May/June 2023

WORLD TRENDS FOR OIL, GAS & RENEWABLE ENERGY

DRILLING RIG MARKET UPDATE

Global rig market tightens as
inventory declines, demand increases
Annual rig survey shows that ten
largest rig contractors have taken on
increased market share

PLUS:
NORTH SEA
Tax regime impact
on drilling
GEOSCIENCES
Seismic survey market
on the upswing
ESG FOCUS
Green hydrogen
pilot project
SPECIAL REPORT
Remote operations
COMMENTARY
Rise of the robots

2305_06OFF_C1-C4.indd 1 5/22/23 8:46 AM

 TECHNOLOGY
TRENDS

Exploring the Future of

Maritime Innovation
Download your copy today
at www.eagle.org/techtrends

2305_06OFF_C1-C4.indd
2306OFF_ABS.indd 1 2 5/22/23
5/10/23 8:46
2:38 AM
PM
 MAY/JUNE 2023

DECOMMISIONING

22 Production data underpins successful

worldwide ARO analysis
Planners should understand relationship between
asset retirement obligations, production rates

ESG FOCUS
COVER STORY: DRILLING RIG REPORT

12 Top 10 offshore rig managers

expand their dominance
26 Green hydrogen platform enters harsh
environment offshore test phase
Production module expected to be
China Oilfield Services Ltd continues to hold onto top spot
deployed to an open-sea test site soon

15 Adrilling
tale of two North Seas: Norway incentivizes
while UK levy could lead to rig loss
Global demand for harsh environment semis
may pull rigs from UK North Sea

GEOSCIENCES

18 Seismic survey market finally recovering

Analysts says seismic market upturn is in full swing

COVER: The deepwater, harsh-environment

semisubmersible drilling rig Hercules will be
FOLLOW US
mobilizing to eastern Canada before heading
to offshore Namibia later this year. (Photo FACEBOOK TWITTER LINKEDIN
by Ole Jørgen Bratland, courtesy Equinor) @OffshoreMagazine @offshoremgzn www.linkedin.com/groups/4542757

MAY/JUNE 2023 |  www.offshore-mag.com OFFSHORE 1

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 MAY/JUNE 2023

SPECIAL REPORT:
REMOTE INSPECTIONS & OPERATIONS
30 The rise of remote operations in
OVERVIEW

the offshore energy industry

Offshore operations are being
revolutionized with remote technologies

32 Autonomous drone technology

DRONES

increasing efficiencies of
offshore platform inspections
Autonomous drones are lowering risk while 41 Affordable offshore well
REMOTE-CONTROLLED OPERATIONS

increasing data quality and efficiency for monitoring lowers P&A costs
complex offshore platform inspections Digital innovations are driving adoption
of satellite-powered monitoring

33 Transforming offshore operations: The

ROBOTICS

rise of autonomous inspection robots

Autonomous inspection robots have the
42 Remote survey services reducing
project carbon footprint,
potential to transform offshore asset monitoring
mobilizations and costs
Sophisticated communications

35 Executive insights: Remote operations

AUV/ROV hardware provides connectivity
to bring data processing ashore
and reduce survey costs
are evolving with ROV/AUV advancements
43 Opinion: Nigeria needs
Oceaneering executive details the challenges
and solutions of remote operations
to take the leap toward
adopting digital twins
38 Advanced ROV vision systems are
the future of subsea operations
New technology employs edge computing
Digital twins provide a blueprint for
overcoming the gaps in Nigeria’s oil
and gas digital transformation journey
to capture high-quality stills images

44 AIunplanned
in tandem with low-latency video
tools improving HSE, reducing
downtime
39 Autonomous robots use AI for data
collection and intervention services AI is unequivocally transforming
offshore operations
AI streamlines subsea operations,
DEPARTMENTS
45 Examining
enhances productivity and safety
an evolution in FPSO
autonomous operations
40
3 ONLINE Troubleshooting problems has become
A new project is underway to
4 COMMENT a more manageable process advance safety performances
5 DATA C-I performs remote survey work offshore of a global FPSO fleet
Guyana from its Louisiana headquarters
6 GLOBAL E&P
8 SUBSEA SYSTEMS
9 RIGS & VESSELS
1 1 GULF OF MEXICO
46 BUSINESS BRIEFS
47 ADVERTISERS’ INDEX
48 BEYOND THE HORIZON

2 OFFSHORE www.offshore-mag.com |  MAY/JUNE 2023

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 OFFSHORE-MAG.COM LATEST NEWS Vol. 83, No. 3

The latest news is posted daily for the offshore energy industry covering technology, companies, personnel moves, and products. GROUP PUBLISHER Diana Smith
dsmith@endeavorb2b.com
CHIEF EDITOR/CONFERENCES EDITORIAL DIRECTOR 
VIDEOS WWW.OFFSHORE-MAG.COM/VIDEOS David Paganie
dpaganie@endeavorb2b.com
MANAGING EDITOR Bruce A. Beaubouef
bbeaubouef@endeavorb2b.com
EDITOR-EUROPE Jeremy Beckman
jbeckman@endeavorb2b.com
EDITOR and DIRECTOR OF
SPECIAL REPORTS Ariana Hurtado
ahurtado@endeavorb2b.com
POSTER EDITOR E. Kurt Albaugh, P.E.
Kurt.albaugh@yahoo.com
ART DIRECTOR Meg Fuschetti
The search for alternative marine fuels Top 5 projects to watch in 2023
PRODUCTION MANAGER Josh Troutman
Rig operators and vessel owners are The five projects were selected on the jtroutman@endeavorb2b.com
hoping to reduce their emissions through basis of upcoming FID, and also use of AD SERVICE MANAGER Shirley Gamboa
the use of ammonia, hydrogen, methanol, unique technologies, innovative solutions, sgamboa@endeavorb2b.com
biofuels, compressed natural gas, and LNG and renewable energy components. AUDIENCE DEVELOPMENT MANAGER Emily Martin

WWW.OFFSHORE-MAG.COM/14292469 WWW.OFFSHORE-MAG.COM/14290806

endeavorbusinessmedia.com
Corporate Officers
CEO Chris Ferrell
PRESIDENT June Griffin
CFO Mark Zadell
COO Patrick Raines
CRO Reggie Lawrence
Deepsea mining – opportunities Offshore wind energy and the CHIEF DIGITAL OFFICER Jacquie Niemiec
and challenges problem of global stilling CHIEF ADMINISTRATIVE AND LEGAL OFFICER 
Tracy Kane
The energy transition is driving The phenomenon of “global terrestrial
EVP INDUSTRIAL GROUP Mike Christian
demand for resources that deepsea stilling” may pose a significant reality
Offshore Customer Service:
mining may be able to extract. check on the offshore wind industry. P.O. Box 3257, Northbrook, IL 60065-3257
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2305_06OFF01-03_toc_online.indd 3 5/22/23 8:46 AM

 COMMENT
Oil, gas investment is core
to energy transition
David Paganie
CHIEF EDITOR
T
he critical role of oil and gas supply for an
orderly energy transition has never been in
question to those that work in the industry.
But in recent years, policy and social chang-
es, and investor ESG requirements, have influenced
structural changes within many operating compa-
nies. Part of the changes are related to corporate
marketing and external messaging. Many compa-
nies have changed logos, branding, and messaging
to support new strategic objectives.
One important message that has been seeming-
ly muted within these communication efforts is
the critical role of oil and gas in the energy tran-
sition. This is changing, as the geopolitical events
of 2022 have reinforced the need for balance in
energy security, affordability, and sustainability.
Fossil fuels still account for about 80% share of
primary energy needs, and oil demand is expect-
ed to reach a record high by the end of this year.
It was encouraging to see oil and gas technolo-
gy presentations as a big part of the agenda of this
year’s Offshore Technology Conference. One session
addressed the role of deepwater in the energy tran-
sition. All the panelists, including three from oper-
ators – BP, Petrobras, and Hess – pointed to oil and
gas as the core component of their energy invest-
ment plans. BP is transforming into an integrated
To respond to articles in Offshore, or to offer articles for publication, contact the chief editor at dpaganie@endeavorb2b.com.
4 OFFSHORE
2305_06OFF04_comm.indd 4
energy company, but still plans to invest up to $8
billion of new capital through 2030 on oil and gas
short-cycle, quick return opportunities with low
carbon emissions, and on existing assets that can
benefit from life extension.
Petrobras has increased its planned oil and
gas E&P investments to $64 billion for the period
2023 – 2027, up from its previous five-year invest-
ment plan. The strategic plan calls for up to 18 new
FPSOs, and some may be equipped with all-elec-
tric topsides that could lower emissions by up to
30%. Both Petrobras and BP are investing in tech-
nologies to lower the carbon footprint of their oil
and gas assets.
Hess has allocated $3.7 billion this year for its oil
and gas E&P capital and exploration budget, with
more than 80% of it directed to its developments
offshore Guyana. The operator strategically targets
what it considers to be high margin and low carbon
intensive prospects in high growth basins.
Shell talked at OTC extensively about how it
adapted to a new business environment to bring
its Vito project in the deepwater Gulf of Mexico
to first production earlier this year. And now it is
applying lessons from Vito to Whale, its next deep-
water GoM project.
The best way forward for deepwater to be con-
sidered more sustainable – and essential to long-
term corporate investments plans – is to co-locate
the resources with renewables and CCS, according
to Julie Wilson with Wood Mackenzie. She calls
these co-located basins “energy super basins”
of the future.
Still, oil and gas continue to be core to the tra-
ditional operator’s investment strategy; the differ-
ence today is the level of comfort in voicing the
corporate imperative.
www.offshore-mag.com |  MAY/JUNE 2023
5/22/23 8:46 AM
 DATA
Slower rig contracting activity Offshore rig fixtures
For jackups, both the contract duration and 140
number of fixtures announced in Q1 2023 are Q1 2022 duration (rig-years)

down from Q1 2022. Most 2022 jackup work 120 Q1 2023 duration (rig-years)

was for the Middle East, where operators are Q1 2022 fixture count

working to get many of these rigs operating, 100 Q1 2023 fixture count

which has slowed 2023 contracting activity

so far. For semis, the number of fixtures 80
in Q1 2023 was a little below Q1 2022, but
60
the duration was up as charter terms are
lengthening, notably for Norway, UK and
40
Mexico. Drillships saw the most increase in
duration over Q1 2022 and were the only rig 20
type to record more fixtures. Drillship time
booked in Q1 2023 was triple that of Q1 2022 0
Jackup Semi Drillship
mainly due to multiple awards for Brazil and
new work in the US Gulf.—Esgian Source: Esgian Rig Analytics

Vessel supply to fall short Turbine demand & supply forecast

In Vessel Years | 2023–2030 41
Spinergie predicts 200 GW of offshore wind
demand by 2030, a sevenfold increase.
A key challenge in meeting this demand Extra O&M
43%
is insufficient supply of installation and < 11 MW
maintenance vessels. While the jackup 11–15 MW
(WTIV) fleet will see three to four units enter > 15 MW
22
the market by 2027, the floater fleet will see
the older O&G legacy fleet bolstered by 17 17
31%
newbuilds and conversions. More vessels are
12
required to meet demand for offshore wind 11 50%
installation and maintenance. The market 7 94% 94%
7 13%
requires the building of small O&M jackups, 57%
29% 97%
or alternative solutions, to reduce pressure 71%
78%
17% 13%
30%
on installation-capable vessels. Without such
Demand Supply Demand Supply Demand Supply Demand Supply
measures, reaching 2030 global offshore wind 2023 2025 2028 2030
energy targets may be impossible. —Spinergie Supply: Accounting for newbuilds, and newbuild contracts in option and under discussion. Source: Spinergie

OFS revenue growth improves Year-on-year growth rate of key financial parameter
SLB, Baker Hughes and Halliburton are on for major OFS trio
SLB
course for strong financial performances in 40% 600%
Halliburton
the coming quarters after the trio of oilfield 540.3%
Baker Hughes
services (OFS) giants all posted a sparking set 29.8%
32.5%
2.1%
3.6%
500%

of results for the first three months of the year. 30%

400%
All three posted improved topline numbers, 344.0%

margins and cash flow in Q1 2023 compared 20% 18.2% 0.8% 300%
to Q1 2022. The trio has focused on returns to
shareholders and increasing dividends, with 200%
151.9%
two hatching a share repurchase plan for the 10%
100%
year. Market fundaments necessary for OFS 34.9% 41.8%
49.2% 42.3% 34.3%
11.6%
players to boost their financial performance 0% 0%
will remain strong for the rest of the year. Jackup Incremental adjusted CFO Capex Dividends paid
EBITDA* margin
—Rystad Energy
Note: Results of Baker Hughes includes both its business segments. Year-on-year
calculation based on 1Q 2023 and 1Q 2o22
*EBITDA: earnings before interest, tax, deprecition and amortization Source: Rystad Encergy ServiceCube — Oil & Gas

MAY/JUNE 2023 |  www.offshore-mag.com OFFSHORE 5

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 GLOBAL E&P
NORTH AMERICA
KBR has a Letter of Intent from Equinor to perform the topsides
FEED for a newbuild FPSO for the Bay du Nord project offshore
Newfoundland. This will produce oil from various discovered fields
in 650-1,170 m water depth in the Flemish Pass basin, 500 km
north-east of St. Johns. KBR’s scope of work includes supporting
Equinor with development of a combined cycle power system and
other technologies to minimize the platform’s emissions and crew
complement and maximize the use of digital solutions. Equinor is
targeting first oil in the late 2020s.
The Canada-Newfoundland and Labrador Offshore Petroleum
Board has included 28 parcels off eastern and south-eastern New-
foundland in its latest Call for Bids, which will remain open until
November 1. Exploration licenses for successful applicants could
be awarded early next year.
Shell Offshore has commissioned Worley to perform FEED and
detail design studies for a lightweight floating production platform
at the Sparta development, 170 mi off the Louisiana coast. Shell
deployed Worley’s concept for two previous platforms: the compa-
ny and partner Equinor expect to take FID on Sparta later this year.
Wintershall Dea’s recent Kan discovery in Mexico’s offshore Sur-
este basin could hold up to 300 MMboe in place, initial analysis
suggests. The well, drilled by the Borr Ran jackup 25 km from the
Tabasco coast in 50 m of water, encountered over 170 m net pay
sands in the Upper Miocene. The Block 30 consortium, which
includes Harbour Energy and Sapura OMV, will finalize an apprais-
al plan by the end of July.
Pemex has submitted a Unit Development Plan (UDP) for the giant
Zama oilfield to Mexico’s National Commission of Hydrocarbons
(CNH) for approval. Zama extends across two contiguous blocks:
Pemex and the Block 7 partnership of Talos Energy, Wintershall
Dea and Talos Energy agreed to form an integrated project team
to take the development into the construction phase. Main com-
ponents of the UDP are two fixed platforms, 46 dry-tree wells and
two 68-km subsea pipelines exporting the oil and gas to new pro-
cessing facilities at the onshore Maritima Das Bocas terminal.
SOUTH AMERICA
McDermott is working on the FEED for Shell’s Manatee gas
development offshore Trinidad and Tobago, said to be one of the
country’s largest discoveries. The work scope covers a wellhead
platform, export pipeline system shore approach, midstream pipe-
line and onshore control room.
ExxonMobil and its partners have taken FID on the$12.7-billion
Uaru project, their fifth FPSO-based development in the Stabroek
6 OFFSHORE
2305_06OFF06-07_glob.indd 6
Jeremy Beckman london
block off Guyana, in 2,000 m water depth. MODEC is constructing
the 250,000 b/d FPSO, named Errea Wittu: this will be connected to
44 production and injection wells at up to 10 subsea drill centers.
Technip FMC will supply the subsea trees, 12 manifolds and associ-
ated controls and tie-in equipment, while Saipem will design, fabri-
cate and install the connecting SURF facilities, using its FDS2 and
Saipem Constellation vessels for the offshore campaign. Recent-
ly, the Stabroek licensees boosted their reserves with the Lan-
cetfish-1 discovery well, drilled by the Noble Don Taylor drillship.
Petrobras has produced first oil from its revitalization project at the
post-salt Marlim and Viador fields in the Campos basin off Brazil.
The FPSOs Anna Nery, which started operations last month, and
MODEC’s Anita Garibaldi MV33, are replacing nine platforms on the
two fields and should eventually deliver 150,000 boe/d combined.
The company is also part of the Equinor-led consortium that has
just taken FID on a $9.9-billion development in Block BM-C-33 in
the pre-salt Santos basin, covering three accumulations discov-
ered by Repsol in 2010. Collectively, Pão de Açúcar, Gávea and Seat
hold over 1 BBoe recoverable: Repsol Sinopec Resources is the
other member of the current consortium. Plans call for a 126,000
b/d FPSO with a gas production capacity of 16 MMcm/d, and facil-
ities topside to process the gas and oil/condensate and specify
these for sale without the need for further onshore processing.
Proposed field layout for the BM-C-33 project
in the Campos basin. COURTESY EQUINOR
Sales gas will be exported through a 200-km offshore pipeline
to reception infrastructure at the Cabiúnas terminal onshore in
Macaé, with processed liquids offloaded via shuttle tankers.
WEST AFRICA
The refurbished FPSO Baleine (ex-Firenze) has sailed to Côte d’Ivo-
ire for service on Eni’s Baleine field development in blocks CI-101
and CI-802. Following the upgrades, the facility can process up
to 15,000 b/d of oil and around 25 MMcf/d of associated gas, with
the latter to be exported to shore through a new subsea pipeline.
Eni aimed to start production this month, less than two years
www.offshore-mag.com |  MAY/JUNE 2023
5/22/23 8:46 AM
 after the Baleine 1X discovery well, and is also progressing Phase
2 towards start-up in December 2024.
AFC Equity Investment, owned by Africa Finance Corp, has nego-
tiated a deal that makes it the sole shareholder in Aker Energy,
which has a 50% operated stake in the Deepwater Tano Cape
Three Points block offshore Ghana. Aker Energy has since sub-
mitted a Plan of Development to the Ghanaian Authorities for a
phased project, initially focused on an FPSO and subsea pro-
duction system on the Pecan field, 115 km offshore and in water
depths of 2,400-2,700 m.
Aker Solutions will supply deepwater standard and configurable
subsea production systems to TotalEnergies for three infill wells
tied back to the Moho Nord field center off Republic of Congo.
Moho Nord, 75 km offshore in 750-1,200 m of water, came onstream
in March 2017 and is the country’s largest oil project to date.
Tullow Oil and Perenco have signed an asset swap agreement
covering offshore and onshore fields in various licenses in Gabon.
For Tullow, the arrangement would allow it to optimize its equity
ownership in the offshore Tchatamba field cluster which it would
seek to develop as a new core production hub.
NORTH SEA
Shell U.K. expects the FPSO Haewene Brim to produce more than
30,000 boe/d at the Pierce field in the UK central North Sea fol-
lowing upgrades at Aibel’s yard in Houston. The project will switch
production from Pierce, which came onstream in 1999, from oil
alone to gas and oil, with the gas exported through a new subsea
pipeline connecting to the SEGAL pipeline system and onward to
the St Fergus terminal north of Aberdeen.
NEO Energy is set to take control of the Greater Buchan Area
licenses in the central UK sector after negotiating a 50% farm-in
with current operator Jersey Oil & Gas (JOG). With NEO agreeing
to part-fund JOG’s costs, this opens the way to a redevelopment
of the shut-in Buchan oilfield and a phased development of vari-
ous other discoveries in the area.
BlueNord (formerly Noreco) has applied for a license in the Danish
sector containing the Elly-Luke gas discovery. If successful, an
award could follow later this year, with work then starting on a
technical review ahead of a possible 5-bcm development. In addi-
tion, BlueNord has formed a partnership with Semco Maritime to
assess other oil and gas development opportunities, including
taking on operation of existing fields.
BLACK SEA
Turkish Petroleum Corp (TPAO) has started production from
Sakarya, Turkey’s first deepwater gasfield development. The Phase
One subsea-beach facilities came onstream only two and a half
years after the discovery in August 2020, and should deliver up to
MAY/JUNE 2023 |  www.offshore-mag.com
2305_06OFF06-07_glob.indd 7
350 MMcf/d from the 10 subsea wells. Wood Mackenzie claimed
an expanded Phase Two development could supply almost 30%
of the country’s gas needs by 2030.
MEDITERRANEAN SEA
Panoro Energy has agreed to acquire Beender Tunisia Petroleum’s
40% stake in Sfax Petroleum Corp (SPC) for around $18 million.
As SPC’s new outright owner, Panoro gains control of the Sfax
Offshore exploration permit in the Cretaceous and Eocene car-
bonate platforms of the Pelagic basin. The permit contains three
oil discoveries with combined recoverable reserves estimated at
20 MMboe and numerous prospects and leads with potentially
much larger resources.
BP and Wintershall Dea have commissioned the Subsea Inte-
gration Alliance (Subsea 7 and One Subsea) to supply and install
subsea equipment for the two-well Raven Infills tieback proj-
ect in Egypt’s offshore West Nile Delta block, in water depths of
around 800 m.
Subsea 7 will install the subsea infrastructure for the
Raven Infills project offshore Egypt. COURTESY SUBSEA 7
ADNOC and bp have jointly offered to acquire a 50% interest from
Delek Group in NewMed Energy, a partner to Chevron in the Levi-
athan and Tamar gasfields offshore Israel. If accepted, this could
represent the first step of their plan to form a joint venture com-
pany focused on gas developments, including in the East Medi-
terranean region.
ASIA-PACIFIC
Valeura Energy has resumed oil production from the Wassana
field in the Gulf of Thailand, which had been shut down prema-
turely by previous operator KrisEnergy in 2020. Output has been
ramping up steadily as the wells are activated sequentially, and a
planned infill drilling campaign in Q3 could add a further 5,000 b/d.
Shell Australia has agreed to sell its interests in the Woodside-op-
erated Browse project offshore north-west Australia to bp. The
Browse Joint Venture has been seeking a development solution
for the Brecknock, Calliance and Torosa fields 425 km north of
Broome in the Browse basin. Woodside’s last update revealed a
preference for two LNG/LPG/gas FPSOs and a 900-km export
pipeline connecting to infrastructure serving the North West
Shelf Project. ●
OFFSHORE 7
5/22/23 8:46 AM
 SUBSEA SYSTEMS
Overcoming unfavorable conditions
during ROV pipeline inspections
Last year was a busy one for Advanced
Navigation, an AI-based navigation
and robotics specialist, as it released
two new technologies: the Boreas D70
fiber-optic gyroscope inertial navi-
gation system and the Hydrus fully
autonomous subsea drone. Plus, it just
recently announced its investment in a
new subsea robotics center in Australia.
Discussing current subsea systems
challenges, Peter Baker, senior product
manager, told Offshore that a common
challenge the company’s customers
face is when depths and other condi-
tions are not favorable.
“Subsea pipeline inspection is crit-
ical to the safe transfer of oil and gas
from offshore rigs to storage and pro-
cessing facilities on land. Typically,
large and heavy work-class ROVs are
used for this purpose; however, these
ROVs remain suited to large-scale oper-
ations and at suitable depth,” he said.
“For example, as the water becomes
shallower or the environment more
sensitive to larger vessels, complica-
tions arise in getting appropriately
sized and maneuverable equipment into
place. The situation might entail using
divers or perhaps not surveying at all.”
As a result, he said more companies
are moving toward small-scale ROVs
to reduce overall costs, carbon emis-
sions, vessel and crew sizes. However,
this results in the challenge of sourc-
ing a subsea navigation system that
is appropriately sized, easy to install,
and doesn’t affect performance or
maneuverability, he added.
Advanced Navigation has developed
Subsonus USBL2, a miniature underwa-
ter acoustic positioning system that is
designed to provide high-accuracy
position, velocity and heading at ranges
of up to 1,000 m. The system features
a calibrated hydrophone array com-
bined with an internal tightly coupled
inertial navigation system, all packed
8 OFFSHORE
2305_06OFF08_sss.indd 8
into a miniature titanium enclosure
small enough to fit in the palm of your
hand, Baker said. It runs fully on the
processor within the transceiver and
is accessible via a web browser, with
no additional rack-mounted interface
units or processing PCs.
Case study
JM Robotics was tasked with carry-
ing out a submarine pipeline inspec-
tion for a major energy provider. The
challenge was developing an agile,
miniature ROV that provided accurate
acoustic heading and absolute position
in difficult shallow-water conditions.
“For JM Robotics, the first challenge
was to design an ROV that could oper-
ate in shallow depths and be deployed
by two crew members, while the ROV
was meant to reduce carbon emis-
sions, expenditure, vessel and crew
sizes,” Baker said. “The maximum ROV
weight was capped at ~50 kg (in air).
The requirement for lightness imme-
diately discounted a range of compo-
nents that are either too big and/or
heavy or would otherwise compro-
mise manoeuvrability of the ROV.”
Johan Hellstrøm, JM Robotics
technical manager, added, “This was
more challenging than we expected
because of poor or no visibility, a lot
of current, [and] shallow water with
obstacles such as fishing nets. The
pipes are magnetic also. There were
also disturbances due to boat engines
and water jets that needed to be han-
dled without disrupting the USBL or
sensors. There were a lot of very diffi-
cult situations.”
The small size of the JM Robotics
HD3 ROV necessitated using an
ultra-compact USBL2 system that
would not impede maneuverability
or affect buoyancy of the vehicle.
“In this case, Advanced Navigation’s
Subsonus was found to be the only
Ariana Hurtado houston
COURTESY ADVANCED NAVIGATION
viable solution that had the necessari-
ly small physical dimensions and mini-
mal weight for the project,” Baker said.
“Complementing this, the straightfor-
ward installation and connectivity of
the Subsonus made the system easy for
the team to set up, test and verify for
both ROV and surface vessel.”
As a result, the company received
accurate ROV navigation using acous-
tic heading. The Acoustic Compass
heading provided by Subsonus in
USBL2 configuration meant that the
ROV project is commercially viable.
“JM Robotics found that using
Subsonus immediately provided the
additional navigation functions and
accuracy that they required,” he con-
cluded. “This particular application
requires complex ROV piloting, using
six degrees of freedom of movement,
to follow the hidden pipelines and suc-
cessfully battle currents and avoid vari-
ous obstacles. This makes ROV heading
even more essential to the solution. ROV
piloting is also improved when visibil-
ity becomes difficult, with Subsonus
providing continuous position and
acoustic heading data regardless of
water turbidity. An added benefit is
that having accurate ROV position
and heading can provide additional
safeguards against collisions which,
particularly in resource extraction
applications, can be devastating to
the environment.” ●
Editor’s note: Read an extended version of
this article at offshore-mag.com/14293561.
www.offshore-mag.com |  MAY/JUNE 2023
5/22/23 8:54 AM
 VESSELS/RIGS Bruce Beaubouef houston

Arrival of eighth-generation drillships to the

Gulf of Mexico heralds new era in HP/HT drilling
The era of high-pressure, high-tem-
perature development in the Gulf of The Deepwater Titan is the world’s
Mexico has arrived. After years of first drillship delivered with two
research, study, investment, and field 20,000-psi BOPs, well-control, riser,
and piping systems for high-
experimentation, the technology pressure and high-temperature
has been developed that enables off- drilling and completion operations.
shore drillers to take on challenging COURTESY TRANSOCEAN

HP/HT fields.
Transocean announced the arriv-
al of its eighth-generation drillships
Deepwater Atlas and Deepwater Titan to
the Gulf in 2022 and 2023, respectively.
The Deepwater Atlas and Deepwater
Titan are the world’s first eighth gen-
eration ultra-deepwater drillships
and only rigs to feature a three-mil-
lion-pound hook-load. Importantly,
these drillships also include the first
20,000 psi well control system, a
feature that has important implica-
tions for deepwater Gulf of Mexico
development.
High-pressure, high-temperature
reservoirs have been a challenge for
Gulf E&P for the past decade or more.
Overcoming the HP/HT challenge,
at least on the drilling front, stands
to be hugely important for the US
Gulf of Mexico as a producing region
going forward.
Recently, Offshore spoke w ith
Marijana Sosic, Manager, Technical
Marketing, with Transocean. She
offered some thoughts about the capa-
bilities of the new rigs, and what they
mean for Gulf of Mexico and deepwa-
ter development going forward.

Offshore: Can you talk about how these

rigs came to be, and their origins?
Sosic: While Deepwater Atlas and
Deepwater Titan were or ig ina l-
ly ordered in 2014 just before the
industry downturn, these two proj- a rig capable of drilling in 20,000 construction management contract,
ects shifted in 2018 when one of our psi environments – the new fron- and a five-year drilling contract,
customers approached us with an tier of ultra-deepwater drilling. As we shifted gears and got to work to
opportunity to design and construct a result of the new rig design and accomplish the design, construction

MAY/JUNE 2023 |  www.offshore-mag.com OFFSHORE 9

2305_06OFF09-10_vess.indd 9 5/22/23 8:46 AM


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and delivery requirements set forth
in the construction contract.
As a result of these design changes,
both the Deepwater Atlas and Deepwater
Titan became the first of their kind –
eighth-generation drillships – offer-
ing 20,000 psi well control capabilities
and a 3.4-million-pound hoisting
capacity, the highest rated equipment
in the industry. This newest genera-
tion of ultra-deepwater drillships will
allow Transocean, and its customers,
to access high pressure and high tem-
perature reservoirs that previously
were not accessible. The equipment
on our newest drillships, in addition,
can reduce the time it takes to drill a
deepwater well, bringing total costs
down for our customers.
For context, seventh-generation
rigs offer 2.5-to-2.8-million-pound
hoisting capacity, and 15,000 psi
well control systems, while operat-
ing in water depths up to 12,000 feet.
Sixth-generation rigs offer a hoisting
capacity of up to 2.0 million pounds
and are rated for water depths up to
10,000 feet.
Offshore: Can you elaborate on how the
equipment on the two drillships is specifi-
cally designed to drill and complete these
HP/HT wells?
Sosic: Transocean’s eighth-genera-
tion drillships are the only two assets
in the world specifically designed to
maximize efficiencies for 20,000 psi
well completions. The vessels and
marine risers have been outfitted
for 20,000 psi well control capabil-
ity, including cement systems, inte-
gral hull piping, and riser choke and
kill auxiliary lines. The Deepwater
Titan is outfitted with two 20,000
psi BOPs, while the Deepwater Atlas
is outfitted with two 15,000 psi BOPs,
one of which will be replaced with a
20,000 psi BOP later this year. Both
rigs possess a 3.4-million-pound
hoisting capacity. To provide this
hoisting capability, upgrades had to
be made to the derrick structure and
a new active heave compensating
drawworks, the highest-rated in the
world, top drives and rotary tables
were installed. Increased hoisting
capacity will provide our customers
with numerous cost and time-sav-
ing opportunities, especially when
drilling programs and well configu-
rations, such as HP/HT wells, require
the handling of heavy, large-diame-
ter casing strings.
Well control equipment upgrades
to safely access 20,000 psi reser-
voirs were required and an industry
first 20,000 psi BOP was engineered
(prototyped), built and installed, as
well as the 20,0000 psi rated choke
manifolds designed for high pres-
sure drilling, cement manifolds and
cementing unit, and associated riser
string modifications. This equipment
was designed and delivered specifi-
cally for these projects – marking new
firsts, not only for Transocean, but for
the entire industry.
Offshore: What does the arrival of
these two drillships mean to GoM
development going forward? To u ­ ltra-
deepwater drilling?
Sosic: Given that Deepwater Atlas
and Deepwater Titan are the only
two eighth-generation assets in the
world, we are quite excited about
the expanding list of opportunities
requiring the extraordinary capabil-
ities of these rigs.
Transocean has a long history of
introducing new technologies that
enable our customers to safely and
efficiently access the world’s most
challenging reservoirs. We are proud
to be adding to that history by deliv-
ering the industry’s first two rigs
capable of drilling and completing
wells requiring subsea equipment
rated to 20,000 psi and offering the
industry’s highest hookload capaci-
ty. We are extremely excited about
the initial campaigns in the Gulf of
Mexico for the Deepwater Atlas and
the Deepwater Titan, and look for-
ward to continuing to deliver safe,
reliable and efficient drilling opera-
tions for all our customers across our
global fleet.

