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AOG

May - June 2015

ASIAN OIL & GAS

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Perth basin
exploration 32
Cyber security solutions

14

Malaysia delivers safety training

36

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Contents
EDITORS COLUMN

6 Investing in Asia A look at potential investment opportunities.


REGIONAL UPDATES

8 Briefs CNOOC brings Kenli 10-1 oilfield online and more news from
India, Malaysia, Indonesia, Thailand, Papa New Guinea and New Zealand.
FEATURES

14 Cybercrimes in Asia
As cyber criminals continue to advance their techniques, CyberArks
regional director for ASEAN, Cynthia Lee tells us how this can also impact
oil and gas organizations in the Asia-Pacific region.

16 BP strengthens presence in Russia


BPs involvement in Russia could potentially increase oil exports to energythirsty Asian countries like China, Japan, India and South Korea.
Eugene Gerden investigates.

18 Subsea reliability of multiphase meters

22

Although multiphase meters bring a number of benefits like reducing


capital and operational expenditures, the recovery cost from wrong
metering can also be exceptionally high. Emmelyn Graham explains.

22 Valve endurance with Nanotechnology


Dr. Yuri Zhuk, Hardide Coatings technical director discusses the use of
advanced chemical vapor deposition (CVD) tungsten carbide coatings to
extend the life of valves in subsea environments.

26 Capreolus 3D illuminates new


oil prospect offshore Australia
Polarcus discusses the 22,130sq km Capreolus 3D seismic survey across
the Roebuck Basin, considered to be the birth of a new oil province for
Australia.

30 Under construction in Singapore


Alan Thorpe gives a rundown of some of the floating production, storage
and offloading unit conversions and shipbuilding underway in Sembcorp
Marine and Keppel Offshore and Marine shipyards.

32 Perth basin gas discovery prompts economic boom


AWEs onshore exploration could deliver significant gas into the Western
Australia domestic market, plus generate economic opportunities in the
region. Ian Howarth reports.
GEOFOCUS: MALAYSIA

34 Malaysia has ambitious plans


Malaysia aims to grow its oil and gas production capacity by 5% per annum,
plus increase the energy sectors GDP contribution to US$70 billion by 2020.
The Malaysian Investment Development Authority (MIDA) shows how.

30

36 Safety and technical skills development


Malaysians can now be trained to globally recognized industry
qualifications allowing them to work in oil and gas sectors anywhere
around the world.
PRODUCTS & TECHNOLOGY

40 Solutions
New tools and software to improve performance, production, and modeling.

42 Activity C-Mar and Shanghai Maritime University launch dynamic


positioning center, plus other regional news.

AOG
ASIA

IL
N O

On the cover
2015
May - June
al.com
aogdigit

COMPANY NEWS

AS
& G

SPOTLIGHT

44 Moving to Southeast Asia


The culture, entrepreneurial spirit and experience of being in a growth
market makes it all very appealing to work in the Southeast Asian oil and
gas sector, says Suerd Polderdijk, general manager Asia-Pacific, Frames.
FACTS & FIGURES

46 Numerology

basin
Perth
tion 32
explora
Cyber

ns 14
y solutio
training
s safety

securit

Malaysia

deliver

36

AOG looks into a three well


exploration and appraisal
drilling campaign with upside
potential of 1.3 Tcf of gas, making this the largest onshore
gas discovery in Western
Australia since the 1960s.
32.
Read more on page 32
Ltd.
Photo from Awe Ltd

A capsule view of interesting industry statistics.

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Editors Column
Investing in Asia
C

hallenges and opportunities in Vietnamese fractured


basement drilling was one of the few Asian highlights
at the 2015 Offshore Technology Conference (OTC) held in
Houston this May.
Most of Vietnams oil production comes from the granite
basement in the Cuu Long basin, comprising of large oil producing fields with an estimated 3.37 billion bbl of crude oil
potential.
In an interview, Nguyen Tien Long, vice president for exploration at PetroVietnam Exploration and Production noted that
out of the 935 drilled wells in the Cuu Long basin, 500 were
drilled in the granite basement.
Although the Cuu Long basin is one of the most difficult
environments to explore, thanks to improved technologies,
wells that once took about three months to drill can now be
completed within six weeks, Long said, as he encouraged
exploration investments.
China, on the other hand, is home to some 1.1 Tcf of shale gas
deposits. In its attempt to replicate a US-style shale boom, the
Chinese are also promoting foreign oil and gas investments.
Cost, complex drilling and insufficient infrastructures like
pipelines and supporting facilities are some of the key challenges for this development.
In a meeting organized by OTC and the US Department of
Commerce, Michael Haney, director of Douglas Westwood said
exploration and production activities are expected to grow
from moderate to high in China.
With PetroChina and Sinopec actively exploring for shale
gas in the Sichuan Basin, China will look into expanding
business in the Sichuan area.
However, while the natural gas market is expected to grow,
China will still rely on imports for the coming years, because
domestic production will not keep up with demand.
Back in the Queensland state of Australia, about 11,000sq
km is being released for exploration in the Cooper, Eromanga
and Surat basins.
The bargain here, according to the Australian government,
potential investors will also have access to approximately
AU$70 billion worth of infrastructure in pipelines, processing
facilities and liquefaction plants.
Furthermore, Australia is also offering 29 offshore blocks
across eight basins for investors to bid, as part of it its annual
Offshore Petroleum Exploration Acreage Release.
These blocks are located offshore the Territory of Ashmore
and Cartier Islands, Western Australia, Victoria, South Australia, the Northern Territory and Tasmania.
Specific areas to look out for include six in the Bonaparte
basin, four areas in the Browse basin, one for the Roebuck
basin, eleven in the Carnarvon basin, one area in the Ceduna
basin, three for Otway basin, one spot in the Sorell basin and
two in the Gippsland basin.

Indonesia, a former Organization of the Petroleum Exporting Countries (OPEC) member, is shifting exploration activities from the west to the eastern parts of the country.
Basins in Papua, Moluccas, Halmahera and Sulawesi have
been said to have some large quantities of hydrocarbon potentials, but due to its remote and offshore locations, exploring these basins are becoming costly, plus require advanced
technologies.
According to KATADATA, an Indonesian research firm,
Papua alone has around 61.7 MMbbl of oil and 23.46 Tcf of gas
reserves, while Sulawesi holds about 50.17 MMbbl of oil and
2.56 Tcf of gas reserves.
Underinvestment has hindered progress in the Indonesian
oil and gas sector because of regulatory frameworks in the last
couple of years.
This draws back to the land tax imposed by the government
in 2010 to have production sharing contract (PSC) operators
pay tax while exploring for hydrocarbons, whether a successful attempt or not.
New regulations introduced in 2014 to restrict foreign
investments in Indonesian oil services has also hampered
investor opportunities, as the government was keen to give
priority to domestic companies. In order to revive exploration
investments, Indonesia has now scrapped land tax, as part of
its investor-friendly reform.
According to the Malaysian Investment Development Authority (MIDA), Malaysia has attracted its fair share of investors in the upstream, midstream and downstream sectors.
The country currently homes over 3500 oil and gas businesses comprising of international oil firms, independent
service providers and manufacturing companies.
It is of no doubt that Asia can provide lucrative opportunities for both local and international investors seeking business
expansion in the region. AOG
Audrey Raj
Editor

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June 2015

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Regional Briefs
BEACH HITS AT COOPER BASIN
Beach Energy encountered oil shows at
the Callawonga-10 oil development well
onshore South Australia.
Callawonga-10 is located in PPL 220 on
the western flank of the Cooper basin and
is the first of a three-well drilling campaign targeting the Namur Sandstone.
Drilling with the EDA Rig 903, the well
reached 1482m in the Westbourne formation where oil shows were observed in
the primary targets, McKinlay Member
and Namur Sandstone with a total gross
oil column of 4.8m.
Joint venture partners Beach and
Cooper Energy have cased and suspended the well to accelerate oil production
from the southern area of the field.
According to Cooper Energy, pre-drill
modeling indicated Callawonga-10 has
potential to produce up to 200,000 bbl
of oil, of which approximately 85,000
bbl could be incremental 2P reserves.
Further work is required post-Callawonga-10 to confirm these estimates.
AUSTRALIA PACIFIC LNG
POWERS UP
The start-up of the first of seven gas
turbine power generators that are designed to provide electrical power to the
Curtis Island LNG facility has begun in
Australia.
Australia Pacific LNG said that while
the majority of the natural gas arriving
at the LNG facility will be processed and
exported as liquefied natural gas (LNG),
a small amount will be used to power
the gas turbine generators to generate the
electrical power required to operate the

two LNG processing trains.


Each of the Bechtel-constructed seven
gas turbine generators will produce a
peak output of approximately 15 mW and
combined will deliver 105 mW.
We will progressively test and start additional critical elements of the processing trains to bring the LNG facility on
line and ready for first LNG export, Page
Maxson, Australia Pacific LNG CEO said.
CHEVRON FINDS GAS IN GORGON
Chevron Australia hit an additional gas
discovery at the Greater Gorgon Area,
located in the Carnarvon Basin, offshore
northwest Australia.
The Isosceles-1 exploration discovery
well encountered approximately 134m
of net gas pay in the Triassic Mungaroo
Sands in 968m of water.
The well is located in the WA-392-P
permit area approximately 95km northwest of Barrow Island, off the coast of
Western Australia.
This discovery is a continuation of
our exploration and further positions our
company as supplier for future liquefied
natural gas (LNG) demand in the AsiaPacific region, said Melody Meyer, president, Chevron Asia-Pacific Exploration
and Production.
BENGAL UPDATES
CUISINIER OPERATIONS
Bengal Energy Ltd., completed the phase
two drilling campaign on ATP 752 Barta
Block, where it has a 30.357% working
interest.
Average gross production from the
Cuisinier field, prior to the tie-in of the
new phase two wells and the reactivation

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of the Cuisinier-6 well was approximately 1653 bo/d.


The drilling campaign exceeded
Bengals technical and commercial expectations. With three of the four cased
wells now completed as oil wells, the
group expanded the pool boundaries and
tested the structural flank positions for
the presence of oil.
The last well of the phase two drilling
campaign, Cuisinier-21, tested the northwest flank of the Cuisinier structure. The
well encountered oil in the Murta DC70
zone with reservoir pressure at approximately 96% of virgin pressure.
The Murta DC70 zone in this well
came in structurally below what had
been established by other producing
wells. Upon perforation the Cuisinier-21
well naturally flowed approximately 380
bo/d at 100% oil cut.

China
CNOOC BRINGS
KENLI 10-1 ONLINE
China National Offshore Oil Corp.
(CNOOC) began production at the Kenli
10-1 oilfield in the Bohai Sea, offshore
China.
The Kenli 10-1 oilfield is located in
the South of Bohai with an average
of 17m water depth. CNOOC said the
main production facilities of this
oilfield include one central processing platform, two wellhead platforms
and 70 producing wells.
There are currently 12 wells producing approximately 10,750 b/d of
crude oil, with expectations of reaching 36,000 b/d at peak production in
2016. CNOOC is the operator of Kenli
10-1 with 100% interest.
TECHNIP BAGS
CHINAS FIRST TLP GIG
CNOOC also awarded the Technip
and China Offshore Oil Engineering
Co. (COOEC) consortium a front-end
engineering design (FEED) contract
for two tension leg platforms (TLPs)
for the Liuhua 11-1 and 16-2 joint
development project located in the
South China Sea.
Liuhua sits 240km southeast of
Hong Kong, in about 370m water
depth. Technip will be responsible
for the FEED work of Chinas first
two TLPs. The contract covers the
design and engineering of the topsides (including two drilling rigs),
hulls, mooring and riser systems.
It is to be completed by the end of

2015. Technips Houston operating center


will execute the FEED contract.

West and deep exploration wells on


Linxing East.

