Offshore Feb.2016

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February 2016
World Trends and Technology for Offshore Oil and Gas Operations
Drilling
market
review
DeepStar Q&A
Proposed well
control rule
ROV update
Eastern Canada
outlook
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International Edition
Volume 76, Number 2
February 2016
Celebrating 60 Years of Trends, Tools, and Technology
CONTENTS
TOP 10 DRILLING CONTRACTORS

Drilling contractors face changing market ............................ 28
After years of growth, the offshore rig supply, including rigs under
construction, declined in 2015 by 43 units to a total of 1,145 drill barges,
drillships, jackups, semisubmersibles, submersibles, tender-assist units,
and Arctic rigs.
GULF OF MEXICO
DeepStar evolves to meet
new deepwater challenges ..................................................... 31
Recently, Offshore met with Chevron Energy Technology Co.s Dr. Greg
Kusinski, who serves as DeepStar director, and John Allen, co-chair
of DeepStar Contributors Committee, to discuss the programs latest
activities, recent accomplishments, and goals for the upcoming year
and beyond.
EASTERN CANADA
Operators remain interested
in offshore Canada .................................................................. 34
Oil and gas production offshore Canada may not represent a significant
part of global offshore production, but it does play an important role for
the countrys energy future.
GEOLOGY & GEOPHYSICS

Database integration improves
hydrocarbon seep evaluation .................................................. 36
Exploration programs can be improved by bringing together disparate
datasets into a single coherent database, with a consistent ranking
scheme. To that end, a new reference library is available which standardizes all existing onshore and offshore data under a single product
suite.
DRILLING & COMPLETION

Monitoring systems help improve
mooring integrity, performance .............................................. 38
Inspecting deepwater mooring systems is a difficult task, but because
these systems are safety-critical, understanding their performance and
degradation is essential to safe operations.
Deepwater MPD system aids

drilling operations offshore Angola ........................................ 40
Inspired by an accelerating learning curve and ongoing efforts to
establish distinctive integration protocols for floating drilling rigs, key
industry players are increasingly recognizing pressure control technologies and techniques, including managed pressure drilling, as safe
and cost-effective approaches to drilling deepwater wells.
43
Legacy BOP design could be
approaching design limitations .............................................. 41
The Presidential Commission that studied the Deepwater Horizon
tragedy described BOPs as the last line of defense in preventing a
catastrophic release of hydrocarbons into the environment. However,
when it comes to this critical barrier that protects the rig and its crew,
the industry is still using 90-year-old technology that has significantly
increased in size, weight, and complexity over time.
Proposed rule seeks stricter well control regulations ........... 43

On April 17, 2015, the Bureau of Safety and Environmental Enforcement announced its new proposed BOP and well control requirements
rule for the outer continental shelf federal waters.
PRODUCTION OPERATIONS
Riserless light well intervention
increases production, operating efficiency ............................ 45
With oil prices expected to remain depressed for an extended period,
riserless light well intervention is the most cost-effective and proven
method to unlock additional production, raising overall recovery rates
and improving the economics of existing fields.
BOP skids on ROVs provide

backup for wellhead control ................................................... 46
New standards are emerging to ensure that BOP rams lock in a well as
fast as possible. As a double safeguard, rig operators are considering
stationing ROVs on support vessels to undertake blowout prevention if
the rig crew are unable to activate the BOP at the wellhead.
Enhanced satellite imagery supports

offshore oil spill, security monitoring ..................................... 47
Observations using satellites orbiting thousands of meters above the
Earth allow energy companies to regularly monitor sites for oil spills
and leaks, without the costs associated with conventional monitoring
techniques.
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International Edition
Volume 76, Number 2
February 2016
ARTICLES FOR
DISTRIBUTION
Use published editorial content to
validate your marketing initiatives.
COVER: With oil prices continuing to fall, offshore drilling contractors are facing a challenging year.
The expectation is that by the end
of 2016, many rigs will have been
scrapped and very few new orders
will have been placed. Still, work
is ongoing in several offshore oil
and gas markets. For example,
Transoceans ultra-deepwater drillship Deepwater Thalassa (cover)
recently left Cape Town, South
Africa, on its way to the US Gulf of
Mexico, where it will commence a
10-year contract with Shell in early
2016. (Photo by Virtual Media)
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SUBSEA
ROV technological advances allow for more precision, efficiency........................... 48
The ROV industry is poised to make a significant step change thanks to advances in automation
control, machine vision technology, and new algorithms in artificial intelligence.
Forsys Subsea aims for life-of-field partnerships with deepwater operators......... 51

Officially launched last June, a new joint venture combines FMC Technologies strengths in
subsea production and processing systems with Technips capabilities in engineering and installation of subsea umbilicals, risers, and flowline systems.
FLOWLINES & PIPELINES

Novel subsea configuration set
to free stranded gas offshore west of Shetland ........................................................ 52
Located 140 km (86 mi) northwest of the Shetland Islands, the Laggan-Tormore development
on the UK Atlantic Frontier has suffered several delays. Only through relatively new technology
and techniques, including a long-distance subsea tieback, could Total E&P UK Ltd. enable its
commercial viability.
D E P A R T M E N T S
Online .................................................... 6
Comment ............................................... 8
Data ..................................................... 10
Global E&P .......................................... 12
Offshore Europe .................................. 16
Gulf of Mexico ..................................... 18
Subsea Systems ................................. 20
Vessels, Rigs, & Surface Systems ...... 22

Drilling & Production .......................... 24
Geosciences ........................................ 26
Business Briefs ................................... 62
Advertisers Index............................... 67
Beyond the Horizon ............................ 68
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COMMENT
David Paganie Houston
Top 10 drilling contractors survey

signals more changes ahead
This years edition of Offshore and IHSs annual survey of the Top 10 drilling contractors finds some compelling results. Chief among them is the strong possibility that the
most profound changes to the sector are yet to come. Indeed, the drilling contractor
segment of the industry is arguably taking the greatest hit of all sectors during this
downturn. But, the one significant change that has been anticipated for some time but
has not yet occurred is consolidation.
The author of the accompanying article
to the Top 10 survey inside this issue, Cinnamon Odell with IHS Petrodata, points
to declining rig demand as a primary factor. She says that in 2017/2018, the offshore rig industry should begin seeing
more consolidation among rig contractors
as sales of both individual rig and entire
companies will become necessary due to
sustained low demand in response to continued low oil prices, and those contractors
with cash on hand will be able to take advantage of the market and its competitors.
In reviewing this years survey results, it is interesting to note that the only change to
the listing of companies that made this years Top 10 is their order.
Odell also expects that by the end of this year, many more rigs will have been scrapped
and very few new orders will have been placed. Since the beginning of 2014, 66 units
have been removed from the fleet for various reasons.
Perhaps the biggest change from last years survey is the number of rigs working, as
operators terminated charters and new contracting declined. Since the end of 2014, the
total number of rigs working has dropped by 161 units to 519. This years Top 10 drilling contractors witnessed only a marginal share of that decline. Its fleet of working rigs
dropped from 47.8% to 45.3% year-over-year.
Odells full market analysis with regional highlights begins on page 28.
New regulations
Another relevant change to come in the drilling sector is the impending release of
a new BSEE rule for BOPs and well control requirements. The rule aims to enhance
well control and equipment reliability, and includes a suite of reforms in well design,
well control, casing, cementing, real-time well monitoring, and subsea containment.
Also included in the new rule are several post-Macondo industry standards to establish
minimum requirements for the design, manufacture, repair, and maintenance of BOPs.
Following BSEEs in-house review, the proposed rule will go before the US Office of
Information and Regulatory Affairs in the US Office of Management and Budget. Offshore Editor Sarah Parker Musarra reviews the details of the proposed rule and its
status beginning on page 43. Musarras comprehensive report includes a conversation
with BSEE officials: Dough Morris, Chief of Offshore Regulatory Programs; and Allyson K. Anderson, Associate Director.
Meanwhile, one equipment supplier believes that the 90-year-old BOP technology has
reached its design limit, and that a next generation is required to further mitigate the
possibility of another Macondo-type incident from happening again. The case for new
BOP technology begins on page 41.
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G L O B A L D ATA
Worldwide day rates
Worldwide offshore rig count & utilization rate
Year/Month
Minimum
Average
Maximum
Drillship
2015 Jan
2015 Feb
2015 Mar
2015 Apr
2015 May
2015 June
2015 July
2015 Aug
2015 Sept
2015 Oct
2015 Nov
2015 Dec
$151,000
$151,000
$151,000
$97,000
$97,000
$97,000
$97,000
$97,000
$97,000
$97,000
$166,860
$166,860
$500,890
$506,862
$505,472
$501,962
$502,177
$508,568
$504,288
$493,466
$496,661
$501,820
$510,979
$507,581
$735,000
$735,000
$735,000
$735,000
$708,000
$670,000
$670,000
$670,000
$670,000
$670,000
$670,000
$660,000
Jackup
2015 Jan
2015 Feb
2015 Mar
2015 Apr
2015 May
2015 June
2015 July
2015 Aug
2015 Sept
2015 Oct
2015 Nov
2015 Dec
$51,405
$51,405
$51,405
$38,000
$51,405
$51,405
$51,405
$35,000
$50,000
$38,000
$38,000
$35,000
$143,235
$143,871
$144,389
$142,068
$141,803
$140,569
$137,539
$136,126
$134,912
$135,571
$136,017
$136,572
$389,000
$389,000
$389,000
$389,000
$389,000
$414,000
$414,000
$414,000
$414,000
$414,000
$414,000
$414,000
Semi
2015 Jan
2015 Feb
2015 Mar
2015 Apr
2015 May
2015 June
2015 July
2015 Aug
2015 Sept
2015 Oct
2015 Nov
2015 Dec
$145,000
$145,000
$145,000
$145,000
$115,000
$115,000
$115,000
$115,000
$115,000
$75,000
$75,000
$75,000
$396,493
$396,860
$402,003
$400,804
$401,125
$401,210
$397,567
$398,551
$397,667
$399,894
$392,017
$395,875
$641,000
$641,000
$641,000
$641,000
$605,000
$605,000
$624,000
$624,000
$624,000
$615,000
$615,000
$615,0002
January 2014 December 2015
Total supply
Total contracted
Working
100
Source: IHS RigBase
No. of rigs
1,000
900
90
800
80
700
70
600
60
500
n
Ja
Fleet utilization rate %
Source: Rigzone.com
Contracted fleet utilization
50
14
Ap
14
ril
ly
Ju
14
ct
14
O
n
Ja
15
r il
15
Ap
ly
Ju
15
ct
15
O
US offshore drilling permits and development plans

In its US Drilling Permit Monthly of January 2016, Evercore ISI reports that a total of 15 new permits
were issued in the US Gulf of Mexico in December, down from 21 in November and down from 25 a year
ago. Five permits were issued for new wells, including one deepwater, three midwater, and one shallow
water. Six permits were issued for sidetracks while four were issued for bypasses. A total of 220 new permits were issued in 2015, down 31% versus 2014, driven primarily by sharply lower bypass and new well
permits. Only 81 new well permits were issued in 2015 compared to 133 during 2014. While the number
of ultra-deepwater and midwater new well permits were relatively robust over the past year, deepwater
new well permits fell 17% to 25 and shallow water new well permits dropped 78% to just 14 (from 65).
Meanwhile, the number of new exploration plans filed in the Gulf last month fell to two (from seven) and
operators filed plans to drill a total of just 10 wells, down from 11 in November. Only one development plan
was filed to drill during December; development of the Lower Tertiary appears to remain a long ways off as
the industry has filed few development plans year-to-date. With pricing having contracted sharply, Evercore
says it expects development activity to accelerate slightly in the coming months and years and believes that
the Gulf of Mexico will be the only relative bright spot for deepwater activity in 2016-2017.
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GLOBAL E&P
Market caution lifts drilling services
Mobile offshore drilling unit day rates will likely continue to fall
into 2017, according to a report by Douglas-Westwood, as more rigs
come off long-term contracts. The World Oilfield Services Market
Forecast also foresees limited rig demand post-2017 with so few
projects currently being sanctioned, particularly in the Brazil presalt
and West African deepwater plays. Instead, the analyst expects operators to focus more on complex completions and longer lateral wells
and raising production from existing assets. This should benefit suppliers of directional drilling, coiled tubing, and stimulation services.
Another analyst, Wood Mackenzie, expects upstream oil and gas
deal activity to ramp up after a sluggish 2015. Depressed prices will
force more companies to sell or merge businesses in order to survive, with some capital-intensive development assets having to be
sold almost regardless of price. If oil prices recover later this year to
more than $65/bbl, as Wood Mackenzie anticipates, the main players will move quickly to take advantage of any opportunities in order
to catch the next upward-cycle.
North America
Husky Energy has contracted the harsh environment semisubmersible Henry Goodrich for a two-year program offshore Newfoundland, starting in mid-2016. This includes development drilling
at the North Amethyst field and South White Rose Extension and
near-field exploration.
Mexico plans to invite bids later this year for exploration licenses
over 10 deepwater areas. Four in the Perdido Fault Belt are thought
to be prospective for light crude. The Energy Ministry is also set to
open more shallow-water blocks.
US independent Fieldwood Energy has signed a production-sharing contract for Area 4 in the Bay of Campeche which includes the
undeveloped Ichalkil and Pokoch fields in 100-150 ft (30-45 m) of
water. This is one of the latest awards under Mexicos Round 1 Call
2 bid process. Fieldwoods partner in the permit is PetroBal.
South America
The newly-completed FPSO Cidade de Maric should have departed the Brasa shipyard for duty on the Petrobras-operated Lula field in
the Santos basin offshore Brazil. Sister ship Cidade de Saquarema was
then due to enter the yard for topsides module integration before also
heading out to Lula. Contractor SBM Offshore says both vessels are
of the same design as the Cidade de Ilhabela, which started production for Petrobras in November 2014.
Elsewhere in the Santos basin, Petrobras has completed formation testing of a well on the ultra-deepwater Carcar Norte structure
Jeremy Beckman London
which delivered good-quality 31 API oil. Analysis indicates that this

and the previous Carcar and Caracar Noroeste discoveries are the
same oil accumulation.
ExxonMobil has contracted Fugro to conduct a multi-beam bathymetry, side-scan sonar and geotechnical survey offshore Guyana
over the site of the planned deepwater Liza oil field development.
Liza was discovered last May in the Stabroek block in the GuyanaSuriname basin.
Guyanas government has approved an extension to the spud
date for a first commitment exploration well on CGXs Corentyne
offshore block until July 1. CGX requested the deferral in light of
current oil prices.
Officials from Eni and PDVSA have discussed future options for
the Perla gas field in the Gulf of Venezuela which came onstream
last summer, and which was recently producing 14 MMcm/d. Production under a second phase could rise to more than 23 MMcf/d,
with the potential for some of the gas to be exported.
West Africa
The first appraisal well on the deepwater SNE oil discovery offshore Senegal fulfilled expectations, according to operator Cairn
Energy. SNE-2, drilled in 1,200 m (3,937 ft) of water in the Sangoma
Offshore block, 3 km (1.8 mi) north of SNE-1, flowed up to 8,000 b/d
from a 12-m (39-ft) interval during a drillstem test and up to 1,000
b/d from a 15-m (49-ft) interval of lower-quality pay. Results suggest
the reservoirs can produce at commercial rates.
Ophir Energy has become operator of the CI-513 license area offshore Cte dIvoire after acquiring a 45% stake from African Petroleum. The concession carries a commitment to drill an exploratory
well by mid-2017.
Yinson Production (West Africa) has commissioned Keppel Shipyard to convert an FPSO to operate on Enis Offshore Cape Three
Points block offshore Ghana.
Total has started production from the Moho Phase 1b project, 75

km (47 mi) offshore Pointe Noire, Republic of Congo. The development, in water depths of 750-1,200 m (2,460-3,937 ft) involves drilling
11 subsea wells and installing two subsea multiphase pumps. Production, which should eventually reach 40,000 boe/d, is tied back to
the FPU on the Moho Bilondo field. Work continues on the nearby
Moho Nord development, targeting a further 100,000 boe/d.
In addition, Total has signed an agreement with Sonangol to jointly explore Angolas ultra-deepwater concessions and to implement
an adjustment addendum for the Kaombo project in ultra-deepwater
block 32.
Mediterranean Sea
FPSO Cidade de Maric at Brasa shipyard. (Photo courtesy SBM Offshore)
Italys government has approved legislation that reimposes restrictions on offshore oil and gas activity within 12 nautical miles of the
countrys coasts. These measures were first implemented in 2010 following the Deepwater Horizon incident, but were rescinded in 2012. The
Ombrina Mare oil field development in the Adriatic Sea could be one of
the projects impacted by the ruling, according to operator Rockhopper.
Energean Oil & Gas has brought onstream the first of 15 new development wells from its fields in the Gulf of Kavala offshore western
Greece. The companys tender-assist barge Energean Force drilled
the PA-35A well at the Prinos field. The campaign, which also takes
in Epsilon and Prinos North, is targeting 30 MMbbl of reserves.
PROBLEM 03
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GLOBAL E&P
Petroceltic, which was one of the successful bidders for the recent Greek offshore
licensing round, has offloaded its interest
in the Patraikos concession to the remaining partners. The Irish independent has
also agreed to sell its stakes in the deepwater North Theka and adjacent North Port
Fouad exploration license offshore Egypt to
partner Edison for $9.5 million.
Cyprus government has reportedly approved a request by the Eni-KOGAS consortium to extend the exploration license for
offshore blocks 2, 3, and 9 to February 2018.
The partners wanted more time to assess
the resource potential, particularly in light
of Enis recent deepwater Zohr discovery
in the Egyptian sector, 6 km (3.7 mi) from
Cyprus block 11. This may involve applying
the same model used for Zohr to track potential carbonate reservoirs.
Noble Energy has applauded Israels

governments implementation of a natural
gas framework which it says introduces
regulatory certainty and stability, and provides transparency for domestic pricing and
natural gas competition. This should allow
the partners in the deepwater Leviathan
gas field to proceed with development. According to Delek Drilling, parent company
for two of the partners, the basic plan is to
produce 1.6-1.8 bcf/d from the field to supply customers in Israel, Egypt (mainly BG),
Jordan and the Palestinian Authority, in accordance with signed letters of intent.
Asia/Pacific
ONGC has contracted McDermott International and L&T Hydrocarbon Engineering to supply and install subsea facilities for
the Vashista and S1 development offshore
eastern India. The fields are in 250-700 m
(820-2,296 ft) of water off the Amalapuram
coast. Workscope includes 30 mi (48 km) of
umbilicals and 64 mi (103 km) of dual rigid
pipelines extending from the shore line out
to 2,300 ft (701 m) of water, which will likely
be installed by McDermotts DB30 and
NO105 vessels.
ExxonMobil has started operations at

the onshore processing facility serving the
Banyu Urip oil field in the Java Sea off Indonesia. The company expects production
to build to a peak later this year of more
than 130,000 b/d. Banyu Urip, which came
onstream in 2008, has been developed via 45
The offshore Mahakam block and its discoveries.

(Image courtesy INPEX)
wells producing from three well pads, a 60mi (96-km) offshore/onshore pipeline, and
an FSO offloading to tankers.
INPEX has signed a heads of agreement
with Pertamina and Total concerning the
future of Indonesias offshore Mahakam
block. Once the current production-sharing
contract (PSC) expires, operatorship would
GLOBAL E&P
transfer to Pertamina although the other two

parties would remain as partners managing
activities post-2018. Since signing the initial
PSC in 1996, INPEX and Total have discovered seven fields which have produced oil
and gas for more than 40 years, with the gas
exported to Indonesias LNG complex onshore at Bontang.
Woodside Energy has discovered gas

with its first exploration well off Myanmar.
Shwe Yee Htun-1 was drilled in the deepwater western offshore area in the Rakhine
basin. The well, targeting one of numerous channel complexes identified over the
Saung Anticline, encountered a 129-m (423ft) gross gas column. Woodside is joint operator with MPRL E&P.
PTTEP has budgeted $2.09 billion for capex and $1.35 billion for opex this year, with
fields in Thailand accounting for 55% of the
total. The companys main focus will be on
sustaining production levels at the Arthit,
Bongkot, Contract 4 and MTJDA projects,
with a further 27% of the budgeted committed to producing fields and the M3 project
offshore Myanmar.
Rocs potential crest.
New Zealands Energy and Resources Ministry has issued nine new exploration permits.
Four offshore concessions in the Taranaki basin went to OMV, in partnership with Mitsui.
Two others in the same basin were awarded to
Todd Exploration and to Mont DOr.
OMV and its partners in the Maari oil field
offshore New Zealand have commissioned

DOF Subsea to upgrade the mooring system on the FPSO Raroa. The $NZ60-million
($39-million) program was due to start this
month, and is designed to future-proof the
system for the next decade. The eight mooring lines are anchored to the seafloor in 100
m (328 ft) of water and connected to the vessel via a swivel, allowing it to rotate freely in
prevailing winds and currents.
ENHANCING SUBSEA TIEBACK TECHNOLOGY THROUGH
AWARD WINNING ENGINEERING

DESIGN & PRODUCT DEVELOPMENT
Australasia
The Woodside-led partners in the North

West Shelf (NWS) project offshore northwest Australia have approved the $2-billion
Greater West Flank Phase 2 development.
This will deliver 1.6 tcf of gas from eight
wells on the Dockrell, Keast, Lady Nora,
Pemberton, Rankin, and Sculptor fields via
new subsea facilities and a 35-km (21.7-mi),
16-in. pipeline connected to the Goodwyn
A platform. It will be the fourth large-scale
NWS development in the past seven years.
Woodside anticipates start-up in 2019.
In the Browse basin, Wood Group Kenny

has secured two front-end engineering and design contracts for the proposed Browse floating
LNG development, 300 km (186 mi) from the
Kimberly coast. One involves flow assurance
and process integration studies for the Brecknock, Calliance, and Torosa gas condensate
fields, to be developed using Shells FLNG technology. The other contract concerns the configuration of the flexible risers and umbilicals.
Quadrant Energy has discovered condensate-rich gas in the Roc-1 well in the WA437-P permit offshore Western Australia.
The location is 150 km (93 mi) north of Port
Hedland. Sampling revealed a condensategas ratio of 20-40 bbl/MMcf. Previous operator Apache had discovered oil 20 km (12.4
mi) to the northwest in 2014 on the Phoenix
South structure. Partner Carnarvon Petroleum said another well may be drilled to test
offshore.@nylacast.com
www.nylacast.com/offshore
Stand 2641-K
OFFSHORE EUROPE
Jeremy Beckman London
UK, Norway level in well returns