10 OFFSHORE www.offshore-mag.com |  MAY/JUNE 2023

2305_06OFF09-10_vess.indd 10 5/22/23 8:46 AM

 GULF OF MEXICO
bp affirms commitment to Gulf of Mexico with
startup of Argos platform
With a series of announcements made this year, bp has
shown its commitment to E&P in the US Gulf of Mexico.
In mid-April, the company reported that it had success-
fully started oil production at its Argos offshore platform,
delivering more energy at a critical time and strengthen-
ing its position as a leading producer in the deepwater US
Gulf of Mexico.
With a gross production capacity of up to 140,000 bar-
rels of oil per day, Argos is bp’s fifth platform in the Gulf of
Mexico and the first new bp-operated production facility in
the region since 2008. Argos is the centerpiece of bp’s Mad
Dog Phase 2 project, which extends the life of the “super-gi-
ant” oil field discovered in 1998.
The semisubmersible platform ultimately will increase
bp’s gross operated production capacity in the Gulf of
Mexico by an estimated 20%. The company says that it
expects to safely and systematically ramp up production
from Argos through 2023.
Operating in 4,500 feet of water about 190 miles south
of New Orleans, bp says that Argos will support 250 per-
manent jobs. Standing 27 stories tall, the platform has a
deck the length and width of an American football field
and weighs more than 60,000 tons.
Argos is bp’s most digitally advanced platform operat-
ing in the Gulf of Mexico, featuring bp’s proprietary LoSal
Enhanced Oil Recovery and Dynamic Digital Twin tech-
nologies. Argos has a waterflood injection capacity of more
than 140,000 barrels of low-salinity water per day to help
increase oil recovery from the Mad Dog field.
The platform also has a Dynamic Digital Twin, a bp pat-
ent-pending software that links complex data from Argos to
3D digital models of those systems, allowing remote oper-
ators wearing Virtual Reality headsets to access data in
real time to improve decision-making, efficiency and safety.
Starlee Sykes, who recently served as bp’s senior vice
president, Gulf of Mexico and Canada, said: “Safely start-
ing up the Argos platform is an incredible milestone for bp
and a proud moment for our team who delivered the proj-
ect with an impeccable safety record. Producing some of
bp’s highest value, lowest operational emissions barrels,
our Gulf of Mexico business has an important role to play
in delivering the energy the world needs.”
Ewan Drummond, senior vice president, projects, produc-
tion and operations, said: “Argos is key to our strategy of
increasing our Gulf of Mexico production to around 400,000
barrels of oil equivalent per day by the middle of this decade.”
And bp has been affirming its commitment to the Gulf in
recent months. Earlier this year, the company announced
MAY/JUNE 2023 |  www.offshore-mag.com
2305_06OFF11_gom.indd 11
Bruce Beaubouef houston
Operating in 4,500 feet of water, Argos stands 27 stories tall, and
the platform has a deck the length and width of an American
football field, and weighs more than 60,000 tons. COURTESY BP
plans to invest a total of $7 billion into E&P activities in
the Gulf of Mexico by 2025, compared to $10 billion in
investment over the past five years. The investment figure
amounts to an annual average of $2.3 billion in the Gulf of
Mexico in the 2023-25 period, up from the $2 billion annual
investment seen over the past five years.
As laid out in its “US Impact Report: Investing in
America,” the company said that it aims to increase pro-
duction in the Gulf of Mexico from about 290,000 boe/day
in 2021 to around 400,000 boe/day by the mid-2020s.
Several new projects are underway, including a $1.3-bil-
lion expansion at the Atlantis field in the Gulf of Mexico,
the $9-billion Mad Dog 2 development, and a major expan-
sion at the Thunder Horse field.
Back in January, bp’s Gulf of Mexico & Canada team
achieved a milestone when the company’s largest platform
in the GoM, Thunder Horse, hit a production target of more
than 200,000 boe/d for the first time in over a year.
In an interview with Offshore in April, Sykes affirmed
bp’s ongoing interest in the US Gulf of Mexico. “The Gulf
of Mexico is an incredible basin; I’ve heard it called many
times a ‘super basin,’” she commented. “And we continue to
advance technology that can unlock these reserves. High-
pressure/high temperature equipment is quickly becoming
industry-proven technology. And bp has done a lot of work
on seismic technology to the point where we can, in many
cases, see below the salt layer, and thus have more certain-
ty about our geologic targets. And all of that continues to
evolve. So from a geologic perspective, I think the Gulf of
Mexico has massive running room.”
OFFSHORE 11
5/22/23 8:46 AM
 DRILLING RIG REPORT

Top 10 offshore rig

managers expand their
dominance
COVER STORY

China Oilfield Services Ltd

continues to hold onto top spot
Cinnamon Edralin, ESGIAN

T
he global supply of offshore drilling rigs continued to
shrink last year, even as demand picked up across mul-
tiple regions. At the end of 2021, the total supply of drill-
ships, semisubs, and jackups was 723. By the end of 2022, the
total had fallen to 709. Over this same period, the number
of rigs under contract increased to 451 at the end of 2022
from 418 at the end of 2021. A total of 254, or 56%, of the rigs
under contract at the end of the year were managed by the China Oilfield Services Ltd. once again stands atop Offshore’s
ten largest rig contractors in terms of managed fleet size Top Ten Drillers list with a fleet of 58 rigs. The COSL Promoter
for jackups, semisubs and drillships. This is up from 49% rig, shown here, has recently been undertaking a drilling and
of the fleet at the end of 2021. P&A campaign for Equinor offshore Norway. COURTESY COSL

Sales for conversions, recycling decline
In response to rising demand, rig owners are now less moti-
vated to sell their rigs outside the industry than they have
been for the past several years. Almost all of the rigs sold
for recycling last year were built before the 1990s. Two
notable conversions were confirmed last year. Seadrill
sold the semisubs Sevan Brasil and Sevan Driller to New
Fortress Energy for conversion to non-drilling units for its
LNG business.
Conversely, we saw an increase in rig sales within the
drilling industry. Many of these sales were tied to rig con-
tractors in the Middle East going on a buying spree of pre-
mium jackups from around the world as they sought to
build their fleets to meet demand. Out of the 41 jackups sold
for drilling purposes in 2022, only five were jackups not
intended for the Middle East market. The four Middle East
contractors that purchased jackups last year were ADES,
ADNOC, Arabian Drilling, and Shelf Drilling.
One notable purchase transaction involved the merger
between Noble Corp. and Maersk Drilling. The UK’s
Competition and Markets Authority required the pair to
divest some jackups in connection with the merger out of
concern for reduced competition in the North Sea. Shelf
Drilling, which prior to this did not have a presence in the
North Sea, stepped in and acquired five jackups – Noble
Sam Turner (to be renamed Shelf Drilling Winner), Noble
Sam Hartley (Shelf Drilling Fortress), Noble Lloyd Noble (Shelf
Drilling Barsk), Noble Houston Colbert (Shelf Drilling Odyssey),

12 OFFSHORE www.offshore-mag.com |  MAY/JUNE 2023

2305_06OFF12-14_ten.indd 12 5/22/23 8:46 AM

 and Noble Hans Duel (Shelf Drilling Perseverance) – for a com-
bined total of $375 million. Shelf then set up an entity called
Shelf Drilling North Sea to manage the rigs.
Parent company Shelf Drilling also made one other rig
acquisition last year when it purchased jackup Deep Driller
7 from Aban Offshore. The rig is now named Shelf Drilling
Victory and is scheduled to start its next charter in the
Middle East in 2Q 2023.
Noble Houston Colbert is the only one of the five units pur-
chased by Shelf Drilling North Sea that is currently located
outside the North Sea region. The rig has been working off
Qatar since October 2022. Its last job in the North Sea was
for work in the UK that ended in April 2020. Furthermore,
according to the purchase agreement, the jackup Noble Lloyd
Noble, which is working off Norway, will continue to be
managed by Noble under a bareboat agreement for the dura-
tion of the charter.
As mentioned previously, only five of the jackups sold for
drilling purposes last year were not targeted for the Middle
East. Four were the Shelf Drilling units still in the North
Sea, and the fifth was the purchase of a previously retired
jackup by US-based White Fleet Drilling for use in the US
Gulf of Mexico. This rig has a management agreement with
Enterprise Offshore Drilling.
COSL maintains top spot on list
The accompanying table lists the ten largest offshore drill-
ing rig contractors in terms of managed fleet size, meaning
the figures include rigs that are managed on behalf of other
owners. China’s state-run China Oilfield Services Limited,
or COSL, continues to hold onto the top spot on the list
with 58 rigs under its management. Second place is also
unchanged from the end of 2021, with Valaris managing
46 units at the end of 2021. For clarification, Valaris’s fig-
ures do not include units managed by ARO Drilling, which
is a 50/50 joint venture with Saudi Aramco. New to the list
this year is Advanced Energy Systems, or ADES, which is
based in Egypt. Following a string of rig acquisitions, ADES
made its debut on the Top 10 list in third place with 45 units
under its management.
The Middle East makes a strong showing in the Top 10
as the headquarters of four of the companies – ADES, Shelf,
ADNOC Drilling, and ARO Drilling. For the purposes of this
article, the Shelf Drilling North Sea fleet is counted under
the parent, Shelf. These combined fleets of these four com-
panies represent approximately 18% of the global fleet and
37% of the Top 10 total.
The company that dropped out of the Top 10 list was
Maersk Drilling, which was acquired by Noble. At the
end of 2021, Noble had the seventh largest managed fleet,
with Maersk following in ninth place. The combined fleet
now comes in sixth place. In late December 2022, Seadrill
announced its intention to acquire Aquadrill. Because the
transaction was not finalized until April 2023, Seadrill’s
fleet count on the table does not include the Aquadrill fleet.
Fewer rigs under construction
At the end of 2022, 45 rigs remained in the under-construc-
tion phase, meaning they had not yet been delivered. The
breakdown by rig type is 14 drillships, 6 semisubs, and 25
jackups. Many of these rigs are far along in the construc-
tion process and no recent work has been undertaken, as
some have been considered stranded at shipyards while
seeking new ownership ahead of final outfitting and formal
delivery. Last year we started seeing meaningful activity in
terms of new bareboat arrangements, purchase agreements,

F L E E T B Y R I G S TAT U S FLEET BY REGIONAL SPREAD

OTHER UNDER TOTAL LATIN NORTH SEA/ WEST MIDDLE ASIA-

COMPANY DRILLING STATUSES CONSTRUCTION RIGS US GOM AMERICA BARENTS AFRICA EAST PACIFIC OTHERS
COSL 50 8 0 58 0 2 4 0 5 47 0
Valaris 30 14 2 46 8 5 11 8 5 8 1
ADES 29 16 0 45 0 4 0 0 37 4 0
Transocean 18 21 1 40 9 4 9 2 0 7 9
Shelf Drilling* 28 7 0 35 0 0 3 6 13 12 1
Noble Corp.* 24 9 0 33 3 10 11 4 1 3 1
ADNOC Drilling 27 3 2 32 0 0 0 0 29 3 0
Seadrill 17 4 1 22 2 9 2 4 3 2 0
Borr Drilling 16 3 2 21 0 1 1 5 5 9 0
ARO Drilling 15 0 2 17 0 0 0 0 17 0 0
Top Ten Total 254 85 10 349 22 35 41 29 115 95 12
Entire Fleet 451 213 45 709 44 98 71 46 177 226 47
Top Ten % of Total 56.3% 39.9% 22.2% 49.2% 50.0% 35.7% 57.7% 63.0% 65.0% 42.0% 25.5%
Rig types: Jackups, semisubs, drillships.
Latin America consists of Mexico, Central America/Caribbean, and South America. Asia-Pacific consists of Far East, Southeast Asia, India/Subcontinent, Oceania.
Source: Esgian Rig Analytics. Data as of 31 December 2022.

MAY/JUNE 2023 |  www.offshore-mag.com OFFSHORE 13

2305_06OFF12-14_ten.indd 13 5/22/23 8:46 AM

 DRILLING RIG REPORT CONTINUED
and purchase options for many of the rigs, leaving fewer
assets deemed stranded. This activity has carried over into
2023, shrinking the number of stranded units without a
manager. The Top 10 managers controlled nearly 22% of
the undelivered supply at the end of the year.
The last rig delivered in 2022 was Transocean’s
ultra-high-specification drillship Deepwater Titan, which
has a five-year contract with Chevron for work in the US
Gulf of Mexico that is scheduled to start in the third quar-
ter of this year. At the time of writing, the rig was in
transit from Singapore to the US Gulf. This is the world’s
first drillship delivered with a blowout preventer (BOP)
equipped for pressures up to 20,000 psi. Deepwater Titan
is outfitted with two 20K stacks manufactured by NOV.
Meanwhile, sister rig Deepwater Atlas, which was deliv-
ered in mid-2022, was delivered with two 15K psi BOPs.
The rig is scheduled for change-out to 20K capabilities
later this year.
Top 10 make strong Middle East showing
Globally, we’ve also seen a decrease in the non-drilling sta-
tuses, as a result of demand increasing and more rigs work-
ing. Breaking this down by region, the Middle East is where
the Top 10 is the most dominant, managing 65% of the fleet,
up from 45% last year. The big boost is the direct result of
so many purchases of rigs by Middle East contractors seek-
ing to build their fleets.
West Africa has the second biggest showing in the Top
10, although the 63% recorded in 2022 is down quite a bit
from 73% the prior year. While the Top 10 companies had
nearly the same number of rigs at the end of 2022 as in
2021, with 29 and 30, respectively, more rigs have moved
into the region, increasing the supply from 41 to 46, which
has brought down the percentage. West Africa was the
final portion of the Golden Triangle (Brazil, US Gulf, West
Africa) to show signs of demand recovery following the
prolonged downturn. Notably, discoveries in the Orange
basin off Namibia have seen some rigs moving into, or
making plans to move into, the region. Some of this work
requires harsh-environment units, which has been a con-
tributing factor in the decreasing offshore rig supply in the
Norwegian sector of the North Sea.
The North Sea’s rig supply fell from 76 to 71, with the
Top 10 contractors managing 41 units at the end of last
year versus 46 at the end of 2021. The North Sea region
has faced a double-whammy of slower-than-anticipated
demand recovery off Norway, and the implementation of
a windfall profits tax in the UK, which has dampened
near-term demand and encouraged rig contractors to look
to other regions, such as West Africa and Australia, to
find new work.
The US Gulf has achieved a relatively stable supply/
demand balance. There was little change to the region’s
fleet from the end of 2021 to the end of 2022. The total fleet
14 OFFSHORE
2305_06OFF12-14_ten.indd 14
count was unchanged at 44, while the Top 10 companies
controlled one fewer rig at the end of 2022 with 22 units
under their management. Even though the supply figure
was unchanged, the region did have movement of rigs in
and out over the course of the year.
More growth expected in Latin America
Latin America has had a lot of attention recently due to
Brazil’s Petrobras issuing several multi-rig tenders that
are resulting in reactivations of some cold-stacked float-
ing rigs, and the continued drilling successes in Guyana
and Suriname. Mexico, on the other hand, has experienced
several rig departures, particularly jackups. It has been
widely noted that there have been issues with contrac-
tors receiving timely payments from state-run oil compa-
ny Pemex. With growing opportunities around the world
and quickly rising dayrates, some rigs have been enticed
to other regions. Additionally, several jackups from Mexico
were purchased by contractors from the Middle East.
Latin America’s offshore rig supply fell to 98, of which 35
were managed by one of the Top 10 companies, from 108 the
previous year, with 34 of those managed by that year’s Top
10. Interestingly, for 2022, the Top 10 companies increased
their dominance in the region, representing nearly 36%
versus almost 32% at the end of 2021. Keep an eye on this
region for rig count growth over the next couple of years,
as additional capacity is brought in to meet demand.
Asia-Pacific is another region in which the Top 10 con-
tractors increased their representation in terms of percent-
age, but in this case, the total number of rigs they managed
fell from 104 to 95. This region experienced a decline in
supply, dropping from 250 to 226. The primary cause for the
supply change is due to Asia-Pacific being home to most of
the offshore rig construction yards. Only two of the rigs
delivered in 2022 remained in the Asia-Pacific region fol-
lowing delivery.
For 2023, Esgian expects that some of the rigs still in
shipyards will receive contract awards, and yard work will
resume with an aim to deliver. However, because of global
supply chain challenges, rigs that have not yet resumed con-
struction may not be able to achieve a 2023 delivery date,
as lead times for parts and equipment are longer than they
were at this time last year. Meanwhile, global rig demand
is expected to continue to grow, aided by energy securi-
ty concerns and by operators moving forward with proj-
ects made more economical given the strong oil prices the
market has seen lately. ●
Cinnamon Edralin is Head of Rig Market Research at Esgian. She has
more than 15 years of experience researching and analyzing the
offshore oil and gas drilling rig market. Edralin previously worked for
ODS-Petrodata, which was later acquired by IHS Markit. She graduated
from the University of St. Thomas in Houston, Texas, with a bachelor’s
degree in liberal arts.
www.offshore-mag.com |  MAY/JUNE 2023
5/22/23 8:46 AM
 DRILLING RIG REPORT
A TALE OF TWO NORTH SEAS:
Norway incentivizes
drilling while UK levy
could lead to rig loss
Global demand for harsh environment
semis may pull rigs from UK North Sea
Bruce Beaubouef, MANAGING EDITOR
T
o paraphrase from Dickens’ classic
work, the North Sea has become a
tale of two seas: the UK North Sea
and the Norwegian North Sea. The
difference, which is already being
manifested in drilling activity and
field development plans, comes down
largely to extremely contrasting fiscal
regimes and regulatory policies.
In the UK North Sea, drilling activ-
ity has been hampered by the Energy
Profits Levy (EPL) enacted last spring,
a fee that was subsequently increased
by an additional 10% late last year,
bringing the headline tax rate for
UK oil and gas producers to 75%.
The increased fees have led some UK
North Sea operators to slow their drill-
ing campaigns, and put the brakes on
field development projects that could
have seen FID this year.
Already this year, the UK North Sea,
which has been fairly active in recent
years, has seen a decline in floating
drilling rig activity. With the global rig
market tightening, and the economics
MAY/JUNE 2023 |  www.offshore-mag.com
2305_06OFF15-17_drill.indd 15
of the UK North Sea less appealing,
some drilling contractors are now
anticipating moving their rigs out of
the North Sea and into more reward-
ing environments. Harsh environ-
ment semisubs could be particulalry
impacted, as their owners and manag-
ers look to deploy these high-demand
rigs for drilling campaigns off South
Africa or offshore Australia.
For exa mple, Odf jell Drilling
recently announced that its semisub-
mersible Deepsea Mira will leave the
North Sea for a 300-day contract
with TotalEnergies in Namibia in 2Q
2023. Other rigs are departing the
UK North Sea too. The only drillship
in the region, Deep Value Driller, has
been bareboat chartered by Saipem
and will move to Cote D’Ivoire to
drill for Eni this year. Apache recent-
ly announced an early contract ter-
mination for Diamond Offshore’s
Ocean Patriot. The semisubmersible
rig should now become available in
July, more than 400 days earlier than
The harsh-environment
semisubmersible Deepsea Yantai
is currently working in the
Norwegian North Sea for OMV
Norge. COURTESY ODFJELL DRILLING/
NORWEGIAN PETROLEUM DIRECTORATE
planned. Apache said the cancellation
followed the changes to the EPL.
According to Westwood Global
Energy Group’s Teresa Wilkie, a letter
of intent awarded to a sixth-genera-
tion semi by a UK operator has been
cancelled after the company over-
hauled its UK drilling plans. The rig
could have been contracted until 2030
if all options had been taken up but
will now be available on completion
of its current UK drilling campaign
in mid-2024.
The International Association
of Drilling Contractors’ North Sea
Chapter recently sent a letter to all 650
UK MPs and 129 MSPs warning that
further harsh-environment rigs could
be “lost for good” to the UK due to the
windfall tax changes.
The North Sea rig supply is now
40% below what it was in March 2017,
Westwood’s RigLogix has calculated,
with 13 rigs departing the region in the
past two years either for work else-
where or retirement. Two more – the
semis Hercules and the aforementioned
Deepsea Mira – will relocate later this
year to eastern Canada and Namibia.
A Westwood Insight published
last November found that despite
OFFSHORE 15
5/22/23 8:46 AM
 DRILLING RIG REPORT CONTINUED
improving North Sea rig conditions,
assignments elsewhere commanded
longer durations and higher day rates.
RigLogix counts four cold-stacked
rigs at present in the North Sea at
large, comprising three semis and
one jackup, and nine warm-stacked
rigs (five semis and four jackups). Only
three of the latter have work lined up,
in two cases outside of the region. And
15 further rigs could come off contract
before the end of this year if follow-on
work is not secured or options not
declared. A high-spec, harsh-environ-
ment semi currently in the North Sea
could relocate later this year to drill in
the eastern Mediterranean.
As for jackups, Valaris reportedly
plans to preservation-stack the Valaris
Viking as a cost-reducing measure as
it does not foresee sufficient work
in the region to keep all three of its
16 OFFSHORE
2305_06OFF15-17_drill.indd 16
harsh-environment rigs operating due
to weaker North Sea demand related
to the fiscal changes.
And once rigs exit the region, they
may not return, said Wilkie, due to
a combination of high mobilization
costs and more attractive contract
terms and day rates in the Golden
Triangle region, the Middle East,
and Australasia. This would lead to a
smaller pool of rigs within the North
Sea region, with less choice and higher
day rates for operators planning fresh
campaigns in the years ahead.
In addition, several field devel-
opment projects planned for the UK
North Sea could be jeopardized by the
EPL. Wilkie said that the UK North
Sea outlook could worsen consid-
erably if offshore operators decide
their projects are no longer feasi-
ble in the current financial climate.
TotalEnergies, Equinor, Shell and
EnQuest have announced plans to
reduce their UK offshore expendi-
ture this year, and FID for planned
greenfield projects, such as Ithaca
Energy’s West of Shetland Cambo
oil development, may also be at risk
due to the EPL.
Meanwhile, drilling activity off-
shore Norway is picking up. Earlier
this year, the harsh-environment semi
Deepsea Yantai, operated by Odfjell
Drilling, spud the Eirik exploration
well in the Norwegian North Sea for
operator OMV Norge. The 15/2-2 S well
is drilling in production license 817,
close to the Equinor-operated Gudrun
field in 111 m water depth. Operations
could last up to 100 days in the event
of a discovery, which would include
a sidetrack. Eirik is a gas and con-
densate prospect close to existing
Departing the UK North Sea: the
semisubmersible rig Hercules will
relocate to eastern Canada in 2Q
2023. PHOTO BY OLE JØRGEN BRATLAND,
COURTESY EQUINOR
www.offshore-mag.com |  MAY/JUNE 2023
5/22/23 8:46 AM

infrastructure, said OMV Norge gen-
eral manager Knut Mauseth.
In March, Equinor awarded con-
tracts for the use of the Transocean
Encourage, mainly in the Norwegian
Sea; and Transocean Enabler, for the
Johan Castberg field, in the Barents
Sea. The two companies also signed a
strategic collaboration agreement. The
rigs have been on eight-year contracts
with Equinor – one that expired last
December and one that will expire in
April 2024, respectively. This will be
the first contract extensions for these
rigs since they were built, as so-called
Cat D rigs, specialized for Norwegian
conditions. The drilling program in the
Norwegian Sea consists of nine wells
to be drilled on the Tyrihans, Verdande,
Andvare and Vigdis fields located in
the Tampen area of the North Sea.
Verdande and Andvare will be tied
in to the Norne field. The drilling pro-
gram also includes exploration wells
and may be further extended, adding
six wells. The estimated total value
of the nine wells is about $191 mil-
lion. The Transocean Encourage and
the Transocean Enabler are sixth-gen-
eration fully winterized, harsh-envi-
ronment semisubmersible rigs with
automated drilling control special-
ly designed for operations on the
Norwegian Continental Shelf.
Development spending offshore
Norway, buoyed by an ostensibly
temporary tax regime, is expected to
increase significantly following the
submission of plans for multiple proj-
ects late last year. According to Rystad
Energy, the overall capex of greenfield
investments proposed in 2022 will be
$42.7 billion. The Norwegian govern-
ment implemented its temporary tax
regime during the 2020 market down-
turn to secure future development
spending. The measures incentivized
operators by boosting the uplift rate
on all ongoing investments in 2020
and 2021, and on new projects sanc-
tioned before 2023 up until first oil
flows. Despite a reduction in the uplift
rate last year from 2020’s 24% to 12.4%,
the temporary regime still lifts the net
MAY/JUNE 2023 |  www.offshore-mag.com
2305_06OFF15-17_drill.indd 17
DRILLING RIG REPORT CONTINUED
Departing the UK North Sea: the semisubmersible Deepsea Mira is scheduled for work
offshore Namibia starting in 2Q 2023. COURTESY ODFJELL DRILLING
present value and lowers the breakeven
prices of development projects.
Operators on the Nor weg ia n
Continental Shelf strove to submit
their plans of development and oper-
ation before the new standard regime
took effect at the start of this year. Of
the 35 projects sanctioned within the
temporary regime, 24 were sanctioned
in 2022, a record for Norway in a single
calendar year, with the total value of
these projects likely to approach $29
billion. Greenfield spending from the
35 projects should climb steadily over
the next three years, to $9.1 billion in
2024, $7.4 billion in 2025 and to $6.3
billion in 2026. The combined resourc-
es are estimated at 2.472 Bboe.
Some of the key upcoming field
development projects in the Norwegian
North Sea include Aker BP’s North Sea
Yggdrasil Hub (startup in 2027), Shell’s
Phase 3 of Ormen Lange (startup in
2025) and Equinor’s Irpa (startup in
2026). These projects are expected to
provide a significant boost to Norway’s
gas supply. And NCS liquids produc-
tion should also be steady going for-
ward, helped by the Yggdrasil Hub,
Equinor’s Breidablikk (start-up in
2025), and Vår Energi’s Balder Future
(start-up in 2024).
It should be noted that the main
suppliers of gas will continue to be
major fields sanctioned during the
standard tax regime, such as Johan
Sverdrup in the North Sea.
Rystad estimates the additional
supply of gas in 2028 at about 24.9 Bcm,
close to 6.225% of demand in the EU
and the UK combined, with Norway
accounting for almost one-third of
European gas supplies in five years.
And those projects sanctioned
u nder Nor way ’s tempora r y t a x
regime should help sustain high gas
production on the NCS through 2030.
Rystad Energy estimates that produc-
tion from the tax window projects
should peak at 921,000 boe/d in 2028.
Thereafter, based on current plans,
production could slip to 818,000 boe/d
in 2029, 659,000 boe/d in 2030, then
evening out at 254,000 boe/d in 2035.
The firm’s upstream analyst Mathias
Schioldborg said: “The outcome of
this tax break is threefold: increased
investment on the NCS, increased tax
receipts when production starts and
increased supply to Europe at a crit-
ical time. Norway will need to con-
sider if this regime is a one-off to
attract investment or if lessons can
be learned for the future.” ●
OFFSHORE 17
5/22/23 2:54 PM
 GEOSCIENCES

Seismic survey market

finally recovering
Analysts says seismic market
upturn is in full swing
Ariana Hurtado,
EDITOR AND DIRECTOR OF SPECIAL REPORTS

T
he future is looking bright for seis-
mic service providers this year.
Recent a na lysis by Esg ia n
revealed that seismic campaigns and
capex budgets are all up, with major
seismic player highlights that include:
• CGG: fourth-quarter 2022 delivered
higher-than-anticipated multicli-
ent data and equipment sales;
• PGS: 2022 multiclient late sales
second highest on record; and
• TGS: highest fourth-quarter 2022
late sales since 2014.
Offshore recently chatted with ana-
lysts from Rystad Energy and S&P
Global about the recovering seismic
survey market to gauge their thoughts
on the current trends and outlook for
the remainder of the year.
“With increased exploration activ-
ity, demand for seismic services is
expected to grow by an additional
14%, or $1.1 billion, and total almost
$9.3 billion in 2023,” said Binny Bagga,
vice president of supply chain analy-
sis with Rystad Energy. “Key offshore
regions such as the Gulf of Mexico
[GoM] and the North Sea are expect-
ed to remain core to the seismic
market, with strong growth expect-
ed in Norway. The surge in oil and
gas prices in the past year following
Russia’s invasion of Ukraine has led
to an increased appetite for offshore
exploration spending among majors
and national oil companies alike.
Mature basins are set to take the lion’s
Petrobras has contracted a consortium of Alcatel Submarine Networks and Maersk
Supply Service to construct and install a permanent seismic monitoring system offshore
Rio de Janeiro. COURTESY MAERSK SUPPLY SERVICE
share of exploration capital expendi- 35% year-on-year and has since said
ture, while 20% of the year’s total is it expects this to continue, though it is
set to go on frontier basins, a hike of unlikely to replicate the rate increase
more than 50% from 2022.” experienced between 2021 and 2022,
Track ing the ma r ine seismic according to Sinclair.
market and its vessels, Beth Sinclair, “The uptick in multiclient late sales
an analyst with Petrodata SeismicBase and the success in obtaining full pre-
by S&P Global, added, “The consensus funding for multiclient sweeps off
within the industry is that 2023 and Brazil, West Africa and Southeast Asia
beyond will see the seismic market demonstrate the current appetite for
go from strength to strength as the exploration once again, and seismic
upturn is deemed to be finally in companies will be happy to be bolster-
full swing. There is real optimism. ing their coffers. Especially the vessel
Continued energy security concerns owners,” she said. “The streamers in
and improved profits have seen oil the global fleet are generally getting
and gas companies increase their E&P quite old, and to replace a full spread
spending, which in turn has seen the costs approximately $50 million, as
revenues of seismic firms rise.” quoted by PGS.”
Meanwhile, companies are reacti-
Vessel updates vating vessels, such as Shearwater’s
In the final quarter of 2022, PGS report- SW Mikkelsen and SW Gallian last
ed that vessel day rates had risen by year and PGS’ Ramform Victory this