SINO GAS DOUBLES


SANJIAOBEI CAPACITY
Operations are well underway at the
Sanjiaobei block adjacent to Linxing
West and Mizhi fields in the Ordos
Basin, located in the Shanxi province of
North China.
The second compressor at the
Sanjiaobei central gathering station has
been brought online, said Sino Gas and
Energy Holdings Ltd., increasing capacity from approximately 2-8 MMcf/d.
Current production has been increased
to about 6 MMcf/d with 13 wells online from the pool of 16 wells currently
connected.
New wells that have been brought
online to fill the additional capacity are
currently choked back and will gradually be opened up as flow rates stabilize.
Field operations are underway with
four wells drilling and a further two rigs
preparing to commence operations.
Six wells are currently undergoing
testing operations, which include development and appraisal wells on Linxing

Japan
JAPANS TEPCO, THAILANDS
EGAT TEAM UP ON LNG
Tokyo Electric Power Co. (TEPCO) signed
a memorandum of understanding (MOU)
with the Electricity Generating Authority
of Thailand (EGAT) in late May to create
an LNG value chain business, which covers the procurement, transportation and
supply of LNG for electricity generation.
TEPCO said the new venture would be
its first undertaking of such an LNG business overseas.
TEPCO said it decided to enhance its
cooperation with EGAT, which plans to
build a new LNG thermal power station
in Thailand and has been negotiating
with TEPCO towards cooperation in LNG
value chain business.
Going forward, the two companies will
implement activities in accordance with
the MOU, such as information exchange
and mutual training courses. TEPCO said
it believes its newly formed joint venture
with Chubu Electric Power Co., called
JERA, would be useful in this endeavor.

Indonesia
OIL FLOWS FROM BUNIAN-3
WELL
Testing of the Bunian-3 sidetrack 2
(ST2) development well has begun
with oil flows from the primary
target TRM3 sand.
Bunian-3 is located 730m southwest of Bunian-1 and the primary
target is the Talang Akar Formation
TRM3 sand. It is an onshore well
in the Sukananti KSO in South
Sumatra, Indonesia.
The TRM3 sand flowed
for two hours at a stabilized
flow rate equivalent to
1742 bo/d through a 1/4-in
choke, with a flowing tubing
head pressure of 500 psi.
According to Cooper
Energy Ltd., the flow consisted of oil and gas with no
water, and measurements
to quantify the gas rate are
ongoing.
Oil flows are being directed to a temporary production facility and produced
oil is being trucked directly
to market.

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5/22/15 1:55 PM

Myanmar
INTERRA TAPS OIL IN MYANMAR
Singapore-based Interra Resources
completed the development of the CHK
1196 well in the Chauk oil field in Myanmar,
where it holds 60% interest in the
Improved Petroleum Recovery contract.
CHK 1196 was drilled using the ZJ 450
rig owned by Goldpetrol Joint Operating
Co. Since Interra also owns 60% of
Goldpetrol, which is the operator of the
field, drilling costs were relatively low.

Indonesia
OPHIR EYES 2016-7
INDONESIAN DRILLING
Ophir Energy is to commission 2D and
3D seismic with a view to drilling on
2016-17 on four deepwater production
sharing contracts (PSCs) in Indonesia it
has now acquired from Niko Resources.
The PSCs, all in two core areas in
Eastern Indonesia West Papua and the
Western Birds Head are West Papua IV,
Aru, Kofiau and Halmahera-Kofiau, all of
which will be operated by Ophir now the
deal has completed.
Ophir is also in the process of completing the acquisition from Niko of two
additional PSCs North Makassar Strait
and North Ganal; a further update on
these will be provided in due course.
Ophir has separately decided that it will
no longer be proceeding with the acquisition of the Obi PSC.
OTTO MARINE DELIVERS
VESSELS WORTH US$36.6 MILLION
Singapore-based Otto Marine completed
the construction of two harbor tug and
two anchor handling tug supply (AHTS)
vessels for Indonesian PT Pertamina
Trans Kontinental (PTK).
The vessels were built by Otto Marines
PT Batamec shipyard team in Batam,
Indonesia, where an official delivery
ceremony was also held.
The deliveries consisted of two 3000 bhp
harbor tugs, Patra Tunda 3151 and Patra
Tunda 3152, plus two 5150 bhp AHTS,
Transko Balihe and Transko Moloko, all for
a total contract value of US$36.6 million.

India
SWIBER BAGS INDIAN EPIC
Singapore-based Swiber Holdings
secured an engineering, procurement,
installation and construction (EPIC) contract worth US$133 million from same
Indian oil company, which awarded two
major contracts in February and March.
Previous agreements involved surveys,

10

Interras share of the cost of drilling was


funded from existing funds on hand. CHK
1196 was drilled to a total depth of 2900ft
in the Chauk South-Central fault block as
an up-dip offset development well to producing wells CHK 1185 and CHK 1192, both
of which were completed as oil producers
in 2014.
Following four days of production testing,
CHK 1196 has been completed through
casing perforations over 76ft covering nine
reservoirs for 30 bo/d.

design, engineering, procurement,


fabrication, installation and commissioning of six pipelines totaling to 60km,
scheduled for completion by the second
quarter of 2016.
The company is optimistic about
prospects despite the fall in oil price
and including the cutbacks in capital
expenditure by some of the oil majors.
We believe that our strategy of establishing long-term relationships with clients
and suppliers has put us in good stead for
a time like this, said group chief executive officer and president, Francis Wong.
RIL DEVELOPING
MJ OFFSHORE INDIA
Indias Reliance Industries (RIL) MJ discovery is estimated to have 1.4 Tcf of unrisked contingent resources offshore India,
according to partner Niko Resources.
The joint venture recently received an
independent resources evaluation from
petroleum engineering firm Deloitte LLP
on the MJ Discovery, in the D6 Block.
D6 is located in the Krishna-Godavari
basin and spans over 1.88 million acres.
Dhirubhai 1 and 3 MA gas and oil fields
are also located in the block.
According to the report, Deloitte evaluated the contingent resources based on
available information, including the
drilling, testing and coring results of the
MJ-1 discovery well and the MJ-A1, MJA2, and MJ-A3 appraisal wells.
The discovery and successful appraisal of MJ adds a new and exciting
chapter to the D6 Block, said William T.
Hornaday, Niko chief operating officer.
Going forward, the contractor group in
the block will be working on plans to
develop MJ, which may lead to potentially significant additions to reserves and
production levels in the coming years.

Malaysia
LUNDIN ACHIEVES
FIRST BERTAM OIL
Lundins Bertam field hit first oil offshore

Malaysia, with plans to continue production from remaining wells throughout


2015.
The Bertam field is located in Block
PM307, offshore the eastern side of
Peninsular Malaysia. Production began
from four pre-drilled development wells.
The remaining production wells will
be drilled sequentially and put onstream
through the rest of the year, with the
fields gross plateau rate of 15,000 b/d
expected to be achieved by late 2015.
The field is estimated to contain gross
reserves of 18.4 MMboe.
JX NIPPON FINDS OIL
OFFSHORE EAST MALAYSIA
Japans JX Nippon Oil & Gas Explorations
Malaysia subsidiary is planning two
additional exploration wells offshore
Malaysia after confirming a deepwater
oil discovery.
The discovery was made at the
Bestari-1 exploration well in deepwater
Block R, located offshore East Malaysia
covering an area of 672sq km with water
depth ranging from 100-1400m.
Preliminary findings point to an approximate 70m column of oil bearing
sands across multiple horizons, announced joint venture partner Inpex.
The group will analyze and evaluate
the data retrieved from the well, and proceed with plans to drill two exploratory
wells to assess the possibility of new oil
and natural gas deposits.
STATOIL COMPLETES SALE OF
SHAH DENIZ SHARE
Statoil completed their sale of 15.5%
share in Shah Deniz to PETRONAS, announced previously on 13 October 2014.
The sale involved the transfer of
Statoils 15.5% participating interest in
the Shah Deniz production sharing agreement, 15.5% share in the South Caucasus
Pipeline (SCPC), 15.5% share in the SCPC
holding company, and 12.4% share in the
Azerbaijan Gas Supply Co. (AGSC).
Following this transaction the State
Oil Company of Azerbaijan, SOCAR, will
assume operatorship of AGSC and commercial operatorship of SCPC as of 1 May
2015, which have both previously been
held by Statoil.

New Zealand
AWE PRODUCES OIL
OFF NEW ZEALAND
The subsea tie-back and installation
project to connect the Pateke-4H development well to the Tui area oil fields

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23. Inmarsat_Oil & Gas11
Asia_212x282_v23.indd 1
AOG_0515_Ads.indd

05/05/2015
22:08
5/22/15
10:53
AM

gathering system has been completed and


oil production has commenced.
Australian-based energy company
AWE Ltd., is the operator of the Tui area,
which comprises the Tui, Amokura and
Pateke oil fields located approximately
50km off the coast of Taranaki, New
Zealand.
The Pateke-4H project was completed
with no safety or environmental incidents and initial production from the
well is in line with expectations, said
AWE Managing Director Bruce Clement.

Papa New Guinea


SEARCHER BEGINS
2D BROADBAND PSDM
Searcher Seismic is currently reprocessing two regional seismic datasets in the
Philippines and Papua New Guinea.
In the Philippines, the Pala-Sulu
seismic survey was acquired in 2011. The
dataset is currently being reprocessed
with broadband deghosting and prestack depth migration (PSDM) to further
enhance the quality of the existing data.
The Pala-Sulu survey is being processed following the recently completed
Mialara 2D new acquisition seismic survey, creating a comprehensive tied 10km
grid over the PECR5 blocks.
The Perth-based company is also reprocessing the Lahara 2D seismic survey
in Papua New Guinea, which includes
over 12,000km of 2D long-offset seismic
data over the southeastern Papuan Basin.
The Lahara survey was acquired in
water depths ranging from 30 to 2500m.

Singapore
SEMBAWANG SHIPYARD
WINS FSO GIG
Sembawang Shipyard, a Sembcorp Marine
subsidiary, secured a floating storage and
offloading (FSO) conversion contract from
Teekay Offshore Partners.
The S$56 million deal will see the group
work closely with Teekay to convert the
shuttle tanker Randgrid into an FSO for the
Gina Krog field in the North Sea.
Conversion works include installation of a new
helideck, hull reinforcements, refurbishment of
submersible turret loading (STL) compartment,
installation of offshore
crane, loading hose reel
package, azimuth thruster
and replacement of two
generators.

12

According to Searcher, Lahara is regarded as one of the most comprehensive


seismic exploration datasets in the Gulf
of Papua.
NEPTUNE BAGS SUBSEA GIG
Neptune has been awarded a five-year
offshore diving and subsea inspection
contract by Oil Search (PNG) Ltd.
Diving works will be performed from
a client supplied vessel or facility at the
Oil Search base in Port Moresby, Papa
New Guinea.
Works will be focused primarily on the
Kumul Marine Terminal, the oil export
pipeline and CALM buoy with the option
to include other Oil Search assets as
required.
The award of this contract demonstrates our strategy for extending our
core capabilities into new geographical
regions. Neptune is well positioned to
service clients in Papua New Guinea
and beyond from our various Australian
and South East Asian bases, said Robin
King, CEO, Neptune.

Singapore
EMAS BAGS US$55 MILLION
PROJECTS
Headquartered in Singapore, EMAS AMC
won multiple new awards from various
oil and energy companies worth approximately US$55 million.
Scope of work includes project support, inspection, maintenance and repair
(IMR), subsea removal work of pipelines
and structures, installation of buoys and
The yard will also fabricate and install
new living quarterdecks on the vessel and
associated piping and additional cabling
works.
Scheduled for completion in 11 months,
the vessel is expected to arrive at
Sembawang Shipyard in Singapore this
June. After which the FSO Gina Krog will
head towards the Norwegian North Sea
under a charter contract between Teekay
and Statoil.

lifting of structures and mattresses, as


well as a front-end engineering design
(FEED) study.
EMAS AMC now has a backlog of approximately $1.0 billion, with majority of
the contracts to be executed over the next
24 months.

