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October 2014

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World Trends and Technology for Offshore Oil and Gas Operations
For continuous news & analysis


technology review
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International Edition
Volume 74, Number 10
October 2014
Offshore (ISSN 0030-0608) is published 12 times a year, monthly by PennWell, 1421 S. Sheridan Road, Tulsa, OK 74112. Periodicals class postage paid at Tulsa, OK, and additional offices.
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Celebrating 60 Years of Trends, Tools, and Technology
Prelude turret sets new standards for size, capability .......... 34
Shells Prelude FLNG project offshore northwestern Australia contin-
ues to push the technology boundaries with a number of frsts. The
mooring turret system for the vessel is no exception. At almost 100 m
(328 ft) in height, it is the largest in the world. This part of the system
weighs 4,300 metric tons (4,740 tons) alone. The turret construction
contract is held by Drydocks World and consists of fve parts, all to
ship from Dubai to Geoje, South Korea.
Ichthys project reaches peak construction activity ............... 38
Australias Ichthys project is now offcially half way to completion. Three
mega-projects in one, the Ichthys project will involve some of the largest
offshore facilities in the industry, signifcant onshore infrastructure, and
an 889-km (552-mi) pipeline connecting the two. When complete, the
pipeline will become the ffth-longest subsea pipeline in the world.
Australian research aims
to reduce pipeline, drilling costs............................................. 42
Australia has invested heavily in the oil and gas industry but with
increasing capex and ever-increasing demand, the country is focus-
ing heavily on R&D to help mitigate costs while continuing to attract
foreign investment to exploit its oil and gas reserves. Australian re-
searchers have pinpointed three areas in which costs can be decreased
through innovation and new technology.
ONS 2014 highlights next-phase deepwater
drilling, subsea recovery challenges ...................................... 44
Deepwater engineering contractors Aker Solutions, Baker Hughes,
GE, and GVA outlined their visions of the way forward at the recent
Offshore Northern Seas exhibition in Stavanger, Norway.
RPSEA continues technology advance
with ultra-deepwater R&D projects ........................................ 50
The business of advancing technology continues as the Research Part-
nership to Secure Energy for America (RPSEA) moves forward with its
transition into the role of technical coordinator under National Energy
Technology Laboratory/US Department of Energy management in 2015.
RPSEAs Ultra-Deepwater Conference recently held in Houston not only
reviewed the status of programs under way, but also took a look ahead
at how the organization might function in the future.
Collaboration takes industry to new
technical highs, greater depths .............................................. 54
Since its inception in 1991, DeepStar has served as an incubator for
collaborative development of technologies that enhance deepwater ex-
ploration, drilling, and production. DeepStars approach to technical col-
laboration has delivered advances across the deepwater E&P spectrum,
from reservoir appraisal, ultra-deepwater drilling and completions, fow
assurance, subsea processing solutions to foating structures and life
extension. Some of the key research initiatives under way in its Phase
XII development are described.
1410OFF_2 2 10/1/14 3:56 PM
Read the case study at
Petrobras saved rig time with real-time wireless
data transmission on a deepwater well test.
The Quartet system enabled by Muzic wireless telemetry delivered highly accurate pressure data
to surface for the duration of a Petrobras deepwater well test offshore Brazil.
Obtaining downhole data in real time allowed Petrobras to terminate the test earlier than planned
and to know with certainty that their test objectives were achieved.
1410OFF_3 3 10/1/14 3:56 PM
International Edition
Volume 74, Number 10
October 2014
4 Of fshore October 2014 t
Celebrating 60 Years of Trends, Tools, and Technology
Offshore at 60: The Blue Water breakthrough ........................ 58
In January 1962, a strange contraption under lease to Shell Oil, called
the Blue Water 1, spudded a record-setting offshore well in 297 ft
(91 m) of water in the Gulf of Mexico. The maiden voyage of the
Blue Water 1 took place a month before NASA astronaut John Glenn
became the frst person to complete an orbit of the earth. Both mis-
sions revealed a newfound human ability to explore frontiers beyond
the comfort of terra frma. On Aug. 14, 1962, Shell Oil dramatically
disclosed the details of its new foating drilling platform.
From the archives: CDI completing
frst deepwater decommissioning .......................................... 66
Selected from the October 1999 issue of Of fshore, this article describes
Cal Dive Inc.s journey to complete the Cooper feld, the frst deepwater
subsea decommissioning project in the Gulf of Mexico.
Reservoir modeling: revising uncertainty
quantifcation and workfows ................................................. 70
Technology to support a better reservoir understanding is available.
Operators can continuously update models everywhere in the workfow,
from seismic to simulation. A combination of powerful hardware, an
intelligent visualization-driven framework for computation and data-
management, and a model-driven software approach to interpreting and
modeling workfows can properly support reservoir modeling demands.
Liner drilling enables operators to reach new depths ........... 74
The process of liner or casing drilling, in which the wells liner or
casing string is used as part of the drillstring, can be a cost-effective
solution to address many drilling challenges. Liner/casing drilling is
an integrated services solution that can shorten drilling time and costs,
reduce non-productive time, lower the risk of drilling through trouble
zones, and help ensure that the liner reaches total depth.
MPD and closed-loop techniques solve
drilling challenges off West Africa .......................................... 78
A complex set of challenges offshore West Africa has defed drilling ef-
forts for more than 40 years. Multiple attempts in the areas high-pres-
sure/high-temperature and regressive pressure regimes using conven-
tional methods have been unable to construct a wellbore to total depth.
The solution came with an unusual scope of managed pressure drilling
(MPD) operations and closed loop well construction techniques.
Industry shows renewed interest
in foat-over installation .......................................................... 82
Float-over installation has become an attractive alternative to heavy-lift
crane installation for offshore construction, as increasing size and weight
of offshore platform topsides continually exceed the lifting capacity of
cranes. Dockwise Ltd. analyzed topsides installation trends from 2005
to 2012, and found that the demand for cost-effective and more fexible
alternatives to crane installations has been the driving force behind foat-
over installation using semisubmersible heavy transport vessels.
1410OFF_4 4 10/1/14 3:56 PM
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6 Of fshore October 2014 t
International Edition
Volume 74, Number 10
October 2014
Subsea power grid accelerating transfer of topsides functions to seafoor............ 84
Siemens is close to completing an initial test program on the four main components of a pro-
posed subsea power distribution hub. The Subsea Power Grid will be connected on the seafoor
to an array of new equipment emerging for subsea production, processing, and boosting. This
should facilitate expansion of feld development into deeper water, longer step-outs, and more
demanding production environments.
Reservoir conditions, fow regimes challenge measurement accuracy .................. 86
Multi-phase meters play an increasingly important role from royalty and fscal allocation to
production control, prevention of water encroachment, and the generation of real-time well data
to help diagnose and optimize well performance. Yet, as multi-phase meters continue to increase
their market penetration, more challenges arise.
Online .................................................... 8
Comment ............................................. 10
Data ..................................................... 12
Global E&P .......................................... 14
Offshore Europe .................................. 18
Gulf of Mexico ..................................... 20
Subsea Systems ................................. 22
Vessels, Rigs, & Surface Systems ...... 24
Drilling & Production .......................... 26
Geosciences ........................................ 28
Offshore Automation Solutions .......... 30
Regulatory Perspectives ..................... 32
Business Briefs ................................... 90
Advertisers Index ............................... 95
Beyond the Horizon ............................ 96
COVER: With much of the oil and
gas world watching developments
offshore northwest Australia, Shell
continues to pursue its Prelude FLNG
project, the frst of its kind. The hull,
shown on the cover, is in Geoje, South
Korea, at Samsung Heavy Industries
shipyard awaiting arrival of the largest
non-disconnectable internal mooring
turret ever built. The mooring system is
just one of several technologies being
adapted for use on the largest foating
facility ever built. These design hurdles
range from shrinking the footprint of
an equivalent onshore LNG process-
ing plant by 75% to dealing with liquid
natural gas sloshing in partially flled
tanks. Shell expects Prelude to be the
frst of many FLNG installations to
come. (Photo courtesy Shell)
1410OFF_6 6 10/1/14 3:56 PM
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8 Of fshore 0ctober 2O14

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10 Of fshore October 2014 t
Historic initiative paved way
for deepwater, industry collaboration
Recent reports indicate that deepwater and ultra-deepwater capex will continue their
upward trend. Infeld Systems predicts it will grow 8% from now to 2018. Developments
offshore Brazil, myriad FLNG/FPSO projects underway and in planning, and new deep-
water regions joining the trend all contribute. They also expand the defnition of deep-
water and ultra-deepwater.
But what, exactly, is deepwater? What are the defning water-depth parameters? What
are the technological limitations? The answers depend on who you ask, and when. In the
early 1960s, Shell launched a technology development program to extend the water-depth
limitation of drilling and production to 600 ft. That was considered deepwater back then.
The program was top-secret to give Shell a competitive advantage for deepwater leases in
an upcoming bid round. To Shells chagrin, it was the only bidder on a handful of deepwater
tracts, which, as a result, were defaulted back to the government. The operator concluded
that there had to be competition both to enable Shell to acquire the deepwater acreage and
to stimulate the commercialization of the technology. It would need to share its knowledge
with the industry. Thus, in 1963, Shell held an unprecedented three-week educational pro-
gram on offshore technology for representatives from industry and government.
Most importantly, they (Shell) established a new learning curve, redefning what was
possible at the time, helping other companies in the industry see the potential of offshore,
and fostering a new spirit of technological cooperation, writes Tyler Priest, associate
professor and author of The Offshore Imperative: Shell Oils Search for Petroleum in Postwar
America. As part of our ongoing coverage of Offshores 60-year anniversary, Priest shares
an excerpt of this compelling story beginning on page 58.
Regardless of defnition, a lot of attention is being directed toward deepwater. ONS
2014 stressed the next phase of deepwater drilling and subsea recovery. See Jeremy
Beckmans review of the conference starting on page 44.
Australian technology
Shell, today, continues to push the boundaries of technology development. A good ex-
ample is the Shell-operated Prelude FLNG project for installation offshore Australia. It
boasts a number of industry frsts, including its mooring turret. Upon completion, it will
be the largest of its kind in the world. Gene Kliewer, Offshore Technology Editor, Subsea
& Seismic, interviewed Shell senior management for a review of the projects key design
parameters, and the outlook for similar projects. Kliewers report begins on page 34.
Elsewhere in Australia, the Ichthys project is now offcially half way to completion. Three
mega-projects in one, Ichthys will involve some of the largest offshore facilities in the in-
dustry, signifcant onshore infrastructure, and an 889-km (552-mi) pipeline connecting the
two. When complete, the pipeline will become the ffth-longest subsea pipeline in the world.
Offshore contributing editor Wendy Laursen shares a detailed review of the project
scope, challenges, design strategy, and construction progress to-date. Laursens report
begins on page 38.
Subsea power grid
Siemens is close to completing an initial test program on the four main components (sub-
sea transformer, subsea MV Switchgear, subsea variable speed drive, and subsea power
control & communication system) of a proposed subsea power distribution hub. The Subsea
Power Grid will be connected on the seafoor to the array of new equipment emerging for
subsea production, processing and boosting. This should facilitate expansion of feld devel-
opment into deeper water, longer step-outs, and more demanding production environments,
suggests Jeremy Beckman, Offshore Editor, Europe. The development, testing and qualifca-
tion program is supported by Chevron, ExxonMobil, Petrobras and Statoil. The technolo-
gies they and other operators are looking to transfer to the seabed include gas compression,
water injection, multiphase booster pumps, and subsea separation.
Beckmans full report on the subsea power grids design, components, and qualifca-
tion status begins on page 84.
1410OFF_10 10 10/1/14 3:57 PM
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Worldwide offshore rig count & utilization rate
July 2012 August 2014














Contracted fleet utilization Total fleet Contracted Working

Operator capex share (%) in Australia 2009-2018
GDF Suez
BHP Billiton
Source: Infield Systems
2010 2011 2012 2013 2014 2015 2016 2017 2018



Worldwide day rates
Year/Month Minimum Average Maximum
2013 Sept $151,000 $460,989 $681,000
2013 Oct $151,000 $465,759 $681,000
2013 Nov $151,000 $472,587 $681,000
2013 Dec $151,000 $477,497 $681,000
2014 Jan $151,000 $480,353 $681,000
2014 Feb $151,000 $486,160 $681,000
2014 Mar $151,000 $487,145 $735,000
2014 Apr $151,000 $497,479 $735,000
2014 May $151,000 $500,733 $735,000
2014 June $151,000 $502,751 $735,000
2014 July $151,000 $502,771 $735,000
2014 Aug $151,000 $506,750 $735,000
2013 Sept $30,000 $125,384 $365,000
2013 Oct $30,000 $126,303 $365,000
2013 Nov $30,000 $127,986 $365,000
2013 Dec $30,000 $127,469 $365,000
2014 Jan $30,000 $129,462 $365,000
2014 Feb $30,000 $131,160 $365,000
2014 Mar $30,000 $130,610 $365,000
2014 Apr $30,000 $131,247 $365,000
2014 May $30,000 $131,924 $365,000
2014 June $30,000 $133,665 $377,000
2014 July $30,000 $136,846 $377,000
2014 Aug $30,000 $136,624 $377,000
2013 Sept $145,000 $386,554 $656,662
2013 Oct $145,000 $382,295 $656,662
2013 Nov $145,000 $395,521 $656,662
2013 Dec $145,000 $394,529 $656,662
2014 Jan $145,000 $394,603 $656,662
2014 Feb $145,000 $393,032 $656,662
2014 Mar $145,000 $387,284 $656,662
2014 Apr $145,000 $391,396 $656,662
2014 May $145,000 $393,873 $656,662
2014 June $145,000 $395,812 $656,662
2014 July $145,000 $396,901 $656,662
2014 Aug $145,000 $397,563 $656,662
12 Of fshore October 2014 t

This month Infield Systems looks at offshore capex
distribution in Australia up to 2018.
Australia will continue to attract significant offshore
investment, with key operators Woodside, Chevron,
Inpex, and Shell projected to account for a combined
60% of the countrys capex. Woodside-operated develop-
ments are expected to require the highest levels of
offshore expenditure, with the Browse resources which
will require the use of three FLNG FPSOs projected
to account for almost 39% of the companys Australian
offshore investment over the timeframe. Chevron will
continue to invest in the Greater Gorgon Area, while its
Wheatstone project is anticipated to be the most capital
intensive field development that the IOC will develop
over the 2014-2018 period. Inpexs Ichthys field, which
requires an FPSO and semisubmersible platform, is
anticipated to require the largest offshore investment in
Australia over the next five years. While Shells Prelude
FLNG project is likely to account for almost 70% of the operators Australian offshore capex to 2018, with
the FLNG FPSO anticipated to be installed toward the end of the timeframe.
The floating platforms market in Australia is projected to see significant levels of investment to 2018,
supported by the growth of FLNG upon which Australia is anticipated to capitalize in order to exploit
remote offshore gas reserves as well as the development of other various floating developments such
as the Ichthys, Equus, and Laverda projects. Likewise the pipelines market is also projected to require sig-
nificant investment during the timeframe, driven by a number of subsea developments which are required
where deeper waters prevent the use of fixed platforms and thus require the use of subsea production
equipment, and long export pipelines including the Ichthys and Poseidon export lines. With increased
levels of offshore activity in Australia the demand for subsea infrastructure, and thus expenditure demand,
will undoubtedly increase over the next five years.
George Griffiths, Senior Energy Researcher, Infield Systems
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14 Of fshore October 2014 t

