an already progressive five
years for safety standards in Australia. The National Offshore
Petroleum Safety Authority (NOPSA) began operations in 2005.
Today Australian law requires every offshore facility to have a
NOPSA accepted safety case. The mandatory introduction of the
safety case, Fitzgerald notes, is one of the biggest changes he has
seen in his over 25 years in the industry. However, he believes,
more action needs to support the plans. “A lot of people think
that the job is over when the safety case is delivered. Producing
the safety case and having it accepted by the regulator is just the
first step. You then have the lifetime of the facility to operate. The
safety case is a roadmap and you have to walk the talk.”
Safety issues for drilling are an obvious concern with industry
penetrating harsher environments and increasing water depths.
Well designs are becoming more complex through extended
reach, horizontal, and multi-lateral wells; all pose high risks and
enormous costs of failure not previously encountered in Australia.
The best accident prevention and safety enforcement is quality
training as viewed by Welltrain,
a rapidly expanding school for
operationally relevant well con-
trol training. Welltrain addresses
both the human element of acci-
dent prevention and harnesses
the transferrable skills between
offshore, onshore, and CSG
drilling.
“Improved levels of train-
ing are required to match the
skills necessary to operate more
complicated equipment and well
Safety first and alwaysThree converging issues have heightened the safety mindset in
Australia to new levels. In August 2009 the Montara rig, owned
by Thai exploration company PTTEP, began leaking oil for two
months off the coast of WA. The final results of a federal gov-
ernment inquiry into the report are expected by year’s end with
likely regulatory changes to follow. Second is Deepwater Horizon
with its impact reverberating around the world. In response, 30 of
Australia’s biggest oil and gas producers are preparing an industry
wide agreement to allocate financial resources in the event of an
oil spill in Australian waters. Third, and perhaps most challenging,
is the integration of a multitude of new workers under one com-
mon safety culture.
Lange asserts this might be easier said than done. Australia
“will have a large influx of people who may not speak the lan-
guage and have different cultures, educational backgrounds, and
expectations. When you put all the new backgrounds, cultures,
and expectations together, the management of the integration of
all of these people is my main concern.”
Specific changes to the regulatory landscape are still unclear.
“I think there is no doubt that the Australian oil and gas industry
CarsVan_OGFJ_1011 1 10/18/10 11:33 AM
Bernie Kelly, Managing Director, Baker Hughes Australia
Brendan Fitzgerald, Managing Direc-tor, Vanguard Solutions
November 2010 Oil & Gas Financial Journal • www.ogfj.com 25
designs,” says training manager Dave Pol-
lack. “Today, we have cyber-outfitted drill-
ing rigs where the work for a driller is all
done through joysticks, not brake handles.
The driller is more removed from the drill-
ing process by being insulated inside a
quiet, high tech environment.”
Pollack notes that existing well control
training tends to be more academic and
does not provide sufficient practical and
operational training. Welltrain aims to
plug that gap by blending the practical
with the theoretical.
Third party drilling training is still an
evolving market in Australia that is neces-
sarily driven by industry changes. “Previ-
ously, in-house training courses were a
feature of working for major oil and gas
operators,” explains Welltrain managing
director Tom Brand. “In the last 10 years,
however, companies are tending more
towards outsourcing training. There are
also a lot of smaller rig owners who just
don’t have the resources or specialized
skills to run their own training department.”
Specialized training is also required
in the comparatively new CSG industry.
“Whilst the mechanics of the drilling pro-
cess are essentially the same, crew mem-
bers may not be aware of the hazards that
are involved in drilling CSG wells where
hydrocarbons are being exploited,” adds
Brand.
Engineering the futureWhile Australia is preparing for an eventful
decade of major LNG projects whose pro-
duction and economic impact will extend
decades more into the future, the head of
one engineering firm is looking ahead to
life after LNG. “We have this unbelievable
LNG energy source from which we hope to
be the number two provider in the world,”
says Steve Jones, CEO of Plexal Group.
“But it is a finite resource. Where will Aus-
tralia be in 50-60 years when these fields
are seriously depleted?”