18 OFFSHORE www.offshore-mag.com |  MAY/JUNE 2023

2305_06OFF18-21_seis.indd 18 5/22/23 8:46 AM

 year, which “exemplifies the confi-
dence companies have in the market
going forward,” Sinclair added. “It is a
pricy business to take vessels out of
cold stack.”
Collaborations, M&A
“The marketplace is certainly chang-
ing, however, with collaboration and
amalgamation an ongoing trend,”
Sinclair explained. “Companies strike
vessel time agreements (e.g., CGG with
Shearwater GeoServices; WesternGeco
with Shearwater GeoServices; TGS
with COSL) while acquisitions shrink
the market. TGS’ most recent acquisi-
tion of Magseis Fairfield has placed it
at the forefront of the OBN [ocean-bot-
tom node] sector. Meanwhile, SeaBird
is calling for more mergers, believing
that its source/2D vessels would be the
perfect addition to an OBN company.”
Sinclair said OBN is on the “up and
up” and that crews are booked through-
out 2023 and onward. For example,
PXGEO’s OBN crew has work offshore
Brazil until August 2024. A crew for-
merly operated by Magseis Fairfield
(now TGS) has work in Guyana until
the end of the year, while a second
TGS crew has contracts in the US GoM
stretching beyond that.
In addition, TGS signed a collabo-
ration agreement with SLB in March,
under which the two companies will
gain access to each other’s US GoM
data for sparse OBN acquisition and
processing. The combined database,
covering all prospective areas of the
US GoM, will allow the companies to
jointly pursue multi-year acquisition
campaigns over producing and explo-
ration acreage.
“Shearwater GeoServices (with its
newly activated source vessels men-
tioned earlier) will also remain in
the US Gulf of Mexico for the fore-
seeable future, while SW Tasman is
being converted into the industry’s
first dual ROV, source and stream-
er multi-purpose vessel,” Sinclair
said. “Meanwhile, SW Vespucci has
Norwegian OBN work to keep it busy
throughout the summer season, TGS/
MAY/JUNE 2023 |  www.offshore-mag.com
2305_06OFF18-21_seis.indd 19
Magseis Fairfield is mobilizing a
crew to work in Norwegian and UK
waters in the coming months, and
SAExploration has been contracted by
TGS to gather multiclient data around
Carbon Transition’s Utsira survey
off Norway.”
Market outlook
“The strong market outlook for 2023
is good news for the seismic compa-
nies after the promising developments
we have seen last year,” Bagga said.
“Preliminary revenue reports from
both TGS and PGS for the first quarter
of this year as well as numerous recent
contract awards point to continued
growing demand for seismic services.
Multiple contracts that will support
the suppliers’ growth this year have
been awarded in the past few months.”
The following sampling summariz-
es some of the latest contract awards
around the world.
South America
In April TGS announced the com-
mencement of the second stage of a
Peninsular Malaysia multiclient 3D
reprocessing project covering 20,347
sq km from 32 3D seismic studies
in collaboration with DownUnder
GeoSolutions (DUG). Combined with
the 16,957-sq-km first stage of the
Shearwater’s SW Empress vessel will conduct a two-month 4D monitoring survey
offshore Cote d’Ivoire. COURTESY SHEARWATER GEOSERVICES
project, it will be one of the largest of
its kind in Asia to date, Bragga added.
Other major seismic contrac-
tors such as Shearwater have also
announced several contract awards
in recent months, including two con-
tracts awarded to Shearwater by
Petrobras for 4D seismic surveys at the
Jubarte and Tartatuga Verde fields in
the Campos Basin off Brazil.
Equinor and partner YPF gained
environmental approvals in April to
acquire 3D seismic across three blocks
offshore Argentina, with Shell and
TotalEnergies, along with partners bp
and Qatar Energy, also set to acquire
3D seismic on their Argentinian acre-
age during 2023/2024.
That same month, PGS released
the first data from its new Pacific
MegaProject covering prospective
areas across much of Colombia’s off-
shore Tumaco and San Juan basins.
The company has reprocessed all
available data in the target area to
produce a single unified and rejuve-
nated MegaProject dataset. This is said
to provide new insights into potential
petroleum system elements and possi-
ble hydrocarbon-bearing traps.
Back in March, a consortium of
CGG, TGS and BGP completed Phase IV
of their deepwater 3D seismic survey
offshore Suriname. The 1,800 sq km
OFFSHORE 19
5/22/23 8:46 AM
 GEOSCIENCES CONTINUED
covered was the final part of a pro-
gram to acquire a 14,500-sq-km survey
of new 3D data in deep and shallow
water in the Guyana-Suriname Basin,
with more than 6,400 sq km of exist-
ing data reprocessed.
The Petrobras-led Sépia consor-
tium contracted PXGEO in March
to acquire a 3D OBN survey in the
Santos Basin offshore Brazil. The pro-
gram, in water depths of up to 2,300
m, will take about four months to
complete. It will be PXGEO’s fourth
acquisition project for Petrobras
since mid-2021.
Petrobras contracted a consortium
of Alcatel Submarine Networks and
Maersk Supply Service in February
to construct and install a permanent
seismic monitoring system (PSMS) in
the Mero Field in the presalt Santos
Basin, 180 km offshore Rio de Janeiro.
The project will deploy 4D seismic
mon itor ing tech nolog y to track
reservoir behavior over time. Data
acquired should broaden k nowl-
edge of distribution of fluids in the
reservoir and support more efficient
oil production from the Mero Field,
Petrobras said. The PSMS will be
installed next year.
Europe
In April GEOxyz’s Geo Ocean III vessel
started a geophysical survey for
Hartshead Resources over the Anning
and Somerville gas fields and planned
PGS’ Ramform Hyperion vessel recently
completed a 3D seismic acquisition
contract for exploration purposes in the
Mediterranean Sea, awarded by an
unnamed energy company. COURTESY PGS
20 OFFSHORE
2305_06OFF18-21_seis.indd 20
inter-field pipeline locations in the UK
southern North Sea. The 77-m-long
DP2 vessel is equipped with cone
penetration testing and vibrocor-
ing equipment.
Additionally, in February PGS com-
pleted 2D seismic surveys over the
west and southwest areas offshore
Crete, Greece, for licensees Exxon
Mobil and Helleniq Energy. Hellenic
Hydrocarbons and Energy Resources
Management Co. (HEREM A), the
authority that manages the concession
rights on behalf of the Greek State, said
a total of 12,278 line km were collect-
ed, far above the minimum contractu-
al obligation of 6,500 km for the two
blocks combined.
Late last year, CGG formed an
agreement with Carbon Transition
subsidiary Axxis Multi Client to repro-
cess the Utsira OBN seismic survey in
the Norwegian North Sea. The 2,000-
sq-km Utsira survey, which is due to
be completed in 2024, is claimed to
be the largest ultra-high-resolution
OBN survey in the North Sea. For the
reprocessing, CGG will employ OBN
processing and imaging technol-
ogy including time-lag full-wave-
form inversion.
Gulf of Mexico
In February TGS and SLB started
acquisition of the Engagement III
ultra-long offset OBN survey in the
Green Canyon region in the US GoM.
The 111 OCS Block survey was expect-
ed to be completed in April and deliver
imaging uplifts through full-wave-
form inversion velocity model build-
ing, using ultra-long offsets. SLB will
perform imaging with final results
expected in mid-2024. Engagement III,
the fifth multiclient ultra-long offset
OBN acquisition exercise in the GoM,
will extend the data coverage south
from prior phases.
That same month, TGS inked a
letter of agreement to shoot a propri-
etary 4D OBN survey over the Walker
Ridge canyon in the US GoM. The com-
pany expects to mobilize for the 100-
day campaign this summer.
Africa
Shearwater’s SW Empress vessel will
conduct a two-month 4D monitoring
survey offshore Côte d’Ivoire. The pro-
gram, due to start in May, will be in
direct continuation of the vessel’s cur-
rent activity in the region.
In addition, a 3D survey over PEL
87 and the surrounding area in the
Orange Basin offshore Namibia had
reached progress of being more than
50% complete as of late April, accord-
ing to Sintana Energy. The survey
will cover a total area of 6,872 sq
km. Initial processed results should
be available by the end of August.
Woodside Energy reportedly cov-
ered the costs of the $35 million 3D
seismic survey over an area of at least
5,000 sq km.
Asia-Pacific
Korea National Oil Corp. has com-
missioned Shearwater to acquire a
3D streamer survey offshore South
Korea. The 1,200-sq-km survey will
be the company’s third project for the
state-owned oil and gas corporation.
At the beginning of the year, TGS,
SLB and Petrobangla conducted a new
multiphase 2D seismic program off-
shore Bangladesh. The initial phase
involved acquiring a minimum of
about 11,000 line km of HR broadband
seismic data, designed to improve
understanding of the prospective
Bengal Fan. According to TGS CEO
Kristian Johansen, this is one of the
world’s most-extensive remaining
unexplored frontier basin.
The energy transition
“The ongoing energy transition is
expected to create alternative reve-
nues streams for seismic players that
have diversified their businesses by
venturing into the carbon storage,
geothermal, offshore wind and deep-
sea mining sectors,” Bagga said.
For example, Fugro plans to per-
form offshore geotechnical site inves-
tigations for the Star of the South wind
development off the Gippsland coast in
southeast Australia.
www.offshore-mag.com |  MAY/JUNE 2023
5/22/23 8:46 AM
 As another example, TerraSond
and Benthic, both in Acteon’s Data
and Robotics division, will perform
geophysical and geotechnical survey
work for two planned floating wind
farms northeast of Aberdeen. The
Ocean Fortune vessel, under long-term
charter to TerraSond, will acquire the
geophysical survey with support from
Acteon in Aberdeenshire and UTEC’s
data center in Livingston.
Additionally, Thistle Wind Partners
recently initiated seabed surveys for
its two ScotWind projects: the 1-GW
Ayre floating offshore wind farm off-
shore Scotland and the 1-GW Bowdun
fixed foundation wind farm offshore
Aberdeenshire in the North Sea. G-tec
is leading the first phase, geophysi-
cal surveys of the seabed at both sites
in leasing zones NE2 and E3, which
are due to continue through October.
The survey vessel will cover an area
of almost 400 sq km. G-tec special- “Our scheduling team were able to view
ists will process the data, apply-
ing the results to ground modeling
the impact of changes in real-time which
studies from October onward, with led to a direct impact on the bottom line.
metocean surveys starting around
the same time.
We saved $10 million on one well alone, by
“The current climate is the per- rapidly generating scenarios showing the
fect storm for seismic firms,” Sinclair
concluded. “The continued need for impact of different well sequences.”
traditional oil and gas exploration,
paired w ith the ongoing energ y
transition process, puts the seismic
industry in an enviable position.
Frontier exploration is once again
in favor, while the need for spe- That's what a customer Program Manager
cialized seismic over potential CCS stated after they implemented Actenum DSO.
and wind farm sites means seismic
companies can be at the forefront of
new exploration and data processing With DSO, you can achieve results like this too.
innovation.” It's AI-powered software that integrates and
She listed the 1,600-sq-km survey
conducted by PGS’ Ramform Hyperion optimizes your offshore operations schedules,
in June last year as an example. It and enables your team members to share, view
covered the Northern Endurance
Partnership CCS area in the UK North
and report on the same data.
Sea, which she said was the first and
largest of its kind. “Repeat 4D work Request a demo now!
will be required over the site in 2027,
and every five years thereafter, pro-
viding prolonged and predictable seis-
mic demand,” she said. ●
MAY/JUNE 2023 |  www.offshore-mag.com info@actenum.com actenum.com

2305_06OFF18-21_seis.indd 21 2306OFF_Actenum.indd 1 5/22/23 8:46 AM

5/3/23 10:54 AM
 DECOMMISIONING

Production data
for public companies reporting decom-
missioning liability are included
within a broader category called pro-

underpins successful
visions with (slightly) different rules
and requirements than AROs, but gen-
erally speaking the two liability clas-

worldwide ARO
sifications are quite similar.

Reporting requirements
For public companies that are orga-

analysis
nized under the laws of the United
States or are listed on US exchanges,
US Generally Accepted Accounting
Principles (GAAP) are required, also
referred to as the Financial Accounting
Planners should understand relationship between Reporting Standards (FASB). In other
asset retirement obligations, production rates countries, International Financial
Reporting Standards (IFRS) as issued
by the International Accounting
Mark J. Kaiser, LOUISIANA STATE UNIVERSITY Standards Board (IASB) are employed.
Both standards require decom-

P
ublic oil and gas companies are
required to report the present value
of their decommissioning liability,
referred to as asset retirement obliga-
tions (AROs) and provisions, for all oil
and gas assets worldwide where there
is a legal obligation to perform.
One well-known feature of the oil
and gas industry is the strong cor-
relation that exists between produc-
tion and reserves. In the first part of 2306OFFkais
site to its original condition. These are missioning liabilities to be recorded
called asset retirement obligations at the present value of the expendi-
and public oil and gas companies are tures expected to be required to settle
required to disclose the present value the obligation. The amount should
2306OFFkais
of their AROs annually in theirfigures
finan- reflect the best estimate that a com-
cial reporting. pany would pay to settle the obli-
Outside the US, legal requirements gation at the balance sheet date or
for decommissioning 10000 vary widely to transfer it to a third party at that
depending on the country’s regulato- time. These standards are similar but
ry regime and the contract terms that y = 0.0884x
not identical, with differences in ter-
figuresand production. R² =minology,
0.8994
Production (MMboe)

govern exploration reporting requirementsyand = 0.0215x

this two-part series, we show that a 1000
International accounting standards measurement. R² = 0.7809
similar relationship arises between
AROs and production, a much less 10000
obvious result but one with import-
ant implications. y =100
0.0884x
R² = 0.8994
Production (MMboe)

We begin with the regulatory defi- y = 0.0215x

nitions of AROs and provisions and 1000 R² = 0.7809
how AROs are estimated at the cor- 10
porate level. 1,000 10,000 100,000 1,000,000
100 Reserves (MMboe)
Asset retirement obligations
Whenever a well is drilled, equipment Integrated Integrated-
installed, or a pipeline placed in ser-
vice for oil and gas production, there 10
1,000
Figure 1. Production
10,000
vs. proved100,000
reserves for integrated companies and
1,000,000
is a legal obligation in the US for the
Aramco and the four Russian majors (“Integrated-”), year ending Dec. 31
operator to abandon the well when no Reserves (MMboe)
longer producing or useful for service, Figure 1. Production vs. proved reserves for integrated companies and those that
remove the equipment, decommission exclude Saudi Aramco and the four Integrated Integrated-
Russian majors (“Integrated-”), year ending
or remove the pipeline, and restore the December 31, 2021. 10000
y = 0.0884x
22 OFFSHORE
Figure 1. Production vs. proved reserves for integrated companies and
R² = 0.8994
www.offshore-mag.com |  MAY/JUNE 2023
those that exclu
Aramco and the four Russian majors (“Integrated-”), year ending Dec. 31, 2021.
n (MMboe)

1000

2305_06OFF22-25kais.indd 22 5/22/23 8:46 AM

100
2306OFFkais figures
Asset retirement obligations associ-
ated with the retirement and decommis-
sioning of tangible long-lived assets are
10000 required to be recognized under FASB
guidelines asy =a 0.0884x
liability in the period in
which a legalR²obligation
= 0.8994 is incurred
Production (MMboe)
cases where an asset has been sold but
the subsequent owner is no longer able
to fulfill its decommissioning obliga-
tions, for example due to bankruptcy.
Let’s look at how AROs are estimated.
and
profitable and reduce the discounted
cost of future decommissioning (com-
pared to P1 reserves calculations).
Discount and inflation rates
Assumptions on discount rate and

becomes determinable, with an offset- y = 0.0215x

Decommissioning cost inflation rate in ARO calculations are
1000 R² = 0.7809
ting increase in the carrying amount Decommissioning costs are estimat- company specific, whereas in the stan-
of the associated asset. The cost of the ed at a field (or project) basis by engi- dardized measure of proved reserves
tangible asset, including the initial rec- neers and project managers using calculations, discount rates are fixed
100 ognized ARO, is depleted such that the historical data, internal estimates and at 10%. The discount rates applied in
cost of the ARO is recognized over the market information. Typically, plug and ARO calculations consider the risk-
useful life of the asset. The fair value of abandonment well cost and structure free rate by term and currency, coun-
2306OFFkais
10
figures
the ARO is measured using expected removal cost are based on estimated try risk and a spread according to the
cash outflows associated with the ARO, duration and estimated rig spread rates, debt structure and cash flow proj-
1,000 10,000 100,000 1,000,000
discounted at a credit-adjusted risk-free lift boat rates (if offshore), and planned ect period. Companies that apply low
rate10000 Reserves
when the liability is initially (MMboe)abandonment logistics. Rig rates may
record- discount and inflation rates (1-3%/yr)
ed. Accretion expense is recognized over be based on a rolling three (or five) year are essentially valuing future decom-
time as the discounted Integrated
yliability
= 0.0884x Integrated-average observed in the marketplace for
is accret- missioning cost under current undis-
R² = 0.8994
Production (MMboe)

ed to its expected settlement value. similar types of rigs. Estimated dura- counted conditions, and this appears
y = 0.0215x
Figure 1. Production
1000 anvs.
Where provedexists
obligation reserves
for a newfor integrated companies
tion is normally based and
on
R² = 0.7809 those
historic that
jobs exclude Saudi assumption among
to be a common
Aramco and the four
facility Russian
or item of plant, majors
such as(“Integrated-”),
oil and adjusted year
for ending Dec.conditions.
site-specific 31, 2021. companies, while high discount and
natural gas production or transporta- inflation rates (4-8%/yr) assume sig-
tion facilities, this liability is recog- Timing nificantly lower present value to these
100
nized on construction or installation. The cessation of production is esti- costs. Companies do not have to report
10000
Similarly, where an obligation exists for mated by
y = 0.0884x decline curve methods and the discount/inflation rates applied,
a well, the liability is recognized when assumptions
R² = 0.8994 on commodity prices, but rates are sometimes disclosed.
1000 it is drilled. An obligation for decom- operating cost and economic limits,
Production (MMboe)

10
missioning may also crystalize
1,000 during
10,000 similar to the standardized 1,000,000
100,000 measure Commodity prices
the period of operation of a well, facil- of proved
Reserves (MMboe) reserves (STM) calculations. Commodity price assumptions impact
100 ity or item of plant through a change Companies that follow FASB guide- ARO cost directly and indirectly through
y = 0.0875x
in legislation or ythrough
= 0.086x a decision to
Integrated
lines apply
Integrated-
proved reserves P1 in their their impact on market cost assump-
R² = 0.9253 R² = 0.9043
terminate operations (e.g., additional timing assessment, while companies tions and timing effects. In STM compu-
10
or lesser work may be required when following IASB guidelines may apply 2P tations, commodity prices are assumed
Figure
wells1.or Production
infrastructure vs.are proved
preservedreserves for integrated
reserves (proved plus companies and those
probable), which thethat exclude
average of the Saudi
last reporting period,
Aramco
or and the
decommissioned four to Russian
a differentmajors
stan- (“Integrated-”),
will normally year
add ending
several Dec.
years to 31,
the 2021.
but in ARO estimation there are no spe-
1
dard);
1 an obligation
10 may also
100 arise in 1000time when 10000production is
100000 no longer cific requirements on what commodi-
Reserves (MMboe) ty prices should be applied. One would
10000 think similar price assumptions would
y = 0.0884x be applied in both ARO and STM calcu-
Onshore Integrated- Offshore R² = 0.8994 lations, but this is not required.
Production (MMboe)

1000
Figure 2. Production vs. proved reserves for independent onshore, independent offshore, and
Categorization
integrated companies excluding Saudi Aramco and the Russian majors (“Integrated-”),P year ending
ubl ic compa n ies a nd gover n-
Dec. 31, 2021. 100 y = 0.0875x ment-sponsored enterprises (GSEs)
y = 0.086x
R² = 0.9253 R² = 0.9043 are organized into integrated and
10 independent company groups, and
two subcategories for independents
are applied, primarily offshore and
1 primarily onshore independents.
1 10 100 1000 10000 100000 Primarily onshore/offshore compa-
Reserves (MMboe) nies have more than half of their pro-
1
Figure 2. Production vs. proved reserves for independent onshore, independent duction onshore/offshore.
Onshore excluding
offshore, and integrated companies Integrated- Offshore
Saudi Aramco and the Russian majors Most national oil companies (NOCs)
(“Integrated-”), year ending December 31, 2021. do not report ARO, STM or well data,
Figure 2. Production vs. proved reserves for independent onshore, independent offshore, and
MAY/JUNE 2023 |  www.offshore-mag.com OFFSHORE 23
integrated companies excluding Saudi Aramco and the Russian majors (“Integrated-”), year ending
Dec. 31, 2021.
2305_06OFF22-25kais.indd 23 5/22/23 8:46 AM
 DECOMMISIONING CONTINUED
but we include a few NOCs in our sample (e.g., Saudi Aramco,
and the four major Russian majors Gazprom, Lukoil, Novatek,
and Rosneft) even though they are of a different character
than public companies and GSEs, especially in terms of geo-
political drivers and the manner of decision making.
Saudi Aramco and the four Russian companies are all
integrated oil and gas companies, but having only a small
percentage of their production offshore (or in the case of
1000
Saudi Aramco, low-cost shallow water production), these
companies are more like independent onshore producers in
STM ($billion)
many small companies (5-50 MMboe) such as Callon, DNO,
Kosmos Energy, Spirit Energy, and Tullow Oil.
Most onshore companies sampled produce exclusively
onshore, but five companies also had offshore production
(ConocoPhillips, DNO, Hess, Marathon Oil, Occidental) rang-
ing between 15-40% total production.
Production vs. reserves
Reserves are the storehouse of production, and since pro-
duction operations are subject to the same engineering
y = 0.1387x

terms of their ARO requirements since AROs

100 do not include requirements
R² = 0.9845 in field development, similar business con-
downstream or midstream assets. Russian companies pro- straints (at least for public and private companies, and to a
y = 0.0967x
duce offshore in the Arctic, Far East and their Southern Seas large extent GSEs) and market conditions,
R² = 0.9154 it is not surpris-
10 1000 produc- 1000
(Azov, Black, Caspian), but as a percentage of total ing that production and reserves correlate across similar
y = 0.092x
tion, offshore regions contributes 5% or less per company industry groups. y = 0.1387x
R² =y0.9209
= 0.1387x

STM ($billion)
100 year-out, the basic oil and
STM ($billion)

(10% for Lukoil), and thus, these companies1 can100be catego- Year-in R² =gas
0.9845
business models in
R² = 0.9845
rized as primarily onshore producers. 10 capital
100 markets hold fast and true, and this is observed
1000 for they = 0.0967x
y = 0.0967x10000
Two integrated producer groups are identified: production-reserves
Production
10 relationships
(MMboe) shown in Figure
R² = 0.9154 1 for inte-R² = 0.9154
“Integrated” and “Integrated-” where the minus sign10 signi- grated companies, and in Figure 2 for offshore independents
y = 0.092x
fies the exclusion of Saudi Aramco and the four major Russian and onshore producers. y =With
0.092xproduction andR² = reserves varying
0.9209
Integrated- Onshore R² Offshore
= 0.9209
companies from the sample. Independent onshore companies more than1 three orders-of-magnitude, log-log plots are used.
1 10 100 barrels of oil equivalent1000
are denoted “Onshore”, and the “Onshore+” group signifies
10
For integrated companies, 0.022
100 companies excluding 1000 10000
Figure 3. STM vs production
the addition of Saudi Aramco, Gazprom, Lukoil, Novatek, and were produced in 2021 for every boe reserves in the ground. and the Russi
for integrated Production Saudi Aramco
(MMboe)
majors (“Integrated-”), and primarily onshore Production (MMboe) offshore independents, year endin
and primarily
Rosneft to the sample.
1000
Dec. 31, 2021. Integrated- Onshore Offshore
Integrated sample group Integrated- Onshore Offshore
y = 0.1387x
STM ($billion)

The integrated sample group includes 100 Figure 3. STM R² =vs production for integrated companies excluding Saudi
0.9845
19 integrated companies along with Figure 3. STM vs production for integrated
majors (“Integrated-”), andcompanies
primarily excluding
y = 0.0967x
onshore andSaudi Aramco
primarily and thin
offshore
several NOCs. Equinor and Petrobras majors 10 R² = 0.9154
(“Integrated-”), and primarily
Dec. 31, 2021. onshore and primarily offshore independents, ye
are almost exclusively offshore oper- Dec. 31, 2021. y = 0.092x
ators (>90% production derives from R² = 0.9209
offshore fields), whereas about two- 1
100000 10 100 1000 10000
thirds of Pemex and ONGC production
comes from offshore operations. All Production (MMboe)
y = 20.42xfor integrated companies excluding Saudi Aramco and the
Figure 3. STM vs production
other companies, except Saudi Aramco10000
and the four Russian companies, have Russian majors (“Integrated-”),
R² = 0.8573 and primarily
Integrated- onshoreOffshore
Onshore y = 12.821x
and primarily offshore
ARO ($million)

independents, year ending December

100000 31, 2021. R² = 0.9015
offshore production contributing 1000
between 20-60% total production. Figure 100000
3. STM vs production for integrated companies excluding Saudi Aramco and the Ru
majors
100 (“Integrated-”), and primarily onshoreR²and
10000 primarily offshore independents, year en
y = 20.42x
= 0.8573 y = 12.821x
Primarily onshore and Dec. 31,10000
2021. y = 20.42x
ARO ($million)

R² = 0.9015
offshore producers R²1000
= 0.8573 y = 6.3969x y = 12.821x
10
ARO ($million)

Twenty-three companies with at least R² = 0.6918 R² = 0.9015

1000
half of their production from offshore 100
were identified as primarily offshore 1
producers, and twenty-one compa- 1 100 10 100 1000 10000 y = 6.3969x
10
Production (MMboe) R² = 0.6918
nies comprised the primarily onshore
y = 6.3969x
producer group. 10
1 R² = 0.6918
The independents sampled contain 100000 Integrated- Offshore Onshore
1 10 100 1000 10000
a few large producers (>400 MMboe) 1 Production (MMboe)
10000 1 y = 20.42x
10 100 1000 Saudi Aramco 10000 and the Russi
such as ConocoPhillips, CNOOC,Figure
one 4. ARO vs. production for integrated
R² = 0.8573
companies excluding y = 12.821x
of China’s GSEs, and Occidental, many
majors, primarily offshore independents and primarily
Production onshoreOffshore
(MMboe)
Integrated- independents,
Onshoreyear ending Dec. 3
ARO ($million)

R² = 0.9015
moderate-sized companies (50-400 1000
2021. Figure 4. ARO vs. production for integrated companies excluding Saudi Aramco and the
MMboe) like Apache, EOG, Hess, Murphy, Russian majors, primarily offshore independents and primarily onshore independents,
FigureIntegrated-
4. ARO vs.Offshore
production Onshore
for integrated companies excluding Saudi
Santos, Wintershall, and Woodside, and year ending
100 December 31, 2021.
majors, primarily offshore independents and primarily onshore independ
24 OFFSHORE Figure 4. ARO vs. 2021.
production for integrated companies
y = 6.3969x excluding
www.offshore-mag.com Saudi
 |  MAY/JUNE 2023Aramco and th
10
majors, primarily offshore independents and primarily
R² = 0.6918 onshore independents, year ending
2021.
1
2305_06OFF22-25kais.indd 24 1 10 1002 1000 10000 5/22/23 8:46 AM
 DECOMMISIONING CONTINUED
If Saudi Aramco and the four Russian companies are exclud- of integrated companies which are more expensive than
ed from the integrated group (Integrated-), the integrated onshore AROs: $20.4/boe (offshore), $12.8/boe (integrated-),
companies produced on average about four times more per and $6.4/boe (onshore).
barrel reserves (0.088 boe/boe). One might not suspect that such strong fits would result,
Public companies produce more of their reserves com- nearly as strong as the STM-production models, but because
pared to NOCs because of their development strategy and AROs/provisions are estimated under broadly similar guide-
capital requirements, and because NOCs are agents of the lines to STM, perhaps the relations are not that surprising since
state subject to their government’s geopolitical aims which AROs are also model constructs like STM.
fall outside profitability criteria. Political factors play a large ARO and production behave in a broadly similar manner
role in NOC decision making hidden behind the veneer of as reserves and STM with production, and since this is
corporate strategy. neither intuitively obvious nor self-evident, an empirical
For primarily onshore and offshore producers, a very sim- demonstration is both convincing and satisfying.
ilar relationship to the Integrated- group results, with the The slopes of the lines in Figure 4 provide valuable
model coefficient being 0.088 and 0.086 boe/boe (Figure 2). quantitative information on the relative difference in ARO
For all three groups, the production-reserves relations are cost per boe production by geographic specialization.
essentially identical. Independent offshore producers realize the highest ARO
unit cost, $20.4/boe, and independent onshore producers
STM vs. production the lowest ARO unit cost, $6.4/boe. Integrated companies,
Production generates revenue and is valued using cash excluding Saudi Aramco and the four Russian majors, fall
flow analysis over the lifetime of assets and reported as in-between these limits at $12.8/boe. ●
the standardized measure of reserves. STM values, along
with production and oil prices, are the three most import- Mark J. Kaiser is Professor at the Center for Energy Studies, Louisiana State University,
ant factors determining a company’s market capitalization Baton Rouge, Louisiana.
and enterprise value.
STM is computed according to a common set of assump-
tions across the FASB universe, and therefore, like proved
reserves, the valuation of reserves and production are expect-
ed to be strongly correlated.
STM and production are linearly related for all compa-
ny groups (Figure 3), with offshore producers realizing the
highest boe value at $139/boe, followed by integrated com-
panies at $96.7/boe, and $92.0/boe for onshore independents.
The slopes of the lines depend on oil price, and will
increase/decrease year-by-year increasing with higher
(average) oil prices during the reporting period and decreas-
ing with lower (average) oil prices.
Only five offshore producers report STM data so caution
is warranted in interpreting the $139/boe statistic. Offshore
companies may or may not fall within the range described
by onshore and integrated companies, $92/boe and $96.7/boe.
The fact that the line segments are roughly parallel is
also no accident, but indicative of industry similarity, at
least in the way STM values are computed, determined via
cash flow models using a similar set of assumptions accord-
ing to regulatory guidelines.