Thailand
KRISENERGY IN FIRST
WASSANA DISCOVERY
KrisEnergy made its first discovery in the
Wassana oil field as it continues its Thai
drilling campaign.
The Rayrai-1 exploration well intersected 50ft of net oil-bearing sandstones
after reaching a total depth of 1945m
using the Key Gibraltar jackup rig.
The well is in the 4696sq km G10/48
license located in the southern section of
the Pattani basin, in 170ft water depth.
It lies 2.25km north of the Niramai oil
discovery drilled in 2009.
Drilling at Rayrai-1 began last week
to test the Early Miocene stacked fluvial
sandstones on a north-south trending
faulted basement high.
Once the well is plugged, the Key
Gibraltar will begin drilling up to 15
Wassana development wells. Production
at Wassana is scheduled to begin in the
second half of 2015 and plateau at up to
10,000 b/d of oil.
SOLSTAD BAGS
CHEVRON 2016 CAMPAIGN
Solstad Offshore (SOFF) received
confirmation from Chevron Offshore
(Thailand) Ltd., Chevron Thailand
Exploration and Production Ltd., and
Chevron Pattani Ltd., for the 2016
offshore installation campaign utilizing its derrick lay barge (DLB), Norce
Endeavour.
The contract value is confidential among
the parties, said SOFF in a statement.
Norce Endeavour will install multiple
new wellhead platforms and subsea
pipelines for Chevron in the Gulf of
Thailand.
The offshore scope of work includes
the installation of 14 wellhead platforms
and 15 pipelines with an estimated
utilization of the DLB Norce Endeavour
of around 200 days with preparation
for mobilization starting first quarter of
next year.
SOFF will also provide project management, engineering, procurement and logistics to support the DLB installation and
construction scope of work through its
DLB Marine Projects group in Singapore.

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008_AOG0415_Regbriefs.indd 12

5/22/15 1:56 PM

PubCorporate 212,72x282,575:Mise en page 1 23/01/2015 10:46 Page1

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Email: info@beiciptecsol.com
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AOG_0515_Ads.indd 13

5/19/15 2:46 PM

Cybercrimes
in Asia

As cyber criminals continue to advance their


techniques, CyberArks regional director for ASEAN,
Cynthia Lee tells us how this can also impact oil and
gas organizations in the Asia-Pacific region.

Privileged account security

ast year, oil and gas companies across Europe and North
America were hit by a group of Russian hackers known
as the Energetic Bear, and we in the Asia-Pacific region
escaped the crosshairs this time.
What the perpetrators were after are also found in enterprises
across Asia, making a similar attack highly possible. Perhaps,
not by the same group of criminals, but through the use of
similar tactics.
The Energetic Bear has been in operation since 2011 targeting companies within the energy and pharmaceutical sectors
in US, Spain, France, Italy, Germany, Turkey, Poland and more.
They have been hacking into intellectual properties and valuable datas.
Multinational companies have set up operations across the
globe and Asia, too, could become a lucrative target for such cybercrimes. In fact, three out of the top five patent organizations
are based in this region.
According to KPMG, Asia-based energy firms are slowly
migrating their corporate values to digital assets like bid information. Compared to physical assets, such as facilities and

14 AOG

products in the past, this


makes them vulnerable
to cyber thieves. Thus, it
is critical we prepare a
defense for the inevitable
threats that will target
intellectual properties.
Behind the
infiltration
In order to achieve their
goals quickly and efficiently, the attackers develop privileged account
pathways to identify
themselves as de facto
insiders on networks.
They obtain access to
companies credentials,
which help them gain
unfettered access to key
systems.
Methods like phishing and watering hole attacks are employed for initial network
penetration, while industrial control systems (ICS) software
providers are infected with malware.
The two primary tools the Energetic Bear use for their operation are Remote Access Tools (RATs) such as Backdoor Oldrea
and Trojan Karagany.
Backdoor Oldrea is a light tool with minimum capabilities,
which lets hackers maintain presence in networks, as well as
install complex malware on the infected machines.
Trojan Karagany, on the other hand, has the ability to
run modules like those that steal credentials and take
screenshots.
In the case of the 2014 attack, the hackers set up infrastructures for further attacks. They used both tools to steal authorizations and gather system information like file lists, installed
programs, roots of available drives, data from email address
books and VPN configuration files.
These credentials allowed them to go deeper into the networks, impersonate employees and use privileged accounts to
reach systems.

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| May June 2015
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014_AOG0615_Feature1_CyberSecurity.indd 14

5/22/15 1:58 PM

Low security spending


for the oil and gas industry. Organizations in the Asia-Pacific can
Energetic Bear is merely one of the many attacks plaguing
start by protecting privileged accounts, because even if attackthe oil and gas industry, with many other malwares, such as
ers manage to penetrate the network, this can stop them from
Stuxnet, Shamoon and Night Dragon hitting companies across
achieving their goals. The following techniques should be used
the industry since 2009.
for risk mitigation:
Using a jump server that disallows credentials from residing
For example, a Unisys-commissioned study, conducted by
on the endpoint machines. This prevents attackers from hijackthe Ponemon Institute found that 78% of critical infrastructure
ing and accessing sensitive assets;
providers in Malaysia have experienced at least one breach
Monitoring activities on privileged accounts to understand
from 2013-2014.
the difference between normal and anomalous behavior that
About 57% of participants said they had experienced secumight point to malicious activities;
rity incidents, due to insecure networks, and one in three were
Using an automated password management product to
caused by the use of social networks and unmanaged access to
prevent typing or observing passwords when connecting to
cloud services.
network systems. This also protects against stealing passwords
Over the last few decades, business changes in the oil and
from computer screenshots or key logging; and
gas industry have affected cyber security standing as well. In
Using a credentials management system to create complex
fact, the recent drop in global oil prices has prompted firms
passwords to guard against brute force attacks.
across the industry to drastically reduce capital and operating
All companies in the Asia-Pacific that hold intellectual
expenditures, including cyber security spendings.
properties should take steps by safeguarding their privileged
Many companies in the industry are exposed to cyberattacks
accounts against external attackers and stopping attackers from
through Big Data, which is managed by supervisory control
masquerading as privileged insiders. AOG
and data acquisition (SCADA) and ICS used for analysis. With
shareholders pressuring companies
to boost returns on investments and
Privileged account security solutions best practices
reduce costs, information technology (IT) is being used for operational
Organizations can control and protect privileged accounts through use of the best practices listed
efficiencies.
below. Many of these practices require only process changes, while others may involve tools or
Thus, there is some hesitation
solutions to implement. To help you determine which actions give you the most benefit we have
grouped them by maturity level.
towards spending extra money on
cyber security; as such technologies are generally viewed as an add Disable inactive privileged accounts
on. Even though organizations have
Use multifactor authentication for all admin access
improved their abilities to imple Ensure passwords are current with automated password verification/reconciliation
Regularly change and verify hardcoded passwords embedded in applications
ment cyber security tools, making
Prevent password display to users through direct connection to a target system
them invest in this area continues
Eliminate privileged users directly accessing sensitive assets in IT infrastructure
to remain a challenge.
Integrate dual-controls and helpdesk ticketing with credential request workflows
A recent Ernst and Young report
Proactively detect malicious behavior
found that oil and gas security
budgets have remained static, and
majority of spending on IT security
High
was to simply maintain existing
effective maturity
security capabilities.
Automatically change privileged
This budget constraint is further
account passwords on a 30 or 60-day cycle
Use one-time passwords
complicated when IT departments
Implement session recording
are focused on purchasing the latest
Eliminate the option of interactive(human)
technologies, instead of evaluating
login for service accounts
the root cause of security challenges
Change hard-coded or embedded passwords
for scripts and service accounts
they face in order to better prioritize
Use focused auditing and monitor for
finite budgets.
anomalous behavior
Lastly, with layoffs taking place in
Medium
the oil and gas industry, safeguardeffective maturity
ing against insider threat has become
even more important than ever.
Businesses will need to closely
Baseline
monitor and assess disgruntled
effective maturity
employees that may perform risky
Inventory/reduce the number of privileged
accounts in your organization
acts detrimental to the establish Prohibit standard user accounts from having
ments cyber security, such as theft
privileged access
of sensitive data.
Create a process for on- and off-boarding employees that have
Prevention
With security threats growing every
passing day, cyber security is critical

privileged account access


Eliminate the practice of accounts that have non-expiring passwords
Store passwords securely
Link all shared admin account activity to a specific individual

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014_AOG0615_Feature1_CyberSecurity.indd 15

15

5/22/15 1:58 PM

BP strengthens
presence in Russia
BPs involvement in Russia could potentially increase oil
exports to energy-thirsty Asian countries like China, Japan,
India and South Korea. Eugene Gerden investigates.

espite western sanctions on Russia, oil major BP plans


to significantly strengthen its presence in the country
during the next several years by entering into a project
for the development of large oil fields in Eastern Siberia.
Under the terms of a preliminary agreement signed between
BP and Russias state-owned Rosneft, BP will acquire 20% stake
in East Siberian oil producer, Taas-Yuryakh Neftegazodobycha.
The value of the deal has not been disclosed, but it has been
estimated to be between US$700-800 million. Representatives
from Rosneft and BP have declined to comment.
Taas-Yuryakh, a Rosneft subsidiary, holds production licenses for the Central and Kurungsk blocks of the
Srednebotuobinskoye field. This oil and gas condensate is
known to be one of the largest undeveloped fields in East
Siberia with approximately 135 million tonne of oil reserves.
Through this joint venture, both BP and Rosneft plan to
produce more than 5 million tonne of oil per year from the
Srednebotuobinskoye field, with most production exported to
the Asia and Europe.
In 2014, about 25% of Russian crude oil was bought by energy-thirsty Asian countries like China, Japan and South Korea,
totaling imports to 592 million tonne.
Moreover, due to sanctions imposed on Russia by western
countries and reduced supplies to Europe, Russia has also seen
an increase in crude oil exports to Asia. Oil exports to Europe
fell to less than 3 MMb/d, compared to 3.72 MMb/d in 2013.
China at present accounts for the majority of Russian crude
oil exports, plus remains the worlds second largest consumer
of Russian oil after the Netherlands.
Despite the sanctions Russia remains an extremely

16 AOG

Left: The Verkhnechonskoe field in East Siberia Photos from Rosneft.


Right: Rosneft CEO Igor Sechin and BP CEO Bob Dudley.

important market for the company. BP is ready to increase its


investments in Russia, which will not violate any sanctions. In
the case of declined oil prices, there are some positive factors
associated with Russia, commented BPs CEO, Bob Dudley.
The cost structure is built in rubles, that move in accordance with oil prices and the company finds it easier to work
with such cost structure. I think Russia is one of the few
worlds countries, which rebuild its taxation policy with the
aim to provide a support to the domestic oil industry.
Srednebotuobinskoye field development
First oil production from Srednebotuobinskoye started in
October 2013 and oil outputs reached 900,000 tonne the following year. In 2012, the field welcomed its connection to the
160km Eastern Siberia Pacific Ocean (ESPO) oil pipeline used
to export Russiancrude to the Asia-Pacific region.
Further development of the Srednebotuobinskoye field could
commence in the second quarter of this year. Rosnefts technologies and equipment will be utilized for the initial operation and those of BPs, which are not subject to sanctions will
follow suit.
Russian geophysical company, OJSC Geotech Seismic, may
be involved for seismic study of the field, through the use of
foreign equipment and technologies.
We operate mostly French Sercel and US ARAM equipment. Telemetry systems, which are produced by the Saratov
plant are no inferior to foreign analogs, in terms of quality and

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| May June 2015
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016_AOG0615_Feature2_BP Russia.indd 16

5/22/15 1:59 PM

Lubricant drums in Vietnam.