Drilling activity has stayed strong offshore Norway despite the
oil price slump, according to analyst Hannon Westwood (HW). In
contrast, UK well numbers have fallen back to a level last seen in the
early days of North Sea exploration in the 1960s. Yet returns from
wells drilled across both sectors last year were broadly comparable.
HW identified 45 exploratory and appraisal (E&A) well spuds offshore Norway, only one down on the previous years total. These led
to 16 discoveries, with the best returns as before in the Norwegian
Sea (a success rate of 50%), followed by the North Sea at 47.6%. One
of the largest new finds was Statoils 45.5-MMboe Julius gas/condensate accumulation, close to the undeveloped King Lear field in
the southern Norwegian sector.
Lundin encountered sub-commercial gas in the rnen structure
in the Barents Sea in December, while one other well in this region
was temporarily suspended. However, total discovered volumes
were only 268 MMboe as against 838 MMboe discovered with 18
wells the previous year.
Offshore the UK, HW counted a mere 13 E&A well spuds in 2015,
10 of which targeted prospects in the generally more prolific UK
central North Sea. At least one of these led to a discovery (Bartoli) for Shell near the Shearwater high-pressure/high-temperature
complex. There were also finds in the UK northern North Sea at
Boatswain, K Prospect (Callater), and Corona; another for Chrysaor
on the Mustard structure west of Shetland; and at Sillimanite in the
southern gas basin. Including results from a re-entered appraisal
well on the Seagull field (100 MMboe), the commercial success rate
was 46%, the highest since 2002, HW said, with discovered reserves
just short of the Norwegian total at 265 MMboe. This year numer-
ous high-impact wells will likely be drilled in UK waters, the analyst

added.
Another positive indicator for the UK was the anticipated 7% rise
in production for 2015, the first in the sector for more than 15 years.
Seven fields came onstream, completed at year-end by TAQAs Cladhan tieback to the Tern complex northeast of the Shetlands. However, the oil price reduced tax receipts from UK production to 130
million ($189 million), against 2.2 billion ($3.2 billion) in 2014.
Steam flood an option for UK heavy oil

Independents, seen as the saviours of the UK North Sea, continue
to fall by the wayside as cashflow evaporates in current conditions.
Yet others appear willing to take their place. One of the more ambitious is The Steam Oil Production Co. (SOPC), which has agreed on
a deal (subject to ratification by Britains Oil & Gas Authority) to acquire license P1996 in the northern UK sector from EnQuest, covering blocks 28/2b and 28/3b. These include the undeveloped heavyoil fields Narwhal and Elke, discovered respectively by Arco and
Murphy, in Tay sandstone reservoirs. Oil gravity ranges from 12-15
API, with combined in-place reserves estimated at 226 MMbbl.
Elsewhere in the license area are numerous untested Tay sand
and Jurassic prospects, while a short distance to the northwest are
the Pilot Main, Pilot Harbour, and Harbour discoveries. All taken
together offer a potential resource of 500 MMbbl that appear to be
suited to a steam flood development: SOPC claims it could produce
more than 250 MMbbl, making this potentially one of the largest
remaining UK North Sea projects.
The company points out that heated heavy oil can be much less
viscous than a cold light crude, and for this reason steam flooding
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OFFSHORE EUROPE
The Glen Lyon FPSO leaves

the HHI yard in Ulsan, South
Korea. (Photo courtesy BP)
Offshore run-out for Quad 204 floater

The newbuild FPSO for BPs Quad 204 project west of
Shetland underwent sea trials late last year, and should reach
the North Sea this spring, docking initially at a Norwegian yard
for inshore commissioning. Glen Lyon, built by Hyundai Heavy
Industries in South Korea, will replace the decommissioned
floater originally installed to develop the Schiehallion and Loyal
oil fields in the late 1990s. BP expects the new vessel to extend
production from these fields to 2035 or beyond. The 270-m
(886-ft) long, 52-m (170-ft) wide ship will be able to process and
export up to 130,000 b/d of oil and store up to 800,000 bbl.
should be viable. Although more commonly applied onshore, the

technique has been implemented in Congos offshore Emeraude
field, in Bohai Bay offshore China, and in the shallow waters of Lake
Maracaibo. Experience suggests long horizontal wells are most effective for offshore steam flooding, SOPC says, leading to better
sweep patterns. And if the formation has a high permeability, injec-
tion rates into the wells can be raised to counteract heat losses in the
wellbore and to the sea.
SOPC expects to be able to recover about 60% of in-place oil in
the Pilot reservoir via steam flood, after optimizing issues such as
well placements relative to the oil/water contact. It will also evaluate
co-injection of steam and propane to further increase recovery and
improve the steam oil ratio, thereby limiting fuel requirements. The
company believes the process could recover an additional 2 Bbbl of
heavy oil from fields around the UK shelf.
Minimal platform chosen

for next phase of Osebreg
Statoil has submitted a development plan for Oseberg Vestflanken 2, designed to recover a further 110 MMboe from the Oseberg
area in the Norwegian North Sea and sustain the current production level beyond 2030. The project takes in the Alpha, Gamma,
and Kappa structures 8 km (4.9 mi) northwest of the Oseberg field
center. Statoil plans a 10-slot unmanned wellhead facility remotely
controlled from the field center, with two of the slots occupied by
injectors importing gas through a new pipeline from the existing gas
injection system in the area. One of the companys new Cat J jackups
will drill the wells, with production slated to start in spring 2018.
Minimal wellhead platforms with no helidecks or lifeboats operate in the Dutch and Danish sectors, but this scheme is a first for
Norway. Part of Statoils reasoning in following this route was the
tripling of costs for subsea templates over the past decade. Since settling on the fixed steel jacket alternative early last year, the company
claims to have reduced the costs for this project by around NOK1
billion ($112 million).
Bruce Beaubouef Houston
GULF OF MEXICO
The Heidelberg truss spar has a

capacity of more than 80,000 b/d of
oil and 2.3 MMcm/d (81 MMcf/d) of
natural gas. (Courtesy Anadarko)
Operators make new commitments

amidst market downturn
Even as low oil prices continue to form a
black cloud over the industry, some operating companies and developers are moving
forward with new commitments to E&P
activities, both in the US Gulf of Mexico and
in the Mexican GoM.
BHP Billiton recently announced a renewed
commitment to the E&P activities in the US
Gulf as part of its allocated total capex of $1.5
billion for various offshore programs in 2016.
The company says it will focus on potentially high-return infill drilling opportunities
in theGulf of MexicoandWestern Australia,
and on life extension projects at its fields in
the Bass Strait off southeast Australia and the
North West Shelf.
The main targets for exploration (total budget $600 million) are oil plays in thedeepwater
GoM, the Caribbean, and theBeagle sub-basinoff Western Australia.
Since last August, the company has acquired
26 blocks in the Western Gulf of Mexico Lease
Sale, each with a 100% working interest.
Elsewhere in the Gulf, work is moving forward on the Hummer exploration prospect
in Main Pass block 270. The project is being
developed by Castex Offshore Inc. and Petsec Energy Ltd. Petsec has reported that a
platform jacket will be fabricated and installed
over the Main Pass block 270 #3 BP 1 well this

summer.
Jacket installation is scheduled to begin in
June, and the cost for fabrication and installation has been estimated at $1.08 million.
The anticipated timeframe for the fabrication,
installation, well completion, and testing is approximately six to seven months.
The well, which was drilled and mud-line
suspended at 14,300 ft TVD/14,342 ft MD
(4,358/4,371 m), will be completed and tested
after the jacket has been fabricated and installed.
Operator Castex began drilling the Main Pass
270 #3 BP 1 well in July 2015 utilizing the ENSCO 87 jackup drilling rig. The well is located in
US federal waters, approximately 50 mi (80 km)
southeast of Venice, Louisiana. Water depth at
the prospect location is about 215 ft (65 m).
Meanwhile, Anadarko Petroleum Corp.says
oil has begun to flow on its Heidelberg project,
located in Green Canyon block 859 in the ultradeepwaterGulf. The Heidelberg field is situated in 5,300 ft (1,615 m) of water and has 200-400
MMbbl of recoverable resources.
Development consists of a truss spar with
a capacity of more than 80,000 b/d of oil and
2.3 MMcm/d (81 MMcf/d) of natural gas,
six production wells, two drill centers, dual
looped 8-in. flowlines, and 16-in. oil and gas

export lines.
The Heidelberg truss spar is 605 ft (184 m)
in length, 110 ft (33.5 m) in diameter, a topsides operating weight of 16,000 tons, and a
hull weight of 23,000 tons.
This is Anadarkos second major truss spar
development in the deepwater Gulf of Mexicoin the last two years. The company implemented its Design one, build two approach
to the field development by constructing a
replica of the Lucius spar.
To the south, activity in the Mexican portion of the GoM is progressing despite the low
oil price environment. In early January, Houston-based Fieldwood Energy announced that
it had signed a production-sharing contract for
Area 4offshore Mexico, which was awarded
in theRound 1 Call 2 bid process.
Area 4 comprises the proven but undeveloped Ichalkil and Pokoch fields and is located
in theBay of Campecheat water depths of 100
to 150 ft (30 to 45 m).Fieldwood Energy E&P
Mexico will serve as operator of Area 4 and has
partnered with PetroBal, S.A.P.I. de C.V., a subsidiary of Grupo Bal, a Mexican conglomerate.
The signing of the Area 4 contract represents the companys inaugural investment
in Mexico. The company will commence an
approximate two-year appraisal period beginning early this year, during which time it intends to conduct a limited drilling program
and technical evaluation process.
And there was more news in mid-January,
as Mexicos oil regulator voted to approve
plans by PEMEX to drill two new deepwater
wells near the maritime border with the United States. According to a Reuters report, these
wells are expected to be drilled later this year.
Both wells are expected to yield light or
super light crude, and are within the Mexican
extension of the Perdido Fold Belt, which has
proved highly productive in adjacent US waters but has represented a major challenge for
PEMEX.
The National Hydrocarbons Commission
approved PEMEXs request to drill the Vasto-1001 and Nobilis-1 wells, both off the coast
of northeastern Tamaulipas state.
Vasto-1001 will be drilled at a depth of 23,717
ft (7,229 m), costing an estimated 3.4 billion pesos ($190 million); it is believed to hold prospective resources of about 203 MMboe in mostly
light crude.
The nearby Nobilis-1 well will be 19,619 ft
(5,980 m) deep and cost about 2.73 billion pesos ($152.7 million). The deposit that the well
will explore is believed to hold prospective resources of about 161 MMboe in mostly super
light crude.
The location of the Nobilis-1 well is just over
4 mi (7 km) from PEMEXs Maximino-1 well,
one of the companys most promising deepwater discoveries in recent years.
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SUBSEA SYSTEMS
DeepStar announces
long-distance tieback study
in this study will consist of three main components: all-electric subsea and downhole
systems; fiber optic networked communications for control and data acquisition; and
subsea processing. In defining the elements
of the new architecture for the subsea system, the study assumes that the technology
is 10 years out from field deployment, so
both existing and emerging technologies
will be considered.
operations, and calculation and prediction of

the corrosion growth rate.
Production from Zakum started in 1983.
The goal of this project is to extend the design and service life of selected pipelines by
an additional 20 years.
Over the last 50 years, technological advancements have spurred the evolution of
subsea production systems. For example,
long-distance subsea tiebacks have allowed
these systems to move from operating in
shallow-water close to the shore or a platBibby Offshore secures
form to producing in deepwater locations
infrastructure project
more than 60 mi (100 km) from supporting
Bibby Offshore was granted a multi-milinfrastructure.
lion pound contract by BP to replace subsea
Although not very commonplace in the FMC delivers another
infrastructure in the UK central North Sea
industry today, DeepStar says that it expects tree for TEN project
as part of the $1-billion Eastern Trough
to see the number of long-distance subsea
FMC Technologies has delivered the Area Project (ETAP) Life Extension Project.
tiebacks to increase as the industry ventures eighth subsea tree for the Tullow Oil-oper- ETAP comprises six fields operated by BP
into deeper waters and harsher climates. ated TEN field development offshore Ghana (Marnock, Mungo, Machar, Monan, MirTo this end, the industry body launched a four weeks ahead of schedule.
ren, and Madoes) and a further three by
new study in November 2015 to identify
FMC Technologies is assembling and Shell (Heron, Skua, and Egret). The ETAP
new subsea system architecture for fields testing all subsea trees for the project at Life Extension Project (ELXP) will help selocated more than 50 mi (80 km) from their its recently expanded facility in Takoradi. cure the future of the fields until 2030 and
host facilities. This new system would then Awarded in 2013, the contract has led to beyond.
serve as a first step in developing a more ro- training and development of Ghanaians who
The Bibby Offshore ELXP contract involves
bust solution for future long-distance subsea represent 76% of the local workforce.
installing new subsea control system infrastrucfields.
ture to safeguard power and comDeepStar selected INTECSEA
munication links to ETAPs Machar,
to perform the desktop configuraMadoes, and Mirren fields, some
tion study, which is projected to
150 mi (241 km) east of Aberdeen.
conclude in March.
From April 2016, the company
The study aims to review and
will provide dive support and conclarify the operating requirestruction support vessels from its
ments of a representative subsea
international fleet to deliver serfield configuration while identifyvices including; umbilical installaing and evaluating key advanced
tion, trenching, structure installatechnologies for integration. It will
tion and commissioning, through
also look to summarize the status
to final survey of the completed
of additional technologies for inwork scopes.
tegration, both existing and to be
developed.
DNV GL advances
It will also define a path forward
codes program
for eventual deployment, includAquatic Engineering & Constring plans to address technology
uction is assisting DNV GL and other
gaps as well as engagement plans
subsea organizations on guidelines
for strategic partners and stan- A total of 22 trees will be delivered to the TEN field, with each weighing for The Development of Codes for
dardization entities.
Offshore Equipment for Cable and
around 40 tons (36 metric tons). (Image courtesy FMC Technologies)
DeepStar considers that technoPipe Laying Phase 1. These will
logical advances are key to the economies of
Weighing around 40 tons (36 metric tons), be incorporated into new or existing DNV
scale necessary to ensuring that these long- the subsea trees are vital pieces of equipment GL offshore standards or recommended
distance fields remain economically viable. which control the flow of fluids into and out practices.
Deepwater subsea developments require of the oil and gas wells. A total of 22 subsea
The work will see engineering and technisizeable capital investments, which are typi- trees will be installed as part of the project - cal experts from contractors and equipment
cally repaid a few years after start-up, while one for each well.
manufacturers collaborating to establish joint
the field still has a long operating life.
industry guidelines for cable and pipelay
The study intends to identify economies Ramboll to assess integrity
equipment. Subject to satisfactory compleof scale that could reduce capital investment of Zakum subsea pipelines
tion of the first two phases, a third phase unenough to make long-distance tiebacks
Zakum Development Co. (ZADCO) has dertaken by DNV GL will result in the publieconomically viable where conventional awarded Ramboll Oil & Gas an inspection cation of an offshore standard or recommend
methods would not be, enabling significant contract offshore Abu Dhabi. This involves practice for cable/pipelaying equipment.
returns on investments.
an integrity study of 15 subsea pipelines
Other Phase 1 participants are Allseas
The strategic value of an investment in serving the Zakum oil field, allowing ZAD- Engineering; Amclyde Norson Engineerthis study is clear, DeepStar said. Beyond a CO to plan future maintenance and potential ing; IHC Engineering Business; IHC SAS;
reduction in capital, technological advances equipment replacement needs.
MAATS Tech; NLI Offshore & Marine Prodcould also reduce potential risk and increase
Rambolls scope includes a review of ucts; Parkburn Precision Handling Systems;
in operational flexibility and performance.
available pipeline data, assessment of cur- Reel SAS (IMECA); Saipem Group; Subsea
The advanced technologies considered rent and future pipeline integrity for future 7; and Technip UK.
Integrate subsurface and subsea engineering domains

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VESSELS, RIGS, & SURFACE SYSTEMS
Eni terminatesOcean Rig

Olympia contract
Eni has terminated its contract with Ocean
Rig UDW Inc. for the ultra-deepwater Ocean
Rig Olympia drillship. The rig provider said
that the Italian company had reassessed its
drilling activities and moved to terminate the
contract due to the dramatic fall of thecrude
oil price and the volatile market context.
Ocean Rig announced in May 2015 thatOcean
Rig Olympia had entered into a new contract
with Eni to drill offshore Angola. Work was to
begin in 3Q 2015 for a minimum of eight months
with a total contract backlog of about $91 million.
The DP-3 class Ocean Rig Olympia was
built at Samsung Heavy Industries South Korean shipyard. The 2011-build is designed and
equipped for drilling in water depths from 5003,000 m (1,640-10,000 ft).
According to an update on the transaction
provided byEvercore ISIs Oilfield Services,
Equipment & Drilling group, Enis decision
reduces Ocean Rigs backlog by an estimated
$49 million.
Noble Drilling
to stack more rigs
Noble Corp. has issued a status update for
itsdrilling rigfleet. Last month Shell terminated theNoble Discoverers contract. A payment
to Noble was made for the remaining term at
about 90% of the operating day rate, adjusted for certain other items. The rig is
being mobilized to Singapore where it is
expected to be stacked.
The Noble Sam Croft and Noble Tom
Maddenremain under contract withFreeport-McMoraninto July 2017 and November 2017, respectively. The company has
announced plans to reduce the number of
rigs it uses in the US Gulf of Mexico.
As for theNoble Scott Marks,Noble Roger Lewis,Noble Joe Beall, andNoble Gene
Houserigs, Noble said that its Saudi Aramco contract rates were adjusted downward
for 2015.
Atwood defers
delivery of two ultradeepwater drillships
Atwood Oceanics has deferred delivery of two remaining newbuilds. Last
month the company entered another
delay agreement to defer the deliveries of the Atwood Admiral until 2017,
and the Atwood Archer until 2018. The
agreement with Daewoo Shipbuilding
& Marine Engineering Co. postpones
the milestone payments of $93.9 million for the Admiral and $305 million
for the Archer to their delivery dates in
exchange for $50 million payments for
each rig on Dec. 31, 2015. This deferral builds on the companys April 2015
choice to delay rig delivery for one year to

reduce its near-term capex spending in light
of the challenging offshore drilling market.
Atwood signed a letter of intent for one of
the newbuilds to commence a drilling program offshore Brazil in 3Q 2017.
Two new vessels launched

for Otto Offshore
The sister vessels Go Matilda and Go Mundara, platform supply vessels under construction
at the Wuchang Shipbuilding Industry Co. for
Otto Offshore, were recently launched.
The vessels are number two and three in
a series of four, with the first vessel being Go
Michigan.
The PX121 vessels are capable of supporting offshore activities. In addition to tanks for
various contents such as oil, water, and drilling fluids, they have four stainless steel tanks
for flammable liquids or corrosive chemicals.
The vessels are certified by DNV and carry
the Clean Design notation. They can accommodate 30 persons and keep a speed of approximately 14.5 knots.
A vessel of the PX121 design has an overall length of 274 ft (83.4 m), a beam of 59 ft
(18 m), and a load capacity of about 4,000
metric tons. The vessels are equipped with
the most modern solutions for DP-2 dynamic positioning, oil recovery, and fire-fighting.
Robin Dupre Houston
The contract with Ulstein includes the deliveries of design, engineering and main equipment. An extensive delivery from Ulstein
Power & Control includes integrated control
systems, bridge (radio, navigation), switchboard, diesel electric propulsion and frequency converters, and communication systems.
The vessels will be prepared for offshore
crane and a mezzanine deck for ROV.
Bisso Marine has acquired the offshore pipelay

industrys stalwart derrick/pipelay barge Global
Iroquois. (Image courtesy Bisso Marine)
Bisso Marine acquires new

derrick/pipelay barge
Bisso Marine has acquired the offshore

pipelay industrys stalwart derrick/pipelay
barge Global Iroquois. The 400 ft x 100 ft
x 30 ft (122 m x 30 m x 9 m) laybarge has
performed pipelay operations worldwide
and will be renamed Bisso Iroquois.
The central part of the barges station
keeping system are the 10 single drum
winches with 320 kips of pulling force
and 744 kip holding force each. Each single drum winch holds 5,300 ft (1,615 m)
of a 2.5-in. wire rope. The barges main
tub mounted dynamic revolving crane
has a 250-ton capacity and the deck
crane is a Manitowoc 4100W Series 2.
The pipe handing system is designed
to handle 40-ft (12-m) pipe joints but can
accommodate 60-ft (18-m) joints with
some modifications. The pipe handling
Above: Go Matilda, a PX121 vessel is capable of supporting
system can handle pipe joints weighing
offshore activities. (Image courtesy Otto Offshore)
up to 38 tons each. Through a series of
Below: Go Mundara, a platform supply vessel, was recently
conveyors, pipe is fed into a fully enlaunched. (Image courtesy Otto Offshore)
closed ready rack, line up station and
firing line.
The Bisso Iroquois can accommodate
256 persons and features a large galley
and dining area, a large theater, several
conference rooms, ample client office
space, a gym, and a three bed hospital.
During the last decade, the barge has
been reconfigured and received significant capacity, technology, and efficiency
upgrades to enable it to perform internationally in very harsh environments
for long durations.
DRILLING & PRODUCTION
A return to lean and mean?

Last year was a tough one for the oil and gas industry, as spending
and headcounts were slashed and the specter of bankruptcy became
an impending concern for some. Recent trends in commodity prices
have not helped, says Andy Jenkins of Douglas-Westwood. He notes
that late December saw Moodys downgrade its price forecast for
2016 by 17% and a further dip in the price of oil, with Brent crude
falling to the lowest level since 2004.
Producers have continued to produce and new Iranian output may
result in even more oversupply. By all accounts, 2016 is shaping up
to be just as challenging as 2015.
If prices remain low, one thing is clear, says Jenkins: 2016 is lined
up to be a year of consolidation. Cost savings are required to ensure that future developments are economically viable. Project optimization and supply chain improvements will be key in reducing
costs. However at current prices industry consolidation will play
a large part in ensuring the cost-effective development of projects.
In all likelihood, 2016 will see the completion of two E&P and OFS
deals with Shell and Halliburton acquiring BG Group and Baker
Hughes, respectively. Further M&A activity is expected those
with strong balance sheets are in line to benefit from a wealth of distressed assets. This is particularly clear in the drilling sector since
2014s drop, firms have relied on credit markets to keep rigs going.
With prices below $40, this option will dry up, forcing a search for
partners. This year looks to be a difficult one for all involved. Yet,
for those companies that are well positioned, there is likely to be a
plethora of opportunities, Jenkins commented.
Robin Dupre Houston
Total North Sea production split by hydrocarbon.