Analysts forecast steady
deepwater growth
Brazil will account for 32% of deep and
ultra-deepwater capex worldwide between
now and 2018, according to a report from In-
feld Systems. Overall, the market is set for
8% capital growth over this period, the au-
thors add. Other contributory factors will be
an increase in FLNG/FPSO projects across
Southeast Asia, Australasia and the Middle
East, and deepwater gas pipeline projects in
Europe such as Polarled in the Norwegian
Sea and South Stream in the Black Sea.
Infeld also foresees steep increases in
deepwater activity outside the established
Atlantic triangle area, including projects
such as the Krishna Godavari UD and Dhi-
rubhai developments off eastern India and
the giant Rotan offshore Malaysia, where
the PFLNG-2 facility is due to be installed in
2018. Infeld expects a total of 81 operators
to contribute to deep and ultra-deepwater
capex over the period compared with 55
during 2009-2013, with independents such
as Anadarko and Noble Energy among the
highest spenders.
North/Central America
Shell has resubmitted a draft plan to the
US Department of the Interior concerning
exploration drilling in the Chukchi Sea. Ac-
cording to the New York Times, the company
plans to use two rigs for a campaign in 2015
or 2016. Shell holds interests in three pros-
pects spanning fve offshore blocks.
Statoil and state-owned entity Petronic are
looking to collaborate on joint oil and gas ac-
tivities offshore Nicaraguas Pacifc coast.
They have submitted a request to the coun-
trys Ministry of Energy and Mines to ne-
gotiate concession contracts in the region,
where Petronic has authorized Geoex Inter-
national to acquire 32,000 sq km (12,355 sq
mi) of 3D seismic.
South America/
Caribbean Sea
BP has awarded Technip an EPIC contract
for the Juniper project offshore southeast
Trinidad. Technips Houston center will man-
age the program which includes construc-
tion of a 10,400-ton (9,434-metric ton) plat-
form, designed to process 590 MMcf/d (17
MMcm/d) of gas, and engineer and install a
10-km (6.2-mi) 26-in. rigid pipeline and asso-
ciated fexible fowlines, umbilicals, and other
subsea structures. Offshore work is expected
to start during the second half of 2016.
Petrobras has confrmed an extension of
a gas and light oil discovery in the Moita
basin area of the Sergipe-Alagoas basin off-
shore Brazil. Moita Bonita 3, the second well
in the BM-EAL-10 concession, was drilled 82
km (52 mi) from the Sergipe coast in 2,790
m (9,153 ft) of water. It encountered 40-m
(131-ft) thick reservoirs with good perme-
ability and porosity.
In the presalt Santos basin, the company
has submitted a declaration of commercial-
ity for three felds Sul de Guar, Nordeste
de Tupi, and Florim which it proposes to
rename Sul de Sapinho, Sepia, and Itapu.
Combined reserves are 1.214 Bboe. Produc-
tion from Sepia and Itapu should start in
2018 and 2020, respectively. Concept evalu-
ation continues for Sul de Guar.
Wood Group Kenny (WGK) is working
on conceptual engineering for Petrobras
presalt Lapa (ex-Carioca) feld, 170 m (273
km) off the south coast of Rio de Janeiro.
WGK is examining two alternative pipeline
heating systems, water or electrically trace
heated. Either would be a frst in a presalt
environment. The results will help deter-
mine options for a southwest area tieback
on the feld.
KCA Deutag subsidiary RDS is performing
a drilling front-end engineering and design
study for main contractor AMEC for the Sea
Lion development in the offshore North Falk-
land basin. This covers the drilling rig mod-
ules for the proposed TLP, to be installed 200
km (124 mi) north of the Falkland Islands.
West Africa
Nigerias Department of Petroleum Re-
sources has sanctioned development of the
Afren-operated Aje oil feld. The frst-phase
will involve tieback of two subsea production
wells to a leased FPSO, with start-up likely
in late 2015.
Mediterranean Sea
ADX Energy has been awarded an explo-
ration permit in the Sicily Channel offshore
southwest Italy, on trend with the companys
Kerkouane permit in adjoining Tunisian wa-
ters. The 363 C.R.AX concession includes
the abandoned Nilde oil feld, formerly oper-
ated by Eni.
Circle Oil is reporting a promising oil
discovery in the Mahdia permit offshore
Tunisia, 120 km (74 mi) east of the port of
Sousse. The El Mediouni-1 well, drilled in
240 m (787 ft) of water, encountered light
oil in the lower Birsa and upper Ketatna car-
bonates, with analysis confrming a working
petroleum system both for this and other
prospects. Discovered resources could be
around 100 MMbbl.
The Petrobel joint venture has brought
onstream the DEKA gas project in the Tem-
sah concession in Egypts offshore East
Nile Delta. Initial production is through the
Denise South-6 well, 65 km (40 mi) north of
Port Said in 100 m (328 ft) of water. JV part-
ners BP and Eni plan fve subsea wells on
various felds in the concession, linked via
sealines to the onshore El Gamil gas plant,
with production peaking at 230 MMcf/d (6.5
MMcm/d) early next year.
Noble Energy has a letter of intent (LOI)
to supply 1.6 tcf (45 bcm) of gas over a 15-
year period from the deepwater Leviathan
feld offshore Israel to Jordans National
Electric Power Co. Deliveries will occur at
a border location between the two countries,
with an initial sales volume of 300 MMcf/d
(8.5 MMcm/d). Noble says it now has more
than 60% of the 22-tcf (620-bcm) felds initial
capacity tied up in LOIs with customers in
the region.
The FPSO Cidade de Ilhabela left the Brasa
shipyard last month for sea trials ahead of
starting service on the Sapinho field in the
presalt Santos basin offshore Brazil. Owners
SBM Offshore, Quiroz Galvo Oleo e Gas, and
Mitsubishi will operate the vessel on behalf of
Petrobras and its block BM-S-9 partners BG and
Repsol. (Photo courtesy SBM Offshore)
1410OFF_14 14 10/1/14 3:57 PM
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1410OFF_15 15 10/1/14 3:57 PM
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Energean Oil & Gas has purchased the tender-assist rig Glen Esk
from KCA Deutag for use in a $225-million development program
offshore northwest Greece. The rig, to be renamed Energean Force,
is expected to start operations in early December. Energean plans to
drill 15 wells and install two new unmanned platforms on the Prinos
North and Epsilon felds.
Caspian Sea
Offshore delivery started last month of the topsides for the riser
block platform for Lukoils Vladimir Filanovsky feld in the Russian
sector. It will connect interfeld and export pipelines carrying oil
and gas. This month, transport was due to start on the ice-resistant
stationary platform that will be used for drilling. All four platform
topsides and bridges are expected to be in place by year-end.
Middle East
More development phases are nearing completion at the South
Pars gas-condensate feld in the Persian Gulf. The export pipeline
has been laid between the Phase 22 facilities and the Iranian main-
land, while a new platform at Phase 17 should enter service in Janu-
ary, adding 14.5 MMcm/d (500 MMcf/d) to the countrys output.
East Africa
A second drillstem test on the deepwater Mzia gas discovery off-
shore Tanzania has reduced reservoir risk ahead of a planned devel-
opment, according to operator BG Group. The DST was performed
on the Mzia-3 appraisal well in block 1 in 1,800 m (5,905 ft) of water,
6 km (3.7 mi) north of the discovery well, fowing up to 101 MMcf/d
(2.8 MMcm/d) of gas. BG now estimates recoverable resources
from blocks 1, 3, and 4 at 15 tcf (425 bcm). The drillship Deepsea
Metro-1 was due to transfer north to drill the Kamba-1 well in block 4.
Aminex has applied to Tanzanias Petroleum Development Co. to
convert an obligation for shallow-water seismic over its Nyuni Area
PSA to deepwater 3D seismic in the outboard sector. Aminex has
identifed a large prospect that appears analogous with other large
deepwater gas discoveries in neighboring blocks.
ION Geoventures has acquired an additional 2,330 km (1,448 mi) of
2D seismic over three blocks offshore the Union of the Comoros. Bahari
Resources and partner Discover Exploration commissioned the survey
which total around 18,000 sq km (6,950 sq mi) in the western part of the
Comoros. Interpretation to date indicates an extension of the same gas-
Energeans tender-assist rig will drill
development wells offshore Greece.
(Photo courtesy Energean)
1410OFF_16 16 10/1/14 3:57 PM
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rich reservoir play fairway offshore neighbor-
ing Mozambique.
Rosneft has started production from the
northern section of the Chayvo oil and gas
feld offshore Sakhalin Island. In the process,
the land rig Yastreb established a new record
for a long-reach well drilled from shore, the
company reports, with a drilled depth of 10,825
m (35,515 ft) and a horizontal displacement of
9,517 m (31,223 ft). The second well will be
around 11,000 m (36,989 ft) long. Rosneft was
also due to start drilling from the newly in-
stalled Berkut platform in the Sea of Okhotsk.
CNOOC has brought onstream the Wen-
chang 13-6 oil feld in the Pearl River Mouth
basin offshore China. Water depth is 120 m
(393 ft). Facilities include a wellhead platform
with 12 producing wells, fve of which were in
service last month.
Shell has discovered gas in the deepwater
Marjoram structure offshore Sarawak, Malay-
sia. Marjoram-1 was drilled in 800 m (2,624 ft)
of water in block SK318, 180 km (112 mi) from
shore. It follows a gas fnd earlier this year on
the Rosmari prospect in the same concession.
In the shallow-water SK408 permit, Sapura-
Kencana Energy notched its ffth gas discovery of
the year with Bakong-1, which intersected a gross
gas column of more than 600 m (1,968 ft) within
late Miocene carbonates. Total resources found to
date are more than 3 tcf (84 bcm). Petronas has
achieved start-up three months ahead of schedule
at the Banang oil feld development off peninsu-
lar Malaysia. This was the second feld onstream
in the KBM cluster (Kapal produced frst oil last
December). Facilities include a mobile offshore
production unit, a 600,000-bbl storage tanker, a
wellbay module, and a fexible fowline.
Idemitsu Oil & Gas has proven more gas
and condensate in blocks 05-1b and O5-c, 300
km (186 mi) offshore Ho Chin Minh City,
southern Vietnam. The well was spudded in
February, and drillstem tested in May and
August. The company and partners JX Nip-
pon Oil & Gas and Teikoku Oil plan to assess
other prospects on the block.
Also off southern Vietnam, the consortium
developing the TGT feld is aiming for frst oil
in September/October 2015 from the nearby
H5 accumulation. According to partner SOCO
International, the jackup Naga 2 was due to
start drilling the frst of fve planned wells from
the newly installed wellhead platform that will
be linked by pipeline to the FPSO serving the
TGT complex.
Husky-CNOOC Madura has awarded a LOI
to Bumi Armada Offshore for a leased FPSO
for the Madura feld development offshore In-
donesia. The location is 65 km (40 mi) east of
Surabaya and 16 km (10 mi) south of Madura
Island. Contract value is $1.18 billion over 10
years, with optional extensions.
Apache has discovered a potentially large
oil feld in the Canning basin offshore Western
Australia. According to partner Carnarvon Pe-
troleum, the Phoenix South-1 well in the WA-
435 permit encountered at least four discrete
oil columns in the Triassic lower Kerauden
formation. In-place reserves could be 300
MMbbl. The location is 110 mi (180 km) north
of Port Hedland in 435 ft (133 m) of water.
Santos is also claiming a signifcant fnd in
the Browse basin. The Lasseter-1 well, 480 km
(298 mi) northeast of Broome and 35 km (22 mi)
southeast of the companys Crown discovery,
intersected a 405-m (1,329-ft) gross gas/conden-
sate bearing interval. Lasseter is near the sites of
proposed LNG projects in the area.
1410OFF_17 17 10/1/14 3:57 PM
18 Of fshore October 2014 t
Statoil is considering a new type of unmanned
platform on Oseberg. (Photo courtesy Kvaerner
Oil and Gas)
Drilling technique
brings productivity gains
Statoil plans to step up use of Baker Hughes
SureTrak steerable drilling liner (SDL) ser-
vice on its wells offshore Norway.
According to a presentation at ONS Stavan-
ger, the company will employ the technique
on up to three wells this year after favorable
results on the Grane oil feld in the North Sea.
Next in line will be Oseberg in the same sec-
tor and Midgard in the Norwegian Sea, and
further applications could follow on greenfeld
developments including Johan Sverdrup and
Gina Krog.
According to Lars Hoier, Statoils senior vice
president research, development, and innova-
tion: The normal approach is to drill through
a formation, pull [the drillstring] out, and then
bring in the liner. However, there is a lot of
risk with hole stability in certain formations,
and the process takes time. With SDL, you
bring in the liner while drilling, which leads to
increased well robustness. The technique also
enables drilling of sections considered undrill-
able, and allows more optimal well placement
in some reservoirs, with a higher IOR factor.
In time, we think this could replace conven-
tional drilling on a regular basis.
Statoil frst challenged its vendors to de-
vise a solution in 2004. Baker Hughes re-
sponded and worked with Statoil during the
subsequent four-year development phase.
The technique was frst trialed on a Norwe-
gian feld in 2009-2010, followed by the frst
commercial applications in 2012-2013.
SureTrak employs proven rotary steer-
able/liner drilling technologies, including
the AutoTrak range. Aside from eliminating
the need to re-enter the borehole to run cas-
ing or liner, the rotary steerable system al-
lows continuous drilling without the need to
slow down to change direction.
Geir Tungesvik, Statoils drilling & well
senior vice president, said that although
the heavy-oil Grane reservoir is generally
productive, there are sections with reactive
shales that were causing the liner to collapse
when retracting the drillstring. So we were
having to drill above these shales, leaving oil
we couldnt recover. Use of SDL has allowed
the company to access 350,000 bbl from the
feld that would otherwise have stayed in the
ground. Another potential application, Tung-
esvik said, could be on Statfjord in the North
Sea. Although the reservoir is depleted,
there may be further volumes underneath
which until now we havent been able to ac-
cess due to pressure issues.
Huldra on the way out
In the North Sea, Statoil is looking to put
a new platform in and take an existing one
out. The company has commissioned a con-
cept study from Kvaerner Engineering for a
standardized, unmanned dry tree wellhead
platform for the Oseberg Future Develop-
ment project. The focus will be on minimiz-
ing facilities, equipment, and costs in water
depths down to 150 m (492 ft), and the result
could be the frst of a series of unmanned
wellhead platforms replacing traditional,
higher-cost subsea tiebacks.
The Huldra feld platform, which came on-
stream in 2001, ceased gas/condensate pro-
duction last month. Statoil will continue regular
maintenance on the facility until 2016, when
the jackup West Epsilon is due to arrive to begin
plugging the six production wells. The platform
comprises conventional topsides and a 154.5-m
(507-ft) tall jacket, each weighing 5,000 tons.
According to feld analysts ScanBoss, the com-
pany considered re-using the topsides for the
current Valemon development and also offered
the entire platform for sale on the Norwegian
version of e-Bay. Whether or not the facility
ends up being re-used or scrapped, it will have
to be removed from its current location.
Statoil says it will decommission the plat-
form no later than 2021. The company is re-
taining Huldras 160-km (99-mi), 22-in. pipe-
line to export Valemons gas to the Heimdal
complex, while the existing condensate line
to Veslefrikk will be left in situ.
Veolia Environmental Services UK has won
a contract to decommission Talisman Ener-
gys 14,000-metric ton (15,432-ton) oil produc-
tion MOPUstor platform, which never entered
service on the redeveloped Yme feld. Contin-
ued construction delays at Adyard in the UAE
led to the structure fnally being installed on
the feld in mid-2011. However, a year later
hookup and commissioning had to be halted
when cracks were discovered in grouting se-
curing one of the legs to the seabed storage
tank. Talisman then decided not to use the
platform and terminated the redevelopment.
Veolia says the structure will be removed in a
single lift operation and towed to Lutelandet,
southwest Norway, in mid-2015 for disman-
tling and subsequent recycling.
Norways growing
undeveloped resources
Wood Mackenzie claims Norway holds 10
Bboe of discovered resources that have yet to
be developed, of which more than 60% could
be commercialized. These are spread across
206 discoveries ranging in size from 1 MMboe
to the 2.4-Bboe Johan Sverdrup feld. Half are
in the North Sea with the remainder split be-
tween the Norwegian and Barents seas.
Another Wood Mac report details how al-
most half of Norways $200-billion development
spend over the next decade will be directed at
incremental projects, led by sgard and Ormen
Lange (subsea compression), Heidrun Nord
Flank, Valhall Vest Flank, and the Hod feld re-
development. These fve projects alone should
add estimated reserves of 1 Bboe, increasing the
felds recovery factor by an average of 9%. Com-
pared with the new Norwegian greenfeld devel-
opments, the average investment capex/bbl of
these projects is 30% lower, the analysts claim,
although some have incurred large increases in
costs that could erode their long-term value.
Denmark set
for further decline
Analysts Douglas-Westwood believe that Den-
mark could be a net importer of oil by 2021, with
the countrys North Sea production by that point
down to around 130,000 b/d, the lowest level
for 30 years. They point to continuing declines
in Denmarks North Sea felds, with production
halving this year to 192,000 b/d compared with
the peak of 389,000 b/d in 2004. A lack of large
discoveries has also held back the countrys up-
stream sector, they claim, while a paucity of fresh
developments has led to a decline in develop-
ment drilling, with just eight development wells
drilled over the last three years.
In the mid-term well completions should
rise during development of the high-pressure/
high-temperature Hejre feld, although ac-
cording to operator DONG Energy, work on
the topsides is behind schedule and this may
push back the start of production until 2017.
Douglas-Westwoods forecast does not take
into account the impact of two probable new
development projects. Maersk Oil & Gas has
submitted an $868-million plan to link the Adda
gas/condensate feld to its Tyra East complex
via a new 16-slot, unmanned platform and two
new subsea pipelines. Phase 1 calls for drilling of
eight wells, with start-up slated for late 2016.
1410OFF_18 18 10/1/14 3:57 PM
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1410OFF_19 19 10/1/14 3:57 PM
20 Of fshore October 2014 t
Operators advancing deepwater projects
with new and existing technologies
Work is proceeding on a number of deepwater production efforts
in the Gulf of Mexico, and recent announcements regarding the Big
Bend, Dantzler, and Jack/St. Malo projects are providing fresh evi-
dence of the Gulfs vitality as an E&P region.
Some projects are making use of existing infrastructure by tying
back to foating production facilities already in place, and some are
deploying huge new deepwater production facilities.
In mid-September, SBM Offshore reported that it had signed a
production-handling agreement with Noble Energy to produce the
Big Bend and Dantzler felds to the Thunder Hawk DeepDraft Semi
located in 6,060 ft (1,847 m) of water in the Gulf of Mexico.
First oil from the Big Bend and Dantzler felds is expected in late
2015 and 1Q 2016, respectively. At these levels, both felds will use
a maximum of 85% of total daily asset capacity. Brownfeld construc-
tion to upgrade the facility will be handled by Noble Energy.
The Big Bend feld is 18 mi (29 km) from the Thunder Hawk
platform in 7,200 ft (2,195 m) of water in Mississippi Canyon block
698. Noble Energy operates a 54% working interest in Big Bend,
alongside W&T Energy VI LLC (a wholly owned subsidiary of W&T
Offshore Inc.) with 20%, Red Willow Offshore LLC with 15.4%, and
Houston Energy Deepwater Ventures V LLC with 10.6%.
The Dantzler feld is 7 mi (11 km) from the Thunder Hawk platform
in 6,580 ft (2,006 m) of water in Mississippi Canyon block 782. Noble
Energy operates Dantzler with a 45% working interest. Additional
interest owners are entities managed by Ridgewood Energy Corp.
(including ILX Holdings II LLC, a portfolio company of Riverstone
Holdings LLC) with 35%, and W&T Energy VI with 20%. Big Bend and
Dantzler will be developed via a dual pipe-in-pipe loop system.
The Thunder Hawk DeepDraft Semi, installed in July 2009, was
developed as a steel catenary riser-friendly foater solution. The
deck and hull can be integrated quayside, avoiding costly offshore
lifting and system commissioning operations.
The Thunder Hawk platform allowed for a cost-effective develop-
ment solution for Noble Energy and its partners, said SBM CEO
Bruno Chabas. The deepwater semi solution offers numerous advan-
tages for subsea developments including reduced development capi-
tal, lower operating costs, and an accelerated development schedule.
Also in mid-September, McDermott International Inc. said it had
completed its work on the Jack and St. Malo project for Chevron USA
Inc. The project involved the installation of jumpers, fying leads, sub-
sea pump stations, umbilicals, and subsea landing of some of the indus-
trys largest and complex umbilical end terminations to a host foating
production platform in 7,200 ft (2,195 m) of water 279 mi (449 km) off-
shore Louisiana. The project is part of the frst stage of development of
the Jack South, St. Malo South, and St. Malo North drill centers.
McDermott says it executed in-house fabrication of 21 high-spec-
ifcation rigid fowline, manifold and pump jumpers, and installed
the structures using the Derrick Barge 50 (DB50) with its specialized
deepwater lowering system.
In addition, the DB50 installed more than 80 fying leads, fve ad-
ditional rigid production well jumpers, and other subsea control and
production boost components. DB50 was assisted by a feet of up to
12 support vessels delivering material from various Gulf Coast fabri-
cation and staging facilities to the offshore installation site.
Additionally, three control and two power umbilicals totaling 65 mi
(105 km) were transported and installed by the subsea construction
vessel North Ocean 102, along with other related subsea structures.
TDW performs subsea pressure isolation job
T.D. Williamson (TDW) says it was recently retained to isolate
pressure in a GoM riser so that a wye could be safely installed and
so that divers, who would be working 228 m (748 ft) subsea near the
open end of the line, would be safe.
For this job, TDW developed a custom solution that provided the dive spe-
cialist with a safe, reliable method of isolating the riser and platform from the
section that was to be prepared for the wye installation.
Before the line was isolated, it was imperative to determine whether the
line was piggable, and that the specially sized (or engineered) SmartPlug
tool would be able to negotiate the
tight bends in the riser to reach the
set location. TDW conducted a pig-
gability and pipeline stress simulation
study by bi-directionally running a
modifed gauge pig to simulate the
exact path of the isolation tool during
the forthcoming operation. The study
confrmed that the plugging tool
would successfully traverse the pip-
ing and reach its target destination.
Working from the platform, the
TDW crew launched the tool into
the riser. As it traveled through the
riser, the team onboard the support
vessel used its remote-controlled
SmartTrack tracking and monitor-
ing system which uses two-way,
through-wall electromagnetic com-
munication between a transponder
and a receiver to track the tools
progress, control its speed, and
monitor conditions in real time. When it reached its subsea set location
of 228 m (748 ft), the tool was set into position, where it remained for 3.5
days, isolating the riser against a pressure of 63 bar (914 psi).
With the line safely isolated, divers cut the line in preparation for
the tie-in. Throughout the operation, divers worked near the open-
ended line while the plugging tool prevented the gas from escaping.
The wye spool was installed, and the tool was retrieved through a
valve ftted with a temporary receiver. The procedure was complet-
ed on schedule and without incident.
Keeping the divers safe while installing the piggable wye on time
was a major achievement, signaling that the next step of the plan to
tie in the line to the new deepwater oil and gas project could pro-
ceed. The task was carried out using technologies offering continu-
ous pressure and subsea condition reports, giving the dive specialist
confdence to proceed with the installation.
T.D. Williamson recently used its Smart-
Plug tool to isolate pressure in a GoM ris-
er so that a wye could be safely installed
in advance of a tie-in to a new deepwater
oil and gas system in the Gulf of Mexico.
(Photo courtesy T.D. Williamson)
Noble Energy says it will produce the Big Bend and Dantzler fields via
tiebacks to the Thunder Hawk DeepDraft Semi located in 6,060 ft (1,847 m)
of water in the Gulf of Mexico. (Photo courtesy SBM Offshore)
1410OFF_20 20 10/1/14 3:57 PM
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offshore pipeline industry, with a primary focus on the inspection of pipe girth welds
utilizing both Real Time Radiography (RTR) and Automated Ultrasonic Testing (AUT)
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allowed SPS to grow equipment and personnel pools of the highest standard, serving
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1410OFF_21 21 10/1/14 3:57 PM
22 Of fshore October 2014 t
Subsea equipment
new DNV GL target
DNV GL has launched a new certifcation
scheme covering subsea equipment and
components. The target is to increase qual-
ity control and effciency through standard-
Some of the benefts enumerated by DNV
GL of the new standard and certifcation are
as follows:
* !rovide a predictable set ol documents
for integrators, equipment owners, or
operators; there will be a consistent set
of quality activities required of all sup-
pliers in a project.
* Reduce risk lor the integrators and
owners by having much of the verifca-
tion and review work completed on site
at sub-suppliers prior to being shipped
to integrators` sites lor assembly. Risks
will also be identifed at earlier stages
of a project.
* !mprove quality and, therelore, salety
by increasing the suppliers familiarity
with the requirements and specifca-
tions via the unifed and effcient de-
ployment of quality control plans for the
individual projects.
* Reduce pressure on the global supply
chains by facilitating the use of subcon-
tractors for inspection and surveillance
* Lnable suppliers to stock longlead
items. Short lead time is important in
the development of marginal felds and
The DNV GL standard aims to help in-
terpret existing A!! and !SO standards, and
the certifcate will provide operators with
confdence that fabrication quality is being
controlled and assured.
For operators, it will reduce costs with-
out sacrifcing quality, innovation, or safety
and subsequently shorten lead times. For
suppliers, it will increase predictability and
enable the strategic stocking ol longlead
items, said Bjrn Sgrd, segment director
lor subsea at DN\ CL Oil & Cas.
!n a related step, Statoil has asked DN\ to
organize a joint industry project to develop
subsea processing equipment interface
Think ol the modules as LLCO bricks.
By having standardized module dimensions
which may be assembled using standard tie-
ins, we may combine technology from differ-
ent suppliers and also cover several needs
through subsea solutions. This will reduce
costs and increase volume, says executive
vice president ol Technology, !ro|ects &
Drilling in Statoil, Margareth vrum.
Statoil believes that this standardization
initiative will help increase the number of
business cases for subsea processing and
reduce the cost of new projects. Standard-
ization will be important to secure a strong
and coordinated approach to the supplier in-
dustry in order to achieve the goal of more
proftable subsea developments.
A rst step lor the ]!! will be to collect
ideas, comments, and suggestions from
suppliers regarding the areas they believe
will beneft from standardization.
New vertical
subsea tree revealed
CL Oil & Cas has unveiled its Deepwater
\ertical Xmas Tree. !t is rated lor depths to
8,OOO m (9,84O lt). !t can be deployed with
CL`s nextgeneration remote electronics
canister, the SemStar5R. The company also
says its Mod!od subsea control module
with a 22O km (187 mi) range is designed
to complement the DVXTs modular layout,
with a exible network that can benet lu-
ture feld expansion and enhance access to
remote wells.
CL says the new tree expands its prod-
ucts portfolio of pre-engineered, pre-qual-
ifed modular systems, designed to enable
products to be brought to market laster.
!etrobras has awarded CL Oil & Cas a
$300-million-plus contract to supply subsea
manifold systems for presalt felds offshore
Brazil, in water depths up to 6,500 ft (2,000 m).
The scope includes eight manifolds that
will feature retrievable injection modules to
allow water-alternated-gas injection for up to
four wells, and system integration with sub-
sea controls.
All equipment will be manufactured in
!n Brazil during Rio Oil & Cas, CL Oil &
Cas presented its work on the Naxys A1O
integrated acoustic monitoring equipment.
The sensor uses acoustic sensing to identify
potential problems related to subsea opera-
tions and to nd any leaks that may be harm-
ful to the environment.
Baker Hughes, Aker
Solutions get OK on
subsea production alliance
Baker Hughes !nc. and Aker Solutions
have received regulatory approvals to form
a Subsea !roduction Alliance. The intent
was announced earlier this year when the
companies agreed to form an alliance to de-
velop technology for production solutions
designed to boost output, increase recovery
rates, and reduce costs for subsea felds.
The alliance is expected to combine Aker
Solutions subsea production and processing
systems with Baker`s well completions and
artifcial lift technology to deliver reliable,
integrated in-well, and subsea production
solutions that help mitigate risk, accelerate
output, and extend the life of subsea felds.
!n addition, the team aims to advance in-
dustrys well-intervention capabilities to op-
timize elciency and reduce risks in subsea
Cameron shows new
subsea controls system
Cameron has introduced the Mark !\ con-
trol system with three-points of distribution
(!oD) design as an option lor its subsea BO!s.
Cameron introduced the frst multiplex
BO! control system lor subsea drilling and
has developed the patentpending three!oD
stack design to provide additional redundan-
cy. Adding a third !oD can improve the sub-
sea control systems availability to as much as
98, and reduce the likelihood ol a !oDrelat-
ed stack pull by up to 78, the company said.
The new !oD design also ollers increased
lunctionality in a smaller, lighter package.
The simpler design can reduce leak paths
by using 50% less tubing compared to the
company`s previous two!oD design. Addi-
tionally, the number of available functions
has increased 33% to accommodate newer,
eightcavity stacks. !oD size was reduced
26%, and weight is one-third less than other
control !oDs.
Siemens to acquire Dresser-Rand
Siemens has agreed to acquire Dresser-Rand for $7.6 billion. The friendly takeover
bid is supported by Dresser-Rands board of directors, according to Siemens. The
transaction is expected to close by next summer.
Given the vision Siemens has for Dresser-Rand as its oil and gas company, and
its expressed wishes to build Dresser-Rands product and service portfolio with
some of the existing Siemens offerings that have previously been marketed sepa-
rately into the oil and gas space, it is clear that this is a transaction that should
create value for clients, as well as for both sets of shareholders, that would not have
otherwise been achieved had Dresser-Rand not become part of the Siemens group,
said Vincent R. Volpe Jr. CEO and president of Dresser-Rand.
Our intention is to leverage these strengths by maintaining the existing company
and brand name and selectively moving complementary products and services from
the existing Siemens portfolio into Dresser-Rand enabling us to offer a much broader
range of products, services and solutions to meet our customers needs, said Lisa
Davis, member of the Managing Board of Siemens AG.
1410OFF_22 22 10/1/14 3:57 PM
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as well as cost-efective intervention capabilities that will change the paradigm for subsea recovery
from new deepwater developments and mature felds. lnnovative solutions built on the bedrock
of industry-leading completion, production, and intervention products and services from
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1410OFF_23 23 10/1/14 3:57 PM
24 Of fshore October 2014 t
Ceona Amazon (Photo courtesy Ceona)
Ceona Amazon foats in Bremerhaven
and progresses to fnal outftting
Ceona has successfully foated the Ceona Amazon, the companys
new fully owned feld development vessel, in Bremerhaven, Germany.
The vessel was towed-out from the Crist yard in Poland, last April.
A major construction milestone was reached at the Lloyd Werft
yard in Bremerhaven, and is set for completion at the end of No-
vember 2014. All machinery, equipment, and the helideck have been
installed, with accommodation, piping, and electrical outftting in
progress. System commissioning is due to commence in the next
few weeks. Once work in Germany is completed, the vessel will
move to the Huisman yard in Schiedam for installation of a 570-ton
(517-metric ton) pipelay tower and the two 400-ton (363-metric ton)
cranes before entering into service in early 2015.
Ceona Amazon is a 653-ft (199-m) deepwater feld development
vessel. With a carrying capacity of 5,000 tons (4,536 metric tons) of
fexible or 8,500 tons (7,711 metric tons) of rigid pipe stored on and
below the 4,600-sq m (49,514-sq ft) deck, the vessel is equipped with
twin 400-ton AHC cranes capable of working in tandem lifting mode,
innovative on-vessel pipeline fabrication capabilities (welding, NDT,
and FJC), and a drillship-design hull operability.
Rowan Viking rig upgrade completed
Damen Shiprepair Vlissingen has completed an upgrade of a Kep-
pel Fels N-Class drilling rig, the Rowan Viking, one of the largest in the
North Sea, in 30 days less than was initially projected by the client.
The scope of the project involved extending three legs by 33 ft
to 591 ft (10 m to 180 m), a fve-yearly special periodic survey, and
bringing the rig up to standard for the acknowledgment of compli-
ance (AoC) certifcation required by the Norwegian authorities.
To achieve this goal, Damen Shiprepair Vlissingen adopted a new
approach: a project execution plan that allowed the three aspects of
the contract to be undertaken simultaneously. To enable this to hap-
pen, changes had to be made both to working practices and to the
organization of the yard itself, Damen stated.
The use of a Mammoet crane and Palfngers JUMP system were
also critical elements. The PTC crane was delivered on more than 100
trucks and was erected to a height of 656 ft (200 m) on special per-
manent foundations installed to bear the loads. This allowed the rig to
remain at sea level and the leg extension pieces to be lifted directly
from the shore on to the legs for installation. Palfnger supplied the
platforms that allowed the engineers to move up and down the legs at
heights of up to 525 ft (160 m) for ftting and welding.
Oceanteam Shipping partners
with Pacifc Radiance
Oceanteam Shipping ASA has secured, through its joint venture
DOT Holdings AS, an interest in a newbuild offshore support vessel,
resulting in a partnership with Pacifc Radiance Ltd. Closure of re-
maining conditions are expected to be fnalized in the coming month.
Once full closure is reached, the initial interest of DOT Holdings
AS is 50%, but the investment comes with an option to buy the re-
maining 50% after a period of seven years against agreed terms.
Ulstein Group introduces
design for harsh conditions
Ulstein Group has introduced the X-STERN, a vessel design fea-
ture that increases operability through positive effects on station
keeping, wave response, comfort, and safety in harsh conditions.
An X-STERN vessel can stay on position in harsh weather with the
stern toward waves, wind, and current. For vessels where the best pos-
sible motion characteristics are vital, positioning the X-STERN toward
the weather instead of the bow will be the captains natural choice.
The X-STERN leads to reduced pitch and wave drift forces, and
also eliminates slamming. Positive effects are reduced power and
fuel consumption while on DP, or the possibility of operating in a
wider sector with the same power consumption.
The X-STERN has several of the same characteristics as the X-
BOW, and additional ice operation capabilities. Its gentle displace-
ment reduces acceleration, pitch, and heave, improves comfort and
safety, and increases the operational window. There will be no sea
on deck, and reduced ice buildup in cold climates, due to the stern
shape and enclosed nature of the aft deck.
Strategic Marine unveils Generation 3 vessel
Strategic Marine has unveiled its Generation 3 crew transfer ves-
sel for international offshore markets. The new 40-m (131-ft) design
has been in development since 2013. In assessing areas to upgrade
the model, Strategic Marine focused on a more effcient hull; in-
creased passenger, fuel, and water capacities; higher payload; and
increased comfort.
The key beneft we can pass on is the major saving in fuel achiev-
able at speeds from 20-30-plus knots, said Reece Newbold, head
of Group Business Development. An actual saving in horsepower
of 10% at all speeds below 25 knots and even greater reductions in
horsepower over 25 knots have been realized. What this means in real
terms is a reduction in horsepower and fuel consumption to achieve
the 25 knots currently specifed by a large number of charters.
The hull has been designed with adaptability in mind, and the
propulsion packages can vary with a clients engine preference. The
seating cabin has been increased in size and can cater for 100 pas-
sengers. Improvements to the cargo deck area have also been made,
featuring a clear deck area of 120 sq m (1,292 sq ft).
The Gen 3 can also serve security/patrol boat duties, emergency
response, oil spill recovery, frefghting, general workboat duties, or
as a shadow vessel.
Generation 3 (Image courtesy Strategic Marine)
1410OFF_24 24 10/1/14 3:57 PM

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26 Of fshore October 2014 t
Gazprom Neft Shelf LLC says that the Prirazlomnoye facility is the worlds first project involving
oil extraction on the Arctic shelf by means of a stationary platform. (Photo courtesy Gazprom Neft
Shelf LLC)
Conservation takes
a different tack
There are many defnitions of the word
conservation. According to Websters New
Collegiate Dictionary, conservation is de-
fned as conserving, preserving, guarding,
or protecting. When applied specifcally to
natural resources, it relates to maintenance
and supervision.
This editor suggests an additional defni-
tion as applied to equipment or assets is ex-
tending useful life. The industry recently
experienced an excellent example of this lat-
ter defnition when Shell announced comple-
tion of its plan to use the Auger TLP to pro-
cess production from its Cardamom feld.
Discovered in 1995, the Cardamom feld is
located in Garden Banks block 427, about 225
mi (362 km) southwest of New Orleans. Verti-
cal depth to the reservoir is more than 25,000
ft (7,620 m). Water depth is greater than
2,720 ft (800 m), and the reservoir is subsalt,
making its discovery technically challenging.
The ultimate solution involved advanced ex-
ploration technology with its ability to image
beneath thick salt layers.
For its part, Shell exercised many of the
core principles of conservation in devel-
oping Cardamom production by making
maximum use of the existing Auger asset.
The decision was even more appropriate
considering that the Cardamom discovery
well was actually drilled from the Auger plat-
form. Although the decision to use Auger
required additional expenditures, the net
effect saved considerable cost. The expen-
ditures were needed to upgrade the existing
process train; install additional subsea re-
ceiving equipment; and increase the liquid
handling, cooling, and storage capacities.
Taking a global view, the decision was a
victory for conservation in many ways. First,
using the existing facility allowed Shell to tie-
back Cardamom wells to the mother ship
as they were completed. In fact, the frst
production from Cardamom began in 2010.
All the receiving and processing equipment
was already vetted, and had performed safely
and effciently for over two decades. This is
another way of saying that if there were any
bugs, they had certainly been remediated
by now. The tension-leg concept is a proven
one and several TLPs are currently produc-
ing oil around the world. Engineers deemed
that Auger had many years of useful life left.
Total gross ultimate recovery from Auger
was estimated at about 300 MMboe with a 2:1
gas/oil ratio. Cardamom ultimate recovery
is estimated at 35 MMboe. Augers produc-
tion capacity at the outset was expected to be
about 42,000 b/d of oil and 125 MMcf/d of
gas, but two separate upgrade projects raised
capacity initially to 72,000 b/d of oil and 165
MMcf/d, and later to 100,000 b/d of oil and
300 MMcf/d of gas. Adding more than 10%
ultimate recovery to an already proftable as-
set is conservation at its best.
Deepwater tiebacks have increased in popu-
larity as a way to conserve infrastructure. Why
build a new production facility if you can tie sub-
sea wells back to a facility already in place? This
is particularly benefcial if the existing facility is
under-utilized. The Independence Hub was de-
signed to accept gas production from 16 felds,
process it and commingle it, ultimately ship-
ping it to shore in a 20-in. pipeline. The Inde-
pendence Hub is operating under its maximum
capacity today, so it too could offer an economic
solution to a neighboring producer.
Recently, Statoil also employed this strat-
egy with two tiebacks offshore Norway. In
mid-September, the company reported that
it had started production from the Fram H-
North and Svalin C satellites in the Norwe-
gian North Sea. These are the eighth and
ninth of the companys fasttrack develop-
ment projects offshore Norway.
Fram H-North, thought to hold around
10 MMboe recoverable, is in the Troll area.
It has been developed using a standardized
subsea template that can accommodate four
wells, and is connected by 5 km (3.1 mi) of
pipeline and umbilicals to the existing sub-
sea template on Fram West A2.
Svalin C in the Grane area contains just
over 30 MMboe. Development called for a
subsea facility with two wells, 6 km (3.7 mi)
southwest of the Grane platform.
The plan for development and operation
(PDO) for Svalin C was submitted in June 2012
and approved by the Ministry of Petroleum
and Energy in November 2012. The Fram H-
North partners took their investment decision
in summer 2012. In this case, the project was
exempt from having to submit a PDO.
Statoil says drilling and well activities on
Fram H-North turned out to be more diff-
cult than expected, while Svalin C encoun-
tered issues connected to deliveries of the
control system for the subsea template, re-
sulting in a delayed production start.
Millionth barrel produced
at Prirazlomnoye
Meanwhile, in the Russian arctic, Gaz-
prom Neft Shelf LLC is employing a dif-
ferent strategy. The company recently an-
nounced that the Prirazlomnoye feld has
produced its millionth barrel of oil. A tanker
is currently being loaded, and a further two
tankers will transport around 1 MMbbl of oil
from the Prirazlomnoye feld before the end
of the year. In total, 2.2 MMbbl are expected
to be produced at Prirazlomnoye in its frst
Prirazlomnoye is the worlds frst project
involving oil extraction on the Arctic shelf by
means of a stationary platform. Extraction as
part of pilot production began in December
2013. The new Prirazlomnaya offshore, ice-re-
sistant, stationary oil production platform was
developed for this feld to facilitate all techni-
cal operations, including drilling, extraction,
oil storage, preparation, and shipping.
One production well has been drilled and
an injection well should be completed soon.
There are plans to complete the main drilling
work for an absorption well by the end of 2014.
Four more wells are to be drilled in 2015. In
total, the project will involve the commission
of 36 wells, comprising 19 production wells, 16
injection wells, and one absorption well.
The Prirazlomnoye is 60 km (37 mi) off-
shore in the Pechora Sea. Recoverable re-
serves of oil at the deposit are in excess of
70 MM metric tons (77 MM tons). Gazprom
Neft Shelf LLC is the project operator and
subsurface license holder.
1410OFF_26 26 10/1/14 3:57 PM
1410OFF_27 27 10/1/14 3:57 PM
28 Of fshore October 2014 t
Seismic survey list starts
offshore Africa
TGS announces acquisition of a 3D multi-
client survey offshore Sierra Leone. The sur-
vey, Sierra Leone Block 4A Extension, will
add 1,000 sq km (386 sq mi) of new 3D data
to the existing 6,268 sq km (2,420 sq mi) of
3D data library in Sierra Leone.
TGS is chartering the 12-streamer Polar-
cus Alima for this survey. Data processing
will be performed by TGS and will be avail-
able to clients in 1Q 2015.
The survey is supported by industry
Dolphin Geophysical will acquire and
process a 7,000-sq km (2,703-sq mi) SHarp
Broadband 3D survey offshore Senegal for
Kosmos Energy.
The Dolphin high-capacity 3D vessel Po-
lar Duchess has started to work and it will
take an estimated four months to complete.
Dolphins OpenCPS software will be used
both onboard the vessel to produce a Post-
STM Fast-Track dataset and then for the
fnal PSTM volume at the companys UK
Processing Centre.
Aminex and its partners plan to focus on
the deepwater portion of the Nyuni Area
PSA offshore Tanzania following a detailed
technical review.
The company has applied to Tanzanias Pe-
troleum Development Co. to vary the Nyuni
Area work program for the shallow-water
seismic obligation, originally planned for this
year, to be converted to deepwater 3D seis-
mic in the outboard sector of the PSA area.
Here Aminex has identifed a large poten-
tial prospect that appears to be analogous
to some of the recent major deepwater gas
discoveries in neighboring blocks. It plans
a tender process for a contractor to acquire
3D data over the Pande West lead and to
identify other potential drill-ready prospects.
However, a larger farm-in partner will
be needed to help share the costs of any
deepwater drilling. Current participants in
the Nyuni Area PSA are Aminex subsidiary
Ndovu Resources (70%, operator), RAK Gas
(25%), and Bounty Oil & Gas (5%).
Dolphin also will perform an industry
frst ever 16-streamer 3D seismic contract
for an undisclosed client in the Kara Sea.
The contract has a duration of approximate-
ly three months starting in 2Q 2015. Dolphin
will use one of the high-capacity ice classed
3D seismic vessels for the survey and take ad-
vantage of its wide-tow capabilities by towing
a large 16-streamer confguration with 100 m
(328 ft) separation to acquire the seismic data
in as short a time as possible.
a supplement agreement from Statoil Petro-
leum AS worth $1 million for multi-client 3D
EM data acquisition in the Norwegian Sea.
EMGS expects to commence the survey
soon, after completing the survey for Statoil
announced in June in the same area, using
the vessel Atlantic Guardian.
Dolphin enters realm
of software processing
Following the award of several processing
projects, Dolphin Geophysical wholly owned
subsidiary Open Geophysical Inc., has won
its frst contract valued at more than $1 mil-
lion to supply software to a national oil com-
pany. This contract marks Dolphins entry
into supplying advanced and user friendly
processing software.
Dr. Gareth Williams, chief geophysicist, said
Our processing and imaging business is set for
rapid growth on the back of a larger feet, entry
to new market segments such as depth imag-
ing and re-processing, and increased software
sales. To facilitate this growth, our Singapore
P&I team have recently moved into a larger
offce, our UK hub will relocate and expand in
3Q and we also expect our Houston processing
center to be operational in 4Q 2014.
#MVFCBDL 3FTFSWPJS has released Blue-
back Toolbox plug-in for Petrel version 15.
The Blueback Toolbox suite contains Pe-
trel function features not available in standard
Petrel. It has been developed by Blueback
Reservoir using Petrels Ocean development
framework. All functionality has been devel-
oped based on requests from Petrel users
around the world and the development is co-
ordinated with the Petrel software teams at
Split into four domain modules, the Blue-
back Toolbox is a collection of more than
100 plug-in features complementing current
Petrel workfows and has proven to save
time for Petrel users, Blueback says.
Version 15 supports Petrel 2014 and the
new Ribbons user interface. In addition the
new version contains several new and ad-
vanced tools, like the wavelet editor which
allows the user to perform operations; like av-
erage, shift, and fip on one or more wavelets,
in addition to the waveform classifcation
that searches seismic data for matching wave-
forms to aid classifcation of seismic data and
identifcation of facies types.
4DIMVNCFSHFS has launched its Quanta
Geo photorealistic reservoir geology service.
The new service includes the industrys frst
microresistivity imager that produces ori-
ented, photorealistic, core-like images of the
formation in wells drilled with oil-base mud
The physics of the Quanta Geo services
high-resolution array of 192 microelec-
trodes overcomes the electrically resistive
barrier imposed by OBM.
Using the companys Techlog wellbore
software, Quanta Geo data are rendered,
creating an image of 0.24-in. resolution that
resembles a whole core. Geologists inter-
pret these images in the same manner that
they would perform continuous core de-
scription, with the added beneft that these
images cover a longer continuous interval
and are precisely oriented. This enables ex-
traction of key reservoir parameters such
as the structural dip, or the identifcation of
sand body type, extent, and orientation.
GAC Group has signed a frame agreement for ship agency services with Norwegian
seismic company Petroleum Geo-Services for its oil and gas exploration activities
globally. Under the agreement, GAC will provide support for vessels chartered and
owned by PGS calling at ports worldwide. (Photo courtesy PGS)
1410OFF_28 28 10/1/14 3:57 PM
Sergipe Discovery Wells
Sergipe 2014 Phase 1 (New Acquistion) - 16,000 km
Sergipe 2013 Reprocessing - 8,130 km
+1 281 647 0602
Brazil: Sergipe Alagoas
Spectrum has commenced a 16,000 km Multi-Client
2D seismic survey offshore Brazil in the Sergipe and
Alagoas Basins along the Eastern Margin of Brazil.
The new acquisition program will tie key wells in the
Basins, including the recent Barra, Muriu, and Farfan
discoveries. PreSTM and PreSDM data will be available
in Q4 2014.