Photo from BP.

speed of data transmission, explained Salavat Zaripov, head of


Geotech Seismic.
Currently, Russias drilling fleet is estimated to be about 1900
units, of which 1500 are operational. Rigs produced from 1987
to 1992 that have a service life of 25 years will end in the next
three or four years.
Therefore, according to analysts at the Russian Ministry
of Energy, the Srednebotuobinskoye field operation may also
require the use of new drilling rigs, which could be supplied
by BP.
Eastern Siberian oil and gas reserves have so far been untapped, because of geographical remoteness and harsh environment in the region. Poor infrastructure, too, makes it difficult
to transport equipment to Srednebotuobinskoye, as well as
export products from it.
As a result, partners, BP and Rosneft, plan to transport
majority of future productions from the field through the
Baikal-Amur Mainline. It is one of Russias longest rail lines,
traversingEastern Siberiaand theRussian Far East. Parts of the
future production will also be transported through the ESPO
oil pipeline system.

gas, but it will not create serious problems for the country, said
BPs Dudley.
The entry of the British company in Eastern Siberia has been
discussed for a long time. BP became a key foreign partner
with Rosneft two years ago, after receiving a 19.75% stake in
the company, as part of the TNK-BP (Tyumenskaya Neftyanaya
Kompaniya-BP) consolidation.
Through TNK-BP both parties have planned to explore the
Domanik oil field in the Orenburg and Volga-Urals regions, but
plans were put on hold, due to sanctions and lack of resources to
import advanced technologies needed for the operation.
Despite this, BP will continue its operations in Russia for it
has already invested heavily in the country and to leave would
result in multimillion dollar losses, noted analysts at the Russian
Ministry of Energy. The company has also no plans to sell its
share in Rosneft and is ready for implementation of its joint projects with the Russian company.
Sanctions imposed on Russia were not as painful for BP, as
they were for ExxonMobil, who had to halt operations in the
Russian Arctic, said an official spokesman for Russias Minister
of Industry and Trade, Denis Manturov. According to the
Minister, departure of competitors from Russia, due to sanctions
Russia Sanctions
will provide new opportunities for those companies who decide
According to BP, the project does not violate any of the recent
to stay.
sanctions imposed on Russia, because of its involvement in the
Strengthening its presence in Russia is part of BP plans for
Ukraine crisis.
the expansion of its operations in the entire post-Soviet region.
However, the sanctions may significantly delay implementa- This also involves the $6 billion worth development of the Shah
tion of projects in Russia that involve the production of shale
Deniz gas field inAzerbaijan. AOG

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016_AOG0615_Feature2_BP Russia.indd 17

17

5/22/15 2:00 PM

Subsea reliability
of multiphase meters
Although multiphase meters bring a number of benefits like reducing
capital and operational expenditures, the recovery cost from wrong
metering can also be exceptionally high. Emmelyn Graham explains.

ntroduced in the early 1990s as a game changing technology


for the oil and gas industry to meter unprocessed oil and gas
streams, the use of multiphase meters have grown significantly over recent years.
Multiphase meters are now installed topside and subsea in
fields around the world, including the deepwater Kikeh field
located 120km north of Eastern Malaysia, in water depths of approximately 1300m. The field has a recoverable reserve base in
excess of 400-700 MMbbl of oil.
Flow meters calibrated under laboratory conditions.

As advancements have been made in multiphase flow metering technology, the industry has become more confident in the
performance and reliability of multiphase measurements.
Operators have also gained significant experience using the
meters in subsea applications and now understand the magnitude of the issues and challenges involved.
Although much has been done to advance multiphase metering technologies over recent years, improvements in their
reliability and performance for subsea applications is still

Images from NEL.

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018_AOG0615_Feature3_meters.indd 18

5/22/15 2:02 PM

necessary to exploit full potential.


This is key to the economical development of deeper and
more complex fields, which would otherwise prove cost
prohibitive.
Multiphase meter benefits
Multiphase meters bring a number of benefits, such as reducing capital and operational expenditure, increase capability
to monitor individual wells in real time, reduce need for test
separators and associated maintenance, as well as minimal loss
of production through well shutdowns during tests.
For subsea activities, installing multiphase meters can
provide further benefits, such as reduction in required piping
infrastructure and the capability to install meters on each well
to continually monitor production.
It also allows different operators to share pipeline systems,
reducing cost and disruption, as individual well production
can be metered before commingling. The information provided
by multiphase meters is, therefore, crucial in allowing operators to make informed decisions.
Subsea impacts
Special considerations have to be made when installing a
multiphase meter subsea, as the meters are exposed to much
harsher environments, which can have a major impact on materials, reliability, safety and accuracy.
When considering solutions to the issues of using subsea
multiphase flow meters, one major operator condensed this to
the three Rs retrievability, reliability and redundancy.
The cost of getting subsea metering wrong can be exceptionally high. Retrieval alone of defunct meters can be extremely
expensive in deep waters, with one operator reporting costs of
around US$7.5million to recover one poorly performing subsea
meter.
Meters normally undergo a factory acceptance test (FAT) at
a multiphase flow measurement facility, before being installed
subsea. There is, however, still a risk that following installation
subsea the meter may fail to work. This makes the design for
meter retrieveability a major consideration, which can impact
on the overall cost of the meter.
First and foremost, a flow meter has to be capable of mechanically surviving the hostile conditions it will be exposed
to during its lifetime in service.
Like all equipment destined for subsea installations, to avoid
catastrophic failure, multiphase meters have to be
robust, reliable and contain
the fluid without leakage or
degradation to materials.
Subsea meters must also
be compliant with subsea
equipment standards. From
an international perspective, this usually includes
ISO 13628, (Petroleum
and natural gas industries
design and operation of
subsea production systems)
and API MPMS Chapter 20.3
NELs flow measurement
facility

Measurement of Multiphase Flow.


The overall use of flow meters in Malaysia for well and reservoir management and allocation measurement are required to
comply with the Petronas Operations Management Guidelines
(PUGGA) Volume 7.
The installation and configuration of multiphase flow meters
require careful consideration to avoid any undesirable external loading, thermal cycling and movement of meter joints.
These can significantly impact the meters reliability and
performance.
Meter failure
Fundamentally, multiphase meters have to be capable of withstanding the flow assurance issues, which come with subsea
multiphase oil and gas production. This includes the formation
of hydrates, waxes, scaling, slugging, chemical deposits, erosion and corrosion.
Although the multiphase meter on many accounts is used to
detect the very presence of these flow assurance issues to allow
early intervention, the meter itself and its performance can be
seriously hindered through exposure to such conditions.

Flow assurance issues.

The main reasons for meter failure include:

Formation of waxes, hydrates, scales etc. inside the flow meter


body and in differential pressure impulse lines;

Measurement sensors coated in deposits and fail to work or


provide incorrect measurements;

Restrictions and blockage of pipes and inside the flow meter;


Damage of equipment from slugging; and
Corrosion and erosion of the meter body and sensors.
Chemical deposits and formation of waxes and hydrates can
depend on the fluid temperature and pressure, fluid composition and flow conditions. Rapid changes in the temperature and
pressure, for example, during well shutdowns can cause major
flow assurance issues.
During well start-up extreme cooling to temperatures of
-40oC may occur and lead to large effects on the integrity and
reliability of multiphase sensor and components, as well as flow
assurance issues.
When looking at the reliability and performance of multiphase flow meters subsea, it is important to remember that the

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018_AOG0615_Feature3_meters.indd 19

19

5/22/15 2:03 PM

The range ability of meters is


extremely important and is frequently overlooked. Meters are
often required to operate over very
wide flow ranges. It is vital that
the meter can cope with changing
flow conditions over the lifetime
of field production, especially as
the field depletes during the latter
stages leading to lower flows and
production.
Although flow predictions and
modeling is used to size multiphase
meters for specific applications, meters are still prone to being under or
oversized. For example, the sensors
to measure the differential pressure
across the Venturi tube, which is
a key component when measuring
bulk flow rate, could be saturated or
Multiphase meter undergoing test at NELs flow measurement facility.
operating at the lower limits. Hence,
overall measurement relies heavily on accurate fluid properties
the uncertainty of the measured flow rates will be much higher.
input data, which is obtained from fluid sampling.
Reportedly, one operator reviewed the different types of
Information relating to the water, oil and gas phases, such
subsea multiphase meter failure and the effect on the flow
as density and conductivity can have a very large effect on
measurement. They found that 10% of their subsea multiphase
the gamma densitometer and electrical sensor measurements
meters had to be retrieved, only 70% to 85% of the meters were
within the meter.
considered as fully functional and 5% of the meters were out of
Therefore, inaccurate physical properties data can have a
range.
large impact on measurement accuracy. For example, collecting
Slow data communication was also identified as a major isfluid sample topside may not be fully representative of fluids
sue. The table below provides a breakdown of other reliability
subsea at the meter location, due to liquid holdup in lengthy
issues encountered during subsea multiphase metering.
tiebacks.
Type of failure
Meters affected
The major difficulty with subsea metering is the complexities involved in obtaining a representative sample at such
Gamma measurements to determine the
20%
water depths. Over the last decade, the industry has therefore
phase fractions
focused on developing dedicated subsea sampling technologies
Electrical measurements, e.g. capacitance
designed to overcome these specific challenges.
Up to 30%
measurements to determine water-cut
The design, modeling and validation of subsea multiphase
sampling systems to demonstrate their ability to obtain repreIssues with differential pressure sensors
5%
sentative samples under challenging flow assurance conditions
from hydrates or being out of range
and operating envelope has been crucial to reduce the risk of
2%
Failure of subsea flow computer
failure in the field. The cost of getting a sample wrong can be
costly.
Many multiphase meters use a radioactive source as part of
a gamma densitometer to determine the water, gas and oil fractions in the flow.
This could be problematic if over the lifetime of the meter the
strength of the source deteriorates significantly and intervention at deep waters is necessary to replace it. Consequently,
new technologies are now being developed, which do not rely
on radioactive sources to overcome this potential risk.
Redundancy
Redundancy of sensors and components are essential for
subsea applications to provide back up if a component fails.
Redundancy also allows cross checking and verification from
one sensor to another to validate performance and drift.
This is essential in subsea environments when there are
limited options for verification. Redundancy can be considered
for a number of components across the measurement chain,
including flow computers, pressure sensors and temperature
transducers.

20 AOG

Subsea multiphase metering is still very much an evolving


technology and significant resources are being directed at improving their reliability, accuracy and performance.
To overcome many of the challenges operators are working
more closely with meter manufacturers and industry experts
through collaborative joint industry research projects designed
to advance the technology and best practice.
Looking at longer-term trends, the use of subsea multiphase
meters will continue to grow in order to enable the development of remote and deepwater fields. AOG
Emmelyn Graham, senior measurement
consultant at NEL has specialised in wet gas
and multiphase flow metering for more than
eight years. She has also been involved in
producing new equations for the correction
of gas flows with entrained liquid for Venturi
tubes, which has been included in a new ISO
wet gas technical report.

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5/22/15 2:03 PM

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5/21/15 11:38 AM

Hardide coated components


being precision measured.

Valve endurance
with Nanotechnology
Dr. Yuri Zhuk, Hardide Coatings technical director discusses the
use of advanced chemical vapor deposition (CVD) tungsten carbide
coatings to extend the life of valves in subsea environments.

orking in the oil and gas industry can be tough,


often operating in harsh and difficult environments. With pressure to extract oil from less
accessible reservoirs and carry out exploration in new
frontiers, it is increasingly important to ensure fields are
exploited economically.
The extreme environments and working conditions put
pressure on the equipment being used. Exposure to sand and
other elements in the oil and gas can lead to corrosion, abrasion
and erosion, resulting in component failures and unscheduled
downtime.
In a subsea environment, components are at particular risk
from chloride, sour gas and sour oil (H2S), all of which attack
stainless steel. Maintenance or replacement of failed parts is
costly as subsea interventions can involve a remotely operated vehicle (ROV) or saturation diver. In order to prevent
unscheduled downtime and costly maintenance, extending

22 AOG

tool life has become a key focus.


Valves are a vital link in the chain for oil and gas to control
the flow of abrasive, erosive and corrosive fluids and gases.
However, their resistance to wear and galling poses a material problem for oil and gas companies worldwide. Oil and gas
operators are set to spend US$6 billion on solutions to valve
maintenance and operational problems in 2015.
Using the nanostructured tungsten carbide-based coatings
can alleviate many of the issues found with coating valves
effectively.
Valve coating challenges
Bearing the brunt of shock loads and high pressures, some
valve components can become deformed, causing fracture,
chipping and catastrophic malfunction of equipment.
Sour oil and gas containing aggressive H2S, other grades
of crude containing CO2 and acidic fluids can quickly attack

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022_AOG0615_Feature5_Valves_Hardide.indd 22

5/22/15 2:06 PM

Reactor loading. Images from Hardide.

The hard materials traditionally


used to coat tools in severe environments can be brittle when put under
the pressure of shock loads they
risk fracture, which may be catastrophic, compromising economics
and viability.
Combining the issues of corrosion, abrasion and erosion seen
in subsea environments a coating solution becomes difficult to
determine. Common anti-corrosion
coatings are not hard and will
not effectively protect against
abrasion.
In the past, hard chromium
electroplating was seen as a trusted
solution to extend the life of valves,
but this will be severely restricted
or banned under environmental
health and safety guidelines as
they utilise carcinogenic hexavalent chromium salts in their
production.
Hard chrome coatings contain
networks of micro cracks. These
cracks provide pathways for corrosive media to attack substrate materials. This has been confirmed by salt spray testing, which demonstrated the superiority of both hard chrome and HVOF coatings.
HVOF is a type of thermal spray coating technology used to
deposit tungsten carbide grains contained in a cobalt binder.
This is a line-of-sight technique, and as such is unsuitable for
coating internal faces and other complex designs.
The resultant coatings are rough and porous in nature and often require grinding which is not possible on intricate shapes.