(Graphs courtesy UCube from Rystad Energy)
Total North Sea discovered volumes by lifecycle.
Sandbox to purchase distressed assets

John Fredriksen, owner of offshore drilling company Seadrill, has
created a new firm called Sandbox to purchase distressed rig assets from shipyards. With rising numbers of canceled and delayed
newbuilds sitting at shipyards as offshore drillers focus on de-risking their balance sheets, Raymond James stated the new company
should be able to acquire floaters and jackups at a discount.
The firm intends to take advantage of the downturn to make
smart investments that may pay off when the offshore drilling market recovers. Raymond James stated: Sandbox is one of the first
firms to vocally declare its intentions to invest in distressed rigs in
the near term. Though many firms within Raymond James coverage
have expressed interest in the acquisition of distressed assets, they
generally believe the bid/ask spread is too wide.
North Sea decline expected to end

Production from the North Sea is expected to remain constant
over the next five years as operators focus on redeveloping mature
discoveries and reversing the production decline of the last decade,
says Olga Kerimova, analyst, and Theodora Batoudaki, analyst, Rystad Energy. From 2020, Johan Sverdrup will play a significant role in
maintaining this trend.
Norway and the UK make up about 90% of the regions production; however, production has been declining historically due to
natural decline of mature fields, such as the Norwegian fields Gullfaks (Statoil-operated), Ekofisk (ConocoPhillips), Sleipner (Statoil),
and Oseberg (Statoil). In 2015, production is expected to increase.
The main drivers for this growth are the mature fields Oseberg and
Gudrun that produced more than expected, partly as a result of a
reduction in maintenance during the summer months of 2015. Additionally, operators have focused on extension projects on already
producing fields such as Ekofisk South and Valhall. From 2016 on,
production is expected to stabilize at around 4.2 MMboe/d. The
contribution of Johan Sverdrup, the largestdiscovery of the last decade, is visible in 2020, when the field is expected to start producing.
From 2020 on, Johan Sverdrup is estimated to be the field with the
second most significant contribution to production, after the giant

Norwegian field, Troll.
Spending levels have increased significantly from $50 billion in
2010, peaking at almost $80 billion last year, followed by a significant
drop expected in 2015 and into 2016 due to the fall in the oil price.
Capex reached around $21 billion in 2010, with an expected growth
to approximately $34 billion by 2020. The increase in spending over
the last five years is primarily from mature fields in the Norwegian
North Sea, such as Troll, Ekofisk and Gullfaks, as well as the recent
Edvard Grieg and Jasmine discoveries, Rystad Energy commented.
Future growth is expected mainly from the development of discovered resources, primarily the first phase of the Johan Sverdrup
field, as well as the Culzean field, both of which are expected to start
producing around 2020. Most of the development costs for the first
phase of Johan Sverdrup are expected to be incurred by 2019, leading to overall lower spending levels in 2019, before picking up again
in 2020. The operating costs are expected to remain around $27-30
billion per year, accounting for inflation.
In 2015, an increase in North Sea production is expected, partly
as a result of lower maintenance throughout the year and as new
development projects come online. Production is estimated to remain stable until the end of the decade. Investments are expected
to start increasing again from 2017, as the development of the major
discoveries Johan Sverdrup (2010) and Culzean (2008) progresses.
No significant increase is expected in exploration activity in the region, validating the focus on stable growth from developing existing
discoveries and mature fields.
GEOSCIENCES
Sarah Parker Musarra Houston
New software releases
Recently, the industry has seen several new or updated suites of

seismic-related software hit the market.
Paradigm 15.5: Paradigm has released its Paradigm 15.5 suite,

aimed at extending its high-definition subsurface workflows and enhancing user productivity. The software aims to help users resolve
stratigraphic details and recover the subsurface features that control hydrocarbon accumulation and recovery.
Paradigm 15.5 includes memory-efficient multi-volume, multi-horizon, and multi-survey flattening. Its horizon-fault contacts are calculated and editable on-the-fly. It also features multi-volume attribute
extraction and blending with geometric attributes in 3D Canvas.
Additionally, the Paradigm Quantitative Interpretation solution
for recovering rock properties from seismic and well data has been
updated with a Wedge Modeling application that analyzes the effect
of bed thickness on seismic amplitudes, and provides the option to
easily test what if scenarios.
Paradigm 15.5 includes the recently released Geolog 7.4 formation
evaluation suite, which expands the solutions reach into the engineering domain with new well integrity and geomechanics modules, to evaluate casing integrity and help assess mechanical conditions around the
wellbore, to provide a better understanding of the reservoir.
Additional efficiency enhancements provided with the Paradigm
15.5 release are enabled by new and expanded interdisciplinary workflows, including:
An extension of the cross-domain integration between Paradigm velocity determination and earth modeling solutions, enabling structurally and stratigraphically constrained velocity model updating
Multi-volume, multi-horizon, multi-survey volume flattening offerings are

available in Paradigm SeisEarth. (Image courtesy Paradigm)
Enhanced integration between geologic modeling and interpretation applications through the loading and display of time-stamped
production data
The inclusion of Paradigm Epos-based well display and mapping
capabilities with certain Geolog configurations.
This release also expands connectivity between Paradigm and other G&G platforms, including Petrel seismic-to-simulation software,
to provide users with additional options for accessing Paradigms
advanced technologies while maintaining value from existing investments in other software platforms.
ImaCore 3017: MR Solutions, of Guildford, UK, in partnership

with Green Imaging Technologies, based in New Brunswick, Canada, have combined technologies to bring ImaCore 3017, a new 3D
magnetic resonance imaging (MRI) solution.
The partners said that the ImaCore 3017 will lessen resolution limitations by allowing customers to bolster the theoretical with actual images of all the fluid present in the rock core sample, and thus the pore
network. The cryogen-free MRI imaging technology is versatile, as the
magnet field can be adjusted depending on image requirements. Sample sizes can range from 1-in. to 4-in. diameters and space is provided
for pressure and flow cells, allowing users to make measurements at
reservoir conditions and to perform high resolution flow studies.
PerGeos: FEI has released PerGeos, a software that aides in interpreting and modeling digital rock imagery. Using PerGeos, core
analysts, geologists and petrophysicists can integrate data from multiple sources and share descriptions and statistics using a common
platform. It features automated workflows, high-powered image processing algorithms and a user-friendly interface. The initial PerGeos
release consists of three modules: petrophysics, pore statistics and
core profile. Each module is designed to help users make statistical
observations about the sample as it relates to their specific function,
and then allows them to transfer this knowledge to a digital environment for interactive assessment by the entire asset team.
Fugro to assess seabed

conditions off Australia
Hess Exploration Australia has commissioned Fugro to conduct a

combined geophysical and geotechnical project in the northern Carnarvon basin offshore northwest Australia. The program, due to start
in the current quarter, will include seabed and shallow geological investigations, some in areas of difficult terrain. For the first phase, the
company will employ a Hugin 1000 AUV to map the seabed. The data
will help optimize planning for the subsequent sediment sampling
phase where a variety of techniques will be applied.
D
UN
L
11th
ENSING R
IC
GABON
DEEP WATER
11th Gabon Deep Water

Licensing Round
Until 31st March 2016, bids will be accepted

for the new Gabon 11th Licensing Round which
has a special focus on five blocks covering
some of the countrys key deep water acreage.
CGG is advising the Gabonese Republics
Ministry of Petroleum and Hydrocarbons on the
promotion of this licensing round and, working
with the Ministry, has acquired more than
25,000 km2 of new 3D BroadSeis multi-client
seismic data over the area. The fast-track data
is available now.
Visit www.gabon11thround.com to find out more.
www.gabon11thround.com
Night time view of a support vessel

next to the illuminated BP-operated
ENSCO DS-3 drillship at sea in the
Gulf of Mexico. (Courtesy BP)
Drilling contractors
face changing market
Many rigs expected to be scrapped in 2016
fter years of growth, the offshore rig

and remain part of the active fleet, albeit withCinnamon Odell
supply, including rigs under construcout a dedicated rig owner and manager, their
IHS Petrodata
tion, declined in 2015 by 43 units to a
shipyard contract cancellations do not affect
total of 1,145 drill barges, drillships,
the overall numbers in the accompanying table,
jackups, semisubmersibles, submersexcept that the totals for specific managers that
ibles, tender-assist units, and Arctic rigs. This was a direct result canceled rigs will not be as high as they would have been otherwise.
of an oversupply problem that began to show itself even before oil
The biggest drop from the table is the working count, as operaprices collapsed in the second half of 2014. New rig orders dropped tors not only terminated charters, but also failed to sign as many
off steeply, while attrition became a hot topic.
contracts as had been expected. Numerous rigs rolled off contract
Since the beginning of 2014, 66 units have been removed from the without follow-up jobs in hand and most of these remain idle as the
fleet for various reasons, such as scrapping, conversion to a non-drill- new year began. Since the end of last year, the working count has
ing unit like a mobile offshore production unit, or simply being retired dropped by 161 units to 519. That being said, as a whole, the 10 largfrom the active fleet. Of these 66, 25 were removed in 2014, and the est contractors went from having 47.8% of the working rigs to 45.3%,
rest occurred in 2015. However, this is not expected to be the end maintaining their dominance, as at present there are over 170 differof the scrapping session, as a delicate balance between supply and ent rig managers worldwide.
demand in a relatively stable oil price environment has not yet been
As expected, the rig manager with the biggest drop in its fleet is
achieved. With many oil analysts in agreement that the crude price also the largest manager Transocean. The company downsized
has not yet reached bottom, it makes it tougher on rig contractors from a fleet of 86 in 2014 to 74 by the end of 2015. In terms of fleet
to determine how many rigs need to be culled from their portfolios.
percentage though, Diamond Offshore slimmed down nearly 20%
At the end of 2014, 180 rigs were under construction. Fast for- from 2014, while Transoceans drop amounted to about 14% from its
ward one year and 184 units were under construction at the end rig portfolio. Of the other top 10 managers, only one did not have
of the year. As rigs generally take multiple years to build, many of any change Shelf Drilling stayed at 39 units, while China Oilfield
these were rollovers from the year before. A total of 29 rigs were Services Ltd. (COSL) is the only manager to have increased the size
delivered in 2015. Many more were previously scheduled for deliv- of its fleet, going from 46 to 47 units following the change of manager
ery last year, but due to worsening market conditions throughout for the rig Nanhai VI. COSL has been the owner of this rig since 2003,
the year, several had their delivery dates renegotiated and delayed. but Maersk was acting as manager while it worked off Australia.
Still others that were either finished or nearly finished had their
While there were no changes to the companies that made it onto
shipyard contracts canceled by rig contractors unable or unwilling the top 10 list this year, the biggest shake-ups are the fall of Diato accept delivery. However, as these rigs were built to completion mond from fifth to seventh place following its rig reductions, switch28 Offshore February 2016 www.offshore-mag.com
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INVENTING. COLLABORATING. LEADING.
Top 10 offshore drilling contractors by number of rig managed (Total rigs includes rigs under construction)
Total Rigs
Working
Under
construction
US GOM
Latin Am
NW Europe
W Africa
Transocean
74
30
10
11
11
19
Ensco
70
38
17
11
Seadrill
56
29
14
COSL
47
30
Shelf Drilling
39
27
Paragon Offshore
36
17
Diamond Offshore
33
12
Noble
32
Rowan
32
Hercules Offshore
Top Ten Total
Company
Middle East
Asia/Pacific
Rest of World
22
14
14
11
21
37
18
14
11
10
11
21
10
23
10
11
29
18
448
235
37
94
41
60
43
71
132
Entire Fleet
1145
519
184
125
202
107
85
171
401
54
Top Ten % of Total
39.1%
45.3%
20.1%
75.2%
20.3%
56.1%
50.6%
41.5%
32.9%
14.8%
Notes: Rig Types: Arctic, drill barges (but not inland barges), drillships, jackups, semisubmersibles, submersibles and tender-assists.
Rigs en route between regions are shown in the destination region.
Latin America includes all South America, Central America, Caribbean and Mexico.
Seadrill numbers do not include rigs owned and managed by North Atlantic Drilling.
Data courtesy of IHS. All data as of December 31, 2015.
ing spots with Shelf Drilling, while Paragon Offshore remained in

between in sixth position; and Hercules fall from the eighth spot to
tenth, boosting Noble and Rowan up by one place each to eighth and
ninth, respectively. However, in 2017/2018, the offshore rig industry
should begin seeing more consolidation among rig contractors as
sales of both individual rig and entire companies will become necessary due to sustained low demand in response to continued low oil
prices, and those contractors with cash on hand will be able to take
advantage of the market and its competitors. Some rig managers are
likely to be forced out of the market altogether in particular those
with little to no experience who were hoping to cash in on the high
day rates the industry was experiencing the past few years. Once
the recovery begins, we will see a leaner group of rig managers with
higher-end rigs in their portfolios.
In terms of region, Latin America lost the most rigs, dropping 17
units over the total from 2014. This was the direct result of national
oil companies PEMEX (Mexico) and Petrobras (Brazil) reducing
their contracted rig counts, combined with both of these countries
not being long-term stacking locations for idle rigs. In turn, this
helped feed the increase that took place in the US Gulf of Mexico,
which rose from 121 rigs to 125, despite over a dozen rigs being
retired or scrapped from the region. At the time of writing, 68 of the
US Gulfs rigs were in various idle states (i.e. hot-, warm- or coldstacked), proving the popularity of the region as a parking spot for
rigs without work. In 2014, the average contracted count in the US
Gulf was 77, compared to 59 a year later. The utilization rate for marketed rigs fell from 89.1% to 79.2%.
One region that has not felt the decrease in demand as severely
as other regions is the Middle East. Its fleet rose from 167 in 2014 to
171 at the end of 2015. The region had eight units under construction
at the end of both 2014 and 2015. Also for each year, demand averaged approximately 130 units. This is a pure-play jackup region, as all
rigs working in the region at present are jackups. It is also a region
that primarily awards long-term charters, which has helped insulate it
from declining utilization. More importantly, the biggest country user
is Saudi Arabia, which has 44 units under contract. In the midst of this
global downturn, Saudi Arabia has determined not to decrease its pro30 Offshore February 2016 www.offshore-mag.com
duction in an effort to maintain its market share. This has been good
news for drilling contractors that have rigs contracted in the Middle
East, although there have also been numerous rate renegotiations
that resulted in lower-than-originally-contracted adjustments.
Northwest Europe has also not fared too poorly so far. Its fleet grew
about six units over 2014. However, the average contracted count fell
from 93 to 87. Average utilization for marketed rigs in 2014 was 98.9%
versus 91.3% in 2015. Over half of the regions fleet is supplied by the
top 10 rig contractors. Similarly, the top 10 also provide more than half
the fleets in the US Gulf and West Africa. They are less dominant in
Latin America, Asia/Pacific, and the Middle East, where local players
are often given preference over outside companies.
Interestingly, some of the largest rig contractors have reduced
their presence in regions that are not the biggest users of offshore
drilling rigs. The Rest of World section in the accompanying table
shows a reduction in the presence of the top 10 from 27.1% at the end
of 2014 to 14.8% by the end of 2015. That category includes offshore
Alaska, which recently saw Shell pull out following its unsuccessful
campaign and subsequent decision to not pursue additional exploration work in the region for the foreseeable future. Other regions that
had reductions include the Mediterranean and Black Sea sector, and
the Australia/New Zealand region. In particular, frontier areas are
at higher risk for a pullback in activity, as oil and gas companies are
more likely to cut exploration work before development work when
crude prices are low.
The expectation is that by the end of 2016, many more rigs will
have been scrapped and very few new orders will have been placed.
Year-end should also see rigs begin to change hands as some rig
contractors will fall under the pressures of the current low oil pricelow rig demand scenario, while those with available resources will
take the opportunity to high-grade their fleets at attractive prices.
Notably, Hercules Offshore recently emerged from the bankruptcy
it filed in 2015, while Paragon Offshore has retained advisors for
guidance on strategic alternatives related to its capital structure and
has recently announced that it has elected to defer an interest payment while it continues to engage in discussions with its debtholders related to its strategic alternatives.
GULF OF MEXICO
DeepStar evolves to meet

new deepwater challenges
Consortium continues to help operators, vendors leverage resources
Bruce Beaubouef
Managing Editor
he DeepStar program, a joint industry consortium which has been in

continuous operations since 1992, has
become one of the offshore industrys
primary means of moving todays
technology into the future. As it approaches
its 25th anniversary, DeepStar officials remain committed to the goal of identifying
and developing economically viable, safe,
low-risk methods and technologies to produce hydrocarbons from deepwater fields.
DeepStars vision for the development
of deepwater technology is closely tied to
the concept of cooperation and evolution
of a synergistic relationship among the
members of the oil community. Since 1992,
operating companies, vendors, regulators,
academia, and research institutions working
in multidisciplinary technology areas have
collaborated through DeepStar to develop
the technologies needed to tackle deepwater challenges.
Through this shared effort, DeepStar
members have been able to minimize the
cost while mitigating the risk of technology
development in order to maximize the organizations particular technology achievements. In short, DeepStar officials say that
the consortium offers members the opportunity to significantly leverage their technology investment.
DeepStar has also established a working
relationship with the Bureau of Safety and
Environmental Enforcement and US Coast
Guard to resolve regulatory issues which
potentially affect safety aspects of design,
implementation, and operation of future
deepwater drilling and production systems.
The organization not only reaches out to
the traditional mix of US-based operating
companies, vendors, and suppliers, but also
openly extends the invitation for membership to international oil companies alike.
Yet, DeepStar officials do concede the need
for the consortium to grow its ranks, which
have been winnowed by mergers and acquisitions over the years.
For almost 25 years, DeepStar has worked to improve the profitability, reliability, and safety of deepwater production systems. (Courtesy DeepStar)
Recently, Offshore met with Chevron Energy Technology Companys Dr. Greg Kusinski, who serves as DeepStar Director and is
Chevrons Senior Advisor to that group. Dr.
Kusinski joined Chevron in 2008, and has
served in the capacity as DeepStar Director for the past four years. Chevron Energy
Technology Co. is a division of Chevron USA
Inc., and administers the DeepStar program.
He was joined by John Allen, a strategic
business advisor with INTECSEA, who is
also a co-chair of the DeepStar Contributors
Committee. Allen has been engaged in all
the DeepStar subcommittees over the last
20 years.
Dr. Kusinski and Allen spoke with Offshore at length about DeepStars latest activities, recent accomplishments, and goals for
the upcoming year and beyond.
Offshore: The DeepStar program is approaching its 25th anniversary. How have the
challenges changed over time, as the industry has gone into even deeper water?
Dr. Kusinski: The DeepStar mission is to
improve profitability, and enhance the availability, flexibility, reliability, and safety of deepwater production systems. Our mission stays
constant, but our activities to support that mission change.
In the oil and gas industry, technological
advances are needed to sustain well performance and develop new assets. Thus, a program such as DeepStar is imperative since it
is the most effective way to share technical
knowledge, experience, and leverage joint resources industry wide while enabling and enhancing technologies. Although we are not an
advocacy group, periodically there is a need
to have a healthy dialogue with regulators.
Sometimes that regulatory component changes; we do a little bit more at times, maybe a
little less at other times. Again, the DeepStar
mission is continuous as it evolves in order to
keep ahead of industry advancements.
www.offshore-mag.com February 2016 Offshore 31
GULF OF MEXICO
Offshore: Can you speak generally about the value proposition

that DeepStar offers?
Dr. Kusinski: From the operator perspective, one of the key
values has been about the ability
to define the target. One of the primary reasons that operators are so
willing to collaborate is because of
what being a part of DeepStar offers, with the statement that competitive advantage comes not from
what the technology is, but how
you use it. Operating companies
are not in the business of making
gizmos, but rather understanding
the conditions and integrating the
technologies; shedding insight industry wide on how to use it. Its
for this reason that this type of collaboration
is desirable to operators. With DeepStar,
operators can leverage their technical and
physical resources. Im a big believer that
two SMEs (subject matter experts) working together are better than three working
independently. We foster that one-plus-oneequals-three type of synergy. Thats the
value to operators.
Think about it. If ten of us put our thoughts
together, we go ten times as far; versus all of
us spending time, money, and resources on
the same stuff independently. At the end of
the day you can go further, while significantly reducing the bottom line. If I have a dollar
here from him, a dollar from somebody else,
the next thing you know, I now have two dollars. What can be done with two dollars is of
far greater value than two people each having one dollars worth of value. Well guess
what? If I have ten people with a dollar, the
multiplier is even better.
Allen: The vendor perspective is also important. Many operating companies have
their own specifications. There is a move in
the industry to look at standardization. Its
very hard, because weve got so many buyers. A common set of specifications is hugely valuable to the vendor community. Very
often, in the past, vendors have been faced
with 50 or more specifications. At DeepStar,
we get a more consolidated view from the
operator, which is a bit like standardization.
We here can understand better what the
drivers are, and what the industry needs. So
having a common set of needs and drivers
is very valuable. It enables vendors to get
a better understanding of what areas they
should invest in.
Dr. Kusinski: To a vendor it is tremendously valuable to understand the disagreements among operators, or if there is a certain diversion of vision among them. As a
vendor, you will draw different conclusions
if there is a consensus among operators, or
if there is a divergence between

them. You will react differently
to different scenarios. Moreover,
that intelligence is vital to development of technologies that will have
Greg Kusinki, DeepStar Director,
Chevron Energy Technology Co.
John Allen, Strategic Business

Advisor, INTECSEA, Inc.
field applications. A lot of magic

happens within DeepStar, and it
is not because DeepStar funds a
project, but often just because we
were discussing a topic. We dont
have the budget to fund or advance every
idea. If in principle we can signal to the marketplace that something is needed, and the
marketplace sees the prize, they will solve
it. We do a lot of projects that signal the goal
to the technology developers. Thats why
we spend a lot of money on lower technology readiness level concepts. Nevertheless,
these concepts are still tested in the context
of value creation and at the end of the day
its all about the kind of value as defined by
operators.
Offshore: Obviously, industry collaboration is a key component of the DeepStar program. Yet it is still a competitive industry. Is
it a challenge to strike that balance?
Dr. Kusinski: Yes. It is not trivial to define an acceptable program. For this reason,
it is important to discuss value drivers and
technical topics that bring value from implementation. In todays environment, we have
an additional challenge. Its always tough to
do things when everyones being more pressured for resources. I believe collaboration
is one of the answers to those problems. As
we think about the future, we will be spending more time to precisely define the value
for each member, and how those benefits
are divided. Ultimately, one of the values for
the industry is to develop better technologies by effectively leveraging resources.
Technology in itself is useless, if it is inefficiently utilized. The true value comes when
you efficiently put that technology to use.
Offshore: What are the key technologies
being developed by DeepStar today, and
what are the key areas of industry concern
today and going forward?
Dr. Kusinski: There are several big
themes that are supported by the 50-plus
projects that DeepStar is currently executing. Standardization is one key technology
for all themes. If we can bring a greater level
of standardization to the offshore arena in

the context of development, qualification,
and individual technologies the cost of
deepwater development might be reduced.
For example, within the realm of reservoir engineering, we have been looking
at enhanced oil recovery methods. Now
of course, this is a very competitive area.
DeepStar is still working in this area as
well. We all know the movie with Brad Pitt
Money Ball, right? That movie examined
how one can do analytics to understand
why certain players are better, even though
they lower cost. By doing a lot of analytics
of many older wells, we have created a database of many of the shallow, mid-shallow,
mid-deep, and deepwater wells. That analysis will give us a better understanding of
why certain wells are more productive than
others. Substantiating certain rules of practice and industry with this data can lead to
things like better completion design.
For example, I might have two similar
reservoirs that were completed differently,
and produced different results. One was
better than the other because the control
parameter (completion) was different. This
knowledge will allow operators to improve
their processes. At DeepStar, we are funding
a program to verify the API TR8 [American
Petroleum Institute] approach to the 20 ksi
design. We are doing this by performing
certain numerical finite element analysis.
Its a project to verify that the industrys approaches to 20 ksi design are conservative.
In the subsea arena, theres work going on
within DeepStar with regard to flow assurance and long-distance tie backs.
The industry has had these technologies
for years, but can we understand these systems better? Is a 50-mile tieback feasible,
and can an all-electric enable that? These
are some of the issues we are examining in
the subsea committee. In floating systems,
one topic that has come up a lot lately is
continued service of floating production systems. Why? It is because we are seeing the
first generation of floating infrastructure approaching their original design life. For this
reason, DeepStar has funded work to develop a draft document that will be offered to
API, a document which will define a process
and guidance for continued service of floating offshore structures.
We have also been examining mooring systems integrity, and that work is being guided
toward adoption as an API Recommended
Practice. Another example is technology for
harsh marine conditions, specifically steel
lazy wave risers.
Offshore: As the industry moves into ultradeepwater, do you think we will be seeing any
new production platform designs, perhaps
GULF OF MEXICO
with regard to hulls or mooring concepts?