To supplement the new acquisition in this active
exploration area, Spectrum has completed the
reprocessing of 8,130 km of data through both PreSTM
and PreSDM and is offering this data to industry in
order to get a head start on the expected upcoming
round in 2015.
Spectrum Multi-Client 2D PSDM
seismic from Sergipe Alagoas 2014
Reprocessing near Barra well
New 2D Multi-Client Seismic Data Available
1410OFF_29 29 10/1/14 3:57 PM
30 Of fshore October 2014 t
Manuel R. Suarez
Kumana & Associates
Large amounts of oil and gas reserves are in remote offshore loca-
tions. Oil is normally produced offshore and transported to onshore
process facilities via pipelines or FPSO vessels. Oil processing units
are often located in coastal areas; however, their characteristics pre-
clude any considerations of moving them offshore. Gas on the other
hand, depending mainly on volume, distance to processing facilities,
and expected production life of the reservoir could be transported
to shore or processed offshore in fxed facilities (platforms) or in
foating units.
New technologies allow some processes to be moved offshore
where gas volumes previously fared or re-injected can now be pro-
cessed economically.
A clear trend in the near future is for more gas processes to move
offshore. With LNG already a reality in fxed or foating units, the
question is which process will move next. An obvious candidate is
Gas-To-Liquids (GTL), originally conceived for applications with
stranded gas streams that could not very well be processed and sent
to markets. Advantages include no cryogenics, no high pressures,
simply come out of the feld with market-ready liquid products.
Some of the essential characteristics that processes should have
to be feasible offshore are scalability and modular unit confguration
(not just modularized construction). In the case of foating units,
an additional requirement is fexibility with respect to the feed gas
to allow the unit to operate in different felds.
Three options for GTL have been successfully implemented in
commercial scale onshore: Fischer-Tropsch (FT), methanol to gaso-
line (MTG), and single loop syngas to gasoline (STG).
Of the three, only STG meets all the offshore requirements. FT
and to some extent MTG still need work to develop economically
feasible small-scale units. STG produces syngas via steam methane
reforming (SMR) and is cost effective in scales as low as 6,000 b/d
of fnal product: 90+ octane gasoline. There are STG units suitable
for fared gas in the 500 to 2,000 b/d range of product.
Offshore processes
The chemistry and therefore the basic control strategy and op-
erational philosophy of a given process are essentially the same in
onshore and offshore environments. However, a key difference is
the lower tolerance for incidents in offshore units. This results in
more demanding operating and maintenance standards where envi-
ronmental liability risks and high mitigation costs can well preclude
moving certain processes offshore.
Offshore is essentially the same as facilities in coastal regions
where oil and gas facilities are common. The tilt and motion-induced
vibration in foating units may require attention in some areas like
special bearings in rotating equipment and operating conditions in
process equipment involving liquid-liquid or vapor-liquid contact
(e.g., scrubbers, absorption, distillation towers).
Blow downs and emergency dumping of vessels (e.g., reactors)
have to be carefully examined and avoided if possible. To make pro-
visions for them in offshore facilities where space is severely limited
is expensive and may not be possible.
Best practices
Consider this incident in an onshore site. In Fischer-Tropsch pro-
cesses hydrogen is produced by the water gas shift reaction: H
CO + H
O = 2H
+ CO
(1). During the startup of one of these units
at an Eastern European refnery, as reformed gas feed reached the
adiabatic shift reactor, the steam fow meter suddenly dropped to
zero and soon after the temperature readings in the bottom section
of the reactor started to get abnormally high. An instrument special-
ist was sent to check the steam fow meter and to replace the high-
reading thermocouples. With zero steam fow, the perceived heat
source, the temperature could not be going up.
When the specialist reached the reactor, saw that the bottom in-
sulation had fallen off and a red-hot bulge was visible in the night.
The fow meter and the thermocouples readings were all correct.
With no water (steam) fow, reaction (1) is replaced by the highly
exothermic methanation reaction: 3H
+ CO = CH
+ H
O (2).
The startup was delayed for months and the losses aggravated by
site clean up and major equipment replacements.
Had this taken place offshore, the losses would have been much
higher. In an offshore setup, any incident likely to put a hole in the
factory foor is sure to put a much bigger one in the ventures bot-
tom line.
Some of the practices that should have prevented this incident
are very much the same as those required to successfully move and
operate processes offshore:
* Adequate interdisciplinary training lor engineers, operators,
and maintenance technicians in the four main branches: elec-
trical and instrumentation, chemical engineering, mechanical
engineering, and electrical engineering. This is just core engi-
neering knowledge not onshore or offshore specifc.
* !rocess design by multidisciplinary team including operational
philosophy narrative, control strategy, procedures, and safety
issues associated with each process step.
Shamefully enough, this is not happening as it should.
In industry, an indication that the process control was left entirely
to E&I with little or no input from process engineering is the over-
abundance of alarms and interlocks, some times to the point of seri-
ously impairing proper operation. This is observed in various offshore
facilities and many onshore facilities.
* Beware ol easy" solutions with tools lor process design (e.g., dy-
namic simulation, hardware-in-the-loop, safety packages, auto-con-
fgured alarm systems, etc.) that claim to be almost plug-and-play/
no experience required. They are usually excellent tools but tools
only, not a replacement for solid core engineering knowledge.
Also, when moving a process from onshore to offshore, be specially
aware if the process uses standard, pre-engineered equipment designed
for oil and gas onshore operations that may not be suitable for offshore. If
so, instead of a savings, a hidden faw would be introduced in the design.
And especially offshore, with water all around, the hidden faw sel-
dom remains hidden.
Some of the practices that should have prevented this
incident are very much the same as those required
to successfully move and operate processes offshore.
More gas processes are heading offshore
1410OFF_30 30 10/1/14 3:57 PM
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1410OFF_31 31 10/1/14 3:57 PM
32 Of fshore October 2014 t
Christopher Hannan
Baker Donelson
Over the last year, the US Coast Guard
(USCG) has focused on normalizing the regu-
latory sphere on the outer continental shelf
(OCS) by making a concerted effort to give
industry defnitive parameters.
In February, the USCG Marine Safety and
Security Council released the winter issue of
its quarterly magazine Proceedings: Journal of
Safety and Security at Sea, entitled The Outer
Continental Shelf: One Shelf, One Standard.
The journal provided many insights into the
long- and short-term outlook regarding the
regulatory environment on the US OCS; and
noted the rapid technological advances that
have advanced OCS capabilities into deeper
offshore waters, outstripping the scope and
content of existing regulations.
In addition to the regulatory outlook set
forth in Proceedings, the USCGs rulemaking
over the last year has exhibited the One
Shelf, One Standard approach to regulating
industry on the OCS.
The USCG issued a notice of proposed
rulemaking (NPRM) to seek comment on a
proposed rule that would require all vessels
engaged in OCS activities including both
domestic- and foreign-fagged vessels to
develop, implement, and maintain a vessel-
specifc [Safety and Environmental Manage-
ment System (SEMS)] program that incorpo-
rates [API RP 75] . . . to be. . . compatible with
a designated lease operators SEMS required
under [BSEE] regulations. (78 Fed. Reg.
55230 [Sept. 10, 2013]).
This SEMS requirement would solve the
problem of BSEE-USCG overlap by render-
ing SEMS applicable to all vessels and fa-
cilities across the board on the OCS. This
proposed USCG SEMS rule also notes that
many vessels currently operating on the
OCS are subject to compliance with the Safe-
ty Management System (SMS) standards of
the International Safety Management (ISM)
Code (as promulgated by the International
Maritime Organization and applicable under
USCG regulations at 33 CFR Part 96).
Thus, the USCG is seeking comments
regarding whether the ISM SMS standards
(or even others issued by the International
Association of Drilling Contractors or Inter-
national Standards Organization) could con-
stitute as an alternative means of satisfying
SEMS requirements for OCS vessels.
Likewise, the USCG has issued two calls
for comments regarding a draft policy letter
on DP systems, emergency disconnect sys-
tems, blowout preventers, and related train-
ing and emergency procedures on mobile
offshore drilling units (MODUs) in light of
the potential for catastrophic environmental
damage and loss of life in the event of a DP
failure on a MODU on the OCS. (77 Fed.
Reg. 26562 [May 4, 2012]).
Finally, the USCG issued an NPRM in
May 2013 proposing the adoption of API RD
2 for all vessel-mounted cranes on MODUs
and offshore supply vessels (OSVs), which
would again solve the problem of BSEE-
USCG regulatory dichotomy by simply ren-
dering all cranes on the OCS (vessel-mount
or rig-mounted) to the same standards. (78
Fed. Reg. 27913).
These recent instances in which the USCG
has adopted and/or reacted to the prior edicts
of BSEE are consistent with the One Shelf,
One Standard trend. As a result, vessel opera-
tors working on the OCS need to be aware of
new rulemaking by both BSEE and the USCG
and perhaps even the IMO that may be
applicable to vessel and/or vessel related op-
erations, and should consider submitting com-
ments in response to any NPRMs issued by
both agencies as and when appropriate.
Finally, and most recently, effective Aug.
18, 2014, the USCG followed through on its
promise in the Proceedings winter journal and
issued an interim rule setting forth compre-
hensive regulations for a new class of US-
fagged large OSVs more than 6,000 tons.
(79 Fed. Reg. 48894).
As it has done in the SEMS NPRM, the
USCG looked to international standards to
establish unifed set of regulations for the in-
dustry on the OCS. At a high level, the new
regulations set forth comprehensive stan-
dards for large OSVs to meet safety needs by
establishing design and operation standards
for this class of vessels newly available in the
US domestic feet. The USCG has adopted
certain pre-existing USCG standards for
smaller OSVs and other vessel types with simi-
lar attributes to these large OSVs (i.e. tanker
and cargo vessels); adopted wholesale certain
standards under various international conven-
tions; and developed certain of its own hybrid-
ized regulations derived from international
standards supplemented by the USCG.
The USCG notes that it has never re-
quired OSVs to comply with international
standards as a fag state in the past. In short,
the interim rule seeks to establish a unitary
regulatory regime for large OSVs, to avoid
the prior practice (before the Coast Guard
Authorization Act) of certifcating what were
effectively large OSVs via multiple certif-
cates under a hodge-podge of standards that
applied directly to non-OSV types (i.e. chemi-
cal and petroleum tank vessels). This interim
rule will allow for a streamlined, single certi-
fcation for multi-purpose OSVs.
In its continued quest for unitary stan-
dards in the ever-expanding oil patch, the
USCG notes in the interim rule that it may
initiate a separate, broader rulemaking to ad-
dress issues common to OSVs of all sizes.
The path forward
USCGs vision, as set forth in the One
Shelf, One Standard issue, highlights some
of the recent on-the-ground steps the USCG
has taken to put this vision into practice.
Other prominent regulatory issues and/or
new regulatory initiatives include:
cieties are considering changes to exist-
ing regulations to prolong the life cycle
of TLP mooring systems using new tech-
Center of Offshore Expertise is evaluat-
ing USCG licensing standards to deter-
mine proper requirements for licensing
of ballast control offcer, barge supervi-
sor, and offshore installation manager.
synergies in terms of their dual and some-
times overlapping spheres of regulatory au-
thority on the OCS. For example, MODU
and fxed facility oversight and informa-
tion exchange; updating and revalidation
of legacy USCG/BSEE agreements; and
the development of a new memorandum
of understanding regarding inspection re-
sponsibilities for offshore vessels that ser-
vice and/or construct renewable offshore
energy projects.
al state regulations (33 CFR Subchapter
N) to ensure that all MODUs, foating fa-
cilities, and vessels both foreign-fagged
and US-fagged operating on the OCS
are held to the same standards. These
new regulations will incorporate indus-
try consensus and international stan-
dards, which will set the framework to
keep pace with the rapidly evolving tech-
nology employed on the OCS.
rules to address dynamic positioning (DP)
standards (pursuant to its fag state author-
ity under Title 46), and has also initiated
non-regulatory efforts to foster DP safety
and gather information for a potential rule
in the future.
Dove-tailing off of its discussion of the
current OSV construction boom, the USCG
noted that its fnal rules for inspection and
certifcation of large OSVs more than 6,000
tons would be published in the near term to
give effect to the 2010 Coast Guard Autho-
rization Act, which removed the prior statu-
tory bar prohibiting US-fagged OSVs more
than 6,000 gross tons.
USCGs path forward: A unitary regulatory approach to industry on the OCS
1410OFF_32 32 10/1/14 3:57 PM
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1410OFF_33 33 10/1/14 3:57 PM
34 Of fshore 0ctober 2O14

Prelude turret sets new standards
for size, capability
Equipment will moor the FLNG facility of f northwestern Australia
hells Prelude FLNG project offshore northwestern Australia
continues to push the technology boundaries with a number
of frsts. The mooring turret system for the vessel is no ex-
ception. At almost 100 m (328 ft) in height it is the largest in
the world. This part of the system weighs 4,300 metric tons
(4,740 tons) alone.
The turret construction contract is held by Dubai Drydocks
World and consists of fve parts, all shipped from Dubai to Geoje,
South Korea.
The frst module was completed in September 2013 and loaded
onto a ship for transport to Geoje, where it was installed into the hull
before it was foated, said Marjan van Loon, VP Development LNG &
Integrated Gas for Shell. Once complete, the 93-m (305-ft) high tur-
ret will be the largest non-disconnectable internal turret in the world.
One design target is the ability to stay on location in all sorts of
weather up to and including Class 5 cyclones. The turret is designed
to swivel, or weather vane as the prevailing winds and ocean cur-
rents change direction, while the turret moorings remain fxed to
the ocean bottom.
The turret mooring system consists of four groups of four lines, a
total of 16, that reach from the vessel to anchor points in about 250
m (820 ft) of water depth. The lines are made of a chain and wire
combination that connect the turret mooring system to seabed an-
chor piles that are 65.5 m (215 ft) long and 5.5 m (18 ft) in diameter.
The chain links are about 1 m (3.2 ft) long and are among the largest
ever manufactured. The chain connectors are designed to affx the
vessel substructure to the mooring lines for 25 years.
The turret also connects the subsea fowlines/risers between the
subsea production equipment and the Prelude vessel. The vessel
is 488 m (1,600 ft) long, 74 m (243 ft) wide, and will weigh 600,000
metric tons when its cargo tanks are loaded.
The turret was designed by SBM Offshore in Monaco and built at
Dubai Drydocks World starting in 2012. It will join the FLNG vessel
at the Samsung Heavy Industries shipyard in Goeje, South Korea,
where the facility is under construction.
Once complete, Prelude FLNG will operate in a remote basin around
200 km (124 mi) off Australias northwest coast, for around 25 years. It
will produce about 3.6 MM metric tons (3.96 MM tons) of LNG a year,
along with 1.3 MM metric tons (1.43 MM tons) per year of condensate
and 0.4 MM metric tons (0.44 MM tons) per year of LPG.
The vessel topsides processing installation will turn the natural gas
produced by the subsea wells into liquid natural gas for delivery into
specialized ships that will take the gas to shore. In this manner, there is
no need for a pipeline to shore and the dredging that would accompany
it, nor for a shore-based processing facility to turn the produced gas into
LNG. It will be the frst-ever application of Shells FLNG technology.
An FLNG requires a somewhat different approach compared to
conventional LNG carriers, said van Loon. Normally, LNG carrier
cargo tanks at sea are either completely full or empty, whereas an
FLNG facility will fll over time as the gas is processed on board and
stored, and will only partially empty when an LNG carrier loads.
Therefore, the LNG tanks have been designed to withstand car-
go liquid motion forces, or sloshing forces, when only partly full.
From 2005-2011, Shell participated in a joint industry program
Gene Kliewer
Technology Editor, Subsea & Seismic
The hull of Shells Prelude FLNG
project is under construction at
the Samsung Heavy Industries
shipyard at Geoje, South Korea.
(All photos courtesy Shell)
1410OFF_34 34 10/1/14 3:57 PM
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Challenges in deepwater production are complex and command our attention to develop solutions that are
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1410OFF_36 36 10/1/14 4:19 PM
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The Prelude mooring turret begins its trip from
Dubai to South Korea.
looking at the fundamentals of sloshing.
We performed full scale (1:1) and large
scale (1:6) focused wave impact studies in fume
tanks, said van Loon. Scaling and hydro-struc-
tural effects were investigated. The studies de-
livered new insights into physical phenomena
of sloshing, revealed complexities of fuid inter-
actions against actual LNG membrane systems
with raised elements, and advanced industry
knowledge and methods.
As a result of this study, Shells FLNG design
has a dual row of tanks based on GTT MKIII
containment system, with a reinforced primary
membrane and a triplex secondary barrier.
Sloshing damage prevention measures and en-
hancements to the design reinforce the contain-
ment system integrity. Instead of the standard
single row of membrane tanks that one might
fnd on an LNG carrier, an FLNG facility will
have pairs of side-by-side tanks.
Prelude will have six LNG tanks, four LPG
tanks, and two for condensate which can store
up to 220,000 cu m of LNG, 90,000 cu m of
LPG, and 126,000 cu m of condensate.
The total storage capacity is equivalent to
around 175 Olympic swimming pools, said
van Loon in relating the capacity numbers to
a more familiar comparison.
After the frst 25-year assignment, Prelude
FLNG could be refurbished and moved to a
different feld for another quarter century.
The facility is designed to have a 50-year
life span. We expect to have the facility at one
location for around 20-25 years, before bring-
ing it back to dry dock for refurbishment and
then potentially moving it to a new develop-
ment, said Nicholas Kauffmann, Shells
FLNG project manager.
We have had to adapt our processes and
change the layout of the plant so some ele-
ments are stacked rather than placed side by
side, reducing the overall size of the facility so
that it can be sent out to sea, said Kauffmann.
Dont forget that while the Prelude facility is
big, it is also small taking up one-fourth the
area of an equivalent onshore LNG plant.
To accomplish that, Shell has adapted a lot
of existing technology to use. Among these,
Kauffmann said, are the following:
* Close coupling between the producing
wells and the LNG processing facility
This is the physically short length from
one to the other
* Mooring systems making it bigger lor
the largest foating facility ever built and
dealing with the associated forces
* The marinization ol processing equipment,
so that it will work on a moving facility
* Water intake risers, as water will be used
as part of the cooling process needed to
turn the gas into LNG
* LNC tanks that can handle sloshing that
is the motions of the liquid LNG within
the hull if and when there are stormy seas
* LNC oloading arms which will trans-
fer LNG from the facility to the ships
moored alongside two moving facilities
instead of just one.
We feel there is large potential for FLNG
projects going forward and many deployment
opportunities, said van Loon. We expect
Prelude to be the frst of many more FLNG
projects to come. We have developed a long
term relationship with TSC to ensure that the
key lessons and replication opportunities are
applied to our future FLNG projects. We are
working further partnerships and plays for
future projects.
Shell is the operator of Prelude FLNG in joint
venture with INPEX (17.5%), KOGAS (10%) and
O!!C (5), and is working with longterm stra-
tegic partners Technip and Samsung Heavy In-
dustries (the Technip Samsung Consortium).
FLNG will enable the development of gas re-
sources ranging from clusters of smaller more
remote feldsto potentially larger feldsvia
multiple facilities where for a range of reasons
an onshore development is not viable, said Pe-
ter \oser, CLO, Royal Dutch Shell.
In addition, FLNG reduces the cost and en-
vironmental footprint of LNG development,
Voser explained, because there is no need for
long pipelines or onshore development such
as roads, laydown areas, and accommodation
Voser also noted that Shell has established a
center of excellence for FLNG. We have called
it the FLNG Program Team, he said. This
team captures, applies, and extends key lessons
from Prelude FLNG. It provides a growing pool
of commercial and technical expertise for new
FLNG projects.
1410OFF_37 37 10/1/14 3:57 PM
38 Of fshore 0ctober 2O14

Ichthys project
reaches peak
construction activity
ustralias Ichthys project is now offcially half way to comple-
tion. Three mega-projects in one, the Ichthys project will in-
volve some of the largest offshore facilities in the industry,
signifcant onshore infrastructure, and an 889-km (552-mi)
pipeline connecting the two. When complete, the pipeline
will become the ffth-longest subsea pipeline in the world.
To date, all 889 km (552 mi) of the 42-in. pipeline has been pro-
duced and coated, and pipeline construction started mid-year. The
Saipem pipelay vessel Semac-1 is installing around 120 km (74.5 mi)
of pipe through Darwin Harbour and beyond before transferring it
to a deepwater lay barge, Saipems Castorone, which will take it all
the way to the Ichthys feld.
Throughout the year, 30,000 metric tons (33,069 tons) of equip-
ment and 400 km (249 mi) of fexible and rigid lines will be installed
on the seabed to gather and distribute the process fuids to the wells
and the production liquids from them. Subsea structure fabrication
and rigid pipeline assembly is well advanced in McDermotts and
Heeremas yards in Batam. Flexible riser production is also in prog-
ress at various locations in Europe including the 110-m (360-ft) high,
7,000-metric ton (7,716-ton) riser support structure that will be in-
stalled by Heeremas deepwater construction vessel Aegir.
The production drilling rig Ensco 5006 is undergoing 175 days of
extensive upgrades before being towed to the feld to commence
drilling the frst production wells in October 2014. By 4Q 2014, the
frst topsides will be lifted on to the central processing platform
(CPF) and FPSO hull, paving the way for modules integration and
then commissioning.
Project scope
The Ichthys reservoirs are located in the Timor Sea around 200
km (124 mi) off the Western Australian coast, more than 800 km
(497 mi) southwest of Darwin. There are two geological horizons
with a total of around 12 tcf of gas and 500 MMbbl of condensate.
This makes it the largest discovery of hydrocarbon liquids in Aus-
tralia in more than 40 years.
Once in production, most condensate will be transferred from the
CPF to the nearby FPSO for offshore processing. The remainder
will be sent to Darwin with the gas via the pipeline.
The huge FPSO one of the largest and most sophisticated to be
deployed worldwide will be positioned about 3 km from the CPF to
treat and export the condensate. The 336 m by 59 m (1,102 ft by 193.5
ft) hull has now been launched from the dry dock at the Daewoo Ship-
building and Marine Engineering shipyard in Okpo, South Korea. De-
signed with a storage capacity of nearly 1.2 MMbbl, the FPSO will be
a weather-vaning ship-shaped vessel that will be permanently moored
on a non-disconnectable turret. The turret is one of the most complex
pieces of equipment used on the project.
Major contractors
Some of the worlds best known contractors are engaged for the
tang as the detailed engineering subcontractor
engineering contractor
Italy (Nuovo Pignone) and France (Thermodyne)
Wendy Laursen
Contributing Editor
The Ichthys FPSO will
be positioned about
3 km from the central
processing facility to
treat and export the
The Ichthys reservoirs are located in the Timor Sea around 200 km (124
mi) off the Western Australian coast, and are projected to be the largest
discovery of hydrocarbon liquids in Australia in more than 40 years. (All
photos/images courtesy INPEX except where noted)
1410OFF_38 38 10/1/14 3:57 PM
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|rem keeer t October 2014 Of fshore 39
* The subsea production system is being
supplied by \etco, part ol CL group
* The umbilical, risers and ow lines
L!C! contract has been awarded to
McDermott. The installation has been
subcontracted to Heerema
* The gas export pipeline contract has
been awarded to Saipem with the shal-
low water part subcontracted to Semac
and Boskalis lor the dredging and rock
* GO ol the pipe will be supplied by Mitsui
with Luropipe in Cermany. Nippon Steel
and Sumitomo will supply 2O each. Lx-
ternal coating, including concrete coat-
ing, and internal ow coating is the re-
sponsibility ol Mitsui/ Bridero Shaw.
Pipeline challenges
The 42in. pipeline has taken a total ol one
and a hall years to manulacture. !t has 75,OOO
|oints, G9O,OOO metric tons (7G,O59 tons) ol
steel and will weigh 1.2 megatonnes (1.822
MM tons) including the concrete coating. !t
will take a year to install with over GOO peo-
ple working on the pipelay barge.
]arrad Blinco is leading the pipeline team
at !N!LX: We decided on using three mills
to provide supply chain redundancy and
schedule exibility," he said. We had 1OO ol
their capacity lor quite some time, but we se-
quenced the work to provide a steady, continu-
ous supply ol pipe to the coating yards."
The pipeline coating process starts with an
internal ow coat application to enhance the
ow perlormance characteristics ol the gas
stream, lollowed by an external anticorrosion
asphalt enamel coating. !t is then coated exter-
nally with concrete ol varying thicknesses to
provide additional weight which helps pipeline
dynamic stability on the seabed.
Because it`s such a long pipeline, the sea-
bed is highly variable," Blinco commented.
The pipeline traverses sand, clays, silt and
rocky outcrops, but one unexpected element
was on the approach to the eld, where we
discovered a big escarpment about 8O m (98
lt) high. So today, il you look at the pipeline
route you can see there`s a big dogleg as we
avoid this geohazard."
Blinco lurther explained that while we
could have engineered a solution to span the
escarpment, we decided on a dillerent route,
providing a solution which satised the nec-
essary robustness lor operating a hydrocar-
bon pipeline lor the lull development lile. !t`s
an asset that needs to operate without any
compromise lor the 4Oyear lile span ol the
!chthys development. Also, the pro|ect is a
rst lor !npex as an operator, so we adopted
a conservative approach."
The shallowwater lay barge is an anchored
vessel which works outside ol the cyclone
season. This mitigates risk associated with
cyclone avoidance because ol the slow re-
sponse time typical ol anchored vessels. She
will have a 12point anchored mooring sys-
tem that she uses to navigate her way along
the pipeline route," said Blinco. The deep-
water pipelay vessel is a newbuild and quite
unique. She can actually prelabricate triple
|oints inside the vessel hold belore transler-
ring them into the ring line lor nal welding
into the pipeline. !t`s a big shipshaped vessel,
with capacity lor 7OO people and as big as an
aircralt carrier. !t`s extremely elcient with
much ol the process automated. Because
she`s so big, she can`t work in shallow water,
hence the other barge."
!ipeline construction in Darwin involves
The Ichthys field will include an offshore central processing facility; a floating production, storage, and
offloading (FPSO) facility; tankers; and an 889-km (552-mi) subsea pipeline to move the gas to market.
1410OFF_39 39 10/1/14 3:57 PM
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winching onshore at the landfall site via a
3-km shore-pull, employing buoyancy tanks,
roller boxes, and a 600-metric ton (661-ton)
linear winch. After roughly 120 km (75 mi) of
pipelay with the shallow-water lay barge, the
pipeline will be transferred to the deepwater
pipelay vessel via industry standard abandon-
ment and recovery procedures. The pipeline
will then be laid all the way to the Ichthys
feld before terminating with the worlds larg-
est subsea driverless connector incorporated
into a pipeline end termination assembly.
Topside design strategy
Ichthys LNG project director for offshore,
Claude Cahuzac, says the CPF is designed
to stay on site without dry dock for 40 years:
This is taken into account in our design
specifcations but also in the lay out of the
hull where any part is accessible and can be
inspected. All equipment on board has been
specifed for 40 years. Lay-out and topsides
design as well as the redundancy of the equip-
ment allows for maintenance and replacement
without production shut down, he added.
In the Northern Territory and offshore
from the Kimberley region the number of
cyclones and strength is well known, Cahu-
zac observed. But here we face an additional
challenge we are in a zone of cyclone forma-
tion, which means we do not have much time
to anticipate. Therefore the CPF is designed
to survive 10,000-year return conditions and
to be operable in 200-year return conditions.
The cyclone season runs from November to
April, and while wave heights are not extreme
by North Sea standards, wind speed can be
extreme. The size of the CPF and therefore
the control of the weight is one of the main
challenges that INPEX faces. A strict control
of the weight has been implemented during
the FEED. Optimization studies have been
carried out which resulted in modifcation to
the design, layout, and material specifcations.
The size of the topsides, and its square
shape, has an impact on ventilation and risk
of blast. Quantitative risk assessments have
been conducted during FEED resulting in
modifcation to decks and column height to
improve ventilation.
Production drilling
Production will come from 20 subsea wells
in the frst phase of the project, although
50 will be drilled in total. The 30 remaining
wells from a further eight drill centers will be
drilled at a later stage to maintain gas produc-
tion as the two reservoirs are depleted over
the life of the feld. Wells will be drilled using
directional drilling technology allowing for
the clustering of wells and subsea facilities,
and well centers have been designed to ac-
commodate 4-6 wells. Drill depths for the frst
phase of 20 wells will be dependent on a num-
ber of factors, but well depths will range from
approximately 4,200 m to 6,500 m (13,779 ft to
21,325 ft). The feld lies in water depths rang-
ing from 235 to 275 m (771 ft to 902 ft).
The project is underpinned by sales and
purchase agreements that cover the total
production volume of 8.4 MM metric tons a
year (9.26 MM tons/yr) of LNG for 15 years
with shipments scheduled to begin in 2017.
Approximately 70% of the contracted Ichthys
LNG will go to Japanese utilities; the remain-
der will go to Taiwanese markets.
When operational, the project is expected
to produce 8.4 MM metric tons of LNG and
1.6 MM metric tons (1.76 MM tons) of LPG
per annum, along with approximately 100,000
b/d of condensate at peak. Production is
scheduled for the end of 2016.
The Saipem Castorone deepwater pipelay vessel will take the project over from the Semac-1 once the
shallow-water sections of the pipeline are placed. (Photo courtesy Saipem)
1410OFF_41 41 10/2/14 7:57 AM
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Australian research aims
to reduce pipeline, drilling costs
Wendy Laursen
Contributing Editor
ustralia has invested heavily in the oil
and gas industry but with increasing
capex and the ever-increasing demand,
the country is focusing heavily on R&D
to help mitigate costs while continuing
to attract foreign investments to develop its oil
and gas reserves.
Australian researchers have pinpointed three
areas in which costs can be decreased through
innovation and new technology.
An estimated 1,864 mi (3,000 km) of pipe-
line is planned offshore Australia over the
next 10 years at a cost of more than $15 bil-
lion, and with 30% of this relating to stabiliza-
tion measures, operators have a vested inter-
est in reducing pipeline cost.
Pipeline stability in Australia is uniquely chal-
lenging due to the onerous metocean and sea-
bed conditions, and the prevalence of light gas
pipelines. Current design approaches are fawed
because they neglect the potential benefts of sea-
bed mobility. This mobility, for example through
scour, changes the topography and strength of
the seabed. If scour holes form around a pipe-
line, the hydrodynamic lift is reduced and the
soil support is altered. The pipe may sag into the
scour hole, and as the scour holes spread along
a pipeline, self-burial may occur.
A new R&D concept, O-Tube, recently
launched to help alleviate pipeline costs. De-
veloped by Woodside Petroleum Ltd., Chev-
ron Australia, Wood Group Kenny, Atteris
PTY Ltd., and the University of Western Aus-
tralia (UWA) as part of the Stable Pipe JIP, O-
Tube was built by an UWA in-house technical
team led by Winthrop University professors
Liang Cheng and David White.
O-Tube is a facility that rapidly circulates 66
tons (60 metric tons) of water to simulate un-
derwater conditions during tropical cyclones.
The program has provided signifcant eco-
nomic benefts to Woodside including the life
extension of one of Australias most important
pipeline assets the trunkline from the North
West Shelf Venture gas plant on the Burrup
Peninsula to the offshore North Rankin A plat-
form. It has also been used for optimization
studies for Chevron Corp.s Wheatstone proj-
ect pipelines, providing signifcant savings, ac-
cording to the company.
O-Tube experiments allow direct measure-
ment of the pressures applied to a pipeline by
cyclonic waves with up to 1 in 1,000-year return
periods. The changing topography of the seabed
is captured by digital imaging methods includ-
ing binocular infrared scanning. This allows new
theoretical methods to be developed for predict-
ing seabed morphology. Once calibrated against
the O-Tube results, these methods then provide
a basis to optimize the design of seabed pipelines
and other offshore infrastructure.
1410OFF_42 42 10/1/14 3:58 PM
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logical Innovation.
Mobile foundation, mudmats
UWA professor Susan Gourvenec is devel-
oping a mobile foundation that could replace
mudmats, which are used to support subsea
fowlines. Mudmats, typically 16 to 49 ft (5 to
15 m) in edge length, can at times measure
more than 131 ft (40 m). Mudmats transfer
the weight of the structure they support over
a suffciently large area of the seabed to avoid
settlement, resisting the lateral loads applied
by the connected pipelines as they undergo
cycles of thermal expansion and contraction.
Gourvenec said that as developments move
into deeper water, seabed soils can be extreme-
ly soft, requiring larger and heavy mudmats,
and installation from a heavy-lift vessel. This
adds to project expenses. As an alternative, her
mobile foundation technology acts in a way that
is similar to snow skiing except that it would
just move a few meters to absorb some of the
loads experienced by the fowlines.
Improved drilling technology
Professor Brian Evans of Curtin University,
a member of the Deep Exploration Technolo-
gies Cooperative Research Center, works with
other universities, mining and drilling compa-
nies, and the Australian Commonwealth Sci-
ence & Industrial Research Organization to
deliver new mine site drilling technologies of
the future.
One of the major road blocks to any explo-
ration and production program in both oil and
gas, and mining, is the cost of drilling, he said.
His research team is working on a system to
achieve what promises to be a future para-
digm shift in drilling technology.
There is a belief that the cost of offshore drill-
ing could be reduced if drilling rigs used a coiled
tubing operation. This would reduce the amount
of pipe stored on board the rig deck, allowing a
reduction in rig size, and reduce the number of
personnel needed on the rig, said Evans.
By using a coiled tube drilling rig, the objec-
tive of the research is to develop a mineral ex-
ploration drilling rig which can drill boreholes
at a cost of $50 per drilled meter. It is expected
that the drilling rig will drill 1,640-ft (500-m)
exploration holes within the next fve years,
with only two operators controlling the rig,
and logging-while-drilling being controlled in
real-time. The use of sensors embedded in the
composite coiled tube laminated would allow
electronic chips to operate while drilling; and
sampling of cuttings would be done on board
while the automated sample sensing would be
controlled by one of the two operators.
However, the next step to reduce offshore
costs further would be to run the rig on the
seabed. If this coiled tubing rig could be
made to operate underwater, replacing the
two men with ROVs, as is common in todays
oil and gas production world, then it would be
possible to drill around the year, going into
Arctic waters for the frst time, and staying
under the ice cap or water, without the prob-
lem of any rough weather on the surface.
Evans admits this is something of a dream
right now, but that it could be developed
over the next decade. Automated offshore
seabed drilling has to be the way forward in
the future for the industry.
Coiled tube drilling. (Photo courtesy professor
Brian Evans of Curtin University)
1410OFF_43 43 10/1/14 3:58 PM
44 Of fshore 0ctober 2O14