Top: Hardide coated ball valves. Above: Hardide coated internal


surfaces.

valves, pumps and pipelines. Even without this additional


burden, valves in normal operation are still susceptible to
microcracking and fatigue erosion, with a possible outcome of
premature failure.

CVD coating technology


Applied by low temperature CVD coatings are crystallized from
the gas phase atom-by-atom, producing a conformal coating,
which can coat internal and external surfaces and complex
shapes.
CVD takes place in a vacuum chamber reactor at temperatures of approximately 500oC. The coatings are a metallic tungsten matrix with dispersed nanoparticles of tungsten carbide
typically between 1-10 nanometers in size.
Dispersed tungsten carbide nanoparticles give the material
enhanced hardness, which can be controlled and tailored to
give a typical range of hardness of between 1100 and 1600Hv.
Abrasion resistance is up to 12 times better than hard chrome
or 500 times better than Inconel.
Nanostructured materials are known to possess unique
toughness, crack and impact resistant features. For example,
Hardide-T has proven this by withstanding 3000 microstrain
deformation without any damage; this deformation will crack
or chip most other thick hard coatings.
During the 30-day test the uncoated control sample
cracked across the full 20m width and suffered from extensive micro cracking and pitting, while the same substrate
coated with Hardide-T showed no micro or macro cracking
or degradation after the same test, completely isolating the

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022_AOG0615_Feature5_Valves_Hardide.indd 23

23

5/22/15 2:07 PM

reduction feed liquor


(RFL) level control to BHP
Billitons Kwinana Nickel
Refinery, located in the
south of Perth.
This is a severe service
application, due to the high
pressures and temperatures and the inherently
erosive natures of the operating environment, which
is primarily ammonium
sulphate with dissolved
nickel metal and ammonia
in water.
Between 1993 and 2010,
WPC redesigned the plug
stem four times in efforts
Unitech UH-550 2in male stab connector with integrated ball valve.
to extend its lifespan. The
fourth design lasted the
substrate from attack.
longest with a life span of six to eight weeks. The average repair
This demonstrated that the coating could help extend the life
cost after a plug failure was AU$12,000.
of the valves controlling sour oil and gas in both upstream and
Hardide Coatings worked with WPC to engineer a coating
downstream applications.
solution on the fourth design, which has extended the life of
A number of CVD coating variants are offered to solve probthe part up to three fold. The plug stem now has a life cycle of
lems, such as severe wear, corrosion or galling. Components,
approximately four months in service with minimal wear to
such as valves will be found in subsea equipment like ROVs
the plug. The coating is now standard on all overhauls, saving
and using a CVD coating can increase the lifetime of a critical
considerable downtime and repair costs.
component dramatically.
The UH-550 with integrated ball valve is designed for critiProjects have proven that parts can last up to four times
cal subsea applications, such as wellhead control. The handle
longer with a CVD coating than traditional materials, saving on
mechanism on the valve is operated by a ROV manipulator to
costly component failure and general maintenance.
control flow at pressures up to 10000psi.
This application required a wear resistant coating that would
Applying CVD to valves
protect the ball assembly against abrasion from sand and other
Traditional line-of-sight coating methods present issues with
materials, as well as corrosion. It also needed to be smooth and
cages and plug trim in choke valves. They would clad the outer
non-porous for sealing against a PEEK inlay and low friction so
surface of the component, but not coat the inner diameters of
minimal torque would be required for operation.
the through holes, which run along the sleeve.
Conclusion
Due to their pressure reducing role, the choke valves face
In an industry, which is fast paced and challenging, compahigh velocities and abrasive media, so lack of coverage can
nies, are under increasing pressure to seek ways to improve
cause additional wear and erosion issues on the exposed base
performance while delivering reduction in downtime and
material.
meeting environmental regulations.
Ball valves can also suffer from severe abrasion by sand or
The challenging environments put pressure on the equipstone chippings present in fluids, and from erosion by accelerment, leading to failure of critical components, downtime
ating flow when the valve is being closed or opened. The CVD
and lost production. Tungsten carbide CVD coatings procoatings make the valve parts resistant to scratching and wear
vide an effective solution for these problems, ensuring
by sand, which leads to valve leaking.
extended life of critical components and less time spent on
The metal-to-metal seals in ball valves face a hardwearing
maintenance.
application and there is sometimes a need for flex in the mateThe use of this CVD process opens the door to advance
rial. Traditional carbides cannot fulfil this as its rigid nature
design for valves operating in extreme subsea conditions, enis conducive to cracking and the component geometry is also
abling a level of engineering flexibility that is not possible with
unsuitable for machining post coating.
alternative technologies. AOG
The CVD process also eliminates the potential for edge chipping, a particular problem in ball valves up to 4in when using
Dr.Yuri Zhuk is the co-founder of Hardide
the traditional methods. Other benefits of utilizing CVD on
Coatings and is currently responsible for the
smaller balls and seats are the shorter lead times through batch
companys technology, research and developprocessing and the coast savings achieved by eradicating the
ment, patenting, production improvement
need for machining after coating.
and applications development programs.
Australian case study
Western Process Control (WPC) based in Western Australia
supplies Fisher AA 80mm angle body control valves for

24 AOG

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5/22/15 2:07 PM

lagcoe.com

2015

Years

& Still
Climbing

Global Collaboration Local Resources

LAGCOE proudly celebrates 60 years supporting the oil and gas industry
through world-class expositions, technical presentations, and a commitment
to industry educationand were Still Climbing.
Climbing
Attendees enjoy one of the most culturally inspiring areas in the U.S.,
Lafayette, Louisiana - gateway to Americas Energy Corridor.

Register now at:

lagcoe.com/register.
October 27-29, 2015

Lafayette,Louisiana USA

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AOG_0515_Ads.indd 25

5/19/15 1:18 PM

Capreolus 3D illuminates new


oil prospect offshore Australia
Polarcus discusses the 22,130sq km Capreolus 3D
seismic survey over the Roebuck basin considered to
be the birth of a new oil province for Australia.

olarcus Capreolus multi-client 3D seismic survey


offshore Western Australia covers an area of 22,130sq
km, which is more than 30 times the size of Singapore
or about the size of Wales in the UK. The statistic also qualifies it to be the largest single 3D survey ever acquired offshore
Australia.
The project idea for Capreolus was conceived in 2014 after
the announcement that the Phoenix South-1 well had encountered light crude oil nearly 5km below the seabed, while drilling for natural gas.
Discussions with oil and gas companies active on the North
West Shelf of Australia confi rmed there was significant interest
in this well, because the area was only lightly explored and had
the possibility of a new oil province for Australia.
In response Polarcus drew up an initial survey outline for an
extensive broadband 3D seismic survey over the Roebuck basin,
including over the discovery location.
The company presented this plan to the industry and the
Capreolus multi-client 3D seismic survey was born, named
after a roe deer native to the British Isles that also gave its name

Top: Polarcus Asima in production mode. Images from Polarcus.


Left: Map of the Capreolus survey.

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026_AOG0615_Feature6_Geology.indd 26

5/22/15 2:09 PM

Subsea Innovation and Efficiency


Delivering Economic Success

August 11-13, 2015


www.deepwaterintervention.com

er
Regist
Today!

Contact Information
Conference:
Jennifer Granda
Tel: +1 713-874-2202
jgranda@atcomedia.com

Sponsorship & Exhibits:


Gisset Capriles
Tel: +1 713-874-2200
gcapriles@atcomedia.com

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AOG_0515_Ads.indd 27

5/19/15 3:49 PM

Preliminary data imaging from the tertiary through Precambrian basement.

to William Dampiers ship, HMS Roebuck.


In late 2014 the planning commenced in earnest. The survey
lies in an environmentally sensitive sea area known as the
Commonwealth Marine Reserve Network and work commenced
on the environmental plan necessary to allow the project to
receive regulatory approval to proceed.
Polarcus allocated two A-Class 3D seismic vessels, Polarcus
Amani and Polarcus Asima, for the project. With air emission
reducing technologies and invasive species eliminating ballast
water treatment, these vessels are amongst the most environmentally advanced.
Both vessels have been certified by the international classification society DNV GL to the highest Level 1 standard in the
Triple-E environmental rating scheme.

100m x 8,100m streamer array in the Bedout basin and a 12 x


100m x 9,000m array in the deeper Rowley basin, with a 12.5m
flip/flop source interval and 12-second record lengths.
It was agreed that data would then be processed through
pre-stack depth migration at DUGs processing center in Perth,
Western Australia.
In order to acquire this vast survey efficiently and enable
final data imaging products to be available within 15 months of
project mobilization, it was decided to acquire the survey using
dual vessel simultaneous mode acquisition, a technique previously used by Polarcus offshore Greenland.
The use of continuous data recording further enabled the
capture of the desired 12-second record lengths without compromising the objective of very high fold data.

Survey design
In designing the Capreolus survey, Polarcus geoscience experts
first identified the key geological objective as developing a
comprehensive understanding of the Triassic and Jurassic
reservoirs, in both structural and stratigraphic traps, and their
possible charge history.
The existence of large undrilled structural features are
evident from the legacy seismic data acquired in the Roebuck
basin, however the key to unlocking the areas true prospectivity is understanding the paleogeography, sedimentology
and charge history within the individual seismically defined
packages.
To ensure that the geophysical parameters addressed these
geological objectives, Polarcus opened a dialogue with oil
and gas companies operating in the area.
In conjunction with Polarcus data processing partner,
DownUnder GeoSolutions (DUG), it incorporated that information into the survey design. The output from this dialogue
was a recommendation to acquire the survey with a 12 x

Responsible exploration
The Capreolus survey area covers the North West Shelf
Province and the North West Transition bioregions; a known
humpback and pygmy blue whale migratory route, flatback
turtle breeding site, and a site for breeding seabirds and for
commercial fisheries.
Therefore, maintaining a minimal environmental footprint
was critical.
The environmental plan identified that several species of
migratory marine mammals are known to traverse the survey
area during the proposed acquisition period.
Polarcus then decided to design an acquisition plan to provide temporal mitigation for the known migratory timing and
routes.
During the stakeholder engagement, other socio-economic
issues were also identified and addressed accordingly.
In particular, the pearl industry had concerns related to
periods of pearl oyster spawning, and due to this, Polarcus
proposed to avoid water depths 100m during the spawning

28 AOG

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026_AOG0615_Feature6_Geology.indd 28

5/22/15 2:09 PM

periods, and further avoided any data acquisition in water


depths 30m throughout the whole campaign.
Polarcus vessels are well-suited to work in these environmentally sensitive sea areas, having inbuilt selective catalytic
reduction technologies on each vessel eliminating up to 35% of
nitrogen oxides (NOx) from exhaust gas emissions.
In order to limit the sulfur oxide (SOx) emissions, Polarcus
also uses low sulfur content marine gas oil (MGO) to fuel its
seismic vessels and the support vessel fleet.
Through mid-April, the sulfur content of the MGO consumed during the course of the survey was 98.9% lower
than the legal limit mandated by both the International
Maritime Organization and the Australian Maritime Safety
Authority.
Further supporting this commitment to reduce the environmental footprint of these surveys, Polarcus will compare the
actual emissions data with the predicted models prepared at
the outset of the project, in a bid to achieve continuous and
sustainable improvements for future projects.
Polarcus also electively uses other mitigation measures, such
as passive acoustic monitoring (PAM) technology specific to
this dual vessel operation.
It will maintaining minimum operating distances of 40km
between the acoustic sources on the two vessels, reducing the
risk of any cumulative sound energy that may potentially affect
the surrounding marine life.
The PAM technology on each vessel is used to help detect cetaceans during the nighttime and periods of reduced visibility,
supplementing the visual observations and guidance provided

by the onboard marine fauna observers (MFO).