Dr. Kusinski: DeepStar has done quite
a bit of work on semisubmersible platform
concepts for ultra-deepwater. In terms of
mooring, polyester and hybrid systems are
maturing. I think these concepts are pretty
much ready for ultra-deepwater, with the
caveat that there is a need to always try to
understand more. We have also been doing some studies on marginal fields. We are
asking the question How do you do a costeffective floater? in these situations. We
have analyzed twelve independent concepts
from twelve independent concept owners.
We have been giving them feedback, but we
are also trying to develop certain guidelines
for operators.
Offshore: As you mentioned, maintaining
the integrity of moorings for floating production units has been another area of focus
for DeepStar. Could you update us on this
effort?
Dr. Kusinski: DeepStar finished a project and developed a draft document on best
practices for risk-based mooring integrity
management. Our members have access to
this process, but we also have begun a process to donate this work to API. DeepStar
is not a standard-setting organization, hence
our partnership with API. The relevant API
committee has had great interest in incorporating our unified perspective contained
within this document into industry standards, which is why the legal teams at API
and DeepStar have developed a framework
for this knowledge transfer. It is expected
that the DeepStar draft document will have
to go through the API committee due process before it can become an API standard.
However, we think that our work will be a
great starting point for the volunteer-based
API committee. It will be easier for the API
committee to perhaps modify the draft document that was vetted by our DeepStar Floating Systems Committee, than to start from
scratch.
Offshore: DeepStar has launched a new
study, led by INTECSEA, involving long
subsea tiebacks. How much growth, if any
at all, do you expect to see in the usage of
long-distance subsea tiebacks in the GoM in
the near- and long-term future?
Allen: The real question is why were doing the tieback study. Of course tiebacks are
not new, and the industry has taken tiebacks
out to longer distances. Were examining the
flow assurance challenges of long tiebacks.
The reason is that we are looking for ways
to reduce the cost of field development. If
you are looking to save money by reducing
a project scope, you can potentially save anywhere from 5 to 10%, maybe as much as 20%.
Although, we are looking for a paradigm

shift of how we do field development, one
known way we can do that is through tiebacks, because it moves the local host. We
even talked about what that host should
look like. The study findings may recommend minimizing that host. Its potentially a
huge cost savings. Thats why were looking
at this now.
What we are ultimately trying to do is
to foster the development of an all-subsea
system. That would involve sophisticated,
long-distance electrical power lines and a
fiber-optic data lines, with many more data
collection points. At DeepStar, we believe in
having a lot of data, to maintain integrity and
manage flow. Were looking at an electrical
power and fiber-optic umbilical and single
flowline, and thats it, with everything subsea. We can then tieback to an existing (depleting) platform in a distant field or install a
minimum facility (power) platform servicing
multiple fields.
Dr. Kusinski: Think about it what is
long? Tiebacks already exist right? As
you go out further, with a longer radius, it
could become too expensive. You do need
to think about flow assurance. The more we
understand about the fundamentals of flow,
the better off we are, because one can better
understand the point at which hydrates are
likely to form. Another important question
is: Do I really need to be dumping so much
methanol into the system as a way to prevent hydrates? Thats a long-term vision that
DeepStar is pursuing, and we are advancing
it progressively by better understanding hydrate formation.
Offshore: The first HIPPS (high integrity
pressure protection system) is about to be
deployed in the GoM. Can you talk about
DeepStars role in advancing this technology?
Dr. Kusinski: DeepStar was involved in
the initial studies that examined bringing
HIPPS to the Gulf of Mexico. Even as recently as two years ago, we had completed a
study, on the Wilcox reservoir, for example.
We examined the response time needed for
a HIPPS in a context of a low-permeability
reservoir. We asked, how fast will the pressure build-up happen? We have developed
an integrated reservoir and subsea facility
model to study various hypothetical blockage and pressure build up scenarios. As we
look back further, there have been six or
seven various studies, over last decade plus,
that DeepStar has done on HIPPS. Furthermore, DeepStar SMEs had a series of meetings with BSEE on it, to help promote it and
get it accepted.
Allen: DeepStar spent a lot of time working within our Subsea Technical Commit-
tee, looking at the HIPPS concept. We had

workshops on HIPPS all over the world. We
got the relevant federal regulatory agencies
involved. We had a regulatory committee,
which met in Metairie, Louisiana, regularly.
We worked over an extended period of time,
bringing them different aspects of it what
the technology is, how it works. Basically
getting towards a good understanding of
what the technology does. This was a complex system issue, looking at where to locate
a HIPPS system and what the reinforced
zone philosophy was for specific applications. Then we transferred that knowledge
to the API. It took a while for it to actually
happen, in the Gulf of Mexico. The HIPPS
concept and knowledge was really forged
by DeepStar in the early days, then it was
accepted by the API, and is about to be deployed in the Gulf of Mexico.
Offshore: What are your goals and objectives for DeepStar in 2016?
Dr. Kusinski: The big one obviously is to
maintain a certain core, and continue to stay
relevant to our members from a technology
perspective. We will continue with our existing ongoing projects, but we will also examine how DeepStar can continue to be relevant for its members and for the industry.
We will be looking at ways in which we can
contribute to the development of technologies that bring value and lower cost through
both standardization and unification.
We have been the pre-eminent offshore
global technology development consortium.
In order to maintain that status, we must
constantly keep innovating. We hope to attract more national oil companies and international oil companies this year, and in the
future. It would be good for everybody to
continue to hear, and understand, and contribute to overall improvement of deepwater
development. Thats our mission for next
year and beyond.
Allen: We are trying to do things that can
make field development more cost effective
in an environment of low oil price. Obviously
the stronger the membership, the more effective that is. I think were going to make
sure that its clear that DeepStar has that value proposition. That will reinforce the goal,
which is to make the pie bigger in this particular environment. That is the focus of our
next phase. When the oil prices go back up
well have another phase. However, we would
have gone through that efficiency phase,
which is what we will be focusing on in the
near term. With the current low oil price and
cost conscious environment, we will be more
motivated to adopt technologies that can do
things more efficiently and lower the cost of
development, so as Greg pointed out earlier,
this is a time for innovation.
EASTERN CANADA
Operators remain interested

in offshore Canada
Sona Mlada
Rystad Energy
il and gas production offshore Canada

may not represent a significant part of
global offshore production (Canadian
production represented only about 1%
of the global offshore production in
2015), but it does play an important role for
the country in the future.
By 2020, it is expected that the supply from
Canada offshore will grow to ~350,000 boe/d
(from the current production at 270,000 boe/d),
with nearly 75% represented by liquids.
The production has the potential to grow
as high as 500,000 boe/d in the following decade, assuming all of the discoveries come online and operators unlock some of the new discovery potentials. A couple of key questions
remain: How much of the not-yet-sanctioned
projects will come online given the current oil
price environment? And, is there going to be a
production rebound or a steady decline?
SURF market continues to show strength

Global offshore capital expenditure (development and exploration) 2015-2020
(USD billion) by top 20 countries and water depth. (Graphs courtesy: Rystad Energy UCube)
Global offshore regions
To set the scene for the global offshore regions, one can start by looking at the expected spending levels from
20152020. More than $300 billion will be invested into Western Europe, where Norway is the largest country with offshore investments
amounting to $180 billion (or ~10% of global investments). The second largest region is North America, including the US ($140 billion),
Mexico ($90 billion), and Canada ($24 billion).
South America represents the third-largest region, where Brazil
takes the lead, as the second-largest country globally, with expected
investments of $165 billion. Brazil, the US, Angola, and Mozambique
are the countries with the largest investments in ultra-deepwater
(over 1,500 m [4,921 ft]); whereas countries like Norway, Mexico,
and the UK dominate the shelf developments (less than 125 m [410
ft] of water depth). Canada ranks as the 19th country in terms of total spending in offshore exploration and development, with expected
investments amounting to $24 billion in the time period 2015-2020.
About 70% of this spending will be dedicated to the development
of infrastructure, drilling and completion of the offshore wells, primarily in the shelf water areas. The exploration capex will represent
nearly 30% of the total spending in the country. The exploration activities will focus mostly on the deep and ultra-deepwater developments; more than 75% of all exploration capex will be dedicated to
these deepwater developments.
Canadian market
Unlike other offshore markets, where several operators are competing for their share (e.g. the US, UK, or Norway), in Canada there
are only a handful of operators of the offshore fields. Throughout
2015-2020, the largest operator, ExxonMobil, is expected to invest
over $11 billion offshore Canada.

Almost 80% of these investments are directed to projects under
development primarily Hebron. Husky is the second- largest operator in terms of offshore spending in Canada. For Husky Energy,
over 80% of the total expected spending ($4 billion) will be directed
to developing the White Rose discovery. Suncor is estimated to direct all of its short-term capital into development of the producing
Terra Nova field; at the same time, Statoil is expected to invest in the
development of its Bay du Nord discovery from 2013, which established the Flemish Pass as a new play offshore Canada. Currently,
the investments in the field are related to appraisal campaign. While
waiting for the final investment decision, Statoil is working with
the Newfoundland government to establish the terms for Bay du
Nord development. Bay du Nord was the first significant deepwater
(more than 1,000 m [3,281 ft] of water depth) discovery in Canada
offshore, with resources estimated at 400 MMboe. The second largest deepwater discovery was Mizzen from 2009 (130 MMboe) and
Harpoon from 2013 (70 MMboe).
Looking at shelf and deepwater discoveries combined, Bay du
Nord still stands out as the largest single asset discovery since 1984
(when Terra Nova was discovered), with total estimated resources
of 550 MMboe. The largest discovery ever made in Canada offshore
was Hibernia in 1979. The total original resources were estimated at
about 1.5 Bboe, and the field continues to be the largest producing
field offshore Canada, with an average daily production of 120,000
b/d in 2015. However, the production from Hibernia has been on a
steady decline and on average, production on this field is expected
to decline by 10% over the next five years.
EASTERN CANADA
Total offshore capital expenditure 2015-2020 (USD billion)

in Canada by top five operators and life cycle.
Remaining resources and breakeven prices for the main assets offshore
Canada (size of the field represents the remaining resources).
Canada offshore oil and gas production (Thousand boe/d) by life cycle.
vember 2015 less than one-fifth of the peak production from the field
from early 2014. Much speculation followed with regard to Encanas
next steps concerning the offshore field in Nova Scotia. The fact remains that Panuke Deep does not fit into the new strategy of the largest
Canadian upstream company it sold most of its gassy assets during
the last two years and has invested heavily in the liquid-rich shale acreages onshore North America.
Production trends
Production from projects offshore Canada has been steadily declining since the end of 2010. It will be the ExxonMobil-operated
Hebron project (depicted in yellow in the chart), that will change the
direction of this curve past 2017. The project was sanctioned at the
end of 2012, and first oil is expected during 2017. Bay du Nord is depicted in the green color on the chart. Statoil has not yet sanctioned
the project; however, the supply from Bay du Nord will be crucial to
maintain the growing tendency of the Canada offshore production
going forward.
Canada will need contributions from the projects currently under
development, such as Hebron, to change the declining trend and
grow again to more than 400,000 b/d, a level at which Canada offshore was producing from 2002 to 2008.
Canadian offshore resources

Crude oil represents nearly 75% of the total remaining resources
of offshore Canada. This is light oil, with the average API gravity between 30 and 35. Nearly 50% of the total remaining crude resources
(~2.1 Bboe) are represented by the three largest fields: Hibernia
(producing), Hebron (under development), and Bay du Nord (not
yet sanctioned discovery). Hebron, together with Hibernia, belong
to the five largest crude oil offshore fields globally (in terms of remaining resources) that have a fixed concrete gravity-based (CGB)
structure, with Hebron at the top of the list. The associated gas is
being injected at the large oil fields offshore Canada.
The Encana-operated Panuke Deep field is the largest gas resource
offshore Canada (remaining resources of over 700 bcf). Encana operates the field with a medium steel platform facility type. According to
the Nova Scotia Offshore Petroleum Board, Panuke Deep has been facing serious water woes since the beginning of 2015. Based on governmental information, the field produced on average ~130,000 liters (~820
bbls) of water per month during the months JanuaryApril 2015. Facing these difficulties, the operator was forced to shut down production
from Panuke Deep from June through September 2015. The production recommenced in October 2015, and reached ~50 MM cu m in No-
Breakeven prices
As discussed above, there is tremendous growth potential offshore Canada. The question remains will these fields be profitable
at current oil prices? Looking at the breakeven prices for the Canadian offshore projects, it can be observed that only the southern
extension of Hibernia and Terra Nova fields have their breakeven
prices below the current low oil price ($34/bbl as of Jan. 8, 2016).
Rystad Energy believes in a significantly higher oil price towards
2020, making many projects economical in future. The large volumetric contributions from Hebron will require the oil price to be
above $60/bbl. The depicted graph shows that there is a potential
for the production to grow as much as 500,000 b/d by 2030 (~75%
crude oil) if oil prices increase to the $100/bbl level by 2020. With oil
prices at around $50/bbl going forward, offshore Canadian production would never experience a rejuvenation; large projects discoveries (like Bay du Nord) would never come onstream; and production
would face a steady decline past mid-2030.
The author
Sona Mlada, senior analyst, is the lead Canada onshore and

offshore activity analyst at Rystad Energy.Her main responsibility is the analysis of upstream E&P activities in Canada, with a
specific focus on shale asset modeling. She is the project manager
for the quarterly North American Shale Report, published by
Rystad Energy.
Database integration improves

hydrocarbon seep evaluation
New system combines validation data with ranking scheme
Mike King
Alan Williams
CGG GeoConsulting
atural oil seepage at the surface is a dynamic component

of petroleum systems and can be an important indicator of
economically significant hydrocarbon accumulations. Historically, such sites have guided explorers to many of the
worlds major oil discoveries, such as Spindletop, Texas
(1901) and Kirkuk, Iraq (1927). Almost all petroleum basins leak but
not to the same degree, so a way of assessing the distribution and
intensity of seepage is needed.
Seepage data has now become part of the routine exploration
workflow and is a recognized and valuable tool for new ventures
and exploration teams. However, there is no single, universally applicable detection technique.
Offshore, remote sensing data can be used by expert interpreters
to identify oil seepage locations across large areas in a cost-effective
and timely manner. Onshore, however, interpreting remote sensing
data for seeps is more complex and convincing examples are far
fewer than for offshore. The challenge that geoscientists face is how
to use these different datasets in a consistent manner and how to
understand the uncertainties associated with each method.
The aim here is to describe how the creation of the industrys
only integrated onshore and offshore seepage database offers the
industry a high-quality exploration screening tool.
Process of seep detection. (Images courtesy CGG NPA Satellite Mapping 2016)
Seep mapping methods
Offshore seep detection by satellite remote sensing uses Synthetic Aperture Radar (SAR). The technique was pioneered by
CGG GeoConsultings NPA Satellite Mapping group (NPA) as part
of a joint research project with the British National Space Agency
(BNSC, now UK Space Agency) in 1991. SAR is an active instrument
that uses radio waves (typically with wavelengths between 2 and 30
cm) to image the surface of the Earth. They have the significant
advantage of being able to image day and night through all but the
densest cloud.
Oil seepage slicks are formed when oil is transported to the ocean surface either as discrete oil
bubbles or more typically as an oil-coated gas
bubble, where the bubble bursts and leaves behind an oil film. Over time, the oil films coalesce
and form oil slicks that are large enough to be
detected by SAR. The detection of these slicks relies upon the physical properties of oil (i.e. viscosity and elasticity) and their dampening effect on
waves in the mm to cm wavelength that populate
the sea surface at low to moderate wind speeds.
It is literally the act of pouring oil on troubled
waters that is being observed. The SAR instruments image at an oblique angle so the effect of a
smooth area caused by an oil slick is that energy
is reflected away from the sensor and the slick is
imaged as a dark area of low return.
The flatter areas on the sea surface that SAR
detects can have various origins, not all of them
being natural seepage. This means there are uncertainties in the interpretation of the SAR images which require specialized expertise to unravNatural oil seepage slicks (black areas) imaged on satellite radar over the US Gulf of Mexico.
el. Interpretation is undertaken by experienced
Seepage or fluid escape features recorded in CGGs Seep Explorer.
professionals who expertly discriminate oil

and non-oil slicks, then between natural oil
seeps and pollution, based on the characteristics of the slicks. Slicks are classified using
a number of criteria including: shape, size,
edge characteristics, distribution, location,
and temporal repetition (across multiple
SAR images taken over a period of time).
While the process is robust and discrimination can be achieved with a high level of
confidence, it is subjective and contains an
inherent uncertainty until the slicks are validated against collateral datasets.
The interpretation technique developed
by NPA has successfully identified seepage
in multiple deepwater basins prior to the
main phase of discovery. One of the most
successful examples of the technique was
in deepwater off Angola, where NPA seeps
data indicated the presence of an active petroleum system in the mid-1990s ahead of
any in situ exploration. These deepwater
blocks have now been drilled with a succession of major discoveries made by BP, Total,
and ExxonMobil.
Increasing confidence
Uncertainty in the offshore remote sensing data and ambiguity in the source and
accuracy of the existing onshore reference
data therefore require a high degree of standardization and validation to provide a robust
and reliable evaluation dataset. To achieve
this, CGG GeoConsulting has recognized
the need to bring together these disparate
datasets into a single coherent database with
a consistent ranking scheme and assembled
a new reference library which standardizes
all existing onshore and offshore data under
its Seep Explorer product suite.
Offshore, the aim was to supplement the
remote sensing data with all existing evidence of seep-related fluid features (such as
mud volcanoes, pock marks, chemosynthetic
communities, and seismic direct hydrocarbon indicators (DHI) such as phase reversals, flat spots, gas chimneys, water column
gas plumes or slicks sampled at the surface
from a variety of sources and create a fully
interactive GIS layer. The strength of the association of the fluid features with the remote
sensing data can then be assessed. For example, a seep sampled at the surface revealed to
be from a thermogenic source would score
very highly. These positive indicators include
various features with a strong association
with seepage, such as seabed mud volcanoes,
pock marks and seismic DHIs, which would
receive a high rank in the scheme. They may
also include more subjective associations
such as deep faulting, which extends to the
surface and may provide a plausible migration pathway, but do not have direct evidence
of oil migration, which would therefore be
ranked lower.
The new offshore reference data in Seep
Explorer allows for an additional validation
of the existing Global Offshore Seepage Database (GOSD). The strength of the associations as well as the distance between the interpreted slick and the recorded feature can
then be weighted and ranked to provide an
assessment of the offshore seepage slicks
plausibility.
The task onshore is far less subjective
as the features have usually been directly
recorded, sampled and, in some cases, geochemically analyzed. This means the main
uncertainty is the reliability of the source
material or location rather than whether the
feature is associated with hydrocarbon seepage. After recently acquiring the Global Oil
Gas Onshore Seepage Database (GLOGOS)

from Gas Consult, CGG GeoConsulting also
combined and harmonized its data with that
of its Frogi onshore seepage categorization
scheme.
The product now contains more than
15,000 onshore attributed data points (and
more than 31,000 features including offshore), with many also containing geochem
analyses and therefore enabling a user to
draw his or her own conclusion as to the significance of the features.
The integration of the GOSD, Frogi seeps,
and GLOGOS reference databases has for
the first time created an attributed global
on- and offshore seepage reference dataset. Uniquely, it addresses the uncertainty
involved in seep interpretation by combining validation data with a rigorous ranking
scheme. This allows exploration opportunities around the world to be benchmarked
in a consistent and transparent manner.
The new system is continually expanding
as more data becomes available. More than
25,000 SAR images have been interpreted
with ~2,500 additional scenes analyzed each
year; most basins now have five-fold coverage, which increases the confidence in seep
interpretation. The opportunity to incorporate proprietary information is also included
and the scheme can easily ingest the users
own data. A positive feedback process has
been created to allow for the verification
and increased confidence of the existing offshore seepage database.
Through the combination of these database products, CGG GeoConsulting has created the standard go-to dataset when reviewing frontier acreage and reducing the source
risk of prospects through both the identification and validation of petroleum seepage.
Monitoring systems help improve

mooring integrity, performance
Load cells can be an effective tool for detecting failures
orrosion, wear, installation damage,

flaws in manufacturing, material incompatibility, and even design errors
can lead to degradation and deterioration that impact mooring system functionality and compromise safety. Inspecting
deepwater mooring systems is a difficult task,
but because these systems are safety-critical,
understanding their performance and degradation is essential to safe operations.
Evaluating todays systems
To date, the vast majority of mooring systems have performed to design specifications,
but there have been failures in recent years.
Some of those failures have involved multiple
mooring lines, resulting in lost stationkeeping;
emergency production shutdown; damage to
risers; and in some cases, small hydrocarbon
leaks. Although none of the recorded incidents resulted in complete failure of the mooring system, the impact on safety and the associated financial consequences were quite high.
Suqin Wang
ABS
The greatest area for potential improvement in mooring system safety is in programs that address mooring integrity management, inspection, and monitoring.
The first step toward improving the way
inspections are being done is to understand
the monitoring systems in use, taking into account the fact that the effectiveness of these
methods depend on the particular characteristics of the mooring system, the environmental conditions on site, and a number of
other conditions.
Using load cells is the most straightforward
way to detect mooring line failures. Unfortunately, accuracy, reliability, and robustness are
major concerns with this approach, especially
underwater, where access to the mooring line
and instrumentation is extremely limited. Over
the long term, power and signal transmission
cables deteriorate, and while signal drift can

be detected up to a point, it is not always possible to determine what is due to instrument
drift and what is the result of a change in the
mooring line load. The introduction of in-line
load cells housed in protective casing and
transmitting data via acoustic transmitter offers improvements to the traditional approach.
Inclinometers offer a way to evaluate system integrity by measuring mooring line angles. If there is a significant change in angle
in calm weather conditions, it is quite likely
that a line failure could be the cause. For catenary systems, inclinometers can be used to
derive an approximation of the mooring line
(quasi-static) tension by measuring the angle
of the mooring line at or near the top connection to the platform. The drawback is that
the dynamic and non-linear effects are not
included in the calculated tension from angle.
A third approach is to use a global positioning system that can identify abnormalities in the offset of the floating production
Pros and cons of accepted mooring monitoring systems

Load cell
Inclinometer
GPS
Integrated system
Maturity
Has been used in number of applications
Has been used in a limited number

of applications
Has been used in a number of applications
Has been used in a limited number of

applications
Intent
Monitor mooring line load for the

detection of line failure, overloading, or fatigue assessment
To measure mooring lines angles

for the use of detecting line failure
or as inputs to the mooring lines
load assessment
To monitor and measure FPSO

locations and hence to derive the
mooring line load
Monitor and detect mooring line

overloading, failure, and provide
operation advisory
Application
All types of mooring systems; difficulty for submerged turret mooring

system
All types of mooring systems,

most suitable for catenary system
for derived line tension
All types of mooring systems
All types of mooring systems
Deployment
New and existing systems. for inline

load cell; retrofit is relatively difficult
New and existing units
New and existing systems
New and existing systems.
Advantage
Long time, very well used method for

load measurement. Relatively simple
system, low cost.
Direct measurement of line angle

and not affected by other parameters. Relatively simple system with
low cost. Signal could be acoustic
transmitted, low maintenance.
Easy to install and relatively low cost.

