NSR288_20140827

North Sea Reporter News & Analysis – keeping you informed

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I N S I D E T H I S I S S U E

Viking with Lundin 2

Oseberg concept study 13

XTO assets for sale 23

C O N T E N T S

Rig market 2

Construction 10

Contracts 13

Field development 15

Production 15

Drilling 17

Mediterranean briefing 21

Oil price 22

Seismic 22

Licence activity 23

Companies 23

Safety 25

Shale gas 25

Renewables 25

People 26

Conferences 26

Incremental projects will account for half Norway spending in next decade Incremental projects in Norway will account for almost half the sector’s $200 billion upstream development spend over the next decade, according to new analysis by Wood Mackenzie prepared for ONS in Stavanger this week. Current intense investor pressure on the upstream industry, resulting in greater scrutiny of capital allocation and project screening, means decisions over whether to invest in greenfield developments or incremental projects are crucial. However, WoodMac finds that on a cost per barrel and risk basis, incremental projects stack up favourably against new projects. Lennert Koch, senior NW Europe upstream research analyst, says: “As the Norwegian Shelf is maturing and the government wants to increase overall recovery rates from 50% to 60%, brownfield and incremental projects are becoming more important. We estimate that incremental projects - such as compression installations, infill drilling programmes and field redevelopments - account for almost half the estimated $200 billion of upstream development spend over the next 10 years.” WoodMac compared the economics of Norwegian greenfield developments against those of five large incremental projects: Åsgard subsea compression, Heidrun North Flank, Hod redevelopment, Ormen Lange subsea compression and Valhall West Flank. Combined, these projects carry a total investment of $11 billion and will add estimated reserves of 1 billion barrels of oil equivalent, increasing the recovery factor of the initial fields by an average of 9%, greatly contributing to the overall increase in recovery rates for Norwegian fields. The analysis reveals that while some of the projects WoodMac profiled are challenging, their economics are in line with Norway’s greenfield development. In fact, the average investment capex per barrel of these projects is 30% lower and average rate of return is 18% which means a reduced economic risk to the companies involved, in addition to the lower perceived subsurface risk.

27 August 2014 Issue 288

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North Sea Reporter – 27 August 2014

2

Rig Market By John Kendall

Departure of Energy Endeavour may be delayed until April Northern Offshore has demonstrated a measure of optimism that current client Wintershall may exercise an outstanding six-month option with the jack-up Energy Endeavour, as the contractor now the lists the rig as starting its next contract in April 2015 with Rosneft, drilling in Russian waters. Wintershall’s current contract expires in early-November and features a dayrate close to $160,000. The option, if exercised, is likely to involve a similar dayrate. Meanwhile, when the Rosneft contract does get under way Northern confirms the Endeavour will be on a higher rate of around $170,000. The contract with Rosneft covers a firm period of 30 months. Northern also has the Energy Enhancer under firm contract with Maersk Oil in Denmark. The current commitment is firm until July 2015, with a one-year option. The rig is on a dayrate of around $140,000 for the remainder of the firm period, while a higher rate will apply to the option, if exercised. Due to Maersk’s forward workload it seems there is a strong likelihood the operator will retain the rig through to July 2016. In contrast to recent negative market views indicating new contract activity could dip over the next 12 months, not only in the North Sea but internationally too, Northern has managed to strengthen the contract situation for its two jack-ups. The contractor is also on course to expand its fleet with the newbuilds Energy Engager and the Energy Encounter; both are being built by China’s Dalian shipyard and are due for delivery in February and August 2016 respectively.

Viking on contract with Lundin for multi-well programme The N-class jack-up Rowan Viking is reported to be on contract with Lundin after spending a 115-day period in a yard for inspection and modification work. Rowan says the jack-up has just left port and will shortly begin the operator’s planned 15-well drilling programme in the Norwegian sector. Lundin has the rig fixed firm until March 2017 under two separate contracts. The current one runs to January 2016 and features a $345,000 dayrate. The subsequent deal is in direct continuation and leads to the rig’s dayrate increasing marginally to $355,000. The deal also contains provisions for an improved rate should the contract exceed 1,000 days. The contractor expects to have all its six-unit fleet active again by end-month, as the high-spec Rowan Gorilla VI’s departure from Rotterdam is imminent. The jack-up has spent an extensive period in a yard undergoing repairs, inspection and modifications, but this month the unit received clearance from Norway’s PSA to return to work. The Gorilla VI has a long-term contract to fulfill with ConocoPhillips that runs to February 2018; the fixture involves a confirmed dayrate of $350,000.

Endeavour on $170,000 rate for Rosneft contract

Rowan Gorilla fixed until February 2018


3

Meanwhile, it seems plans for the Rowan Stavanger to drill in Norway have changed. The jack-up’s current contract was due to expire in September with the rig then expected to head to Norway for a period of four months, which Rowan reported as involving a much higher dayrate of $413,000. However, the rig now looks set to stay in the UK sector until April next year, with its dayrate dropping to $225,000 after September. Rowan’s rig utilisation figure for 2015 has improved and stands at 72%. The contractor has two rigs showing availability next year - the Rowan Gorilla VII and the Rowan Stavanger. They end their current and respective commitments in June and April 2015. The Rowan Gorilla V could also become available after June next year if client Total elects not to exercise a one-year option with the jack-up.

Transocean confirms GSF Galaxy III completes Nexen contract Transocean reports minimal changes regarding its North Sea fleet, but confirms the high-spec jack-up GSF Galaxy III completes its contract with Nexen this month. Indeed the rig is already thought to have left the Buzzard field where it is understood to have been used briefly as an accommodation unit. The rig’s dayrate was reported to have been $180,000, although the latest update issued by Transocean indicates the unit’s final rate was $160,000. Transocean has no further work lined up for the rig, which is believed to have entered a yard for inspection. The Galaxy III is one of only four jack-ups Transocean now has operating in the North Sea; all are classed as high-spec units. The contractor also confirms the dayrate for the semi-submersible Transocean Arctic has dipped marginally to $414,000 under its current contract with Rig Management Norway (RMN). The rig is with RMN until January 2016 and will then fulfill a six-month commitment with OMV, also in Norway, for which a notably higher dayrate of $513,000 will apply. A review of Transocean’s North Sea rig utilisation position reveals its 2015 and 2016 figures for semi-submersibles have edged up to 70% and 20% respectively, while its jack-up utilisation for the next two years stands at 37% and 25%. In West Africa, VAALCO has fixed the semi-submersible GSF Celtic Sea on a one-well contract that will start in November. The rig is currently drilling for ExxonMobil off Angola; the contract expires in October. VAALCO will use the rig in the same sector and has agreed to pay a dayrate of $338,000 for the short-term deal. At the moment Transocean has no work lined up for the rig in 2015. Total’s remaining contract time (401 days) with the GSF Rig 135 has been transferred to the semi-submersible Sedco Energy, which will start working for the operator next month, drilling in Congo’s offshore sector. The Sedco Energy was previously idle. Meanwhile, the GSF 135 has been allocated 198 days of contract time from the Sedneth 701, which was drilling off Nigeria for state company NPDC. Therefore the Sedneth 701 is currently believed to be idle.

West Tellus is off contract and arrives in Las Palmas Seadrill’s drillship West Tellus, which only entered service in 2013, has completed a contract drilling for Chevron off Liberia that featured a $635,000 dayrate. The drillship is another unit now based in Las Palmas with no forward commitment.

Galaxy III appears to be available this autumn


4

North Sea Rig Utilisation – 27 August 2014 Semi-submersibles

2014 2015 2016

Rig Co. Current Rigs

Rig Months (Contracted)