Since the beginning of the survey these operating teams of
PAM operators and MFOs have so far logged over 68 sightings
comprising of 900 animals, including one blue whale.
Project status
The presence of viable Triassic oil prone source rock in a poorly
understood and underexplored part of the North West Shelf has
led to the potential opening of a new oil-prone fairway primed
for exploration and is ideally suited for high definition broadband seismic imaging.
The productivity delivered by the dual vessel simultaneous
mode acquisition has been excellent with over 11,000sq km of
broadband 3D seismic data acquired in 1Q 2015, corresponding
to some 50% of the planned survey.
Fast track data from Polarcus Capreolus 3D multi-client
survey is already showing seismic imaging from the Tertiary to
Precambrian basement.
The acquired data are presently being processed through
pre-stack depth migration by DUG in their Perth facility,
with final data products expected within 1Q 2016.
When completed, the Capreolus multi-client survey will
provide exploration companies with an extensive basinwide high quality broadband 3D seismic data set over
this underexplored frontier. The data should enable new
prospects to be mapped and identified for future drilling
operations.
There is indeed every possibility that this is the birth of a
new oil province for Australia. AOG

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026_AOG0615_Feature6_Geology.indd 29

29

5/22/15 2:10 PM

Under construction
in Singapore

Alan Thorpe gives a rundown


of some of the floating
production, storage and
offloading unit conversions
and shipbuilding underway in
Sembcorp Marine and Keppel
Offshore and Marine shipyards.

FPSO Armada Ali in Keppel Shipyard


Photos from Alan Thorpe

eppel Shipyard, the marine division of Keppel Offshore


and Marine (Keppel O&M) is best known for the conversion of tankers into floating production, storage and
offloading (FPSO) units.
To date, the yard has carried out approximately 117 projects
since 1981. Currently, there are four projects underway, all of
which signed before the dramatic fall in oil prices.
Scheduled for delivery later this year is SBM Offshores
159,000 dwt FPSO Turritella, which will be sent to Shells
Stones field in the Gulf of Mexico.
Keppel Shipyard is also working on two projects for Bumi
Armada, such as the 166,468 dwt FPSO Kraken for the Kraken
Field in the UK sector of the North Sea and the 301,963 dwt
Armada Ali for works offshore Angola.
The group is also carrying out the topsides modules integration for Rubicon Offshore Internationals 112,046 dwt Front
Puffin FPSO, to be located offshore Nigeria.
Also in the pipeline, is the FPSO refurbishment operation
for Mitsui Ocean Development and Engineering Companys

30 AOG

(MODEC) 287,000 dwt FPSO Cidade de Caraguatatuba, which


will operate at the Lapa Field offshore Brazil.
Conversion work on the 126,277cu m floating liquefied
natural gas (FLNG) unit, Hilli, for Golar LNG has already commenced in the shipyards Tuas and Benoi yards.
Here, Keppel Shipyard is responsible for the provision
of the design, engineering and procurement of the marine
systems and all of the conversion-related construction services. It has also engaged Black and Veatch to provide design,
procurement and commissioning support services for the
topsides and liquefaction process.
Keppel Shipyard is also in the midst of fi nalizing the contract for a second similar unit of FLNG conversion for Golar
involving Hillis sister ship the Gimi. This second vessel is
already in the shipyard.
Meanwhile, Keppel O&Ms shipbuilding division, Keppel
Singmarine, is currently building a high-specification deepwater pipelay (S-Lay) vessel for McDermott International.
Developed by Keppels Marine Technology Development

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030_AOG0615_Feature4_Vessels.indd 30

5/22/15 2:05 PM

s.

(MTD), this vessel, to be named DLV 2000 and delivered later


this year, is designed to support advanced pipelay operations,
in which pipelines are installed to depths of up to 10,000ft.
Keppel FELS, which represents the offshore sector of Keppel
O&M has some 25 new building rigs on orders too. This year
saw Keppel FELS deliver its 100th jackup rig for Vietnamese
ownership, 11th jackup rig delivered to Mexicos Pemex, another
jackup for Maersk Drilling and the completion of Floatels
fourth accommodation rig.
Keppel FELS is also currently involved in the post-delivery
upgrades of a drillship built in South Korea by Samsung Heavy
Industries (SHI). Other examples of modification works are the
two Friede and Goldman 9500 semisubmersibles owned by
Songa Offshore.
Shipyards of Sembcorp Marine
Jurong Shipyard (JSL), a wholly owned subsidiary of Sembcorp
Marine has entered into an agreement with Heerema Offshore
Services for the engineering and construction of a new semisubmersible crane vessel (NSCV).
The NSCV is designed to install and remove offshore facilities, be equipped with two Huisman heavylifting offshore
cranes of 10,000 tonne lifting capacity each and a large reinforced work deck area.
One FPSO contract currently underway at JSL involves the
US$696 million contract to convert a shuttle tanker into a
FPSO vessel for OOGTK Libra GmbH & Co. KG, a joint venture
between Brazils Odebrecht Oil and Gas and Teekay Offshore.
The tanker involved is the Navion Norvegia shuttle tanker.
Work scope includes engineering, installation and integration
of topside modules, installation of external turret and power
generation, accommodation upgrading, as well as piping and
electrical cabling works.
Scheduled for completion in 3Q 2016, the FPSO will have
the capacity to produce 50,000 bo/d and 4 MMcf/d, and will be
chartered to Petrobras for work on the Libra field in the ultradeepwater section of Brazils Santos Basin.
A second FPSO conversion in progress at JSL is for Japans
MODEC Offshore Production Systems (Singapore) Pte Ltd. This
is to complete the repair and life extension, plus conversion of
the VLCC Centennial J into a FPSO vessel, as part of the Ghana
TEN Development Project.
When completed in late 2015, the FPSO will be named Prof
John Alla Mills, after the recent President of Ghana. It will have
a capacity of production and treatment of 80,000 b/d of crude oil,
65,000 b/d of produced water, and 180 MMscf/d of gas, with an
onboard storage capacity of 1.7 MMbbl.
The Ghana TEN Development FPSO will be external turret
moored in 1000-1800m water depth and operated by MODEC,
on behalf of their client Tullow Ghana Ltd., a wholly owned
subsidiary of Tullow Oil Plc.
Sembawang Shipyard, also part of Sembcorp Marine has
recently secured a FSO conversion contract from Teekay for the
Gina Krog Field in the North Sea. Sembawang Shipyard will
work closely with Teekay to convert the 125,402 dwt shuttle
tanker Randgrid into an FSO.
Major conversion work includes installation of a new helideck,
hull reinforcements, refurbishment of submersible turret loading
(STL) compartment, installation of offshore crane, loading hose
reel package, azimuth thruster and replacement of two generators, as well as associated piping and additional cabling works.
The vessel is expected to arrive at Sembawang Shipyard in

Ensco DS 6 in KFELS

Ghana TEN FPSO in Jurong Shipyard

Shuttle tanker Randgrid

June 2015, with completion in 11 months, after which the FSO


Gina Krog will head towards the Norwegian North Sea under a
charter contract between Teekay and Statoil.
Moreover, there are also two FPSO conversion projects currently underway at Sembawang Shipyard, both from Italys
Saipem for the Kaombo Project offshore Angola.
Major works include refurbishment of the very large crude
carriers (VLCCs), construction engineering, the fabrication of
flare, helideck, upper turret and access structure, integration
of the topsides modules and lower turret components, and precommissioning of the FPSOs.
The two converted FPSO units, owned by Total, will each
have oil treating capacity of 115,000 bo/d, a water injection
capacity of 200,000 b/d, 100 MMscf/d gas compression capacity
and a storage capacity of 1.7 MMbbl. AOG

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31

5/22/15 2:05 PM

Perth basin gas discovery


prompts economic boom
AWEs onshore exploration could deliver significant gas into the
Western Australia domestic market, plus generate economic
opportunities in the region. Former resources editor of the Australian
Financial Review, Ian Howarth reports.

Enerdrill Rig 3 at Irwin 1.


Photos from AWE.

AWE Ltds discovery of a substantial new gas resource in the


Senecio and Waitsia fields in Western Australias onshore Perth
basin, has dramatically changed the game for the domestic gas
market.
The company has estimated that the combined discoveries
contain 2C contingent resources of 360 Bcf of gas, with upside
potential of 1.3 Tcf of gas, potentially making this the largest
onshore gas discovery in Western Australia since the 1960s.
AWE is now embarking on a three well exploration and appraisal drilling program in 2015 to confi rm the potential for
development of the Senecio and Waitsia gas fields, as well as to
add further discovered resources in the basin.
The fi rm is currently drilling the fi rst well, Irwin 1, a follow
up exploration well located about 10km east of Senecio and
Waitsia fields on a separate structure, and has already reported
elevated gas shows in the upper Dongara and Wagina formations. This well will be followed by two appraisal wells to be
drilled on the Waitsia field.
Lying between the Senecio and Waitsia fields and the
Irwin well is a further structure, Synaphea, which will also
be drilled in the future, potentially adding even more gas to
AWEs burgeoning inventory.
One of the major benefits of developing new gas resources in
this area of the Perth basin is that AWE controls two separate
gas processing plants within very close proximity to the new
discoveries.
Each gas plant, Dongara and Xyris, has significant spare processing capacity and each is directly linked to the major Perth
market by existing gas pipelines, making any future development a likely low cost affair.
In a statement to the Australian Securities Exchange in
March this year, AWE reported that the Senecio
3 well produced an average gas flow rate of 12.3
MMscf/d from the deeper, conventional Kingia interval, confi rming the commercial potential of that
structure, which has been named the Waitsia field.
AWEs managing director, Bruce Clement, said
that the gas flow demonstrated that the Waitsia field
is capable of producing gas at commercial rates
with potential for low cost, onshore development.
AWE originally drilled the Senecio 3 well as an
Bruce Clement
appraisal of the Senecio gas field, which was a tight

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32 AOG | May June 2015
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032_AOG0615_Feature7_Drilling.indd 32

5/22/15 2:12 PM

Drill pipe making connection.

Enderdrill emergency exercise drill.

gas field in the Dongara and Wagina formations. After coring


that reservoir section, we drilled deeper down into the Kingia
and High Cliff play and that is where we made the discovery of
the Waitsia field.
The Irwin well is primarily planned as a test of the Dongara
and Wagina play in a separate structure to Senecio and we have
reported elevated gas shows in that formation. We are drilling
now to the deeper Kingia and High Cliff formations and then
on to a total depth of 4064m. We will then acquire wireline
logs to fully evaluate the formation intervals, Clement said.
Importantly, Clement also noted that any additional gas
resources found in this area could all be easily linked back to
existing gas processing facilities allowing for quick delivery of
gas into the Perth market.
The Waitsia gas field represents an estimated gross 2C
Contingent Resource of 290 Bcf of gas with significant upside
of up to 1.17 Tcf of gas. The two additional appraisal wells to
be drilled this year will provide additional data to assess the
fields full potential.
AWE is also undertaking engineering studies for a potential
low cost, first stage development of the Waitsia gas field using
existing gas plants and pipeline infrastructure.
The Waitsia gas field has the potential to be a significant
source of gas for the Western Australia domestic market. The
long-term outlook for gas prices is positive and the firm has
already started preliminary gas marketing activities.
The first gas production could enter the Perth market by the
middle of 2016.
The Irwin 1 well appears to have identified an extension of
the Dongara and Wagina formations to the East, Clement said,
potentially adding further gas resources to the basin and additional development opportunities.
From a technical perspective there should not be a lot of
challenges in developing the conventional Waitsia play. We are
drilling wells to a depth we have drilled to previously, the gas
quality is within pipeline specification and we have access to
significant existing pipeline infrastructure.
Once developed, this project will have a very small surface
impact with a relatively small number of wells connected by
underground gas pipelines to a gas plant.
We are looking at a conventional gas development for the
Waitsia field, with a first stage of development connecting three

Running pipe in
hole at Senecio 3.