No stranger to conventional hydro-
carbon engineering, the Plexal Group’s
expertise is in brownfield expansions,
upgrades, and marginal
greenfield developments
with a focus on control
and safeguarding systems.
Jones cites Plexal’s work
on Woodside’s Goodwyn
A Safeguarding System as
a critical experience that
underpinned its extension
into Thailand and its con-
tinued expansion through-
out Southeast Asia. Plexal
proved its ability to
upgrade and transfer under full production
conditions, with no dedicated shutdowns,
a gas platform of 3,500 safety devices.
But driven by a larger purpose – and a
clear business opportunity – Jones is posi-
tioning Plexal to leverage technical IP from
LNG and transfer it into renewables which
he believes is the next big industry for Aus-
tralia. “The LNG business
is going to produce a lot of
revenue. It is also going to
bring in a lot of technical
expertise. In the medium
term, we would like to
grow a lot of this exper-
tise and get ourselves
involved in geothermal
energy, tidal power gen-
eration, or concentrated
solar power,” says Jones.
Indeed WA’s total natural
resource endowment creates many syner-
gies between conventional fossil fuels and
renewable energies. “There are massive
water and power issues in the northwest
Brunel Energy provides specialised
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and construction industries. Our parent
company, Brunel International NV, is publicly
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with operating offices in 35 countries.
Since 1975, we have been providing
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Providing Professionals Globally
www.brunelenergy.net
CarsBru_OGFJ_1011 1 10/18/10 11:27 AM
Craig Follett, Regional Director Australasia, Brunel Energy
26 www.ogfj.com•Oil & Gas Financial JournalNovember 2010
The best place on the planet for oil and gas Natural gas is still the biggest game in town. With declining pro-
duction in the North Sea, a drilling moratorium casting a shadow
on the Gulf of Mexico, and Brazil still years away from first oil in its
pre-salt fields, Australia is the darling of the offshore oil and gas
world. “This is such an exciting and dynamic time,” says Belinda
Robinson. “This is the industry that has helped Australia evade
some of the more negative consequences of the financial crisis.
This industry provides so much optimism for the long-term eco-
nomic sustainability of Australia and in doing so, supplying clean
energy. It has so much going for it that it is hard to not be excited
for it.”
Perth, the capital of oil and gas Australia and this year’s host
of the World Energy Cities Partnership, is certainly reaping the
benefits of the rising tide of the industry. Beyond the quantifiable
returns on multi-billion dollar projects, a walk down St. George’s
Terrace or a stroll through an engineering office will bring to life
the international face of oil and gas in Perth. “The industry is
really putting us on the map in a global sense – it is profiling WA
and the city of Perth to the world,” beams Dowling, a native of
WA. “The oil and gas industry being a global industry is really
helping drive that cultural change in our society and it is a benefit
that should not be underestimated.”
Australia has all of the necessary assets to become the premier
oil and gas province for the foreseeable future. Voracious Asian
demand for preponderant natural resources has attracted global
talent and capital which in turn are stimulating innovation and
enhancing service industries. A very favorable picture is painted
for Australia’s future as an exporter of cutting edge technology
and leader in clean energy if it can surmount today’s obstacles
of fiscal uncertainty and human resource deficits. The mixture
of future promise and current challenges present unprecedented
opportunities for coordination and collaboration between industry
and government. All things considered, the right place, right time
for exciting oil and gas activity is Australia, today.
so it is rewarding to be involved in sustaining that cornerstone of
the Australian economy in a way that has a lower environmental
footprint. If we can really leverage off this industry maintaining
an energy production or delivery focus to the world, that will be
Australia’s next fantastic export.”
Oil 36%
0 10 20 30 40 50 60 70 80 90 100%
Black coal 17%
Natural gas 33%
Brown coal 6%
Renewables 8%
Fig. 3: Forecast share of primary energyconsumption, 2029-30 (%)
Source: ABARE
CarsWel_OGFJ_1011 1 10/18/10 11:32 AM
Tom Brand, Managing Director and Dave Pollack, Training Manager, Welltrain