ARO vs. production

ARO and production are linearly related for each compa-
ny group and the results follow expectation (Figure 4). All
the company groups are well populated (14 integrated-, 23
offshore, 21 onshore) and the results are considered reliable
and significant.
Offshore producer AROs are greater per boe than a
mixed onshore/offshore production mix characteristic

MAY/JUNE 2023 |  www.offshore-mag.com OFFSHORE 25

2108OFF_RMYoungCo.indd 1 5/6/21 1:45 PM

2305_06OFF22-25kais.indd 25 5/22/23 8:46 AM

 ESG FOCUS
Green hydrogen
platform enters
harsh environment
offshore test
phase
Production module expected to be
deployed to an open-sea test site soon
Jeremy Beckman, EDITOR-EUROPE
T
esting of the world’s first offshore green hydrogen pro-
duction pilot plant will shortly transfer from the har-
bour at Saint Nazaire, western France to an open-sea test
site, operated by French engineering school Centrale Nante.
Nantes-based Lhyfe, which produced the first hydro-
gen using power from onshore wind turbines in 2021, has
adapted its technology to operate on a floating platform,
named “Sealhyfe.” The production module, secured to a
Wavegem wave energy structure, began operating in the
harbour last September and has been producing up to 400
kg/d of hydrogen. On completion of this initial six-month
phase, the Sealhyfe platform will be relocated to the SEM-
REV test site in the Atlantic, 20 km from Le Croisic. Here it
will be powered by the Floatgen floating offshore wind tur-
bine (another demonstrator) that has been operating con-
tinuously since installation in 2018.
Lhfye, the project developer, collaborated with US com-
pany Plug Power Inc to adapt the latter’s electrolyzer to
operate on a floating platform. Other French offshore/
marine renewable energy specialists contributing to the
program are local shipyard/engineering group Chantiers
de L’Atlantique, responsible for structural strengthening
to withstand environmental stress, the ventilation sys-
tems and the electrical architecture; GEPS Techno, which
developed the Wavegem platform, also working with Eiffage
Energies Systèmes on integration of the production equip-
ment with the platform; Port of Saint-Nazaire, which facil-
itated assembly and testing; and Kraken Subsea Solutions,
26 OFFSHORE
2305_06OFF26-28_lhyfe.indd 26
The Sealhyfe
green hydrogen
production
platform at the
quayside in
Saint-Nazaire
last September.
COURTESY LHYFE
which assisted the design of the underwater connection
to the Floatgen wind turbine developed by a consortium
led by BW Ideol. This recently exceeded 22 GW of electric-
ity production since commissioning in late 2019, and has
operated at maximum capacity for more than 80% of the
subsequent period.
According to Lyhfe’s Technical Director Thomas Créach,
who has a background in offshore oil and gas and renew-
able energy (as do other members of the management team),
power used during the initial trial period in the harbour is
supplied locally via the French marine renewable energy
hub: the electrolyser has a 1-MW requirement and the
system auxiliaries 0.3 MW. The platform, with an overall
weight of 330 metric tons, measures 21 m long and 14 m
wide, with an above-water height of 6 m.
“All the tests that are meant to be performed offshore
(for a longer period of time) have been done during the
harbour tests phase,” Créach said. “The remaining part is
the impact of the waves and exposure to weather condi-
tions, which will be tested at SEM-REV. The system has
www.offshore-mag.com |  MAY/JUNE 2023
5/22/23 8:46 AM
 been custom-designed for offshore applications, so it is
already compliant and planned for this deployment, by
design. However, some of the equipment could be modi-
fied following the port tests in order to increase its reliabil-
ity and particularly its mechanical resistance in offshore
conditions. The strategy of 100% autonomous control on
a system powered by intermittent energy will also be the
second offshore challenge.”
“Through this pilot site, Lhyfe will produce the first kilo-
grams of renewable green hydrogen at quay and then at sea,
operating automatically, in the most extreme conditions.
The company has voluntarily set the bar high by install-
ing its production unit on a floating platform, connect-
ed to a floating wind turbine. The Sealhyfe platform must
therefore meet several major and unprecedented challeng-
es associated with hydrogen production at sea, including
converting the electrical voltage from the floating tur-
bine; pumping, de-salinating and purifying seawater; and
deploying electrolysis to break down water molecules in
order to produce green hydrogen. Other goals of the sea
trial are managing the system’s impact on the platform’s
motions – listing, swinging movements, accelerations –
demonstrating that the system can withstanding prema-
ture ageing of components caused by corrosion, impacts,
and temperature variations. And being able to operate fully
The production module, secured to a Wavegem wave energy structure, has been
producing up to 400 kg/d of hydrogen since last September. COURTESY LHYFE
MAY/JUNE 2023 |  www.offshore-mag.com
2305_06OFF26-28_lhyfe.indd 27
automatically without interventions, except during sched-
uled maintenance periods.
“Since the company’s early days, Lhyfe has been con-
vinced of the central role offshore has to play in large-scale
renewable green hydrogen production. In 2021, the compa-
ny built its Lhyfe Pays de la Loire plant in Bouin, western
France Vendée to prove the feasibility of producing renew-
able green hydrogen from a wind farm (and managing its
intermittency, and doing so at a good price). For more than a
year now, that plant has been delivering its hydrogen to the
multi-energy filling station in La Roche-sur-Yon, and to the
Lidl logistics center where there are 98 hydrogen-powered
forklifts. With Sealhyfe, Lhyfe wants to demonstrate that
producing renewable green hydrogen at sea is possible and
define the optimizations required for future, larger-scale
systems. That’s why the company chose the most extreme
conditions for its pilot (floating platform plus floating wind
turbine). This has never been done and it includes a series
of major and unprecedented challenges – but as a world
premiere, that helps the market to take a step forward.”
The program has the support of the Pays de la Loire
region, the Pôle Mer Bretagne Atlantique cluster, and
France’s strategic committee (CSF) for marine industry oper-
ators. Other aims are to identify port areas and facilities that
could accommodate different prototypes, and the industri-
al requirements and port infrastructure
needed for assembling and integrating
the equipment that would produce off-
shore hydrogen on a mass scale.
As for Lyhfe’s own green hydrogen
ambitions, by 2030-2035 offshore could
represent an additional installed capac-
ity of around 3 GW for the company,
Créach said. “Our next offshore project
will be to develop, build and operate a
larger production unit to demonstrate
the technical and financial viability
of producing renewable hydrogen off-
shore and transporting it by pipeline
to serve customers.” Various offshore
deployment solutions are under consid-
eration, he added, including renewable
hydrogen production platforms either
on existing fixed structures or on fixed
or floating foundations, “For each one,
specific partners will be involved, some
of them already contributors to the
Sealhyfe development. However, Lhyfe
remains the architect of the global solu-
tion and the operator of these systems in
order to offer hydrogen to offtakers.” ●
OFFSHORE 27
5/22/23 8:46 AM
 /////////

/////MOVING
///// FORWARD
OCT 23 – 25, 2023
Moody Gardens Hotel and Convention Center
Galveston, TX // offshore-event.com

OWNED & PRODUCED BY PRESENTED BY SUPPORTED BY

2305_06OFF26-28_lhyfe.indd
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PM
 SPECIAL REPORT

REMOTE INSPECTIONS
& OPERATIONS
An overview of the
latest trends in drones,
robotics, AUVs and
remote-controlled
operations

2305_06OFF29-45_RO SR.indd 29 5/22/23 8:46 AM

 REMOTE OPS SPECIAL REPORT
REPORT: Overview
The rise of remote operations in the
offshore energy industry
Offshore operations are being revolutionized with
remote technologies
TROND NOTLAND, Remota AS
I
n the age of digital transformation, remote operations have
become increasingly prevalent in the offshore energy industry.
There has been a rise of remote technologies, such as unmanned
surface vessels, drones, robotics, remotely operated vehicles
(ROVs) and autonomous underwater vehicles (AUVs), that have
had an impact on offshore operations. From reducing travel costs
to improving safety and efficiency, remote technologies have rev-
olutionized the industry, making it more sustainable, diverse and
resilient. The world of remote operations has the potential to shape
the future of the offshore energy industry.
Remota has remote operations centers in Norway that operate
different offshore applications and subsea ROVs. COURTESY REMOTA
The industry has always been associated with complex and
hazardous operations that require a lot of labor, time and resourc-
es. But with the recent push toward sustainability and cost effi-
ciency, the industry is turning to remote operations as part of
the solution to these challenges. Remote operations refer to the
use of unstaffed or lightly staffed vessels or platforms to con-
duct tasks offshore, from inspections and maintenance to drill-
ing and production.
Benefits of remote ops
One of the main benefits of remote operations is reduced travel
costs. Offshore operations require a lot of travel, and this can
be a significant cost for companies. By using remote operations,
30 OFFSHORE
2305_06OFF29-45_RO SR.indd 30
companies can reduce the need for travel and save money on
transportation, lodging and meals. The workforce can spend more
time with their families and reduce the environmental impact fre-
quent travel results in.
Safety is increased by moving personnel away from the poten-
tially harsh environment offshore. The offshore energy industry
is known for its harsh and dynamic working environment, and
remote operations can reduce the risk of accidents and injuries.
By using unstaffed or lightly staffed platforms, workers can avoid
exposure to hazardous materials and dangerous environments.
This can improve safety and reduces insurance costs and liability.
Modernizing inspections with remote operations can also
improve the accuracy and speed of them. By using drones,
advanced cameras and sensors, inspections can be conducted
with greater precision and efficiency. This reduces the need for
physical presence offshore, which can be costly and time-con-
suming. With remote inspections, issues can be identified and
addressed quickly, reducing downtime and improving overall
productivity.
Finally, remote operations can contribute to sustainability
efforts. By reducing travel, companies can lower their overall
carbon footprint and minimize their impact on the environment.
Remote operations also allow for better resource utilization, as
companies can optimize their operations and reduce waste. This
contributes to a more sustainable and efficient industry overall.
Challenges
While there are many benefits with remote operations, there are
several challenges that must be addressed. With remote opera-
tions, the activities are often located far from the central office
and may have limited access to communication channels. This
can make it difficult to coordinate tasks and ensure that everyone
is on the same page. Companies must invest in robust communi-
cation systems to ensure that workers can communicate effec-
tively and efficiently.
High latency can be a significant challenge for remote opera-
tions, particularly when using geo-stationary satellite systems for
communication. Latency refers to the delay between when data
are sent and received, and with satellite systems, the distance
that the data must travel can result in significant delays. This is a
physical limitation of how fast the signal travels.
While low-orbit satellite systems offer many advantages, such
as global coverage and lower cost compared to traditional satellite
systems, they can also suffer from high latency. This delay can be
especially problematic in remote operations, where split-second
decision-making is often required.
www.offshore-mag.com |  MAY/JUNE 2023
5/22/23 8:46 AM
 One solution to this challenge is to use 4G and 5G networks off-
shore. These networks can provide faster and more reliable com-
munication than satellite systems, with lower latency and higher
bandwidth. Additionally, they can offer more security and priva-
cy than satellite systems, as the data are transmitted through a
private network.
There are, however, challenges to implementing 4G/5G net-
works offshore. These networks require significant infrastructure,
such as towers and antennas, and may be affected by the harsh
offshore environment, such as storms or sea spray. Additionally,
the initial investment and ongoing maintenance costs can be high,
which may be a barrier for some companies.
Despite these challenges, the benefits of 4G/5G networks for
remote operations are significant. They can improve communica-
tion and decision-making speed, increase safety and efficiency,
and reduce costs compared to satellite systems. As the offshore
energy industry continues to embrace digitalization and remote
operations, these networks are likely to become an increasingly
important part of the communication infrastructure.
Communication costs
The costs of both satellite and 4G/5G networks can be high, which
can be a barrier to adoption for some companies. For these com-
munication technologies to become more widespread in the
offshore industry, it will be important to reduce their cost and
increase their accessibility.
One potential solution to reduce the cost of satellite systems is to
utilize shared networks, where multiple companies share the same
satellite system and the associated costs. This can help to reduce
the upfront investment required for individual companies and make
satellite communication more accessible for smaller companies.
Similarly, the cost of 4G and 5G networks can be reduced through
innovation and increased competition in the market. As more com-
panies adopt these networks for remote operations, there may be
economies of scale that result in reduced costs for everyone.
Overall, while the cost of these communication technologies
is a challenge, it is important to continue exploring and investing
in them, as they offer significant benefits for the offshore indus-
try in terms of safety, efficiency and environmental sustainability.
Cybersecurity
Another challenge of remote operations is cybersecurity. With
unstaffed or lightly staffed vessels and platforms, there is a risk
of cyberattacks that can compromise sensitive information and
operations. Companies must implement an effective cybersecu-
rity program to protects against these risks, including encryption,
firewalls and regular security audits as safety measures.
The implementation of remote technologies, such as drones,
robotics and AUVs, in offshore operations has significantly
reduced the risk of injury and improved overall safety. However,
it has also introduced new risks to cybersecurity. Remote oper-
ations are often controlled by digital systems, which can be vul-
nerable to cyberattacks such as hacking, phishing and malware.
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2305_06OFF29-45_RO SR.indd 31
One major concern is the potential for hackers to gain unau-
thorized access to the remote system and cause damage or
disruption. Cyberattacks could lead to the loss of critical data,
operational downtime or even physical damage to equipment.
These threats pose financial risks and could also jeopardize the
safety of personnel and the environment.
Another risk is the possibility of insider threats, where employ-
ees or contractors with access to the remote system may intention-
ally or unintentionally cause harm. This could include tampering
with data or equipment, stealing confidential information or sab-
otaging the system.
Furthermore, the use of personal devices and unsecured net-
works could increase the risk of cyberattacks. If remote workers
use their personal devices to access the remote system, they could
introduce vulnerabilities in the system’s security. Preventing unse-
cured networks, such as public Wi-Fi, is also important to prevent
cybercriminals access to the remote system.
To mitigate these risks, companies need to implement robust
cybersecurity measures. This includes conducting regular cyber-
security assessments, monitoring system logs for suspicious activ-
ities and implementing access controls to limit who can access
the remote system. Companies should also ensure that all remote
workers are trained on cybersecurity best practices, such as using
strong passwords and avoiding public Wi-Fi. A layered approach
where everyone is trained and equipped to prevent and recog-
nize cyber incidents is key.
In summary, while remote technologies have brought numer-
ous benefits to offshore operations, they have also introduced new
cybersecurity risks. Companies must prioritize cybersecurity to
ensure the safety of personnel and equipment, protect confiden-
tial information and prevent operational downtime. This is a sub-
ject that also garner more focus in traditional maritime operations.
Workforce
Remote operations also require specialized training for workers.
With unstaffed or lightly staffed vessels or platforms, workers must
be trained to operate and maintain the equipment properly. This
requires specialized skills and knowledge, which can be difficult
to acquire and maintain. Companies must invest in training pro-
grams to ensure that workers are properly trained and can per-
form their duties safely and efficiently.
Remote operations may face resistance from workers and
unions that are concerned about job security. By reducing the
need for physical presence offshore, remote operations may lead
to job losses or reduced work hours for some workers. Companies
must work with workers and unions to ensure that they under-
stand the benefits of remote operations and are prepared for any
changes that may occur. ●
Trond Notland is the chief product officer with Norway-based Remota AS, which
offers remote operations and semi-autonomous maritime services to the offshore and
marine industries by utilizing remote operating centers. Read an extended version of
this article at offshore-mag.com/14292805.
OFFSHORE 31
5/22/23 8:46 AM
 REMOTE OPS SPECIAL REPORT: Drones

Autonomous drone technology increasing

efficiencies of offshore platform inspections
Autonomous drones are lowering risk while
increasing data quality and efficiency for complex
offshore platform inspections
STERLING HAYS, Skydio

T
he oil and gas industry is under pressure to deliver value in a
turbulent economic environment. Digital strategies can provide
distinct advantages, and for years, energy executives have expect-
ed drones to play a significant role in operations.
Progress has been seen, but mass adoption of drone technolo-
gy for offshore platform inspections hasn’t happened yet. Artificial
intelligence (AI) is rapidly changing the paradigm with reduced
costs, increased efficiency and improved safety. Skydio, the largest
US drone manufacturer, is partnering with industry leaders such as
Shell and contractor CAN USA to de-risk, demonstrate and prog-
ress the inspection capabilities available for offshore operations.

Empowering human operators

One of the most significant barriers to adoption has been lack of
accessibility. Traditional drones simply cannot efficiently oper-
ate in offshore environments because they require expert pilots
to manually fly with limited space and visibility in unpredictable
weather conditions. However, AI-powered autonomous drones
use advanced computer vision to automatically navigate com-
plex environments, avoid obstacles and adapt to changing envi-
ronments in real time. Easy to operate and hard to crash, existing
workforces can fly them with just a few hours of training. New
innovations in drone docking stations even allow for fully automat-
ed remote inspection workflows, running scheduled “missions”
without the need for a dedicated individual to pilot the device.
The physical locations of offshore platforms make for another
major accessibility hurdle that AI clears with ease. When flight is
based on AI computer vision rather than GPS, autonomous drones
aren’t restricted to satellite range, making for seamless naviga-
tion in GPS-denied environments, such as under metal structures.
Reducing downtime
Downtime leads to lost revenue. Rapid and accurate inspections
are paramount to diagnosing damage before it can lead to expen-
sive downtime. Autonomous drones enable always-on inspection
without the need to shut down, navigating tight spaces and flying
at heights hazardous and typically inaccessible to humans with-
out a time-consuming scaffolding setup. They generate compre-
hensive, repeatable, consistent datasets and 3D maps, enabling
An autonomous drone inspects an offshore platform and
captures thousands of images per day to generate
comprehensive, repeatable, consistent inspection datasets.
COURTESY SKYDIO, SHELL, CAN USA
inspectors to identify potential issues that may not be visible to
the naked eye before they become more serious and costly to
repair. High-quality data help optimize maintenance schedules,
travel and logistics, further cutting costs and carbon footprint.
In a 2021 report, “Necessity is the Mother of Re(Invention) in Oil
& Gas,” Accenture cites connectivity as a key competitive advan-
tage but identifies significant gaps—only 15% of industry leaders
agree their remote operations are highly connected and moni-
tored in real time. Similarly, lack of emphasis on cybersecurity is
a “serious blind spot.” When evaluating drone manufacturers, look
for SOC 2 Type II Certification, which validates an internal con-
trol environment focused on protecting the security and privacy
of customer information, and National Defense Authorization Act
(NDAA) compliance, indicating the US federal government has
confirmed the drone hardware is secure and critical components
do not come from blacklisted countries.
Continuing to realize the efficiency, safety, cost savings and poten-
tial that drones bring to offshore platform inspection requires ongo-
ing collaboration across industry, regulatory and manufacturers. ●
Sterling Hays is solutions engineer with Skydio’s Public Safety & Enterprise division.

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 REMOTE OPS SPECIAL REPORT: Robotics

Transforming offshore operations:

The rise of autonomous inspection robots
Autonomous inspection robots have the potential
to transform offshore asset monitoring
DR. MARCO HUTTER, ETH Zurich and ANYbotics; and
DR. PÉTER FANKHAUSER, ANYbotics

A
dvanced robotic technology is revolutionizing offshore facility
inspections, making them safer, more efficient and cost-ef-
fective. This article delves into the capabilities of autonomous
inspection robots, their impact on the oil and gas industry, and
their potential to transform offshore asset monitoring as well
as reviews various types of robots and the future prospects of
fully autonomous, unmanned offshore facilities operated by
robotic workers.

Automating offshore
facility inspections
The wide variety of offshore oil and gas
platforms, such as fixed platforms, com-
pliant tower platforms, jackup platforms
and floating production systems, share
common operational challenges arising
from potentially explosive atmospheres,
complex infrastructure, extreme weather
conditions and remote locations.
Operators constantly seek real-time
data from their assets to monitor asset
health and take timely preventive action.
Today fixed installed sensors already
monitor critical process aspects like tem-
perature, pressure and flow rates. Additionally, operators per-
form regular inspection rounds, typically within each work shift,
to look for signs of damage or wear on equipment. However, the
logistical challenges and expenses of accessing offshore plat-
forms, as well as the importance of personnel safety, complicate
these inspections.
To mitigate safety risks and collect better data than manual
inspections, oil and gas companies are increasingly adopting
autonomous ground robots for routine inspection work. The latest
generation of autonomous inspection robots can traverse oil and
gas facilities designed for humans and collect data in complex
environments without human intervention.
Inspection robots automating jobs
Autonomous inspection robots provide significant value to off-
shore operations by performing inspection tasks autonomously,
ANYmal X, the world’s only Ex-proof
legged inspection robot, performs
inspection missions on an offshore
platform. COURTESY PETRONAS
delivering frequent, accurate and reliable
results. High-quality sensors, extreme
mobility and AI-based inspection intelli-
gence allow these robots to perceive and
analyze beyond human capabilities and
be easily deployed, even in older brown-
field facilities. Inspection robots perform continuous monitoring
with hundreds of inspection points per deployment and execute
multiple precise tasks simultaneously. Inspections can be sched-
uled as routine, relevance-based monitoring, or on-demand, con-
ditional or ad hoc inspections.
Specific offshore inspection jobs automated by these
robots include:
• Visual and acoustic monitoring of assets in operation to detect
equipment failures early and take preventive maintenance
actions to avoid costly defects and downtime;
• Identifying thermal anomalies to gain previously undetect-
ed insights into equipment health through thermal trend
analyses; and
• Real-time monitoring and localization of the presence and
concentration of flammable and toxic gasses to enable early
operator action.

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 REMOTE OPS SPECIAL REPORT: Robotics
These capabilities allow inspection robots to support and com-
plement humans in generating alerts, making critical decisions,
responding early to detected anomalies and automating end-to-
end workflows and preventive maintenance.
Challenging offshore inspections
Offshore inspections are challenging for both robots and humans
due to complex terrain, corrosive atmospheres, high winds, high
seas, and potentially dangerous or unpredictable situations.
Areas handling flammable or explosive gasses or liquids are
Ex-rated, requiring Ex-certified, intrinsically safe equipment,
such as ATEX or IECEx certification. These areas include zones
(Zone 0, Zone 1 or Zone 2) depending on the occurrence and
duration of explosive atmospheres. Zone 1 certification is nec-
essary to bring inspection robots close to process areas where
they provide the greatest value. While the industry has devel-
oped standards for heavy machinery, it remains challenging for
agile robots to comply.
Several robots on the market are certified for use in hazard-
ous environments, but their capabilities vary depending on their
locomotion mechanisms. Robots with wheels or tracks, such as
the ExR-2 from ExRobotics, are well-suited for flat terrain but may
struggle in more complex environments. Some tracked systems,
like the Inspector from Taurob and EX ROVR from Mitsubishi Heavy
Industries, are equipped with “flippers” that allow them to traverse
more complex terrain, including high steps.
However, larger robots may have difficulty navigating narrow
environments. To address this, some robots, such as the ANYmal
X from ANYbotics, use legs to provide maximum flexibility. These
robots can negotiate steep stairs, step over piping and navigate
narrow environments due to their ability to move sideways. When
selecting a robot, it is important to consider the specific needs
of the application, as the choice of locomotion mechanism can
significantly impact its performance in different environments.
Transforming offshore asset monitoring
The oil and gas industry is a hotbed of innovation driven by the
need for efficient production, safety, cost control and improving
the long-term sustainability of operations. Technological advanc-
es in autonomy, mobility and inspection intelligence have made
34 OFFSHORE
2305_06OFF29-45_RO SR.indd 34
Four-legged robots can climb
stairs and easily negotiate steps,
pipes and other obstacles.
COURTESY ANYBOTICS
inspection robots increasingly
attractive for offshore use.
Operators such as Shell, Petro-
nas and bp have been working
with robots for several years, and
the adoption of Ex-proof inspec-
tion robots has recently gained
momentum among many offshore operators. Autonomous, legged
Ex-proof inspection robots are transforming offshore monitoring,
with operators increasingly incorporating these robotic solutions
into their inspection and workforce planning.
Autonomous inspection robots not only reduce health and
safety risks but also help mitigate an increasing workforce
shortage, one of the main reasons for the accelerated adop-
tion of robotic solutions. Additionally, operators benefit from
reduced manual labor, fewer people in hazardous environments
and decreased unplanned downtimes. Autonomous inspec-
tion robots contribute to safer, greener and more efficient off-
shore operations.
Future development
The use of autonomous mobile inspection robots represents a
paradigm shift and fundamentally changes the perception of the
constant need for the physical presence of human workers. As
a result, fleets of robotic workers will increasingly be remotely
managed by human supervisors. The accelerated use of inspec-
tion robots in the offshore oil and gas industry is a positive trend
expected to continue in the coming years. With the continued
development of AI-driven capabilities, robots are a key enabler
in the acceleration of digitization and automation.
In addition to inspection, robotic manipulation is a rapidly evolv-
ing field involving the development of robots that can manipu-
late objects. In the oil and gas industry, manipulation will allow
robots to handle equipment, take samples and perform simple
maintenance tasks.
The concept of unmanned offshore oil and gas facilities specif-
ically built with robots in mind has gained traction in recent years,
and interest in developing such facilities is growing. These facilities
would be operated entirely by autonomous systems and robots,
requiring little or no human intervention and reducing overhead in
living quarters, HVAC, desalination and safety requirements. The
potential benefits of safety, efficiency and cost reduction make this
concept a promising area for future development. ●
Dr. Marco Hutter is a professor at ETH Zurich, Branco Weiss Fellow, co-founder and
vice chairman of ANYbotics.
Dr. Péter Fankhauser is co-founder and CEO of the Swiss robotics company ANYbotics.
www.offshore-mag.com |  MAY/JUNE 2023
5/22/23 8:46 AM
 REMOTE OPS SPECIAL REPORT: AUV/ROV
Executive insights: Remote operations are
evolving with ROV/AUV advancements
Oceaneering executive details the challenges and
solutions of remote operations
ARIANA HURTADO, Editor and Director of Special Reports
R
emote operations is a big area for Oceaneering, with estab-
lished facilities for remote operations in Norway, Aberdeen
and along the Gulf of Mexico (GoM). Oceaneering has carried out
remote commissioning, remote pipeline pigging, remote survey
and rig positioning, and remote inspections.
Earl Childress, Oceaneering’s senior vice president and chief
commercial officer, shared insights with Offshore about the evo-
lution of remote operations, the disadvantages and challenges
of remote ops, remote commissioning, R&D, automation capa-
bilities, offshore wind remote ops, and the state of the offshore
energy industry.
“Remote operations are continuously evolving to address chal-
lenges in the offshore energy industry by increasing efficiency,
reducing costs, minimizing risks and lowering the environmental
impact of operations,” he said. “Technological advancements play
a crucial role in these improvements. Some notable recent advanc- While there are numerous advantages of remote operations for
es include improved connectivity and communication, such as
high-speed networks (4G LTE and satellite connections), which
have enabled better communication between onshore and off-
shore personnel, allowing for smoother remote piloting and real-
time collaboration.”
The illustration showcases Oceaneering’s remote operations capabilities. COURTESY OCEANEERING
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2305_06OFF29-45_RO SR.indd 35
He listed several other examples of technology advances,
including onshore remote operations centers, which are dedi-
cated facilities that act as operational hubs for remote piloting
activities and that he said are enhancing efficiency and collabo-
ration between teams.
Resident robotic systems, such as Oceaneering’s Liberty E-ROV,
reduce the need for support vessels and offshore personnel,
resulting in cost savings and reduced carbon emissions, he added.
“In the asset inspection and integrity management space, the
ability to collect data with drones, quadbots and sensors (for
image, rotating information, gas, temperature, material deterio-
ration) is improving with great speed,” Childress said, offering
another example of a notable technology advancement. “These
things, combined with improvements in software and the use of
artificial intelligence [AI] and machine learning to process data,
are delivering impressive results, such as the integration of new
technologies tested onshore for subsea like stress concentration
tomography in ROVs.
Challenges
offshore oil and gas projects, there are also some challenges that
offshore oil and gas operators face.
Childress listed latency and network reliability being one of the
disadvantages. “Remote operations depend on reliable and low-la-
tency communication networks. In areas with poor connectivi-
ty or high latency, remote operations
can face difficulties,” he explained.
“Oceaneering addresses this chal-
lenge by working with operators to
provide the required communication
networks, using LTE, geosynchronous
satellites or low earth orbit satellites, to
ensure reliable connectivity.”
He also listed IT security as a
challenge. “Secure communication
between onshore and offshore per-
sonnel is crucial to protect sensitive
data and maintain operational integ-
rity,” he said. “Oceaneering has devel-
oped robust IT security measures and
fail-safe systems to overcome poten-
tial cybersecurity threats and maintain
secure communication channels.”
Lastly, Childress said a resistance
to change can be another setback.
OFFSHORE 35
5/22/23 8:46 AM
 REMOTE OPS SPECIAL REPORT: AUV/ROV

“Traditional offshore operations might be hesitant to adopt remote is a significant challenge,” he said. “Solutions involve staying
piloting due to concerns about reliability, safety and operation- updated on the latest regulatory updates, collaborating with local
al efficiency,” he said. “Oceaneering works to build confidence in authorities and implementing technology that adheres to region-
its remote piloting capabilities by showcasing our extensive track al requirements.”
record, redundancies and offshore control measures.” Additionally, offshore oil and gas operations in regions like the
Offshore oil and gas operators face a variety of remote opera- Arctic, the North Sea and the GoM face extreme weather con-
tions challenges that can vary by region and environment. Accord- ditions, which can hinder remote operations. “Solutions include
ing to Childress, some of the most common challenges include developing specialized equipment and tools designed to with-
infrastructure limitations, regulatory compliance and harsh envi- stand these conditions, implementing real-time monitoring sys-
ronments, and other issues may include integration with existing tems and using advanced analytics to optimize operations and
methodologies and adoption of new techniques. minimize downtime,” Childress said.
“Today, the crews conducting remote operations have prior
experience working in a physical offshore environment. In the Remote commissioning ROV
future, we may see crews that have never been offshore or only The company’s Liberty E-ROV resident vehicle has performed
have limited experience,” he suggested. “This could introduce a numerous subsea production systems commissioning tasks as
future operational risk where the crews become more disconnect- part of its regular operations.
ed from the operations. Therefore, new training programs will be “Liberty performs commissioning by remote operations without
needed to address the adoption of new technology and the new needing the installation vessel to stay on station for the full com-
way of working.” missioning operation,” Childress explained. “Liberty has its own
Regarding infrastructure limitations, remote operations requirebattery pack, subsea garage and communication buoy allowing
reliable communication networks, which may be limited in cer- it to stay subsea for longer without support.”
tain areas. “Solutions include investing in communication infra- It also helps with decarbonization strategies. A conventional
structure, such as satellites and subsea communication cables, to ROV will emit 644 metric ton of CO2 on an average 14-day inspec-
ensure stable connectivity regardless of location,” Childress said.
tion, maintenance and repair campaign, but the Liberty E-ROV by
As for regulatory compliance, different regions have specif- contrast will emit 178 metric ton of CO2 over the same time period,
ic regulatory requirements for offshore operations, including saving approximately 466 metric ton of CO2.
remote operations. “Ensuring compliance with these regulations As of April 20, the Liberty E-ROV has completed 163 missions
and almost 14,000 operational hours. It has
eliminated 10,000 support vessel hours or
roughly 400 vessel days, thereby eliminating
19,000 tons of CO2 emissions by eliminating the
need for the support vessel to stay on station
while the ROV works. By bringing workers back
to shore, Oceaneering’s remote operations
have eliminated 240 personnel crew changes
(12-hour shifts over 14-day trips).
Liberty also assists with decommissioning
tasks, and the resident vehicle recently con-
ducted a remote subsea pipeline isolation for
a major North Sea operator.
“Traditional pipeline isolation programs call
for an onsite support vessel for most of the
work,” Childress said. “However, Liberty does
not require one to stay on station. For this oper-
ation, a remotely controlled high-pressure, pig-
gable isolation tool was selected, which allows
pipeline isolation without requiring the system
to be fully evacuated. Liberty tracked and mon-
itored the pigging tool’s position as it navigat-
ed the pipeline.”
Oceaneering has an onshore remote operations center in Stavanger, Norway. Operations were monitored from an
COURTESY OCEANEERING Oceaneering onshore remote operation center