Utilisation %


Utilisation %


Utilisation %

Awilco 2 24 (24) 100% 24 (23) 96% 24 (10) 42%

COSL 3 36 (36) 100% 36 (36) 100% 36 (32) 89%

Diamond 4 51 (40) 78% 60 (27) 45% 60 (12) 20%

Dolphin 6 66 (66) 100% 75 (72) 96% 84 (57) 68%

N. Atlantic 3 39 (39) 100% 48 (37) 77% 48 (19) 39%

Ocean Rig 1 12 (12) 100% 12 (12) 100% 12 (2) 17%

Odfjell 3 39 (39) 100% 48 (36) 75% 48 (24) 50%

Paragon 1 12 (12) 100% 12 (6) 50% 12 (0) 0%

Saipem 2 24 (24) 100% 24 (15) 62% 24 (12) 50%

Songa 3 36 (36) 100% 66 (66) 100% 84 (66) 78%

Stena 2 24 (24) 96% 24 (15) 50% 24 (1) 4%

Transocean 15 180 (161) 89% 180 (126) 70% 180 (37) 21%

TOTALS 45 543 (513) 94% 589 (472) 80% 636 (278) 44%

Jul-14 516 467 273

Jun-14 516 466 273

May-14 523 464 258

Apr-14 518 458 250

Mar-14 517 458 250

Feb-14 521 461 241

Jan-14 523 467 217

Dec-13 521 467 217

Nov-13 521 445

Oct-13 521 443

Sep-13 505 396

Aug-13 505 396

Jack-ups 2014 2015 2016

Rig Co. Current Rigs


Utilisation %


Utilisation %


Utilisation %

Ensco 10 116 (111) 96% 132 (116) 88% 132 (57) 43%

Hercules 0 0 (0) 0% 0 (0) 0% 6 (6) 100%

Maersk 9 117 (117) 100% 138 (118) 85% 150 (102) 68%

Noble 3 30 (30) 100% 36 (30) 83% 42 (20) 47%

N. Atlantic 3 32 (32) 100% 36 (36) 100% 36 (24) 66%

North Off. 2 24 (23) 66% 24 (7) 29% 24 (0) 0%

Paragon 7 84 (84) 100% 84 (37) 44% 84 (4) 5%

Prospector 0 7 (7) 100% 24 (24) 100% 24 (21) 87%

Rowan 6 72 (64) 89% 72 (52) 72% 72 (31) 43%

Transocean 4 48 (44) 92% 48 (18) 12% 48 (12) 25%

TOTALS 44 532 (512) 96% 594 (438) 74% 624 (277) 44%

Jul-14 508 432 271

Jun-14 508 435 265

May-14 510 424 254

Apr-14 514 424 248

Mar-14 514 423 248

Feb-14 496 372 220

Jan-14 490 372 220

Dec-13 481 360 220

Nov-13 465 329

Oct-13 475 328

Sep-13 471 299

Aug-13 426 299


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NW European Shelf: Rig location & contract details Rig Type Operator Block location Sector Dayrate

($,000)

Contract expiry

AWILCO DRILLING

WilHunter SS Hess 39/2 UK 385 11/15, yard then 275 day option

WilPhoenix SS Premier 205/26a UK 442 08/14 then Apache

COSL DRILLING

COSLInnovator SS Statoil Troll 31/2 Nor 350-360 11/20 + 8x1 year options

COSLPioneer SS Statoil 34/8 Nor 312-322 08/16

COSLPromotor SS Statoil Troll W 31/5 Nor 350-360 01/21 + 8x1-year options

DIAMOND

Ocean Guardian SS Shell 22/24b UK 350 07/15

Ocean Nomad SS Dana 210/24a UK 330 08/15 + 2 6-month options

Ocean Princess SS EnQuest 21/19 UK 300 09/14 then Ithaca, EnQuest

ENSCO

Ensco 70 JU RWE Dea 42/13a UK 170-173 12/14 yard then Maersk Oil

Ensco 71 JU Maersk Oil Halfdan Den 170-173 05/15 + 2x1 year option

Ensco 72 JU Maersk Oil 5505/17 Den 140-143 09/15 + 2x1 year options

Ensco 80 JU GDF SUEZ 44/12a UK 144-146 04/17

Ensco 92 JU ConocoPhillips UK 164-166 08/15

Ensco 100 JU Ithaca 30/6a UK 164-166 01/15 then Premier

Ensco 101 JU BP 22/24a UK 217-219 12/15

Ensco 102 JU ConocoPhillips 30/7a UK 210-213 06/16

Ensco 120 JU Nexen 20/1 UK 234-236 11/15

Ensco 121 JU Wintershall 5503/3 Den 230-233 06/16

FRED OLSEN – DOLPHIN

Bideford Dolphin SS Statoil Nor 468 01/17

Blackford Dolphin SS MPX 9/14a UK 419 09/14

Borgland Dolphin SS Det norske (RMN) 34/7 Nor 521 09/17

Borgsten Dolphin SS Total 3/14a UK 202-240 05/16 + option

Bredford Dolphin SS Lundin (AGR) 16/4 Nor 442 09/15

Byford Dolphin SS BP 211/18a UK 345 04/16 + 3-year option

MAERSK

Maersk Giant JU Det norske 2/9 Nor 09/14 then Talisman

Maersk Guardian JU Lundin Brynhild 7/7 Nor 01/15 then Premier

Maersk Innovator JU ConocoPhillips Ekofisk 2/4 Nor 02/17 + 2x1-year options

Maersk Inspirer JU Statoil Volve 15/9 Nor 12/17

Maersk Reacher JU BP Valhall 2/8 Nor 09/16

Maersk Resilient JU ConocoPhillips 30/7a UK 08/16

Maersk Resolve JU DONG Hejre Den 02/17 + 2 well options

Maersk Resolute JU Hess South Arne Den 04/15 + four well options

NOBLE DRILLING

Noble Hans Deul JU Shell 22/30b UK 242 08/16

Noble Regina Allen JU GDF SUEZ L/5 Neth 231 06/15

Noble Sam Turner JU Maersk Oil 5504/7 Den 215 07/16

NORTH ATLANTIC DRILLING (SEADRILL)

West Elara JU Statoil Valemon 34/11 Nor 360 03/17 + 2-year option

West Epsilon JU Statoil Gudrun 15/3 Nor 286 12/16

West Hercules SS Statoil 497 01/17 + 1-year option

West Linus JU ConocoPhillips 2/4 Nor 375 05/19

West Navigator DS Shell 6407/9 Nor 589 09/14 then Centrica, then Russia

West Phoenix SS Total 206/1a UK 464 06/15

West Venture SS Statoil Troll W 31/2 Nor 441 07/15


6

NW European Shelf: Rig location & contract details (continued) Rig Type Operator Block location Sector Dayrate

($,000) Contract expiry

NORTHERN OFFSHORE

Energy Endeavour JU Wintershall F/14 Neth 160 11/14 + option then Russia

Energy Enhancer JU Maersk Oil Gorm Den 140-143 07/15 + 1-year option

OCEAN RIG

Leiv Eiriksson SS Total (RMN) 34/6 Nor 610 05/16

ODFJELL

Deepsea Atlantic SS Statoil 33/12 Nor 560 08/15 + 2x1-year options

Deepsea Bergen SS Statoil Heidrun 6507/8 Nor 361 06/17 + 1-year option

Island Innovator SS Lundin 7220/11 Nor 04/15

PARAGON OFFSHORE

Paragon B391 JU Centrica 43/18b UK 154 04/16

Paragon C461 JU ONE L/6 Neth 162 03/15

Paragon C462 JU GDF SUEZ L/10 Neth 168 01/15

Paragon C463 JU GDF SUEZ K/12 Neth 168 01/15

Paragon C20051 JU Total Neth 176 12/15

Paragon C20052 JU Dana F/6b Neth 180 02/15

Paragon HZ1 JU Wintershall 44/24b UK 168 06/15

Paragon MSS1 SS Nexen 20/1 UK 278 06/15

ROWAN

Rowan Gorilla V JU Total 29/5b UK 274 06/15 + 1-year option

Rowan Gorilla VII JU Apache 22/6a UK 254 06/15

Rowan Norway JU ConocoPhillips 2/4 Nor 361 07/16

Rowan Stavanger JU Talisman UK 250 09/14 then contract to 04/15

Rowan Viking JU Lundin Nor 345 03/17

SAIPEM

Scarabeo 5 SS Statoil Visund 34/8 Nor 491 11/17

Scarabeo 8 SS Eni Goliat 7122/7 Nor 460 03/15

STENA

Stena Don SS Statoil Troll W 31/2 Nor 399 12/16

Stena Spey SS EnQuest 21/6b UK 06/15

SONGA

Songa Dee SS Statoil Gullfaks 34/10 Nor 353 08/16

Songa Delta SS Statoil 25/11 Nor 360 11/16+ 1-year option

Songa Trym SS Statoil 35/11 Nor 368 03/16

TRANSOCEAN

GSF Galaxy I JU Total 22/30c UK 216 05/17

GSF Galaxy II JU GDF SUEZ 30/1f UK 193 03/15

GSF Monarch JU Perenco (GDF sublet) 53/2a UK 168 03/15

GSF Arctic III SS Chevron 13/22a UK 411 10/14

Paul B Loyd Jr SS BP 206/12a UK 441 07/17

Sedco 704 SS Maersk Oil 15/20a UK 383 02/16

Sedco 711 SS Talisman 22/29c UK 355 12/15

Sedco 712 SS Maersk Oil 30/17a UK 386 10/16 (sublet from Talisman)

Trans. Arctic SS RMN Nor 414 01/16 then OMV Norway

Trans. John Shaw SS TAQA 210/29a UK 361 12/15

Trans. Leader SS Statoil Nor 409 03/15 + 1-yr FPO

Trans. Prospect SS ConocoPhillips 21/3a UK 406 06/15

Trans. Searcher SS BG 34/3 Nor 395 05/15

Trans. Spitsbergen SS Statoil 7220/2 Nor 545 07/15 + 2-year FPO

Trans. Winner SS Marathon 24/9 Nor 456 07/16


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NW Europe Rigs in port: still on contract / contract preparation / available / stacked Rig Type Operator Current