Equipment on board the vessel and
easy to maintain
Comprehensive system for real time

monitoring and provide advisory for
operations
Disadvantage
Measurement is not reliable especially when the mooring line load is

not very high. Many other factors affect the output of the measurement,
such as frictions, temperature, signal
drafting, recalibration, etc. durability
of transmission cables
Can only derive quasi-static mooring line tension. Dynamic and

nonlinear effects are not included.
Need careful calibration for the
model of mooring line angles and
mooring line load.
The relationship between vessels

position and mooring line load needs
to be carefully studied to have a clear
understanding between the measured
positions and mooring line load. Environment measurement (wind, wave,
and current) may be necessary.
Relatively expensive; A lot of data

processing; The system is relatively
new and the effectiveness of the
advisory system is not known yet.
Evaluating accepted mooring monitoring systems allows their strengths and weaknesses to be identified. (Courtesy ABS)
system (FPS) to possibly indicate a mooring

line failure. The issue with this approach is
that it is imprecise and can only indicate that
a change has occurred. It can provide a trigger for further inspection, but it is limited in
its usefulness on its own.
A fourth alternative is to use an integrated
monitoring system in conjunction with a forecast system. The monitoring system can track
a range of parameters such as wind, wave and
current, FPS motions, mooring line angle and
load. The forecast system can include FPS
motion and mooring line load predictions.
A central server onboard the FPS collects,
stores, and processes data from the various
instruments. A relatively simple integrated
monitoring system installed on an FPSO logs
vessel position and mooring line angle measurements, deriving the mean mooring line
using the measured mooring line angles and
vessel position data. The calculated mooring
line tension can be compared to preset thresholds so changes can be identified.
Limitations
The effectiveness of system monitoring is a

considerable concern because not every system works on every type of mooring system.
Many factors need to be taken into account
when a monitoring system is being designed.
First, monitoring objectives have to be defined clearly so the proper analysis tools can
be validated and abnormal behavior identified so line failures can be detected. The
second critical step is to evaluate mooring
system performance under various environmental conditions so there is an acceptable
baseline for mooring system performance.
Third, it is important to understand the
monitoring system itself its functionality,
limitations, and the extent of its reliability.
Real-time mooring monitoring systems can
be beneficial to mooring system integrity by
revealing anomalies for further investigation,
providing line failure warnings, verifying numerical models for mooring strength analysis
for improved understanding of the system, assessing fatigue damage. They can also provide
information for risk-based inspection, inspection modification, and repair plan development. While progress has been made, with
the number of installed monitoring systems
increasing and subsequent technical advancements being achieved, their reliability and effectiveness are still limited.
R&D goals
One of the most significant challenges in

developing and maintaining mooring monitoring systems is managing costs while monitoring the optimum useful information at
the lowest level of investment. In addition to
being easy to use, an effective system must
gather the information needed to understand
performance relative to established baselines

using reliable and accurate equipment and to
effectively record and process data such that
degradation and failures are detectable.
Data processing and management is another area for improvement. The data management system has to accurately store,
analyze, interrogate, and trend a very large
volume of captured data so appropriate system assessments can be made.
It also is vital to understand gaps in mooring
monitoring technology. The lack of the direct

link between monitored parameters and specific onboard operations guidelines is likely the
reason for insufficient impetus for industry to
deploy suitably robust and effective systems.
Finally, it is important to develop better
training for operations personnel. Improving
operations and failure response procedures
will make it easier for personnel to monitor
system performance and respond to emergencies.
Deepwater MPD system aids

drilling operations offshore Angola
Earl Dietrich
Weatherford
nspired by an accelerating learning curve and ongoing efforts to establish distinctive integration protocols for floating drilling rigs, key
industry players are increasingly recognizing pressure control technologies and techniques including managed pressure drilling (MPD)
as safe and cost-effective approaches to drilling deepwater wells.
Specifically, for the extremely narrow fracture-pressure gradients
typical of deepwater wells, they point to the capacity of MPD to maintain constant bottomhole pressure (CBHP) with early kick/loss detection and correction. Unlike conventional open-to-atmosphere circulating systems, MPD employs a unique rotating control device (RCD),
surface chokes, and related components to deliver near-instantaneous
application of annular surface backpressure to control bottomhole pressures and equivalent circulating density (ECD) critical for operations
in tight and often shifting deepwater drilling margins.
Thus, while no cut-and-dried checklist exists for what constitutes a
prospective MPD well, the increased risks of well-control issues and
related costs make the deepwater environment ripe to adopt closedloop drilling techniques. The mandate to reduce the risks and costs of
offshore development is driving industry-wide efforts to break down
the remaining technical and regulatory obstacles to the wholesale integration of MPD systems on classed floating drilling rigs.
MPD originated as a technique for drilling trouble zones in onshore
and shallow-water applications, and soon evolved into a standard practice for drilling the most difficult wells. However, transferring what
had become a routine land-rig technique to deepwater semisubmersibles and drillships involved a steep learning curve. Unlike typical
surface BOP applications, the integration of MPD systems with the
existing risers of floating drilling rigs creates two barriers: an RCD
for top-of-the-riser pressure containment and an upper marine riser
annular preventer. Failure of either barrier, or any component in the
system front, can lead to severe consequences in deepwater scenarios, further heightening the need to conduct a thorough case-by-case
evaluation before initiating the integration process.
Much of the planning required when installing an MPD package
onto an existing floating rig involves integrating equipment and re-evaluating techniques such as tripping, flow checks, kick drills, and well
control. This is due to the installation and operation of the subsea RCD,
including its integration with a riser gas handling (RGH) device.
No consistent industry-wide rules or standards currently exist to
guide the integration and application of MPD on floating drilling rigs;
class societies and regulatory bodies are working toward classifying MPD systems and their respective components. Experience has
proven that the application of MPD offshore requires extensions and
modifications to the design of critical components to help ensure safe
operations in harsh environments.
Aside from the dearth of standardized sub-components, the rig-up
of a MPD system on a floating drilling rig is enormously complex.
Integration experience has shown, for instance, that it is imperative
to consider the inside diameter; drift; tension ratings of marine risers;
tension ring; upper flex joints; and the telescopic joint during planning stages to prevent issues during deployment. Further, the rig-up
The team integrated a rotating control device into the rigs existing riser
gas handling system. (Photo courtesy Weatherford)
process must also include planning for fire and gas system upsets,
emergency shutdown events, and emergency disconnects.
The customized network of umbilicals, control systems, piping and
valves in the moonpool area is among the more critical and arduous
elements of an aggregate rig-up. The pipe and valve system must be
able to accommodate conventional drilling and seamless conversion
to MPD, pressurized mudcap drilling, early kick detection, or RGH
when required.
Despite the significant challenges, MPD integration on existing
floaters, which took hold in the Asia/Pacific region, has since expanded worldwide with impressive results. Over the past decade,
the MPD methodology has been used extensively and effectively in
water depths exceeding 7,500 ft (2,286 m), with the frequency and
complexity of targeted wells increasing appreciably.
More recently, an operator in Angola requested the permanent
integration of an MPD package on an under-class drillship. MPD
was seen as the only viable solution to minimize losses, control gas
migration and, most importantly, provide early kick and loss detection, particularly in the 1818-in. section.
After a comprehensive rig survey, the drillship was outfitted with the
deepwater MPD package, including the latest automated control system for monitoring losses and conducting dynamic flow tests gains, as
well as the BTR RCD to facilitate closed-loop drilling. Once the rig-up
was complete, the MPD system in CBHP mode drilled a cumulative
13,358 ft (4,072 m) through three troublesome sections. In the 14 16-in. hole section, the MPD team drilled from 12,182 to 18,574 ft
(3,713 to 5,661 m) at sustained drilling rates of 66 ft/hr, with a 12.2 lb/
gal mud weight. The ECD held relatively steady between 12.7 and 12.75
lb/gal. In the intermediate 12-in. hole interval, the MPD team drilled
from 18,602 to 20,692 ft (5,670 to 6,306 m) at ROP from 3- to 7-ft/hr with
a 9.8-lb/gal mud weight and ECD ranging from 12.3 to 12.35 lb/gal.
Overall, the MPD system enabled the operator to avoid total losses
while effectively controlling nuisance gas, and to safely reach total depth
at a significant savings in both drilling time and associated costs.
Legacy BOP technology could be

approaching design limitations
Authors call upon industry to consider alternatives
Some pipe sizesAuthor
and components that current shear rams may not be able to cut.
Author info
OD (in)
ID (in)
Wall (in)
UTS (psi)
Area (in2)
Shear
force (lbs)
Surface Casing Q-125
18
16.5
0.75
135,000
40.64
3,308,462
Intermediate Casing Q-125
16
14
135,000
47.12
3,835,898
Intermediate Casing Q-125
14.25
12.25
135,000
41.63
3,388,376
Intermediate Casing Q-125HY
11.875
9.875
165,000
34.16
3,399,031
Production Casing Q-125HY
10.75
8.75
165,000
30.63
3,047,408
Drill Collar (80ksi)
11
95,000
87.96
5,038,759
Hevi-wate DP Tool Joint (150ksi)
4.625
1.688
180,000
33.47
3,632,116
Joint Type
Jay Read
BOP Technologies
Roy Shilling
Frontier Deepwater
Solutions LLC
he Presidential Commission that studied the Deepwater Horizon tragedy

called a BOP the last line of defense
to prevent a catastrophic release of
hydrocarbons into the environment.
However, when it comes to this critical barrier that protects the rig and its crew, the
industry is still using 90-year-old technology
that has simply increased in size, weight, and
complexity over time.
Originally, BOPs had only pipe rams,
which were designed to close and seal
around drill pipe. When the industry moved
offshore and subsea wells were developed,
the same closing technology behind the
pipe ram was adapted to shear rams. As de-
Source: West Engineering Shear Ram Capabilities Study, 2004.
signed, it would cut the drill pipe when needed and allow a floating drilling unit to safely
perform an emergency disconnect while still
shutting in the well. Over the years, shear
ram BOPs have increased in size and actuation pressure in order to generate more
and more force to cut the ever-larger and
stronger tubulars run in the wellbore. The
net result in todays post-Macondo world
is that BOPs may need to be twice the size
and weight of those used just a little more
than a decade ago. Even with this dramatic
increase in size and capacity, they are still
not able to generate the force required to cut
all of the tubulars that are currently being
run into the wellbore. In other words, dur-
ing significant periods of time, drilling and

subsea completions of wells are taking place
when there is an unshearable tubular in the
path of the shear rams.
Following Deepwater Horizon, the industry committed to prevent such a tragedy
from ever happening again. The problem
is that the ability to prevent a blowout still
depends on a 90-year old design that these
authors feel has reached its design limits.
Post-Macondo, the new BOPs still produce
less than 2.5 million pounds of shearing
force, but they require very large dual hydraulic actuators along with a large number
of accumulator bottles to deliver the 5,000
psi operating pressure at depth. Since these
The standard BOP operates on 90-year-old technology that has only increased size and weight. BOP Technologies CIRBOP delivers 5 million pounds of
shearing power to the ram in a lighter, smaller form. (Images courtesy BOP Technologies)
BOPs have grown larger and heavier. When they are too large
and too heavy, transportation and installation can be negatively impacted. They can also pose the danger of being too
heavy for the wellbore to support.
BOPs still cannot reliably shear large tool joints on drill pipe, an additional shear ram is now required so that at least one of the shear
rams will not cut through the drill pipe body, rather than through
the tool joint.
Limitations in force
As mentioned earlier, shearing BOPs are based on the design

that James Abercrombie and Harry Cameron patented in 1922.
They have gotten more powerful and complex, but the fundamental
engineering principal has not changed much. They can now shear
and seal on most drill pipe, but cannot cut Hevi-Wate tool joints, drill
collars, or some thick walled casing strings.
Recent studies indicate that these unshearables may be across
the BOP more than 10% of the time, which is an unacceptable level
of risk.
This limitation contributed to one of the largest oil spills in history, when, in 1979, PEMEXs IXTOC I in Campeche Bay experienced a blowout. The shear rams were activated at a time when they
happened to be lined up with a drill collar, so they failed to cut and
arrest the leak. The IXTOC I oil spill took nine months to control.
The Deepwater Horizon blowout also raised questions whether
conventional shearing BOPs have the power to successfully shear
and seal the well.
In this case, the upward flow of hydrocarbons buckled the drillstring, pushing it to the side of the BOP and moving it out of the direct path of the shearing zone of the rams. There were a number of
other complications that limited the effectiveness of the shear rams,
but investigators questioned whether existing shear rams could
generate the force required to completely close and seal a well when
the pipe is off-center.
The resulting blowout took nearly three months to get under control and cap the well.
Size and weight
Adding an additional shear ram to in an effort to ensure that at

least one ram is not lined up on a tool joint increases both the height
and weight of the BOP. Increasing the shear force requires implementing ever-larger actuating pistons with even higher operating
pressures. The larger actuators and heavier accumulator bottles
also increase the size and weight of the BOP stacks. Next-generation BOP stacks which are capable of working in 20,000 psi environments will be more severely impacted. Also, BOP stacks that are
larger are more difficult to transport and lower into position. They
may require significant rig modifications to fit within its moonpool,
testing, and handling system. Significantly, they can impart more
fatigue loading into the wellhead and may be too heavy to support
in the event of a weak point failure during a drive off or drift off
event. This raises the very real danger of a blowout that will rage
unchecked until a relief well can be drilled.
BOP Technologies believes that the current shear ram designs
have met their limitations. For this reason, it is taking a different
approach with its Circular Intensifier Ram Blowout Preventer (CIRBOP). Intensifying the pressure within CIRBOP allows it to deliver
5 million pounds of shearing power to the ram, which is enough to
shear anything in the wellbore.
The centralized design allows for a mechanism with a smaller diameter, which measures about 12 ft (3.6 m) across, versus 19 ft (5.7
m for current designs). Additionally, the new system requires less
hydraulic fluid, and has a limited number of components, which is
designed to make the technology more reliable, less expensive, and
easier to maintain.
The design that debuted in the 1920s has served the industry well
for a long time, but these authors believe it is time to move on to the
next generation BOP, as we face the new challenges of oil and gas
exploration.
In its proposed well control rule 30 C.F.R. Part 250,

US regulator BSEE aims to enhance well control
and equipment reliability, but API and other industry
bodies have voiced opposition. (Image courtesy API)
Proposed rule
seeks stricter
well control regulations
n April 17, 2015, the Bureau of Safety

and Environmental Enforcement (BSEE)
announced its new proposed BOP and
well control requirements rule for the
outer continental shelf federal waters,
30 C.F.R. Part 250. Several years in the making,
it aims to enhance well control and equipment
reliability, and includes a suite of reforms in well
design, well control, casing, cementing, real-time
well monitoring, and subsea containment.
While we have current requirements related to well control, BOP equipment, and well
control equipment, this represents a major upgrade in existing regulations, BSEEs Chief of
Offshore Regulatory Programs Doug Morris
told Offshore.
Currently undergoing BSEEs in-house review as the agency works to produce the final
version, once completed, the proposed rule will
go before the US Office of Information and Regulatory Affairs in the US Office of Management
and Budget for finalization. Although BSEE is
unable to say at this time when the final rule will
be published, the agency said that it expected to
finish its review soon.
Post-Macondo standards
Morris said that the rule has been under

development since 2012. The impetus for its
drafting, however, reaches back even further.
Following the Deepwater Horizon tragedy,
several groups headed investigations that
resulted in sets of recommendations being
made to the industry. The proposed rule says
that these investigations found a need to enhance well control best practices to advance
safety and protection of the environment.
In 30 C.F.R. Part 250, BSEE intends to bolster these recommendations by formalizing
them into legal requirements. Additionally,
the agency has incorporated guidance from
Editor
its formal communications to operators and

contractors, which are termed Notices to Lessees and Operators.
We had a lot of recommendations arising
out of Deepwater Horizon, some of which related
to blowout preventers, and some of which related to issues like drilling margins, Morris said.
To the extent we could, we tried to address
those issues within this proposed rule-making.
He said that hundreds of Macondo-related recommendations were captured in this rule.
BSEE is also looking to close existing gaps
with the new rule, thereby strengthening the cohesion between its regulations and industry standard practices, especially with regard to BOP
testing and reliability. Included in the new rule
are several post-Macondo industry standards to
establish minimum requirements for the design,
manufacture, repair, and maintenance of BOPs.
Of the eight American Petroleum Institute (API)
and American National Standards Institute
(ANSI) standards included in the new rule, five
are specifically related to BOP systems.
Bureau officials regularly attended industry
meetings with these standard-setting organizations during their post-Macondo reviews,
Morris said, explaining that this participation
helped the agency when drafting the proposed
well control rule.
The proposed rule will also allow the US
regulator to enact more control over BOP repair and maintenance. Under 30 C.F.R. Part
250, a BSEE-approved third party will be required to review the repair and maintenance
records related to BOP equipment annually.
The rule stipulates that the people perform-
ing BOP maintenance work must be qualified and trained pursuant to original equipment manufacturer recommendations. The
traceability of this equipment and its critical
components is a key point in the new rule;
the third-party equipment audit is one way
that BSEE is seeking to ensure it, even if the
equipment is serviced or repaired outside
federal jurisdiction. The bureau also doubles
the current BOP pressure testing interval for
workover/decommissioning operations from
7 days to 14. BOP testing frequency for drilling/completions operations remain at a testing interval of 14 days. BSEE estimated that
this provision would save the industry $150
million a year, noting that the cost savings
benefit of the proposed rule would result in
benefits greater than the identified quantitative costs of the rule.
The complete breakdown and detailed inspection of the BOP in an interval not to exceed
every five years is a regulatory requirement
under 30 C.F.R. Part 250. This is currently an
industry standard.
Another focus of the proposed rule centers
on shear rams. For example, double shear
rams have become an industry baseline standard for most operators under API Standard
53, Blowout Prevention Equipment Systems
for Drilling Wells. As one of the API and
ANSI standards incorporated in the proposed
rule, BSEE is again seeking to make an industry standard compulsory.
BSEE also tried to enhance API Standard
53 and the others incorporated into the rule
when necessary. For example, under the
proposed rule, an operator could report
to the original equipment manufacturer
(OEM) with the appropriate data if there
was to be a problem with that OEMs BOP.
What it will do, effectively, is help prewww.offshore-mag.com February 2016 Offshore 43
vent problems from occurring and becoming really big problems, like if we had to do
a full recall of a certain thing, BSEE Associate Director Allyson K. Anderson told Offshore. Theyll see it early on; if they needed
to adjust any of their manufacturing specs,
they will be able to do so.
Some aspects of drilling operations will
also be affected by 30 C.F.R. Part 250. BSEE
is seeking to require the real-time monitoring of certain drilling activities, including
operations in shallow-water that are deemed
high-risk; deepwater; and high-pressure/
high-temperature operations. The agency is
also seeking to adopt more detailed criteria
for safe drilling margins that are in line with
recommendations made by Department of
Justice and Office of the Inspector General
following Deepwater Horizon.
In addition to the cost savings the agency
associated with the BOP testing interval
change, BSEE named the reduction in oil
spills, fatalities, and time savings as benefits
of the rule, and concluded the societal benefits would justify the societal costs.
Feedback and collaboration
As a matter of procedure, governmental

branches that potentially stand to be affected by a proposed rule will have an opportunity to formally review and comment upon
it. However, BSEE reached out to other governmental agencies and attempted to work
with the industry during the drafting process, prior to the formal intergovernmental
review, Anderson said.
Well before the intergovernmental review,
we tried to reach out and actively engage our
counterparts to make sure that everything
we were doing made sense; is consistent; and
does not have conflicting policies with any
other agency, she explained.
BSEE also held a BOP workshop to receive industry feedback. From this, Anderson said that BSEE was able to gauge where
the whole of the industry was in adopting
these standards, which in turn allowed the
agency to determine the rules effective
dates. For most components of 30 C.F.R.
Part 250, operators will be required to demonstrate compliance within the 90 days following the rules publication.
Having a three-month phase-in makes a
whole lot of sense when the input that we
received on the front-end was very positive,
in terms of how they are already complying
with their standards, Anderson explained.
There are some notable exceptions, and
for these, BSEE has included a staged set
of effective dates that reach years into the
future. Operators will have three years from
the time of the rules publication to comply
with the real-time monitoring requirements.
The installation of double rams on subsea
BOPs and surface BOPs on floating production systems must be completed within five
years, while operators will have seven years
to install shear rams that center drill pipe
during operations.
Industry reaction
Several industry trade associations worked

together to formally submit a 200-page document of technical comments and recommendations to BSEE on the proposed well control
rule: the API, the International Association of
Drilling Contractors (IADC), the Independent
Petroleum Association of America, the National
Ocean Industries Association, the Offshore Operators Committee, the Petroleum Equipment
& Services Association, and the US Oil and Gas
Association.
The 216-page-long missive says that it
is the result of tens of thousands of hours
logged by more than 300 subject matter experts from over 70 companies
In the document, jointly submitted to BSEE,
these organizations said that their members
agreed that operations must be conducted
safely and in a manner that protects the environment. However, it said that its associations members would be adversely impacted
by this BSEE rulemaking.
The API spoke out against what it and
others have called the one-size-fits-all approach of the rule, noting that the risk management based process currently employed
by the industry allows a well to be designed
and operated according to the needs of that
particular well.
Also chief among their points to BSEE was
that the new rules did not take into account any
of the improvements made across the industry
following Deepwater Horizon and instead establishes prescriptive new requirements that would
impose unjustified economic burdens.
These organizations also stated that many of
the rules provisions lack articulated rationale,
citing a part of the rule concerning the better
definition of the drilling margin.
The proposed rule does not discuss how
the current requirements are insufficient, how
the new requirements were determined, or
how these requirements would improve offshore drilling safety, the trade associations said.
Because work on the rule is still under way,
BSEE was unable to comment on any specific
proposed changes to the drilling margin. However, Morris said that the targets were based on
recommendations from the Department of Justice following Deepwater Horizon, which aimed
to better clarify what the target should be for
operators while drilling wells.
API also said it believed that the implementation timeframe proposed in the rule was unrealistic, effectively creating a drilling moratorium in the interim. The standards-setter said
that new equipment cannot feasibly be manu-
factured, produced and installed within that

timeframe, and additionally noted that drilling
rigs could need to be re-engineered to accommodate this equipment.
Cost is another issue. Quest Offshore and
Blade Energy Partners prepared a well control
rule cost and economic analysis for the API.
The analysis found an estimated 10-year cost
of the rule totaling $31.8 billion, with $15.7 billion of that total projected to be used toward
well design, tubing, and equipment.
In the economic analysis included in the
rule, BSEE estimated its 10-year incremental cost at around $883 million.
BSEE said that it received a great deal of
feedback during its comment period following the proposed rules introduction.
We are carefully addressing all of the input received during the comment period in
order to ensure due diligence on that part,
a spokesperson from BSEE told Offshore.
There were approximately 175 commenters,
which amounted to 5,000 pages of comments.
December Senate hearing
Several offshore industry organizations were

present on Dec. 1, 2015 when the US Senate
Committee on Energy & Natural Resources,
chaired by Lisa Murkowski (R-Alaska), heard
testimony from BSEE Director Brian Salerno,
API Director Erik Milito, and others, on the proposed rule.
It is abundantly clear that despite post-Macondo improvements in safety and technological advancements, there are still issues that
must be addressed in order to see an appreciable decrease in dangerous loss of well control incidents, Salerno said in his testimony.
The proposed well control rule represents a
concerted effort to address these issues and
reduce risk offshore.
APIs Milito expressed concerns that the
rule could increase risk and decrease offshore safety and emphasized that the industry
wanted to work with BSEE on the rule. After
the hearing, other industry bodies, including
IADC, NOIA, and others, released statements
confirming that their respective organizations
would work with BSEE on the rule, and urging the regulator not to rush the final rule.
Closing his testimony, Salerno emphasized
that the bureau was taking its time in reviewing
all industry comments, and related findings.
We have heard the concerns about drilling
margins, blowout preventer inspections, accumulator capacity, and real-time monitoring,
Salerno said. We have heard the concerns
about the use of prescriptive language and about
the potential, unintended consequences of the
rule. The bureau must now go through the process of reviewing the technical input received
and determine how the text can be revised to
best serve the interests of safety, environmental
protection, and resource conservation.
P R O D U C T I O N O P E R AT I O N S
Riserless light well intervention increases

production, operating efficiency
urrent low oil prices and the expectation that these low prices will last
for a long period of time are putting
significant pressure on operators
budgets, thus significantly reducing
exploration and production.
In a similar market scenario, it becomes
of paramount importance to maximize the
recovery rates from existing fields (increased oil recovery/IOR) and to reduce
the time required to exploit the field, so that
the return on capex and opex investments in
a certain field can be maximized.
The overall recovery rate also plays an
extremely important role in the assessment
of commercial viability for a given field, and
an increase of a few percentage points can
significantly improve the economics of a
project, ultimately making the difference for
its sanctioning.
This is particularly relevant for subsea
fields, as historically subsea wells see a limited amount of interventions due to the high
costs of a semisubmersible rig to perform
the work. The lack of proactive well intervention for increased production leads to the
undesired effect that subsea wells typically
see much lower recovery rates when compared to fixed platform wells, where intervention can be performed at lower costs.
Riserless light well intervention (RLWI) is
a cost-effective method of intervening in subsea wells from a fit-for-purpose vessel without the use of a riser. The higher operating
efficiency and lower spread rate of an RLWI
system results in a much lower cost per intervention compared to a semisubmersible rig.
The lower intervention cost enables the
operator to perform a higher number of
interventions, by switching from a reactive
intervention mode to a proactive use of intervention to maximize production.
RLWI was established in the North Sea in
the late 1980s, and since then it has become
a well proven, mature, and recognized intervention method, with more than 1,100 wells
intervened and an almost 30-year track record.
Statoil was an early adopter of RLWI as
part of the IOR strategy, and has achieved
remarkable results toward the ultimate goal
of 60% recovery rates for its fields.
FMC Technologies has been supporting
this effort since 2005, providing the intervention stack on the three RLWI vessels operated
Andrea Sbordone
FTO Services
In 2015, FTO Services introduced to the Gulf of