ONS 2014 highlights next-phase deepwater
drilling, subsea recovery challenges
Jeremy Beckman
Editor, Europe
eepwater engineering contractors out-
lined their visions of the way forward
at the recent Offshore Northern Seas
exhibition in Stavanger, Norway.
Representatives of Aker Solutions
and Baker Hughes detailed some of the goals
behind the companies new Subsea Produc-
tion Alliance, announced in April, which is
offcial after clearing all regulatory hurdles.
It combines Aker Solutions offerings in sub-
sea production and processing with Baker
Hughes strengths in well completions and
artifcial lift. The duo will work to deliver in-
tegrated, in-well and subsea production sys-
tems to improve the yield from, and extend
the lives of subsea felds; and enhanced well
intervention to optimize effciency and lessen
the risks in subsea projects.
Ian Ayling, subsea production business
development director at Baker Hughes,
said there was potential for growth subsea
worldwide, and the industry was looking to
achieve the same returns as from dry tree
developments. But subsea capex is increas-
ing, while resultant revenues are staying the
same or are in decline.
Ayling noted that such challenges are be-
coming much more diffcult: Development
is extending into geologically more complex
formations presalt, deeper, hotter, higher
pressure and in more remote locations, all
of which require more innovative develop-
ments. The onus is on service companies
to address these issues, he added, while at
the same time fnding ways of reducing the
costs. Challenges for production include
boosting the performance and recovery fac-
tor of subsea wells. Often recovery is below
10%, and thats not acceptable we must fnd
ways to improve it.
Jonah Margulis, Aker Solutions director
of business development, said the alliance
would look to steer subsea well manage-
ment planning away from heavy workover
systems to light intervention, with easier
access to subsea trees. Earlier engagement
with clients during concept evaluation would
make a difference, he added, long before
the decision is taken on the completion sys-
tem. As for boosting subsea recovery, the
alliance can offer a wide range of single or
multi-phase pump solutions combined with
different types of intelligent completion and
artifcial lift solutions, he pointed out.
Margulis also said the alliance would work
on technologies including subsea-optimized
downhole electric submersible pumps; inte-
gration of ESPs into subsea well jumpers for
single-well boost or dual-boost applications,
potentially in existing brownfeld wells; me-
dium-cost light intervention risers deployed
from a rig, and ultimately riserless interven-
tion; and on ways of lifting oil longer distanc-
es to platforms, although we will need the
power to do that.
Adaptable deepwater tree
GE Oil & Gas introduced DVXT, a 5- x 2-in.,
10,000-psi (689-bar) deepwater monobore verti-
cal tree with tubing head spool (THS), designed
to operate in up to 3,000 m (9,842 ft) of water, in
a temperature range of -18C to +151C (-0.4F
to +304F), and with a design life of 30 years.
Mike Lenham, GEs subsea trees senior appli-
cations engineer, said the new system incor-
porates various advances that came out of dia-
logue with the companys major customers, but
at the same time relies on proven technology,
i.e. valves and connectors.
DVXT can be deployed on drill pipe, wire,
or the completion/workover riser string,
said Lenham. Or you can run the BOP on
top of the tree and the landing string to do
workovers instead of using a completion in-
tervention riser. We can customize fexibility
into the design according to the customers
The new tree is also fully integrated with
GEs latest generation SemStar5-R controls
system, pressure sensors, and ModPod sub-
sea control module. We could add virtual
fow metering, Lenham said.
Other features include 5.25 MMft/lb bend-
ing capacity connector; standard alloy 625 clad
pipe overlay for the production bores, sealing
Aker Solutions and Baker Hughes are combining their strengths in subsea technology. (Illustration
courtesy Aker Solutions)
GE vertical tree. (Illustration courtesy GE Oil & Gas)
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surfaces, and valve pockets this allows the
system to operate in a broader range of tem-
peratures than super duplex, Lenham said. A
compact design allows the tree to pass through
a 16 x 16-ft (4.8 x 4.8-m) moonpool.
Depending on the specs, the typical weight
is 52 metric tons (57 tons) for the tree and
32 metric tons (35 tons) for the THS which
houses a wellhead adapter and tubing hanger
we can take tooling from our horizontal
trees and attach it to this, Lenham added,
and the running tool for the hanger is pro-
vided with a soft landing. In line with emerg-
ing requirements, the DVXT also incorpo-
rates a 130-in. valve block, which compares
with 98-in. for horizontal tree valve blocks.
GE foresees demand for the new tree range
in most established and emerging deepwater
regions, and off northwest Europe. The com-
pany is establishing a new facility in Batam,
Indonesia, to build and test these trees. It is
expected to be operating within two years,
Lenham said.
Chris Phebus, GEs engineering director,
subsea products and projects, said the company
expected subsea production to grow between 9%
and 15% during 2012-2020. Deepwater is putting
tremendous loads on our equipment, Phebus
explained. Current pressure limits are 15,000
psi [1,034 bar], with 20,000 psi [1,379 bar] to
come we are developing BOPs and wellheads
for these conditions. Higher-temperature down-
hole environments will also have to be taken
into account. For a while we were designing
equipment for 250F [121C], Phebus added.
Today its for 350F [177C], and theres talk
now of 450F [232C]. To this end, we are look-
ing at materials issues such as increased creep
and higher yield strength. This could mean ei-
ther changing equipment internals or enhancing
them with improved geometry.
GE is also considering requirements for
ultra-long offset subsea production out to
220 km (137 mi) using fber optic technol-
ogy; ice interaction with subsea equipment in
arctic environments; and lifting recovery from
subsea wells using GE equipment from the
global average of 35% to 60%. We can refne in-
tervention to clean up wells and get more out
of them, Phebus said, combined with subsea
compression and pumping. But its also criti-
cal to get more power from the surface to the
seabed to do this the main challenge is the
HV connectors.
Semisub more stable
in rough seas
KBR subsidiary GVA showcased its latest
drilling submersible, the GVA 8000. This is
designed for operation across a range of en-
vironments, from harsh to benign, and from
relatively shallow to ultra-deepwater (70-
3,000 m/230-10,000 ft). However, its low mo-
tion characteristics, high deck load capacity,
and structural strength makes it well adapted
for deeper water, GVA claims. The same ap-
plies to the maximum rated drilling depth of
40,000 ft (12,000 m).
The twin-hull confguration is connected
via transverse bracings, four columns, and
a box-shaped deck structure. The deck box,
which contains most of the machinery spac-
es, is designed to provide strength and added
buoyancy during extreme conditions. Two
enclosed decks provide a large area for mate-
rial handling and equipment, more spacious
than on previous GVA semis. Total deck pay-
load is more than 8,000 metric tons (8,818
tons), with additional payload for fuids in the
columns and pontoons.
According to project manager Daniel An-
eljung, the company views the new design
ultimately as a replacement for the GVA 7500,
of which the ninth rig is currently under con-
struction. We believe the GVA 8000 will pro-
vide the best motions and operability of any
rig operating in the North Sea, said Aneljung.
Most often it is the heave motion that causes
rigs in this region to stop drilling in harsh
weather, so we have optimized the hull shape
1410OFF_46 46 10/1/14 3:58 PM
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to better withstand these conditions.
Its a question of playing with dimen-
sions and the ratio between displacement
and the water plane area, or with the shape
of the pontoon columns, Aneljung added.
Also, with this design we have the possi-
bility of increasing the operating draught
typically 23 m to 27 m (75.5 ft to 88.6 ft)
for improved heave response during BOP
handling or other heave-sensitive opera-
tions. In this regard we have done a lot
of analysis and comparisons with similar
designs, based on model tests. We believe
we have achieved the best heave response
compared with all our competitors.
Aneljung says oil companies are ask-
ing for improved heave response and
motion in order to extend drilling in
strong wave conditions in the North Sea and
west of Shetland, and also in areas such as
offshore Australia. This includes deepwater
off South Australia, where BP plans explo-
ration drilling. The GVA 8000 is adapted to
take into account these extremes.
GVA has worked with Statoil on the new Cat
D workhorse semisubmersibles that are de-
signed for a range of tasks on Statoils mature
North Sea felds. Statoil focused strongly on
the working environment, green environment,
and safety, Aneljung explained, including
ample space for materials handling, avoiding
the lifting of heavy equipment onboard the
rigs, and good visibility from the two main
deck cranes. We have taken a lot of these ideas
for the GVA 8000.
The Norwegian authorities have also pressed
for improvements in station-keeping, and their
requirements have been incorporated into the
new semi. During drilling, the rig can operate ei-
ther with DP-3 thruster control or with a 12-point
mooring system. This compares with eight
mooring lines for previous rig designs. The
change follows numerous recent incidents in
rough seas.
On the eight-point mooring systems we
had the maximum chain dimension accept-
able for operations in the North Sea, An-
eljung noted. To increase capacity, we have
expanded the number of lines so that the rig
can stay in position to drill in harsher condi-
tions. This arrangement is more secure, but
it is not mandatory 12 lines should only be
needed for shallower water, harsh environ-
ment operations.
Some of GVAs clients have noted that
the new rigs mud handling capacity is greater
than on the companys previous semis, An-
eljung adds, with four mud pumps in base con-
fguration, with the possibility to add a ffth.
The large mud pump capacity allows for a
split system between OBM, WBM, and com-
pletion fuid. For better circulation, handling
and access the mud storage tanks are cylin-
drical and are all located in the columns. The
mud pit capacity may be increased further by
additional pontoons.
The GVA 8000 drilling semisubmersible.
(Illustration courtesy GVA)
1410OFF_48 48 10/1/14 3:58 PM
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1410OFF_49 49 10/1/14 3:58 PM
50 Of fshore 0ctober 2O14

RPSEA continues technology advance
with ultra-deepwater R&D projects
Gene Kliewer
Technology Editor, Subsea & Seismic
Take-up spool
To atm
Flow meters
Process gas
Purge gas


Spinning gas
Acetone spray
nozzle CNT product
Schematic of the carbon nanotube manufacturing process being devel-
oped at NanoRidge Materials Inc. (Illustration courtesy RPSEA)
he business of advancing technology continues as the Re-
search Partnership to Secure Energy for America (RPSEA)
moves forward with its transition into the role of technical
coordinator under NETL/DoE (National Energy Technology
Laboratory/US Department of Energy) management in 2015.
RPSEAs Ultra-Deepwater Conference recently held in Houston
not only reviewed the status of programs under way, but also took
a look ahead at how the organization might function in the future.
While RPSEA Strategic Advisory Committee representative Van
Romero of the New Mexico Institute of Mining & Technology noted
that there may be legislation to re-institute the program in the fu-
ture, it would continue to function in its original form until the end
of this year. Taking up the explanation of near-term changes, James
Pappas, acting RPSEA president and Ultra-Deepwater Program vice
president, said the existing programs would be under NETL/DoE
management after years end, at which point RPSEA would become
the technical coordinator for ongoing research and development.
Moving beyond 2015, Pappas pointed at the US Department of the
Interiors Ocean Energy Safety Institute (OESI) program as one place
RPSEAs experience and abilities would be useful. OESI is intended to
facilitate exploration and production in collaboration with the public,
and has drilling as its initial focus. The Institute is designed to facilitate
research and development, training, verifcation of best available and
safest technology (BAST), and implementation of operational improve-
ments in offshore drilling safety and environmental protection, blowout
containment, and oil spill response. It is functioning under a $5-million,
fve-year agreement with Texas A&M Engineering Experiment Sta-
tions (TEES) Mary Kay OConnor Process Safety Center in partner-
ship with the University of Texas and the University of Houston.
This presents an opportunity, Pappas said, to overcome an infor-
mation-sharing barrier among operators, and a place to collect data
on near-miss safety events, along with the establishment of com-
mon terms to improve recognition and discussion of such events.
He also said the establishment of BAST criteria requires industry
Other current and prospective joint industry projects (JIP) he
mentioned that could beneft from RPSEA participation included
the Paulson 3C downhole fber optics program, the Battelle work on
technology to replace air guns in seismic surveys, and the Bastion-
led work on a pyrotechnic intelligent subsea accumulator.
Technology reports
The fnal results of several JIPs along with interim status discus-
sions were presented at the UDW conference.
Phase 1 of the Ultra-Deepwater Dry Tree System for Drilling and Pro-
duction in the Gulf of Mexico was summarized by Jenny Yan Lu of DNV
GL. The project objective was to develop and mature two dry-tree drill-
ing platform concepts that would be cost competitive with a spar. The
basis for the project was that with a dry tree, the well could be drilled,
completed, and worked over from the same foating platform. Also, such
an installation would be less dependent on mobile offshore drilling unit
(MODU) support and would be more cost-effective for marginal felds
with the installation and commissioning taking place quayside. While
there were a number of dry-tree system concepts, they had in common
the reduction in heave motion needed for a topside BOP. The two ap-
proaches selected were Houston Offshore Engineerings paired column
design and the Kvaerner feld development long-stroke design.
While there are some vibration induced motion details that need
further study, the HOE hull confguration was found to be usable in
central GoM metocean conditions in 8,000-ft (2,438-m) water depth.
Jelena Vidic-Perunovic of Doris Inc. discussed the results of the
study relating to the prospective use of round hull foaters in the GoM.
While the Phase 1 concluding report is not yet complete, the study
suggests that there are advantages to circular-shaped hulls, and that
VIM studies were needed to investigate the response characteristics.
DNV GL is the prime contractor and is responsible for making sure
both concepts are developed with the same design basis and that each
concept has addressed its unique design challenges.
Reverse-circulation cementing
Circulation in deepwater wells is a topic of research interest, too. RP-
SEA heard the fnal report on deepwater reverse-circulation primary
cementing from Crystal Wreden of CSI Technologies. The project ob-
jective was to assess reverse circulation cementing to reduce circula-
tion pressure requirements in deepwater. Accessing the annulus from
the rig foor in deepwater is one hurdle, and new downhole tools may
be the answer. One such tool under development is a crossover design
based on a gravel pack tool that can work for both conventional and re-
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verse-fow cementing is probably the quickest
route to success. A second tool under study is
one that can switch the cement fow between
the annulus and the drill pipe, and this maybe
the better long-term solution. Contributing to
the work is a program developed for use by
the University of Houston (UH) that can simu-
late reverse cementing. Existing programs
worked for onshore cementing, but deepwa-
ter cementing is not as straight-forward. The
new program takes into account the fact that
deepwater reverse cementing shows higher
temperatures than do onshore applications.
Also the equivalent circulating densities differ
between conventional and deepwater reverse
circulation cementing. With these additions to
the program, the UH derivation can fgure a
critical depth equation that can indicate wheth-
er there is an ECD beneft to reverse circula-
tion. Among the benefts determined by the
research is the fact that reverse-circulation
cementing can reduce the pumping time re-
quired for placement and that it can cause the
cement to thicken in a shorter time and higher
in the hole than conventional methods.
Another related program concerns develop-
ing best practices for cementing in deepwater
using oil-base or synthetic-base drilling muds.
Since OBM and SBM are incompatible with
cement slurries, their benefcial properties
become a detriment when cementing. The in-
compatibilities from cross contamination, mud
residue in the hole, fuid swapping, and other
fuid interactions can result in reduced com-
pressive strength of the cement as well as result
in channelling, downhole gelation, and poor ce-
ment bonding. The frst phase of this investiga-
tion is concerned with the chemical reactions
between the mud and the cement. The second
phase is a large-scale model and feld trials, as
well as new spacer technology and practices.
Intelligent ram actuator
GE Global Research is leading a project to
develop an auto-compensated sensor that can
detect the presence of drill collars, tool joints,
and other unshearable items in and around
the BOP rams. The frst phase of this study
will encompass developing the sensor and sig-
nal conditioning approach, developing sensor
error correction ideas, and evaluation of me-
chanical and software integration of the sensor
with the BOP. Phase two will cover the sensor
design and prototype construction and testing.
Emad Andarawis of GE is the lead.
Nanotube umbilicals
This program aims to develop and produce
high-conductivity umbilicals that can both with-
stand installation and deliver the higher service
loads expected as projects go into deeper wa-
ters and cover longer distances. The work has
led to construction of a prototype double-wall
carbon nanotube wire with a polymer jacket.
The polymer jacket adds mechanical integrity,
abrasion resistance, and eases handling of the
conductor. According to Christopher Dyke of
NanoRidge Materials Inc., the presenter and
a principal investigator, the target is a conduc-
tor that matches the resistivity of copper (10

0*cm at 87.92 M!a/5,5OO psi), but at less than
2O ol the weight. At present, the program is
refning the prototype tool that produces the
carbon nanotube wire to optimize the purity be-
cause the wire must not have any amorphous
carbon and is working to meet the desired re-
sistivity. The machine can manufacture 100-m
(828lt) long carbon nanotube wires.
In a related but separate project, the GE
Global Research Center is early in a project to
develop high-voltage DC current subsea con-
nectors. Qin Chen of GE said the connectors
are a critical part of the DC subsea electrifca-
tion system, and pointed out that the connectors
needed both mechanical and electrical connec-
tions to function in that role. The frst phase of
the project is to establish the requirements for
such connectors and to compare them to the
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54 Of fshore 0ctober 2O14

Collaboration takes industry
to new technical highs, greater depths
DeepStar serves as incubator for multi-participant R&D
ffshore operators face the continuing
challenge of meeting the global pop-
ulations growing demand for oil and
gas while conducting feld operations
safely, effciently, and cost-effectively.
Solutions to these dual challenges are best
realized through collaborative technology
developments that minimize risk and opti-
mize results. This has been the core mission
of the DeepStar joint industry development
project for more than 20 years.
Since its inception in 1991, DeepStar has
served as an incubator for collaborative de-
velopment of technologies that enhance
deepwater exploration, drilling, and produc-
tion. DeepStars consensus-driven approach
to technical collaboration, guided by its close
involvement and consultation of its 70-plus
member organizations, has delivered advanc-
es across the deepwater E&P spectrum, from
reservoir appraisal, ultra-deepwater drilling
and completions, fow assurance, subsea pro-
cessing solutions to foating structures and
life extension. As the industry moves farther
from shore into more challenging reservoirs
and deeper waters, DeepStar is positioned to
keep advancing new technical solutions in a
collaborative environment.
The following is a review of some of the 20
key research initiatives under way in Deep-
Stars Phase XII development, which began in
January 2014 and runs until the end of 2016.
Studying the subsurface
Accurately placing a well to its target depth
is a common technical challenge during most
drilling operations. Within deepwater proj-
ects, these challenges are compounded by
the technical limitations of seismic sensing
technology and its ability to provide a sharp
view of the reservoir, often covered by thou-
sands of feet of water and miles of rock.
DeepStars Geoscience Committee is run-
ning a project that aims to overcome some
of these challenges, by focusing on more
effcient deepwater 3D vertical seismic pro-
fle (VSP) acquisitions. In particular, the re-
search project is investigating new designs
and delivery of a large hydrophone array to
enable seabed-to-total depth instrumentation
of deepwater wells with seismic sensors.
Other research projects are focused on
the reservoir itself. The Reservoir Engineer-
ing Committee is conducting an appraisal
project focused on data mining that aims
to determine the key factors that drive feld
rate and reserves forecasts prior to sanc-
tioning. The committee is also investigat-
ing catalytic in situ carbon dioxide (CO
generation. In particular, this research aims
to establish the technical feasibility of am-
monium carbamate fooding in conjunction
with an interfacially active nanocatalyst as
an alternative to conventional CO
A sizable research project is investigating
ways to improve sweep effciency in high-
temperature, low-permeability reservoirs
using new gels and polymers. Project objec-
tives include identifying suitable chemical
formulations for polymers and gels that will
remain stable at 100-120C (212-248F) for
many years, testing fow properties of prom-
ising polymers in low-permeability (10-mD
and below) rock, and developing reservoir
engineering concepts that allow for optimal
application of gel treatments in the feld.

Upgrading subsea systems
Some research projects are focused on
bolstering subsea structures and facilities to
stand up to the rigors of deepwater environ-
ments for extended periods. The Subsea Fa-
cilities Committee is overseeing an initiative
around pipeline integrity management using
a facilitated workshop setting. Member com-
panies frst discuss common issues related
to integrity management and monitoring
of pipelines, which will then be covered in
greater detail in a series of workshops de-
signed to educate service providers and
technology developers and motivate them to
develop workable solutions. The committee
has approximately $300,000 in funds avail-
able to help develop the best integrity man-
agement alternatives for future feld study.
The committee is also overseeing research
projects aimed at identifying and closing the
gaps in subsea systems designed for operation
in ambient pressures of 20,000 psi or greater.
Integrity of subsea equipment is also a
major focus of research in Phase XII. The
Subsea Facilities Committee is running a
research initiative to identify conformable ar-
rays for subsea pipeline inspection and inter-
nal/external corrosion imaging through pipe
insulation, as an alternative to in-line inspec-
tion (ILI) tools. This project is the continua-
tion of a multi-year research and gap analysis.
The objective of the project is a performance
demonstration and deepwater marinization,
with a focus on determining the performance
limits of the technology.
The Systems Engineering Committee is
guiding projects that are geared toward im-
proving subsea fuid processing and water
management systems. A project qualifying
subsea systems for enhanced oil recovery
(EOR) water injectiona continuation of
research started in a previous phaseaims
to develop a detailed evaluation plan for sea-
water treatment membranes and fltering
media, which were the two most promising
process schemes identifed in the earlier
phase of study.
Another project is investigating methods
of produced water management and dis-
posal, with a particular emphasis on why
offshore produced water reinjection (PWRI)
is not implemented by the industry. The
project will identify current technology gaps
for offshore produced water treatment, and
develop guidelines for produced water treat-
ment to facilitate offshore PWRI.
The industrys wider acceptance of subsea
fuids processing and EOR strategies will re-
quire robust and reliable power systems at
the seafoor. To that end, the Systems Engi-
neering Committee is also spearheading an
electrical power strategies and roadmap proj-
ect, which will identify technology gaps for in-
feld power sources and for subsea DC power
transmission systems. The ultimate objective
is to identify capabilities, technical gaps, and
suppliers working to address these gaps.
Floating systems research
Recognizing the industry need for improved
design and maintenance of foating platforms,
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the Floating Facilities Committee has a number
of research initiatives in Phase XII. For aging
foating infrastructure, a project is developing
the initial framework for a new continuing ser-
vice guide for the industry, which draws upon
existing industry guidance and incorporates
the service planning and implementation expe-
rience of subject matter experts. Another proj-
ect focused on better integrity management of
mooring systems is investigating various types
of corrosion phenomena found on mooring
chains, and then surveying and assessing pos-
sible approaches and technologies to mitigate
these corrosion processes.
Other research projects aim to improve
the design and feld life of risers and tubu-
lars. For example, a gap assessment has
started to identify critical areas for develop-
ment of steel lazy wave risers (SLWRs) as
a robust solution to handle harsh environ-
ments and high vessel motions. The project
will also validate global performance of the
SLWR to establish consistent design prac-
tices and validate design assumptions.
Another project looks to develop a next-
generation computational approach for de-
tailed analysis of fexible risers. Specifcally,
the research will validate an advanced meth-
od for fexible riser simulations that is ca-
pable of incorporating detailed fnite element
models into large-scale global, fully nonlinear
dynamic simulations. It will also directly re-
cover armor stress-time histories while main-
taining execution speeds of standard riser
dynamic analysis software packages.
Two projects are under way for the devel-
opment of riser and tubular systems for ultra-
deepwater applications. The frst is a continu-
ation of development work for fexible pipe
and riser packages rated for 20,000 psi. A se-
lected design, which was developed in previ-
ous phases, will be manufactured and tested
for 20,000-psi design pressures. The second
project focuses on developing and demon-
strating the reliable operation of a 20,000-psi
rated tubular based on the use of a PEEK and
carbon fber composite material.
Addressing industry needs
As with previous phases of research,
DeepStars Phase XII projects are focused
on the ultimate goal of helping the offshore
E&P industry maximize the tremendous re-
source potential contained within the worlds
deep- and ultra-deepwater basins. Many of
the research projects highlighted above,
plus the additional ongoing research being
conducted in drilling, completions and met-
ocean criteria, will likely continue beyond
2016 to further stages of research work or in
the development of industry guidelines and
standards through organizations such as the
American Petroleum Institute.
In this manner, DeepStars research ef-
forts keep moving from the laboratory to
real-world feld practice, and culminate in
commercially viable technologies that contin-
ually advance the deepwater industry to new
successes in deeper, more remote, and tech-
nically complex offshore environments.
The focus of Phase XII is the
resource potential of the worlds
deep and ultra-deepwater basins.
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58 Of fshore 0ctober 2O14

Shells leadership
in the 1960s paved
way for deepwater
he frst question people often ask about
the history of offshore oil is when did
it all begin? The answer is elusive. Do
we place the origin in 1896, when real
estate speculator H.L. Williams promot-
ed the drilling of the frst wells in the ocean,
from piers built off Summerland, California,
into the Santa Barbara Channel? Or did it hap-
pen fve years earlier in Ohio, where the frst
oil well completely detached from land was
drilled in a manmade reservoir called Grand
Lake St. Marys? Do we date the birth of the
offshore industry with the Creole platform,
the frst freestanding platform in the ocean,
completed in March 1938 by Pure Oil and Su-
perior Oil, a mile-and-a-half offshore and 13 mi
from Cameron, Louisiana? Or does the honor
go to Kerr-McGees Kermac 16, the frst well
out-of-sight-of-land that began producing oil
on Nov. 14, 1947, 10.5 mi from the shore of
Louisianas Terrebonne Parish?
A persuasive case can be made for each
of these frsts. But none are technological
precursors to the modern offshore oil indus-
try. They all involved some kind of variation
of land drilling techniques applied offshore.
Such adaptations required great bravery
and fortitude, but not the conceptual or
imaginative leap that decoupled the rig from
the seafoor and made possible the foating
operations and subsea engineering of today,
which are impossible to confuse with drill-
ing on land.
That leap was frst made in January 1962,
when a strange contraption under lease to
Shell Oil, called the Blue Water 1, spudded a
record-setting offshore well in 297 ft of water
in the Gulf of Mexico. This was at least three
times deeper than wells drilled by other mo-
bile drilling vessels, such as submersibles
and jackups. Outside observers struggled
to fgure out how the Blue Water 1 could
remain nearly motionless in those depths
on the open seas. The New Orleans papers
wondered at length what was happening.
Rumors spread that it was sitting on a coral
reef. Curious competitors spied from heli-
copters and workboats. One helicopter even
brazenly tried to land on the rigs heliport
before it was waved off. Oklahoma senator
Robert Kerr, whose company Kerr-McGee
was heavily committed to offshore, person-
ally circled the rig for many days, frst in an
airplane and then in a boat. But like all oth-
ers, he came away with few clues.
The maiden voyage of the Blue Water 1
took place a month before NASA astronaut
John Glenn became the frst person to com-
plete an orbit of the earth. Both missions re-
vealed a newfound human ability to explore
frontiers beyond the comfort of terra frma.
On Aug. 14, 1962, Shell Oil dramatically dis-
closed the details of its new foating drilling
platform. With an eight-anchor mooring
system hidden under the water, this con-
verted submersible was equipped to operate
in 600 ft without resting on the bottom. An-
nouncing successful drilling from the plat-
form, Shell also reported technical progress
in completing ocean-bottom wells by remote
control from the surface.
The unveiling of the Blue Water 1 ended two
years of speculation in the industry about what
Shell had been up to with its mystery rig and
captured national headlines heralding a dou-
ble technical breakthrough. Oilmen can now
fnd and produce petroleum from the open sea
regardless of depth of water or distance from
land, reported the Wall Street Journal.
Shells Blue Water breakthrough resulted
from an exceptional combination of vision and
creativity. No longer satisfed with gradually
inching out into slightly less-shallow waters,
the companys E&P leaders took a calculated
risk in the mid-1950s to see if they could rede-
fne the possibilities of fnding oil in the ocean.
At that time, many people in the industry
had come to believe that offshore develop-
ment had reached its limits. None other than
Shell Oils New Orleans Vice President Bou-
we Dykstra, a tall, steely-eyed Dutchman
who had been a driving force behind Shells
successful moves into shallow water, argued
that venturing deeper than 60 ft would be
folly. Even if it were possible to develop the
kind of equipment needed for those depths,
he insisted, well costs would be prohibitive.
Bothered by both safety and economic risks,
Dykstra felt that the company would be bet-
Tyler Priest
University of Iowa
Offshore at 60:
The Blue Water
(Above) In January 1962, Shell spudded a
record-setting offshore well in 297 ft of water
in the Gulf of Mexico with the Blue Water 1,
the industrys first semisubmersible drilling
rig. (All photos courtesy Ronald L. Geer)
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Shell engineers discuss the future of deepwater
development as they review a scale model of
the Blue Water 1 and the Remote Underwater
Drilling and Completion System (RUDAC).
ter off managing its production in the shal-
low water.
Head offce E&P management at Shell was
more sanguine about what was then consid-
ered deepwater. Exploration Vice Presi-
dent Ronald E. McAdams and Executive VP
for E&P Ned Clark trusted in the companys
technological capabilities, and they believed
that offshore was the only place left in the
United States where Shell could stake a com-
petitive position. The other majors had tied
up the best undeveloped properties onshore
Socony (Mobil) and Socal (Chevron) in
California, Humble Oil & Refning along the
Texas Gulf Coast, and Texaco in South Loui-
siana. For Shell Oil to remain a viable E&P
company in the US, moving deeper offshore
was imperative.
Soon after becoming executive vice presi-
dent, Clark created a top-secret program
to investigate ways to develop a complete
system for drilling and producing in water
depths ranging out to 600 ft of water. If Shell
beat its competitors in fnding the technol-
ogy for deepwater exploration, the company
could obtain leases at very reasonable pric-
es for tracts that nobody else was prepared
to develop. An inventive and enterprising
young naval architect in the program, Bruce
Collipp, immediately went to work design-
ing and building scale models of ideas he
had for drilling platforms that would foat,
partially submerged, in the water. These,
he believed, would provide greater stabil-
ity than the CUSS I, the ship-shaped drilling
vessel with which Shell and a consortium of
other companies (Continental, Union, and
Superior) had been experimenting with off
Upon publication of the initial Call for Nomi-
nations for the 1960 federal lease sale in the
Gulf, the head of Shells New Orleans legal de-
partment, George Schoenberger, convinced
the Bureau of Land Management (BLM) to
withdraw the call and issue a new set of leas-
ing maps with deeper acreage out to and be-
yond the 300-ft depth contour. With Shells
assistance, the BLM redrew the maps with
south additions to all the old original blocks
off Louisiana and issued a new call for nomi-
nations. It was a big sale. Offshore operators
spent $285 million in high bids for tracts off-
shore Texas and Louisiana, more than double
the amount spent in any previous sale. Shell
Oil acquired a number of tracts in the Grand
Isle Area South Addition, where no other com-
pany planned to drill.
The head offce ordered up a foating drill-
ing platform to evaluate its new deepwater
leases. Time was short, however. The explo-
ration managers wanted to drill and obtain
information on these leases before the next
scheduled lease sale in March 1962, which
was going to be even bigger than the last.
Building a new rig from scratch based on
Collipps experimental designs would take
too long and cost too much. Fortunately, Col-
lipp knew of an existing unit that could be
converted into a foating platform. It was the
Blue Water 1, a three-year-old, bottom-sitting,
submersible owned by a consortium of four
small producing companies called the Blue
Water Drilling Corp. With four stabilizing
columns resembling monstrous milk bottles,
the Blue Water 1 had the desired hydrody-
namic properties. The hull pontoons could be
flled partway, making them buoyant enough
to keep the vessel afoat but heavy enough to
sink below the lash of the waves.
Collipp offered to lease the unit from Blue
Water Drilling for fve years, under the condi-
tions that Shell could make changes to it and
that Blue Water had to keep those changes
strictly secret. Blue Waters president, Sam
Lloyd, readily agreed. The Blue Water 1 had
been idle for about six months, and a fve-year
contract in those days was unheard of. Do
whatever you want with it, Lloyd told Collipp.
Paint it red and yellow if you have to.
As the conversion neared completion,
Collipp met with a US Coast Guard offcial,
Captain McPhall, in Mobile, Alabama, to
have the rig certifed. But there were no
classifcation guidelines for something like
the Blue Water 1. Ships were supposed to be
1410OFF_60 60 10/1/14 3:58 PM
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long and pointy and go from point A to point
B. But this vessel was roughly square, did
not transport cargo, and did not transport
people. Therefore, it was not a ship.
When McPhall unrolled the blueprints,
he asked Collipp, What is it?
Its like an iceberg, Collipp explained.
You see, all the hulls are underwater.
I dont know what you are describing to
me, replied the captain, but this thing is
going to sink if all the hulls are underwater.
Well, no, said Collipp, trying his best to
describe in simple terms how the vessel would
remain afoat. After more discussion, McPhall
agreed to register the rig, but he needed to
know how to classify it.
It is kind of a semi-submerged thing, Collipp
told him. The term just popped into his head.
All right, said the captain. We will list it as a
Super Manned Barge-Semi-submersible.
The name stuck, and Collipp would hence-
forth be known as the father of the semisub-
The semisubmersible vessel itself was only
one piece of the deepwater puzzle, albeit the ma-
jor one. Other fertile minds recruited into Shells
deepwater program attacked the problem of how
the oil would be drilled and produced. The effort
began in 1955 with the offshore task force set up
at Shell Oils Bellaire Research Center (BRC) to
study the whole feld of offshore operations. By
1958, the special development program for the
Gulf of Mexico had come to focus on foating
drilling and underwater wellhead completion.
The semisubmersible increased the depth
of exploratory drilling, but new methods would
be needed to produce oil from those depths.
In conventional offshore producing opera-
tions, the deck of a fxed platform housed the
wellhead equipmentthe blowout preventer
and the assemblage of control valves, pressure
gauges, and chokes known as the Christmas
treeabove the water surface. A conductor
connected all this equipment to the bottom.
Because platform designs had not even ap-
proached the water depths (300 to 600 ft) con-
templated by the deepwater program, Shell en-
gineers investigated the possibility of installing,
completing, and maintaining a wellhead on the
seafoor. Because the practical limit of diving at
the time was only about 150 ft, everything had
to be done by remote control. Like the semi-
submersible, an underwater well represented a
giant conceptual leap. But, as Ron Geer, a me-
chanical engineer who directed the design of
the wellhead system, remembered: We were
limited only by our imaginations.
In 1958, Geer joined about a dozen other
young engineers, some fresh out of college,
at the Shell BRC in Houston to develop the
underwater completion technology that would
accompany foating drilling in the Gulf. What
he and others ultimately created was complex,
consisting of many specialized subsystems and
components. Frank Poorman was responsible
for the special blowout preventers. John Hae-
ber helped put all this together with the well-
head suspension system. Lloyd Otteman and
John Lacey designed the structure for guiding
all the various components into alignment. Ed
Lagucki devised an innovative through-the-
fowline system of maintaining well produc-
tion. Bill Foster came up with the instrumen-
tation, and Ray Perner handled dimension
control. Bob Carter, Keith Doig, and Art Wil-
liams were the overall project managers at BRC
during the system and equipment development
phase. The engineers invented many kinds of
patented tools and equipment for the project.
Douwe Dee DeVries, a brilliant mechani-
cal engineer from Holland with broad experi-
ence in both refning and oil production, de-
veloped all the innovative equipment-handling
systems that connected the wellhead to the
Blue Water 1. Assisting Collipp in the conver-
sion, DeVries applied the spider deck assem-
bly concept, devised by Bill Craig at BRC,
under the drilling derrick and developed the
riser equipment and controls for the blowout-
preventer stack. He also designed, built, and
installed the frst telescoping joint and buoyan-
cy chamber, which became standard in foat-
ing drilling. For motion compensation, he de-
vised an elevator system with two buckets that
served as counterweights. It was a terrifc
opportunity because money was no problem,
recalled DeVries. But the money we spent
was worth it. We didnt just develop existing
concepts. We did all this stuff from scratch.
In December 1960, engineers completed
a successful shallow-water test of what they
called the Remote Underwater Drilling and
Completion System (RUDAC). After the
successful test, the engineers prepared the
system for operation with the converted Blue
Water 1 in deepwater. As the crews sounded
the bottom for the offcial depth of the frst
well, someone called out 297 feet. Damn!
Collipp remarked. Why cant we just move it
over a little to 300? But that was quibbling.
The well set a depth record by a long shot.
During the spring and summer, the Blue
Water 1 went on to drill six more exploratory
wells. Even though most of them did not en-
counter oil, after seven years and $7 million of
research, Shell Oil had fnally proven the via-
bility of drilling and producing oil from depths
previously unthinkable. When the company
loosened the secrecy around the project and
announced its fndings in August 1962, the
offshore industry began to adopt a new way
of thinking. As one Shell representative told
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Ron Geer presents details about Shell Oils RUDAC system at the companys unprecedented three-week
school for industry held at the Bellaire Research Center in Houston during January-February 1963.
reporters who visited the rig: Were looking
now at geology frst, and then water depths.
The successful debut of the RUDAC/Blue
Water 1 program gave Shell the confdence
to bid on deepwater leases off Louisiana in
the historic federal lease sale of March 1962.
In this sale, the government had decided to
speed up the pace of development. Some 20
operators nominated 3.67 million acres, 6,000
sq mi, most of which was off the coast of Lou-
isiana (30 tracts were nominated off Texas)
and in water deeper than 100 ft. Shell was the
third highest bidder in money, but it acquired
the largest number of tracts, including a few
in 300-plus ft of water. With this acreage and
its deepwater drilling program, Shell was bet-
ter prepared than any company in the indus-
try to take the next step offshore.
It was too prepared for its own good, howev-
er. On some of the deepwater tracts, Shell was
the only bidder. No one could operate in those
depths, explained Ron Geer. We were fve to
seven years ahead of the rest of our competitors.
Because Shells bids on deepwater leases did not
have any competitors, the government did not
honor them. This forced Shell E&P to reevalu-
ate its secretive approach to deepwater research.
Senior management concluded that there had to
be competition, both to enable Shell to acquire
the deepwater acreage and to stimulate the
commercialization of the technology. Shell had
pioneered a whole new frontier in offshore drill-
ing, but it could not go at it alone. The costs and
risks were too high. Other oil companies, as well
as suppliers, manufacturers, and construction
frms, could progress into deeper waters only to-
gether as an industry. We realized that the only
way we could ever have access to those frontier
areas was to share our knowledge with the rest
of the industry, to give them a base of technology
from which they could expand, said Geer. Wed
still be ahead of the competition because of our
hands-on experience and besides, we owned 160
patents on the technology.
Thus, in January and February 1963, Shell
held an unprecedented three-week school on
offshore technology for representatives from
industry and government at the Bellaire Re-
search Center. The company charged tuition
of $100,000 per company, a sizeable amount of
money for the time. Seven companies, along
with the US Geological Service, signed up for
the series on all facets of Shells deepwater pro-
grams. Collipp conducted seminars on foating
drilling, and Geer led classes on the RUDAC
system and new producing methods. Yet, as
the participants discovered, these were not the
only technologies Shell had developed. Howard
Shatto, a division mechanical engineer from
Shells Pacifc Coast Area offce, presented
other Shell innovations that had been achieved
through a parallel program of research and de-
velopment for the West Coast.
While the Gulf Coast group had been work-
ing on the RUDAC Blue Water 1 system, Bill
Bates, vice president for the Pacifc Coast Area,
had conceived another approach, working on
dynamic vessel positioning with the CUSS 1
and different ideas about making underwater
completions. Bates had urged Ned Clark to es-
tablish the second research program in order to
increase Shells chances of fnding a workable
solution to the deepwater dilemma. The stakes
are so high in offshore oil production that we
had to be sure we had at least one system which
would work successfully, Clark explained.
In March 1961, the CUSS 1 successfully tested
the concept of dynamic positioning using manu-
1410OFF_63 63 10/1/14 3:58 PM