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 in Stavanger, Norway, and the operator was able to save eight
vessel days, reducing carbon footprint and realizing cost savings.
On the technology horizon
“Oceaneering is continuously working on developing innovative
ROV and subsea robotics technologies to enhance their capabil-
ities and efficiency,” Childress said. “One such project is the Vir-
tual Command Center (VCC), which provides a centralized and
real-time digital twin for all Oceaneering’s assets related to remote
operations.”
The technology horizon for Oceaneering, he continued, also
includes advancements in AUVs, AI and machine learning as well
as augmented reality (AR) and virtual reality (VR). For instance,
Oceaneering is in the R&D stage for advanced AUVs capable
of operating independently or in tandem with ROVs to per-
form complex subsea tasks, such as pipeline inspections and
seabed mapping.
“Leveraging AI and machine learning technologies, Oceaneering
aims to improve the efficiency and reliability of ROVs and subsea
robotics, enabling them to perform tasks with increased precision
and accuracy,” he added. “Integrating AR and VR technologies
into the VCC and other remote operations systems can provide
operators with immersive and interactive experiences, facilitat-
ing better collaboration, decision-making and problem-solving.”
Automation
So, how is electrification and digitalization enabling automation
capabilities and enhancing remote operations workflows?
Childress said, “Electrification and digitalization are driving
forces behind the enhancement of automation capabilities and
remote operations workflows in the offshore energy industry.
These advancements enable subsea resident vehicles, includ-
ing fully remote-controlled or autonomous vehicles, to perform
tasks more efficiently, accurately and with reduced environ-
mental impact.”
He named several ways that electrification and digitalization
contribute to these improvements:
• Enhanced communication: Digitalization allows for high-speed,
real-time communication between onshore control centers and
subsea resident vehicles. This improved connectivity enables
remote operators to monitor, control and receive feedback
from underwater equipment more effectively, reducing the
need for onsite personnel and allowing for more informed
decision-making.
• Improved data collection and analysis: Digital sensors on subsea
resident vehicles collect vast amounts of data during operations.
Advanced data analytics and machine learning algorithms can
then process these data to identify patterns, trends and anom-
alies, providing valuable insights for optimizing operations and
maintenance schedules.
• Increased energy efficiency: Electrification of subsea equipment
reduces reliance on hydraulic systems and enables the use of
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Illustration of Liberty E-ROV launch and recovery system
COURTESY OCEANEERING
more energy-efficient electric actuators. This results in lower
energy consumption, reduced operational costs and minimized
environmental impact.
• Greater automation: Digitalization enables the development of
advanced control systems that can automate many aspects of
subsea operations. Autonomous subsea vehicles can perform
tasks independently, while semi-autonomous vehicles can be
controlled remotely with minimal human intervention, increas-
ing efficiency and reducing the risk of human error.
Offshore wind remote ops
Oceaneering released its high-speed, high-current capable Isurus
ROV in 2019 with offshore wind and renewables projects in mind,
and the fifth and sixth Isurus vehicles were released in 2022.
“Based on our proven Magnum ROV, the Isurus features a
more hydrodynamic design allowing it to maintain position in
challenging weather conditions, extending operating windows,”
Childress said.
The company has worked in Europe and Asia for renewables
customers since 2021.
CEO Rod Larson said in October 2022 that the industry is in an
“offshore resurgence” and Childress added to this idea, sharing
his own perspective on the state of the offshore energy industry.
“I believe that there is a durable upcycle in traditional energy
with growing opportunities in renewable sources of energy and
carbon capture,” he said. “We are exploring additional opportuni-
ties through a new strategic agreement, announced in late Jan-
uary this year, with Kontiki Winds, a Havram company, to jointly
pursue the application of floating offshore wind for remote micro-
grid renewable power generation to electrify offshore assets
such as oil and gas production as well as other small scale power
generation opportunities.” ●
OFFSHORE 37
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 REMOTE OPS SPECIAL REPORT: AUV/ROV
Advanced ROV vision
systems are the future of
subsea operations
New technology employs edge
computing to capture high-
quality stills images in tandem
with low-latency video
CHRIS GILSON and PATRICIA
SESTARI, Voyis Imaging
S
ubsea inspection operations are an
intricate task that have historical-
ly required specialized knowledge and
complex technology. ROVs are a critical
tool for underwater exploration, inspec-
tion and maintenance, but their effective-
ness is driven by the quality of their vision
systems. Current ROV cameras prioritize
vehicle piloting and situational awareness,
which are the most immediate needs of
the operators. However, when both pilot-
ing and inspection confidence can be
significantly enhanced with 3D informa-
tion, the industry should seek to adopt
new approaches.
Voyis, a company specializing in under-
water optical imaging and 3D modeling,
has advanced ROV vision systems with
new computer vision technology. The goal
was to create a vision platform that could
capture both low-latency enhanced video
for piloting while simultaneously captur-
ing high-quality stills images for real-
time 3D modeling. The company sought a
solution that could generate incredible 3D
reconstructions in real time without spe-
cialized technicians or expensive third-par-
ty processing.
By leveraging edge computing, Voyis’
Discovery Vision System streams both
crisp 4K piloting video and 3D point cloud
data for complete situational awareness,
addressing the compromise between
piloting cameras and inspection camer-
as. Piloting cameras prioritize low-latency
38 OFFSHORE
2305_06OFF29-45_RO SR.indd 38
video, at the expense of the image data
required for 3D modeling. Conversely,
inspection cameras prioritize image data The Voyis Discovery Vision System
at the expense of piloting effectiveness, inspects a large underwater structure.
limited by their higher latency and a small- COURTESY VOYIS
er field of view.
Case study
The Discovery’s capabilities were evaluat-
ed on a trial project where an uncharted
flooded quarry was explored for the first
time during the Canadian winter. A Video-
Ray Defender ROV was outfitted with the
vision system and deployed through a hole
cut in the ice. The 4K video stream enabled
effective piloting to identify a target, while The software interface shows 3D model
the instantaneous 3D point cloud data was and stills images captured by Voyis
leveraged to evaluate data quality, cover- Discovery Vision System in real time.
COURTESY VOYIS
age and to maintain a consistent target
range using the added depth perception.
A complete 3D reconstruction was quick-
ly generated using a selected segment of
the dataset, attaining a comprehensive set
of qualitative and quantitative visual data
on the subsea asset—crisp video, high-res-
olution stills images and an accurate 3D
model. This delivered a complete under-
standing of the structure and an assess-
ment of its condition.
The system was easily integrated using
the vehicle’s existing power and ethernet
infrastructure, rapidly deploying this new This 3D model was generated by Voyis
capability on the small platform. The Nova Discovery Stereo. COURTESY VOYIS
Mini lights provided high-intensity, uniform
lighting that drastically improved the qual- operations, a capability available for small
ity and clarity of the images compared to platforms using the compact 300-m Dis-
the standard piloting camera. In a single covery Camera and on large work class
day, the Voyis team was able to effectively ROVs with the 4,000-m Discovery Stereo.
integrate and operationalize the Discovery By employing edge computing to cap-
in a new environment to acquire an accu- ture high-quality stills images in tandem
rate 3D reconstruction of a subsea asset. with low-latency video, it achieves a vision
The success of the Discovery Vision system without comprise. It is now pos-
System highlights its potential to revo- sible for every subsea vehicle to see the
lutionize subsea inspections and ROV depths like the surface is seen. ●
www.offshore-mag.com |  MAY/JUNE 2023
5/22/23 8:46 AM
 REMOTE OPS SPECIAL REPORT: AUV/ROV

Autonomous robots use AI for data collection

and intervention services
AI streamlines subsea called Nauticus’ toolKITT, which utilizes
operations, enhances AI and machine learning to power auton-
omous, surface and untethered subsea
productivity and safety robotic platforms. It serves as the “mind”
for robotic vessels, unifying all of Nauticus’
DR. JD YAMOKOSKI, Nauticus Robotics
products into a single control architecture

T
he ocean covers 71% of the Earth’s
surface and intersects nearly all daily
activities, such as food, energy and trans-
portation. It is a $3 trillion economy that
few people think about, much less consid-
er its impact on daily lives and the future.
Legacy practices in the offshore indus-
try have remained largely unchanged
since their inception more than 50 years
ago. This inertia has resulted in wide-
spread operational inefficiencies, indus-
try stagnation and climate degradation.
Artificial intelligence (AI) has the power
to radically change that reality by stream-
lining operations, enhancing productivity,
and protecting not only human crews but
the future of the ocean environment itself.
Nauticus Robotics, a developer of auton-
to enable advanced subsea work.
toolKITT is predicated on the vehi-
cle’s ability to make decisions about the
environment from onboard sensors. It is
self-improving, meaning its ability to solve
problems and complete tasks becomes
more efficient and precise over time.
Therefore, AI-powered robots can sub-
stantially improve the outlook of offshore
operations compared to legacy methods.
Reducing emissions
AI plays a crucial role in streamlining off-
shore activities, which improves oper-
Aquanaut underwater robot runs solely
ational efficiencies and lowers costs as
on electric power, and Nauticus Robotics
well as drastically minimizes environ- says it is the first subsea robot that is just
mental impact. as versatile as it is sustainable. COURTESY
Common legacy solutions require up NAUTICUS ROBOTICS

omous robots using AI for data collection
and intervention services for the ocean
economies, believes AI’s benefits in off-
shore work has potential to continue dis-
rupting an antiquated industry for the
betterment of the oceans.
Advancing subsea work
Historically, subsea work involved a ship
steaming out and dropping a heavy ROV
in the water connected by thousands of
feet of cumbersome umbilical back to the
ship. This expensive, manual technique
has gone largely untouched for decades,
while topside the robotics revolution has
been exploding.
Nauticus leverages and develops
approaches to support subsea applications,
with a specific focus on enabling opera-
tor-supervised, autonomous inspection and
manipulation tasks. These advancements
start with a software-enabled solution
to $100,000 per day or more to operate
and often need large crews to do so, yet
they’re riddled with operational ineffi-
ciencies. In contrast, software-enabled
solutions like toolKITT, when paired with
intelligent all-electric robots, have the
power to integrate seamlessly into work-
flows to accomplish more with less. A
single pair of intelligent robots can per-
form complicated subsea tasks auton-
omously, with more precision and in
significantly less time.
Incumbent methods endanger the
planet by emitting up to 70 mt of CO2 into
the atmosphere daily, which is the equiva-
lent of 5,000 cars on the road. When multi-
plied by the number of vessels doing work
in the ocean, its impact is huge. Nauticus’
AI-powered, all-electric technology can
reduce the estimated CO2 footprint of off-
shore vessels by more than 90% and lower
value stream costs by 50%.
Safety
The efficiencies created by AI innovations
significantly increase safety. From 2012-
2020, the US Bureau of Safety and Environ-
mental Enforcement collected data from
4,474 offshore incidents, resulting in 1,654
injuries and 23 deaths. Autonomous robots
allow for a future with significantly less
risk involved in completing a job because
fewer people will be needed on site.
Conclusion
AI has the potential to create a future where
more autonomous and intelligent robots
are used to reduce environmental impact
and eliminate human exposure to hazards
while improving the offshore industry in
every way possible. Nauticus is working to
make that opportunity a reality. ●
Dr. JD Yamokoski is Nauticus Robotics’ CTO.

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 REMOTE OPS SPECIAL REPORT: AUV/ROV
Troubleshooting problems has become a
more manageable process
C-I performs remote survey work offshore
Guyana from its Louisiana headquarters
TIM BINGHAM, C-Innovation
M
any oil and gas majors are now increasingly moving towards
options that enable them to reduce vessel days and therefore
their carbon footprint, as well as eliminating risks to personnel.
C-Innovation (C-I), owner and operator of Schilling Robotics
ROV systems, provides a range of specialized remote diagnostic
and mission-planning software as well as augmented reality and
mid-water StationKeep systems. Its inspection class, heavy-duty
150-HP and ultra-heavy-duty 200-HP ROVs are used to conduct
a wide range of inspection type work.
In the past two years, drawing upon its submarine ROV techno-
logical capabilities that offer clients a system-wide platform, C-I
has completed more than 30 hull inspections in the Gulf of Mexico,
Alaska, Atlantic Ocean and Brazil. These inspection services vary
in operational tasks and include hull inspections, UWILDS, bull-
seye and riser inspections for drill support, and pipeline surveys.
In addition to being equipped with HD video, C-I’s ROVs inte-
grate tooling due to their modular system and device configura-
tion software. Examples of tooling capabilities for inspection work
include camera booms, 3D modeling, UT/CP monitoring systems,
mux integration, lasers and subsea cleaning tools.
Offshore Guyana case study
C-I’s fully remote operations have been available since the com-
pany first entered the remote survey industry in April 2020 at the
height of the COVID-19 pandemic.
C-I’s goal was to provide its client with offshore services while
operating safely from the company’s headquarters in Mandeville,
C-Innovation performs an underwater plet inspection. COURTESY
C-INNOVATION
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La. The team was challenged from the beginning with its first
project being based out of Guyanese waters. Operating at such a
distance challenged C-I, and ultimately, the company performed
successfully over a span of two years.
During the 2020 Guyana project, C-I operated a fully remote
survey spread in international waters with zero recordable down-
time and was consistently ahead of schedule in the client’s fleet,
remotely providing GVI/SURF inspections, as-laid/left surveys,
valve operations, flowline/umbilical surveys, mooring line surveys,
BOEM surveys, buoy placement and recovery operations, and USBL
calibration/validations.
The Guyanese project was the precursor that set up the com-
pany’s success near its home in the Gulf of Mexico.
Recent projects
C-I has performed several remote surveying operations over the
past year. For example, in January 2022, C-I began remote opera-
tions on Juan C , including BOEM inspections, mooring line inspec-
tions, and USBL calibration/validations.
During summer 2022, C-I enabled simulation operations on
the Island Venture vessel, and the company successfully enabled
remote access to the platform to view the Island Venture ROVs.
Then, in August 2022, C-I began remote operations on the
C-Constructor vessel, which included jumper ops, mooring line
inspections, tree/well installations and USBL calibration/validation.
At year-end 2022, C-I began remote operation with GIS, and this
included remote navigation for geophysical work in Mexican waters.
More recently, in February 2023, C-I began remote operations
on Laney. The client required remote viewing at the base in Prov-
idence, Rhode Island. The company set up a live working system
involving plough operations to be viewed remotely.
Surveying vessels
C-I has five vessels that are actively involved in remote survey
operations, which increases safety and reduces greenhouse-gas
emissions to the environment. Operating out of the company’s
remote operations center (ROC) at C-I’s headquarters, its remote
surveyor eliminates the risk for potential personal injury while
onboard the vessel and cuts down on travel hazards to and from
a vessel or heliport.
By placing an experienced remote surveyor on duty at the ROC
with the ability to log in to any vessel in the fleet, troubleshoot-
ing any potential problems has become a much more manage-
able process. ●
Tim Bingham is survey manager with C-Innovation.
www.offshore-mag.com |  MAY/JUNE 2023
5/22/23 8:46 AM
 REMOTE OPS SPECIAL REPORT: Remote-controlled operations
Affordable offshore
well monitoring lowers
P&A costs
Digital innovations are driving adoption of
satellite-powered monitoring
THIERRY ZOIS, Hiber
E
very well’s life has a hard stop, but the plug and abandon-
ment (P&A) process can feel never-ending. The P&A proce-
dure itself costs multiple $100,000s, compounded by years of site
visit costs (in terms of teams, transportation and pure opportuni-
ty cost). Can the latest satellite technology make well abandon-
ment less painful?
Until recently, connecting wells to satellites was too expen-
sive to be a practical solution for monitoring abandoned wells. Its
power requirements made it impractical for remote applications,
and networking limitations, which limited the distance between
wellhead sensors and the satellite gateway, added to the hard-
ware costs. However, the arrival of Internet of Things, along with
three major technical innovations, has redefined what is possible
(and affordable) with remote well monitoring:
• Long-range networks: Developments in long-range networks
have redefined the economics of satellite monitoring. It provides
a terrestrial coverage radius of 10 km, which means numerous
wellhead sensors can share a single satellite gateway, reducing
the complexity and cost of networking hardware.
• Bite-size data packets: Traditional 24/7 data-gathering moni-
toring solutions have been supplanted by a new generation
of solutions that employ intelligent data gathering and trans-
mission. Instead of beaming data continuously (which is both
unnecessary and expensive), today’s smart sensors sample key
data every few minutes, then transmit it each hour. While users
will not receive real-time data, they will get regular updates of
mission-critical information at an affordable price.
• Power optimization: Small, efficient data transmissions have
enabled improved power optimization. Instead of being a pow-
er-hungry monster, new satellite well-monitoring tools use
much less energy, which translates into savings for operators.
Case study
Today’s smart satellite-powered technology makes it easy to tap
into remote wellhead data, plan better abandonment strategies
and eliminate surprises. To see it in action, look to the North Sea,
where Shell has a portfolio of old wells dating back to the ’60s
and ’70s, many of which are in the process of being abandoned.
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Today’s smart satellite-powered technology can monitor remote
wellhead data, enable better abandonment strategies and
eliminate surprises. COURTESY HIBER
Shell had already calculated the costs of sending teams of engi-
neers in helicopters or boats to manually collect data for 12 months
or more. The company wondered whether this new satellite tech-
nology could reliably and cost-effectively monitor two platforms.
Hiber’s team worked with Shell on a pilot using the HiberHilo oil
and gas technology to validate its predictions. HiberHilo is a turn-
key well and pipeline monitoring tool that includes sensors, soft-
ware, satellite connectivity and continued service.
In April 2021, Shell’s crew installed pressure sensors on annuli
that required close monitoring and network gateways to facilitate
wireless satellite communication. The entire installation of the solu-
tion took less than three hours, with the sensors connected to the
satellites within 15 minutes. It was so fast that the Shell engineers
estimated they could have performed another 15 installations that
same day. Plus, when the team started using HiberHilo, 99.8% of the
data collected were logged in Shell’s monitoring system.
Instead of going offshore monthly to check for possible pressure
buildups, Shell’s technical team can now continually monitor these
abandoned wells and implement a comprehensive P&A strategy.
This reduction in trips reduced the cost of the decommissioning
campaign by an estimated €120,000 ($132,516), while at the same
time improving the integrity of the decommissioning plan.
Furthermore, this approach lowered the probability of remedial
work and reduced rig time, unlocking another potential €300,000
($331,290) in savings. Importantly, the solution also improved crew
safety and reduced the environmental impact of platform visits.
At the end of the project, once the P&A campaign has completed,
the sensors and gateways can be easily transferred to the next
platform on a rolling schedule.
In conclusion, this resulted in a cost reduction and increased
sustainability. ●
Thierry Zois is Hiber’s chief commercial officer, based in the Netherlands.
OFFSHORE 41
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 REMOTE OPS SPECIAL REPORT: Remote-controlled operations
Remote survey services reducing project
carbon footprint, mobilizations and costs
Sophisticated communications hardware
provides connectivity to bring data processing
ashore and reduce survey costs
TORSTEN MARTEN, UTEC
I
n the energy sector, the acquisition and processing of data asso-
ciated with operations has traditionally involved the mobiliza-
tion of personnel and equipment to offshore locations around the
globe. However, with the need to minimize carbon footprint and
costs, which are particularly important considerations for clean
energy stakeholders, operators are looking for innovative ways to
develop and operate assets across the renewable energy, oil and
gas, and nearshore construction industries.
Acteon, a marine energy and infrastructure services company,
reviews the impact of a remote technology that can be deployed
to reduce survey costs and increase project efficiency. Within a
project life cycle, the overall operational schedule can be improved
by optimizing the individual survey tasks and conducting some
of those activities remotely. From site characterization through
to decommissioning, accurate survey data enable the operator
to plan, mitigate potential challenges and choose the optimal
design solution.
One piece of technology used by Acteon to enhance overall
project efficiency is the communications hub (comms hub) devel-
oped by UTEC, a geo-services brand in Acteon’s Data and Robot-
ics division. It provides the communications security and network
resilience required to deliver all types of remote services using any
available internet connection. While bringing data ashore in real
time, the comms hub checks the characteristics of each bonded
link for error rate, packet loss, jitter and latency to determine which
way a particular packet should be dispatched. By adapting rapidly
to network conditions found offshore, where the characteristics
of satellite links change frequently, the comms hub enables net-
work acceleration, bringing data ashore securely and efficiently.
The comms hub can provide live H.265 video streams from a
remotely operated vehicle (ROV) or any camera on board a vessel,
to multiple onshore and offshore locations without the need to
mobilize any additional equipment or personnel. The comms hub
facilitates remote operation of online navigation software and
remote technical support by providing direct remote access to
the offshore survey network. Additionally, it enables remote data
processing via automated file transfer in close to real time.
As the remote technology can reduce personnel on board by
up to 30% by bringing tasks onshore, it reduces aviation and
42 OFFSHORE
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A remote operation center conducts monitoring for an uncrewed
survey vessel. COURTESY UTEC / ACTEON
other travel costs while retaining access to highly skilled per-
sonnel when required. The carbon footprint of operations can
be reduced and improved safety is realized from a reduced off-
shore headcount. Because data-processing personnel are only
paid for the time they work on the data, and not their mobiliza-
tion and standby time, cost savings are generated that can be
passed on to clients.
Case study
Havfram was required to perform a decommissioning project in
Mauritania that involved the removal and disposal of subsea infra-
structure. The survey services included post-decommissioning
multibeam echo sounder (MBES) surveys carried out by an ROV.
A UTEC comms hub installed on the Havfram vessel Island
Victory provided automated file transfer functionality, facilitating
remote data processing. Without requiring additional bandwidth,
the comms hub automatically transferred the MBES data with
backscatter intensity measurement enabled.
Conclusion
By facilitating remote services, Acteon is bringing ashore many
of the tasks traditionally conducted offshore, achieving signifi-
cant project time and cost savings. Simultaneously, risk expo-
sure and carbon emissions associated with offshore mobilizations
are reduced.
Acteon is continuing to invest in remote capabilities to support
operators, particularly in the offshore wind sector. ●
Torsten Marten is a lead surveyor with UTEC.
www.offshore-mag.com |  MAY/JUNE 2023
5/22/23 8:46 AM
 REMOTE OPS SPECIAL REPORT: Remote-controlled operations
Opinion: Nigeria needs to take the leap
toward adopting digital twins
Digital twins provide a blueprint for
overcoming the gaps in Nigeria’s oil and gas
digital transformation journey
ADESHINA ADEBUSUYI, James Fisher AIS
T
he digital transformation in Africa is advancing in leaps and
bounds, with Nigeria leading the charge as home to the most
technology hubs across the continent.
Despite this technology spike, Nigeria’s energy industry is lag-
ging behind its global peers putting its ambition to be a gas-pow-
ered economy by 2030 at risk.
Nigeria’s oil and gas potential could unlock economic prosper-
ity and lift millions out of energy poverty. Previously hampered
by a lack of oil and gas infrastructure, progress is finally being
made in Nigeria following former President Buhari’s “Decade
of Gas Initiative,” alongside the long-awaited reforms delivered
through the Petroleum Industry Act.
Despite planned projects, such as the Dangote refinery and
several LNG plants, Nigeria’s checkered history with the use of
digital technology within the offshore oil and gas industry could
jeopardize this potential success story with many companies
becoming disillusioned by digital transformation.
Pitfall of digital distrust
Most oil and gas decision makers were sold a vision of dig-
ital transformation; however, these purchases not only failed
to improve output, but also did not solve the challenges they
were bought to resolve. It has become an all-too-common pit-
fall, engineered by unscrupulous sales teams, leading to dis-
trust and hesitance in adopting new innovations that would
have a positive impact.
While industry leaders elsewhere are benefiting from the
latest innovations in digital twins, data analytics and remote
maintenance, many Nigerian workers are working from incom-
plete plans and Excel spreadsheets. They waste lots of time
looking for data siloed across several systems—or worse, not
captured at all, residing solely in colleagues’ memories.
Overcoming digital disillusionment
The challenge of balancing the volatility of oil price with main-
taining margins means that digital transformation is often over-
looked. Without it, Nigeria’s domestic supply and exports may
rise, and economic prosperity will not be unlocked to the full-
est potential. To mend the rift created by digital disillusionment,
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operators need a new approach to digital transformation and
an increased focus on maximizing the good times and minimiz-
ing the downturns.
James Fisher AIS’s rollout of its R2S digital twin technolo-
gy is one example of how Nigeria is benefitting from a differ-
ent approach through collaborative partnerships and offering
a compelling alternative to previous digital transformation
attempts, while also building mutual trust and understanding.
The key to putting theory into action is establishing a culture
shift away from the traditional business model that relies on
quickfire sales. The focus must instead be on establishing long-
term partnerships with oil and gas companies to jointly mitigate
their valuable concerns through consultative engagements.
With the investment almost equal for both partners, Nige-
rian oil and gas companies can have renewed confidence
in adopting emerging technologies such as data analyt-
ics, digital twin and predictive maintenance. This approach
lends itself to being scalable and adaptable. Those hesitant
to give digital transformation another try can start with a
small amount of change and then scale that change up on
the back of success.
Those companies that have taken the leap toward adopt-
ing digital twins can now present 2D data, visual data and
real-time data in a real-world context, allowing teams to plan
better and swiftly make important operational decisions. Data
that were once siloed, outdated and disconnected has become
useful, robust and accurate, providing visibility to the remot-
est of assets.
Knowledge transfer
Finally, creating opportunities for knowledge transfer means
that Africa’s oil and gas industry can confidently champion its
digital transformation. Making this vision a reality, James Fisher
AIS is delivering a training school in Angola that equips new
industry recruits with the digital skills needed to operate oil and
gas assets efficiently. It also opened headquarters in Lagos,
giving companies direct access to experts that understand the
region’s specific needs and its digital heritage.
Overcoming the gaps in digital transformation through col-
laborative partnerships will be paramount if Nigeria is to fully
benefit from the forthcoming boom in oil and gas infrastruc-
ture and be considered as an industry heavyweight on the
world stage. ●
Adeshina Adebusuyi is regional business development manager with
James Fisher AIS.
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 REMOTE OPS SPECIAL REPORT: Remote-controlled operations
AI tools improving
HSE, reducing
unplanned downtime
COURTESY SPARKCOGNITION
AI is unequivocally transforming
offshore operations
JASON CHADEE, SparkCognition
W
ork on an offshore rig is physically demanding, unpredictable
and potentially dangerous. While pay and benefits are excellent,
seamen and offshore workers perform duties within proximity to
highly combustible materials while handling massive cranes, hoist-
ing systems, pumps, engines and other heavy equipment on unsta-
ble vessels and slippery decks, and often in challenging weather.
Oil rig incident and death reports are moving targets. It is widely
acknowledged that the offshore oil and gas industry is one of the
most dangerous in the world, yet there is no reliable system for
tracking and reporting injuries and fatalities. What is definitive is
the dangers associated with the job.
Between 2008 and 2017, there were more than 1,500 deaths
on oil rigs in the US. In its 2021 safety report, the International
Association of Oil and Gas Producers showed an increase in the
number of deaths in the industry overall, from 14 in 2020 to 20 in
2021. The total injury rate was 0.77 in 2021, a 10% increase from
the year prior and 580 lost workdays. A 2021 private investigation
found that the Bureau of Safety and Environmental Enforcement,
the government agency created to improve safety and enforce
environmental regulations in the offshore oil and gas industry,
underreports the number of offshore worker deaths due to incon-
sistent or missing data or loopholes that allow some fatalities to
go unreported.
In 1983 the Occupational Safety and Health Administration
(OSHA) and the US Coast Guard entered into an agreement giving
OSHA statutory authority to promulgate regulations that address
working conditions on offshore drilling platforms. OSHA maintains
that the safety of oil rig workers is a leading priority and has enacted
measures to mitigate safety and health hazards and dangerous con-
ditions, but reactionary workplace safety initiatives are insufficient.
Benefits of AI
With the industry’s commitment to safety at its strongest, visual
artificial intelligence (AI) is being deployed as a proactive approach
and technological disruptor in limiting injuries and loss of life on
offshore installations.
The is a visual AI technology available today that utilizes the
closed-circuit televisions (CCTVs) that are ubiquitous on rigs these
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days for around-the-clock surveillance for machine monitoring,
antipiracy deterrents and workplace safety. CCTVs alone collect
and store visual data but are only effective with dedicated staff
monitoring 24/7, a practical impossibility given inevitable oper-
ator fatigue. Even when information is successfully collected, it
only provides retrospective evidence.
Offshore extraction companies can configure and deploy vision-
based applications, leveraging existing infrastructure, using a low-
code/no-code scalable AI-enabled computer vision program.
When coupled with a library of pre-existing use cases for safety
and security, computers and systems can capture and interpret
meaningful information from image and video data and respond
accordingly in real time, transforming them into proactive analyt-
ical assets that provide actionable insights and automated alerts
to manage risks, processes and workforce safety.
Platform operators can flag HSE compliance failures or insuffi-
cient personal protection equipment, identify persons in distress,
and spot potential damage to inventory and impending accidents,
which results in cost savings, improved reputation and increased
overall safety in daily operations.
AI modeling can also improve rig or platform availability at
scale, creating financial incentives while improving safety for engi-
neers and operators. When deployed onshore in a remote control
center, it provides alerts, alarms and can trigger automated proto-
cols increasing overall operational visibility. When fully deployed
across an entire fleet of offshore rigs or platforms, AI modeling
can significantly impact the economics of a business.
AI is unequivocally transforming offshore operations. It
improves health and safety management initiatives, helps mini-
mize unplanned downtime and production impacting events, pro-
actively manages periodic maintenance and reduces costs, helps
reduce the carbon footprint, maximizes the life of assets and can
offer advanced cyber threat detection. ●
Jason Chadee is a global energy sales executive with 25 years of experience in
solving complex operational problems with software solutions for oil and gas, utilities,
and renewables markets.
www.offshore-mag.com |  MAY/JUNE 2023
5/22/23 8:46 AM
 REMOTE OPS SPECIAL REPORT: Remote-controlled operations
Examining an evolution in FPSO
autonomous operations
A new project is underway to advance safety
performances of a global FPSO fleet
MATT TREMBLAY, ABS
T
he FPSO fleet is in the midst of a generational shift in the tech-
nology available to support offshore operations. For 50 years,
maintenance management and condition evaluation have been
a labor-intensive, analog exercise. Today, a new technology-driv-
COURTESY ABS
en agenda is enhancing a safety-first approach with the adop-
tion of tools and systems that improve safety, performance and
operating costs.
Following the launch of the recent ABS “Guide for Autonomous
and Remote-control Functions,” which sets out a goal-based
framework for the implementation of these technologies on ves-
sels and offshore units, a new project is underway to advance
safety performances of a global FPSO fleet.
An FPSO operator has proposed to add remote control function-
ality to their newly installed FPSO, which is under ABS class. The
FPSO is currently located offshore in a new and rapidly develop-
ing area that has challenges with local resources and transporta-
tion infrastructure. The proposed plan is to add a remote control
center called an Integrated Operation Center (IOC) located at a
nearby shore-based facility to add remote control functionality.
The FPSO will be connected to the IOC via fiber-optic cables with
redundant capability. A small crew would also remain on the unit
to serve as oversight. This initiative by the FPSO operator is to add
remote functionality to all topside process-related functions and
large equipment packages such as turbines, compressor, gener-
ators, etc. However, the work scope does not presently include
plans to control the typical marine systems or marine operations
such as stores transfer, station keeping and bunkering via the IOC.
The project will be executed in three phases. Phase 1 will use
remote monitoring to verify all systems are working as they should
and that there are no major problems. In Phase 2, the operator
will gradually add remote functionality for selected modules and
equipment packages. In Phase 3, remote functionality to all top-
side modules, system and equipment packages will be imple-
mented. The scope covers both hardware and software digital
architecture assessments and cybersecurity risk assessments
and management system.
The work is based on ABS’ recent guidance and cross-indus-
try collaboration on remote control and autonomous notations.
Development of this guidance was informed by experiences with
rocket launching and recovery vessels as well as remote control
and autonomous tug projects in Europe, Asia and the Americas.
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The goal-based framework covers interactions with relevant stake-
holders such as port authorities and other vessels. It uses a risk-
based approach to determine the requirements for the assessment
and implementation of autonomous and remote control functions.
Autonomous functions are those in which machines perform
each of the four steps in the operational decision loop (i.e., moni-
toring, analysis, decision and action), without the need for human
intervention to perform tasks and achieve the system mission.
Autonomous functions do not follow predefined routines and oper-
ational scenarios. They have the ability to execute the most appro-
priate actions based on their programming, assigned mission and
tasks, operational environment and the system status.
Remote control functions are an approach whereby the
system and operation being monitored is controlled remotely by
a human operator who is physically located elsewhere other than
on board a marine vessel or offshore unit where the operations
take place. There is a minimal crew on board for oversight and
emergency operations.
The FPSO project is just one of the many growing examples
in which the offshore industry is rethinking the methods to con-
duct asset inspections, collect and evaluate condition data, reduce
costs and increase safety, while ensuring reliability. ABS experts
can also explore with their clients the latest artificial intelligence
tools used to aid in corrosion detection and measurement and the
potential of an accurate digital condition model, or digital twin, to
support modern risk-based inspection techniques.
For this project, ABS will dedicate locally assigned survey teams
and other ABS experts. ABS surveyors will perform the duties
required for classification surveys, and a training program is being
implemented for the client’s technical teams to ensure the techni-
cal staff remain qualified and to ensure the work is done in a safe
and consistent manner. ●
Matt Tremblay is ABS vice president, Global Offshore.
OFFSHORE 45
5/22/23 8:46 AM
 BUSINESS BRIEFS
Offshore announces the 2023 Subsea Tieback Forum Advisory Board
Company News
ABB has completed the divestment
of its UK technical engineering
consultancy business, part of its Energy
Industries division, to TÜV Rheinland.
Rovco, a provider of technology-
enabled project solutions to the
offshore renewable energy sector,
has launched a new marine site
characterization business line. The
new division will serve the offshore
energy sector, providing clients with
a comprehensive range of survey
solutions, including hydrographic,
geophysical, shallow geotechnical,
metocean and environmental surveys.
FROM LEFT TO RIGHT: Amanda Bergin, Baker Hughes; Matthew Obernuefemann,
Paradigm Flow Services has split
ExxonMobil; Pablo Gomes, Petrobas; Tony Matson, Trendsetter Engineering; Randy into two separate entities: Paradigm
Seehausen,Staatsolie; John Smiley, Shell International E&P, Inc; Walid Soliman,bp; Jason Flow Services and Paradigm Fire
Harry, Hess Corporation; Advisory Board Chairman Bruce Crager, Endeavor Management: Protection Services.
Karl Schnakenburg, Woodside Energy; Julie Ingram, McDermott; Chris Egan, TechnipFMC;
Erin Balch, Wood; Mike Clarke, Beacon Offshore Energy; Antonio Critsinelis, Chevron Energy Eco Wave Power Global AB has
Technology Co.; Conference Director David Paganie, Offshore; Nikunj Patel, Oceaneering opened a US subsidiary under the
International. NOT PICTURED: Maria Bulakh, Aker Solutions; Ron Ledbetter, College of name Eco Wave Power US. The
Engineering TAMU; Phillip Luce, OnseSubsea; Glenn Mediamolle Jr, LLOG Exploration; Cort company plans to also establish a
Prois, Occidental US Offshore; Ian Ramsay, Navitas Falklands; JR Salinas, Equinor; Jeremy corporate office in New York City,
Woulds, Subsea 7 which will be its first office in the US.