wells like the existing Senecio-3 well and the two Waitsia appraisal wells back to an existing gas plant, Clement added.
That early production will give valuable reservoir and
production information, which will be used to plan the number
and spacing of wells for the full field development. We will
be in a strong position to optimise development planning by
having those wells producing for six months or so, while going
through the next phase of drilling next year.
There are other opportunities to add further gas resources
in the basin, such as Synaphea. The appraisal wells, Waitsia 1
and Waitsia 2, will provide better definition, in particular of
the upside potential of the field, which has 2D and 3D seismic
coverage over the area to help plan development.
Clement emphasized that the new Waitsia discovery, and
potentially, the additional resources at Irwin, are good news for
the state of Western Australia and the entire country.
The discovery of new domestic gas resources in the Perth
Basin is good for the local community, which will benefit from
additional economic activities in the region. We anticipate
there will be significant opportunities for local businesses to
provide services in the exploration and development phase.
On a broader scale, our projects will deliver benefits for
Western Australia by adding onshore gas supplies, ensuring
diversity in gas markets and additional royalties paid to the
Western Australia government, Clement explained.
The Irwin-1 exploration well is the first well of a three well
drilling program planned for the Perth Basin in 2015. It will be
followed by the Waitsia-1 and Waitsia-2 appraisal wells. AOG

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032_AOG0615_Feature7_Drilling.indd 33

33

5/22/15 2:12 PM

GEOFOCUS MALAYSIA

Malaysia has
ambitious plans
Malaysia aims to grow its oil and gas production capacity by 5% per annum and
increase the energy sectors GDP contribution to US$70 billion by 2020. The
Malaysian Investment Development Authority (MIDA) shows how.
In supporting the presence of several
multi-national oil companies operating in the
Photos From MIDA.
country, Malaysian oil and gas companies have
demonstrated their market leadership and
strong capabilities in segments, such as marine,
drilling, engineering, fabrication, offshore installation and operations and maintenance.
There are over 3500 oil and gas businesses
residing in Malaysia, which comprise of international oil firms, independent service providers
and manufacturing companies.
This has created a strong ecosystem of service
providers that support the needs of the oil and gas
value chain both domestically and regionally.
Malaysia is also well positioned to be the
regional hub for machinery, equipment and
fabrication services. Its strong foundation in the
area of maintenance, oilfield development and
monitoring, inspection and testing provides investors investment opportunities.

Kuala Lumpur skyline.

ince 1972, the Malaysian oil and gas sector has been a
significant contributor to the countrys economy and it
currently makes up almost 20% of the total gross domestic
product (GDP) contribution.
Due to this rapid growth, the government included this critical sector as part of the Economic Transformation Programme
initiative, which acts as a catalyst to transform Malaysia into a
high-income earning economy by 2020.
The government has targeted a production growth of 5% per
annum for the oil and gas sector from 2010 to 2020 and to meet
this target four key development strategies have been envisioned.
These include sustaining oil and gas production, enhancing downstream growth, positioning Malaysia as the number
one Asian hub for oilfield services and building a sustainable
energy platform.
This ambitious goal is projected to take form, despite the slow
growth in the upstream business triggered by low oil prices. The
government wants the energy sectors GDP contribution to increase to US$70 billion (RM241 billion) by 2020, as this will also
create more employment opportunities for skilled professionals.
Malaysia has the 16th largest natural gas reserves and the 27th
largest crude oil reserves in the world. It also has a strong regulatory and legislative framework to safeguard the interests of investors in oil and gas activities.
Investment opportunities
The opportunities available have created a robust market
for substantial investments in the upstream, midstream and
downstream sectors attracting more international oil and gas
companies to make strategic investments in Malaysia.

34 AOG

Moving forward
One of the most significant project that has started to drive the
countrys quest to be a regional oil and gas hub is the development
of the Pengerang Integrated Petroleum Complex (PIPC) in Johor.
PIPC was launched as part of the Economic Transformation
Programme, with an aim to establish new engines of growth for
the oil and gas industry, plus create value to the downstream
sector in Johor.
This venture will be catalyst for development in areas, including refinery, petrochemicals, power, naphtha cracker and
regasification plants, as well as crude oil storage and liquefied
natural gas storage tanks.
Moreover, within PIPC is the development of PETRONAS
$17.2 billion (RM60 billion) refinery and petrochemical integrated project to be commissioned by 2016. The refinery will have
a 300,000 b/d refining capacity, while additional petrochemical
plants will generate value to petroleum products produced.
The Malaysian Investment Development Authority (MIDA),
an investment promotional agency in Malaysia has facilitated
global manufacturers and service providers such as Aker
Solutions, FMC Technologies, Halliburton, Cameron, Technip,
Schlumberger and Baker Hughes to set up their operations in
Malaysia.
Their presence has not only benefited the oil and gas sector, but
also the machinery and engineering sectors, in terms of technological progress, skills development and outsourcing requirements.
The plunge in global crude oil prices in 2014 underscored the

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Energy sector.

need for Malaysias oil and gas industry to reinvent itself and
create new opportunities in both the manufacturing and oil
field services.
In 2014, MIDA approved four oil and gas projects worth $876
million (RM3.1 billion), which will contribute significantly to
businesses in both the upstream and midstream sectors. These
projects are also expected to create about 2800 jobs.
Moving forward Malaysia has also created a vibrant market for merger and acquisition activities that will ultimately
provide avenues to acquire the latest technologies and skilled
personnel.
Skills development
Malaysia recognizes the urgent need to nurture technical
talents, in particular engineers, geosciences professionals and
those in specialized supervisory and trade categories.
To address this requirement, it has established several oil
and gas skills development programs conducted in various
ministries and training institutes.
Some of these include the Industry Centre of Excellence
(ICoE) by the Ministry of Education, Malaysia and Structured
Internship Program (SIP) by TalentCorp, in collaboration between the Malaysia Petroleum Resources Corporation (MPRC)
and the University of Technology Malaysia (UTM).
Altogether, there are 13 high learning institutes and four
skills training centres that offer oil and gas courses in Malaysia, equipped with state-of-the art engineering, marine,
enhanced oil recovery and deepwater technologies. AOG

Talent development.

Offshore production.

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35

GEOFOCUS MALAYSIA

Safety and technical skills


development
Malaysians can now be trained
to globally recognized industry
qualifications allowing them
to work in oil and gas sectors
anywhere around the world.

Technical training
Photos from INSTEP.

36 AOG

By Audrey Raj

n 2012, PETRONAS and Offshore Petroleum Industry Training Organization (OPITO) inked an agreement, which was the
start of a new era in safety and technical skills training for
Malaysias offshore workforce.
Through this collaboration, OPITO has been developing a
framework for helping to build a competent oil and gas work
sector in the country, starting with the assessment and accreditation of safety and technical training programs offered by the
Institut Teknologi Petroleum PETRONAS (INSTEP).
Owned by the Malaysian oil major, INSTEP was established
in 1981 to train skilled technicians and operators in the local
petroleum sector.
Two years on and INSTEP has grown as a globally recognized
technical training centre for oil and gas skills, and vocational
qualifications in electrical and mechanical maintenance and
instrumentation and controls.
The outcome of this agreement has also seen seven institutes
in Southeast Asia become accredited to deliver emergency response training to international standards. These associations
include SEQU Offshore Safety, Terengganu Safety Training
Centre, Borneo Safety Training Services, Malaysian Maritime
Academy, MSTS Asia and SMTC Malaysia.
Hundreds of Malaysians can now be trained to recognized
industry qualifications, allowing them to work in oil and gas
sectors anywhere in the world.
This will open up new economic opportunities for Malaysians,
increase the global mobility of the countrys workforce, plus give
employers confidence in the competence of their technicians.
We are proud of our achievements in creating a regional hub
of excellence in learning and safety training. Through our work
with OPITO, we are establishing Malaysia as a world class centre for the oil and gas industry where innovation and quality
are at the core of everything we do, said INSTEPs chief executive officer, Chandramohan Saminathan.
Vocational qualifications
To meet current and future skills demands, as well as improve
workforce competence in activities associated with hydrocarbon extraction, this year OPITO announced the launch of a
global framework for vocational qualifications.
According to the fi rm, in the last 18 months, government
bodies, international and national oil companies and contractors having been on the look out for skilled workers equipped
with the technical expertise to exploit oil and gas reserves.
Whether a school leaver in Mumbai or an existing offshore
worker in Kuala Lumpur, individuals will be able to gain globally recognized qualifications in processing hydrocarbons,
electrical and mechanical maintenance and instrumentation

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5/22/15 2:15 PM

Bringing Ideas & Technology to Mexico Since 1994

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5/19/15 2:03 PM

GEOFOCUS MALAYSIA

Metering training facility.

technical training facility I have ever seen. We are proud of our


relationship and association with PETRONAS and look forward
to continuing to work together to develop the skills of the Malaysian people, Doig said.

Technical training.

and controls, which will be recognized by oil and gas companies the world over, explained David Doig, group chief executive, OPITO.
Through our work with PETRONAS, INSTEP will now deliver qualifications which are industry-designed and industryrecognized and underpinned by technical training standards,
occupational standards, a robust assessment process and accredited certification and qualifications.
Moreover, as part of the framework, an entry-level course,
oil and gas foundation level, was also developed. This training
program will act as a gateway for individuals who dont have
the basic skills normally associated with entry to a vocational
skills development program.
Through PETRONAS, Malaysia has established the fi nest

Safety center.

Safety comes first


According to OPITO, the international oil and gas industry faces
a significant challenge in building a safe and sustainable workforce with the right skills, as it seeks to prolong the life of existing
fields, develop new fields and operate them safely and efficiently.
As a result, PETRONAS and OPITO have been working
jointly to ensure that every worker gains Basic Offshore Safety
Induction and Emergency Training (BOSIET), before going
offshore as a mandatory requirement in the same way as it is
compulsory in the North Sea.
The seven training providers in Southeast Asia have now
been accredited by OPITO to also deliver this training to ensure each individual knows how to get to work safely, carry out
their work offshore safely and return home safely.
The success of the oil and gas industry is on achieving the
right balance between optimizing production and ensuring the
safety of the people. Safety, therefore, features in everything we
do, Doid said.
Wherever we are in the world, we need to set standards,
before we send people offshore or into other hazardous environments. More complex developments in increasingly hostile
environments and creeping complacency in oil and gas can
have catastrophic repercussions.
Too often people are focused on the task rather than on the
safety, which is what causes accidents. We aim to make sure that
every worker anywhere in the world is also totally focused. Safety therefore features in everything we do, he concluded. AOG

Central control room.

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5/22/15 2:16 PM

EUROPES LEADING
TECHNICAL E&P EVENT

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AOG_0515_Ads.indd 39
RXOE7508 AOG Advert - Master3_v2.indd 1

5/21/15 11:43 AM
24/03/2015 10:23

Solutions
Wrtsil unveils new vessel design
options of 180 tonne, with options for 150 or 220 tonne, and a
hybrid propulsion system with a two-speed gearbox. The equipment is suitable for medium to large size AHTS vessels.
The hybrid two-speed gearbox PTI (power take in) solution
ensures a transfer from one operational mode to another, with
the ability to work efficiently in all operational modes.
Compared to conventional diesel mechanical four engine
solutions, the new design provides a reduction of 25% in fuel
consumption making it an economical option.
When changing propeller speeds, the arrangement produces
no loss in PTO (power take off ) power. Crew requirements
need not change to operate vessels featuring the new Wrtsil
design, as no special electrical skills are necessary.
Wrtsil Corp., introduced its new anchor handling tug supply

Fully compliant with ABS and the latest SOLAS regulations,

(AHTS) vessel at the Sea Asia exhibition held in Singapore.

the new design focus is on simplicity, efficiency, low fuel con-

The new Wrtsil series of AHTS designs features Bollard Pull

sumption, and reduced environmental impact. www.wartsila.com

TURBINES ORDERED
FOR KAZAKHSTAN
Siemens has
received an order
for the supply of
two steam turbine
generator units
for the Balkhash
coal-fi red power plant in Kazakhstan.
Siemens scope of supply for the order
includes two SST5-6000 steam turbines,
each with an electrical generating capacity of 660 megawatts (MW), and two
generators of type SGen5-3000W, including control systems and all auxiliary and
ancillary systems.
The two turbines will be used primarily for power generation in the plant,
although the plant is also designed for
co-generation of heat and power for flexible generation of district heating. This
plant is characterized by its particularly
high fuel efficiency thanks to co-generation of heat and power.
Commissioning is scheduled for summer 2019. www.siemens.com