ally controlled thrusters to keep the vessel on
location. Concurrently, Shell was preparing to
outft a small core drilling ship, the Eureka, with
a manually controlled system. But Shatto felt that
such a system was too diffcult for a human oper-
ator to coordinate, and he convinced his bosses
to equip the Eureka with an automatic system
that he designed. It featured two thrusters and
three analog controllers, which evaluated the
three basic degrees of motion on the vessel
surge, sway, and yawand transmitted its drift-
correcting orders to the thrusters.
In May 1961, two months after the CUSS 1
tests, the Eureka began core drilling with great
success. Anchored coring vessels of its size
took a day or two to set anchors, drill a core
hole, and recover anchors. Their water depth
was limited to 200300 ft. By comparison, the
Eureka drilled as many as nine core holes in
one day and in water as deep as 4,000 ft. Be-
yond its success in core drilling, it validated
the concept of automatic dynamic positioning
and initiated a new trend in the evolution of
Shatto and other Pacifc Coast engineers also
developed an experimental underwater com-
pletion system that addressed the perceived
need for diverless operations in a unique way.
Code-named MO, for manipulator operated,
the system featured the use of a free-swimming
remote-controlled robot diver designed by
Hughes Tool, which had a mechanical arm ca-
pable of turning lock screws, operating valves,
and attaching control hoses and guidelines.
Driven by propellers and guided by sonar and a
television camera, the so-called Mobot could
be lowered by a wire cable and attached to the
wellhead equipment. It then rode around the
wellhead on a circular track to perform its tasks.
The dazzling array of new technologies
demonstrated by Shell in its three-week mil-
lion dollar school, encouraged operators and
contractors to tackle ever-increasing water
depths and more hostile environments.
Most importantly, they established a new
learning curve, redefning what was possible
at the time, helping other companies in the in-
dustry see the potential of offshore, and foster-
ing a new spirit of technological cooperation.
In 1971, Shell received the Offshore Technol-
ogy Conferences frst annual Company Dis-
tinguished Achievement Award for its numer-
ous advances in deepwater drilling technology
from 1955 to 1967. Bruce Collipp and Dee
DeVries were later awarded the prestigious
Holley Medal from the American Society of
Mechanical Engineers for their contributions
to developing the semisubmersible. In 1984,
2001, and 2002, respectively, Geer, Shatto, and
Collipp each received the OTCs Individual
Distinguished Achievement Award for their
pioneering contributions to deepwater drilling
and underwater completion technology.
Adapted from Tyler Priest, The Offshore Imperative:
Shell Oils Search for Petroleum in Postwar America
(College Station, TX: Texas A&M University Press,
2007), pp. 73-99.
The author
Tyler Priest is associate professor
in the Departments of History and
Geographical and Sustainability
Sciences at the University of Iowa.
He is the author of The Offshore
Imperative: Shell Oils Search for
Petroleum in Postwar America
(Texas A&M Press, 2007), which won the 2008
Geosciences in the Media Award from the American
Association of Petroleum Geologists. In 2010 he served
as a senior policy analyst on the Presidents National
Commission on the BP Deepwater Horizon Oil Spill
and Of fshore Drilling. He also serves on the Industry
and Technology Pioneer Advisory Committees to the
Of fshore Energy Center and is a past member of the
Scientifc Advisory Committee to the Bureau of Ocean
Energy Management.
1410OFF_64 64 10/1/14 3:58 PM | +1-800-821-2222 | +44 (0) 1420 541188
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66 Of fshore 0ctober 2O14




Offshore milestones,
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creating niche in extended
reach drilling
2000 Three-field tieback system
first of its kind for US Gulf
2001 Crazy Horse project to employ
worlds largest semisubmersible
2002 Deep shelf gas frontier
offers new potential
2003 Offshore Malaysias first
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70 Of fshore 0ctober 2O14

Reservoir modeling: revising uncertainty
quantification and workflows
il and gas companies always strive to
make the best possible reservoir man-
agement decisions, a task that requires
them to understand and quantify un-
certainties and how these uncertain-
ties are affecting their decisions. In attempting
to ascertain risk, however, great uncertainty
pertaining to the geological data and thus the
description of the reservoir, as well as time-
consuming workfows, are current bottle-
necks impeding the ability of oil and gas com-
panies to address their business needs.
New technologies and approaches en-
able faster, more accurate, and more intui-
tive modeling to help todays geophysicists
make better decisions.
Earth modeling software has come a
long way since its appearance in the 1980s.
Reservoir modeling has become common
practice in making economic decisions and
assessing risk related to a reservoir during
several stages of the reservoirs life, using
detailed modeling to investigate the reserve
estimates and its uncertainty.
Despite the progress, conventional reser-
voir modeling workfows are optimized around
oil paradigms developed in the 1980 and
1990s. The workfows are typically segmented
and siloed within organizations, relying on
a single model that becomes the basis for all
business decisions for reservoir management.
These models are not equipped to quantify
the uncertainty associated with every piece of
geological data (from migration, time picking,
time-to-depth conversion, etc.). The disjointed
processes may take many months from ini-
tial model concepts to fow simulation for
multiple reasons, one of which is the
outmoded technologies used to drive
these processes. When faced with the
challenges of increasingly remote and
geologically complex reservoirs, con-
ventional workfows can fall short.
There are two main types of data
used in reservoir modeling, data
from seismic acquisition and drilling
data (well logs). Geophysicists typi-
cally handle the data and interpreta-
tion, and geomodelers try to turn
those interpretations into plausible
reservoir models. This time-consum-
ing and resource-intensive approach
requires strict quality control and
multiple iterations. Data is often ig-
nored, or too pretentious interpretations are
made based on poor seismic data, which nar-
rows the possibility of obtaining a realistic
Interpreters still frequently have to rely
on manual work and hand editing of fault-
and horizon-networks, usually causing the
reservoir geometry to be fxed to a single
interpretation in the history-matching work-
fows. This approach makes updating struc-
tural models a major bottleneck, both due to
the lack of methods and tools for repeatable
and automatic modeling workfows, and for
effcient handling of uncertainties.
As a result of the traditional manual work
and time-consuming workfows, some oil
felds go as long as three years between
modeling efforts, even though the aver-
age rate of progression on drilling is a few
meters per day. With traditional model-
ing, it takes several days or even weeks to
construct a complete reservoir model, and
at least several hours to partially update it.
Earth models currently comprise dozens
of surfaces and hundreds of faults, which
means users cannot and should not update
an earth model completely by hand. Instead
they should rely on software that allows for
(semi-) automated procedures, freeing the
user from certain modeling tasks.
Instead of a traditional serial workfow for
interpretation and geomodeling, Roxar pio-
neered model-driven interpretation. This
allows geoscientists to guide and update a
structural 3D model, which is geologically
consistent, directly from the data. This ap-
proach allows geoscientists to focus efforts
where the model needs more details. In some
areas, such as on a horizon depth, neighbor-
ing data tell the same story; they are all repre-
sentative. In other areas, for example close to
faults, some data points are more important
than others, namely those indicating where
the faults create a discontinuity horizon
depth. Geoscientists should focus on these
critical data points, instead of on data not al-
tering the model. In the extreme, having a
correlation of 1.0 between two variables im-
ply that keeping one of these is suffcient, as
the other value is known, and it does not mat-
ter which of these the geoscientists choose
to keep. In practice, however, correlations
between data generally are not 1.0, leading
most geoscientists to ask: at what correla-
tion, or redundancy level, should we simplify
our data model, and thereby save time and
money in updating it by omitting this extra
data? The modeling efforts in the oil and gas
industry should be purpose-driven. This is
the key behind model-driven interpretation.
A model-driven approach
As shared earth models require resolution
ranging from pore- to basin-scale, all aspects
of data management, manipulation, and visu-
alization need to straddle this enormous
gap. Seismic data sets consume tens of
gigabytes of disk space, but these are
highly structured data sets that technol-
ogies such as HueSpace, coupled with
NVIDIA GPUs, can read and process at
gigabytes per second. Complex geologic
models and reservoir grids may be far
less structured, with representations
Linda Gaas
Arne Skorstad
Tone Kraakenes
RMS 2013 unites the geophysicist and the
geologist on a common platform to un-
lock the value of the geologic models in
new ways. (Images courtesy Hue, Roxar)
1410OFF_70 70 10/1/14 3:59 PM
1410OFF_71 71 10/1/14 3:59 PM
72 Of fshore 0ctober 2O14

Seismic interpretation representation.
such as polyhedrons or a mixed rep-
resentation. Supporting all these types
of data, including interactive manipula-
tion, is non-trivial.
Substantial computing power is re-
quired to run the software tools eff-
ciently for interactive visual interpreta-
tion of geophysical data. Most current
technologies do not support this kind
of on-site analysis and require models
to be sent to a data center for process-
ing, causing delays in the interpreta-
tion workfow as high-performance
computers process the data before
delivering visual interpretations back
to the feld. Technology is needed that
can enable on-site interpretation and
processing of seismic data into rendered 3D
models, and current technologies are limited
in their ability to achieve this.
Recently a team of Lenovo, Magma, and
NVIDIA engineers combined to address this
challenge. Working with the Norwegian-
based technology company Hue, the team cre-
ated a solution that combines powerful Lenovo
ThinkStation workstations with NVIDIA GPU
accelerators and Magmas high-speed expan-
sion system to bring the computing power
needed for interpretation to the feld, to re-
duce the time required to render accurate and
complex models dramatically. In doing so, the
team brought interactive high-performance
computing technology to the geophysicists
The ability to manipulate and interpret huge
amounts of data with these new technologies
allows faster and more dynamic analysis in
near real-time at workstations. The thousands
of processing cores and fast DDR5 memory of
NVIDIA GPUs originally created for graph-
ics processing provide the processing power
needed for these data sets. Software develop-
ment frameworks, such as HueSpace, are de-
veloped to use this power to process high vol-
umes of seismic data in seconds. This allows
for interactive visualization of terabytes, or
even petabytes, of data to create models that
help identify subsurface prospects and help
engineers make better decisions.
Quantifying uncertainty
Oil and gas reservoirs are found at depths
of hundreds to thousands of meters, making
their physical access limited, and the col-
lection and modeling of data challenging.
Seismic acquisition technology is only able
to capture a portion of the earth response in
a seismic image.
To determine the commercial viability of
a prospect the uncertainty of the available
data needs to be quantifed. This traditional-
ly involves relying on a single model, or sce-
nario, instead of stochastic models driven by
the uncertainty and resolution of the data.
Considering the uncertainty aspect of the
data, fexible models are required that can
be updated in a timely manner as new data
become available. Such data can be from
well logs, core samples, or new seismic.
However, with the current high drilling ac-
tivity, the increasing use of permanent sen-
sors for monitoring pressure and fow rates,
and developments in 4D seismic monitor-
ing, the amount of data being produced for
input to the reservoir model has increased
substantially. This means models need to
be updated both more frequently and from
more diverse data sources. The updated
models are important to evaluate new and
improved oil recovery measures, future well
prospects, and other critical functions.
Given the uncertainty in the geophysical
and geological domain regarding data and res-
olution, a reservoir model will not completely
match the actual measured fow data of the
reservoir. Hence, history-matching has been
introduced to alter simulation models to bet-
ter represent the actual fow rate and pressure
measured in a well. Since the simulation mod-
el usually has a coarser resolution than the
fne-scaled geological model, changes made
(frequently by hand during history-matching)
often are not incorporated into the geologi-
cal model. A paradigm change is coming as
a more full- or closed-loop history-matching
gets increased attention by many companies.
A full update of the model requires automated
workfows where the model is the key, instead
of manual, subjective decisions based on du-
bious erroneous, data. Such a closed-loop
approach seeks to mend the broken chain of
information where the true data in the fow
simulation domain carries value to the model.
The need to constantly update models
to address uncertainty requires a software
architecture with computational tools that
support interactive visual interpretation and
integration of geophysical data to produce a
structural model of the reservoir in a timely
manner. Working with large-scale reservoir
models, which today feature multi-million-cell
unstructured grids, to a greater extent
honors geological features (e.g., com-
plex faults, pinchouts, fuid contacts)
and engineering details (e.g., wells),
coupled with demands for advanced
accuracy for simulations, challenge
the underlying technology capabili-
ties. The technology must cope with
both structured and unstructured
grids for the reservoir model, and
with fully coupled wells and surface
networks. HueSpaces approach to
this offers a visualization-driven and lazy
compute framework, in the sense that it only
fetches and computes the absolute minimum
data required, for maximum interactive per-
formance. This approach, which uses NVID-
IA GPU technologies, allows both structured
and unstructured grids to be edited interac-
tively without relying on level-of-detail ap-
proaches to achieve high interactivity.
Achieving high-performance computing
while processing stochastic models in the
feld can be challenging, but Lenovo, Magma,
NVIDIA, and Hue demonstrate that it is pos-
sible by combining current technologies.
By capturing the uncertainty at the be-
ginning of the geoscience workfow, opera-
tors can gain a greater understanding of the
subsurface risks and have the best possible
foundation for drilling decisions.
The pressure is on oil and gas companies
to make smart and economic decisions to
maximize reservoir recovery. Current com-
mercially available tools and workfows do
not adequately address the need for making
the best economic decisions and for assess-
ing risk related to a reservoir. Limitations
result in rigid models that are not fexible
when it comes to incorporating new data,
even though updated models leads to new
knowledge and a better understanding of the
Technology to support a better reservoir
understanding is available. Operators can
continuously update models everywhere in
the workfow, from seismic to simulation. A
combination of powerful hardware, an intelli-
gent visualization-driven framework for com-
putation and data-management, and a model-
driven software approach to interpreting and
modeling workfows can properly support
reservoir modeling demands.
Contributing authors: Chris McCoy, Lenovo Think-
Station; Jim Madeiros, Magma; and Ty McKercher,
1410OFF_72 72 10/1/14 3:59 PM
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74 Of fshore 0ctober 2O14

Liner drilling enables operators
to reach new depths
Integrated solution mitigates risks, lost circulation while reducing costs
eepwater drilling into complex reservoirs located miles below the
seafoor presents common challenges to drilling contractors. Drill-
ing through weak or lost circulation zones may prevent the liner from
reaching total depth, leading to increased well construction costs and
limiting the production potential of the well. These challenges may
be so insurmountable by conventional drilling processes that the operator is
forced to P&A the well.
The process of liner or casing drilling, in which the wells liner or casing
string is used as part of the drillstring, can be a cost-effective solution that ad-
dresses many of these challenges. Liner/casing drilling is an integrated ser-
vices solution that can shorten drilling time and costs, reduce non-productive
time (NPT), lower the risk of drilling through trouble zones, and help ensure
that the liner reaches total depth.
In standard drilling practices, an unstable formation may collapse before
or after the bottomhole assembly is pulled out of hole, which may cause drill-
string sticking and loss of hole gage. Drilling with liner mitigates the risks
associated with unstable formations, keeps the hole protected, and allows the
liner to reach its desired position. By imparting stability to the wellbore, liner
drilling means that longer hole sections are possible.
Liner drilling also minimizes the risk of lost circulation if the mud weight
exceeds the fracture gradient of the formation, which can cause drill pipe to
get stuck, resulting in fshing jobs, side tracks, or P&A operations. Because
the liner is permanently installed during drilling, lost circulation and forma-
tion damage are minimized, costs are reduced, and production rates can be
higher at the outset.
Conventionally drilling through trouble zones can be challenging. The up-
front analysis, pre-planning, and understanding of the reservoir are critical to
success, and required to understand the geology and structure of the reser-
voir. Regardless of which liner drilling architecture is deployed, each system
component must handle the torque and loads created during drilling opera-
tions, including rotation, reciprocation, and vibration.
At the same time, the liner drilling system must work seamlessly as part
of the overall well construction. For example, the system must be compat-
ible with the mud system to ensure the wellbore is effciently cleaned during
drilling without signifcant loss of mud into the formation. This is achieved
through comprehensive project management and collaborative planning with
both the operator and other service providers on the job.
Maurilio Solano
Baker Hughes
Schematics of possible liner drilling systems (left to right). The first three layouts
show standard liner drilling with an EZLine liner drilling system followed by an
EZLine control-set liner drilling system, and next a TORXS expandable liner hanger
system. The fourth illustration is a SureTrak steerable drilling liner system, and the
fifth layout is a casing drilling system with EZDrive casing manipulation tool. (Photos
courtesy Baker Hughes)
1410OFF_74 74 10/1/14 3:59 PM
A custom-built solution
All liner drilling assemblies have in common some type of non-
retrievable casing drill shoe mounted on the end of the casing or
liner. The shoe comprises polycrystalline diamond compact (PDC)
cutting structures and drillable nozzles capable of either reaming to
the bottom of a pre-drilled hole or drilling a new hole. It can also be
drilled out by another PDC or tricone bit to allow drilling to continue
in the next section. The metallurgy of the bit is selected to provide
the necessary structural strength for the applications drilling pa-
rametersweight on bit, rotary speed, and torqueto reach the
section total depth. The casing bit shoe is also designed to improve
the hydraulics for cuttings removal from the face of the bit, and to
drill out easily with minimal risk of plugging the well or damaging
the formation.
Beyond the bit, there is no one size fts all solution to the equip-
ment used in a liner drilling application. Rather, the system should
mirror the needs of the well, and the tools deployed depend on the
complexity of the wellbore, and the geometry and geology of the
reservoir. If a vertical well is to be drilled without the need for build-
ing angle, steering, or logging, a simple hydraulic balance liner drill-
ing system can consist of a liner setting sleeve, Type I landing collar,
foat collar, and casing drill shoe. This is a robust system, capable of
operating at higher revolutions per minute (RPMs) and for longer
times down hole. However, this option does not include a top packer
or liner hanger, which places an upper limit on pumping rates and
circulating pressures.
When drilling into sections where higher circulation rates and
pressure spikes may lead to lost circulation, the liner drilling sys-
tem may be equipped with a top packer and liner hanger assembly.
A liner drilling assembly that incorporates Baker Hughes TORXS
hydraulic balance expandable liner hanger system, for example, af-
fords higher RPMs of the drill bit in combination with an expandable
hanger system that allows for higher circulating pressures, better
handling of pressure spikes, and a cleaner wellbore while drilling.
The system incorporates ZX expandable seals to provide reliable top
Cutting returned
with liner drilling.
1410OFF_75 75 10/1/14 3:59 PM
76 Of fshore 0ctober 2O14

sealing and one-trip, two-stage setting with-
out a plug bump. Additionally, the bypass
area is another key element of liner drilling
system, which allows better cleaning with
improved circulation pressure.
Higher RPMs not only shorten the time
required to drill the section, but also im-
prove subsequent cementing operations.
Faster rotation of the bit assures more ef-
fcient drilling through potential trouble
zones to provide a wellbore with a straight
and smooth profle. Higher revolutions also
create smaller cuttings in a narrower size
distribution for more effcient circulation
out of the hole and a cleaner wellbore result-
ing in better cement bonding.
For other liner drilling applications, the
well may require additional reservoir infor-
mation through logging, which can be used
to adjust the well path. This requires addi-
tional hardware on the liner assembly.
The SureTrak steerable drilling liner is
one option. It incorporates a rotary steerable
system with modular logging-while-drilling
and measurement-while-drilling systems.
This service acquires various real-time well-
bore datasets, including pressure, resistivi-
ty, gamma, neutron and density, which allow
the rotary steerable system to drill continu-
ously and change direction without slowing.
The choice of which type of liner drilling
system to deploy depends upon the wells
requirements, and must also account for the
added risks associated with more sophisti-
cated assemblies, and the extra costs. For
example, the steerable drilling liner service
option may be cost prohibitive for a liner
drilling application in a vertical or deviated
section of the well (where steering or log-
ging is not required), so the driller may de-
cide to deploy the expandable liner hanger
system instead. If the liner section is shorter
and deployment of the expandable liner be-
comes too expensive, the driller may decide
to run a simpler assembly with no top pack-
er or liner hanger.
Case studies
Such a project management philosophy
was instrumental in the planning and ex-
ecuting of a liner drilling operation in the
UK sector of the North Sea. The reservoir
conditions for this well included a complex
lithology consisting of two unstable cap rock
formations, shales, depleted sands, and clay
stones in which wellbore swelling and stuck
pipe events were highly probable with con-
ventional drilling. In addition, the presence
of a fault at a depth of 16,775 ft (5,113 m)
raised the risk of complete lost circulation,
without the opportunity to drill another sec-
tion below. These risks prompted the opera-
tor to seriously consider P&A the well.
As an alternative, the operator approached
the possibility of deploying liner drilling to
drill through the trouble zones and get the
well to total depth. Because the operator was
working on a very tight timetable, the liner
drilling solution had to be developed and de-
ployed within a two-week window.
A project management team of UK-based
personnel from both the operator and the
service company, as well as a Houston-
based subject matter expert and support
personnel met regularly via conference calls
to analyze the well and develop the neces-
sary liner drilling equipment and process.
The team settled on a simple liner drilling
assembly consisting of a liner setting sleeve,
Type I landing collar, foat collar, and EZ-
Case casing drill shoe.
To minimize fuid loss while drilling, the
smear effect or plastering effect was
considered. This theory is based on the sol-
ids created during the drilling operation that
are ground into smaller more homogeneous
solids, and are then plugged into the narrow
lost circulation zones as they travel up the
wellbore. No pressure control or lost circu-
lation events were recorded during drilling,
(Above) A liner drilling system consisting of the TORXS expandable hanger and drill bit offshore
Mexico minimized lost circulation while maintaining the proper angle. (Below) SureTrak steerable
drilling liner service incorporates a rotary steerable system with modular logging-while-drilling and
measurement-while-drilling systems.
1410OFF_76 76 10/1/14 3:59 PM
which indicated that the combined effect of
plastering, stress cage, and MPD technol-
ogy in the drilling mud worked as planned.
In addition, rotating the liner during drill-
ing likely resulted in the smear effect, in
which the cuttings were pulverized in the
narrow annular space as they traveled up
the well. These particles become embedded
in, or smeared against, the wellbore wall to
form an impermeable seal that prevents loss
of drilling fuids to the formation.
Additionally, the team used engineering
services to develop a drilling mud that incorpo-
rated additives to prop open and seal any frac-
tures (per the so-called stress cage effect).
The team also decided to deploy managed
pressure drilling (MPD) techniques through
these trouble zones as an additional pressure
control and fuid loss mitigation measure.
The next step was to develop a high-eff-
ciency, low-risk liner drilling running proce-
dure. A number of drilling simulations were
conducted using actual feld data to see how
changes to drilling rotation, rate of penetra-
tion, fuid circulation rates/pressure, and
mud density would impact the safety and
reliability of the liner drilling operation.
The next step was to assemble the neces-
sary equipment for the job. The right people
were needed on location to perform the job
in a short time period. This required com-
bining local expertise in drilling engineering
with support from Houston-based subject
matter experts. This was accomplished us-
ing the service providers BEACON real-
time collaboration centers, which allowed
for remote monitoring, support, and control.
With the drilling plan in place and with the
collaboration center providing real-time moni-
toring and communication, liner drilling com-
menced. A total of 225 ft (69 m) was drilled
with liner through the clay stone, shale, deplet-
ed sand and two-cap rock seals, and the well
reached the planned TD of 16,864 ft (5,140 m)
without incident in two days.
Ultimately, liner drilling saved the opera-
tor on its well costs and delivered a produc-
tive well that would otherwise have been
Careful planning was also critical for a
liner drilling job in a highly deviated well off-
shore Mexico. The operator was expecting
total lost circulation at a window located at
2,600 ft (800 m) MD while drilling at a 64
deviation. The total length of liner required
was 8,860 ft (2,700 m), making this one of
the longest liner drilling jobs to date.
The operator and service provider worked
together to develop the drilling plan, which
consisted of running a 7-in. expandable liner
hanger with a liner-mounted drill bit. To
minimize lost circulation in the window, an
oil-base mud was used.
The system demonstrated high torque ca-
pabilities and a better bypass area, combined
with a bit that effciently drilled through the
trouble zone. While the original liner drilling
target length was 66 ft (20 m), the system
drilled 243 ft (74 m), all while maintaining
the required 64 angle.
Drilling went according to plan, allowing
the operator to reach total depth with no
NPT, no fshing or stuck pipe events, and with
minimal fuid losses. The operator was able to
maintain the planned well deviation and drill
this record-setting liner drilling job in one
trip. During this job, neither MPD nor seal
particles were used, proving that the plaster-
ing effect alone helped to mitigate mud loss
as a solution for trouble zone solutions.
These are two examples of successful
stories realized with liner drilling systems in
offshore wells around the world. As wells go
deeper and new reservoir challenges arise,
the same careful collaborative approach to
liner drilling planning and execution will
likely lead to similar success.
1410OFF_77 77 10/1/14 3:59 PM
78 Of fshore 0ctober 2O14