Learn more about the conference at subseatiebackforum.com/2024.

People directors that he plans to

step down. He will continue
vice president of Australian
operations. Westcott most
bp has appointed Starlee in his current role until his recently held the role of
Sykes CEO of Archaea successor is in place. COO at EnergyAustralia.
Energy, and Andy Krieger The International Marine Fraser Moonie has been
will succeed Sykes as Contractors Association appointed COO of Rovco.
senior vice president of has announced that Iain BW Offshore has
bp’s Gulf of Mexico (GoM) Grainger will succeed appointed Anders S.
and Canada business. Allen Leatt as CEO when Platou as chief strategy
After nearly seven years he retires at the end of May. officer, effective July 1. He Fraser Moonie
at the helm of the Net Colonna’s Shipyard Inc. previously held the role of
Zero Technology Centre has promoted Randall head of corporate finance
(NZTC), Colette Cohen Crutchfield to executive and strategy.
OBE is standing down vice president (EVP) and Petrobras’ board of
as CEO, with Myrtle COO, Jordan Webb to EVP
Colette Cohen directors has elected
Dawes announced as OBE of shipyard operations and Mário Vinícius Claussen
the NZTC’s new CEO. Chris Hartwig to senior Spinelli as the company’s
Rebecca Allison has been director of Steel America. chief governance and
promoted to COO.
North Star has appointed compliance officer, with
After more than six years James Bradford CTO. James Bradford a term until April 13, 2025,
as Prosafe’s CEO, Jesper the same term as the
Woodside has appointed
Kragh Andresen has other members of the
Liz Westcott executive
informed the board of executive board.

46 OFFSHORE www.offshore-mag.com |  MAY/JUNE 2023

2305_06OFF46_bb.indd 46 5/22/23 8:46 AM

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2305_06OFF47_adx.indd 47 5/22/23 8:46 AM

 BEYOND THE HORIZON
Robots: over-promised, over-hyped, but now real
I
t’s old news in oil and gas industries that there’s a skilled
labor shortage, as there is in every industrial sector. And
it’s getting worse due to demographics, the “silver tsuna-
mi,” and cultural realities enervating students’ appetites
for pursuing trades in “old” industries, even though they’re
essential for all the new, shiny products and services.
It’s long been known that industrial automation can help
here, by amplifying the effectiveness of those, of any age,
with skills. But automation has done little to alleviate the
skills gap for most tasks in most industries.
Of the millions of industrial robots in the world today,
the majority are isolated to bolted-down or high-volume
tasks, found in automobile manufacturing or similar facto-
ries. As the need for task flexibility rises, or the size of the
firm shrinks, the robot share shrinks faster. Even for firms
of over 500 employees, just half have industrial robots. And
you won’t find any industrial robots in 90% of America’s
manufacturing enterprises.
That isn’t because managers don’t see the need. That auto-
mation yields more output per employee is intuitively obvious
and borne out by history. Robots are underused in industries
because of a simple fact; they haven’t been good enough, yet.
Until now, there wasn’t any prospect for robots that both
match or exceed human performance and can be reassigned
to new tasks, and that can also work safely alongside people,
instead of isolated and bolted down, or limited to fixed tracks.
We’ve seen myriad demonstrations and stunts in the race
to produce real robots. Only recently have engineers finally
built anthropomorphic robots, even if most are not yet com-
mercially viable. As with the arrival of the automobile age,
the (true) robot is made possible by the confluence of a suite
of technologies. The car itself was only possible because of
the independent maturation of high-strength steel, internal
combustion, and oil refining. For robots it’s the arrival of pow-
erful micro-motors, vision “chips” enabled by AI, and lithium
batteries. While the latter two components have received the
most attention, useful robots wouldn’t be possible without
the contemporary and remarkable 50-fold gain in the power-
to-weight ratio of tiny motors over the past several decades.
Boston Dynamics’ human-like Atlas robot meets that
definition of a true anthropomorphic robot, as does Digit
from Agility Robotics, for example. While Digit is less agile,
it is both cheaper ($250,000 versus a rumored $1 million)
and commercial now. Nonetheless, Atlas illustrates the
near future of bots that have human-like capabilities to
run, jump, back-flip and navigate autonomously.
48 OFFSHORE
2305_06OFF48_bey.indd 48
Such robots vastly surpass the best that could be built
as recently as 2015 in a Grand Challenge from DARPA
(Defense Advanced Research Projects Agency). That con-
test was industrially-oriented: an untethered robot needed
to ascend a staircase, open a door, and turn a valve – tasks
inherent to operating within a human environment, and
all previously beyond the capabilities of any robot. In late
2021 DARPA held another challenge, where teams com-
peted using wheeled, tracked, or walking robots to per-
form mining-like tasks in a network of caverns. One of
the contestant’s robots, for example, was able to survey
and build a detailed subterranean map in one hour, a task
that entailed 100 person-hours of human surveyors prior
to the contest.
Two years ago, Boston Dynamics offered for commer-
cial sale (base price at $74,500) its autonomous, ambulatory
four-legged automaton, Spot, the same year Digit went on
the market. That such robots are now being offered for sale
is more than a mere curiosity. It will be seen in hindsight
as a Model T moment in history.
Digit’s skills target warehouse-like tasks which similarly
consume valuable (human) time in industrial domains. And
Spot, initially, is seeing deployment for safety surveillance
on offshore oil platforms, refineries, and construction sites,
on farms, and in factories. Inspection is self-evidently crit-
ical but inherently repetitive and is the kind of drudgery
that lends itself to error and oversight; i.e., ideal for robots
while letting people upskill for other tasks.
At least two dozen companies are designing pre-com-
mercial anthropomorphic or mobile robots, from start-ups
to industrial giants such as Toyota. Elon Musk announced
that Tesla would soon commercialize a walking robot
called Optimus.
The warehouse “logistics” markets has become the
hotbed for robot development and deployment, forecast to
displace automotive as the growth sector, with spending
forecast to grow 300% more over the next five years than
the past five. Given the close alignment in tasks and perfor-
mance metrics, all that commercialization will accelerate
robot capabilities for the adjacent heavy industries.
Soon, the labor-productivity boost from robotification
will echo what happened a century ago with industrial
mechanization. More business, more services, new kinds of
jobs replacing old ones, and more wealth and well-being. ●
Mark P. Mills, Manhattan Institute senior fellow; strategic partner, Montrose Lane
www.offshore-mag.com |  MAY/JUNE 2023
5/22/23 8:46 AM
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 The U.S.
Gulf of Mexico
A STRATEGIC
NATIONAL ENERGY
ASSET AND ENERGY
INNOVATION HUB

NOIA | THE U.S. GULF OF MEXICO C1

2305CP_NOIA.indd 1 4/28/23 6:08 PM

 Erik Milito,
President of NOIA

The author, National Ocean Industries Association President

Erik Milito, leads industry efforts to advance smart public
policy decisions in support of domestic energy production and
to promote the industry as an innovator, problem-solver, and
preferred investment choice. Erik has been at the forefront of
efforts to develop and establish industry programs to enhance
safety and environmental performance, including the NOIA
ESG Network, The Environmental Partnership, and the Center
for Offshore Safety. Erik previously served as Vice President,
Upstream Policy for the American Petroleum Institute and as
an attorney for the U.S. Department of the Interior. Erik also
served on active duty in the U.S. Army as a judge advocate.
He holds a Juris Doctor from Marquette University Law School,
and a Bachelor of Business Administration from the University
of Notre Dame.

2305CP_NOIA.indd 2 4/28/23 6:08 PM

 ABOUT NOIA
For the past 50 years, the National Ocean
Industries Association (NOIA) has represented
the interests of all segments of the offshore
energy industry, including offshore oil and gas,
offshore wind, offshore minerals, and offshore
carbon sequestration. NOIA membership includes
energy project leaseholders and developers and
the entire supply chain of companies that make
up an innovative energy system contributing
to the safe and responsible exploration,
development, and production of energy for the
American people.

NOIA represents and advances a dynamic and

growing offshore energy industry, providing
solutions that support communities and protect
our workers, the public and our environment.
NOIA is the sought-after and credible voice,
advocate and forum for uniting and advancing
the interests of the offshore energy industry,

Photo [this page] 1138600700 © MsLightBox ; [cover] 146757957 © michaelbwatkins | gettyimages.com

recognized for promoting solutions that provide
the energy vital for lifting society in a safe and
environmentally sustainable way. NOIA’s work
in Washington, D.C. with Congress and the
Administration consistently results in positive
public policy outcomes that support investment
in U.S. offshore projects, with an emphasis on safe
and responsible development.

NOIA | THE U.S. GULF OF MEXICO 1

2305CP_NOIA.indd 1 4/28/23 6:08 PM

 CONTENTS
5 Introduction: the Offshore Gulf of Mexico is a Strategic
National Energy Asset and an Energy Innovation Hub
7 Recognizing Our Energy Realities
11 U.S. Offshore Energy Development Delivers Vast,
Uplifting Benefits for Americans
11 Offshore Energy Development Enhances Energy Security
11 Oil and Natural Gas Will Be Crucial Energy
Sources for Decades to Come
14 Oil and Natural Gas Account for a Large
Share of U.S. and Global Energy
16 Offshore Oil and Gas: Capital Investment in Acreage
and Exploration Results in Production
19 The Continuously Improving Efficiency of U.S.
Gulf of Mexico Offshore Development
20 The Gulf of Mexico Is Poised for Continued
Global Energy Leadership
28 Gulf of Mexico Production Improves Energy Affordability
36 Gulf of Mexico Energy Development Stimulates
Domestic Spending
38 The U.S. Gulf of Mexico Supports High-paying Jobs
41 The U.S. Gulf of Mexico Provides Among the Lowest
Carbon Barrels in the World, with a Commitment to
Safety and Environmental Performance
47 The Offshore Gulf of Mexico is Characterized by
Innovation and Advanced Technologies
49 Offshore Facilities Create and Support
Flourishing Marine Ecosystems
52 The U.S. Gulf of Mexico Adheres to a Strong System
of Safety and Environmental Protection
56 U.S. Offshore Energy Production Generates Tremendous
Value for Taxpayers, Including Funding for the Land & Water
Conservation Fund, the Outdoor Recreation Legacy Partnership
Program, and Coastal Resiliency And Restoration
60 Companies in the Offshore Oil and Gas Supply Chain Play a Key Role
in Investing in, Scaling, and Deploying Low Carbon Solutions
63 Offshore Energy Development Increases
Our National Security
65 The Gulf Coast’s Role in the Emerging U.S. Offshore Wind Industry
67 The Gulf’s Central Role in Offshore Carbon Capture And Storage
71 Conclusion

PARTNER PROFILES

73 EXMAR Offshore
74 bp
75 MSRC
76 Quality Companies
77 Oceaneering

2 NOIA | THE U.S. GULF OF MEXICO

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 Photo 172304385 © MsLightBox | gettyimages.com

NOIA || THE
NOIA THE U.S.
U.S. GULF
GULF OF
OF MEXICO
MEXICO 3

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 4 NOIA | THE U.S. GULF OF MEXICO

2305CP_NOIA.indd 4 4/28/23 6:08 PM

 INTRODUCTION

■ THE OFFSHORE GULF OF MEXICO IS

A STRATEGIC NATIONAL ENERGY ASSET
AND AN ENERGY INNOVATION HUB

The Gulf of Mexico is globally recognized as a premier global energy hub,

bringing together the companies that produce foundational energy sources
such as oil and gas, while leading innovation and investment in energy
sources and technologies that will drive decarbonization efforts well into
the future. In essence, the oil and gas industry is often in the vanguard of the
development and deployment of zero carbon, low carbon, and carbon removal
technologies. The offshore energy sector has unparalleled expertise and
experience deploying and scaling technologies at levels necessary to achieve
decarbonization objectives. Companies throughout the offshore oil and gas
supply chain continue to lead the way in innovating low emission solutions that
include offshore wind, carbon capture and storage, hydrogen, and geothermal,
among others.

For the foreseeable future, the U.S. Gulf of Mexico offshore energy sector will
play an integral role in shaping an energy system that promotes the provision
of affordable and reliable energy while simultaneously continuing to reduce
the environmental and emissions footprint of development and distribution.
Importantly, for the coming decades, oil and gas supplies will remain a vital
Image 1020383430 © FrankRamspott | gettyimages.com

energy source for Americans and our allies around the globe1.

1. https://www.eia.gov/outlooks/aeo/

NOIA | THE U.S. GULF OF MEXICO 5

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 6 NOIA | THE U.S. GULF OF MEXICO

2305CP_NOIA.indd 6 4/28/23 6:08 PM

 RECOGNIZING OUR
ENERGY REALITIES

■ ENERGY LIFTS SOCIETY

A system of reliable, abundant, and affordable energy is essential for meeting
basic societal needs, including healthy living conditions, health care, education,
and mobility, economic or otherwise.

Oil and gas fill the fuel tanks of passenger vehicles and airplanes. They are
transformed into the essential building blocks of smartphones, clothing, and
medical equipment. They are in many products we use every day that underpin the
conveniences of modern life.

Natural gas is recognized as a key energy source for providing electricity, heating,
cooling, and clean cooking. More than 750 million people around the globe do
not have access to electricity, which leaves entire communities at a severe and
fundamental disadvantage. According to the World Health Organization (WHO),
“Access to energy is critical when it comes to the functionality of health-care
facilities and the quality, accessibility and reliability of health services delivered.
Electricity is necessary for the operation of critically needed medical devices such
as vaccine refrigeration, surgical emergency, laboratory and diagnostic equipment,
as well as for the operation of basic amenities such as lighting, cooling, ventilation
and communications.”2

Globally, 2.6 billion people do not have the means for clean cooking and must
Photo 1317214769 © curraheeshutter | gettyimages.com

use solid fuels such as wood, crop wastes, charcoal, and dung in open fires and
inefficient stoves. The WHO attributes 3.8 million premature deaths each year to
indoor air pollution caused by the fumes and soot generated by inefficient and
dirty cooking.

2. https://www.who.int/activities/accelerating-access-to-electricy-in-health-care-facilities

NOIA | THE U.S. GULF OF MEXICO 7

2305CP_NOIA.indd 7 4/28/23 6:08 PM

 The tragic impacts of energy insecurity are not only experienced abroad; 44 percent of
low-income American households experience energy insecurity, spending 10 percent to
20 percent of their income on energy expenses3.

Energy insecurity has adverse consequences on both physical and mental health.
Millions of Americans are faced with the “heat or eat” dilemma, regularly having to
choose between paying utility bills and paying for food4.

All forms of energy, including oil and gas, wind, solar, nuclear, geothermal, and emerging
forms of energy such as hydrogen, can play a role in raising the standard of living and
lifting communities out of poverty. The offshore energy sector is particularly well
poised to deliver reliable, abundant, and affordable energy of many types for society.
Traditionally recognized as a key producer of oil and gas, the offshore sector has
emerged as a leader in offshore wind, is spearheading the deployment of carbon
capture and storage technologies, and is playing a vital role in developing innovative
hydrogen technologies.

Operations in the U.S. Gulf of Mexico demonstrate that it is possible to develop

offshore resources while adhering to the highest safety and environmental standards.
A multitude of companies involved in offshore energy development are working
collaboratively to shrink an already small carbon footprint. From electrifying operations
to deploying innovative solutions that reduce the size, weight, and part count of
offshore infrastructure – thus increasing safety and decreasing emissions – the U.S.
Gulf of Mexico hosts a high-tech revolution.

Currently, global oil consumption is approximately 100 million barrels per day. Various
scenarios forecast global oil consumption volumes through 2050 and beyond, and
nearly all of them predict substantial oil production will be necessary through 2050. The
question is, “Where should that oil come from?”

The answer is from the cleanest and safest sources.

Oil produced from the U.S. Gulf of Mexico has a carbon intensity one-half that of other
producing regions.5 The technologies used in deepwater production – which represents
92 percent of the oil produced in the U.S. Gulf of Mexico – place this region among
the lowest carbon intensity oil-producing regions in the world6. Policies that restrict
domestic offshore development require imports to make up the shortfall, and that
supplemental production comes from higher-emitting operations in other countries.
Foreign providers generally employ less environmentally conscientious production

3. http://large.stanford.edu/courses/2020/ph240/radzyminski2/
4. S. Jessel, S. Sawyer, and D. Hernández, “Energy, Poverty, and Health in Climate Change: A Comprehensive Review of an
Emerging Literature,” Front. Public Health 7, 357 (2019).
5. Motiwala, and Ismail, “Statistical Study of Carbon Intensities in the GOM and PB,” ChemRxiv, April 13, 2020.
6. https://www.woodmac.com/news/the-challenge-of-negative-emissions/

8 NOIA | THE U.S. GULF OF MEXICO

2305CP_NOIA.indd 8 4/28/23 6:08 PM

 Photo 1410488206 © Leigh Ann Speake | gettyimages.com

methods, which when combined with the added emissions from transporting oil
over great distances by tanker, increases the amount of carbon released into the
atmosphere rather than decreasing it.

Emissions reduction is a global challenge. As analysts at Wood Mackenzie explain,

“Removing or handicapping a low emitter hurts the collective global average.” 7 This is a
debilitating solution with devasting consequences.

The better choice is to institute government policies that promote cleaner and safer
domestic production, less reliance on higher-emitting foreign suppliers like Russia and
China, and the preservation of hundreds of thousands of American jobs.

On the other hand, restricting U.S. offshore energy development could eventually
lead to Americans of every walk of life having to contend with the issues Europe is
experiencing as a result of disrupted supply from Russia, including potential industrial
curtailment and families having to make difficult choices between heat and food.

7. https://www.woodmac.com/news/opinion/could-restricting-oil-production-in-the-us-gulf-of-mexico-lead-to-
carbon-leakage/

NOIA | THE U.S. GULF OF MEXICO 9

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 10 NOIA | THE U.S. GULF OF MEXICO

2305CP_NOIA.indd 10 4/28/23 6:08 PM

 U.S. OFFSHORE
ENERGY DEVELOPMENT
DELIVERS VAST,
UPLIFTING BENEFITS
FOR AMERICANS

■ OFFSHORE ENERGY DEVELOPMENT

ENHANCES ENERGY SECURITY

OIL AND NATURAL GAS WILL BE CRUCIAL ENERGY

SOURCES FOR DECADES TO COME

Oil and natural gas touch every part of our daily lives. Fundamentally, “Everything
that is fabricated, grown, operated or moved is made possible by hydrocarbons.”8
The U.S. Department of Energy states:

Oil and natural gas play an essential role in powering America’s vibrant
economy and fueling a remarkable quality of life in the United States.
Together, oil and natural gas provide more than two-thirds of the energy
Americans consume daily, and we will continue to rely on them in the
future. In addition to meeting our energy needs, oil and natural gas are
Photo 604033056 © curraheeshutter | gettyimages.com

integral to our standard of living in ways that are often not apparent.
Several key advances in technology enabled a dramatic increase in
domestic oil and natural gas production over the past 20 years. This
increased production provides energy security and economic benefits to
the entire country, and ongoing technology advances will help us to enjoy
those benefits into the future.

8. Mark Mills, Wall Street Journal, January 8, 2019

NOIA | THE U.S. GULF OF MEXICO 11

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 Oil and natural gas are used in many ways that are familiar to consumers. Petroleum
products power transportation, providing fuel for cars, trucks, marine vessels,
locomotives, and airplanes. Natural gas generates more than one-third of the electricity
needed for dependable heating, air conditioning, lighting, industrial production,
refrigeration, and other essential services, and tens of millions of Americans rely on oil
and natural gas to heat their homes directly and on clean burning natural gas to cook
their food. But petroleum products do so much more than fuel our cars and power our
homes and businesses.

While perhaps less recognized, oil and natural gas also play critical roles in supplying
essential products and materials, increasing agricultural productivity, and supporting
the expansion of new energy sources.

Oil, natural gas, and natural gas liquids are building blocks for a range of modern
materials used to produce life-changing prosthetics, energy-efficient homes, safer
cars that go farther on a gallon of gasoline, and hundreds more consumer products that
Americans use every day. Plastics and chemicals derived from oil and natural gas make
our food safer, our clothing more comfortable, our homes easier to care for, and our
daily lives more convenient.

Natural gas is also a key ingredient for chemical fertilizers, helping increase crop
production and yield per acre planted, and powering many important operations on the
farm like crop drying.9

According to the United Nations, access to affordable, reliable, and sustainable energy is
critical to achieving many international development goals, specifically, the eradication of
poverty through continued improvements in education, health, and access to water.10 Oil
and natural gas play a central role in eliminating poverty and raising the standard of living
for millions by serving as a key form of abundant and affordable energy.

High energy density makes oil an invaluable resource to global society. According to the
Brookings Institute:

Oil resources are not as extensively distributed worldwide as coal, but oil has
crucial advantages. Fuels produced from oil are nearly ideal for transportation.
They are energy-dense, averaging twice the energy content of coal, by weight.
But more importantly, they are liquid rather than solid, allowing the development
of the internal combustion engine that drives transportation today…

The energy density of fossil fuels is particularly important in the transportation

sector. A vehicle needs to carry its fuel around as it travels, so the weight and

9. U.S. OIL AND NATURAL GAS: Providing Energy Security and Supporting Our Quality of Life, U.S. Department of Energy,
September 2020, p. 4.
10. https://unstats.un.org/sdgs/report/2016/goal-07/

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 Oil in everyday life.
VEHICLES
Gear oil, brake fluid, tires, fuels,
car seats, bumpers, window
seals, motorcycle helmets, boats,
baby car seats, ambulances,
helicopters, etc.
FUEL
Kerosene, heavy fuel oils, marine
fuels, diesel, gasoline, jet fuel,
heating oil, etc.
MEDICAL
Pharmaceuticals, hoses,
antiseptics, aspirin, hand
sanitiser, aesthetics, x-ray,
examination equipment,
pacemakers, crutches,
wheelchair, bandages, etc.
ELECTRONICS
Cable coatings, computers, TV
sets, tablets, headsets, cameras,
mobile phones, photographic
film, etc.
AGRICULTURE
Propane, lubricants, greases,
fungicides, fertilizers, pesticides,
herbicides, insecticides, irrigation
piping, gloves, etc.
CONSTRUCTION
Traffic cones, barrier tapes,
asphalt, tarpaulins, paint, safety
glasses, water pipes, tools, safety
helmets, caulking, roofing
shingles, plywood adhesive, paint
rollers etc.
OFFICE
Printing inks, pens, computers,
glue, tape, etc.
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2305CP_NOIA.indd 13
FURNITURE
Garden furniture, sun loungers,
artificial fibers, parasols, carpet
backing, rugs, upholstery,
curtains, pillows, lamps,
refrigerator linings, candles, toilet
seats, etc.
HOUSEHOLD
Exterior paints, thermal isolation,
heating oils, window frames,
kitchen surfaces, non-stick pans,
plastic surfaces, detergents, TV
sets, dishwasher, faucet, trash
bags, mops etc.
CLOTHING
Outdoor clothing, clothing made
out of polyethylene terephthalate
(PET), artificial fiber, sweaters,
panty, rubber boots, running
shoes, shoe soles, shoe polish
etc.
BEAUTY
Nail polish, make-up, facial
creams, perfumes, shampoo,
soap, shaving cream, hair curlers,
toothbrushes, toothpaste, hair
coloring, deodorant, hairdryer,
etc.
ACCESSORIES
Sunglasses, carrier bags,
synthetic leather, umbrellas,
jewelry, luggage, etc.
SPORTS
Sports clothing, tennis balls,
basketballs, footballs, surfboards,
cleats, bicycles, parachutes,
roller-skate wheels, golf bags, golf
balls, helmets, lifesaving jackets,
fishing rods etc.
TOYS
Pacifiers, frisbees, crayons,
balloons, dolls, etc.
13
4/28/23 6:08 PM
 volume of that fuel are key. Electric vehicles are a much-touted solution for
replacing oil, but they are not perfect for all uses. Pound for pound, gasoline
or diesel fuel contain about 40 times as much energy as a state-of-the-art
battery. On the other hand, electric motors are much more efficient than internal
combustion engines and electric vehicles are simpler mechanically, with many
fewer moving parts. These advantages make up for some of the battery’s
weight penalty, but an electric vehicle will still be heavier than a similar vehicle
running on fossil fuel. For vehicles that carry light loads and can refuel often, like
passenger cars, this penalty isn’t a big deal. But for aviation, maritime shipping,
or long-haul trucking, where the vehicle must carry heavy loads for long
distances without refueling, the difference in energy density between fossil fuels
and batteries is a huge challenge, and electric vehicles just don’t meet the need…

Industrial processes that need very high heat — such as the production of steel,
cement, and glass — pose another challenge. Steel blast furnaces operate at
about 1,100° C, and cement kilns operate at about 1,400° C. These very high
temperatures are hard to achieve without burning a fuel and are thus difficult to
power with electricity.11

The nascent offshore wind sector will be part of the energy transformation. Through
research, development, and demonstration projects, technology advances will enable
wind and other renewable energy sources to eventually provide pathways for overcoming
some of these challenges. While that inevitable progress is being made in the coming
decades, oil and natural gas will continue to account for a majority of our energy portfolio.