Location Sector Dayrate


JW McLean SS Invergordon UK Stacked

Ocean Vanguard SS Available for hire

Sedco 714 SS Total Nigg UK (439) Resumes contract 09/14

Trans. Barents SS Shell Stord Nor (602) Contract starts 10/14

GSF Galaxy III JU UK Inspection

Maersk Gallant JU Statoil Odense Nor Contract starts 08/14

Rowan Gorilla VI JU ConocoPhillips Rotterdam Neth (350) Imminent departure

NW Europe Rigs: Newbuilds Ensco 122 JU NAM Rotterdam (230) Contract starts 4Q-14

Maersk Intrepid JU Total Westcon yard Nor (376) Contract starts 08/14

Prospector I JU Total Cromarty UK (185) On standby rate until 4Q-14

Prospector 5 JU Total Mobilising UK (218) Contract starts 09/14

Mediterranean & Black Sea: Rig location & contract details

Rig Type Operator Location Dayrate ($,000)

Contract expiry

ATWOOD

Atwood Beacon JU Eni Italy 185 01/16

CROSCO

Zagreb I SS Total Libya 09/14 + two well options

DIAMOND

Ocean Endeavour SS ExxonMobil Black Sea 521 12/15

ENSCO

Ensco 5004 SS Mellitah Libya 300 01/17

MAERSK DRILLING

Maersk Discoverer SS BP Egypt 500-534 07/16 + 1 year option

NOBLE

Noble Paul Romano SS Genel Morocco 420 12/14

SAIPEM

Perro Negro 4 JU Petrobel Egypt 03/15

Scarabeo 4 SS Eni Egypt 08/14

Scarabeo 6 SS Burullus Egypt 12/14

SHELF DRILLING

Rig 105 JU Petrobel Egypt 70 12/15 + 5 month option

Comet JU Gupco Egypt 70 05/16

Key Manhattan JU Eni Italy 133 10/15

Rig 124 JU Gempetco/Amapetco Egypt 69 04/15

Rig 141 JU GUPCO Egypt 70 09/15

STENA

Stena Forth DS Hess Egypt 10/14

Rigs in port GSF Dev. Driller SS Lukoil Romania (355) Contract start 10/14

Noble Homer Ferrington SS Malta Available

Transocean Amirante SS Malta Available

Stacked rigs & locations Atwood Southern Cross SS Malta

D R Stewart JU Croatia

Deepwater Discovery DS Spain

Ensco 6000 SS Spain Being sold

Ensco 7500 SS Spain Being sold

GSF Arctic I SS Spain

Interocean III JU Egypt

Sedco 710 SS Spain


8

West Africa: Rig location & contract details Rig Type Operator Location Dayrate


ATWOOD

Atwood Aurora JU Noble Energy Eq. Guinea 182 09/14 then Addax

Atwood Hunter SS CNOOC Eq. Guinea 337 11/14

ENSCO

Ensco DS1 DS Total Angola 357-359 01/16

Ensco DS2 DS Total Angola 437-439 10/14 then yard

Ensco DS6 DS BP Angola 547-549 02/18

Ensco DS7 DS Total Angola 634-636 11/16

Ensco 5001 SS PetroSA South Africa 284-286 01/15 + options - being sold

HERCULES

Hercules Resilience JU Perenco Congo 187-189 10/14

KCA DEUTAG

Ben Rinnes JU Sonangol Angola 232 07/16

MAERSK

Maersk Deliverer SS Chevron Angola 06/15

Maersk Endurer JU Addax Cameroon 137 11/14

NOBLE

N. Globetrotter II DS Shell Benin 461 09/23

NORTHERN OFFSHORE

Energy Searcher DS CAMAC Nigeria 265 05/15

OCEAN RIG

Eirik Raude SS Lukoil Sierra Leone 09/14

Ocean Rig Olympia DS Total Angola 584 07/15

Ocean Rig Poseidon DS Eni Angola 07/16

Ocean Rig Skyros DS Total Angola 432 12/14

ODFJELL

Deepsea Stavanger SS BP Angola 420 12/15 + 2x2 well options

PACIFIC DRILLING

Pacific Bora DS Chevron Nigeria 474 08/16

Pacific Khamsin DS Chevron Nigeria 660 12/15

Pacific Scirocco DS Total South Africa 495 01/15 + 2-year option

PARAGON OFFSHORE

Paragon L782 JU SOCO Congo 125 09/14 then Marathon (Eq. Guinea)

Paragon L783 JU SAP Benin 145 10/14

Paragon M825 JU Perenco Cameroon (141) Starts late-August

Paragon M826 JU Perenco Cameroon 136 12/14

PETROSERV

SSV Catarina SS Cobalt Energy Angola 06/16

ROWAN

Ralph Coffman JU Galp Morocco 243 09/14

Rowan Renaissance DS Repsol Namibia 619 04/17

SAPURAKENCANA

West Setia SS Chevron (CABGOC) Angola 223 08/14


9

West Africa: Rig location & contract details (continued) Rig Type Operator Location Dayrate


SAIPEM

Perro Negro 6 JU Chevron Angola n/k

Saipem 12000 DS Total Angola 08/17

Scarabeo 3 SS Addax Nigeria 03/15

SEADRILL

West Capella DS Total Nigeria 627 04/17

West Eclipse SS Total Angola 450 01/15 + options

West Gemini DS Total Angola 656 10/17

West Leo SS Tullow Ghana 605 06/18

West Mischief JU Eni Congo 175 04/15

West Polaris DS ExxonMobil Angola 655 03/18

West Tellus DS Chevron Liberia 635 07/14 (possibly released)

SHELF DRILLING

Adriatic IX JU Afren Nigeria 160 04/16

Adriatic X JU Addax Nigeria 151 10/14

GSF Baltic JU ExxonMobil Nigeria 167 08/14

Trident XIV JU Chevron Angola 116 09/14 then Afren (Nigeria)

TRANSOCEAN

Cajun Express SS Cairn Morocco/Senegal 596 09/14 then CNR

Deepwater Discovery DS Shell Nigeria 461 09/14

Discoverer Luanda DS BP Angola 483 01/18

GSF Celtic Sea SS ExxonMobil Angola 328 10/14 then VAALCO

GSF Constellation II JU Total Gabon 162 09/15 then VAALCO (Gabon)

GSF Jack Ryan DS Lukoil Ghana 480 08/14

GSF Rig 135 SS Total Congo 387 08/14 then NPDC (from 11/14)

Sedco Express SS Eni Nigeria 455 10/14

Sedco 702 SS Shell Nigeria 461 02/16

Transocean Honor JU Chevron Angola 155 04/15

Transocean Marianas SS PetroSA South Africa 370 04/15

Rigs in port

Ensco 5000 SS South Africa Warm stacked - being sold

Ocean Confidence SS Las Palmas Maintenance until 02/15

Ocean Valiant SS Las Palmas Available

Sedco Energy SS Total Congo (395) Contract starts 09/14

Stena Carron DS Las Palmas Inspection / maintenance

Trident VIII JU Shebah (Nigeria) Gabon (168) Contract starts 08/14

West Tellus DS Las Palmas Available

Stacked rigs & locations

Ensco 5003 SS Namibia

GSF Aleutian Key SS Gabon

Hercules 260 JU Gabon

Noble Don Walker JU Cameroon


10

Construction

EIC report gives signs of hope despite decline in contract awards Despite the mature status of the UKCS and the Norwegian Shelf (NCS), successful exploration drilling campaigns combined with redevelopment and enhanced recovery programmes mean more players than ever have converged on the North Sea in recent years, leading to renewed optimism about opportunities in the region. However, rising costs generally and tax changes in Norway have seen the number of contract awards so far this year assume a downward trend. These are the findings from the Energy Industry Council’s (EIC) latest report into contracting activities in both sectors based on EICDataStream, the global project database that tracks over 10,000 active and future projects worldwide. According to EICDataStream, there are currently 271 projects proposed or under development on the UKCS and NCS, worth a total potential investment of $262.3 billion. Between January 2010 and July 2014 482 major contracts (FEED, EPC and SURF) were awarded, 203 engineering, procurement & construction contracts, 170 subsea, subsea/umbilical/riser/flowline contracts and 109 FEED contracts. However, based on figures so far this year, the number of EPC contracts has suffered the most serious decline since 2012, followed by the number of subsea/SURF contracts, although the number of FEED contracts awarded so far in 2014 is close to reaching 2013 figures. Taking a closer look at contracting levels, activity in Norway peaked in 2011-2012 and has entered a fairly rapid decline since, with just six major contracts awarded in 2014 up until July. Activity in the UK also peaked in 2011, but has declined at a steadier rate, with 16 major contracts in 2014 up until July. In contrast with the UK, where the government has introduced a number of tax allowances in the last few years, the Norwegian offshore industry is being affected by the introduction of new tax rules in 2013, in addition to high costs. As a result, a number of operators are delaying projects to reconsider development concepts under the new tax regime, Statoil’s Snorre and Johan Castberg projects being two examples. Nevertheless, “while both the UKCS and NCS have seen a decline in contract activity, the report shows there are still reasons for optimism and that offshore UK and Norway will continue to see high levels of activity”, says Neil Golding, EIC head of oil & gas. “The focus on enhanced recovery, increase in tie-ins between marginal fields, the hoped for rise in exploration drilling, as well as the continued commitment to development from operators will provide key engines for growth over the next few years. However, this can only be achieved with government support for the UK and Norwegian offshore industry,” he adds. On the UKCS, BP has led contracting activity in recent years, awarding 35 major contracts across seven North Sea developments. It is joined by Nexen, Talisman, Statoil, GDF SUEZ, EnQuest, Total, Ithaca, Chevron, Premier Oil and ConocoPhillips. Statoil leads contracting activity on the NCS, awarding 144 major contracts across 37 developments, although this is not surprising given that it controls 70% of Norway’s oil and gas production. It is followed by ConocoPhillips, Det norske, Total, Shell, BG, Marathon, Lundin, Eni and Premier Oil.