MPD and closed-loop techniques solve
drilling challenges off West Africa
Novel approach af fords access
to well last drilled in the 1970s
complex set of challenges offshore West Africa has defed
drilling efforts for more than 40 years. Multiple attempts in
the areas high pressure/high temperature and regressive
pressure regimes using conventional methods have been un-
able to construct a wellbore to total depth.
The solution came with an unusual scope of managed pressure
drilling (MPD) operations and closed loop well construction tech-
niques. Conducted successfully in both the 12-in. and 8-in. sec-
tions, the MPD and closed loop drilling involved rarely used opera-
tions including statically underbalanced coring, closed loop wireline
logging, statically underbalanced liner running, and statically under-
balanced liner cementing.
Reaching the Isongo
The primary objective of the gas well in the Etinde feld was to
reach the top middle Isongo reservoir sand at approximately 10,335
ft (3,150 m) measured depth (MD). Doing so required drilling within
a very narrow window between pore pressure and fracture gradient.
In prior experience dating to the 1970s, drilling had been severely
challenged due to loss of pressure during drilling pipe connections.
This, in turn, set in motion well-threatening kick/loss cycles, and
major variations in the pressure gradient at different depths.
MPD overcame these conditions by using a lower mud weight and
managing downhole pressure with the combined effects of equivalent
circulating density (ECD) and surface backpressure (SBP). This was
achieved using a rotating control device (RCD), an MPD manifold, and
other associated equipment to create a closed loop circulation system.
The closed loop system enabled greater control of the wellbore pres-
sure using an automatic choke and algorithm-based well parameters
that make up Weatherfords Microfux control system. A Coriolis mass
fow meter provided accurate fow monitoring to enable the rapid iden-
tifcation of losses and gains within the closed loop system.
The static mud weight of 12.9 to 14.2 ppg in the 12-in. section and 14.2
to 15.5 ppg in the 8-in. section would have been statically underbalanced
in conventional drilling. To use the lower weight mud, ECD and/or SBP
was required at all times to maintain bottomhole pressure (BHP) within
the drilling window above pore pressure and below the fracture gradient.
The operating target was to remain at least 100 psi above the pore pressure
gradient at all times while drilling and during connections. For tripping op-
erations, a heavy mud cap was planned at a suitable depth to balance the
well without SBP to allow removal of the RCD bearing assembly.
The purpose of implementing MPD was to manage the borehole pres-
sure profle to reduce the chance of well control events. Other goals in-
cluded increasing wellbore stability, mitigating stuck pipe, and precisely
determining and managing the drilling window between pore pressure
and fracture gradient. Its use on this well had a signifcant impact on time
and cost savings by greatly reducing expected swab surge problems, and
enabled non-drilling operations such as coring, closed loop wireline, liner
running, and cementing.
Pre-job modeling had indicated that these operations might not be con-
ventionally possible. The rapid speed in which the ECD can be adjusted via
minor changes to the Microfux system also saved time that would have
otherwise been spent circulating fuids out of the hole and changing the
mud density. This capability alone delivered a signifcant cost savings over
previous drilling operations in the region.
The sensitivity of the MPD system enabled rapid identifcation, deci-
sion-making, and reaction to drilling events, which boosted safety and
accuracy, and enhanced confdence in decision making. The application
of SBP to a statically underbalanced mud was a key strategy in control-
Marc de Boer
Essam Sammat
Stephen OShea
Easily deployed on the small jackup, the MPD closed loop system
included an RCD, manifold, and control system, along with an MGS.
(All images courtesy Weatherford)
The Microflux control system manifold features a Coriolis mass flow meter
that delivers accurate flow monitoring to enable rapid identification of
losses and gains.
1410OFF_78 78 10/1/14 3:59 PM
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COURSES t October 2014 Of fshore 79
ling and applying constant bottom hole pres-
sure (CBHP) in the 12-in. and 8-in. sections.
SBP was applied during pumps off events when
ECD was not affecting the annular pressure,
as well as during drilling to compensate for the
shortfall required to stay in the drilling window.
MPD operations
In planning a return to the feld, the historic
drilling problems and downhole uncertainty led
the operator to implement the full scale MPD
and closed-loop approach to well construction.
These problems were amplifed by abnormal
pressures, high temperatures that made the
mud diffcult to condition and control, very
low kick tolerance, and the need for a rapid
response to mud weight (MW) requirements.
The MPD system, including a mud gas sepa-
rator (MGS), was installed on the small jackup
with no modifcations. MPD operations began
with fngerprinting to identify expected pres-
sure trends, and in-casing tests to confrm and
fne-tune system operation. Tests in cased hole
were performed prior to drilling each new sec-
tion to establish limits and procedures.
While not needed to drill the 12-in. sec-
tion, MPD was conducted to provide opera-
tional exposure as well as to familiarize and
train the rig crew. MPD operations differ from
standard drilling operations and crew perfor-
mance, and communications are important
to smooth MPD operations. For instance, it is
necessary to gradually ramp down the pump
rates when making connections to allow MPD
to compensate for the change in ECD.
The 12-in. section was drilled with statically
underbalanced mud of 12 to 9 ppg with bottom-
hole equivalent circulating density (BHECD)
ranging from 14 to 14.6 ppge. There were no
well control events and a stable drilling window
was maintained through the 1,263 ft (385 m)
drilled. Although MPD was not needed, it was
able to provide valuable data that was not avail-
able from logs. The section provided the frst
opportunities to conduct dynamic leak off tests
(DLOT) and dynamic pore pressure determi-
nation tests (DPPDT).
During MPD operations in the 8 -in. section,
there were fve minor well events that resulted in
closure of the annular preventer. Each was relat-
ed to either equipment failure or anticipated high
gas levels resulting from operation activities. In
the frst instance, a top drive system swivel
packer failure resulted in a decision to pull back
fve stands of pipe to the shoe. The pipe move-
ment resulted in swabbing and masked volume
outfow trends. The second event involved a rig
power failure, and event three occurred when
gas levels reached 29% at the mud loggers and
58% at the Weatherford GC-Tracer gas chro-
matograph located downstream from the choke
manifold and upstream from the MGS. Gas was
expected due to testing procedures and con-
nections, and was not the result of a gas infux.
Event four was precipitated by line vibration that
sheared crossover pipework, and event fve oc-
curred when the pump feed failed.
Critical testing
Use of DLOT and DPPDT was critical in de-
fning drilling window limits. The data informed
decisions on what BHECD to hold. Hole
strength was also improved with stress gauge
material pumped in a DLOT mud squeeze.
Dynamic leak off test (DLOT) is shown on Weatherfords Microflux control system interface.
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80 Of fshore October t
The Weatherford wireline pressure control string
(shown above) is installed in the RCD to provide
a solid anchor for the wireline dual pack off.
In conducting DLOTs, connections were
carried out with SBP automatically increas-
ing to replace frictional losses and maintain
constant BHP as mud pump pressure was re-
duced. SBP was achieved by fowing the auxil-
iary pump through the MPD chokes. As much
as 1,200 psi SBP was required when the mud
pumps were fully stopped.
The DLOTS were performed using rig
pumps to pump through the bit while rotating
the drillstring. This method results in lower re-
quired surface pressures, which enhances safe-
ty and surface equipment life. The MPD system
provided SBP to eliminate non-productive time
(NPT) and use of the BOP. Flow meters in the
MPD system confrmed the fracture gradient
by recording small fuid losses. DLOTS were
conducted several times in a section to measure
the weakest point rather than assuming the cas-
ing shoe was the weakest point.
Similarly, DPPDT were performed using mud
pumps and rotating the string. No additional
MPD rig up was required. Surface pressure
was reduced in stages until a small infux was
seen via the fow meter. The infux was safely
circulated out of the well through the MGS.
Along with DLOT, the test was valuable in de-
termining the actual drilling window.
Rare operations
Relatively rare closed loop coring operations
were performed in the 8-in. section. The closed
1410OFF_80 80 10/1/14 3:59 PM t October 2014 Of fshore 81
loop system was used to maintain early kick loss
detection (EKLD) and keep BHP constant dur-
ing coring. The system had no affect on the cor-
ing operations. Extra tripping with a large gauge
BHA was required and swabbing was counter-
acted with SBP after a mud cap was placed.
Closed loop wireline, also a seldom-used op-
eration, contributed signifcantly to the safety
of operation. The system was used to maintain
EKLD and prevent swabbing when pulling out
of the hole by applying SBP. The closed loop
system was created without using rig well
control equipment and while allowing the rig
to maintain fow detection capabilities. In addi-
tion, the RCD provided a solid anchor for the
wireline grease head.
Closed loop statically underbalanced ce-
menting was also performed on the well. Ce-
menting involved varied surface pressures
due to different fuid weights in the hole to
maintain constant BHP. The closed loop sys-
tem yielded more precise spacer and slurry
displacements, and enabled detection of in-
duced fractures while cementing. Annular
backpressure, applied using a choke or back-
pressure pump, allowed pressure to be adjust-
ed throughout the cementing process.
Unconventional solutions
Drilling the West Africa well was a chal-
lenge that had stood since the 1970s, when
it became obvious that conventional drilling
methods were not adequate for the task.
The application of MPD methods and closed
loop drilling technology provided an unconven-
tional well construction solution. The successes
and versatility of the project provides a path for-
ward for many prospects that have previously
been undrillable.
The authors
Marc de Boer works as a project
engineer for Weatherford Managed
Pressure Drilling in Cameroon.
After studying business administra-
tion and economics in Holland,
he spent his next 12 years with the
Royal Dutch Marine Corps. De
Boer began his career in oil and
gas in Holland with multiple feld jobs in nearby Euro-
pean countries working as service technician for TRS,
Snubbing and Hydraulic workover. He next joined
Weatherfords Controlled Pressure Drilling group as
UBD crew and MPD operator, and then eventually
moved on to MPD wellsite supervisor where he was
involved on a number of managed pressure drilling
projects in UK, Norway, Denmark, Hungary, Tunisia,
Egypt, Nigeria and Cameroon, several of which were
high profle and/or HP/HT.
Essam Sammat graduated from Alexandria Univer-
sity with a bachelors degree in mechanical engineering
in 1999. With over 14 years of industry experience, Es-
sams career started in the Arabic Gulf, Abu Dhabi, as
a well testing feld engineer before joining Weatherford.
At Weatherford, he started as an underbalanced drill-
ing engineer, moved on to opera-
tions manager and then regional
BD manager. Sammat has been
involved in a number of underbal-
anced/managed pressure drilling
projects in Algeria, Oman, Libya,
Saudi Arabia, Norway, Nigeria,
Ghana, Denmark, Turkey, and
the UK. Currently, he is a regional
product line manager for Weatherford in Aberdeen.
Stephen OShea holds a BSc in geology from Univer-
sity College Cork, Ireland, and an MSc in petroleum
geoscience from University of
Manchester, UK. Formerly with
Halliburton Sperry, OShea has six
years of industry experience and has
spent that past four years working
with the Weatherford team focused
on managed pressure drilling and
underbalanced drilling in Europe,
Texas, and West Africa. Specif-
cally within MPD and UBD, OShea primarily focuses
on HP/HT and narrow margin drilling, employing
constant bottomhole pressure, early kick loss detection,
and statically underbalanced drilling techniques.
1410OFF_81 81 10/1/14 3:59 PM
82 Of fshore 0ctober 2O14

Industry shows renewed interest
in float-over installation
loat-over installation has become an attractive alternative to
heavy-lift crane installation for offshore construction, as in-
creasing size and weight of offshore platform topsides con-
tinually exceed the lifting capacity of cranes. One out of six
units weighs more than 12,000 tons (10,886 metric tons).
Dockwise Ltd. analyzed topsides installation trends from 2005 to
2012, and found that the number of offshore installations has grown
over the past decade and is expected to increase in the future. The
demand for cost-effective and more fexible alternatives to crane in-
stallations was the driving force behind foat-over installation using
semisubmersible heavy transport vessels (HTVs).
From 2005 to 2012, the offshore crane lift method took the lions share
totaling 115 (44%) of the 264 installations. Yard lift and foat-over instal-
lations totaled 112 (42%) and 37 (14%), respectively. Of the 264 topsides,
192 (73%) Type A weighed between 4,000 and 12,000 tons (3,629 and
10,886 metric tons), and 72 (27%) Type B weighed more than 12,000
tons. While 6% of the Type A topsides were installed by foat-over, more
than one-third of the Type B topsides were installed by foat-over. This
indicates that foat-over installation is growing as a preferred installation
method as topsides weight reach 12,000 tons and more.
An estimated 480 Type A and 93 Type B production platforms (fxed,
foating, or gravity-based) are expected to be installed between 2014 and
2018. For the majority of Type B units, the offshore installation approach
is known: 14 are expected to be installed by foat-over, 12 by crane lift, and
one by yard lift, 19 are unknown or yet to be decided. A total of 47 FSPOs
fall under Type B units, but these units require a different installation ap-
proach other than foat-over or heavy-lift. Of the 46 Type B productions
units within scope (non-FSPO and known installation), 52% of the instal-
lation will be conducted by foat-over. The majority of the 19 production
platforms whose installation approach is unknown or to yet to be decided
are expected to be foat-over installations.
In the next few years, an estimated 660 offshore platforms are ex-
pected to be constructed of which 180 are expected to weigh more
than 12,000 tons. The need to develop felds in remote locations
where foating and gravity-based production units are required is
driving the demand for larger offshore units.

Why foat-over?
The foat-over installation approach has been proven for more
than 30 years, and is regaining interest from the oil and gas industry.
To determine if a foat-over installation is the best choice, one
needs to review the advantages and disadvantages.
Reduced schedule interfaces
Reduced risk
Minimize offshore exposure hours
Reduced offshore hookup and commissioning
Vessel availability
Cost savings
Limited workability
Jacket slot requirements
Transport and installation support conditions
Installation method design implications
Early commitment to contractor.
Float-over phases
From an operational point-of-view, there are several distinct phases
for a foat-over installation starting with the load-out phase. Require-
ments for the load-out stage are governed by the integrated topsides
weight, tidal range, and quayside dimensions. Following load-out, the
integrated topsides has to be fastened onboard the vessel for sea trans-
port. After completion of the transit, the vessel needs fnal preparations
prior to the commencement of the actual docking operation of the ves-
sel for the stand-off phase. Preparatory work needs to be executed
such as removal of sea fastenings, start-up of mooring/docking/mating
winches, start-up of motion and weather monitoring equipment, start-
up of active load-transfer system, and pre-ballasting of the vessel.
The vessel is then moved into the jacket for the docking phase.
Once the vessel is positioned directly above the jacket structure and
docked, the topsides legs have to be aligned with the jacket legs for
pre-mating. Once the topsides is lowered onto the jacket by the ves-
sels rapid ballasting system where large quantities of water enter the
ballast tanks, enabling the vessel to submerge, the mating phase be-
gins. The topsides weight is completely transferred onto the jacket.
For the post-mating phase, the topsides are secured on top of the
jacket and a clearance gap is created between the topsides support
unit and the vessel to ensure limited contact between the two. The
vessel then departs from the jacket slot on its own propulsion or
with assistance from tugs.
Float-over vessel requirements
Three essential criteria are required for an HTV to perform a foat-
over. The frst is the width -- the vessel must be narrow enough to ft
Jonathan Martinez
Dockwise installed the production platform at the SHWE gas development
offshore Myanmar, and set a company record for the heaviest float-over
installation. The 30,000-ton topsides were launched from the HYSY229
barge. (Photo courtesy Dockwise)
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inside the jacket slot. The larger-sized topsides (15,000 tons) typically
have jacket leg clear spacing of around 151 ft (46 m). Assuming nominal
clearances, the vessel width is limited to no more than 138 ft (42 m).
Second, the vessel must be equipped with movable casings and de-
signed with an open stern. To ensure the topsides is perfectly positioned
onboard the vessel, the casings, which facilitate balance and ballasting,
can be moved to best accommodate cargo. The open stern enables the
vessel to exit the jacket slot during the last phase of an installation.
Third, HTVs require suffcient strength and stability to support and
transport heavy topsides. Various engineering disciplines ensure the
cargo is precisely positioned on board the vessel. Prior to loading, the
vessel is outftted with fxed materials and equipment to safeguard the
load-out, transport, and installation. The equipment used depends on
the installation requirements.
Mooring system
A mooring system needed for most foat-over operations should be
sized to accommodate expected vessel motions, site environmental
conditions, and site geometry. Mooring lines are made up of either steel
or polypropylene lines terminating at steel ropes. The lines and their
pretensions are calculated and adjusted to provide precise positioning
of the vessel and to minimize the motion. The natural period of the ves-
sel needs to be checked to make sure there are no resonance issues.
The mooring system must be small enough to be deployed and
disconnected easily, while strong enough to maintain vessel control.
Typically, mooring winches with around 121-ton (10-metric ton) pull-
ing capacity and wire size less than 5-6 cm (2-2.4 in.) in diameter are
selected. Anything larger will be diffcult to handle offshore or will
require special winches. For smaller mating lines that terminate at
the jacket legs, 50-ton (45-metric ton) capacity winches work well.
The limitations
Each component of a foat-over system will have physical limitations in
terms of maximum motions or loads. If these limits are exceeded, safety
is compromised, but an iterative process can establish these limitations.
Leg mating unit (LMU) and deck support unit (DSU) component ge-
ometry determine the motion limits. Maximum LMU excursion radius
is restricted mainly by the substructure leg diameter. The maximum
excursion radius rarely exceeds 3 ft (1 m).
Vertical and lateral load limits on the LMU and DSU components are
determined by the substructure and the topsides structural strength.
Usually, the foat-over vessel and the specifc analyses are not available
at the time of the topsides and substructure structural design, so the
limits may be set based on experience.
The mooring and mating lines (and fenders, if used) have limits.
Barge motion limitations need to be verifed so that the vessel does not
contact the substructure. In the fnal analysis, the wave limits are estab-
lished as a function of approach direction that will allow safe operations.
Based on the weather limitations for different directions of weath-
er approach for different times of the year and for historical installa-
tion site weather data, the next step is to look at the potential work-
ability for the foat-over.
Although the workability thus obtained will not be strictly deter-
ministic, the result will guide the potential weather downtime for a
given installation period.
Another decision-making tool that can be installed is the vessel mo-
tion monitoring system. In this system, the real-time vessel motion
in 3D can be viewed along with its trend. When vessel motions are
within limits and the trend is favorable, operations can proceed.
1410OFF_83 83 10/1/14 3:59 PM
84 Of fshore October t

Subsea power grid accelerating
transfer of topsides
functions to seafloor
iemens is close to completing an initial test program on the four
main components (subsea transformer, subsea medium-voltage
(MV) Switchgear, subsea variable speed drive, and subsea pow-
er control and communication system) of a proposed subsea
power distribution hub. The Subsea Power Grid will be connect-
ed on the seafoor to the array of new equipment emerging for subsea
production, processing and boosting. This should facilitate expansion
of feld development into deeper water, longer step-outs, and more de-
manding production environments.
Design of the grids subsea transformer, switchgear and variable-
speed drives (VSDs), as well as the communication and control sys-
tem started in 2010. The subsequent engineering/test campaign has
been conducted mainly at Siemens Subsea Technology Center in
Trondheim, Norway, since it was opened in September 2011, in co-
operation with Siemens locations in other countries. The 10,000-sq
m (107,639-sq ft) facility in Trondheim includes a pressure test labo-
ratory that can simulate ultra-deepwater
conditions (up to 460 bar/6,672 psi) in 23
pressure vessels of different sizes. Initial
testing of the individual Subsea Power Grid
(SPG) component prototypes is nearing
completion, and will be followed next year
by extended shallow-water trials of the in-
tegrated SPG in Trondheim harbor. One
of the goals is to ensure that the system
can remain in operation on the seafoor for
many years, without maintenance.
The development, testing, and quali-
fcation program is supported by Chev-
ron, ExxonMobil, Petrobras, and Statoil,
all noted for pushing the boundaries of
subsea and deepwater production. The
technologies they and other operators are
looking to transfer to the seabed include gas compression, water
injection, multi-phase booster pumps, and subsea separation. Ac-
cording to Subsea Technology Center director Jan Erik Lystad, oil
companies have been telling us that they need more power to be dis-
tributed to multiple subsea consumers in order to reach out further
to access more reservoir pockets.
Current technology can transmit only limited amounts of power
to the seabed, which does not allow connections to multiple equip-
ment items, or consumers, in an effective manner, Lystad explained.
When each subsea consumer has to be connected to topside power
distribution equipment via individual subsea cables this requires a lot
of topside space and riser capacity. That makes the operation both com-
plex and costly, and it is not a viable solution for long step-outs, for a
large number of consumers, or for high-power requirements.
By implementing a subsea power hub and grid, operators of sub-
sea felds will be able to distribute power more widely, Lystad not-
ed. In addition, the subsea power supply
and distribution system eliminates a lot of
complexity. With the Subsea Power Grid,
there is just one high voltage (typically
up to 100 kV) cable running from the sur-
face to the seabed to a subsea step-down
transformer in the hub, where voltage
will be reduced to 36 kV. Then the power
is distributed through a medium-voltage
switchgear (one switch per consumer)
and on to individual variable-speed drives
for each pump, compressor, and so on.
In addition to reducing cable volume,
the Subsea Power Grid should enable in-
creased use of boosting closer to wells,
Lystad claimed. This will allow new alter-
native and less complex feld development
Jeremy Beckman
Editor, Europe
Shallow-water transformer test in Trondheim.
How the connected items of the Subsea
Power Grid might look on the seafloor.
(All images courtesy Siemens)
1410OFF_84 84 10/1/14 4:00 PM t October 2014 Of fshore 85
solutions that are economically superior to current platform/tieback
concepts. It will also open up development of reserves to be devel-
oped in remoter regions, i.e. beneath Arctic ice.
There are physical limits regarding the length of subsea step-
outs that the subsea grid can supply. The industry is talking in terms
of step-outs of 200 km (124 mi) or more, but achieving this will de-
pend on the type of equipment that needs to be connected and the
total power rating for the distribution.
Interface potential
Siemens Subsea Power Grid is intended to be a comprehensive pow-
er supply and distribution system containing transformers, switchgear
and VSDs, and a fully redundant communication/control system, deliv-
ering power at customer-specifed rates to various subsea consumers.
Confgurations can be tailored according to the projects scope.
The equipment is being designed with open interface tools to en-
sure compatibility both with associated Siemens devices, such as the
subsea hydraulic power unit, and with other suppliers equipment.
Our goal is to provide a complete subsea power solution, said Bjrn
Rasch, Siemens head of Subsea Power, while the processing equip-
ment such as booster pumps, gas compression units, and injection
kit will be delivered by other established players. Should new types
of consumers emerge with currently unforeseen power ratings, Sie-
mens will further enhance the variety of confgurations accordingly.
One in-house item that will be linked to the various modules in
the Subsea Power Grid is a 45 kV wet-mateable connector system
developed by the companys UK-based Siemens Subsea connector
specialist, formerly known as Tronic. The wet-mateable connectors
connect all the different subsea power components with each other
and with the subsea consumers, Rasch noted.
The design of the power units in the Subsea Power Grid incor-
porates new, patented features to improve insulation performance,
reduce the risk of leakage, improve pressure compensation and pro-
vide ease of engagement/disengagement with ROV tooling.
Compared with conventional offshore topsides transformers, switch-
gear and VSDs, the design focus for the SPG has been on pressure-com-
pensated technology with 100% natural cooling. This means the modules
are fuid-flled and most of the components operate under full pressure.
The fuid-flled and pressure-compensated design provides several ad-
vantages in terms of enhanced reliability, Siemens claims, including:
* Llcient natural cooling without any moving parts
* No dillerential pressure on penetrations to seawater, hence a
reduced risk of leakage
* \ery stable and sale environment lor all components
* Same design applies to all water depths
* Lnhanced insulation levels.
All the equipment is being qualifed according to the requirements
from our JIP partners, Rasch explained. We have been running a
comprehensive qualifcation program according to customer expecta-
tions and recommended practice lrom DN\. This started by qualilying
the technology from a component level before moving on to subassem-
blies, and concluding with a shallow-water test of the complete Subsea
Power Grid. The program also includes endurance testing of all compo-
nents using techniques that apply increased stress on the components
to speed up testing to demonstrate a 30-year lifespan.
Test schedule
All tests on the subsea transformer were completed successfully
in 2012 in the Trondheim pressure laboratory as well as in Trond-
heim harbor (shallow-water test), with results confrming that this is a
market-ready product suitable for a wide power range (typically from
1 to 100 MVA) and for operation in water depths of down to 3,000 m
(9,842 ft), says Siemens. Features of the transformer include an en-
hanced insulation system; a robust enclosure design with optimized
natural cooling properties; biodegradable M!DLL 7181 uid lling;
fexible interfaces (dry or wet-mate conditions); and advanced condi-
tion monitoring (oil properties, temperature, pressure, ground fault,
and so on).
The subsea switchgear has a modular design, featuring 36-kV, 500-
A feeders and vacuum circuit-breakers; an integrated auxiliary sup-
ply; main switch in 1-atmosphere system canister; a fuid-flled base
module; a pressure-compensated bus bar base section; a industrially
proven S!!ROTLC protection system; and zero dillerential pressure
at all penetrations to seawater. The design is cascadable to allow more
consumers to be confgured, via connections to seabed templates.
Finally, the variable-frequency drives (VSDs) are also of a modu-
lar and pressure-compensated design said to achieve 100% natural
convection cooling via dielectric fuid. Internal temperature varia-
tions cause fuid to fow, generating the cooling effect.
The VSD prototype will be completed and qualifed next year pri-
or to the fully integrated shallow-water trials. This is probably the
most challenging of the three power units to qualify for operation
in 3,000 m water depth, Rasch added. It incorporates a scalable,
multi-cell topology, meaning that it comprises many smaller build-
ing blocks, or power cells. The number of building blocks is deter-
mined by the voltage rating of the unit. Redundancy can be built
into the design by including more power cells than needed for the
specifed rating. If a power cell should fail, the advanced cell bypass
function would bypass the power cell (i.e. remove it from the VSD
power circuit), allowing the VSD to run with the remaining cells.
Rasch noted that there are other advantages in the multi-cell design
with respect to harmonics. A basic property of frequency converters is
that they change the voltage in discrete steps. The output voltage con-
sists of contributions from each of the power cells, and with a large num-
ber of cells, the total voltage can be changed in many discrete steps. By
incorporating many small discrete steps in the output voltage waveform,
we can achieve an almost sinusoidal output voltage with a low harmonic
content. Furthermore, the number of cells, combined with a uniquely
designed input transformer, cancels out most of the critical harmonic
feedback to the supply the result is low harmonics both to the motor
and to the supplying grid.
Following the completion of pressure testing of the various compo-
nents and subassemblies in the Trondheim lab (around the turn of this
year), next years planned test and qualifcation procedure is as follows:
* Module testing in a dry environment in assembly lactory in Trondheim
* System integration and lunctional testing in assembly lactory
* Shallowwater test and qualication ol the switchgear prototype
(currently being assembled in Trondheim, testing/qualifcation in
2015) and the VSD prototype (assembly and testing/qualifcation
in 2015 in Trondheim)
* Shallowwater test and qualication ol the power communica-
tions and control system
* Shallowwater test and qualication ol the completed subsea power
grid, including switchgear, VSD, transformer, and respective con-
Pressure vessel at the Subsea Technology Center in Trondheim.
1410OFF_85 85 10/1/14 4:00 PM
86 Of fshore 0ctober 2O14

Reservoir conditions, flow regimes
challenge measurement accuracy
Lars Anders Ruden
Emerson Process Measurement
he growth in subsea and topside multi-phase meters over the
last few years is such that they have become an essential ele-
ment of production and monitoring systems for many current
offshore installations.
Further growth is also expected. Industry analyst Douglas-
Westwood predicts a 90% growth in deepwater expenditure between
2012 and 2016, and up to a thousand additional meters worldwide.
Emerson expects the number of new subsea trees coming onstream
each year to increase from 280 in 2011 to around 720 in 2016. Many
of these trees will include multi-phase meters.
A recent report on multi-phase meters by ARC Advisory Group
says that energy companies such as Statoil, PDVSA, BP, and Petro-
bras are deploying multi-phase fowmeters on a broad scale to be
able to continuously measure the individual components in co-min-
gled oil, gas, and water streams.
Multi-phase meters play an increasingly important role from
royalty and fscal allocation to production control, prevention of wa-
ter encroachment, and the generation of real-time well data to help
diagnose and optimize well performance.
Yet, as multi-phase meters continue to increase their market pen-
etration, more challenges arise. These include meter use in more geo-
logically complex and remote felds; the need to manage costs while
optimizing production; and the environmental concerns of nucleonic
sources an important element of many traditional multi-phase meters.
Infuence quantities
One of the biggest challenges facing multi-phase meters today,
however, is the huge variety of reservoir conditions and fow re-
gimes faced when in operation. Accuracy in water production, for
example, is becoming more important in detecting formation water
and producing injected seawater, and there is a need
to measure the process fow over the entire range of
the gas volume fraction (GVF) from 0-100%.
While multi-phase meter performance is measured
by outputs and the ability to accurately track the fow
rates of oil, gas and water, it is equally important to
focus on those elements surrounding multi-phase
meter deployment that are not measured, yet have a
signifcant impact on the meters readings. These are
called infuence quantities.
Infuence quantities are common in many current oil
and gas felds and include everything from H
, and
sand through to hydrate inhibitors, such as MEG (mono-
ethylene glycol), additives such as emulsifers, wax inhibi-
tors and corrosion inhibitors, and a variety of different fow
regimes. The result is a fow stream consisting of multiple
infuence quantities.
To determine how infuence quantities affect multi-phase
meter measurements, it is necessary to calculate sensitivity
Sensitivity coeffcients provide data on how the output estimate
varies based on changes in the value of the infuence quantity how
one estimate is infuenced by small changes in a different estimate.
For example, if an x% change in oil density gives a y% change in oil
rate, then the changes of x% and y% are the sensitivity coeffcients.
The oil density is the infuence quantity, and the oil rate is the mea-
surand from the multi-phase meter.
With a better understanding of infuence quantities and sensitivity
coeffcients, operators can better quantify uncertainty in their multi-
phase measurements to better manage and plan feld development
and reservoir management strategies.
Handling complex fow
Multi-phase meters perform in a huge variety of fow regimes that
might include bubble, slug, mist, churn, and annular. Slip fow also
occurs regularly when gas rises faster than liquid, due to buoyancy
effects and the velocity profle of the fow in the pipe.
To handle multiple and rapid changing fow regimes, a suffcient
number of sensors and calculations must be included within the me-
ter. For annular fows with high gas fractions, compensation
must be incorporated into the gamma system to get accu-
rate measurements.
For rapidly changing slug fows (both water and gas slugs),
fast front-end electronics that can capture these changes are
important. The third generation Roxar Multi-phase Flow
Meter from Emerson, for example, includes high-resolution
sensors capable of capturing small changes in the electrical
properties of the multi-phase fuid passing through.
Phase slip also varies with changes in process conditions
and fow regimes. Some multi-phase systems can only form
an estimation of the slip based on fow regime assumptions
accessing complex slip models. With the Roxar meter how-
ever, the meters dual-velocity system and cross-correlation
capabilities provide fow regime independent measurements.
The direct measurement of the degree of annularity,
the mapping of non-symmetrical fow, and a cross-sec-
The Roxar third generation multi-phase meter.
Multi-phase meter set up. (Photos courtesy Emerson Process Management)
1410OFF_86 86 10/1/14 4:00 PM
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At Cudd Well Control, we stand prepared to prevent and respond
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1410OFF_87 87 10/1/14 4:00 PM
For Exhibiting and Sponsorship
Opportunities please contact:
Europe, Middle East & Asia
Tony B. Moyo
T: +44 (0) 1992 656 658
Dele Olaoye
T: +234 802 223 2864
The Americas
Desiree Reyes
T: +1 713 963 6283
South East Asia
Mike Twiss
T: +61 437 700 093 or +65 9018 5179
Presented by: Owned & Produced by: Supporting Publication: Follow Offshore Events on:
The 19
20-22 January 2015
The Eko Hotel & Suites l Lagos l Nigeria
The 19th annual Offshore West Africa conference and exhibition is the premier technical forum
focused exclusively on West African offshore exploration and production. The conference will provide
attendees with the latest technological innovations, practical solutions and lessons learned from leading
industry professionals.
Under the auspices of the Nigerian National Petroleum Corporation (NNPC) Offshore West Africa
is the leading source of information on new technology and operating expertise for this booming
deepwater and subsea market.
This is your opportunity to join over 1,200 offshore professionals by attending the leading conference
and exhibition dedicated to the offshore oil & gas industry in the region.
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1410OFF_88 88 10/1/14 4:00 PM
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tional breakdown of the fow are other areas where technology devel-
opments are taking place to reduce infuences on accuracy.
Salinity and conductivity
Measuring water conductivity and salinity also is increasingly im-
portant in the operation of multi-phase meters. Salinity is viewed as
a key operational parameter for reservoir management and fow as-
surance with salinity measurements telling the reservoir engineer
whether formation water is entering the fow, and helping the pro-
cess engineer adjust injection rates of scale and corrosion inhibitors.
In water continuous fow, multi-phase meters are also dependent on
an input of water conductivity/salinity values to achieve their correct
performance specifcations. While variations in water salinity have no
infuence on the Roxar multi-phase meters measurements in process
conditions at less than ~60 water/liquid ratio WLR (i.e. oil continuous
fows), at higher water cuts the water conductivity is an important input
value to any multi-phase meter with signifcant sensitivity coeffcients.
For example, with a GVF at 80%, WLR at 60%, and a water conduc-
tivity change at +1% rel, the additional uncertainty would be a liquid
rate (% rel) at -0.1 % and WLR (% abs) at +0.6%.
Taking these infuence quantities into account, Emerson has de-
veloped two dedicated salinity/conductivity sensors for operation
in multi-phase and wet gas fow and that enable absolute measure-
ments of produced water salinity. The wet gas probe measures salin-
ity in wet gas and high GVFs and the multi-phase probe measures
salinity in water continuous multi-phase fow.
The dedicated salinity sensor for multi-phase fow is based on
microwave transmissions and can operate in three-phase gas-liquid
fows. The sensor measures the effect of the fow on the propagation
of the microwave signal in the volume between three probes, with
the salinity of the water phase and the local water/liquid ratio then
able to be deduced. The result is a better quantifcation of uncer-
tainty and improved meter measurements.
Handling MEG injection
Operators face threats to fow assurance and multi-phase meter per-
formance from hydrates the crystals that are formed in high-pressure
and low-temperature gas fows where water and natural gas are present.
The growth in deepwater wells with high GVFs, high pressures,
and low temperatures increase this threat, with gas hydrates the
most common form of downhole blockage. For multi-phase fows,
issues include formation of waxes, hydrates and scales; restrictions
and blockages; and corrosion and damage of equipment.
While thermodynamic inhibitors such as methanol and ethylene gly-
col (MEG) are currently the most effective ways to prevent hydrates,
they add measurement challenges of their own for multi-phase meters.
MEG is measured as water by the electrical impedance sensor
system of the multi-phase meter. The densities of these fuids are
lower than water, so the density of the mixed fow can be reduced
and, if a considerable amount of MEG is injected, could infuence
measurements from the gamma system.
To meet this circumstance, either subtract the MEG injection rate
from the reported water rate from the multi-phase meter or provide
water density input into the multi-phase meter. In this way, measure-
ments can be updated that account for the combined density of the
expected water production and MEG/Methanol injection, thereby
removing the infuence quantity effect on the gamma system.
In all these and other cases of infuence quantities, it is important
to understand that different multi-phase metering technologies may
be affected differently. Understanding infuence quantities, sensitive
coeffcients, and how they are being addressed, should be key ele-
ments of the selection process.
1410OFF_89 89 10/1/14 4:00 PM