OIL AND NATURAL GAS ACCOUNT FOR A LARGE

SHARE OF U.S. AND GLOBAL ENERGY

According to the U.S. Energy Information Administration (EIA), oil and natural gas
accounted for 68 percent of total U.S. energy consumption in 2021 [FIGURE 1].

In its Annual Energy Outlook 2022, the EIA predicts, “U.S. energy consumption will
increase over the next 30 years as population and economic growth outpace gains in
energy efficiency.” 12 Though the organization projects that renewable energy will be the
fastest-growing source of energy through 2050 and will make up more of the energy
mix, it contends that petroleum and liquid fuels will remain the most-consumed source
of energy. In fact, liquid fuels are expected to represent the largest fuel source in the
global energy system [FIGURE 2].

11. https://www.brookings.edu/essay/why-are-fossil-fuels-so-hard-to-quit/
12. https://www.eia.gov/pressroom/releases/press496.php

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 FIGURE 1
U.S. primary energy consumption by energy source, 2021
Total = 97.33 quadrillion Total = 12.13 quadrillion BTU
British Thermal Units (BTU)
Geothermal 2%
Nuclear Solar 12%
electric
power
8% Coal Hydroelectric 19%
11%
Petroleum
36%
Renewable
energy Wind 27%
12%
Biomass waste 4%
Natural gas
32% Biofuels 19%
40% Biomass

Wood 17%

Data source: U.S. Energy Information Administration, Monthly Energy Review, Table 1.3 and 10.1
April 2022, preliminary data
Note: Sum of components may not equal 100% because of independent rounding.

FIGURE 2
Energy production by source AEO2022 Reference case
quadrillion British thermal units
2021
50
history projections
dry natural gas
40

30
crude oil and lease condensate

20 other renewable energy

coal
10 natural gas plant liquids
nuclear
hydro
0
1990 2000 2010 2020 2030 2040 2050

Source: https://www.eia.gov/outlooks/aeo/pdf/AEO2022_ChartLibrary_OverviewandDrivers.pdf

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 In its International Energy Outlook, released October 6, 2021, EIA projects renewable
energy consumption will more than double between 2020 and 2050 (reference case).
During the same period, natural gas consumption is expected to grow by 31 percent, but
the percentage of natural gas used by the global energy system will decline slightly.

As for oil, the forecast for liquid fuel consumption is continuing growth at a near
constant pace through 2050: “As travel increases as the effects of the COVID-19
pandemic lessen, the majority of passenger and freight vehicles continue to be fueled
by liquid fuel-consuming internal combustion engines. Industrial use of petroleum and
other liquids, particularly for chemical feedstocks, also increases through the projection
period.” 13 [FIGURE 3]

Renewables are gaining ground as the world pursues an energy transition away from oil
and natural gas, but hydrocarbons continue to play a central role in the U.S. and global
energy systems and will continue to do so for several decades.

Our national energy needs clearly support a commitment to continued U.S. offshore
energy development. U.S. Gulf of Mexico offshore energy production is a key component
of a national energy strategy that will ensure Americans can continue to have access to
fundamental domestic energy that is produced safely, sustainably, and responsibly.

OFFSHORE OIL AND GAS: CAPITAL INVESTMENT IN ACREAGE

AND EXPLORATION RESULTS IN PRODUCTION

As with many other forms of energy development, oil and gas production is contingent
upon having acreage that can be explored, developed, and produced. Leasing is requisite
to securing the acreage to develop and produce supplies of oil and gas for the country.
Continued lease sales at regular intervals is required for declining production to be
replenished and production levels to be increased when there are spikes in demand.
Simply put, the more acreage that is available, the greater the potential for well-managed
energy production.14

The myth of idle leases has become a red herring in the public debate over federal oil
and gas leasing. Assertions about the “stockpiling” of leases represents a fundamental
misunderstanding of how the oil and gas industry operates under the offshore
leasing program.

13. https://www.eia.gov/outlooks/ieo/consumption/sub-topic-01.php
14. It is not true, however, that more leasing necessarily leads to more environmental impacts. As noted herein, many leases will
not go into production, and for those that do, industry has continued to minimize the footprint necessary for production as it
continues to do more with less.

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 FIGURE 3
Primary energy consumption Share of primary energy consumption by
by energy source, world energy source, world
quadrillion British thermal units percentage
history projections
petroleum 100%
300 history projections
and other 90% renewables
250 liquids1
80%
renewables
70%
200 natural gas coal
60%
coal
150 50%
petroleum
40% and other
100 liquids1
30%
50 20%
nuclear natural gas
10%
0
0%
nuclear
2010 2020 2030 2040 2050
2020 2050
Source: U. S. Energy Information Administration, International Energy Outlook 2021 (IEO2021) Reference case
1
includes biofuels

Oil and gas companies often must bid on leases around which there is significant
uncertainty. In other words, companies must cast a wide net when acquiring lease
blocks, then winnow through prospective blocks by means of additional exploration
and study – a process that can take years – before they can identify a commercially
viable discovery.

Legally competing at auction for rights to explore and develop offshore federal lands
and paying a bonus to acquire a federal offshore oil and gas mineral lease can be a
risky proposition. There is no guarantee that oil and gas resources are present in the
subsurface. Even with incredible advances in technology, there is an element of energy
production that is still speculative. Due to this risk, some leases are studied for quite
some time to determine if energy reserves exist or if they exist in sufficient quantities to
be produced economically and in compliance with regulatory standards. In other cases,
sites being considered for exploratory wells are going through a thorough and lengthy
regulatory approval process.

Given that a production well in the Gulf of Mexico can cost hundreds of millions of
dollars to develop, decision-makers must be judicious in deciding to develop a lease.

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 This means some leases expire and are returned to the federal government for future
consideration when technology improves enough to make resources accessible.

As the non-partisan federal Congressional Research Service concluded during the

Obama Administration:

Many leases expire before exploration or production occurs…Generally, a

number of concerns arise in the oil and gas leasing process that delay or prevent
oil and gas development from taking place, or might account for the large
number of leases held in non-producing status. There could be a lack of drilling
rigs or other equipment availability, and financing and/or skilled labor shortages.
Legal challenges might delay or prevent development. There are typically also
many leases in the development cycle (e.g., conducting environmental reviews,
permitting, or exploring) but not producing commercial quantities.15

Oil and natural gas companies have every incentive to produce as much oil and gas
as possible as rapidly as they can. The decision about which blocks to develop is
predicated on a number of considerations.

■ Finding oil and gas is a prospective business, and not all leases contain commercially
viable amounts of hydrocarbons. In fact, most leased areas do not contain oil and
gas in commercial quantities. Companies need to invest in multiple lease blocks and
methodically assess them to identify and develop the blocks where commercially
viable finds are most likely.
■ A lease is only a rental agreement. When a company buys a lease, it’s tying up
significant (and finite) capital in the search for oil and natural gas. There is a
significant financial incentive for a company to recover its initial investment
by developing oil and gas resources in a timely manner, in other words, to
initiate production.
■ In addition to bidding potentially millions of dollars for each lease block, companies
pay rent to the federal government on non-producing leases. Annual rental rates can
cost hundreds of thousands of dollars per lease block.
■ Companies are required under government leasing regulations to develop a lease
expeditiously or return it to the federal government. Rental terms are established
in the Final Notice of Sale and typically range from 5 to 10 years, depending on
water depth. In general, leases that are not producing by the end of their term are
relinquished to the government, which can then re-lease them. The resources
invested by the company to acquire and keep the lease are lost if a lease is returned
to the government.

15. https://crsreports.congress.gov/product/pdf/R/R40645

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 It takes time and significant investments to explore and develop an offshore lease
block. Capital costs for offshore exploration and development are significant, with total
costs for projects regularly going into the billions of dollars.

■ Offshore seismic exploration can cost upwards of $200,000 per day.

■ Offshore exploratory wells can cost anywhere from $25 million to more than $100
million for some deepwater prospects. It is not unusual for a company to spend more
than $100 million on an exploratory well only to come up empty with a “dry hole.”
■ If a company does end up identifying commercial quantities of oil or natural gas,
the subsequent design and installation of deepwater production facilities regularly
exceeds $1 billion.

Developing a lease block does not occur overnight. The timeline from lease sale to first
oil can take up to ten years. A typical project progression includes:

■ One year for preliminary geological investigation and selection of areas of interest for
seismic data acquisition.
■ One year to two years to acquire and process seismic data and identify
drillable prospects.
■ A year or more to contract and schedule a drilling rig to carry out a drilling program.
■ Six to 10 months to drill and complete an exploratory well.
■ Six months to a year for follow-up evaluation of drilling results, which can include
drilling a sidetrack well.
■ Another two to three years for additional delineation drilling, and formulating a
reservoir development plan if the exploratory well proves successful. During this
time, the company also is working on pre-permit studies, permitting, and design and
procurement for production facilities, including surface and subsurface equipment
and systems,
■ One year or more is needed for facilities installation, followed by development drilling,
which can take one to two additional years. During this period, the company is
involved in design, permitting, engineering, procurement and installation of a pipeline
or offshore system to bring production to market.

THE CONTINUOUSLY IMPROVING EFFICIENCY OF

U.S. GULF OF MEXICO OFFSHORE DEVELOPMENT

Gulf of Mexico oil and gas companies are producing a massive amount of energy with a
small – and shrinking – physical footprint.

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 Gulf of Mexico Oil and Gas Lease Information
Number Acreage
Number of Acreage of of Non- of Non-
Number of Acreage of Producing Producing producing producing Average Daily
Active Leases Active Leases Leases Leases Leases Leases Production

December
2,018 10,773,137 540 2,766,936 1,478 8,006,201 1.73 mbpd
2021

December
3,257 17,331,283 873 4,301,193 2,381 13,030,090 1.73 mbpd
2016

December
5,873 31,576,909 1,244 6,065,566 4,629 25,511,343 1.25 mbpd
2011

Source: BOEM, EIA (As of March 2022, there are 1,997 active leases, with 479 producing leases, 1,518 non-producing leases in the Gulf of Mexico.)

Leasing data demonstrates that the industry is innovating and advancing technologies
to do more with less. Over the 10-year period from 2011, the industry increased oil
production in the Gulf of Mexico by 38 percent while the number of producing leases
decreased by 57 percent. This is an impressive achievement, but access to resources
remains key to continued progress in provide the energy supplies relied upon by
Americans. Continued offshore lease sales are absolutely imperative because it is only
through a robust leasing program with biannual opportunities to secure leases that
companies are able to find and develop the most prospective targets. In the U.S. Gulf of
Mexico, the industry continues to innovate and develop the systems to produce more
resources with an ever decreasing footprint. The preference for all stakeholders should
be to enable consistent lease sales that allow steady and predictable development and
production from this strategic region.

THE GULF OF MEXICO IS POISED FOR CONTINUED

GLOBAL ENERGY LEADERSHIP

According to Rystad Energy, global oil exploration activities must ramp up to meet
global demand through 2050. More than $3 trillion in capital expenditure will be
needed to add the undeveloped and undiscovered resources necessary for the global
market. Rystad analysts expect deepwater areas to play a prominent role in building
essential energy supplies. According to Rystad Senior Upstream Analyst Palzor Shenga,
“Upstream players may have to more than double their conventional exploration efforts
in order to meet global oil demand through 2050.” [FIGURE 4]

The implications of what happens when oil production cannot meet oil demand
surfaced as the world emerged from pandemic lockdowns. The year 2021 saw a strong
economic recovery – domestically and globally – as some degree of normalcy resumed.
Oil consumption grew by a very strong 6.1 percent in 2021, but it takes time, capital, and

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 FIGURE 4
Total new liquids supply required to meet demand towards 2050
Billion barrels (bb)

SOURCE 1 SOURCE 2 (Remaining volumes to satisfy demand)

Total recoverable volumes
Risked volumes
Yet-to-be-found resources
Total liquids
74 volumes needed
378 bb
30%

bb

Resource
+ 121
bb
484
bb
increment via
1. Appraisal
2. Technological
enhancements 47 70%
3. EOR, etc. bb

18 Remaining after Conventional

bb contribution from Unconventional
Source 1
5% resource increment Source: Rystad Energy UCube, research and analysis

Source: Rystad Energy UCube, research and analysis, as reported in Offshore Magazine, “Exploration overdrive urgently required, report claims,”
December 10, 2020.16

entire teams of experts to ramp up production safely and responsibly, and producers
could not immediately meet the demand.

Oil production grew by a “tepid” 1.5% with prices jumping sharply as demand outpaced
supply 17. Brent crude oil, a global benchmark, started the year at $50 per barrel and
increased to a high of $86 per barrel in late October before declining in the final weeks
of the year 18 . The trend continued in 2022, with $98 per barrel forecasted in the fourth
quarter of 2022 and $97 per barrel forecasted in the first quarter of 202319. A recurring

16. https://www.offshore-mag.com/drilling-completion/article/14188804/exploration-overdrive-urgently-required-rystad-
energy-report-claims
17. https://www.forbes.com/sites/thebakersinstitute/2022/08/23/oil-is-the-outlier-in-the-worlds-post-covid-energy-
recovery/?sh=4b3f9605e840
18. https://www.eia.gov/todayinenergy/detail.php?id=50738
19. https://www.eia.gov/outlooks/steo/report/prices.php#:~:text=The%20Brent%20crude%20oil%20spot,and%20
%2497%2Fb%20in%202023.

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 trend of similarly painful price shocks can be reasonably expected if global oil markets
are not able to invest in new projects to keep energy flowing.

The U.S. Gulf of Mexico has been a steady and reliable source of oil production over
the past several decades and achieved a leadership position globally for deepwater
development, maintaining production at more than one million barrels of oil per day
since 1997. The United States must sustain production from this region if the country is
to meet domestic demand.

Analysts at Energy & Industry Advisory Partners (EIAP) published a study titled The
Economic Impacts of a 5-Year Leasing Program Delay for the Gulf of Mexico Oil and
Natural Gas Industry that looks at the drop in production from the Gulf of Mexico if
lease sales are disrupted20. An uninterrupted leasing program in the Gulf of Mexico
would produce an average of 2.6 million barrels equivalent of oil and natural gas per
day from 2022-2040. Eliminating lease sales would result in about 500,000 barrels
equivalent per day less over that period, amounting to approximately 3.3 billion barrels
equivalent of lost production.

The following table shows the anticipated loss in oil and natural gas production with no
lease sales in the program:

2016 2017 2018 2019 2020 2021 2022

Oil (Delayed 5-year

1,598,583 1,680,500 1,757,167 1,892,167 1,644,083 1,696,200 1,770,904
Leasing Program Case)

Oil (Base Case) 1,598,583 1,680,500 1,757,167 1,892,167 1,644,083 1,696,200 1,770,904

Natural Gas (Delayed

5-year Leasing 548,251 484,225 445,142 463,627 360,395 349,089 364,464
Program Case)

Natural Gas (Base

548,251 484,225 445,142 463,627 360,395 349,089 364,464
Case)

Total BOE (Delayed

5-year Leasing 2,146,834 2,164,725 2,202,309 2,355,794 2,004,478 2,045,289 2,135,368
Program Case)

Total BOE (Base Case) 2,146,834 2,164,725 2,202,309 2,355,794 2,004,478 2,045,289 2,135,368

Offshore leasing has a clear and profound impact on U.S. oil and natural gas supplies.
Under the base case, with continued unabated Gulf of Mexico leasing, offshore oil
production from the Gulf is projected to increase to a high mark of 2,443,896 barrels
per day in 2032 and is expected to be near current levels, 1,779,534 barrels per day
projected, in 2040. If there are no lease sales in the program, offshore production from
the Gulf is expected to be 1,791,263 barrels per day in 2032, a drop of more than 600,000
barrel per day from the base case. A delayed leasing program results in 1,320,109

20. https://www.noia.org/noia-one-pagers-infographics/#flipbook-df_223664/1/

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 2023 2024 2025 2026 2027 2028

Oil (Delayed 5-year Leasing

1,862,644 2,045,883 2,104,153 2,125,785 2,131,351 2,104,996
Program Case)

Oil (Base Case) 1,862,644 2,045,883 2,109,445 2,157,480 2,194,981 2,256,299

Natural Gas (Delayed 5-year

379,846 411,896 422,762 427,058 428,169 422,875
Leasing Program Case)

Natural Gas (Base Case) 379,846 411,896 423,869 435,216 443,651 454,074

Total BOE (Delayed 5-year

2,242,490 2,457,779 2,526,915 2,552,844 2,559,520 2,527,871
Leasing Program Case)

Total BOE (Base Case) 2,242,490 2,457,779 2,533,314 2,592,696 2,638,632 2,710,373

2029 2030 2031 2032 2033 2034

Oil (Delayed 5-year Leasing

2,044,281 1,940,296 1,873,776 1,791,263 1,743,126 1,673,276
Program Case)

Oil (Base Case) 2,271,322 2,342,453 2,402,462 2,443,896 2,407,104 2,344,299

Natural Gas (Delayed 5-year

410,677 389,788 376,425 359,849 350,178 336,146
Leasing Program Case)

Natural Gas (Base Case) 456,644 489,210 535,392 546,145 543,756 538,374

Total BOE (Delayed 5-year

2,454,958 2,330,084 2,250,200 2,151,111 2,093,304 2,009,422
Leasing Program Case)

Total BOE (Base Case) 2,727,966 2,831,663 2,937,854 2,990,041 2,950,860 2,882,674

2035 2036 2037 2038 2039 2040

Oil (Delayed 5-year Leasing

1,620,909 1,522,137 1,447,031 1,346,578 1,332,971 1,320,109
Program Case)

Oil (Base Case) 2,276,146 2,187,721 2,062,724 1,930,878 1,849,058 1,779,534

Natural Gas (Delayed 5-year

325,626 305,784 290,695 270,515 267,782 265,198
Leasing Program Case)

Natural Gas (Base Case) 532,478 524,431 511,863 497,875 489,172 481,191

Total BOE (Delayed 5-year

1,946,535 1,827,921 1,737,726 1,617,094 1,600,752 1,585,307
Leasing Program Case)

Total BOE (Base Case) 2,808,623 2,712,152 2,574,587 2,428,753 2,338,230 2,260,725

Source: Energy and Industrial Advisory Partners

barrels per day of production in 2040, a drop of more than 400,000 barrel per day from
the base case.

According to the EIAP study, “A key requirement for continued Gulf of Mexico oil and
natural gas production is continued lease sales, which enable operators to explore new
acreage for previously undiscovered resources, develop new projects, and underpin

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 FIGURE 5
Global crude oil production, 2005-15
million barrels per day

100

80

60
68% 69% 71% onshore

40

20
32% 31% 29% offshore
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

FIGURE 6

Off-trend production due to

abnormal hurricane seasons

Source: U.S. Outer Continental Shelf Gulf of Mexico Region: Oil and Gas Production Forecast 2022-2031, OCS
Report BOEM 2022-022, page 23. Figure 14: OCS, GOMR Annual Oil Forecast
Table 3 below shows the oil forecast in tabular form.

Table 3: Annual Oil Forecast by Forecast Component (thousands of barrels of oil per day)

Contingent Undiscovered
Year Reserves Total Forecast
Resources Resources
24 NOIA | THE U.S. GULF OF MEXICO
2022 1,540 350 2 1,892
2023 1,363 575 62 2,000
2024 1,200 728 86 2,013
2305CP_NOIA.indd 24 2025 1,061 842 149 2,052 4/28/23 6:08 PM
 existing and planned projects by allowing operators to backfill production into facilities
with declining production.”21

The offshore region more generally is recognized as a preferred global region for
offshore oil and natural gas investment. Historically, offshore production has accounted
for about thirty percent of total oil production globally [FIGURE 5]. The BOEM’s own
estimates for the Gulf of Mexico demonstrate continued high levels of oil production
for the region and also assume that federal leasing for offshore tracts continues for the
forecast period [FIGURE 6]. The U.S. has been producing oil in the federal Gulf of Mexico
waters since the 1940s and production from the Gulf has been steadily increasing over
the past 30 years. In fact, this region has been producing more than one million barrels
of oil per day since 1997 and hit its highest level of production on record of 2.044 million
barrels per day in August of 2019, just before the onset of the pandemic [FIGURE 7].

21. https://www.noia.org/noia-one-pagers-infographics/#flipbook-df_223664/1/, at page 3.

FIGURE 7
Federal Offshore — Gulf of Mexico Field Production of Crude Oil

Thousand barrels per day

2,500

2,000

1,500

1,000

500

0
1985 1990 1995 2000 2005 2010 2015 2020

Federal Offshore — Gulf of Mexico Field Production of Crude Oil

Source: U.S. Energy Information Administration

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 Although production dropped during the pandemic in response to the related global
economic downturn, the U.S. Gulf of Mexico has recovered and was at 1.8 million barrels
per day in November 2022.

Oil is a global commodity, and investment in oil production projects occurs on a

global scale. The U.S. Gulf of Mexico shines as a premier region for oil production, with
substantial benefits flowing to American consumers. Eliminating or reducing U.S. oil and
gas leasing opportunities will shift that investment away from the U.S. Gulf of Mexico
to other regions, both offshore and onshore, throughout the world. As the chart below
shows, the U.S. stands out as a global leader in offshore oil production [FIGURE 8].

The U.S. Gulf of Mexico ranked second in the world based on the volume of new
discoveries of oil from 2015-2019 (shown in billions of barrels) as reported by Rystad
Energy in November 201922 .

Following increased investment and additional discoveries offshore Guyana, the most
recent Rystad Energy estimate places Guyana discoveries since 2015 at more than 11
billion barrels.23

This number tells an important story. The oil and natural gas industry continues to
invest in offshore projects around the world because the hydrocarbons produced
offshore have clear and positive economic, environmental, and climate attributes
compared to other regions.

Offshore oil and gas development is recognized for providing among the lowest carbon
barrels of oil in the world, and the U.S. Gulf of Mexico stands out as a global leader.
In the interest of reducing the carbon intensity of oil and gas development globally
and boosting energy security, the U.S. oil and gas policy should proactively attract
investment to the U.S. Gulf of Mexico.

22. https://guyanapetroleumdigest.ca/2019/11/26/guyana-still-leads-world-offshore-oil-discoveries-since-2015-2019-with-
6-8-billion-barrels/
23. https://www.forbes.com/sites/davidblackmon/2022/07/28/new-oil-power-guyana-on-pace-to-surpass-us-offshore-by-
2035/?sh=59eb17cc6c06

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 FIGURE 8
Global offshore crude oil production, 2005-15
million barrels per day
30

25

20
rest of world
15

United States
10
Norway
Mexico
5 Brazil
Saudi Arabia
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: U.S. Energy Information Adimistration, based on Rystad Energy

Note: Includes lease condensate and hydrocarbon gas liquids.

BOEM recognizes a promising future for oil development in the Gulf of Mexico.
According to the 2021 Assessment of Technically and Economically Recoverable Oil
and Natural Gas Resources of the Gulf of Mexico Outer Continental Shelf24 , the region
contains estimated undiscovered technically recoverable resources in the range of
23.31 billion barrels of oil to 36.27 billion barrels of oil. We know from experience that
technology advancements will continue to enable the discovery and development
of ever-increasing volumes, resulting in a continuous upward trend over time in the
estimated undiscovered technical recoverable resources in the Gulf of Mexico.

These estimates mean nothing, however, if companies do not have the opportunity to
continue to lease acreage for development through regular, formalized lease sales. It
is critical that the U.S. does not cede ground in offshore energy production to other
regions and that it recognizes that it is in the best interests of Americans for public
policy to encourage and attract investment to U.S. offshore production opportunities.

24. https://www.boem.gov/sites/default/files/documents/regions/gulf-mexico-ocs-region/resource-evaluation/2021%20
Gulf%20of%20Mexico%20Oil%20and%20Gas%20Resource%20Assessment%20%28BOEM%202021-082%29.pdf

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 ■ GULF OF MEXICO PRODUCTION
IMPROVES ENERGY AFFORDABILITY

The cost of energy is fundamentally driven by supply and demand, and recently, global
markets have been disrupted by a supply crunch in both the oil and natural gas markets.
The energy paradigm has shifted over the past decade, with the United States rising to
a position of energy power and emerging as the leading producer of both oil and natural
gas in the world.

Vice Chairman of IHS Markit Daniel Yergin explains how things have changed:

According to the old script, United States oil production was too marginal to
affect world oil prices. But the gap today between demand and available supply
on the world market is narrow. The additional oil Saudi Arabia is putting into the
market will help replace Iranian exports as they are increasingly squeezed out
of the market by sanctions…. But if America’s increase … [in oil production] …
had not occurred, then the world oil market would be even tighter. We would be
looking at much higher prices – and voters would be even angrier.25

Mr. Yergin made this point in 2012 at the outset of the shale revolution, but the
significance of U.S. production for global energy markets is as important as ever today.
In fact, Mr. Yergin reiterated this very point in February 2022 in the aptly title op-ed in
the Wall Street Journal, “America Takes Pole Position on Oil and Gas.”

Analysts recognize that the downturn in the oil and natural gas industry from 2014-2020,
combined with ill-conceived policies and investment approaches, led to significant
underinvestment in oil and natural gas exploration and infrastructure. According to
Simon Flowers, Chairman, Chief Analyst at Wood Mackenzie and author of a weekly
column called The Edge, “Underinvestment in oil supply will lead to a tight oil market later
this decade. It’s a narrative that’s gained increasing traction as capital expenditure on
upstream oil and gas has shrunk. Spend in 2021 is half the peak of 2014 after slumping to
new depths in [2021’s] crisis.”26

Mr. Flowers poses the question, “How much new oil supply does the world need?” His
answer is, “A lot–we reckon about 20 million b/d from 2022 to 2030.”

According to Flowers, “This is the ‘supply gap’, the difference between our estimate
of demand in 2030 and the volumes we forecast existing fields already onstream or
under development can deliver.”27 If his numbers are correct, a huge amount of new oil

25. Daniel Yergin, “America’s New Energy Reality,” The New York Times, June 9, 2012
26. https://www.woodmac.com/news/the-edge/is-the-world-sleepwalking-into-an-oil-supply-crunch/
27. https://www.woodmac.com/news/the-edge/is-the-world-sleepwalking-into-an-oil-supply-crunch/

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 THE COST OF ENERGY IS
FUNDAMENTALLY DRIVEN
BY SUPPLY AND DEMAND,
AND RECENTLY, GLOBAL MARKETS
HAVE BEEN DISRUPTED BY A
SUPPLY CRUNCH IN BOTH THE
OIL AND NATURAL GAS MARKETS.

is needed to close the expected gap between the supply and demand and help bring
stability and affordability to oil and petroleum product prices.

Rystad Energy echoes the concern about the supply gap and the huge amount of
investment needed to close it. According to Rystad, more exploration for oil and
gas is needed to supply the volumes needed worldwide by 2050.28 In fact, it will take
massive investment just to keep pace with growing demand. Rystad suggests capital
expenditures of at least $3 trillion will be required to replenish declining production from
currently producing assets around the world to meet expected global demand in 2050.

Saudi Aramco CEO Amin H. Nasser identified the crux of the issue with the energy crisis in
his remarks during the Schlumberger Digital Forum, on September 20, 2022:

Unfortunately, the response so far betrays a deep misunderstanding of how we

got here in the first place, and therefore little hope of ending the crisis anytime
soon. So this morning I would like to focus on the real causes as they shine a
bright light on a much more credible way forward. 

When historians reflect on this crisis, they will see that the warning signs in
global energy policies were flashing red for almost a decade. Many of us have
been insisting for years that if investments in oil and gas continued to fall,

28. https://www.offshore-mag.com/drilling-completion/article/14188804/exploration-overdrive-urgently-required-rystad-
energy-report-claims

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 global supply growth would lag behind demand, impacting markets, the global
economy, and people’s lives.

In fact, oil and gas investments crashed by more than 50% between 2014 and
last year, from $700 billion to a little over $300 billion. The increases this year are
too little, too late, too short-term. 

Meanwhile, the energy transition plan has been undermined by unrealistic

scenarios and flawed assumptions because they have been mistakenly
perceived as facts. For example, one scenario led many to assume that major
oil use sectors would switch to alternatives almost overnight, and therefore oil
demand would never return to pre-Covid levels. 

In reality, once the global economy started to emerge from lockdowns, oil
demand came surging back, and so did gas.29 

Mr. Nasser’s remarks about the challenges ahead are similarly profound, “Oil inventories
are low, and effective global spare capacity is now about one and a half percent of
global demand. Equally concerning is that oil fields around the world are declining on
average at about 6% each year, and more than 20% in some older fields last year. At
these levels, simply keeping production steady needs a lot of capital in its own right,
while increasing capacity requires a lot more.”30

We are fortunate in the United States that our Gulf of Mexico region is up to the task of
delivering the oil and gas the economy needs. Production numbers from the U.S. Gulf
of Mexico place it in the company of some of the largest oil producing countries. If the
Gulf of Mexico were its own country, it would be one of the top eleven oil producing
countries [FIGURE 9].

The U.S. offshore oil producing basin can help address the current and projected
gap between global supply and demand. Bringing to market oil from this region will
help exert downward pressure on the price of oil and petroleum products such as
gasoline, which has become a more costly necessity for American consumers as well
as businesses.

Offshore projects around the world contribute massive amounts of natural gas to global
production volumes, and prolific areas like the U.S. Gulf of Mexico can help address
issues surrounding the tightening in global natural gas supplies, which has led to record
high prices in various regions. Although natural gas production from the U.S. offshore
has hovered around two billion cubic feet (bcf) per day, Gulf of Mexico production in the
late 1990s exceeded 5 bcf per day, and there is significant potential for growth. Today,

29. https://www.aramco.com/en/news-media/speeches/2022/remarks-by-amin-h-nasser-at-schlumberger-digital-forum#
30. https://www.aramco.com/en/news-media/speeches/2022/remarks-by-amin-h-nasser-at-schlumberger-digital-forum#

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 FIGURE 9

The U.S. Gulf of Mexico stands out as one of

the leading oil producing regions of the world
Country Barrels of oil per day
United States 11,184,870
Russia 10,111,830
Saudi Arabia (OPEC) 9,313,145
Canada 4,459,455
Iraq (OPEC) 4,084,822
China 3,987,677
Iran (OPEC) 3,110,275
United Arab Emirates (OPEC) 3,091,481
Brazil 2,905,121
Kuwait (OPEC) 2,527,106
U.S. Gulf of Mexico (pre-pandemic peak) 2,044,000
U.S. Gulf of Mexico (current levels) 1,791,000*
Norway 1,775,813
Kazakhstan 1,764,463
Mexico 1,734,495
*as of June 2022

Source: U.S. Energy Information Administration.

the United States is a leading exporter of LNG at a time when demand for U.S. LNG is
growing from our allies around the world31. If the United States were to invest in more
offshore development, natural gas production from the U.S. Gulf of Mexico could feed

31. https://www.reuters.com/markets/commodities/firms-make-deals-boost-lng-exports-60-us-canada-
mexico-2022-08-23/

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 into the domestic or LNG market, helping to bring down the cost and provide secure
energy to our allies.