11

The most successful contractors in 2010-2014, based on the number of contract awards, are Technip (25) and Subsea 7 (21) in the UK and Aker Solutions (40) and Technip (25) in Norway. “In the UK and Norway, we have seen a reduction in the number of major contract awards placed during the last 12 months. For both countries, the rise in contracting costs across the North Sea has played a major role in the slowdown of activity,” says Golding. Golding adds: “Although no development has to date been cancelled in either of these provinces, there have been a number of delays and postponements to projects as operators return to concept plans and review the economics of developments. However, the introduction of tax allowances in the UK and an increase in discoveries made off Norway in 2013–2014 will hopefully have a positive impact on contracting activity in the near future.” ATR is set to introduce new state-of-the-art compressor technology to the Norwegian market following a £7 million ($11.6 million) investment in its rental fleet. The company is supplying DNV 2.7-2 Norsok Z-015 and Atex standard zone II compressors to the Norwegian sector and has invested in an initial 20 units. Designed to deliver a raft of improved safety and operating features as well as significantly reduced noise emission levels, the first compressors are scheduled for delivery in September. ATR is also looking to expand into The Netherlands as well as several other key strategic areas. A further six units have been commissioned and are expected to be shipped to its facility in the Caspian region before the end of next month. DONG Energy, in a first-half 2014 interim results statement today (Wednesday), reports the supporting foundation of the platform for the HPHT Hejre field, in Danish North Sea block 5603/28, has been installed and drilling of the first production well has started. However, although pipeline activity and an extension of the oil terminal in Fredericia are ongoing, topsides work is posing a number of challenges because of delays in the supplier consortium. As a result, first production from the field is expected to slip from end-2015 to 2017. Meanwhile, DONG is still awaiting regulatory approval for the Siri storage tank following completion of repair work on the platform in July which allowed a partial resumption of production (NSR 286/15). Statoil is engaged in a four-week familiarisation process with contractors for the drilling package for the giant Johan Sverdrup field, off Norway, with a formal bidding process expected to begin shortly. Swire Oilfield Services has launched OverVu®, the industry’s first full-service track and trace solution. The state-of-the-art software application platform allows companies to identify, locate and track assets and equipment across the globe through a web browser. Nick Coaton, general manager of Swire’s Track & Trace Solutions business, says: “Supply chain inefficiency is a significant issue for the industry and one that is only set to become greater as operations move into more challenging environments.”


12

North Sea Construction Activity 27 August 2014

Recent awards Operator Sector Field Type of work Value Contractor

Eni Nor Goliat Pipeline, process services NKr500m+ IKM

Statoil Nor Oseberg future Subsea on slim legs - Kvaerner

Current and future construction projects

Operator Sector Field Block(s) Oil/Gas Type of development

Apache UK Forties increment 21/10, 22/6a, 21/9 o Platform

Antrim UK Fyne 21/28a o SPAR

BG Nor Knarr 34/3 o/g FPSO

BP UK Clair Ridge 206/8 o/g Platforms

BP UK Quad 204 204 o Replacement FPSO

Dana UK Western Isles 210/24a o Floater

DEO UK Perth 15/21a, b, c o/g FPSO

Det norske Nor Ivar Aasen 16/1, 25/10 o/g FPSO/platform

EOG UK Conwy/Corfe 110/12 o Platform

Eni Nor Goliat 7122/7, 8, 9, 10, 11, 7123/7 o/g Floater

EnQuest UK Alma/Galia 30/24b, 30/24c, 30/25c o/g FPSO

EnQuest UK Kraken 9/2b o FPSO

GDF SUEZ UK Cygnus 44/11a, 44/12a g Platforms

Ithaca UK Greater Stella 30/6a, 29/10d & 29/10b o/g/c Floater

Lundin Nor Edvard Grieg 16/1 o/g Platform

Maersk UK Culzean 22/5 g Platforms

Maersk DK Tyra SE expansion 5504/12 o Platform

Nexen UK Golden Eagle 20/1 o Platforms

Premier Nor Bream 17/12 o FPSO?

Premier UK Catcher 28/9 o FPSO

Premier UK Solan 205/26a o Subsea + platform

Statoil Nor Aasta Hansteen 6706/2 & 6702/12 g/c SPAR with storage

Statoil Nor Gina Krog 15/5 o/g/c Platform

Statoil N or Johan Sverdrup 16/2, 16/3, 16/5 o/g Field centre + plats

Statoil UK Mariner 9/11a o PDQ + FSU

Statoil Nor Snorre C 34/4, 34/7 o Minimum process TLP

Talisman UK MonArb 22/18 o Platform

Total Nor Martin Linge 30/7, 29/9, 30/4, 29/6 o/g/c WPQ + FSU

Total UK Franklin West (2) 29/5b, 29/4d g Platform

Total UK Laggan-Tormore 206/1a, 205/5a g/c Subsea to onshore plant

2014 start-ups

Operator Sector Field Block(s) Oil/Gas On stream date

Centrica UK Kew 49/4c, 49/5b g January

GDF SUEZ NL Amstel Q/13a o February

GDF SUEZ UK Juliet 47/14b g January

Statoil Nor Gudrun 15/3 l/g April

o – oil, g – gas, c – condensate, l - liquids


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Contracts

Eni contracts IKM for Goliat pipeline, process services Eni has awarded IKM Testing a frame contract, for three years, plus two, two-year options, for pipeline and process services for the Goliat field, in the Barents Sea, off Norway. The contract is worth over NKr500 million ($81 million), including the options. The work is divided into two main phases, comprising pipeline and process services during the operational readiness phase (project scope) and the operational phase (operations scope). The project scope phase will start immediately and will involve considerable work with engineering and commissioning of subsea pipelines and potential completion of process systems. During the operational phase the contract includes routine pipeline pigging and pipeline inspection pigging, in addition to topsides process support and maintenance services such as pressure testing, nitrogen, inspection, steam and machining services, chemical cleaning, hot oil flushing, hydro jetting and bolt tensioning. IKM will carry out the majority of engineering and preparation work at its head office in Sola, with a number of operations and services also being handled through its Hammerfest base.

Statoil awards Kvaerner Oseberg platform concept study Statoil has awarded Kvaerner a concept study for a standardised, unmanned dry tree wellhead platform for the Oseberg future development project. The concept is focused on minimisation of facilities, equipment and costs down to water depths of 150 metres to offer a cost-effective solution compared with a conventional subsea tieback. Kvaerner has been working on developing a cost-efficient, standardised wellhead platform concept called Subsea on a stick® for some time. It says the new wellhead platform could both increase recovery and use the new generations of jack-up drilling rigs, as well as reduce development costs. The project is expected to be the first in a series from Statoil where unmanned wellhead platforms could replace a traditional subsea solution within the applicable water depths. “We fully support the need for cost reductions within the industry and believe this solution could contribute to significant cost savings. We have implemented comprehensive improvements within our business over the last two years and this new concept would be especially suited for future fast-track delivery from our facilities at Verdal in Norway,” says Sverre Myklebust, executive vice-president for Kvaerner’s jackets business area. Kvaerner is carrying out work on the study, which has already started, in Oslo, with support from the jackets technology engineering team. Completion is scheduled for November, with concept selection expected by end-year. BP has contracted Asset Guardian Solutions, which specialises in protecting process critical software assets, under a global framework agreement for the Clair Ridge project, in west of Shetland block 206/8. BP will use the Asset Guardian toolset to improve the performance and security of the process control software it will use throughout the project and to operate assets associated with the Clair Ridge field development when it is fully operational. Clair Ridge will comprise two bridge-linked platforms and new pipeline infrastructure to connect to processing facilities in Shetland. The development is the first sanctioned large-scale offshore enhanced