Mexico the latest addition to the RLWI fleet, the
Island Performer. (Photo courtesy FTO Services)
by Island Offshore in the North Sea. In 2012,

based on the success of RLWI in the region,
FMC Technologies and Edison Chouest Offshore founded a new company, FTO Services, with the intent to export the RLWI model
to other regions, and to expand RLWI capabilities to deeper water and further enhance
the efficiency of these operations.
In 2015, FTO Services introduced to the
Gulf of Mexico the latest addition to the
RLWI fleet, the Island Performer and its deepwater stack.
This is the first time a purpose-built and
dedicated RLWI system is available in the
Gulf of Mexico, and operators have shown
significant interest for its capabilities and
for the highly integrated approach taken by
FTO Services. The system is capable of performing RLWI services in water depths up
to 2,000 m (6,500 ft).
Simple hydraulic intervention can be performed through the dual 238-in. coiled tubing downlines, enabling rigless stimulation;
scale treatments; hydrate remediation; bullheading; and even pipeline intervention; and
pre-commissioning.
When accessing the well through the

deepwater RLWI stack, all kinds of wireline
and slickline operations can be performed,
enabling full well diagnostics, mechanical
intervention, and any other interventions
aimed at increasing production or at bringing wells back online.
Operators have been very successful using
RLWI for increased production, and the percentage gains are significant, reaching even
100% for stimulation treatments, and going
even significantly higher for operations like
scale or other obstructions removal.
In recent stimulations campaigns, operators
have been reporting cost reductions of up to
85% when compared to the same treatment
performed from a rig. The increased production is associated not only to a drastic increase
of the productivity index (up to 1,400% in a
recent case) but also to a major reduction in
drawdown (up to 66% in a recent case) which
results in improved reservoir management
and reduced risk of asphaltene deposition.
Typically the return on investment from
an RLWI operation is five to 10 times the
cost of the intervention itself, and the payback time is in the order of a few months,
bringing a positive cash flow for the operator
soon after the operation is performed.
As an example, documented RLWI case
histories show production increases of 3,000
b/d for a stimulation job, 8,350 b/d for removal of an obstruction (scale/paraffin/
asphaltenes), 5,700 b/d for a production
logging, and re-perforating and 12,600 b/d
for putting a well back into production after
replacement of a downhole component.
When looking at the value generated by
these operations, the following example can
be considered:
Intervention cost: $6,000
Potential additional production: 3,000 b/d
(from 5,000 to 8,000 b/d)
Yearly decline rate: 40%
Discount rate for net present value calculations: 6%
Oil price: $40/bbl
With these assumptions, the operation
would have a payback time of just 88 days
and would generate a net present value of
around $30,000 over a three-year period, thus
confirming RLWI as an effective method of
generating value for the operator even in a
low oil price environment.
BOP skids on ROVs provide

backup for wellhead control
latform support vessels (PSVs)

equipped with ROVs could be used to
help contain blowouts more rapidly.
New standards are emerging to ensure that BOP rams lock in a well as
fast as possible. As a double safeguard, rig
operators are considering stationing ROVs
on support vessels to undertake blowout
prevention if the rig crew are unable to activate the BOP at the wellhead.
Following Deepwater Horizon, the American Petroleum Institute (API) issued a new
industry standard in 2013 (standard 53) that
introduced tighter norms for BOP response.
In particular, it called for BOP equipment to
be capable of closing off the well pipe using
shear rams in less than 45 seconds: after this
period, the build-up of flow across the rams
can negate the capabilities of the elastomer
seals to secure the integrity of the well.
This created challenges for ROV operators and skid manufacturers. BOP equipment on the seafloor can provide hydraulic
fluid to generate sufficient pressure in the
rams to close a pipe. However, it is more
difficult for ROVs to generate the same flow
and pressure.
Modifications
for fluid transfer
BOURBON has recently completed the

integration of its HD ROVs, supplied by
FMC Technologies Schilling Robotics, to
interface with a BOP intervention skid. This
has entailed using the main hydraulic circuit

of the HD ROV to provide maximum flow
and pressure from the high-efficiency 150hp hydraulic power unit.
Re-routing enough of the required fluid
to the BOP rams is possible because, during
the intervention process, the ROV is tied to
the BOP via a hot stab (a tool that connects
the ROV to the BOP, through which fluid
can be passed), held by the ROVs manipulator arm. The stability provided by this connection allows 93% of the ROVs power to be
directed to pumping fluid to the BOP via the
BOP intervention skid.
Another consideration is configuring the
ROVs to carry a BOP skid 365 days a year, if
need be. Supporting the skid, which typically weighs around 1.5 metric tons (1.65 tons),
is not an issue as buoyancy neutralizes the
effect of its weight in water. Typically, ROVs
can handle loads weighing up to 3 metric
tons (3.3 tons).
However, the skids have to fit comfortably
below the vehicle so that they do not impede
its day-to-day operations. For the time being,
BOURBON is adapting its own solutions
and ROVs to standard skid designs, but its
partners are working on a new skid design
that will combine compactness, maintainability, and performance.
The next priority is to ensure that the
ROV/skid combination can function in the
conditions for which it was designed. This
involves comprehensive testing and dry runs
Patrick Belenfant
BOURBON Subsea Services
both in a controlled onshore environment

and offshore. This will be followed by a deepwater test staged with a major oil company in
which the BOP skid will be deployed and attached to an operational wellhead. Although
there have been independent tests of the
ROV and of the pump, only by testing the integrated system in actual seabed conditions
at the wellhead can the operator be certain
that the equipment will work as it should.
During a live test with a UHD ROV, each
stage of the BOP lock-in operation was conducted, stopping only at the point at which
the shear ram would have to be activated to
cut the drill pipe. Future studies will include
how to increase fluid flow in order to shorten the time taken to lock in the BOP.
With continuing pressure to reduce
capex, increasing PSV/ROV support to allow a BOP skid to be on permanent stand-by
during well operations may not be a priority
for some operators or contractors, especially
if existing equipment on the rig is deemed
adequate. However, the environmental and
financial costs of the Deepwater Horizon
accident suggest that this extra safeguard
may well prove to be worth the added investment.
If BOP skids do become more widely
used, the opportunity for the industry to
collaborate on standardized products, parts
and maintenance should also grow, leading
to deployment of skids anywhere in the
world at potentially lower cost.
Left: BOP skid installation on ROV on a BOURBON vessel. (All photos courtesy BOURBON) Right: ROV ready to operate the ROV panel on the BOP
during trials at a subsea field offshore Nigeria.
Enhanced satellite imagery supports

offshore oil spill, security monitoring
bservations using satellites orbiting

thousands of meters above the Earth
allow energy companies to regularly
monitor sites for oil spills and leaks,
without the costs associated with conventional monitoring techniques.
Satellites have a range of applications relevant to offshore operations including providing telecommunications between platforms
and shore-based controllers and navigational
data for positioning offshore vessels. Over the
past couple of decades, the quality and agility of
image sensors mounted on earth observation
satellites, and the associated image processing
technology, have improved substantially.
From the first seismic study commissioned
for an oil or gas prospect to the final day of a
fields decommissioning, satellite images can
make a significant contribution to the monitoring needed to make sound decisions concerning
oil and gas-related assets. Especially since many
of these facilities are in remote, hostile, environmentally and culturally sensitive locations.
Satellites now offer image resolution down
to at least 50 cm while the time taken between
image capture and delivery is continually being reduced. Also, as satellite technology has
improved, so has the range of application areas including offshore assessment of seabed
habitats and bathymetric mapping. Current
sensor technologies are enabling enhanced
clarity underwater, offering sight up to around
100 ft (30 m) in clean water, which is important
for example, in tropical waters.
A recent satellite-based pollution monitoring program involved use of the TerraSARX radar satellite over the Persian Gulf. This
led to accurate mapping of ship and rig locations, with potential slicks classified into
three pollution confidence levels based on
context and morphology. The entire process
of image acquisition, processing, information extraction, map production, and delivery was completed within 24 hours.
Offshore Angola
A group of satellites operated by Airbus

Defence and Space were recently tasked
to complete a pilot test for institutional interests in an evidence gathering trial of its
constellations capability. Twice daily, over
an 11-day period, satellites passed over an
offshore region in Angolan waters covering
several thousand square kilometers, includ-
Michael Hall
Airbus Defence and Space
plot the course and progress of the slicks.

Bespoke maps were compiled showing slick
locations and related features. A classification
system was also applied to assist in determining the probable source of the pollution, for
example whether it was a natural subsea oil
seep or from a leaking riser or flowline. The
slick classification was based on various characteristics including morphology, size, location, direction of flow, and context.
The combination of radar and optical surveillance tools, proved particularly effective.
Radar satellites, such as the TerraSAR-X operating in Wide Scan SAR, are effective for
leakage detection over large areas of open sea
based on the mirroring effect oil slicks have
on the water surface, as waves are dampened
by the oil presence. Optical sensors can identify the smallest items in high resolution.
Security scenario
Area offshore Angola where Airbus Defence and
Space-operated satellites conducted a pilot test.
ing all the countrys major producing fields

such as Girassol, Tulipa, and Bengo.
Using a combination of radar and optical
data gathering, all offshore activity including
that of fixed facilities, drillships, support vessels and tankers, was imaged and identified.
Oil slicks were also documented and classified. Both the optical and radar constellation
were leveraged, adapting the tasking strategy
to the weather conditions: radar satellites,
for example, when weather conditions led
to thick cloud cover or optical satellites for
the highest resolution imagery when clear
weather conditions allowed high visibility.
Analysts used optical images from the
Pliades satellite to identify ship traffic entering the area around production vessels,
and to classify whether this was tankers,
support vessels, or drillships. The Pliades
satellites optical capability was also used to
assess ongoing activity such as water discharge, flaring, and helicopter movements.
In addition, certain time-sensitive and irregular offshore activity could be analyzed,
such as degassing.
During the trial an oil slick was identified
from images taken by the SPOT 6 satellite,
with the slick tracked to an FPSO. Through
accurate, regular imaging it was possible to
In addition to the environmental risk associated with routine operations, offshore and
near-shore infrastructure and facilities are vulnerable to malicious acts. These attacks have
the potential to cause oil leaks from drilling
rigs, FPSOs or platforms, posing risks to offshore personnel as well as potentially significant environmental and commercial impact.
When armed militia groups attacked oil refining and storage facilities in Tripoli, Libyas
capital, fears quickly grew that many of the
millions of barrels stored on site could spill.
Airbus Defence and Space was commissioned
to use its satellite-based Instant Tasking service to provide high-resolution imagery of the
facility. Within 90 minutes of the satellite passing over the selected area, a high-resolution
image became available to planners working
thousands of kilometers away, allowing swift,
time-sensitive decisions to be taken.
Airbus Defence and Space is launching a
24/7 emergency response subscription service, enabling customers from the upstream
sector to obtain access to satellite imagery
in response to the many potential emergency
scenarios that may occur, from terrorist attacks to accidental oil spillage. The service
makes use of pre-trained staff experienced in
satellite tasking procedures to give customers
access to the companys range of satellites.
Subscribers also receive data interpretation and planning for ongoing monitoring in
the aftermath of an emergency.
SUBSEA
ROV technological advances allow

for more precision, efficiency
ver the past 30 years, the remotely

operated vehicle (ROV) industry has
seen many iterative advances in technology, but few that might be considered revolutionary or even a substantial step change. Within the past decades,
there has been an ever-increasing need for
greater horsepower, deeper operating depths,
greater reliability for ROVs, and the ability to
accomplish more intervention tasks with sophisticated subsea tooling.
In the early 1980s, one such major improvement was the use of control data and video
over fiber optic in the offshore oil and gas
ROV industry. This allowed the development
of ROVs that could operate in greater depths
when compared to ROVs that previously used
data over copper. Since then, there has been
little breakout technology.
Now, the industry is poised to make a significant step change, thanks to advances in automation control, machine vision technology, and new
algorithms in the artificial intelligence space.
Control programs
If the ROV industry attempted to create a
fully autonomous ROV control program that
anticipated the challenges of environmental
conditions and possible failure modes and
responses, we would be attempting to build
a program approaching the intelligence of
the HAL 9000 computer character in Stanley
Kubricks 1968 film 2001: A Space Odyssey.
Such a program would be enormous.
An ROVs tasks can be viewed as sequences
of smaller simpler steps that can be easily automated. Unexpected environmental conditions
or a crippling failure would cause the execution of the step to halt, break the sequence, and
return control to the human operator. Most
of the desired actions of the ROV can be constructed from these smaller steps. By utilizing
the human in the decision-making control loop,
the program is broken down into steps issued
as commands by the pilot. These steps can be
commanded individually or as sequences with
linking logic that tests for successful completion of a step before proceeding to the next one.
With these incremental steps, the complexity of the autonomous software is dramatically reduced, and the software becomes much
easier to build and maintain. The use of small
autonomous steps also allows the operator
greater flexibility in constructing sequences
for new types of tasks, or in altering tasks that
Kevin Kerins
Mark Philip
Douglas Smith
Shil Srivastava
Mark Stevens
Oceaneering
Depending on the task, ROVs can be

required to maneuver to a precision of
5-10 mm. (Images courtesy Oceaneering)
must be slightly modified for changing environments or for different ROVs and tools.
Ultimately, the human operator is the decision-maker. Commands such as stab the tool
in the receptacle and grab on to the hand
hold on the panel are automated steps that
enable hands-free piloting. This capability
will greatly limit lost time due to damage that
is often currently incurred on ROV tools, manipulators, and subsea interfaces. Instead of
an ROV pilots hands on the control joystick
and manipulator/tool controller, commands
will be executed via a computer mouse or
voice command and executed by the moreefficient control computer.
Vision control
The most challenging ROV piloting tasks
(which include manipulator tasks such as hot
stab insertion, tool placement, or close visual
inspection) require that an ROV be maneuvered to a precision of 510 mm. Completing delicate tasks with hands-free piloting
demands an automated ROV navigation and
control system that reliably delivers a high
level of precision while operating in a rugged
offshore environment.
The recent explosion of autonomous robotic vehicles including self-driving cars,
unmanned aerial vehicles, autonomous underwater vehicles (AUV) and domestic robots
has driven intense interest and groundbreaking research in vision-based robotic navigation
that has enabled new ROV automation.
The latest development is a hybrid approach to precise hands-free ROV navigation in the immediate vicinity of structures
or panels. Machine vision allows the ROV to
recognize objects in order to control navigation. ROV control is difficult using computer
vision alone, which is why motion sensors
are also incorporated.
With this hybrid navigation system, precision is achieved by leveraging these two innovative and cost-effective new technologies:
Vision technology. Simultaneous location
and mapping (SLAM) technology reverses
the traditional stereo vision model. Instead
of modeling the viewed scene relative to a
pair of stereo cameras, SLAM tracks the 3D
position of a moving camera relative to a coordinate system fixed to the viewed subsea
object (panel or structure).
ROV motion dynamics. These are measured
using a suite of motion sensors, including a
microelectromechanical sensor (MEMS) attitude and heading reference system (AHRS),
a fiber optic gyro, a bottom-tracking doppler
velocity log (DVL), and pitch and roll sensors.
Knowledge of ROV motion dynamics is what
allows the automated control system to look
into the future. By fully understanding ROV
motion dynamics, control needs are anticipated and the brakes can be applied as the ROV
approaches a target position or heading.
Manipulator control
The development of an advanced kinematic
control software for ROV manipulators simplifies the operation of spatially correspondent
manipulators, thereby improving operational
efficiency.
ROV manipulators typically have six degrees
of freedom: three Cartesian (x, y, z) and three angular (pitch, roll, yaw). A modern spatially correspondent (master/slave) manipulator allows the
SUBSEA
operator to simultaneously control all six degrees of freedom in real time,

but, for many tasks, Cartesian and angular motions are somewhat mutually
exclusive, and it is not always desirable to control both at the same time.
It was recognized that too much time is wasted at the jobsite during
the process of stabbing tools into receptacles. More specifically, existing manipulator control methods rely too heavily on the skill of the
operator. So, a decision was made to automate as much of the process
as possible by reducing dependence on operator skill.
The result is a proprietary kinematics software system that allows the
operator to select which of the six degrees of freedom he or she wishes to
control. This essentially allows the operator to control Cartesian motion
while the software automatically controls orientation, or vice versa.
Intelligent diagnostics
For years, the basic approach to fault detection has been the use of
sensors that are threshold tested for low, high, or band range limits.
The advent of digital control systems allowed these thresholds to be
adjusted in situ, and faster telemetry allowed real-time monitoring and
ranking of abnormal operating conditions. However, these sensors
have added a burdensome cost in their material, manufacture and especially maintenance, since correct calibration is essential if the sensors
are the only diagnostic layer that is protecting the ROV from damaging
itself or other equipment. Critically, the sensor itself is a component that
can fail, such as when large subsea systems are removed from service
and recovered to the surface for repair, at significant expense, only to
find that the single fault was in the fault-detecting sensor itself.
As more subsystems are being added to ROVs (and as the overall
complexity of the command-control communications system is increasing to accommodate more sophisticated acoustic and optical sensors,
as well as modern customer payloads), the method of using one sensor to detect one fault quickly scales into the realm of unsupportable,
unintelligible, and uninformative. Multiple simultaneous faults cannot
easily be distinguished from cascading or avalanching failures unless
the operator has wide and deep system knowledge, along with the time
and ability to resolve the origin(s) of the failures.
To address this problem, the Intelligent Diagnostic System (IDS)
was created. This system combines remote sensors in the target control
system, a real-time telemetry path, basic equations of electrical/hydraulic power flow, and a virtual model of the complete power distribution
system to produce a program that can determine whether the system is
healthy or not, and whether it is operating normally or abnormally.
If the operation is out of nominal ranges, then the fault may be isolated to the enclosure; the subsystem, such as a particular printed circuit board (PCB); or, often, the offending component, such as a specific power supply or electronic component on that PCB. Because the
software retains a memory of the sensor values, the surface-based IDS
program, located either on a vessel or onshore, can determine the most
likely cause of a telemetry failure by looking at trends in sensor values
that would indicate that a failure was imminent just prior to the telemetry break. The program can isolate multiple simultaneous failures, and
can identify the origin of a single failure that causes multiple simultaneous failures, i.e., a failure cascade or an avalanche.
Avatar control
Oceaneering recently demonstrated the ability to pilot an ROV on an

offshore vessel via a satellite link from an onshore base.
The Remote Piloting and Automated Control Technology (RPACT)
system utilizes the latest control system programming (Computer-Aided Piloting and Video Machine Vision Technology) and the latest network acceleration technologies (satellite and radio-frequency wireless)
to provide real-time access to operate an ROV remotely, either from on
shore or from a vessel nearby.
The recent rollout of low-earth-orbit satellite access and the availability of LTE cellular networks offshore ensure a high-throughput,
The industry is beginning to see the convergence of ROV and AUV technologies, enabling them to perform more complex operations.
low-latency link to the operator over a secure network. The utilization

of a custom network design provides for the prioritization of the best
network path available to transmit control signals to the ROV from the
remote ROV pilot.
Remote Connection Technology allows the use of multiple virtual
connection technologies and potentially creates cost-saving opportunities, such as the reduction and/or elimination of onsite secondshift crewing for low-intensity operations. RPACT allows the utilization of offsite or remote experts who specialize in advanced tooling
and operational techniques that may not be present during normal
operations, thus enabling the rapid deployment of experts knowledge to the onshore ROV operating stations to ensure quick access
to operations during incidents and other periods of operational need.
The use of time-synced data to correlate ROV movements back to the
ROV pilot ensures that the user experience is similar to operating the
ROV directly from the ship that it is deployed from. The control inputs
are updated by using various techniques, including fly-by-wire controls
that enable the ROV pilot to select a point on the screen to update
where the manipulator arm needs to go, as opposed to steering it there
manually. This fly-by-wire capability allows the ROV operator to select
enhancements such as station-keeping and auto-depth hold.
Looking ahead
The industry is beginning to see the convergence of ROV and AUV

technologies. Currently, AUVs navigate via predetermined and preprogrammed sets of coordinates. The new technology currently being developed for ROVs will also soon enable AUVs to determine their own
courses, based on changes in environment and by means of obstacleavoidance technology and vision technology. In the near future, AUVs
will be able to visually follow pipelines and recognize objects.
Soon, AUVs will also be equipped with decision-making capabilities
and the same automated functions that are being developed for ROVs,
allowing AUVs to carry out tasks more in line with current ROV capabilities, such as tooling tasks and manipulator functions.
As ROV and AUV technologies continue to evolve and converge, we
will see resident ROVs that are semi-permanently installed subsea for
long durations independent of a vessel or platform, along with real-time
AUV control for intervention tasks.
By leveraging these advanced technologies, an entirely new standard is being set for ROV/AUV performance and capabilities. Extended ROV/AUV capabilities will enable more complex remote operations to be performed. Technical experts and engineers will be able to
collaborate further for real-time troubleshooting and inspection tasks.
Additionally, automating difficult tasks will increase productivity, along
with the safety of these operations.
And, at the fast rate that these ROV/AUV technologies are converging, these advancements will soon be considered as more than just a
step change for the subsea industry they will be clearly recognized as
integral components of the revolutionary way forward.
SUBSEA
Forsys Subsea aims for life-of-field

partnerships with deepwater operators
Jeremy Beckman
Editor, Europe
ubsea contractors are teaming up to