KONGSBERG TO
SUPPORT ICHTHYS
Inpex-operated Ichthys LNG Project will
receive subsea structures for the gas
export pipeline project from Kongsberg
Oil & Gas.
Kongsberg will do engineering, procurement and construction and delivery
of the adjustable pipe support (APS)

40 AOG

structures that will support the pipeline


and bring it to the required height and
orientation at the end termination. The
APS ensure adjustability of the pipeline
throughout the design life of the pipeline system and can be adjusted by ROV
torque tool or hydraulic interface.
Design commenced in January 2015
and the APS will be tested and ready
for installation by the end of July 2015.
The construction is being undertaken in
Henderson, Western Australia, and will
be installed by Saipem.
The subsea pipeline is 882km long and
continues 7km onshore to the liquefaction facilities being constructed at Bladin
Point near Darwin. The Ichthys Field is
located about 220km offshore Western
Australia and 820km southwest of Darwin. www.kongsberg.com

ENDURA V91K PASSES THE TEST


Precision Polymer Engineering (PPE),
announced that its EnDura V91K elastomer has been proven to meet TOTAL
General Specification PVV 142. Following its inclusion on the TOTAL General

Specification, the elastomer can now be


specified for use in all equipment requiring TOTAL certified seals.
The EnDura V91K elastomer material
has undergone testing to the TOTAL standard for Explosive Decompression (ED) resistance, an extremely important material
property for seals used in valves, down
hole, surface and subsea oilfield equipment. Furthermore, the material meets
requirements for chemical resistance and
extreme low temperature performance.
Though there is increasing emergence
of sour gas, the elastomer is able to
withstand such aggressive chemicals, as
well as otheraggressive oilfield media,
to function properly in chemically harsh
environments.
Applications at extremely low temperatures and sub-zero environments, like
those found during offshore exploration,
also are a key challenge. Seals for these
environments must have low glass transition temperatures in order to operate in
the cold temperatures and high pressures
of the deep ocean. With a temperature
range from -51C (-60F) and up to +250C
(+482F), the EnDura V91K has an extremely low glass transition temperature
ensuring long term
sealing in demanding environments in
the upstream oil and
gas industry.
www.prepol.com

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| May June 2015
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040_AOG0615_Solutions.indd 40

5/22/15 2:17 PM

Global

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September 15-17, 2015


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For more information

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Registration questions contact


Contact: Jennifer Granda
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Direct: 713.874.2202 | Cell: 832.544.5891
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AOG_0515_Ads.indd 41

5/21/15 11:29 AM

Activity
C-Mar, SMU launch Shanghai DP center
Aberdeens C-MAR and the Shanghai
Maritime University (SMU) officially
launched a dynamic positioning training facility (DPC-SMU) in Shanghai,
China.
In this joint venture, C-MAR will provide dynamic positioning (DP) training
to Chinese nationals and vessel operators in the offshore oil and gas sector.
The launch of DPC-SMU is a considerable achievement for C-MAR and will
see the expansion of our engineering

DELMAR GETS
NEW SPOOLING UNIT
A new 170-tonne state-of-the-art spooling unit is now available at the Delmar
Systems Pty., equipment yard in
Karratha, Western Australia, to support
mooring-related operations.
This large spooling unit is ideal for
the increased size and length of rig and
anchor handling vessel wires.
In addition to the new spooling unit,
the 3000sq m facility in Karratha houses
a large inventory of certified rental
mooring hardware, anchor handling
tools and equipment, and pre-lay mooring systems for use in mooring and
subsea operations.
All equipment is available with manufacturers certifications, provided with
inspection certifications, and tracked in
Delmars proprietary inventory database
from date of purchase and throughout its
service life.

METGASCO WINS COURT CASE


AGAINST NSW GOVERNMENT
The New South Wales (NSW) Supreme
Court has reinstated Metgasco Ltd., the
right to drill Rosella E01 well located
in the exploration license PEL 16 in the
northeast of NSW in Australia.
This comes after Metgascos legal
review of the suspension of its coal seem
gas (CSG) drilling license, issued by the
Office of Coal Seam Gas (OCSG), a unit
within the NSW government.
According to the Australian oil and
gas explorer, in a court hearing, justice
Richard Button found OCSGs decision
as unlawful, lacked proper procedural

42 AOG

fairness and had confused consultation


with persuasion.
Managing director Peter Henderson
said this was a landmark decision for the
resources industry in NSW and could
have implications for broader industry in
the state.
We believe that our decision to
pursue legal action has been vindicated.
We will be seeking compensation for
the damage that has been infl icted on
Metgasco and its 5,000 shareholders by
the NSW governments unlawful decision, Henderson said.

ENTREPOSE ACQUIRES
PT ISTANA KARANG LAUT
Entrepose completed the acquisition of
Indonesian company PT Istana Karang
Laut (IKL).
IKL is a player in the upstream and
downstream sectors of Asias oil and
gas industry and has expertise in both
onshore and offshore activities. The company has 130 employees and generates
revenue of around US$33.4million.
IKL opens up markets for us in
Central and Southeast Asia, where
demand for energy is increasing strongly
and where resources have not yet been
totally exploited, said Benot Lecinq,
chairman of Entrepose.
The company also brings us products
and services in the downstream sector of
the oil and gas industry. An excellent illustration of this is the contract between
IKL and SGFL, a state-owned company
in Bangladesh, for the design, construction and commissioning of a condensate
fractionation plant, he noted.

and marine services to the Chinese


market, said C-MAR chairman,
Chris Hawdon. We look forward to
accelerating the development of
the China market through this partnership in meeting Chinas urgent
demand for DP training.
The DP center boasts equipment
manufactured by Dutch company
Praxis Automation Technology. It
uses 3D graphics from the V-STEP
DP Class B simulator, recently accredited by the Nautical Institute in
Shanghai.

CHUKAR SELECTS VIETNAM


AND MYANMAR AGENT
Chukar Waterjet, Inc., a subsea pressure water jet equipment consultant has
selected MinhAnh TechInfo Co., as its
authorized representative for Vietnam
and Myanmar.
MinhAnh TechInfo, a Vungtau Citybased company will supply Chukars
deepwater subsea water jetting technology to offshore industries.
We are very proud to be represented
by MinhAnh TechInfo, said Chukar
Waterjets general manager, Bruce
Kivisto.
Their commitment and expertise in
the offshore oil and gas industry will
be a tremendous asset to our clients in
Vietnam and Myanmar, he said.
The companys other international
representatives include SERS Group
in Africa and Australia, KaspianLab
Lt., based in Azerbaijan, Indias JVM
Marketing Ltd., and Gurimas Group Sdn
Bhd., in Malaysia.

CIVMEC ACQUIRES TECHNIPS


INDONESIAN SUBSIDIARY
Civmec has agreed to enter into a due
diligence phase for the acquisition of PT
Global Industries Asia Pacific, a subsidiary of Technip.
The terms include a long-term collaboration agreement with Technip for
services and facilities for current and
future project work globally.
The proposed acquisition includes
securing 21 hectares of strategically
located waterfront land with deepwater
access in Batam, Indonesia.

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042_AOG0615_Activity.indd 42

5/22/15 2:18 PM

BUILT BY INNOVATION.

LED BY KNOWLEDGE.

POWERED BY YOU.

online

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AOG_0515_Ads.indd 43

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44 AOG

fter obtaining his masters


degree in civil engineering at
the Delft University of Technology
in 2009, Suerd Polderdijk joined the
Dutch Ministry of Infrastructure
and Transport.
Although he had an interesting
job integrating traffic management
systems in the Amsterdam region,
Suerd
Polderdijk said he was still missing
Polderdijk
out on one thing.
I wanted to experience living and workcountry. I did, however, fi nd out that my
ing in another country with a different
Dutch way of doing things isnt necessarculture. So I was deliberately looking for
ily the best approach, which is also part
an opportunity to work abroad and Frames
of the fun and challenge.
offered me that opportunity, he said.
Being Dutch one expects that you can
In an interview with AOGs Audrey
always get a clear-cut black and white
Raj, Polderdijk chats about his move to
answer. In Malaysia, on the other hand,
Asia, how he coped with the cultural
it can be hard to obtain such an answer.
differences and experience in doing busiDutch are also direct and critical in
ness in the region.
their communication, as we highly value
truthful and factual communication.
Why did you choose to work in Asia, in
In Malaysia, I realized it is sometimes
particular Malaysia?
better to leave things unsaid instead of
In 2013, I took up the role as general
hurting someones feelings.
manager for our Asia-Pacific office in
What do you like about your new home?
Kuala Lumpur (KL), Malaysia. This
The fi rst time I stepped out of the train
position was vacant and the oil and gas
at KL Sentral railway station, I found the
market in Southeast Asia appealed to
use this logo on white or lighter
atmosphere to be gentle and calm. This
me, because of the culture, entrepreneurbackgrounds
is in contrast to Amsterdams central
ial spirit and experience of being in a
station, where people are noisy and in a
growth market.
hurry.
There was also a personal preference
KL is a big metropolis, yet at heart
for my wife and me to move here. The
seems to remain a big kampung (vilrole of my partner was key in making my
use
this logo
on black
darker
lage). I like this laidback atmosphere
expat
move
aorsuccess,
as it was important
backgrounds. The Printing
and it is not as hectic as Singapore or
to usisthat
we both would fi nd a fulfilling
Service
in white.
Hong Kong. Furthermore, I really enjoy
challenge in our new home country.
jungle hikes in the surrounding hills,
Furthermore, Malaysia is a diverse and
chats with taxi drivers and of course the
safe country. Its excellent hub makes it
amazing food.
a fascinating region, for both work and
private trips.
C: 56
M: 0
Tell us about your role in Frames and exY: 100
K: 27 with the cultural
How did you cope
perience in doing business in the Asian
difference? PMS 370 C
energy sector?
We didnt experience a big culture
I joined the Dutch company Frames
shock, as Malaysia is a very welcoming
in 2011. Since 2013, I have led the sales

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n
e
,
.

engineering and project execution teams


in the companys Asia-Pacific hub in KL.
Within Frames, we prefer to cooperate
closely with our customers to optimize
upstream, onshore and offshore processes. Therefore, our office in KL is the link
between Asia and Frames. We also connect our Southeast Asian supply chain
partners with Frames.
The offshore oil and gas fabrication
market is already centered in Asia and
will continue to grow.
Over the past three years, Frames has
seen growth in our collaboration with
suppliers and clients in Southeast Asia.
It has taken several years for us to adapt
to the market and invest in relations, but
now the results have materialized.
What advice would you give professionals moving to Malaysia to expand their
companys business in the oil and gas
sector in Asia?
As a foreigner or foreign company, you
are different and that is also part of our
added value. You should not change, but
you should also adapt to the new environment and cultural differences.

For example, speaking from a Dutch


perspective, we tend to listen only at
what is being said, like the facts. In Asia,
answers can sometimes be given through
indirect communication or body language. This is a challenge for us Dutch
and our Malaysian colleagues alike.
To enhance understanding between
our Dutch and Malaysian employees, we
organize cross-cultural trainings. Appointing advisory panels do help too.
The advice and dedicated support of
these senior level Malaysian oil and gas
industry partners is simply invaluable
when it comes to understanding regional
markets and business cultures.
Last but not least, embassies, the
Malaysian Investment Development
Authority (MIDA) and fellow companies
can provide a lot of support and valuable
advice.
Personally, I am a member of the
board of directors of the Malaysian
Dutch Business Council (MDBC). MDBC
has supported me and Frames considerably with advice and by connecting me
with Malaysian authorities and fellow
companies. AOG

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45

5/22/15 2:19 PM

Numerology
70

Number of producing wells in the Kenli 10-1 oilfield in China.


See page 9.

Size of the Lahara 2D seismic survey


in Papua New Guinea. See page 12.

12,000km
US$

7.5million

25%

Recovery cost from poorly


performing subsea meter.
See page 19.

Percentage of Russian crude oil bought by Asian


countries.
See page 16.

22,130sq km
US$6billion

2016

Amount spent on valve maintenance


solutions in 2015. See page 22.

The year gas production from the Waitsia gas


field enters Perth. See page 33.

Number of institutes in Southeast Asia accredited to deliver


emergency response training. See page 36.

US$17.2billion
46 AOG

Size of Polarcus 3D seismic


survey offshore Western
Australia. See page 26.

Cost of PETRONAS
petrochemical project in
Johor. See page 34.

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