14

oil recovery scheme to use reduced salinity water injection (LoSal® EOR) to extract a higher proportion of oil over the life of the field. Det norske has awarded Plexus a contract, worth about £1 million ($1.7 million), to supply POS-GRIP® surface wellhead and mudline equipment services for an HPHT appraisal well off Norway. The contract, which has a planned duration of 80 days, is expected to start before end-year. Det norske, OMV and VNG have awarded AGR contracts, worth $1 million, to deliver software solutions to manage the time, risk and cost of well operations off Norway. Under the contract, AGR will supply software products P1™, a probabilistic planning tool for managing time and risk of well operations, CT™ , a real-time cost tracker, and newly developed iQˣ™, designed to simplify the planning and execution of wells and which has been nominated for the innovation award at ONS in Stavanger this week. GDF SUEZ has contracted Asset Guardian Solutions to provide a fully configurable process software management programme for the Cygnus field development, in UK southern basin blocks 44/11a and 44/12a. The tool set will enhance management and security of all process control software used to manage all assets associated with the project. First gas from Cygnus is targeted for late-2015. Petrobras has awarded Farstad Shipping a contract, for four years, with an option for up to four years, for the AHTS BOS Topàzio for operations off Brazil. The contract, worth about NKr375 million ($60.7 million), excluding options, runs from this month. Petrobras has awarded Wood Group Kenny (WGK) contracts, worth over $2 million in total, for work on the pre-salt Lapa field, off Brazil. One contract comprises conceptual engineering studies of two options for pipeline heating systems - water-heated pipe-in-pipe and electrically trace-heated pipe-in-pipe. WGK’s scope includes flow assurance analysis, mechanical and installation design, thermo-mechanical analysis, material selection and technological gap evaluation. Cost assessment and an installation capabilities survey will also be carried out. The second contract will focus on engineering support to provide conceptual, basic and detailed design. In addition, WGK will be responsible for a set of engineering studies to be carried out within the contract period. The Lapa field, in block BM-S-9, has estimated recoverable reserves of 459 million barrels of oil equivalent. Premier Oil has awarded Costain Upstream a three-year contract extension, worth £12 million ($19.9 million), to provide project and technical support across its assets, including the Catcher development. On Catcher, Costain Upstream will provide development engineering and consultancy support in various technical areas, including subsea infrastructure and floating production. Saipem has awarded Bureau Veritas a contract to provide classification and certification services for the two FPSOs for Total’s Kaombo development, in block 32, off Angola. Saipem is EPIC contractor for the converted turret-moored FPSOs for the $4 billion development. Bureau Veritas will oversee the conversion of the vessels and class the floaters in service, while certifying the topsides and turret assemblies. Two VLCCs will be converted into FPSOs at Sembawang Shipyard,


15

Singapore. Each will have an oil treating capacity of 115,000 b/d, a water injection capacity of 200,000 b/d, a 100 MMcfd gas compression capacity and a storage capacity of 1.7 million barrels of oil. Some work in connection with engineering, procurement, topsides modules fabrication and integration as well as onshore and offshore commissioning work will be carried out in Angola. Topsides fabrication will be undertaken at Saipem’s Karimun Island Yard, in Indonesia. The first FPSO is scheduled to be operational by first-quarter 2017 and the second by second-quarter 2017. Wuchang Shipbuilding Industry, China, has awarded Ulstein a contract to design and equip four newbuild PX121 type PSVs, plus an option for a further four, for Singapore-based shipowner Otto Offshore. The vessels, scheduled for delivery in 2016, will measure 83.4 metres long and 18 metres wide and will have a cargo deck of 840 sq metres and a load capacity of 4,000 tonnes. Each will have accommodation for 30 crew and be equipped with DP2.

Field development Statoil reports the Aasta Hansteen development, in Norwegian Sea block 6707/10, is on schedule for first production in third-quarter 2017. Together with Polarled, the project is moving the boundaries for technology, deep waters and ripple effects on the Norwegian Shelf, it says. Investment in the two projects is estimated at NKr57 billion ($9.2 billion) in total. The hull and the topsides for Aasta Hansteen, which secured PDO approval in 2013, are being built in South Korea, while the equipment packages and subsea facility and pipeline equipment are being delivered globally. The first offshore work started this summer with laying of a fibre-optic cable by DeepOcean and installation of rocks on the seabed for the pipeline. More than half of the equipment packages for the topsides are being delivered by Norwegian-based suppliers, while 93% of the subsea equipment is also being provided by suppliers in Norway. (Illustration: Aasta Hansteen platform) Total is facing a delay in starting up production from the Laggan-Tormore development, in west of Shetland blocks 206/1a and 205/5a, as a result of problems in the construction of the gas treatment plant at Sullom Voe, partner DONG Energy reports today (Wednesday) in a first-half 2014 interim results statement. DONG expects first production to will be postponed from the end of this year to 2015.

Production

Norway has potential 10 billion boe of undeveloped reserves Norway has 10 billion barrels of oil equivalent of discovered reserves which have still to be developed, 60% of which could be commercially viable, potentially


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adding $106 billion to the country's oil and gas industry revenues, according to Wood Mackenzie. The consultant cautions, however, that bringing the reserves into production presents significant technical and commercial challenges. In its most recent upstream analysis, unveiled at ONS in Stavanger this week, WoodMac shows the undeveloped reserves are held within 206 discoveries, ranging in size from under 1 million boe to the giant 2.4 billion boe in Johan Sverdrup and spread across the Norwegian Shelf, with half in the North Sea and the remainder divided equally between the Norwegian Sea and the frontier Barents Sea. Although the reserves are at different stages of evaluation, WoodMac says over half could be developed, generating significant returns. James Webb, WoodMac NW Europe upstream analyst, says: “We consider 4.8 billion boe likely to be economic, 1.6 billion boe potentially economic and the remaining 3.6 billion boe not commercial and therefore will remain undeveloped. From this we estimate the volumes in the likely and potentially economic discoveries represent $22 billion of potential value for companies in the sector and $84 billion in tax revenue alone for the Norwegian government, excluding the profits of Statoil and the state direct financial interest. However, Webb notes that among the technical and commercial challenges which could threaten the development of the discoveries are low reserves, lack of infrastructure and/or complex geology. “Commercially, the global upstream industry faces an extremely difficult economic environment. Investors are increasingly demanding bigger dividends and better rates of return. As a result many companies have committed to stricter capital discipline and are intensely screening projects based on financial criteria. Capital intensive projects are particularly being scrutinised. This means more difficult projects could be delayed and in some circumstances will simply remain undeveloped.” WoodMac also suggests recent exploration success in Norway has hindered the pace of the development of the discoveries. Over the last five years the average size of new discoveries has been greater than the average undeveloped field and therefore new fields have been prioritised, says Webb. In keeping with the capital discipline theme, complex developments such as HPHT are also being delayed in favour of more straightforward projects. Nevertheless, despite the obvious obstacles WoodMac says the pipeline of future developments in Norway is strong. Statoil has resumed production from the Troll C platform following a shutdown on 17 August after an inspection programme detected corrosion damage to a pipe connected to the oil export system. The pipe has been replaced. Output from Troll C averages around 58,000 b/d of oil and 8 MMcmd of gas. In addition the platform handles about 34,000 b/d of oil and 2 MMcmd of gas from the Fram field. Partner interests in Troll, which straddles blocks 31/2, 31/3, 31/5 and 31/6, are Statoil (operator) 30.583850%, Petoro 56%, Shell


17

8.101450%, Total 3.690960% and ConocoPhillips 1.623740%, while interests in Fram, in blocks 35/11 and 31/2, are Statoil (operator) 45%, ExxonMobil 25%, GDF SUEZ 15% and Idemitsu 15%. (Photo: Troll C )

Drilling

Exploration, appraisal, development activity update There has been little change in the past week regarding current UK E&A drilling activity, with seven wells active. Among these only two operators are commenting on their respective well’s progress. Maersk Oil on 22 August plugged Balloch appraisal 15/20a-20 (TD 11,261 feet) and later the same day the Sedco 704 spudded sidetrack well 15/20a-20z; the current depth is 9,886 feet. BP confirms the Paul B Loyd Jr continues to operate at TD (11,023 feet) in Clair appraisal 206/12a-4. A round-up of all other drilling is as follows: BP has the Ensco 101 operating at a TD of 13,815 feet in Marnock/Skua development well 22/24a-A8. It also has the Byford Dolphin operating in the Don field, in block 211/18a. Centrica is drilling Pegasus West appraisal well 43/13b-7 with the Paragon B391. The well is tight and has been active since mid-July. The operator confirms the rig will drill a Grove appraisal well next. Chevron has the GSF Arctic III on Captain. The rig has one more well to drill after recently completing 13/22a-B30; the rig is with Chevron until October. ConocoPhillips continues to operate Jasmine well 30/7a-S7 with the Ensco 102. The Maersk Resilient is operating Joanne 30/7a-M12, while Brodgar development well 21/3a-H3, which spudded back in early-June, is still being operated by the Transocean Prospect. EnQuest’s well workover on Mallard, in block 21/19, is ongoing with the Ocean Princess. The operation is expected to continue until mid-September. GDF SUEZ is operating Marconi exploration well 30/1f-13y with the GSF Galaxy II; the current sidetrack spudded on 16 August. The Ensco 80 is on location on Cygnus in block 44/12a and is preparing to start a batch-drilling programme. Ithaca is drilling Stella development well 30/6a-B2z with the Ensco 100. The plugged 30/6a-B2 well is believed to have been the pilot hole, while B2z is likely to be the main well penetrating the Stella reservoir. Maersk Oil, in addition to the already mentioned Balloch appraisal, 15/20a-20z, has the Sedco 712 abandoning a James development well in central block 30/17a. For MPX, the Blackford Dolphin is drilling Aragon exploration well 9/14-15a; the well has been active since mid-July and remains tight. Nexen has two development wells active, both on Golden Eagle. The Ensco 120 is drilling 20/1-G2 and 20/1-S1 is being drilled with the Paragon MSS1.