90 Of fshore October 2014 t
Robert R. Harl, CEO and director of
Willbros Group, has announced plans to retire
when his current employment agreement ex-
pires on Jan. 2, 2015. The companys board of
directors has elected John T. McNabb II as
executive chairman of the board on an interim
basis and has elected S. Miller Williams as
lead independent director.
GE Oil & Gas has appointed Patricia Vega
as president and CEO in Latin America.
McDermott International has appointed
Stuart Spence as executive vice president
and CFO.
The Society of Petroleum Engineers Aber-
deen section has appointed Ross Lowdon as
Baker Hughes Inc. has appointed Kimberly
A. Ross as senior vice president and CFO.
Bob Sonny Fogal has decided to retire
from front-line work as Zentechs director
of business development after more than 57
years in the offshore oil and gas industry.
He spent his entire career in the rig building
business, starting with Levingston Shipyard
and subsequent work with major designers
and builders in the US as well as Singapore,
Japan, China, Brazil, India, South Africa, and
the Middle East.
David L. Roland has joined Diamond
Offshore as senior vice president, general
counsel, and secretary.
Lloyds Register Energy has appointed
Joanna Pohorski as senior vice president,
Compliance Services.
Subsea 7 has reappointed Allen Stevens
and Robert Long to its board of directors.
J. Kevin Bartol has resigned as executive
vice president, CFO and treasurer of Rowan
Companies. The company has promoted
Melanie M. Trent to executive vice president,
general counsel and chief administrative
offcer and will assume responsibility for the
Legal function, as well as retain responsibility
for the Human Resources, Information Tech-
nology and Communications departments.
She succeeds John L. Buvens Jr., who is
retiring from after more than 30 years with the
C.J. Cummings, Stewart Gossen, and
Conrad P. Kathol have resigned from Niko
Resources Ltd.s board of directors. Tim
Henry has resigned as vice president, general
counsel, and corporate secretary.
Petrobras CEO Maria das Graas Silva
has received the Global Pacifc & Partners
Award in the Offshore/Deepwater Player
category at the 20th Latin Oil Week, an event
held at the Copacabana Palace Hotel in Rio de
Janeiro. She also received an honorable men-
tion as a Patron of the Global Women Petro-
leum & Energy Club, an association created
to bring together high-profle women in the oil
and gas sector throughout the world.
Trond Olsen has joined ClampOn as presi-
dent. He succeeds Hans A. Wagner, who has
been named senior vice president - Business
Vikoma International Ltd. has appointed
Karen Lucas as general manager and direc-
Edward Snyder, manager of instrument
engineering at William Jacob Management,
has successfully completed the University
of Alaska course in Fundamentals of Arctic
Engineering. The course is a prerequisite for
securing an Alaska professional engineering
license. In August his application for license as
a Registered Engineer for the state of Alaska
was approved.
Hugh Barrs has
joined Ceona as senior
vice president quality,
environment, safety, and
Alex Imperial has
taken over as DNV GL
Oil & Gass regional
manager for South
Canadian Overseas
Petroleum Ltd. has appointed Dr. Richard
Mays as vice president of business develop-
Sigma Cubed Inc. has appointed Mauri-
cio Arboleda as executive vice president of
Deloitte Corporate
Finance LLC has named
Thomas W. Sloop as
managing director in its
Houston offce.
Walter Steedman has
been elected chairman
of the Offshore Survey
Division of the Interna-
tional Marine Contrac-
tors Association.
Lord David Owen
has resigned as a
member of Hyperdy-
namics Corp.s board of
directors. He also served
on the Nominating and
Corporate Governance
and Governmental Rela-
tions committees of the
BMT Reliability Con-
sultants has appointed
Dan Oakley as sales
Circulation Solutions has promoted Zach
Grichor to vice president of business develop-
ment and Mark Laurent to vice president of
RigNet Inc. has named Pal Jensen vice
president -- Energy Maritime.
RMSpumptools has
appointed Ted Boeri as
vice president of global
SAL Heavy Lift
Singapore Pte Ltd. has
transferred Alexander
Poetz, a senior project
engineer and naval archi-
tect from its Hamburg
headquarters, to its
Asia/Australasia base in
Ryan McPherson
has joined ProSep as
general manager for the
Middle East.
Nautronix has
appointed Thomas Mc-
Cudden as global sales
manager for NASNet.
Deborah McDonald
has joined Logan Inter-
national as marketing
Anne LeBoutil-
lier has joined Ocean
Specialists as director
of global marketing and
business development.
2H Offshore has ap-
pointed Paul Hopkins
as principal engineer in
Alan White has
joined Harkand as head
of engineering services
in Europe.
Christopher Salinas
has joined Alloy Metals
and Tubes International
as senior outside sales
Romy Mathew has
joined SOR Inc. as
regional sales manager
in the Middle East.
Survivex has promot-
ed Lisa Flint to human
resources director.
Bjrn Jalving,
executive vice president
Subsea at Kongsberg
Maritime, has received
the Compass Distin-
guished Achievement
Award from the Marine
Technology Society for
his long career and achievements within AUV
technology. Jalving developed the control and
mission management system and was heavily
involved in system design of Kongsberg Mari-
times HUGIN AUV. Jalving was responsible
for the team that designed and implemented
1410OFF_90 90 10/1/14 4:00 PM
BUSI NESS BRI EFS t October 2014 Of fshore 91
the HUGIN aided inertial navigation system.
In 2000, a HUGIN 3000 from C & C Technolo-
gies provided consistent position accuracies of
2 m (7 ft) and 4 m (13 ft) at depths of 1,300 m
(4,264 ft) and 2,200 m (7,216 ft) in the Gulf of
Mexico. This navigation technology has also
been applied in Kongsberg Maritimes HAIN
system for ROV navigation and dynamic posi-
tion vessel reference.
Company News
InterMoor UK Operations has completed
seven years and more than 2,300 projects
without a single lost-time incident. The safety
record includes the companies InterMoor
Ltd., InterMoor Marine Services Ltd. and
ChainCo and operations at three bases, fve
storage yards, and many quayside locations.
InterMoor also has opened a new storage,
maintenance, and inspection facility in Aber-
deen, UK. The new base on a three-acre site
with a warehouse, 20 permanent onsite staff,
and a multi-million dollar mooring inventory
will support the companys global mooring
Acteon has acquired UTEC Survey to
enhances its global survey and data gathering
PMI Energy Services, a Superior Energy
Services company, has opened a shorebase
in Morgan City, Louisiana, to support shelf,
coastal, and inland waters production and drill-
ing activities.
Aqualis Offshore has opened an offce in
Mexico City. The company will also establish
an operations offce in Ciudad del Carmen to
support offshore rig owners and oil service
Seatronics has partnered with Teledyne
RD Instruments Inc. to sell its marine mea-
surement and navigation products. Seatronics
will sell Teledyne RD Instruments Acoustic
Doppler Current Proflers exclusively in Saudi
Arabia, UAE, Qatar, Oman, and Bahrain;
and will represent the company for Doppler
Velocity Logs (DVLs) nonexclusively in Qatar,
Saudi Arabia, Oman, and Bahrain. Seatronics
do Brasil Ltda will sell DVLs in Brazil on the
same, nonexclusive basis.
Premier Hytemp has invested $20 million
in a second precision engineering facility in
Singapore to service global oil and gas mar-
kets with components for wellheads, subsea
trees, valves, and downhole tools.
V.Group has concluded the acquisition of
Core-IRM, an inspection, repair, and mainte-
nance services provider in Southeast Asia.
AGR has entered into a memorandum of
understanding with Antilles Oil and Gas NL
to assist in well planning, design, and execu-
tion, and to provide drilling capability.
Deltamarin Ltd. has established a sub-
sidiary to enlarge the scope of the groups
naval architecture and engineering services.
The new company, Deltamarin Floating
Construction Ltd., will focus on delivering
engineering, procurement, construction,
and installation services to the marine and
offshore industry on turnkey basis.
Baker Hughes Inc. has acquired Weath-
erford Internationals pipeline and specialty
services business. The acquisition provides
Baker Hughes with an expanded range of
precommissioning, deepwater, and in-line
inspection services worldwide.
Maersk Drilling is selling its drilling barge
business, Maritime Contractors Venezuela
S.A., to Panama-based investment company
Barrystar Holding.
NSSLGlobal, an independent service pro-
vider of satellite communications, has merged
with the ESL group of companies, a satellite
solution provider and system integrator.
SKF USA Inc.s factory in Houston has
received the External Specialist Recognition
by the American Bureau of Shipping to
provide condition monitoring services to the
offshore industry.
Bureau Veritas has acquired Matthews-
Daniel Ltd., which provides loss adjusting
and risk assessment services for the global
offshore industry. Its loss adjusting activities
include incident investigations, root cause
analysis, damage and reinstatement assess-
ment, and cost estimation. The companys risk
assessment portfolio focuses especially on
marine warranty surveying activities.
Caterpillar Oil & Gas delivered the 100th
offshore generator set featuring Brazilian
local content from the companys Piracicaba,
Brazil, manufacturing facility. The 100th unit, a
Cat 3512 Diesel electric propulsion generator
set, was packaged, tested, and certifed with
an industry-leading level of Brazilian local
content per ANP standards.
Tenaris has confrmed the purchase of the
remaining 50% of the participation of Soco-
therm Brasil, which belonged to Socotherm
Americas a division of ShawCor.
CRC-Evans Pipeline International
has opened its new global headquarters in
Bibby Offshore has opened an offce in
Stavanger, Norway.
ABS has opened a new offce in Beijing.
The offce will focus on business relationships
and expanded offerings that strengthen its col-
laboration with local enterprises, universities,
and research institutions.
PIDE Solutions Group has entered into a
three-year educational partnership with SAIT
Polytechnic that includes donation of PIDEs
Piper 2.0 software powered by DataDraw,
valued at $600,000. Piper 2.0 is an intelligent
drawing and design platform tailored specif-
cally to support volumetric measurement and
reporting requirements across the upstream
oil and gas sector.
Aberdeen-based subsea IMR provider
N-Sea Offshore Ltd. has announced plans to
move into new premises at Salvesen Tower.
Mirage Machines has expanded its
headquarters in Derby, UK, by acquiring new
5,000-sq ft (464.5-sq m) offce premises adja-
cent to its existing engineering headquarters,
to facilitate the extension of its manufacturing
and service operations workshop to 17,000 sq
ft (1,579.4 sq m).
Enteq Upstream Plc has appointed Shen-
kai as its new distributor in Shanghai.
Citec has completed the acquisition of
M7 Offshore. M7s Norway location now
functions under the name of Citec Norway
AS, while its operations in Singapore now
functions under the name of Citec Group
Singapore Pte Ltd.
Applus RTD plans to open a base in Ber-
gen, Norway, to supply nondestructive testing
NOV Elmar has moved into larger prem-
ises in Tananger, Norway.
SNC-Lavalin Group Inc. has completed its
acquisition of Kentz Corp. Ltd., an engineer-
ing, construction management, and technical
support provider. The acquisition supports
SNC-Lavalins ongoing transformation into a
global Tier-1 engineering and construction
BATS Wireless and Aviat Networks have
formed a partnership to market stabilized
antenna tracking systems. The BATS systems,
when coupled with Aviats microwave radios,
deliver ultra-high-capacity connectivity. It will
deliver wireless communications and data
opportunities to FPSOs, FSOs and drillship
operators, and will enable end users access to
faster and more adaptive networks.
Sierra Oil & Gas S. de RL de CV,
Mexicos frst independent exploration and
production company, has secured equity com-
mitments of $525 million. Headquartered in
Mexico City, the company plans to participate
in exploration, development, and production
optimization opportunities made possible by
the countrys recent energy reforms. Under
the terms of the transaction, energy-focused
private equity frms Riverstone Holdings
LLC and EnCap Investments each have
committed $225 million in funding. Infrae-
structura Institucional, Mexicos largest
infrastructure private equity frm, has also
committed $75 million.
Sembawang Shipyard Pte Ltd. has signed
a shareholders agreement to establish three
subsidiaries in Singapore. The subsidiaries are
Semb-Eco Pte. Ltd., an investment holding
company; Semb-Eco R&D Pte. Ltd., which
will handle research and development and
holding of patents; and Semb-Eco Technol-
ogy Pte. Ltd., which will be responsible for
the manufacturing and commercialization of
1410OFF_91 91 10/1/14 4:00 PM
26 - 28 JANUARY 2015
Supporting Publications:
Owned and
produced by:
Presented by:
Held under the Patronage of H.E. Dr Mohd Bin Saleh
Al-Sada, Minister of Energy & Industry, State of Qatar
Organised by: Hosted by:
Offshore Middle East is the premier event dedicated to the offshore
exploration and production industries in the Gulf region.
Are you interested in exhibiting at the 5th Annual Offshore Middle East
Conference and Exhibition?
With a reputation for providing the best networking opportunities, the event
provides the ideal location from which to collaborate, conduct business and
experience exploration & production in action.
Sponsorship and Exhibiting Opportunities
Make the most of your attendance at the event. Sponsorship and exhibiting
opportunities offer a great way to enhance the profle and awareness of
your company.
Contact your local representative today for details on how Offshore Middle
East 2015 can help you showcase your products and services through a
host of available exhibiting and sponsorship options.
For more information visit:
Tony B. Moyo
Europe, Middle East & Africa
Desiree Reyes
The Americas
T: +1 713-963-6283
M: +1 281-785-7952
F: +1 713-963-6212
Mike Twiss
Australia, New Zealand,
South East Asia
T: +61 8 9593 4405
M: +61 437 700 093
1410OFF_92 92 10/1/14 4:00 PM
SEE RESULTSAsk me how!
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1410OFF_93 93 10/1/14 4:00 PM
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1410OFF_94 94 10/1/14 4:00 PM
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Aero Tec Laboratories, Inc.
............................... 93
Aker Solutions
................................................... 23
Bentley Systems
................................................ 67
Blast Control Systems
...................................... 75
Bluebeam Software, Inc.
..................................... 9
Busch LLC
.......................................................... 64
C & C Technologies, Inc.
................................... 60
C-FER Technologies (1999) Inc.
........................ 10
CANSCO ............................................................. 81
............................................................... 35
.............................................................. 13
Clarcor ................................................................ 65
Clariant ............................................................... 45
Cortec Fluid Control .......................................... 17
Crowley Maritime Corporation.......................... 56
Cudd Well Control .............................................. 87
Delmar Systems, Inc. ......................................... 42
Delta Rigging & Tools ........................................ 53
DNV GL ............................................................... 15
Draeger ............................................................... 51
Dril-Quip ............................................................. 11
Enventure Global Technology ........................... 16
.............................................................. 48
Fluid Control Services, Inc.
.............................. 52
FMC Technologies
............................................ C4
Forum Energy Technologies
............................. 49
Frank Mohn Flatoy AS
....................................... 31
Gazprom International
....................................... 33
Hardbanding Solutions by Postle
..................................................... 61, 63
Hoover Materials Handling Group
.........37, 39, 41
Hornbeck Offshore Services
............................. 71
Integris Rentals
.................................................. 55
ITC Global USA
JD Neuhaus Group
............................................ 19
Karmsund Maritime Offshore Supply
.............. 46
Korean Air
............................................................. 7
Matrix Composites & Engineering, Ltd. ........... 43
Mokveld Valves .................................................. 57
National Oilwell Varco ....................................... 25
Newpark Drilling Fluids ..................................... 27
OneSubsea ........................................................ C2
Deepwater Operations
Conference & Exhibition ..............................36
Offshore Group .......................................40, 80
Offshore Middle East
Conference & Exhibition ..............................92
Offshore West Africa
Conference & Exhibition ..............................88
PNEC Conferences .......................................83
POWER-GEN Natural Gas
Conference & Exhibition ..............................73
Subsea Tieback Forum .................................62
Topsides, Platforms & Hulls
Conference & Exhibition ..............................94
REPSOL .............................................................. 77
Schlumberger ...................................................... 3
Shaw Pipeline Services .....................................21
Spectrum GEO, Inc. ........................................... 29
Spir Star, Inc. ......................................................16
Superior Energy Services ...................................5
Tenaris Global Services .................................... 69
Tiger Offshore Rentals ...................................... 59
TIW Corporation................................................... 6
Tomax AS............................................................ 47
UT99 .................................................................... 89
Weatherford ....................................................... C3
Well Control School ........................................... 79
The index of page numbers is provided as a service. The
publisher does not assume any liability for error or omission.
"%7&35*4&34 */%&9
1410OFF_95 95 10/1/14 4:00 PM
This page refects 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
96 Of fshore October 2014 t
API RP 14C has long been the standard for Analysis, Design, In-
stallation, and Testing of Basic Surface Safety Systems for Offshore
Production Platforms. However, with the emphasis on surface,
it has also long been understood that the concepts did not directly
translate to subsea facilities. It appears that engineering judgment
and the series of Notices to Lessees (NTLs) issued by the Miner-
als Management Service (now Bureau of Safety and Environmental
Enforcement) was all that was standing between a safe design and a
possible subsea failure.
The answer to this dilemma lies in the primary differences be-
tween what API RP 14C has relied on almost exclusively for its
primary protection (relief valves to protect platform facilities), and
what subsea systems have relied on almost exclusively full pres-
sure containment. Another difference is the trend toward extremely
deep HP/HT reservoirs in ultra-deepwater. Increasingly, such res-
ervoirs challenge the limits of current technology and design, and
some concession to the full pressure containment model is to be
Policy makers and standard-setting authorities would be well ad-
vised to consider the adoption of standards for high-integrity pres-
sure protection systems (HIPPS), as well as subsea processing.
They should also account for a growing desire by the regulators
to step back from prescribing the minimum required standards for
subsea safety through NTLs.
Regulators ultimately want experienced industry personnel to es-
tablish the minimum standard rather than the regulators prescrib-
ing one through NTLs. This minimum standard should be based on
accepted industry practice, working through the API. To address
these concerns, the BSEE proposed to the API SC17 Committee
that any document designed to address subsea safety be based on
API RP 14C principles.
In turn, the API SC 17 Committee assigned a task group to adapt
the principles of API RP 14C to an RP for subsea safety using todays
standard industry practices. One important difference is that hav-
ing a minimum foor implies that required expectations are estab-
lished for everyone. That is more or less what a standard does.
An RP provides a list of best industry practices that may or may not
apply in every case. Those practices may not be minimums; rather,
they are what the industry recognizes as acceptable. Therefore
sound engineering judgment still must be applied.
It was also recognized that while a risk-based approach to safety
was becoming almost universal, the imposition of a minimum foor
through an almost prescriptive recommended practice did not pre-
clude the use of the risk-based approach. This was true as long as
the minimum prescriptive practices were applied where applicable.
One critical area that led to multiple reconsiderations was the
scope break between the topside safety and subsea safety. Many in
the industry want to set that break at the limits of a specifc contrac-
tors scope of work. However, it is important that the topside/subsea
safety system interface be carefully managed from a pressure, tem-
perature, and fow spec break with proper shutdowns and isolation
to ensure proper personnel protection. This does not always make
for clean scope-of-work breaks.
Another area that led to much discussion by the task group was
the inclusion of chemical injection systems. There was much debate
on whether check valves, often used subsea to prevent backfow into
the umbilical system, should be considered as barriers and whether
they are in fact part of the safety system. Generally, the belief was
that a check valve was not a safety barrier due to the inability to test
it with reverse fow, which would curtail the injections needed for
fow assurance. Yet these systems and personnel were protected on
the topside facilities by the application of API RP 14C beyond the
scope break between API RP 14C and API RP 17V.
The fnal determination tended to hinge on having the RP incor-
porate current standard subsea design practices as applied by the
industry, and only incorporate changes where industry practice is
determined to be defcient. Given the good operating record of the
subsea installations to date, there was no justifcation for any major
changes to the generally accepted practices.
The development of a new recommended safety practice reinforc-
es this authors belief that there are key differences between subsea
to topsides to the point that API RP 14C is not applicable. Yet, it also
reinforces the idea that the approach used in the development of
the safe charts and safety analysis tables used by API 14C is a vi-
able way to analyze the design to ensure safety and environmental
If used properly, an RP helps those with less experience under-
stand the risks, particularly when applying risk-based management
of safety. It sets a minimum foor. This was the task that BSEE asked
the API to do. The recommendation here is that industry embrace
one of the newest additions to API SC17 Recommended Practices:
API RP 17V Recommended Practice for Analysis, Design, Installa-
tion, and Testing of Safety Systems for Subsea Applications.
Marc S. Young, PE
Chief Process Engineer
Xodus Group
Development of a subsea
recommended safety practice
1410OFF_96 96 10/1/14 4:00 PM
Formation Evaluation
Well Construction
Completion & Stimulation





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OS60Yrs_PetroRM_i_140108 1 1/8/14 11:16 AM
12 Marina Bay, Financial Tower 3
Level 17, Singapore 018982
1410OFFFocusReports_2 2 9/29/14 11:32 AM
estled at the southeastern end of the 500 mile-long Strait of
Malacca, Singapore is a natural trade haven. The waterway
connects the Pacific to the Indian Ocean, and the tankers
running up and down it carry around a quarter of the worlds oil moved
by sea. The narrowest point of the strait, just to the south of Singa-
pore, is the Phillips Channel, which at its widest is just 1.5 nautical
miles across. It is a bottleneck, but also a tap, from which wealth
continues to flow in abundance. Traditional maritime industries, fat
from the business generated by vessels snaking through the narrows,
have been joined by more and more construction, supply and service
companies. From this financial font, Singapore sprang forth.
Publisher: Ines Nandin
Editorial: Fraser Wallace
Project Coordinator: Marie Kummerlowe
Project Director: Roslan J Khasawneh
For exclusive interviews and more info,
plus log onto or
write to
Photo courtesy of Matt Paish, Gardens
by the bay, Singapore
1410OFFFocusReports_3 3 9/29/14 11:32 AM
SLNG Terminal 1, Image courtesy of Singapore LNG Corporation SLNG Terminal 2, Image courtesy of Singapore LNG Corporation
This maritime trade route explains exactly why
the worlds leading oil and gas players have been
present in Singapore for such a long time. Exxon-
Mobil has had a presence in Singapore for over 120
years, reveals Matthew J. Aguiar, chairman and
managing director of ExxonMobil Asia Pacific. But
it is only over the last decade that Singapore has
developed a truly prestigious reputation for produc-
ing high quality oil and gas equipment. The country
started by manufacturing subsea applications and
has made significant gains in manufacturing, technol-
ogy and engineering, explains Lim Kok Kiang, ex-
ecutive director of the industry cluster at Singapores
Economic Development Board (EDB). Such progress
is attested by many international oil field service
companies establishing bases here; expanding their
reach into Asia. For instance, Halliburton just opened
a brand new, flagship manufacturing and technology
As demand for LNG grows in Southeast Asia, Singapores significant
location only stands to benefit. Singapore is geographically very
well-located at the center of major LNG demand and supply routes
and is already a world-class port, trusted financial center and major oil
trading hub, says John Ng, CEO of Singapore LNG. We also have
an LNG terminal that is built with the future in mind with the capability
to efficiently unload, store and reload LNG cargo for import and ex-
port. However, the citys advantages extend to industries beyond just
LNG: It is also recognized worldwide for its business-friendly infra-
structure and policies, as well as its quality workforce, Ng explains.
LNG is the major energy source for the future, and Singapore has the
physical and financial infrastructure to be a regional powerhouse in
this field, adds Paul Cornelius, partner of corporate and international
tax at PwC Singapore.
Singapore knows its strengths and so does the EDB. Manufacturing
in Singapore is a key industry, says Kiang. It manifests job creation,
economic diversity and spin-offs. Southeast Asia is
growing rapidly and turning into a manufacturing
hub. We want to position ourselves to capture the
market potential in not only Singapore but in the
wider burgeoning region.
It is not just good fortune that continues to draw
major oil and gas companies to Singapore: the city-
state is actively pursuing policies to secure key play-
ers. Singapore is channeling a lot of effort into
building its R&D capabilities, whether through ship
design engineering or through our offshore and
subsea equipment players. We want to harness the
synergies between sectors and translate these tech-
nologies to the maritime and offshore industries,
says Kiang.
The city-state has cultivated a transparent and
stable pro-business environment, backed by a strong
government philosophy, states ExxonMobils Aguiar.
The efforts of the Singaporean authorities have
resulted in an ecosystem that encourages and attracts
business, while not limiting the scope of risk manage-
ment activities, furthers Andy Milnes, CE of Integrated Supply &
Trading, Eastern Hemisphere, BP. Although it is limited in land area,
Singapore is effectively utilizing the space it has and is maintaining
investments in upgrading its infrastructure in terms of pipelines, jetties
and terminals as well as increased capacity, he adds. This enables
Singapore to bring large parcels of energy products.
Whilst Singapore is famed for its business environment, its neighbors
are definitely seeking to forward their oil and gas industries too. Some
see the growth in Singapores neighbors as a sign of the rise of rivals;
this is not necessarily the case. Business interests are intertwined across
the region, and Singapores long developing specializations allow the
city to take advantage of the direct commercial opportunities arising,
whilst also consolidating its position as a regional financial hub through
the development of the Singapore stock exchange, the SGX.
Andy Milnes,
CEO, Integrated
Supply &
Trading, Eastern
Hemisphere, BP
John Ng, CEO,
Singapore LNG
Lim Kok Kiang,
Industry Cluster
at the Economic
J. Aguiar,
Chairman &
Asia Pacific,
1410OFFFocusReports_4 4 9/29/14 11:32 AM