help operators lift the current brake
on deepwater activity. Over the last
year, the list of those forming complementary alliances to tender for new
contracts include OneSubsea and Subsea 7;
GE and McDermott; Aker and Saipem; and
Technip/FMC Technologies, under the Forsys Subsea joint venture. All share the same
ultimate goal of cutting costs in order to
move more projects forward.
Forsys Subsea, officially launched last June,
combines FMCs strengths in subsea production and processing systems (SPS) with Technips capabilities in engineering and installation of subsea umbilicals, riser, and flowline
systems (SURF). The duos stated aims are
to simplify seabed architecture, reduce the
complexity of conventional subsea equipment
interfaces, accelerate time to first oil or gas,
and maximize well performance and sustainable peak production.
All this can be achieved, they claim, through
various measures that include earlier involvement in the concept selection phase of front-end
engineering and design (FEED), where the
ability to influence cost is greatest; integrated
life-of-field (LOF) well surveillance, monitoring,
and data interpretation; and joint research and
development into technological innovations
that help decrease costs and improve efficiency.
According to Forsys CEO Rasmus Sunde,
speaking at a recent briefing in London, Our
alliance aims to improve returns by re-shaping the way subsea fields are set up and monitored for life. Every operator has stranded assets, for economic reasons.
Historically, Sunde said, the two companies
have worked independently for clients, each doing its own front-end work. Now we are looking
at how we can drive interfaces and optimize the
design of the SURF and the SPSand integrate
the two more efficiently than has been done in
the past. Why has this not been done before?
There is no crisp answer, but the time is clearly
now. Its a value proposition, all about cost.
The costs of subsea hardware have tripled
since 1981, and so have the delivery times. This
was an issue when the oil price was $100/bbl,
and now the situation is clearly not sustainable
The alliance looks to provide comprehensive

subsea production solutions.
(Image courtesy Forsys Subsea)
for developing deepwater projects. Numerous

factors have conspired to push up prices, he
suggested, such as reservoir complexity; the
need to produce from deeper, high-pressure/
high-temperature reservoirs; not enough emphasis on standardization, with each supplier
mandated to produce tailor-made equipment;
and inefficiency. The supply industry has a
history of many projects that end up being not
delivered to requirements, he said.
Technip and FMC decided they could address these issues better together than individually, he added. Prior to formalizing the
alliance, they had examined the potential of various projects they had executed independently,
analyzing alternative actions they might have
taken to get a better slice of the pie.
Both companies share the same values,
Sunde pointed out, with hardly any conflict
of interest, and no cultural clash. There are
over 300 people now working for Forsys
Subsea, half from Technip and half from
FMC. Our headquarters are in London, and
we also have seven operating sites but our
specialists in FEED and LOF can cover all
customers worldwide that potentially have
stranded assets, and which need to do something new to move them forward.
The recent subsea collaborations do not
mean that the entire offshore industry will
suddenly embrace the EPCI approach, Sunde
cautioned. Technip and FMC will continue
do the same things as before, but increas-
ingly Forsys will take on the front-end work,

particularly to promote the two parents technologies. This process, he later explained,
could involve integration in certain contexts
of the duos game-changing technologies,
such as subsea processing and heated flowlines. Clients too are keen on joint development of technologies, he said, as this helps
them achieve cost synergies.
The alliances modus operandum involves
Forsys taking the lead from day one of a contract award for a new development, for field
design, delivery, and LOF planning. Following start-up Forsys comes in again, devising
further LOF measures for flow assurance,
production enhancement, asset integrity, and
predictive monitoring all of which Technip
and FMC will eventually execute.
Historically, managing the SPS-SURF interface has been one of the offshore operators
greatest challenges, Sunde said, with both
parties [the respective subsea contractors]
set up to optimize their own scope, as opposed
to optimizing the project. Under the new
model, Technip and FMC alliance would act
as one company taking on the interface risks
between the two sets of subsea equipment
during installation (traditionally the clients
scope). This should lead to better managed
subsea equipment installations, he suggested,
lessening the likelihood of problems arising
such as late delivery of a manifold, or damage
during offshore installation.
FLOWLINES & PIPELINES
Novel subsea configuration

set to free stranded gas
offshore west of Shetland
Editor
ocated 140 km (86 mi) northwest of the Shetland Islands, the

Laggan-Tormore development on the UK Atlantic Frontier has
suffered several delays, pushing its start-up date back almost a
year-and-a-half from operator Total E&P UK Ltd.s original estimation. Originally, Total set first production for 2014, but after
the project missed two more start-up dates in 2015, according to the
UK Department of Energy and Climate Change (DECC), first production for Laggan-Tormore has once again been pushed back to 1Q 2016.
However, the project has changed a great deal since the first bit
was sunk in Laggans reservoirs about 30 years ago. Only through
relatively new technology and techniques, including a long-distance
subsea tieback, could Total enable its commercial viability.
Sanctioned in March 2010 by DECC, the Laggan-Tormore project
represented Totals largest on the UK continental shelf.
The overall subsea development consists of a long-distance tieback, in water depths averaging 600 m (2,100 ft), connecting the two
fields wells to the new Shetland gas processing terminal. Both Laggan and Tormore have identical six-slot manifolds. The infrastructure is comprised of two parallel 18-in., 141-km flowlines, that will
transfer gas from the subsea production system to the Shetland gas
plant in Sullom Voe at a peak capacity of 665 MMcf/d. The project
facilities also called for 8-in. monoethylene glycol (MEG) and 2-in.
service pipelines and control umbilicals.
From the gas terminal, the processed gas will be exported
through a new 30-in., 225-km export pipeline to the UK Frigg pipeline system in the North Sea.
A joint venture between Ode and Doris carried out basic engineering for subsea production facilities, flowlines, umbilicals, the
onshore gas treatment plant and export pipeline. Corus, contracted
by Total in March 2010 constructed the pipelines.
Corus said when it was awarded the contract that it would produce more than 150,000 metric tons of pipeline. In turn, it took Allseas two years and three of its vessels to install: Solitaire, Audacia,
and Calamity Jane. Offshore pipelay commenced in 1Q 2011 when
Allseas began to install the parallel 18-in. lines. The 30-in. export
pipeline and the umbilical followed in 2012.
Subsea 7 was contracted for SURF work, tasked with engineering, fabricating, and installing the piggy-backed service pipelines; control umbilicals, tie-ins and other subsea structures. The fields are powered and controlled from the Shetland Gas Plant through a main 127-km umbilical to
Laggan as well as an infield umbilical between Laggan and Tormore. The
main umbilical had to be laid in one piece, as the working water depth
was too deep for divers to access.
Even the cage used to lower a work-class ROV to the starting location was susceptible to the strong current. In order to keep the currents from forcing the system off-station, Total worked with Oceaneering to qualify a new method of lowering the ROV cage using the
A schematic rendering of
the Laggan-Tormore subsea
development showing the
sharp drop in water depth,
from 120 m to 600 m. (Image
courtesy Total E&P UK)
ROVs stationkeeping thrusters to overcome drift.

FMC Technologies supplied the subsea production system, including the manufacturing of two six-slot manifolds; nine subsea trees, eight
wellheads, 12 multiphase meters, 10 subsea control modules and the
associated control systems. All subsea equipment was installed and
commissioned using only ROVs. Since the extreme weather conditions
might render inspection, maintenance, and repair operations impossible for about six months in a year, a condition performance monitoring system (CPMS) was specifically developed for Laggan-Tormore.
Through the CPMS, onshore operators at the Shetland Gas Plant are
able to monitor the systems performance and possibly identify issues
before they occur. Total said that it was the first time the technology
was deployed subsea on a production system.
As the Laggan-Tormore infrastructure is intended to contribute to
the exportation of the so-called stranded gas of west of Shetland, the
facilities are designed to accommodate gas from third parties wishing
to access the system for transportation and/or processing.
Due to its extremely harsh conditions and marginal field reserves,
Laggan was not deemed commercial when first discovered first by
Shell in 1986. Water temperatures at the wellhead barely inch over
freezing at 1C; heavy swells are experienced six months a year; and
subsea currents race up the UK continental shelf.
Total acquired the license for the Laggan field in 1995s 16th North
Sea Licensing Round, and in 1996, drilled well 206/1-3, about 4 km
(2 mi) southwest of the initial well. Laggan did not think the find
merited a commercial case at that time.
In 2004, under the 22nd Licensing Round, Total secured the additional acreage that would lead to the Tormore discovery in 2007.
Located about 16 km away from Laggan, Tormore was discovered by
exploration well 205/5a-1.
Only with this second discovery did Total decide to move forward
in commercializing the Laggan-Tormore development to establish
a new production hub in the area. The French operator estimated
reserves at more than 1 tcf.
At the time of this writing, DECC lists first production as occurring 1Q 2016. Total reportedly started flaring at the end of December 2015.
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2016 ADVISORY BOARD

ERIC HEVLE, ADVISORY BOARD CHAIRMAN
Ecopetrol America
PAUL BEER
DAVID LACAZE
Freeport-McMoRan Oil & Gas
Shell International E&P, Inc.
ANTONIO CRITSINELIS
JIM MACKLIN
Chevron Energy Technology Co.
InterMoor
BOB CARTER
GENE RABORN
Vaela Resources
Technip
MARK CARTER
IAN RAMSAY
OneSubsea
Murphy Oil Corporation
BRUCE CRAGER
TONY RAY
Endeavor Management
ConocoPhillips
CHRISTOPHER CURRAN
KARL SCHNAKENBURG
BP E&P
BHP Billiton
ROBIN DUPRE
RANDY SEEHAUSEN
Offshore
INTECSEA
JOHN FITZGERALD
JON SONKA
Independent Consultant
ExxonMobil
STEVE FRANTZ
PETE STRACKE
Talos Energy LLC
Statoil
CLYDE HEWLETT
ERIC STUTES
Oceaneering International, Inc.
Anadarko Petroleum Corporation
CHUCK HORN
MARK TILLEY
Genesis
HESS Corporation
JAY HURSH
BOBBY VOSS
Aker Solutions
GE Oil & Gas
TOM KELLY
MASON WU
FMC Technologies
DMAR Engineering
KAZU KOCHI
Petrobras
20 16
P RE LIMIN A RY
E V E N T
G UI D E
2016 REGISTRATION INFORMATION
REGISTRATION: NOW OPEN!

REGISTERING FOR SUBSEA TIEBACK
FORUM & EXHIBITION 2016 IS EASY!
Consult the table below to decide which registration option is right for you
the full conference option offers the best value.
SPECIAL OFFER! REGISTER BY FEBRUARY 19, 2016

WITH CODE ATTENDSSTB AND SAVE $150
WHICH REGISTRATION TYPE
IS RIGHT FOR YOU?
Full
Conference
Delegate
Early Bird Registration Pricing - registration on or before 2/19/16

Registration price on or after 2/19/16
Exhibitor Full
Conference
Delegate
Exhibitor
Visitor Only
Student
Conference
Delegate
(student I.D.
required)
$945
$595
$95
$95
$1,095
$695
$95
$95
Opening Plenary Session

Exhibit Hall Entrance
Conference Session Access
Networking Reception Tuesday
Networking Reception Wednesday
Continental Breakfast Wednesday
Continental Breakfast Thursday
Coffee Breaks
Delegate Lunch Wednesday
Delegate Lunch Thursday
CORPORATE PLANS Interested in sending a group to Subsea Tieback 2016? Send 5 or more delegates
and receive substantial savings. Contact our registration department now for more details.
REGISTRATION DEPARTMENT Direct: +1 918 831 9160 Toll Free: +1 888 299 8016
4 WAYS TO REGISTER TO ATTEND:

1. ONLINE:
www.subseatiebackforum.com
2. MAIL:
PennWell C&E Registration (SSTB)
P.O. Box 973059
Dallas, TX 75397-3059 USA
3. FAX:
+1-918-831-9161
4. E-MAIL:
registration@pennwell.com
Toll-Free: +1-888-299-8057
W WW.S U B SE AT I E BACK FO R U M . COM
PRELIMINARY CONFERENCE PROGRAM

WEDNESDAY, MARCH 23, 2016
7:00 A.M. 8:00 A.M.
CONTINENTAL BREAKFAST LEVEL 2
Sponsored by:
8:00 A.M. 9:30 A.M.
OPENING PLENARY SESSION ROOM 214
ALL REGISTERED ATTENDEES ARE INVITED TO ATTEND THE OPENING SESSION!
CONFERENCE MANAGEMENT WELCOME & INTRODUCTION

Mark Peters,Vice President of PennWell Publishing and Group Publisher; Offshore and Oil & Gas Financial Journal
CHAIRMANS OPENING REMARKS

Eric Hevle, Development & Production Manager GoM; Ecopetrol America Inc.
8:00 A.M. 9:30 A.M.
OPENING PLENARY SESSION CONTD ROOM 214
ALL REGISTERED ATTENDEES ARE INVITED TO ATTEND THE OPENING SESSION!
KEYNOTE PRESENTATION
Bob Abendschein, Vice President, Deepwater Americas Operations; Anadarko Petroleum Corporation
SCENE SETTING PRESENTATION
Roger Neal, Managing Director Oil, Natural Gas and LNG; MCDRS, LLC
9:30 A.M. 10:30 A.M.
COFFEE BREAK EXHIBIT HALLS CD
Sponsored by:
10:30 A.M. 12:00 P.M.
SESSION 1: PROJECT APPLIED TECHNOLOGY ROOM 214
Chair: Antonio Critsinelis, Pipelines, Flexibles & Umbilicals Team Manager; Chevron
Co-Chair: Gene Raborn, Sales Manager; Technip
Co-Chair: Kazu Kochi, Senior Subsea Advisor; Petrobras America
JACK & ST. MALO PROJECT SUBSEA SYSTEM - DESIGN TO START-UP
Ken Roseboom, Subsea Manager; Chevron
TROUBLESHOOTING OF CASCADE & CHINOOK PUMP POWER DISTRIBUTION SYSTEM
Tony Qiao, Subsea Controls Engineer; Petrobras America
TYRIHANS SUBSEA RAW SEAWATER INJECTION, A 3 YEAR LOOK BACK
Alvin Shaffer, Asset Manager US Offshore; Statoil
WW W. S UB S E AT IE BACK F OR UM . CO M

WEDNESDAY, MARCH 23, 2016
12:00 P.M. 1:30 P.M.
LUNCH EXHIBIT HALLS CD
Sponsored by:
1:30 P.M. 3:00 P.M.
SESSION 2: PROJECT LEARNINGS AND OPTIMIZATION ROOM 214
Chair: David LaCaze, Subsea HPHT Equipment Development Lead; Shell International E&P, Inc.
Co-Chair: Jay Hursh, Principal Business Development Manager & Key Account Manager; Aker Solutions
Co-Chair: Randy Seehausen, Senior Executive Engineer; INTECSEA
BC10 (PH-2) PROJECT: CHALLENGES ASSOCIATED WITH A RAISED TUBING HANGER
Luiz Olijnik, Principal Subsea Engineer; Shell International E&P
BROWNFIELD EVALUATION AND IMPLEMENTATION OF IOR INITIATIVES.

CHALLENGES AND BENEFITS.
Dave Mantei, Senior Subsea Development Manager; Murphy Oil
AN INDEPENDENTS APPROACH FOR VALUE OPTIMIZATION OF THE POMPANO CORRIDOR
Steve Bodden, Gulf of Mexico Operations Manager; Stone Energy

3:00 P.M. 4:00 P.M.
Sponsored by:
4:00 P.M. 5:30 P.M.
SESSION 3: PROGRAM APPROACH TO DEVELOPMENT SOLUTIONS ROOM 214
Chair: Jon Sonka, Engineering Lead; ExxonMobil

Co-Chair: Karl Schnakenburg, Subsea Engineering Advisor; BHP Billiton
Co-Chair: Chuck Horn, Engineering Manager Subsea Processing; Genesis
NOBLE ENERGYS BIG BEND, DANTZLER AND GUNFLINT PROGRAM APPROACH TO LONG DEEPWATER TIEBACKS
James Wiseman, Gunflint Project Manager; Noble Energy
LUCIUS PROJECT EXECUTION
Tim Dean, Sr. Facilities Engineering Advisor; Anadarko Petroleum Corporation
DALMATIAN AREA DEVELOPMENT
Mike Clarke, Project Manager; Murphy Oil

4:30 P.M. 6:00 P.M.
EXHIBIT HALL NETWORKING RECEPTION EXHIBIT HALLS CD
Sponsored by:
201 6
PR E LIMIN A RY
E V E N T
G U I D E

THURSDAY, MARCH 24, 2016
7:00 A.M. 8:00 A.M.
CONTINENTAL BREAKFAST LEVEL 2
8:00 A.M. 9:30 A.M.
SESSION 4: FLOW ASSURANCE ROOM 214
Chair: Christopher Curran, Advisor; BP E&P

Co-Chair: Pete Stracke, Asset Manager; Statoil
Co-Chair: Mason Wu, Project Engineering Manager; DMAR Engineering
COLD TRANSIENT OPERATIONS AND THE JULIA DEVELOPMENT
Douglas Turner, Flow Assurance Advisor; ExxonMobil Development Company
SUMMARY OF AN OFFSHORE INSPECTION CAMPAIGN WITH SUBSEA

CT SCANNING TECHNOLOGY
Jason Harry, Senior Subsea Engineer; Hess Corporation
SUBSEA CHEMICAL INJECTION - LESSONS LEARNED
Christopher Curran, Advisor; BP

9:30 A.M. 10:30 A.M.
Sponsored by:
10:30 A.M. 12:00 P.M.
SESSION 5: ENVIRONMENTAL MEASUREMENT AND INTEGRITY MANAGEMENT ROOM 214
Chair: Steve Frantz, Facilities Engineering Manager; Talos Energy

Co-Chair: Jim Macklin, Vice President of Projects & Engineering; InterMoor
Co-Chair: Mark Carter, Vice President, Business Development; OneSubsea
HOW PROPER SITE CHARACTERIZATION IDENTIFIES ENGINEERING DEVELOPMENT
Aimee Thurlow, Deputy Site Characterization Manager; Anadarko Petroleum Corporation
CURRENTS BEHAVING BADLY HARD LESSONS LEARNED IN THE GULF OF MEXICO
Matt Cadwallader, Business Development Manager; Horizon Marine
AUTONOMOUS UNDERWATER VEHICLE PIPELINE INSPECTION DEVELOPMENT PROJECT
Bill Gilmour, Team Lead - Subsea Survey & Positioning; Chevron Energy Technology Company
12:00 P.M. 1:30 P.M.
LUNCH EXHIBIT HALLS CD
1:15 P.M.
HARLEY-DAVIDSON DRAWING
WW W. S UB S E AT IE BACK F OR UM . CO M

THURSDAY, MARCH 24, 2016
1:30 P.M. 3:00 P.M.
SESSION 6: DEVELOPMENT AND OPERATIONAL APPLICATIONS ROOM 214
Chair: Paul Beer, Deepwater Facilities Manager; Freeport-McMoRan Oil & Gas
Co-Chair: Bob Carter, President; Vaela Resources
Co-Chair:Bobby Voss, Chief Consulting Engineer; GE Oil & Gas
TAHITI HYDRAULIC WELL INTERVENTION
Leonard Wiggins, Subsea Systems Engineer; Chevron
DYNAMIC UMBILICAL FULL SCALE FATIGUE TESTING
Howard Wang, Engineering Associate; ExxonMobil Development Company
KODIAK SUBSEA TIEBACK
Danny Hough, Vice President of Developments; Deep Gulf Energy

3:00 P.M. 3:15 P.M.
SPEAKER RECOGNITION AWARDS CHAIRMANS CLOSING REMARKS
Eric Hevle Development & Production Manager GoM; Ecopetrol America Inc.
$500 AMERICAN EXPRESS GIFT CARD DRAWING

CONFERENCE ALTERNATES
SUBSEA STANDARDIZATION AN OPERATORS PERSPECTIVE
Ryan Gola, Subsea Systems Engineer; ExxonMobil
RE-ENGINEERED WORK OVER SYSTEM ACHIEVES SUCCESSFUL

RISERLESS WELL INTERVENTION
Kevin Smith, Completion Engineer; Stone Energy
SPIRALLY CUT IMPACT PROTECTION (SCIP) RESTRAINT DURING THWI NW RISER

RECOVERY & DEPLOYMENT
Glen Uhack, Subsea Installation Engineer; BP
GULF OF MEXICO SEVERE WAX REMEDIATION AND SUBSEA PIGGING
Scott Bufton, Vice President, Global Flow Assurance & Operability; UniversalPegasus International
201 6
PR E LIMIN A RY
E V E N T
G U I D E
BUSINESS BRIEFS
People
Peter Bennett has been appointed as CEO
of the Murray & Roberts Oil & Gas business
platform and of Clough Ltd. He also joined the
Murray & Roberts Ltd. board. He succeeds
Kevin Gallagher, who was appointed CEO of
Santos Ltd. in November 2015.
Wood Group has named Robin Watson as
CEO.
Ithaca Energy has appointed Dr. Richard
Smith as chief commercial officer.
Samir Brikho has stepped down as CEO
of Amec Foster Wheeler. CFO Ian McHoul
has been appointed into the role of interim
CEO and will chair the Group Leadership
Team while the search for the new CEO is
conducted. McHoul is not putting himself
forward for the role.
James R. Moffett, chairman of the board,
co-founder, and long-time executive, has
stepped down from the Freeport-McMoRan
Inc. board of directors and as executive chairman. He has been named chairman emeritus.
The board has elected Gerald J. Ford as
non-executive chairman.
Port of Den Helder has appointed JacobaBolderheij as CEO,
effective in April 2016.
JDR has hired James
Young as chief technology
officer.
Electromagnetic Geoservices ASA has appointed
Hege A. Veiseth as acting
Young
CFO, following the resignation of Svein Knudsen.
McDermott International
has named Kathy Murray
as vice president, treasurer
and investor relations.
Dana Gas has hired Chris
Hearne as CFO, Iman Hill
as technical director, and
Hill
Duncan Maclean as legal
and commercial director.
Geraint West has joined Sonardyne International Ltd. UK as global business manager
for oceanography.
io oil & gas consulting has
appointed Jeff Measamer
as general manager of Americas, Ed Hernandez as vice
president of operations, and
Jerr y Toth as director of
business development.
Measamer
Cameron Mitchell,
technical disciplines assurance manager for Shell UK; and Mark
Richardson, projects group manager for
Apache North Sea, have joined the board of
Subsea UK.
Neil Poxon has joined Peak Well Systems
as global business development director.
Zennor Petroleum has named Graham
Deepwater Operations Advisory Board

Back row from left to right: Tim Colwell, Shell Brazil; Richard Loveland, BP; John Glithero, Wood
Group PSN; Advisory Board Chairman Dave Blackburn, Hess Corp.; Rick Francis, Consultant;
Pete Stracke, Statoil; Wayland Christensen, Chevron Global Upstream & Gas; Paul Danos, Danos;
Mike Lynch, Granherne/KBR; Amro Hamza, Anadarko Petroleum Corp.; Conference Director
Robin Dupre, Offshore
Front row from left to right: Charles Hutto, Noble Energy Inc.; Craig Sherer, Chevron North
America; Kris Kallaway, ConocoPhillips; Gerhard Visser, Williams; Rusty Desormeaux, Murphy
Exploration & Production USA; Jeremy Burford, BHP Billiton Petroleum (Americas) Inc.
Not pictured: Jay Hachen, W&T Offshore; Sergio Matos, Petrobras America Inc.; Donal Rajasingam, Shell Exploraiton & Production Co.
Deepwater Operations
Despite the downturn in the oil and gas
market, the 2015 Deepwater Operations Conference and Exhibition, which was held Nov. 3-5,
still experienced the second-highest attendance in the history of the event.
Elizabeth Mann of Shell received the best
presenter award for her presentation Perdido
Subsea Caisson Challenges. Perdidos recordbreaking depths required 1,600-hp electrical
submersible pumps to produce the reservoirs. Those pumps meant that the well fluids
needed to be separated at the seafloor using
350-ft deep caissons. Her presentation detailed
the challenges and innovations of the project
team in operating the subsea caissons. Mann
is the Lead for Shells Deepwater Enhanced
Problem Solving Team.
Jay Odom of Anadarko Petroleum Corp.
Best presentation award winner Jay Odom
received the best presentation award. His
of Anadarko and best presenter award
presentation 15K Riserless Stimulation and
winner Elizabeth Mann of Shell.
Flowback focused on the first 15ksi riserless
acid stimulation in the Gulf of Mexico. He discussed the operation as a whole, which
includes planning and execution, as well as the operational and well performance results of the 15 ksi riserless stimulation, and the flowback to the host platform. Odom
is a senior GoM production engineer. The annual event returns Nov. 8-10, 2016, at the
Moody Gardens Hotel & Convention Center in Galveston, Texas.
Cooper as commercial director.
Delmar Systems Pty Ltd. has hired Mark
Mithran as lead marine engineer and Gopi
Chillamcharla as AU technical manager.
SPP Pumps has appointed Ian Mavers as
business development manager, Engineering