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RWE Dea says the Ensco 70 continues with the completion of Breagh development well 42/13a-A8, which reached a TD of 10,420 feet. Shell reports the Noble Hans Deul is abandoning Shearwater well 22/30b-A9; operations started on 6 August. The operator also has the Ocean Guardian abandoning development well 22/24b-S1z. Talisman confirms the Sedco 711 remains operating in Seagull exploration well 22/29c-8y, another tight hole. Total says the West Phoenix is preparing to test Laggan development well 206/1a-L1x. Meanwhile, the Rowan Gorilla V is conducting clean-up and perforating operations in Franklin West 29/5b-H1z, while the GSF Galaxy I is abandoning Elgin 22/30c-G1. Wintershall has the Paragon HZ1 operating in Wingate development well 44/24b-A4; the last confirmed depth was 11,299 feet. In Norway, Lundin Petroleum has been granted NPD approval to drill Lindarormen exploration well 6405/12-1 (PL584) with the Bredford Dolphin following completion of current Luno II Central appraisal 16/4-8S, which has been in progress since June. The well will be drilled about 80 km northeast of the Ormen Lange field. Partner interests in PL584, which also covers blocks 6405/9, 6406/7, 6406/10, 6305/3 and 6306/1, are Lundin (operator) 60% and Bayerngas 40%. Statoil yesterday (Tuesday) spudded Isfjell exploration well 7220/2-1 (PL714), about 35 km north of the Johan Castberg discovery, in the Barents Sea, with the Transocean Spitsbergen, which had previously drilled Pingvin exploration well 7319/12-1 to a depth of 936 metres. The Isfjell well, which has a planned duration of about 30 days, has reached a depth of 520 metres after 36-inch hole was drilled to 501 metres. On completion, the rig will return to Ensis exploration well 7125/4-

3, recently suspended at the 9⅝-inch casing. Partner interests in PL714, which also covers block 7220/3, are Statoil (operator) 50%, Eni 30% and Petoro 20%. Meanwhile, Statoil has been granted PSA approval to drill appraisal well 25/8-18S (PL169) with the Transocean Leader. The well, which has a planned duration of 33 days, will be drilled 12 km northwest of the Grane field. Partner interests in PL169, which also covers block 25/11, are Statoil (operator) 57%, Petoro 30% and ExxonMobil 13%. In The Netherlands, GDF SUEZ reports the Paragon C463 is drilling development well C5 from the K/12-C platform. Elsewhere, the Noble Regina Allen has drilled 12¼-inch hole to section TD at 4,857 metres in development well L/5-D3 and is

preparing to run 9⅞-inch casing. In exploration well L/10-37, the Paragon C462 has

run and cemented 9⅝-inch casing at 4,889 metres and is drilling ahead in the 8⅜-inch hole section.

NAM reports the Swift 10 continues operating at a depth of 1.938 metres in exploration well L/9-FA106.

For ONE, the Paragon C461 is abandoning L/6d after which a pipeline pigging operation will be carried out. The rig will then return to development well M/7-8.


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NW Europe Offshore Drilling Activity 27 August 2014 Well Operator Rig Well Type Spud Status

UK

E&A wells

9/14a-15a MPX Blackford Dolphin Exp Aragon 14.07.14 Drilling

15/20a-20 Maersk Oil Sedco 704 App Balloch 26.07.14 Operating @ TD 11,261ft

15/20a-20z Maersk Oil Sedco 704 App Balloch 22.08.14 Operating @ 9,886ft

22/29c-8y Talisman Sedco 711 Exp Seagull 05.08.14 Operating

30/1f-13y GDF SUEZ GSF Galaxy II Exp Marconi 16.08.14 Drilling

43/13b-7 Centrica Paragon B391 App Pegasus W. 14.07.14 Drilling

53/2a-15 Perenco GSF Monarch Exp Leman South 18.07.14 Drilling

206/12a-4 BP Paul B Loyd Jr App Clair 18.06.14 Operating @TD 11,023ft

Development well

13/22a Chevron GSF Arctic III Dev Captain On location

20/1-G2 Nexen Ensco 120 Dev G. Eagle 22.06.14 Drilling

20/1-S1 Nexen Paragon MSS1 Dev G. Eagle 22.07.14 Drilling

21/3a-H3 ConocoPhillips Trans. Prospect Dev Brodgar 04.06.14 Drilling

21/19 EnQuest Ocean Princess Dev Mallard 18.06.14 Workover

22/6a Apache Rowan Gorilla VII Dev Forties On location

22/17-T27 Talisman Rowan Stavanger Dev Godwin 18.12.13 Rig moved off location

22/24a-A8 BP Ensco 101 Dev Marnock/Skua 14.06.14 Operating @ TD 13,815ft

22/24b-S1z Shell Ocean Guardian Dev 30.07.14 Abandonment

22/30b-A9 Shell Noble Hans Deul Dev Shearwater 06.08.14 On location

22/30c-G1 Total GSF Galaxy I Dev Elgin 21.05.14 Abandonment

29/5b-H1z Total Rowan Gorilla V Dev W. Franklin 01.05.14 Rig on standby

30/6a-B2z Ithaca Ensco 100 Dev Stella 13.08.14 Drilling

30/7a-M12 ConocoPhillips Maersk Resilient Dev Joanne 15.06.14 Drilling

30/7a-S7 ConocoPhillips Ensco 102 Dev Jasmine 09.07.14 Drilling

30/17a Maersk Oil Sedco 712 Dev James 16.08.14 Well abandonment

39/2 Hess WilHunter Dev Fergus 10.05.13 Well abandonments

42/13a-A8 RWE Dea Ensco 70 Dev Breagh 22.06.14 Completing. TD 10,420ft

44/12a GDF Ensco 80 Dev Cygnus On standby location

44/24b-A4 Wintershall Paragon HZ1 Dev Wingate 04.07.14 Drilling @ 11,299ft

205/26a-8v Premier WilPhoenix Dev Solan 13.05.14 Operating

206/1a-L1z Total West Phoenix Dev Laggan 14.08.14 Installing production tree

210/24a Dana Ocean Nomad Dev On location

210/29a-7 TAQA Trans. John Shaw Dev Cladhan 18.07.14 Operating in 8½" hole

211/18a BP Byford Dolphin Dev Don On location

Norway

E&A wells

2/9-5S Det norske Maersk Giant Exp Heimdalshø 21.07.14 Operating

16/4-8S Lundin Bredford Dolphin App Luno 2 Central 19.06.14 Operating

34/6-3S Total Leiv Eiriksson App Garantiana 2 30.05.14 Testing

34/7-36S Det norske Borgland Dolphin Exp Kvitvola 28.07.14 Operating

7220/2-1 Statoil Trans Spitsbergen Exp Isfjell 26.08.14 Drilling @ 520 metres

7220/11-1 Lundin Island Innovator Exp Alta 06.08.14 Drilling

7319/12-1 Statoil Trans Spitsbergen Exp Pingvin 16.08.14 Susp @ 936 metres


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NW Europe Offshore Drilling Activity 27 August 2014 (continued) Well Operator Rig Well Type Spud Status

Norway (continued)

Development wells

2/4-B ConocoPhillips Rowan Norway Dev Ekofisk Operating

2/4-M11A ConocoPhillips Maersk Innovator Dev Ekofisk 13.07.14 Completed 10.08.14

2/4-Z13 ConocoPhillips West Linus Dev Ekofisk 10.07.14 Operating

2/8 BP Maersk Reacher Dev Valhall Operating

7/7-A3AH Lundin Maersk Guardian Dev Brynhild 25.05.14 Operating

15/3-A5A Statoil West Epsilon Dev Gudrun 29.06.14 Completed 14.08.14

15/9-F1C Statoil Maersk Inspirer Dev Volve 22.02.14 Completed 25.03.14

24/9-M2H Marathon Trans Winner Dev Bøyla 25.06.13 Operating

25/11-H4BH Statoil Songa Delta Dev Svalin 15.04.14 Completed 18.05.14 31/2-E6EY3H Statoil West Venture Dev Troll West 28.05.14 Operating 31/2-N21AY4H Statoil COSLInnovator Dev Troll West 30.07.14 Operating 31/2-Y14BY2H Statoil Stena Don Dev Troll West 03.08.14 Operating 31/5-I13AY1H Statoil COSLPromoter Dev Troll West 11.07.14 Operating