The majority of the younger generations have looked

increasingly towards the business and technol-
ogy industries for professional development says the
president of Singapore Maritime Foundation, Michael
Chia. We caught up with Paul Carsten Pedersen, CEO
of Jasper Invests Limited, to discuss how Singapore can
revert the local perception by showing that offshore en-
gineering and operation provides a sexy career path.
With Singapore engineering potential hamstrung by a dwindling talent pool,
Pedersen based upon his diverse management career - lays out a cohesive
national blueprint to abate and ultimately help solve this potent issue.
Taking the lead from the aeronautic industry, Singapore should take the
easy step and invest in a simulator-based training center, which will act as
the nucleus for drilling activities. The focus will be on developing candidates
for top jobs in operations, but with candidates spilling into rig building and
equipment engineering industries. It needs to be attached to one of Sin-
gapores principle polytechnics, which can foster a pipeline of young and
aspiring engineering talent. A simulator-focused training center will appeal
to students as the curriculum is innovative and aligns with current youth
attractions such as travel and computer gaming. Incorporating periods of
practical and well-paid work offshore, the curriculum will help to reshape
the image of offshore activities, which has incorrectly connotations of being
mundane, rather than cutting edge.
Singapores rig producing industry is facing more competition from Chi-
na. The attraction of contracting new rigs in Singapore would be enhanced
if a training center - next door to the shipyards - churns out regularly a
highly capable, trained and modern offshore rig workforce. Furthermore,
training centers develop an environment of interest. When placed within
a university or polytechnic, Singapore will start to see masters students in
drilling technology who will look to developing the equipment for the new
rigs. In this next wave of equipment improvements, automation will be key,
and thus another core competency of Singapores engineering and manu-
facturing arsenal can enhance the value generation in rig building. As an
added bonus, a large percentage of rig crews operating in southeast Asia
are from the region, but many of them do not get their training here. If they
would come to Singapore and train at the center, they can receive certified
training which has Singapores stamp of quality attached to it. This acts as a
further revenue stream for the center.
Underlying Chinas manufacturing competitive advantage is a vast
amount of state capital. Equally, one of Singapores competitive disadvan-
tages is the fact that Singaporeans are reluctant to work abroad, particularly
if there is no second career opportunity in Singapore after experiencing an
offshore life. Consequently, similar to what Petronas has done in Malay-
sia, Singapore needs to engender a Singaporean state company that can
create such comfort for Singaporeans second career. It would be energy
services focused as Singapore has no hydrocarbon reserves. Through such
a national drilling vehicle, Singapore can foster an enduring link between its
nationals and the oil service industry. The sovereign fund Temasek already
investing in drilling rigs outside Singapore would be well placed to absorb
a role of main investor in an SGX-listed company. If any one country could
pull this off, it would be Singapore, being a forward thinking, constantly
evolving nation that is always looking to be one step ahead of the game
and prepared to invest public funds to create work places with long-term
value for the country.
Pedersen started in the Maersk Group in 1981 after finishing university with
a Masters Degree in Engineering. On completing the companys widely-
acclaimed training scheme which forms the framework of Pedersens Sin-
gapore talent solution proposal he has gone on to enjoy a diverse career
spanning three decades in the oil and gas industry.
Singapores Economic Development
Board (EDB) reported in 2013 that
Singapore is the worlds largest manu-
facturer of jack-up rigs, responsible
for 70 percent of global production.
Singapore also delivers 70 percent of
floating production storage and
offloading (FPSO) conversion ser-
vices. The renowned Keppel and
Sembawang shipyards (amongst oth-
ers) are highly capable, handling a
Paul Carsten
Pedersen, CEO,
Jasper Offshore
1410OFFFocusReports_5 5 9/29/14 11:32 AM
fifth of the worlds ship repair operations as well as construction
Sembcorp Marine is one of the worlds largest marine and offshore
engineering companies. It is the proprietor of Sembawang Shipyard
and reported a 27 percent jump in year-on-year turnover in the first
quarter of 2014, growing from SGD 1.05 billion to SGD 1.34 billion
(USD 872 million to USD 1.11 billion). Whilst figures like this paint
a rosy picture, the full story is less positive, with gross margins
shrinking by two percent to 12.8 percent in the same period. This
is in part due to solid competition from other shipyards in the region.
In some rival ports, the quality of the product delivered is increasing,
and, in others, assets are available at a lower cost.
It might seem as if Singapores maritime construction industries
are under siege: neighboring countries are clearly eager to take a
share of the wealth that comes from courting the oil and gas sector.
Singapores rig building industry is facing colossal competition
from neighboring markets such as China and Korea, says Paul
Carsten Pedersen, CEO of Jasper Offshore, which owns and oper-
ates oil rigs for deep sea drilling that are contracted out to oil and
gas exploration and production companies. These markets are now
taking as many orders as Singapore, and, ultimately, Singapore has
to develop much deeper engagement in this industry.
Pedersen suspects that the sheer abundance of companies in
Singapore might start creating economic strains,
given the finite population that the island can
house. Singapore is a place where it is relatively
easy to attract highly skilled expats, but the tight
supply of local and talented people able to work
within and service the offshore industry is fast
becoming the citys Achilles heel, he adds.The
country must do more to abate this acute issue.
If Singapore wants to ensure longevity in the off-
shore products value chain, then it must find solutions to this
Some worry that there are weak links in the chain that connects
Singapore to its prosperity. A conspicuous challenge that is threat-
ening to derail Singapores offshore and marine status is the sheer
annual cost of hiring people, admits Steffen Tunge, managing
director, OSM Ship Management, a global independent provider
of offshore management services. There is an acute talent issue
here, and this has been compounded by recent changes in labor
We are opening a new facility in the bordering regions of Ma-
laysia that is nearly as large as our current one here, says Mark
Beretta, COO of KTL Offshore, one of the largest rigging outfits in
the world. Despite its obvious and fantastic advantages, Singapore
Mark Beretta,
1410OFFFocusReports_6 6 9/29/14 11:32 AM
is becoming an increasingly expensive place to
operate. By gradually shifting some 60 percent of
our production capacity, we are keen to reduce
our cost base but also explore the opportunities
present in Malaysia. Nevertheless, our headquar-
ters will always remain in Singapore. Clearly,
Singapores high costs are pressuring some busi-
nesses into seeking less fiscally strenuous
Everyone has a planuntil they get punched
in the face, boxer Mike Tyson once famously stated. However,
economic competition lasts longer than the 12 rounds of a boxing
match, and a number of Singapores innate qualities make the city
a robust player that will not tumble easily. Arguably, much of the
speculation over regional competition makes too much of high GDP
growth rates in these countries, ignoring the fact that Singapore is
simply a more mature economic unit. This city runs against the
mantra of the oil and gas industry: that risk begets reward. Instead,
Singapores success is built on its stability, but the cost of this stabil-
ity is following the governments economic vision.
Singapore is a special nation that in essence operates like a
successful business: it is always looking to hone and enhance its
competitive advantages, says Tunge. When the Singaporeans
apply their collective endeavors to a task, they do it very well and
craft the finished result very carefully. The Singaporean government
has a deeply ingrained desire to succeed and will supply the neces-
sary resources to ensure the city does.
Singapore will continue to be a major petrochemicals and refin-
ing hub; there is simply too much invested here for that to change,
says Paul Cornelius from PwC. However, in the trading sphere,
Malaysia is not only competing but in some ways surpassing Singa-
pores fiscal incentive package. However, this may not be as much
of a threat as it seems. The Malaysian trading industry struggles
to gain traction because the market and network have been and
remain firmly rooted in Singapore, Cornelius continues. Market
intelligence is critical for trading entities, and there is no place bet-
ter than Singapore to gather that. Moreover, the trading activity
comes off the back of a gargantuan amount of bunker sales coming
out of Singapore. It would appear that, simply, Singapore will
naturally gain some industries and lose others, as the forces of
economic selection pull some businesses to neighboring countries
and encourage others to move towards the center of Southeast
Asias economic activity- Singapore.
Many Singaporean companies are contributing towards extracting
resources in other territories, but this activity serves to bring revenues
from these countries back to Singapore. The traditional hydrocarbon
Paul Cornelius,
Corporate and
Tax, PwC
1410OFFFocusReports_7 7 9/29/14 11:32 AM
2000-07 (avg.) 2012 2014-18 (predicted avg.) 2018
Indonesia Malaysia Philippines Singapore Thailand






titan Indonesia remains a country of considerable potential and a perfect market for a
company of our size, though uncertain political and fiscal policies have resulted in a lot of
missed opportunities in that country, says Francis Chang, CEO of RH Petrogas, an explora-
tion and production company, referring to the countrys proven oil and gas reserves, which
currently stand at 3.7 billion barrels of oil and 101.54 Tcf of gas.
Malaysia is another country which has good hydrocarbon potential. We will continue
to explore new opportunities, including marginal field development, in the country, Chang
continues. We are also
particularly interested in
Myanmars onshore capac-
ity, and last year we sub-
mitted three bids to par-
ticipate in the second
onshore bid round. Even
though we were not suc-
cessful in securing new blocks, Myanmar
continues to be our strategic focus in the
near future, he concludes. The volumes of
oil around the Asia Pacific region will con-
tinue to attract the attention of exploration
and production companies- and clearly they
will require full access to engineering and
support services in order to achieve their
Southeast Asia is a complex market. In-
donesia and Malaysia have implemented a
cabotage regime, and there are risks to for-
eign owners associated with such policy that
have to be managed, explains Andrew Coc-
n 2012, regional conglomerate Jebsen & Jessen (SEA) completed the pur-
chase of Singapore-based Halcyon Offshore, in an expansion move that
extends the multi-disciplinary company into the service of offshore marine
vessels and shipyards.
As new as the offshore and marine sectors might be for the group,
there is still a strong degree of complementarity in its growing business.
Originally a trading company founded in Hong Kong in 1895, the Jebsen &
Jessen family enterprise is now a global conglomerate with four indepen-
dent groups operating from Hong Kong, Singapore, Hamburg and Perth.
Established in 1963, the Southeast Asian part Jebsen & Jessen (SEA) is one
of Singapores most successful family-owned groups composed of eight
independent business units with manufacturing, engineering and distribu-
tion capabilities in sectors such as material-handling, cable-technology and
By leveraging its existing capabilities in industrial cables; cranes, hoists
and technical service; as well as its established regional infrastructure and
back-office excellence, Group Chairman Heinrich Jessen, has big plans for
the new unit. Unlike most of its business units that focus on ASEAN markets,
Heinrich Jessen explains that Jebsen & Jessen Offshore is one of the busi-
nesses that we have global ambitions for, beyond the region. The unit re-
cently established a service center in Dubai, UAE and continues to explore
other opportunities for service points in international
vessel accumulation points including West Africa and
Europe. Jebsen & Jessen (SEA)s recent acquisition of
a 35 percent stake in Norwegian offshore technology
firm Scantrol, also supports the growth of the unit en-
suring it remains connected to the cutting edge know-
how, expertise and R&D offered by this global player
in anti-heave compensation (AHC).
Aw Chin Leng, an offshore industry veteran and
newly appointed Jebsen & Jessen Offshore Regional
Managing Director, points out that 2014 will be a year
of consolidation of the offshore unit into the Group
as it completes a major upgrade of its Singapore pro-
duction facility and fine-tunes the integration of its
back-office functions into Jebsen & Jessens regional
platform. This will set the course for subsequent sub-
stantial growth and expansion of the topline and bot-
tom line of the business unit starting 2015 onwards,
says Aw. Ultimately, our goal is to mold Jebsen & Jes-
sen Offshore into a reliable and trusted supplier of tier one products and
Aw Chin Leng,
Director, Jebsen
& Jessen
Heinrich Jessen,
Jebsen & Jessen
Francis Chang,
1410OFFFocusReports_8 8 9/29/14 11:32 AM
coli, general manager of Farstad Shipping. This
means that businesses frequently have to deal
locally with such regulations in order to do
To mitigate the risk factors, it is crucial to find
trustworthy partners, build enduring relationships
to establish local representation and a solid man-
agement structure, expands Coccoli. One should
hold ownership within such a country, sail under
the local flag and compete on a more level playing field. If you are
operating as a foreign ship-owner under a foreign flag, you face a
myriad of uphill battles, namely not being able to qualify or partici-
pate in a lot of activity.
Despite neighboring nations policies frequently aiming to attract
business from Singapore, the city-state is more than able to retain
business. Although slightly more expensive than their neighbors,
the superior planning and efficiency of the Singapore-based shipyards
gives the owner more certainty, Coccoli explains. Supplementing
this is an array of incentives offered by the government and its
regulators to set up shop and stay in the country, which, whether
in technology, R&D or fiscally, go a step further than the neighbor-
ing states. It is amazing how supportive agencies such as the Maritime
Port Authority are to ship-owners and the marine community gener-
ally, he concludes. Currently, Farstad uses Singapore as a ship
repair hub, with the majority of the companys dry docks and upgrade
projects taking place in the country. We have considered Batam
and elsewhere, but we are more comfortable with the extensive
engineering support and reliability of the shipyards in Singapore,
he explains.
A good analogy for interacting with competitors
would be that of a fishing boat, in an immense
sea, says Thana Balan P Jaganathan, Group Ex-
ecutive Chairman of Global Oil 57, an international
trading company. There are sufficient resources
to go around if one has the ability to pull the fish
out of the water. Bigger fish are worth more, how-
ever, so rather than seeing other oil and gas com-
panies as rivals, I see them as companions that
can help me better haul in my nets- and catch
bigger fish.
Andrew Coccoli,
Farstad Shipping
Group Executive
Global Oil 57
Cape is an international
leader in the provision
of critical industrial
services principally to
the energy and natural
resources sectors.
Our multi-disciplinary service offering
includes access systems, insulation,
specialist coatings, refractory linings and
a range of specialist services including
environmental services, tank storage and
thermal equipment. Cape employs over
18,000 people working across 21 countries.
1410OFFFocusReports_9 9 9/29/14 11:32 AM
Viewing other players in the market as com-
petitors is myopic and unconstructive, continues
Jaganathan. Making deals, working cooperatively;
this is constructive and as long as another player
has this same attitude, I can do business with
Policymakers are aware of the importance of
constructive cooperation too: the OECDs Eco-
nomic Outlook for Southeast Asia, India and China
2014 notes that one of Singapores strategic ob-
jectives ought to be to strengthen companies abilities to seize
business opportunities in Asia.
Jaganathan describes how being located in Singapore benefits
his company: Singapore is a great location from where one can
access the gatekeepers between East and West. These gatekeepers
are essential for one to be able to penetrate any market. One has
to be able to recognize these key figures, and connecting with them
is vital to achieve success in international trading and access to the
resources one needs, he explains.
The practical implications of this attitude have created notable
successes for Global Oil 57. This enterprise started as a very small
company but can now sign multi-billion dollar contracts because
the company has built rapport with its partners, says the chairman.
Performance is performance, regardless of whether it is on a small
scale or a large one. Our partners see we can consistently deliver
on a scalable level, and, thus, they trust us.
A trait I like about Southeast Asia is the pragmatic attitude
towards Headlands investment approach, says Paul Kang, senior
partner and head of Southeast Asia for Headland Capital Partners.
It is a region open to new ideas and robust partnerships. Family
business are prevalent in Southeast Asia -we have sat down with
many such entities and seek to help them in meeting their goals
and manifest creative ways to elevate these companies to the next
level usually from a domestic to a regional player.
There are a stream of companies in the region
that have reached a growth ceiling and need
guidance and capital to facilitate their next phase
of growth. We can help them achieve this.
Singapore-based businesses reach round the
planet to complete operations. In Indonesia, we
undertake work for ConocoPhillips, and in Thai-
land business is relatively simple, says Hendrik
ten Hoeve, managing director of Compass Energy,
an engineering service company. Our work in
Malaysia often sees us act as a subcontractor to
avoid a heavy bureaucratic burden there. We
outsource what work we can to India or Thailand
to reduce costs. Whilst we undertake work there,
we utilize Singaporean standards and knowledge
to ensure that quality is kept high. The business
is very conscious of keeping quality high,and part
of our strategy to ensure this is the case is to have
engineers at the clients desk.
Another company with investments across the region is Integra,
a leading global petrochemical trading and logistics supply solution
provider. Investments in Malaysia, Indonesia and Singapore are
part of its portfolio. Integra views these developments as a triangle
of petrochemical capacity that benefits all involved parties, says
Gina Fyffe, executive director of the business. Although national
interests are clearly at play, not everyone will produce the same
products. Furthermore, companies from a country on one leg of
the triangle stand a very good chance of being able to upgrade
value by exporting to a neighboring country, who will then be able
to turn that mid-grade product into something better, which can
finally move on to the final leg of the triangle to be exported. Such
triangle dynamics are truly fascinating, and they ensure that by
2020, Malaysia, Singapore and Indonesia will add value to each
others economies. Fyffe believes that the primary bottleneck to
the execution of this strategy is the lack of logistics capacity to
support the increase in trade. Integra can help to fill this logistics
gap that has developed within the commercial network, she
Other players agree that Singaporean standards allow them to
capitalize on advantages in other countries which often means
lower production costs. We have developed greater traction in
China than in other markets: ultimately, it is a country that we could
not ignore, says Dorcas Teo, CEO of Nordic Flow Control, a
manufacturer of marine and offshore control systems. Indeed,
today we have a strong local presence in China with two production
facilities located in Suzhou. The fact that we are a Singaporean
Gina Fyffe,
Director, Integra
ten Hoeve,
Compass Energy
Paul Kang,
Senior Partner,
Head of
Asia, Headland
Capital Partners
Marine equipment fabrication must be fully overseen to ensure the owner
gains best value. Courtesy Aqualis Offshore
1410OFFFocusReports_10 10 9/29/14 11:32 AM
company and have a superb track record with the
domestic yards allowed us to leverage the stamp
of quality that is associated with Singapore and
take that into China.
As a locally-based entity, Singapore is of sig-
nificant importance to Jebsen & Jessen (SEA) as
its regional headquarters, says Jebsen and Jessen
SEAs chairman Heinrich Jessen. In terms of
group-wide business activity, although Singapore
is amongst our larger markets, across the region
Thailand and Malaysia are our main markets and
Indonesia is on track to becoming a significant
source of business for the group, he explains.
However, in terms of the offshore market, it
comes as no surprise that the city-state is of para-
mount importance given the nations international
leadership in the segment and the concentration
of offshore businesses here.
Owing in part to Singapores unique geographical positioning
at the crossroads between East and West, the country has evolved
into an internationally recognized offshore and marine hub, notes
Aw Chin Leng, regional managing director at Jebsen & Jessen
Offshore. Singapore has become a critical node for the mainte-
nance and repair of offshore and marine vessels, as well as the
worlds largest bunkering hub. Furthermore, Singapore is home to
two of the worlds largest jack-up rig manufacturers and commands
a leading position in the FPSO conversion industry. This has had
implications for the industry. Naturally, this created a pull in the
market and attracted a slew of both clients and suppliers that now
compromise the island-states rich offshore cluster. That dense
ecosystem of offshore and marine industries makes Singapore an
important oil and gas hub for players across the value chain.
Despite increasing overheads, Singapore has an assortment of
positive attributes, says Yves J.G. De Leeneer, managing director
of Deepblue, which provides quality-engineering support for the
offshore oil & gas industry throughout Asia.Singapore also pro-
vides a brand synonymous with legitimacy, transparency and quality
and, therefore, being associated with such a country generates a
positive image for Deepblue. He describes Singapore as a launch
pad to wider Asia for his business. A number of people champion
Kuala Lumpur as a preferable destination to spearhead an offshore
oriented company. However, we started here and will stay here and
might expand to Kuala Lumpur in the near future. There is an
abundance of activity occurring in Singapore: new mega-shipyards
are being built, and regional business decisions are conjured and
negotiated here.
Business decisions are made in Singapore, planning how best
Yves J.G.
De Leeneer,
Dorcas Teo,
CEO, Nordic
Flow Control
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1410OFFFocusReports_11 11 9/29/14 11:32 AM
the buoyant offshore industry.
Companies are also seeking to engage with the demand for a
broader range of services by diversifying and expanding their own
offering internally to capture a broader section of the market.
We have come to the realization that clients seek and prefer a
fully integrated product and services package, says Tom Kers,
partner, at KBC Advanced Technologies, an independent provider
of consulting and software services to energy and other process
industries. Traditionally, when we are approached by clients, we
examine the various inputs and metrics and return to the client with
our recommendations. However, we have found that although our
suggestions would likely ensure our clients a certain increase in
profitability, problems tend to arise in the execution of the project.
According to Kers, this usually stems from suboptimal client-side
organizational structures related to accountability and reliability
concerns. We intend to extend service offering to clients to go
beyond providing premium advisory services, he continues. Doing
so will position KBC as an integrated services provider that enables
clients to implement recommendations we provide and effectively
realize their benefits. This holistic approach takes into consideration
the technical elements to ensure operative implementation.
Even in the lifting and rigging business, the need for diversity is
apparent. One clear trend in the lift industry is the transition into
ever-heavier lifting and rigging with increasingly large vessels and
cranes, says Beretta of KTL Offshore Gone are the days where a
standard one-size-fits-all solution will do. Each project requires a
thorough technical analysis and input from our side before we can
begin to supply our customers. We sell a total solutions

The wave of experienced industry experts going

into retirement exposes all sorts of energy players
to talent shortages, posing challenges for the develop-
ment of any organization and the industry as a whole,
says Tom Kers, partner at KBC Advanced Technologies.
It is clear that in many ways, the retirement of ex-
perienced, knowledgeable staff can be as significant
a problem as repair of aged platforms. KBC seeks to
help alleviate the loss of skills in part caused by a short-
age of talent. our Petro-SIM 5 software is the only purpose-built rigorous
process simulator that combines process simulation and extensive thermo
physical properties, states Kers.
He expands on what this has meant for the business products: Tra-
ditionally, this package has been developed for refining-based processes
but has evolved into the petrochemical and more re-
cently the upstream processes by incorporating added
on modules for refining and production processes.
Simply, downstream users can optimize refinery-wide
operations, minimizing energy intensity across all pro-
cess units, while upstream, users can maximize facility
performance throughout the life cycle of the reservoir
and optimize gas production throughput and balance
power generation.
We have identified opportunities that enabled our
clients to reduce operating costs of their ethylene pro-
duction processes by USD 10-20 per ton with little capital cost, highlights
Steven Kantorowicz, VP of petrochemicals at KBC.
to harness the resources of the wider region. OSM sources crews
from across the world. Tunge of OSM Ship Management states that
many of [these recruitment locations] are in frontier markets:
Myanmar, Mexico and Africa. In particular, we use the Philippines
as a source for offshore and marine talent. Reflecting on what this
means for OSM in Singapore, he continues, in Singapore, there
is a shortage of qualified people, and the cost is perennially rising,
which makes it a challenging place to hire from. Consequently, the
company is trying to leverage office synergies between different
global branches. OSM is boosting its business in Singapore by
capitalizing on resources from the wider region.
Singapore-based enterprises can capitalize on the regional dynamism
of the oil and gas industry thanks to the city-states level of economic
development. Whilst much of the region is seeing fast rates of
economic growthquantitative increasesSingapore has spear-
headed the route towards developmentqualitative expansion
seeing more variations, types, forms and categories of business
emerge here. One company that has taken advantage of this is
Headland Capital Partners. It has seized on the opportunities avail-
able in Singapore, principally by investing in Kreuz Subsea, a subsea
services company, and Miclyn Express Offshore, an offshore services
business. We have more than USD 200 million invested in Miclyn
and almost USD 200 million invested in Kreuz, and, for Headland,
these are the largest investments ever, says Kang. I believe that
in the offshore space, these two businesses are best in class. Such
investments attest to our commitment and interest in the oil and
gas space. I am absolutely interested in deploying more capital into
Vice President
KBC Advanced
Tom Kers,
partner, KBC
1410OFFFocusReports_12 12 9/29/14 11:32 AM
1410OFFFocusReports_13 13 9/29/14 11:32 AM
Companies cannot rest on their laurels in competitive Singapore.
Technology and quality are the cornerstone principals of our orga-
nization, says Beretta, reflecting values that could be said to be
embodied by Singapore itself. We conduct a good deal of our own
R&D and testing before bringing products to market. That philosophy
has endowed KTL with an excellent reputation in the market, par-
ticularly in Asia. One of theworlds largest heavy lift contractorsbased
in theNetherlands has been a frequent client of ours, demonstrating
the reputation and trust we have earned.
Across Singapore, a proactive spirit is what drives business forward.
In terms of the business in Singapore, we have sought a more co-
hesive and focused approach to operations, says Steve Connolly,
COO of Cape PLC. This involved some quite drastic, but necessary,
changes and required a shift in company culture. This has already
had a significant impact on the company, and, along with a new,
more integrated management structure, has brought about a really
positive improvement in culture and staff attitudes; our business is
all about people and, importantly, the right people.
In order to deliver on these projects, Cape has
expanded its offering, including by acquiring in
early 2014 Motherwell Bridge, a Scottish firm rec-
ognized as a leader in the specialist storage tank
market. Connolly explains that the acquisition has
expanded the range of critical services [Cape] can
now offer, and we are assessing a number of op-
portunities at the moment in the region. The stor-
age facilities in Singapore, Malaysia and Indonesia
are significant, and the blend of Motherwell
Bridges tank management experience, Cape Environmental Services
Tank cleaning technology and also the traditional Cape core trades
of access, insulation and coatings are a fantastic and unique combined
offering. Again, this is an example of qualitative change; synergies
morphing the range of services businesses offer, as they use Singa-
pore as a platform to reach the market. The city collectively offers
a myriad of solutions- it is an urban one-stop shop.
We are always looking at how best to retain the soft
skills of our staff. Many companies have tried to
emulate what MTQ has achieved. They often invest
in hardware in an attempt to copy us- and there is
plenty of money in Singapore to fuel that invest-
ment. However, it is the soft skills that differentiate
MTQ from its competitors.
Not only is MTQ aware of the need to retain
workers with these skills, the company also under-
stands the necessity of being able to transfer these skills through con-
secutive generations of workers. This is the key to our success- MTQ
nurtures these skills.
Geographically, Cape focuses on the APAC region,
rather than the individual constituent countries
here. This greater visibility creates improved effi-
ciencies and we have brought the best human re-
sources our global organization has access to here
in order to drive forward growth.
We have also been able to attract some qual-
ity human resources from our competitors. This is
particularly interesting as this represents the confidence of these staff in
Capes future- the business has a small order book here at the moment,
but the future and Capes prospects are already clear.
There is one discipline at the moment which is par-
ticularly valuable that of subsea skills. This is a
wide area of activity, but with many fields being de-
veloped and more complex and challenging proj-
ects moving forwards to secure marginal resources,
individuals able to deliver success in these projects
are ever more valuable.
The shortage of staff in this area is something
that Swift is seeking to address for its clients. Each
of our recruiters has a target to build a pool of
subsea candidates. Once a month we have meetings to re-evaluate our
progress on this front and to review the status of progress in the subsea
ExxonMobil Singapore
Parallel Train (SPT)
project, Jorong Island,
Courtesy of Cape PLC
Director, Swift
Steve Connolly,
Vincent Tan,
Director, MTQ
Gary McLean,
Director, Cape
1410OFFFocusReports_14 14 9/29/14 11:32 AM
For every lock there is a specific key, and
the congregation of companies in Singapore
is able to provide a solution to every require-
ment. Paul Carsten Pedersen of Jasper Off-
shore explains how Jasper Offshore allows
cost-effective access to hydrocarbon resourc-
es by filling a gap other companies have not
yet occupied. Generally the global rig mar-
ket is very competitive, and there is currently
excess supply in many areas; nonetheless,
there are niche areas requiring special rigs.
For instance: in countries with high local con-
tent requirements, technology must be kept
at a manageable level, which complements
the characteristics of an older rig. The Jasper
Explorer addresses this and, another very
important niche, namely the mid-water rigs
where jack-ups are not readily used and the
fifth and sixth generation drill ships are too
expensive. The work can easily be done by
a less advanced rig than the sixth generation
new builds at an attractive commercial rate.
The broad desire for low day rates is one area
now working well for Jasper.
Ultimately, oil and gas companies have
to focus on their bottom line and will seek
to save costs on rig rates if they can, he
concludes, mulling the consequences rig rates
have on his business. Consequently, it is not
always the most shining piece of equipment
or cutting edge rig that is awarded the job,
so there is room for a well performing older
rig like Jasper Explorer in the right
Viking Offshore and Marine has a bolt-on
strategy, which has seen the business take
over a sequence of companies, allowing Vi-
king to now provide heating, ventilation and
air conditioning (HVAC) technologies, winch
systems and instrumentation equipment.
Speaking with customers, the business
knows that clients appreciate our aim of be-
coming a truly one stop shop supplier-
meaning far less organizational hassle for
them, says JK Low, CFO of Viking. Viking
is seeking to approach its expansion from a
value-chain perspective, adding value through
the tiers of clients need for equipment. In expanding our offering, the
business is also building a deeper relationship with its clients.
Since Singapores stock exchange, the SGX, was founded in 1999, the number
of mineral, oil and gas companies (MOG) has increased steadily. The prolif-
eration of MOG companies on the SGX is simply a question of time, ac-
cording to Lawrence Wong, executive vice president and head of listings at
the SGX. Linc Energy, a diversified energy companys move to list in Singapore
from the ASX in Sydney in December 2013 was indicative of the growing
interest in Singapore as a key location in Asia for oil and gas companies to
access share capital.
I believe that the so-called tipping point is an arbitrary concept; it is far
more important what a given market denotes for a company. MOG companies
are attracted to list on the SGX because of the matching industry clusters
we have here and because we are perceived as a far more international and
independent center, states Wong.
Kris Energys listing in 2013 saw the exchange begin to formalize the rules that impact
energy and resource companies whose shares are held on the main board of the exchange.
These had previously not been fully matured due to the relatively recent maturing of the ex-
change but will now add to the supportive regulatory framework that facilitates business here.
...And going
to commence
the next well
Wells campaign
with success...
JK Low , CFO,
Viking Offshore
Lawrence Wong,
Executive Vice
President &
Head of Listings,
1410OFFFocusReports_15 15 9/29/14 11:32 AM
ccess to key business decision makers is one
of the key motivations for many companies to
locate themselves in Singapore. It provides a route
into eastern markets for western companies and
vice versa.
Prior to moving to Singapore, Nathan Oliver,
Regional President, Asia Pacific MultiClient, PGS,
the seismic exploration company, had invested
over five years into seeking engagement with the
Chinese NOCs and Japanese E&Ps. The NOCs are
driven by a very different agenda to the traditional IOCs: where share-
holder value creation is the key for the latter, resource security is the
focus for the former. The establishment of relationships with the Asia
Pacific NOCs was driven by the variable resource density found in their
own backyard. Put simply, delivering resource security has required an
increasing focus on an international growth agenda which has seen ex-
pansion by the Chinese NOCs in areas such as Brazil, for example. I read-
ily recognized this customer segment as a valuable business relation.
PGS international operations required them to meet the NOCs on their
doorstep in order to create a relationship that would exist the world
over. Singapore was the logical place to locatethe location where
these enterprises congregate.
Singapore is one of the most important financial centers in the
greater Asian region, according to Wong at the SGX. Being the
asset and wealth management center of Asia, with a sovereign wealth
fund alone which exceeds USD 2 trillion, Singapore is most certainly
the regional hub for financial investors of all types.
The new dynamic of the SGX also offers advantages to energy
companies beyond that of the larger, more established exchanges.
Compared to the global exchanges, the SGX is a minnow. Yet, I see
this as an advantage, says Simon Crellin, director of Deloitte Petroleum
Services in Singapore. For instance, on the ASX, TSX and AIM, smaller
PGS Ramform vessel
Nathan Oliver,
Asia Pacific
MultiClient, PGS
Explore the science behind the technology at
A Clearer Image
There are world
class discoveries
waiting to be made
in Asia Pacic
PGS is committed to delivering leading edge
technology to help support your exploration success.
PGS has invested heavily in providing a full seismic
service. From 4D to Full Azimuth acquisition,
Imaging, Electromagnetics, Reservoir Studies, and a
comprehensive MultiClient data library, the company
uses its Flagship Ramform and GeoStreamer
technology to provide the highest quality solutions to
ensure your success.
Global Technology with
Local Expertise
1410OFFFocusReports_16 16 9/29/14 11:32 AM
Headland Capital Partners has
been advising private equity funds
MicIyn Express
Offshore Limited
Kreuz HoIdings Limited
1410OFFFocusReports_17 17 9/29/14 11:32 AM
independents have been drilling wells and indeed
have a good story to tell. Yet their share price is
flat-lining because there are simply too many com-
panies listed: each one is like a tree in a forest, unable
to stand out! To be recognized and generate value
on these markets, says Crellin, smaller independents
need to consolidate. By contrast, the SGX has a
concentrated list of oil and gas E&P companies, and,
because of this, a good story will get a lot more
traction than on the bigger exchanges. As investor
appetite in Asia is voracious, the regional energy industry is buoyant
and Singapore is fast becoming a wealth management hub, I can see
the number of E&P companies gravitating towards the SGX
Mans Lidgren, CEO of Rex Energy, an independent upstream oil
and gas company, concurs: Exploration and production companies
naturally gravitate to London for their IPOs as it has one of the largest
energy exchange markets. Nonetheless, the Singapore exchange only
has eight listed companies, and we prefer to be one of the few than
one of the many. Additionally, there is a need for foreign and local
investors to invest locally to help Singapores future inflow. We have
very ambitious plans to grow in Southeast Asia, and this is why we
listed in Singapore.
This gravitation of companies is building up the SGX, step by step.
When asked what it will take for Singapore to become a key invest-
ment center, PwCs Cornelius replies: The government is putting in
a lot of effort to educate the mining and oil and gas community.
However, I am still somewhat skeptical over the SGXs ability to com-
pete against the major international exchanges. Specifically, for alter-
native areas of energy, a number of clients still come to me and state
it is easier to raise money in London and Hong Kong. Their perception
is that the market is more attuned to the risks associated with the
energy industry and are drawn by the established track records of
raising capital in these markets. Nonetheless, Kris Energy has had a
very smooth and successful listing, and, if it can develop a good track
record, it can be the flag bearer for the SGXs oil and gas sector. We
need another three or four companies like Kris Energy to come through
onto the SGX to really evolve the exchange into a sector powerhouse.
A further development in Singapores capital markets has been the
growth of the analyst community, which I view as essential. They are
partly responsible for making recommendations on companiess and
have thecapacity to stir the investment community to invest.
Singapore is critical to the companys holistic development and
to the future of our assets here, says Kang of Headland Capital Part-
ners. Being based in Singapore is very important because it allows
us to operate in a business ecosystem that is transparent, stable and
business friendly all traits that are instrumental for a private equity
house. Whilst Headland itself focuses on investing
in small to medium sized enterprises, these qualities
equally benefit both listed and unlisted
There is a confidence in the citys ability to attract
the companies that will build up the SGX. The
city-state has a fantastic business ecosystem, says
RH Petrogas Chang. In the past year, we have seen
several new oil and gas companies come to the
market. Despite a surge in IPOs from this sector to the SGX, the ex-
change for listed O&G companies is still a fledgling and rather immature
home. I would like there to be more proper, two way dialogue between
the SGX and listed O&G companies.
Chang anticipates the emergence of Singapore as a fully established
exchange as taking a little longer. Return on investment may take
years from discovery to first production. Patience and sector under-
standing are traits that competent oil investors should embrace, and
we are trying to educate our stakeholders to be with us for the long-
term. That is the challenge we face in Singapore: educating the investor
This progression, from cauldron of technical capabilities to launch
pad for fully listed companies, did not happen instantly, and this is
reflected in the companies that have built themselves up in Singapore
over the years. Established in 1998, we have leapt from a mere service
agent to a fully integrated automation solutions provider, explains
Teo, the CEO of Nordic Flow Control. In 1998, we were a tiny company
consisting of five people and two desks. Over time, we have established
a manufacturing capability and a large-scale marketing team. In 2010,
the progress of the company reached a new peak when it listed on
the SGX. Through unwavering energy, commitment and determination,
we have secured our place as one of Singapores premier automation
service companies.
The SGX is seeing increasing MOG activity.
Mans Lidgren,
CEO, Rex
Simon Crellin,
1410OFFFocusReports_18 18 9/29/14 11:32 AM