Services division for Scotland.
Professor Anna Ger vasoni has resigned
as statutory auditor of Saipem S.p.A. She is
succeeded by Giulia De Martino.
BUSINESS BRIEFS
Nicky Tan Ng Kuang has joined the

Sembcorp Industries board as an independent
director.
Trelleborgs offshore operation in Brazil
has hired Rafael Campos as project manager
and Bruno Matos as sales manager.
Peterson has appointed Chris Coull as
regional director.
Flexlife has hired Richard Gibson as
business development manager for engineering, delivery, and integrity services in the UK/
Europe region.
Borets has named David
Langley as North American
HSE manager.
Daniel P. LeFort has
joined Sutherland Asbill &
Brennan LLPs Energy, Environmental and Commodities
Langley
Practice Group as a counsel
in the Houston office.
Company News
The European Commission has initiated
a Phase II review of Halliburtons pending
acquisition of Baker Hughes. This decision
is a normal step in the commissions review
process, and the views expressed by the
commission at this stage are preliminary
only, Halliburton said. Pursuant to applicable
regulations, Phase II generally provides the
commission with 90 working days to review
the pending transaction. The companies said
they will continue to work constructively with
the commission.
Statoil has acquired 11.93% of Lundin Petroleums shares for around SEK 4.6 billion
($539 million). The Norwegian major says the
move increases its exposure to core field development projects and growth assets on the
Norwegian continental shelf, notably Johan
Sverdrup and Edvard Grieg in the North Sea.
PA Resources has decreased its corporate
organization in order to reduce its costs. The
companys cost reduction efforts entailed
several organizational and management
changes. The companys London office, which
managed its North Sea assets and group exploration activities, closed at the end of 2015.
The corporate headquarters in Stockholm,
Sweden, remains but with reduced manpower
to manage completion of the sales process and
to handle the administration.
Aramco Asia Japan has formed a partnership with seven inspection service providers to support the companys engineering
services operations in Asia over the next five
years. The seven inspection firms are SGS,
Japan Inspection Co., ABS Consulting,
Bureau Veritas, Intertek, Tuboscope, and
Edif NDE. The contractors will perform
inspection activities mandated by Saudi
Aramco engineering standards on all inspectable materials procured from Asia, either
directly by the company or through projects

and joint ventures.
Well Control School has received accreditation from International Well Control
Forum for its System 21 eLearning drilling
course. The course is a level 2 basic well
control course that uses interactive tasks and
roleplay scenarios to familiarize the learners
with well control concepts while emphasizing
proper procedures and teamwork.
ABS has signed a strategic cooperation
agreement with Marine Design & Research
Institute of China. Through this agreement,
the companies will collaborate on technical
support, classification, certification, training
and statutory guidance for merchant vessels
and offshore units. The agreement creates
opportunities to form joint development
projects in areas such as energy efficiency,
environmental performance, techno economic
evaluation, design considerations for harsh environment operations, novel design concepts,
and technology performance assessment.
Alaska Governor Bill Walker has announced Fugro as the winner of the 2015
Governors North Star Award for International Excellence in the category of scientific
exchange. The company was honored for its
development of an airborne sea-ice management capability that enables ice thickness
mapping, characterization, and monitoring
over large geographic areas. Using a unique
radar mapping system known as GeoSAR,
the ice management capability is designed to
reduce risk in Arctic operations.
ExxonMobil has awarded engineering services provider Fircroft a five-year contract to
supply around 250 business services contractors for operations on Sakhalin Island offshore
northeast Russia.
Maersk Training and eDrilling have partnered to assist E&P companies, drilling contractors, and services companies worldwide
make informed drilling decisions and enhance
drilling efficiency. The companies will provide
well specific drilling consultancy services, also
called Real Time Decision Support. Services
will range from drilling the well and testing
new technology to verifying procedures.
Statoil has awarded Schlumberger subsidiary M-I SWACO a four-year NOK 500-million
($56-million) contract to provide tank cleaning
on its support vessels.
Kongsberg Maritime has acquired the
Trondheim-based ship simulation and consultancy company, Ship Modelling & Simulation Centre AS.
Maersk Oil has awarded logistics group
Peterson a five-year contract to support the
operators UK North Sea assets. Services will
include warehousing, inventory control, transport, fuel and quayside logistics, crew changes
and walk-to-work facilities.
Serimax and Technip have signed an
agreement in principle to develop a strategic

partnership in the domain of pipeline welding. The plans envisage that Technip would
acquire a minority stake in Serimax. The
companies will combine their expertise and
will deploy the Serimax welding technology
at Technips spoolbases and s-lay vessels. The
partnership, which is subject to regulatory
approvals, will include exclusive arrangements in the reel-lay welding pipeline market
as well as research and development-related
programs.
Trelleborg Sealing Solutions has opened
a climate-controlled swivel stack seal inspection facility for validation of bespoke seals.
The facility provides a temperature-controlled
environment to avoid fluctuations in the dimensions of the seals caused by temperature
changes, with specialist storage racks allowing
the seals to be acclimatized prior to inspection.
Churchill Drilling Tools has opened
an office in Dubai to support the companys
operations in the Middle East, North Africa,
and Asia/Pacific regions.
Ashtead Technology has secured a worldwide agreement with nCentric to provide
broadband communications between rigs and
vessels and onshore facilities. The deal will
see the company supply video streaming and
data transmissions for large-scale, wireless dynamic mesh networks from its offices across
the globe.
Power Feed-Thru Systems and Connectors LLC has acquired Flowell Oil Tools
Ltd. of Aberdeen, Scotland. The acquisition
expands the Black Gator product line to
include a wide-range of advanced, customized
completion tools and accessories for electrical
submersible pump installations.
Flowserve Corp. has signed a new agreement with Veolia Group that makes Flowserve
a preferred supplier of deep-well submersible
pumps, clear-water single and multistage
pumps, and associated services. The agreement is in effect through August 2018.
Craig International has opened offices in
Doha, Qatar, and Dubai.
The National Chapter of American Association of Drilling Engineers (AADE)
and the Lafayette Chapter have donated more
than $76,500 to the University of Louisiana at Lafayette to go toward its Petroleum
Engineering Department Equipment Fund.
The fund is used to support the Mud Lab,
which offers petroleum engineering students
the opportunity to gain hands-on experience
beyond classroom instruction. The AADE Lafayette Chapter donated $38,934 to purchase
equipment such as laboratory mixers, hot
plates, hand-held balances, a Garrett gas train,
a permeability plugging tester, interval timers,
centrifuges and other required supplies. The
AADE National Chapter donated $37,638 to
purchase gas porosimeters.
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3-6 April Barcelona, Spain
barcelona2016.iceevent.org
I C E Ba rcelona
Centre de Convencions Internacional de Barcelona
Register now for AAPG/SEGs ICE Barcelona, the industrys premier integrated geosciences
conference and exhibition. Attracting a global audience of decision-makers, thought leaders,
and technical experts, ICE Barcelona unites the geologist and geophysicist disciplines under
one roof, providing a truly integrated experience for attendees and exhibitors.
Benet from:
A premier technical program featuring a full range of sessions, short courses, and eld trips
State-of-the-art exhibition displaying the latest in products, technologies, and services
Networking opportunities designed to build connections, drive new business, and enhance career opportunities
Access to leaders on the forefront of advancing the geosciences industry
PRESENTED BY:
Register online today at

Advancing the World of Petroleum Geosciences TM
Exhibition and sponsorship opportunities still available! Visit barcelona2016.iceevent.org for more information.
SUPPORTED BY:
AADE
AMERICAN ASSOCIATION OF DRILLING ENGINEERS
FLUIDS 2016
TECHNICAL CONFERENCE AND EXHIBITION

The Global Premier Drilling, Completion,
Cementing and Fracturing Fluids Conference
April 12-13 | 2016 | Houston Texas

Conference Topics:
Hilton Houston North
Register early and save!
- Case Histories
12400 Greenspoint Drive

Houston, Texas 77060
281-875-2222
Dont forget to book your hotel early too!
- Cementing

Special conference rate deadline for booking is March 20, 2016
- Drilling Fluids
The American Association of Drilling

- Emerging Technologies
Engineers will host the 2016 Fluids
- Formation Damage
Technical Conference & Exhibition

covering improvements and innovations
PROGRAM COMMITTEE
Lindsay Fraser
lfraser@newpark.com
Ed Malachosky
Ed.Malachosky@chevron.com
- Fracturing and Gravel Packing
in drilling, completion, cementing and
- Hydraulics and Rheology

CONFERENCE CHAIRS
Cory Arceneaux
Cory.Arceneaux@chevron.com
- Lost Circulation
This conference will be of interest to
- Managed Pressure Drilling
major and independent operators,
Burney Lee
Burnell.Lee@Shell.com
service companies, drilling contractors,

- Shale Drilling

EXHIBITS CHAIR
Carolyn Berry
carolynberry@att.net|281.293.9800
- Solids Management
AAD
AMERICAN ASSOCIATION
of DRILLING ENGINEERS
Register for the conference at www.aade.org
1144 TTHH ANNUAL

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SUPPORTED
ADVERTISERS INDEX
SALES OFFICES
PENNWELL PETROLEUM GROUP

1455 West Loop South, Suite 400, Houston, TX 77027
PHONE +1 713 621 9720 FAX +1 713 963 6228
David Davis (Worldwide Sales Manager)
davidd@pennwell.com
Shelley Cohen (Regional Sales Manager)
shelleyc@pennwell.com
Mary Sumner (Classified Sales) marys@pennwell.com
AAPG/SEG ICE Barcelona ................. 64

AFGlobal Corporation .......................... 1
afglobal.com/oilandgas
Aker Solutions ...................................... 7
www.akersolutions.com
American Association of
Drilling Engineers ............................... 65
www.aade.org
American Association of
Petroleum Geologists......................... 64
www.aapg.org
ATV S.p.A. ...................................... 16-17
www.atvspa.com
Kobelco / Kobe Steel Ltd. .................. 19

www.kobelcocompressors.com
GREATER HOUSTON AREA, TX

David Davis davidd@pennwell.com
USA CANADA
Shelley Cohen shelleyc@pennwell.com
WASHINGTON OREGON CALIFORNIA
Mary Sumner marys@pennwell.com
UNITED KINGDOM SCANDINAVIA
THE NETHERLANDS
10 Springfield Close, Cross,
Axbridge, Somerset, United Kingdom BS26 2FE
PHONE +44 1934 733871
Graham Hoyle grahamh@pennwell.com
FRANCE BELGIUM PORTUGAL
SPAIN SOUTH SWITZERLAND MONACO
NORTH AFRICA
961 Camp Redon, 83830 Callas, France
PHONE +33 (0) 4 9470 8263 FAX +33 (0) 4 8981 9982
Stefania Piciotti Thompson stefaniat@pennwell.com
Daniel Bernard danielb@pennwell.com
PHONE +33 (0) 1 3071 1119
GERMANY NORTH SWITZERLAND
AUSTRIA EASTERN EUROPE
RUSSIA FORMER SOVIET UNION BALTIC
EURASIA
Sicking Industrial Marketing
Kurt-Schumacher-Str. 16, 59872 Freienohl, Germany
PHONE +49 (0) 2903 3385 70 FAX +49 (0) 2903 3385 82
Andreas Sicking wilhelms@pennwell.com
ITALY TURKEY GREECE
CYPRUS MALTA
SILVERA MEDIAREP
Viale Monza, 24 - 20127 Milano, Italy
PHONE +39 (02) 28 46716 FAX +39 (02) 28 93849
Ferruccio Silvera info@silvera.it
JAPAN
e.x.press Co., Ltd.
AIOS Gotanda 606, 1-10-7 Higashi-gotanda
Shinagawa-Ku, Tokyo 141-0022, Japan
PHONE +81 3 6721 9890 FAX +81 3 6721 9891
Masaki Mori masaki.mori2@ex-press.jp
SOUTHEAST ASIA AUSTRALIA
13 Langrune Grove,
Port Kennedy, WA, Australia 6172
PHONE +61 8 9593 4405 or +61(0) 437 700 093
FAX +61 8 9593 3732
Mike Twiss miket@pennwell.com
INDIA
Interads Ltd., A-113, Shivalik, New Delhi 110 017
PHONE +91 11 628 3018 FAX +91 11 622 8928
Rajan Sharma rajan@interadsindia.com
NIGERIA/WEST AFRICA
Flat 8, 3rd floor (Oluwatobi House)
71 Allen Ave, Ikeja, Lagos, Nigeria
PHONE +234 802 223 2864
Dele Olaoye dele.olaoye@q-she.com
BRAZIL
Centro Empresarial Mourisco
P. Botafogo 501 / Sala 101
Torre Po de Acar, Rio de Janeiro 22250-040
PHONE +55 21 2586 6302
Deny Tenenblat denyt@PennWell.com
FOR ASSISTANCE WITH MARKETING
STRATEGY OR AD CREATION, PLEASE
CONTACT:
PennWell Marketing Solutions
Vice President: Paul Andrews
PHONE +1 240 595 2352
EMAIL pandrews@pennwell.com
1602OFF_Rev_67 67
B
Beijing Zhenwei Exhibition
Co., Ltd. ............................................... 23
www.zhenweiexpo.com
Brunswick Commercial
Government Products ........................C3
www.brunswickcgp.com
C
Cameron .............................................. 29
www.c-a-m.com
CGG Services US, Inc. .......................27
www.cgg.com
CIPPE ZHENWEI International
Petroleum Exhibition ..........................23
www.cippe.com.cn/2016
D
Delta Subsea LLC ............................... 49
deltasubsea-rov.com
Dril-Quip ................................................ 3
www.dril-quip.com
Dyna-Drill Technologies, LLC ............C4
www.dyna-drill.com
F
Fluids Technical Conference &
Exhibition ............................................ 65
www.aade.org
FMC Technologies ..............................C2
www.fmctechnologies.com
FTO Services ......................................... 5
www.ftoservices.com
Fugro Geos Limited ............................ 13
www.fugro.com/ask
N
Newpark Drilling Fluids ...................... 25
www.newparkdf.com
Nylacast ............................................... 15
www.nylacast.com
O
Offshore World Trust ........................... 14
www.offshoreworldtrust.com
OneSubsea .......................................... 21
www.onesubsea.com
OTC Asia 2016 ..................................... 26
2016.otcasia.com
P
PennWell
Deepwater Operations
Conference & Exhibition ...............66
www.deepwateroperations.com
PennWell Books...............................8
www.pennwellbooks.com
Subsea Tieback Forum &
Exhibition ..................................54-61
www.subseatiebackforum.com
R
R.M. Young Company ......................... 14
www.youngusa.com
Research Partnership to Secure
Energy for America (RPSEA) ..............11
www.rpsea.org
S
S. Himmelstein and Company ........... 64
www.himmelstein.com
Society of Exploration
Geophysicists ..................................... 64
www.seg.org
V
Vallourec.............................................. 53
www.vallourec.com
The index of page numbers is provided as

a service. The publisher does not assume
any liability for error or omission.
GE Oil & Gas ......................................... 9

www.geoilandgas.com
2/16/16 9:16 AM
BEYOND THE HORIZON
Oil price pressures risk

discord in drilling sector
A recent report by Moodys Investors Services warned that the
offshore drilling industry will remain under stress through 2017.
The Worst Is Yet to Come for Offshore Drillers notes that the
oversupply of rigs combined with the stubbornly low oil price is putting severe pressure on day rates with the credit rating of contractors being stretched as rig earnings and asset values decline.
Around 75% of the 72 newbuild floating rigs and 90% of the 117
jackups on order are due for delivery by the end of 2017. However,
only 50% of the floaters and less than 10% of the jackups have fixed
employment upon delivery.
Until the recent downturn, offshore construction contracts were
largely profitable ventures for both yards and rig contractors, with
financing secured post-delivery against earnings under lucrative
employment contracts. This arrangement allowed contractors to
negotiate increasingly favorable terms with the yards, with the final
delivery installment often as much as 90% (if not more) of the contract price. In addition, construction contracts were often entered
into with special purpose companies (SPCs) established by the contractors with limited assets, rather than with or guaranteed by a corporation of any financial substance.
While such terms arguably stimulated contractors to build offshore rigs, the present slack demand from oil companies to employ
these units has left many contractors unable to obtain take-out financing to pay the yards the remainder of the contract price and
then take delivery of the rigs.
Failure by a contractor to pay the delivery installment is ostensibly an event of default under the construction contract, entitling the
yard to terminate the contract and claim damages for any loss suffered. In the shipping industry, vessels are (relatively) homogenous
and there is generally some form of re-sale market. However, that is
not the case in the offshore sectors current predicament, with the
yard exposed to the risk of having built a highly specialized asset
with diminishing value for an industry that currently has no use for
it. With this in mind, the yard will wish to keep as many of its options
open as possible against the contractor.
To an extent, each participants hand is forced. Contractors are
unable to find employment for their rigs and hence obtain financing,
while yards are struggling to find replacement purchasers for their
rigs, even if the yard is in a position to terminate the construction
contract for a contractors breach. As a result there have not so far
been extensive terminations of rig contracts but rather renegotiations, with both parties largely agreeing to defer delivery until a future date when the market has hopefully improved.
Any deferral of the delivery date will also likely entail cooperation
from the bank through which the shipyard has secured its refund
guarantees, as the contractor will require those guarantees issued
in respect of any pre-delivery installments to be extended accordingly. But the refund guarantors may prove reluctant to grant an
extension if they perceive an increased risk of the shipyard entering
insolvency.
Irrespective of whether the parties enter into renegotiations with
one another or not, depressed market conditions generally result in
more disagreements between parties than would otherwise occur in
more affluent times. The incentive for a contractor to take delivery
of a rig in order to start profitable operations is simply not there in a
depressed market. Instead, the contractor may view routine issues
that would ordinarily be resolved (such as minor deficiencies with
the rig at the time of delivery) as an opportunity to delay delivery
or even to terminate the contract. However, the contractor should
be cautious about exercising any right to terminate, especially if the
reason given for termination is disputed by the yard.
Should the contractor be found to have wrongfully terminated the
construction contract, it may find itself facing a claim not only for
any pre-delivery installments that it will already have paid but also
for damages arising as a result of its default. A contractor may take
the view that its exposure to damages will be limited to forfeiture of
the pre-delivery installments, given that the yards only recourse is
toward an SPC. However, this fails to take into account the possibility of the yard being able to pierce the corporate veil in certain
jurisdictions when seeking enforcement against other members of
the contractors group, and the reputational fall-out that may attach
to the contractor as a result of such breach. In addition, the contractor (through other SPCs) may have other units under construction
at the same yard, and may be either unwilling or unable to terminate
these contracts, making its relationship with the yard even more
difficult to manage.
Although the effects of the current market conditions have been
widely reported, we are not yet seeing the wholesale project cancellations that perhaps were expected. It would appear that industry
participants are all too aware of the cyclical nature of the market in
which they operate, and, with choices limited, are prepared to work
together in restructuring projects rather than to let them fail. Ideally,
the upturn will come sooner rather than later for all participants in
the offshore rig sector, to prevent any further escalation of disputes.
Joe McGladdery
Partner
Watson Farley & Williams LLP
This page reflects viewpoints on the political, economic, cultural, technological, and environmental issues that shape the future of the petroleum industry. Offshore
Magazine invites you to share your thoughts. Email your Beyond the Horizon manuscript to David Paganie at davidp@pennwell.com.
Reliability and torquea valuable combination.

An operator in the Eagle Ford Shale recently drilled a record run using Dyna-Drills 7-in power section,
which is engineered with aproprietaryhardrubber elastomer. The customer drilled one of itsfastest
curve/lateralhole sections, averaging 3,078 ft/d with ROP up to 400 ft/h while maintaining 1,400-psi
differential pressure.
Since our founding in 1958, Dyna-Drill has been committed to providing robust, high-performance
technologiesthatconsistentlydeliver unprecedented value to our customers.
Find out more at
dyna-drill.com/products/power_sections
Copyright 2015 Dyna-Drill. All rights reserved.

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Houston

For continuous news & analysis

Discover the upside in this down cycle.

Copyright FMC Technologies, Inc. All Rights Reserved.

Celebrating 60 Years of Trends, Tools, and Technology

TOP 10 DRILLING CONTRACTORS

GEOLOGY & GEOPHYSICS

DRILLING & COMPLETION

Deepwater MPD system aids

Proposed rule seeks stricter well control regulations ........... 43

BOP skids on ROVs provide

Enhanced satellite imagery supports

Articles are available in

For additional information,

Forsys Subsea aims for life-of-field partnerships with deepwater operators......... 51

FLOWLINES & PIPELINES

Vessels, Rigs, & Surface Systems ...... 22

In c re a se Pro d uct i on with Isl and Pe rfo rm er

Riserless Light Well Intervention

Increased Oil Recovery Through

VICE PRESIDENT and GROUP PUBLISHER

CHIEF EDITOR/CONFERENCES EDITORIAL DIRECTOR

David Paganie davidp@pennwell.com

SENIOR TECHNOLOGY EDITOR/

Sarah Parker Musarra

E. Kurt Albaugh, P.E.

New tools and resources

AUDIENCE DEVELOPMENT MANAGER

1455 West Loop South, Suite 400, Houston, TX 77027 U.S.A.

6 Offshore February 2016 www.offshore-mag.com

New maps, posters, and surveys

New on demand webcasts

Offshore Top 5 Projects - 2015

Browse Offshore magazine

Our strongest asset

Deepwater Petroleum Exploration

NEW TO THE SECOND EDITION:

David Paganie Houston

Top 10 drilling contractors survey

8 Offshore February 2016 www.offshore-mag.com

To respond to articles in Offshore, or to offer articles for publication,

WERE A FULLSTREAM PROVIDER,

GE brings an innovative and fullstream perspective to break

Worldwide offshore rig count & utilization rate

January 2014 December 2015

10 Offshore February 2016 www.offshore-mag.com

Source: IHS RigBase

Fleet utilization rate %

Contracted fleet utilization

US offshore drilling permits and development plans

There are more than 25,000 miles of

What about the issues you dont see?

Market caution lifts drilling services

Jeremy Beckman London

which delivered good-quality 31 API oil. Analysis indicates that this

Total has started production from the Moho Phase 1b project, 75

FPSO Cidade de Maric at Brasa shipyard. (Photo courtesy SBM Offshore)

12 Offshore February 2016 www.offshore-mag.com

If you want to know how

Noble Energy has applauded Israels

ExxonMobil has started operations at

The offshore Mahakam block and its discoveries.

transfer to Pertamina although the other two

Woodside Energy has discovered gas