33/12-N1AH Statoil Deepsea Atlantic Dev Gullfaks S 13.05.14 Operating

34/3-A1H BG Trans Searcher Dev Knarr 17.07.13 Completed 08.05.14

34/7-B2AH Statoil Bideford Dolphin Dev Vigdis 30.03.14 Completed 19.04.14

34/8 Statoil COSLPioneer Dev Visund Operating

34/10-I4AH Statoil Songa Dee Dev Gullfaks 04.08.14 Operating

34/11-B2 Statoil West Elara Dev Valemon 21.02.14 Operating 35/11-A31AY2H Statoil Songa Trym Dev Fram 25.05.14 Operating 6407/1-A3AY1H Statoil Transocean Leader Dev Tyrihans 29.05.14 Completed 08.07.14

6407/2-Z4H Statoil Deepsea Bergen Dev Åsgard 01.05.14 Completed 26.07.14

6407/9 Shell West Navigator Dev Draugen Operating

6507/8-F1AH Statoil Deepsea Bergen Dev Heidrun 04.08.14 Operating

7122/7-F4H Eni Scarabeo 8 Dev Goliat 02.08.14 Operating

Netherlands

F/6-5 Dana Paragon C20052 Exp 07.08.14 Operating

F/14-8 Wintershall Energy Endeavour Exp 07.08.14 Operating

K/12-C2 GDF SUEZ Paragon C463 Dev Completed slot recovery

K/12-C5 GDF SUEZ Paragon C463 Dev Drilling

L/5-D3 GDF SUEZ Noble Regina Allen Dev re-entry 30.05.14 Drilling @ 4,857 metres

L/6d ONE Paragon C461 Dev re-completion Abandoning

L/9-FA106 NAM Swift 10 Exp 10.08.14 Op @ 1,938 metres

L/10-37 GDF SUEZ Paragon C462 Exp 16.06.14 Drilling @ 4,889 metres

Denmark

Chabazite Wintershall Ensco 121 Exp 20.06.14 Operating @ 2,755 metres

Gorm-N4A Maersk Oil Energy Enhancer Dev 07.07.14 Workover

Half-HDA29A Maersk Oil Ensco 71 Dev 30.07.14 Workover

Hejre-HA1 Maersk Oil Maersk Resolve Dev 11.07.14 Drilling

S Arne-SAN7 Hess Maersk Resolute Dev Drilling

Siah NE-1X Maersk Oil Noble Sam Turner Exp Drilling

Tyra SE-B Maersk Oil Ensco 72 Dev Operating


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NW Europe: Planned Drilling

UK

Block Operator Rig Type Prospect Spud

9/2b EnQuest Ocean Princess App Kraken 3Q 2014

21/10 Apache Rowan Gorilla VII Exp Les Arcs 3Q/4Q 2014

22/16 GDF SUEZ GSF Galaxy II Exp Dalziel 3Q 2014

15/27a Nexen Exp Ravel 3Q 2014

28/15b Statoil Exp Wall 3Q 2014

29/3b Total Rowan Viking Exp Corfe 3Q 2014

42/15a RWE Dea Ensco 70 App Crosgan 4Q-2014

49/10a Centrica Paragon B391 App Grove 4Q 2014

206/12a BP Paul B Lloyd Jr App Clair 3Q 2014

Norway

1/2-3 ConocoPhillips Maersk Gallant Exp Pelikan 2014

2/4-22S, 22A Statoil Maersk Gallant Exp Romeo September

3/7 Premier Exp Myrhauk 4Q 2014

8/10 Centrica Maersk Guardian Exp Butch E 2H 2014

16/1, 4 Lundin Exp Fignon 4Q 2014

25/5 Total Leiv Eiriksson Exp Greip 2014

25/8-18S Statoil Transocean Leader App 2014

25/8-19S ExxonMobil West Alpha Exp Prince November

25/10-12 Lundin Island Innovator Exp Kopervik November

30/11-10, 10A Statoil Transocean Leader Exp Krafla North/Main September

33/2-1 Lundin Transocean Arctic Exp Storm October

33/9, 12 Lundin Island Innovator Exp Vollgrav South 4Q 2014

34/3-4S BG Transocean Searcher Exp Jordbaer SE 4Q 2014

35/9 RWE Leiv Eiriksson Exp Atlas 3Q 2014

6305/8-2 Shell Transocean Barents App Orm Lange D Far South September

6405/12-1 Statoil Bredford Dolphin Exp Lindarormen September

6406/2-8 Wintershall Transocean Arctic Exp Imsa 2014

6406/6-4 Maersk Leiv Eiriksson Exp Tvillingen South 3Q 2014

6607/12 Total Leiv Eiriksson App Alve North 2014

6707/10-3S Centrica West Navigator Exp Ivory 2H 2014

7227/8, 9, 10 Statoil Exp Saturn October?

International Petrobras says appraisal well Moita Bonita 3 has confirmed an extension of the gas and light oil prospect, in Sergipe-Alagoas Basin licence BM-SEAL-10, off Brazil. Well 3-SES-182, the second appraisal, was drilled about 5 km from discovery well Moita Bonita 1 (1-SES-168), drilled in August 2012. The well encountered a 40-metre thick reservoir with good permeability and porosity and a subsequent formation test proved the presence of 41 deg oil and good productivity. Petrobras is sole owner of BM-SEAL-10.

Mediterranean briefing Tunisia: Circle Oil has completed drilling the El Mediouni-1 well (EMD-1) in the offshore Mahdia permit and early indications are the well could be a significant oil


22

discovery. The well, located in the northern central area of the permit where the water depth is 240 metres, reached a measured TD of 1,200 metres in Upper Ketatna carbonates. It came in close to prognosis, with good light oil shows encountered in a Lower Birsa carbonate, primary target, and Upper Ketatna carbonates, a secondary target. The combined interval measured around 133 metres. The hydrocarbons found in the Birsa and Ketatna sections confirm the presence of a working petroleum system in the Mahdia permit and enhance other nearby prospects. The gross oil zone in the Lower Birsa measured 77 metres and the Upper Ketatna has a minimum interval of 48 metres. Using known reservoir and fluid parameters from equivalent formations in the Gulf of Hammamet, recoverable oil reserves discovered in EMD-1 are estimated around 100 million barrels. However, during drilling operations severe mud losses occurred and multiple remedial operations to restore circulation were performed. Nevertheless, hole conditions in the well deteriorated rapidly and attempts at open hole logging failed, as a result of which the decision was taken to suspend the well.

Oil price

Seismic The NPD last week completed, almost a month ahead of schedule, a 5,600-km, 2D seismic survey in the northern Barents Sea. The survey, which started on 18 July, is a continuation of the programmes the NPD has undertaken in the southeastern and northern Barents Sea since 2011. It was carried out by Dolphin Geophysics with the Artemis Atlantic, which is now in Hammerfest for demobilisation and a crew change. Polarcus reports the Polarcus Naila has completed, ahead of schedule, a planned two-month 3D survey for TGS-Nopec west of Shetland. The complex programme comprised two individual surveys, each employing a variable depth streamer spread with a linear gradient from 12 metres to 30 metres. Polarcus says the vessel is continuing to deliver superior performance since a propulsion upgrade in April.

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Brent Oil Price ($) Average price for last 6 months - $108.25


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SeaBird Exploration has been awarded a contract, worth an estimated $11 million, from an unnamed client for a 3D seismic survey in Gulf of Guinea, off West Africa. The survey, to be carried out with the Geo Pacific, will cover a minimum of 1,450 sq km. It is expected to start shortly and will have an estimated duration of 78 days.

Licence activity Atlantic Petroleum is farming out to Repsol 6% of its 15% stake in PL528, covering blocks 6707/8, 6707/9 and 6707/11 and containing the Ivory prospect, and PL528B, covering 6707/10, off Norway. Atlantic acquired the interest earlier this year via a farm-in agreement with Rocksource (NSR 255/32). As a result of the deal, which is subject to government approval, revised partner interests in both licences will be Centrica (operator) 40%, Statoil 35%, Rocksource 10%, Atlantic 9% and Repsol 6%.

Companies

ExxonMobil to open data room for Wingate, Netherlands assets ExxonMobil is seeking to offload its 15.5% interest in the Wingate gasfield, in UK southern basin block 44/24 and surrounding acreage, held through wholly-owned subsidiary XTO UK, as well as its entire the shareholding in XTO Netherlands (XTO NL). The XTO NL portfolio comprises producing assets and a 10.08403% stake in Noordgastransport (NGT). ExxonMobil plans to open an online data room on 1 September, hosted by Schlumberger, with a competitive tendering process being held seeking cash bids by 17 October. Offers will be invited for the entire portfolio or any combination of the elements. Wingate, which came on stream in October 2011, produces from three wells, with a fourth, 44/24b-A4, currently being drilled with the Paragon HZ1 and a fifth planned. Gas is exported via the D/15 platform in The Netherlands and NGT. XTO’s share of output is currently averaging 10,000 cfd. The surrounding acreage includes the Winchelsea prospect, an exploration in which is planned in 2015. As well as NGT, XTO NL’s assets, all GDF-operated, comprise K/9a, K/9b (7.5%), K/9c (5.8%), K/12 (5%), L/10 and L/11 (10.1%). Its share of production in the sector in 2013 averaged 1,400 b/d of oil equivalent. It also has interests in non-producing block N/7b and prospects, development planning for which is under way. Applus RTD, the integrity technology services provider, is opening a new office and test facility in Straume, Bergen, following demand for its non-destructive testing (NDT) services in the region. The facility, planned to open in October, will provide in-house and on-site NDT, metallurgic field work and a range of inspection services, including rig, paint, derrick and hull inspection. Eirik Bjorheim, Applus RTD Norway manager, says: “The organic growth of the company will continue throughout next year as we also plan to open a base in Hammerfest in February, followed by our headquarters in Stavanger next summer.” Expro is to invest $40 million in a major new hub in Tanager, Norway, in summer 2015. Europe CIS director Keith Palmer says the move will unify operations that are


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currently run across three different sites. The 19,000 sq metre facility, equipped for 100 staff, will comprise a 5,000 sq metre yard and a 10,600 sq metre workshop, which will be capable of rigging up four well test packages and service a further six simultaneously. The new base follows a $10 million investment in new equipment in Norway to service well test projects over the past two years. The new facility will complement its other offices in Bergen and Haugesund. NorSea Group, of Norway, is taking over operatorship of Smith Quay and Embankment in Peterhead. The 10-year agreement with Peterhead Port Authority, starting on 1 September, adds to the company’s existing partnerships with Scottish ports, including a 15-year lease at South Quay in Montrose and a long-term agreement with Scrabster Harbour Trust. The announcement follows a merger earlier this month of NorSea and the UK arm of Danish base and logistics company Danbor, securing the group’s long-term plans to service operators, service companies and drilling contractors through its offices and warehouses in both Aberdeen and Montrose. Peterson company 80:20 Procurement Services has established an operations facility in Stavanger as part of an ambitious growth strategy. The move is expected to create up to 20 new jobs, with the company now actively recruiting in the region for buyers and procurement specialists. 80:20 director Tony Bannon says: “80:20 Procurement Services represents a significant investment within the Norwegian sector and is part of our long-term strategy to grow the business internationally. There may also be potential for acquisition as we continue to expand our Norwegian footprint.” Premier Oil says a higher-than-expected increase in UKCS production fuelled a 7% rise in first-half 2014 after-tax profits to £104 million ($172.3 million) following a £73.5 million boost from UK tax credits, although pre-tax profits slumped to £30.7 million, from £129.4 million a year earlier. Premier also says it is well funded, with about £300 million ($497 million) in operating cashflow that it will use to finance its exploration campaigns, including in Norway and the Falkland Islands. Total first-half production was up 11%, at 64,900 boed, ahead of expectations, helped by a resumption of output from the UKCS Kyle field, shut down in December 2011 after the Banff FPSO lost its anchors and suffered damage in bad weather. However, the company has left its output target for the year unchanged at 58,000-63,000 boed. Riverstone Holdings is joining Barclays Natural Resource Investments (BNRI) and Singapore-based investment company Temasek as an investor in new Norway and UK-focused E&P company Origo Exploration. Riverstone and BNRI will each contribute $200 million of funding, while Temasek will provide an additional $125 million. Origo, headquartered in Stavanger, is led by E&P industry veterans Andrew Armour, Timothy Sullivan, Svein Ilebekk, Kent Høgseth and Ørjan Gjerde. It is aiming to acquire acreage in Norway and the UKCS through farm-ins, licensing rounds and focused M&A activity. It plans to participate in drilling around 25 exploration wells over the next five years.


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Safety Two pilots have been suspended from flying duties and an investigation is under way after a helicopter landed on the wrong North Sea installation last Friday (22 August). The Bond-operated S-92 aircraft, with one passenger on board, had been bound for the Nexen-operated Buzzard platform, but instead it made an unscheduled landing on the jack-up drilling rig Ensco 120, about nine nautical miles away, which is currently drilling a well on Golden Eagle, also for Nexen. The aircraft left Aberdeen Airport and made a number of scheduled landings before arriving on the rig. DNV GL has established a joint industry project (JIP) to develop a risk-based maintenance methodology aimed at delivering more effective and cost-efficient BOP maintenance. Industry partners are invited to attend a kick-off meeting on 25 September in Norway. Several BOP manufacturers, operators, rig owners and regulators have already joined the JIP.

Shale Gas IGas Energy has secured a rig to drill the Ellesmere Port exploration well, in NW England, which is expected to spud before end-year. The well will be a straight vertical well and the third in a sequence designed to give the company a suite of results across its licensed areas in the northwest. The second well, drilled at Barton Moss and completed in the first quarter, is currently being evaluated. IGas says: “The core analysis has started and full results will be available after the 14th licence round applications have been submitted. The exploratory work undertaken to date together with offset well data has given the company sufficient information to be able to design an appropriate hydraulic fracture programme for wells in the area. This will prove invaluable for future planning applications for potential shale wells and the ability to demonstrate the commerciality of gas extraction from these deep formations.”

Renewables Funding has been secured to build the first phase of the planned 398 MW Meygen project, the world’s largest tidal energy array in the Pentland Firth, off Scotland. The first phase of the project alone will almost double the tidal energy capacity currently installed in UK waters. The £51 million ($84.5 million) needed for the 6 MW first phase will be partly funded by a £10 million grant from the UK government, with major funding initiatives also coming from Atlantis Resources, Scottish Enterprise, Highlands and Islands Enterprise and The Crown Estate. Construction work on the first four 1.5 MW turbines is expected to begin later this year, with electricity being provided to the grid by 2016. Sandbank Offshore Wind, a joint venture between Vattenfall (51%) and Stadtwerke (49%), has awarded Bladt Industries a turnkey EPCI contract to build the offshore sub-station for the Sandbank wind farm, off Germany. The sub-station, comprising a topsides facility weighing about 2,000 tons, including two


26

transformers and a helideck, and a 1,500t four-legged jacket, is scheduled for sail-away in second-quarter 2016. Statoil and Statkraft have awarded Siemens Energy a contract, worth about £500 million ($829 million), including a five-year-service deal, to deliver, install and commission 67, 6 MW direct-drive wind turbines for the Dudgeon wind farm, off the UK. Installation is planned to start in early-2017. Partner interests in Dudgeon, which will have an overall capacity of 402 MW, are Statoil (construction phase operator) 70% and Statkraft 30%.

People Cubility: Gunnar Hviding has been appointed chairman and William James Wright vice-chairman. Hviding was previously president and CEO of Roxar and Crudecorp. Wright has spent more than three decades in the oil and gas business, most recently with Schlumberger, where he was vice-president of sales. Hunting Energy Services: Ørjan Frøyland has been appointed regional manager for Norway, based initially in Sandnes. International Marine Contractors Association (IMCA): Chris Baldwin has joined as a technical adviser following a short secondment from the Royal Navy. He has wide maritime experience, including DP, AUV and ROV operations, ship and offshore installation security, competency training, safety auditing and most recently commercial diving. He is working mainly in IMCA’s marine and remote systems and ROV divisions, acting as secretary for the management committee, as well as managing the common marine inspection document scheme. Maersk Training (UK): John Abate has been appointed general manager. He has held a number of senior management posts, including with retailers John Lewis and Amazon. Petrofac: Rijnhard van Tets, an independent director, has been appointed non-executive chairman, in succession to Norman Murray, who has resigned as chairman with immediate effect for personal reasons. Murray is a former chairman of Cairn Energy, from which he joined Petrofac in May 2011.

Conferences, exhibitions Oceanology international, 3-5 September, Shanghai, China. Inquiries: www.oichina.com.cn/en/index.html. 2nd East Mediterranean gas conference, 9-10 September, Paphos, Cyprus. Inquiries: Jesse Reynolds, phone +44 (0)20 7596 5004; email [email protected]. Subsea engineering & special materials, 1-2 October, Redditch. Subsea production systems engineering, course, 14-17 October, Aberdeen. Inquiries: email [email protected].

http://www.oichina.com.cn/en/index.html

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Society of Petroleum Engineers annual technical conference and exhibition, 27-29 October, Amsterdam, The Netherlands. Inquiries: www.spe.org/atce/2014.

Offshore energy, 28-29 October, Amsterdam, The Netherlands. Inquiries: Navingo, Las Palmas Building, Wilhelminakade 302, 3072 AR Rotterdam, The Netherlands; email [email protected]; phone +31 (0)10 2092600; http://www.offshore-energy.biz.

Opito safety and competence conference, 4 November, Abu Dhabi. Inquiries: www.opito-oscc.com, or email [email protected].

The SPE annual Caspian technical conference and exhibition, 12-14 November, Astana, Kazakhstan. Inquiries: www.spe.org/events/ctce/2014.

IMCA annual seminar – where next for the offshore marine industry, 19-20 November, London. Inquiries: www.imca-int.com or [email protected].

North Sea Reporter Published by KL Energy Publishing Ltd

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