Expanding natural gas production and usage provides environmental benefits as well.
For example, replacing coal with natural gas in power generation significantly reduces
emissions. According to Fatih Birol, Executive Director of the International Energy
Agency (IEA), “Natural gas is one of the mainstays of global energy. Where it replaces
more polluting fuels, it improves air quality and limits emissions of carbon dioxide.”32
Burning natural gas for power generation produces about half as much carbon dioxide
as coal to produce the same amount of energy.

The U.S. Energy Information Administration (EIA) explains the differences:

CO2 emissions associated with generating electricity from coal and natural gas
differ because of differences in the fuels themselves—coal has more carbon
content per unit of energy. In addition, coal-fired plants and natural gas-fired
plants differ in how efficiently they convert their respective fuels to electricity.
The amount of CO2 produced when a fuel is burned depends on a fuel’s carbon
content. Coal produces more CO2 per unit of energy than natural gas does when
burned. Coal consumption for electricity generation produces 209 pounds of
CO2 per million British thermal units (MMBtu), compared with 117 pounds of CO2 /
MMBtu for natural gas.33

According to the EIA, the shift from coal to natural gas in U.S. power generation has had
profound positive emissions benefits for the U.S., catapulting the U.S. to leadership in
GHG emissions reductions around the world. “Over the past 15 years, the U.S. electricity
generation mix has shifted away from coal and toward natural gas and renewables,
resulting in lower CO2 emissions from electricity generation. In 2019, the U.S. electric
power sector produced 1,724 million metric tons (MMmt) of CO2, 32% less than the
2,544 MMmt produced in 2005.”34

The following EIA graphic shows the impactful decline in emissions attributable to the
rise in natural gas production and use in the United States [FIGURE 10].

The global economy has experienced similar emissions reductions as a result of

switching from coal to natural gas. The drop in emissions from 2010 to 2018 is evident in
data reported by IEA35 [FIGURE 11].

32. https://www.iea.org/reports/the-role-of-gas-in-todays-energy-transitions
33. “Electric power sector CO2 emissions drop as generation mix shifts from coal to natural gas,” This Week in Energy, U.S.
Energy Information Administration, June 9, 2021.
34. “Electric power sector CO2 emissions drop as generation mix shifts from coal to natural gas,” This Week in Energy, U.S.
Energy Information Administration, June 9, 2021.
35. https://www.iea.org/reports/the-role-of-gas-in-todays-energy-transitions (Reprinted from IEA)

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 FIGURE 10
U.S. electric power sector electricity generation and CO2 emissions by source (2005–201 9)
electricity generation CO2 emissions
billion megawatthours million metric tons
4.5 3,000
4.0
renewables
3.5
nuclear
3.0 2,000
2.5
2.0 coal
coal
1 .5 1 ,000
1 .0
natural gas
0.5 natural gas
all other all other
0.0 0
2005 201 9 2005 201 9

FIGURE 11
CO2 savings from coal-to-gas switching in selected regions compared with 2010, 2018
Mt CO2
0

-100

-200

-300

-400

-500

-600
2011 2012 2013 2014 2015 2016 2017 2018

United States China Europe India Rest of world

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 Switching from coal to natural gas has serious health benefits as well. According to
Harvard’s Jackson Salovaara:

[N]atural gas is superior to coal in a number of respects other than CO2

emissions. Natural gas burns much more cleanly than coal, only emitting
NOx and methane in significant quantities when combusted. By comparison,
coal combustion emits NOx and methane at higher rates than natural gas
and also emits SO2 [sulfur dioxide], mercury, particulate matter, CO, and toxic
metals. These air pollutants have dangerous impacts on human health—SO2,
particulate matter, and CO are damaging to the respiratory system and mercury
consumption can cause birth defects and lower IQ.36

Unfortunately, the current energy crisis and the energy challenges associated with
Russia’s invasion of Ukraine have pushed countries to revert to coal power generation,
and in some regions, the move has been substantial. In June 2022, The Washington
Post reported that several European countries were in the process of making the
switch, “Austria, Germany, Italy and the Netherlands announced plans this week to
prepare to resurrect old coal plants as gas supplies dwindled. The moves came just days
after Moscow reduced natural gas flows to several European countries, including Italy
and Slovakia, alarming leaders who are worried about energy reserves ahead of winter.”37

Reuters has confirmed there is now a rush for coal supplies from European buyers to
secure the energy needed ahead of the coming winter,

Prices for thermal coal, used to generate electricity, have leapt to record levels
as a result of the war, which has led to many European countries losing access
to vital supplies of natural gas and coal from their top provider Russia. Buyers in
Europe and beyond are now vying to pay top dollar for coal from often remote
mines in places such as Tanzania, Botswana and even potentially Madagascar.
The resurgent coal demand, driven by governments trying to wean themselves
off Russian energy while keeping a lid on power prices, clashes with climate plans
to shift away from the most polluting fossil fuel.38

And Nasdaq has reported that European imports of coal are expected to hit some
of the highest levels in years, “European imports of thermal coal could be the
highest in at least four years in 2022 and may rise further next year, analysts said on
Monday, highlighting the extent of the energy crisis resulting from sanctions on top
supplier Russia.”39

36. Salovaara, “Coal to Natural Gas Fuel Switching and CO2 Emissions Reduction,” Harvard College, 2011, at pages 87-88.
37. https://www.washingtonpost.com/world/2022/06/22/coal-plant-europe-germany-austria-netherlands-russia-gas/
38. https://www.reuters.com/markets/commodities/coal-rush-energy-crisis-fires-global-hunt-polluting-fuel-2022-09-20/
39. https://www.nasdaq.com/articles/going-back-in-time:-europes-coal-imports-to-hit-multi-year-highs-in-2022

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 The recent switch back to coal for power generation comes on top of continued
construction of new coal-fired power plants around world, particularly in China and
India. A report from the Wilson Center highlights the continued role of coal in the
Chinese economy:

In 2021, China began building 33 gigawatts of coal-based power generation,

according to the Helsinki-based Center for Research on Energy and Clean
Air (CREA). That is the most new coal-fired power capacity China has
undertaken since 2016 and, says CREA, three times more than the rest of the
world combined…. India gets roughly 70% of its electricity from coal, and the
Modi government recently ordered the reopening of more than 100 closed
mines to meet rapidly growing demand made even greater by the country’s
crushing heat wave.40

Although other countries are exerting pressure on China and India to reduce emissions,
it is clear that the global economy will continue to rely on supplies of energy that are
affordable and reliable even if they are not the best choices for the environment. An
“all of the above” approach considers both traditional fuels and renewables to provide
the energy necessary for the fundamentals of life. Growth in renewable energy and
offshore wind will be strong for years to come, and natural gas will play an important and
expanding role, filling the gap as a much cleaner alternative to coal. Gas production from
the U.S. Gulf of Mexico has great potential to help keep energy costs affordable and
support U.S. allies around the globe.

High energy prices impact all Americans, but they disproportionately impact low income
and minority communities in which many must decide between food, healthcare, or
energy bills. In a different way, businesses that rely on affordable and reliable supplies
of energy suffer as well. Today, manufacturers in Europe are laying off employees and
shutting down factories in direct response to high prices of natural gas and electricity.41
Policies that promote U.S. Gulf of Mexico oil and natural gas production promote
important principles of economic justice by helping those in need with greater energy
affordability and jobs, and help fuel the businesses and factories upon which the world
economy relies.

40. https://www.wilsoncenter.org/blog-post/chinese-coal-based-power-plants
41. https://www.nytimes.com/2022/09/19/business/europe-energy-crisis-factories.html

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 ■ GULF OF MEXICO ENERGY DEVELOPMENT
STIMULATES DOMESTIC SPENDING

Offshore oil and gas development is capital intensive. In 2021, an EIAP study titled The
Gulf of Mexico Oil & Gas Project Lifecyle: Building an American Energy & Economic
Anchor places the total lifetime spend to develop and produce a deepwater Gulf of
Mexico at approximately $8.8 billion. The average annual spend is nearly $295 million,
with the highest spending levels taking place during project development, when
subsea tieback development is taking place, and during decommissioning. The average
shallow-water project results in an estimated $1.3 billion total lifetime spending,
including $27.5 million in annual operational expenditures.42

In another EIAP study, The Economic Impacts of a 5-Year Leasing Program Delay for
the Gulf of Mexico Oil and Natural Gas Industry,43 released in 2022, analysts projected
Gulf of Mexico offshore oil and gas spending for 2022 would be approximately $30.3
billion. Across the forecast period from 2022-2040, EIAP estimates Gulf of Mexico the
offshore oil and natural gas industry will spend $30.6 billion per year. This investment
projection assumes there will be no interruption in Gulf of Mexico oil and gas
lease sales.

However, the study shows that lease sale delays serves to dramatically reduce
projected domestic investment. According to the 2022 study, an extensive delay in
federal offshore leasing (or zero lease sales) could result in a drop in capital expenditure
of about $10 billion in the peak year and a nearly $100 billion capital spending loss over
the forecast period.

The study provides a high degree of granularity, identifying the specific types of
spending that take place throughout the lease life cycle. The table below shows the
breakdown in spending for a multitude of areas of offshore oil and gas development for
2021 and 2022:

42. https://www.noia.org/noia-reports/#flipbook-df_218475/1/
43. https://www.noia.org/noia-one-pagers-infographics/#flipbook-df_223664/1/

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 2021 2022

G&G $192 $236

Drilling Tangibles $863 $1,224

Trees $506 $558

Manifolds $261 $290

Other Subsea Hardware $90 $135

Control Umbilical, Flying Leads $308 $354

Infield FL $68 $119

Export PL $358 $734

Infield Risers $33 $57

Export Risers $14 $29

Fixed Platforms & Facilities $88 $168

Floating Production Units & Facilities $1,760 $1,870

Installation $1,038 $1,636

OPEX $13,474 $13,548

Decommissioning CAPEX $858 $785

Drilling $4,882 $6,790

Engineering CAPEX $679 $847

Engineering OPEX $886 $891

Natural Gas Processing and Transportation $124 $127

Total $26,359 $30,272

Source: Energy & Industrial Advisory Partners, The Economic Impacts of a 5-Year Leasing Program Delay for
the Gulf of Mexico Oil and Natural Gas Industry, March 29, 2022. page 59.44

Thousands of companies support offshore Gulf of Mexico oil and gas development.
While the bulk of the work and a significant portion of the spending occur along the Gulf
Coast, the supply chain for offshore oil and gas development is long and strong, with
vendors in every state getting business from the activity.

In a 2021 study, The Economic Impacts of the Gulf of Mexico Oil and Natural Gas
Industry, EIAP identified more than 2,400 companies distributed across all 50 states
that provide supplies or services to the offshore sector. EIAP offers this example as a
snapshot of the range of companies that benefit from offshore oil and gas, noting, “This
list greatly underestimates the number of companies who supply the industry.”45 The

44. https://www.noia.org/noia-one-pagers-infographics/#flipbook-df_223664/1/
45. https://www.noia.org/noia-reports/#flipbook-df_217502/1/, at page 6

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 spending impacts from Gulf of Mexico oil and natural gas development extend beyond
the Gulf Coast, permeating every state in the country.

With U.S. and global demand for oil and gas expected to rise for the next two decades,
high levels of spending stemming from offshore oil and gas leasing will continue to
sustain businesses across the country.

■ THE U.S. GULF OF MEXICO SUPPORTS

HIGH-PAYING JOBS

Offshore oil and gas development is widely recognized as an employment engine that
provides good-paying jobs. The study, The Economic Impacts of a 5-Year Leasing
Program Delay for the Gulf of Mexico Oil and Natural Gas Industry,46 estimates
offshore oil and natural gas employment numbers under the base case with no
interruption in lease sales at an average of 372,012 jobs per year throughout the forecast
period of 2022-204047:

2016 2017 2018 2019 2020 2021 2022 2023 2024

Texas 166,737 158,715 155,767 147,462 133,381 136,682 158,256 169,253 164,634

Louisiana 98,247 94,932 95,089 94,621 89,432 89,175 98,473 107,040 106,535

Mississippi 21,524 20,740 20,926 20,415 19,110 19,116 21,593 23,268 22,947

Alabama 29,595 28,870 29,053 28,011 25,157 26,508 29,250 30,871 30,276

Other U.S. States 65,041 60,861 59,631 54,989 43,624 52,990 63,954 63,667 59,865

Total 381,144 364,119 360,465 345,498 310,703 324,472 371,525 394,099 384,257

2025 2026 2027 2028 2029 2030 2031 2032

Texas 168,823 171,201 176,391 179,528 184,119 178,814 168,823 157,130

Louisiana 108,625 110,246 112,832 114,379 116,248 114,839 111,109 106,689

Mississippi 23,447 23,748 24,349 24,675 25,165 24,710 23,765 22,605

Alabama 30,713 30,922 31,489 31,855 32,460 31,972 31,020 29,808

Other U.S. States 60,641 60,881 61,335 62,846 65,014 62,801 58,175 53,819

Total 392,249 396,997 406,396 413,284 423,006 413,136 392,892 370,050

46. https://www.noia.org/noia-one-pagers-infographics/#flipbook-df_223664/1/
47. https://www.noia.org/noia-one-pagers-infographics/#flipbook-df_223664/1/, at page 51.

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 2033 2034 2035 2036 2037 2038 2039 2040

Texas 150,541 142,724 135,170 120,756 135,144 142,858 148,587 151,886

Louisiana 103,567 100,503 97,262 95,642 96,386 99,700 101,946 103,580

Mississippi 21,901 21,106 20,333 19,889 20,198 20,982 21,564 21,916

Alabama 29,166 28,325 27,531 27,014 27,432 28,141 28,694 29,009

Other U.S. States 51,622 48,733 45,040 43,496 46,369 49,944 51,839 53,838

Total 356,797 341,392 325,336 306,798 325,529 341,625 352,631 360,229

Source: Energy and Industrial Advisory Partners

Not surprisingly, the large majority of jobs are along the Gulf Coast, but the offshore
industry depends on supplies and services from the work of Americans in every state.
With its extensive reach and impact, the Gulf of Mexico oil and gas industry supports
between 40,000 and 65,000 jobs each year outside the Gulf Coast.

Employment projections in the event that policy makers in DC reduce leasing

opportunities remains bleak. Under a zero lease sale scenario, Energy and Industrial
Advisory Partners estimates employment losses at an average of more than 57,000
American jobs per year with a peak during of about 116,000 lost jobs48:

2016 2017 2018 2019 2020 2021 2022 2023

Texas 0 0 0 0 0 0 -159 -1,684

Louisiana 0 0 0 0 0 0 -21 -545

Mississippi 0 0 0 0 0 0 -9 -150

Alabama 0 0 0 0 0 0 -17 -168

Other U.S. States 0 0 0 0 0 0 -70 -594

Total 0 0 0 0 0 0 -275 -3,140

2025 2026 2027 2028 2029 2030 2032

Texas -15,274 -25,344 -38,058 -46,490 -54,668 -52,126 -37,024

Louisiana -6,337 -10,536 -16,303 -20,000 -24,028 -24,150 -20,080

Mississippi -1,551 -2,575 -3,929 -4,780 -5,703 -5,572 -4,312

Alabama -1,617 -2,753 -4,122 -5,101 -6,085 -6,011 -4,791

Other U.S. States -5,724 -10,739 -16,608 -22,096 -25,458 -24,323 -17,011

Total -30,503 -51,948 -79,020 -98,466 -115,942 -112,182 -83,218

48. https://www.noia.org/noia-one-pagers-infographics/#flipbook-df_223664/1/, at page 63.

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 2033 2034 2035 2036 2037 2039 2040

Texas -32,757 -26,109 -24,919 -22,476 -16,375 -13,422 -12,366

Louisiana -18,923 -16,681 -16,163 -13,978 -13,346 -13,242 -13,149

Mississippi -3,971 -3,333 -3,258 -2,679 -2,489 -2,339 -2,272

Alabama -4,516 -3,970 -4,028 -3,481 -3,295 -3,184 -3,178

Other U.S. States -15,415 -13,278 -11,916 -8,486 -6,165 -4,014 -3,755

Total -75,582 -63,370 -60,284 -51,100 -41,669 -36,202 -34,720

Source: Energy and Industrial Advisory Partners

The 2021 EIAP report, The Gulf of Mexico Oil & Gas Project Lifecyle: Building an
American Energy & Economic Anchor, describes the sizable economic and employment
footprint of shallow-water and deepwater project life cycles to provide a foundation
for developing employment estimates. EIAP establishes the credibility of its numbers,
basing them on a vast database that allows analysts to break down offshore energy
development into five distinct stages: pre-development, development, operations, infill
drilling and tiebacks, and abandonment and decommissioning. Each stage is further
segmented to identify individual activities, types of equipment, primary company
and supplier types, sub-supplier types, and types of employment. Finally, the study
describes the fields of work, occupations, and wages for workers throughout the life
cycle of a lease.

One of the things that differentiates a Gulf of Mexico project from other types of
construction efforts is that it has a massive economic impact over their entire project
life cycle. EIAP identified more 200 types of jobs involved in U.S. Gulf of Mexico oil and
gas production. Together, the women and men who fill these positions work to safely
produce lower-emission, environmentally responsible barrels of oil and natural gas.

Offshore oil and gas jobs are varied and high paying, with an average industry wage
of $69,650, or 29% higher than the national average. Every U.S. state has jobs and
investments tied to the U.S. Gulf of Mexico oil and gas industry.

An average deepwater project produces about $3 billion in total direct wages. Direct
employment associated with a modern deepwater project development averages over
1,435 jobs across the project’s 30-year lifecycle. Indirect and induced employment is
projected to account for an average of over 2,200 additional jobs.

While employment during the first two years of a project’s lifecycle is estimated at only
an average of 880 jobs, during the most active years of the project employment impacts
peak at nearly 14,400 jobs. During normal operations, total supported employment
is projected at around 1,900 jobs. While, these numbers are associated with just one
project, the Gulf of Mexico is illustrated by dozens of such projects and an investment
horizon that could span several decades.

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 The study also covered the economic impacts of a shallow water project, which results
in, on average, $16.2 million in annual direct wages, 230 direct jobs supported annually,
390 indirect and induced jobs supported annually, and the same high average annual
wage of $69,650. BSEE reported in 2019 that there were more than 900 producing
platforms in the shallow water of the Gulf of Mexico.49

The offshore industry provides jobs to Americans of all walks of life in communities
throughout the Gulf Coast and the country. Our industry includes companies owned
and managed by all demographics, including women, African Americans, Latinos, Native
Americans, and veterans. Offshore leasing will continue on a global scale over the
coming decades. The offshore oil and gas industry further provides new workers with
the knowledge, skills, and abilities that will be essential for not only oil and gas projects,
but also for renewable energy development.

■ THE U.S. GULF OF MEXICO PROVIDES

AMONG THE LOWEST CARBON
BARRELS IN THE WORLD, WITH A
COMMITMENT TO SAFETY AND
ENVIRONMENTAL PERFORMANCE

The U.S. offshore operates under one of the strongest regulatory and oversight regimes
in the world, which means production here in the United States is more environmentally
friendly than operations in many producing regions in the world. The carbon intensity of
the Gulf of Mexico is 50 percent of that of other producing regions50. Part of the reason
is that U.S. Gulf of Mexico developments deliver high volumes of oil and gas with a far
smaller physical footprint. In 2019, 18 offshore facilities (with a combined surface area
equal to about nine city blocks) produced 75 percent of offshore production51.

The region is also a leader for methane release reductions. This is in large part because
methane releases are closely regulated offshore. Volumes of gas, of which methane is a
primary component, to be flared or vented from offshore facilities are tightly regulated
under the provisions of 30 CFR 250 Subpart K. Over the past few decades, operators

49. https://www.bsee.gov/sites/bsee.gov/files/reports/shallow-water-report-01.pdf
50. Motiwala, and Ismail, “Statistical Study of Carbon Intensities in the GOM and PB,” ChemRxiv, April 13, 2020.
51. Director Scott Angelle, BSEE Director, BSEE Presentation to the Deepwater Technical Symposium, November 13, 2020.

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 FIGURE 12

Offshore Production Provides Low Carbon Intensity Barrels

LOWEST EMISSIONS INTENSITY HIGHEST EMISSIONS INTENSITY

~ 20 KgCO2e/BOE ~ 70 KgCO2e/BOE

Carbon Intensity per Barrel by
Oil Producing Regions
Average Scope 1 & 2 Emissions

Source: Wood Mackenzie

DEEPWATER CONTINENTAL SHALE TIGHT CONVENTIONAL HEAVY OIL

SHELF OIL OIL OFFSHORE OIL SANDS

Source: Wood Mackenzie

have moved away from using natural gas driven pneumatic devices to instrument air,
eliminating the methane emissions from operation of such devices. Furthermore,
gas detection systems are generally deployed on facilities, allowing operators to
identify and address methane gas leaks, further reducing methane emissions from
offshore facilities.

Management practices and related regulations for venting and flaring of methane in
the offshore have helped to dramatically reduce the practice in the Gulf of Mexico. The
U.S. Gulf of Mexico accounted for 15% of U.S. oil production in 2019, yet EIA data shows
venting and flaring emissions from offshore oil and gas operations accounted for a
mere 2.6% percent of nationwide energy production venting and flaring emissions in
2019.52 EPA data also shows methane emissions from offshore oil and gas production
accounted for less than one percent of total nationwide methane emissions in 2019.53

In short, the U.S. and world depend upon reliable supplies of oil and natural gas for a high
quality of life and to lift people out of poverty, and U.S. offshore production should be

52. https://www.eia.gov/dnav/ng/ng_prod_sum_a_EPG0_VGV_mmcf_a.htm
53. Draft 2021 Greenhouse Gas Inventory

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 the basin of choice for producing that energy because of demonstrably lower GHG and
environmental impacts for an energy source we will continue to need for years to come.

In fact, a 2016 report at the end of the Obama Administration—issued under then-
Secretary Sally Jewell—stated, “U.S. GHG emissions would be higher if BOEM were
to have no lease sales…. Emissions from substitutions are higher due to exploration,
development, production, and transportation of oil from international sources being
more carbon intensive.”54

Recent research from multiple sources continues to validate the low carbon benefits of
U.S. Gulf of Mexico oil leasing and production:

The Breakthrough Institute: In any reasonable scenario, similar to the above

discussion, oil and natural gas demand is projected to account for a significant portion
of the world’s energy portfolio for the coming decades. The Breakthrough Institute,
a global research center that identifies and promotes technological solutions to
environmental and human development challenges, recently examined the need for
continued investment in greenfield oil and gas projects in the United States even
in the context of aggressive decarbonization scenarios that aim to meet ambitious
climate objectives.

In the report, “Oil and Gas Assets at Risk, How will clean energy’s rise impact oil and
gas communities in the United States amidst shrinking fossil fuel demand?”,55 authored
by Rystad Energy, Dr. Zeke Hausfather, Mark Boling, and Peter Liu, the Institute finds
“Despite potentially significant declines in global oil and gas demand across the climate
scenarios by 2050, our findings clearly indicate that investment in new oil and gas fields
may still be necessary to meet future demand for oil and gas in all three of the climate
change mitigation scenarios.”

The authors considered four scenarios, including the Sustainable Development

Scenario (SDS) of the International Energy Agency, which is aligned with the Paris
Agreement goals of keeping warming well below 2° Celsius. The report includes key
conclusions:

■ “Growing economies tend to increase their energy demand especially for the

transportation of goods from producers to consumers. Petroleum products such as
diesel and gasoline are the fuels that keep the cargo ships, aircraft, and trucks that
underlie supply chains operating smoothly.”

54. https://www.boem.gov/sites/default/files/oil-and-gas-energy-program/Leasing/Five-Year-Program/2017-2022/
OCS-Report-BOEM-2016-065—-OCS-Oil-and-Natural-Gas—-Potential-Lifecycle-GHG-Emissions-and-Social-Cost-
of-Carbon.pdf.
55. https://thebreakthrough.org/articles/oil-and-gas-assets-at-risk-impacts-of-declining-fossil-production-in-climate-
scenarios-in-the-us

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 ■ “[A]pproximately 10 million bbl/d of oil production from new fields is needed between
2030 and 2050 in order to meet global oil demand in SDS, the most ambitious
climate scenario…. [A]dditional investment in new gas production will be required in
the ambitious SDS scenario as well.”

“New investment in oil and gas fields is likely to occur throughout the world, driven
primarily by economic competitiveness and proximity to demand centers of each field.
In the Rystad modeling, substantial greenfield investment occurs in all of the major
producing regions in the world to 2050, including the United States.”

■ “[N]ew investment could be required in greenfield oil and gas production, including
substantial new greenfield production in the United States, in order to meet future
demand. Political initiatives to entirely ban oil and gas production or prevent
investment may therefore be unrealistic or uneconomic.”
■ “The total greenhouse gas impact of oil varies quite substantially across the world
based on the source and method of production….”
■ “Our field-level economic analysis demonstrates that w oil and gas production is
relatively low carbon and, therefore, would be minimally impacted by carbon pricing
in absolute terms relative to production in other regions[]. In particular, US oil is the
“cleanest” on average in the world, although not the cheapest….”
■ “This finding has implications for domestic US oil and gas policy. To reduce the
marginal emissions of oil and gas production, while ensuring security of supply for
the United States and its allies, policy makers should avoid penalizing or preventing
US production exclusively. Rather, policies that promote more aggressive emissions
reductions for US oil and gas production could also seek to displace higher-emitting
products from other major regions of production, thus minimizing the climate impact
of remaining global oil and gas use in a low-emissions future.”56

Wood Mackenzie: According to Wood Mackenzie, reducing oil production from the U.S.
Gulf of Mexico would increase the average emissions rate for global oil production:

Using our recently updated Emissions Benchmarking Tool, which profiles

emissions for more than 2,800 oil and gas assets around the world, [researchers]
Oberstoetter and Usoro were able to compare the carbon intensity of the
principal sources of crude used in the US. Numerous factors drive the differences
in intensity: emissions in Venezuela, Colombia and Canada are driven by the
more energy-intensive processes needed to produce the heavier crude qualities,
while in Iraq flaring is the big problem. The overall picture is clear, however: the
deep water of the Gulf of Mexico is one of the lowest-carbon sources of oil used

56. https://thebreakthrough.org/articles/oil-and-gas-assets-at-risk-impacts-of-declining-fossil-production-in-climate-
scenarios-in-the-us

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 in the US, with only Saudi Arabia coming in lower. In the light of that, Oberstoetter
and Usoro argue, restrictions on US production in the Gulf could end up having a
counterproductive impact on global emissions. “Removing or handicapping a low
emitter hurts the collective global average.”57

McKinsey: In the report titled “How the Gulf of Mexico can further the energy
transition,” McKinsey describes four key factors that give the deepwater Gulf of Mexico
a “low carbon advantage”:

First, in contrast to other regions where flaring natural gas without a market is
more commonplace, most of the natural gas produced in the Gulf of Mexico is
sold to local markets, which results in minimal routine flaring and, consequently,
less GHG emissions. Second, the facilities have efficient, modern designs that
minimize methane leakage. Third, wells and production facilities have a high
throughput, minimizing the number of energy-intensive processes required to
bring on new supply, such as drilling. And fourth, operators have made active
decarbonization efforts to stay in line with environmental sustainability goals
and in compliance with regulations.58

McKinsey estimates production from the U.S. Gulf of Mexico could decrease by about
800,000 barrels per day by 2040 without additional projects beyond those that have
already been sanctioned. In that situation, McKinsey expects lost production would
be made up by substitutions from other parts of the world without much oil demand
destruction. The country would be able to import sufficient oil, but it would come from
higher-emitting basins, resulting in an increase in greenhouse gas emissions globally:

This supply reduction would have to be offset by alternative sources to meet global
demand, which could hinder net-zero goals significantly. Because many other oil
producing regions globally have total unit costs similar to those in the Gulf of Mexico,
global oil price increases or substitution with other energy sources wouldn’t be
expected, and global demand for oil would remain unchanged. Instead, the reduced
Gulf supply would be offset by production increases from other sources, such as other
deepwater basins, shale, and OPEC. Based on the higher emissions per barrel of this
new supply, global emissions would increase by 50 million to 100 million metric tons of
CO2e through 2040.59

McKinsey also points out other significant, adverse consequences if America moves
away from deepwater Gulf of Mexico oil production, “A shift in production from the Gulf

57. https://www.woodmac.com/news/the-challenge-of-negative-emissions/
58. Brown, Di Fiori, Smith, and Yanosek, “Deepwater Gulf of Mexico’s role during the energy transition,” McKinsey, September
2022, at pages 3-4.
59. Brown, Di Fiori, Smith, and Yanosek, “Deepwater Gulf of Mexico’s role during the energy transition,” McKinsey, September
2022, at page 6.

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 of Mexico to other basins could also have broader implications for the U.S. economy,
including the loss of more than 100,000 jobs and a $30 billion to $40 billion reduction in
federal government revenue from reduced royalties and lease-sale proceeds.”60

Offshore energy is a true story of accomplishing more with less – creating more energy
with less environmental impact. Offshore production platforms are incredible edifices
of continuously evolving technology that allow enormous amounts of energy to be
produced through a relatively small footprint. Incredibly, 18 deepwater facilities, which
equate to about the size of only nine city blocks, produce about the same amount of oil
as the entire state of North Dakota.61 

The offshore oil and gas sector operates with an unremitting commitment to safety
and environmental protection. BSEE has highlighted key data points in the area of
environmental performance:

■ Consistently achieved ratio of less than 1.25% flared/vented gas to produced gas;
one of the best performing producing provinces in the USA
■ Zero incidental marine mammal or sea turtle fatalities from OCS oil and gas
exploration and production activities from at least 2017 through November 2020 [the
date of the presentation]
■ Less oil spilled in 2018 and 2019 form active exploration and production operations
on federal offshore leases in at least a quarter century
■ 2018 ratio of volume spilled to volume produced: approximately 13 tablespoons in a
660,430 gallon Olympic-sized pool
■ 2019 ratio of volume spilled to volume produced: approximately 17 tablespoons in a
660,430 gallon Olympic-sized pool62

From a worker safety standpoint, the offshore oil and gas industry has performed with
a low recordable injury/illness rate when compared to other industries. The following
chart shows the continued low injury/illness trend rate for the sector [FIGURE 13].

Inarguably, any injury is one too many, and the industry continues to work collaboratively
in safety programs and with Interior, other key agencies, and the academic community
in a continuous effort to identify and mitigate against risks.

60. Brown, Di Fiori, Smith, and Yanosek, “Deepwater Gulf of Mexico’s role during the energy transition,” McKinsey, September
2022, at page 6.
61. Director Scott Angelle, BSEE Director, BSEE Presentation to the Deepwater Technical Symposium, November 13, 2020.
62. Director Scott Angelle, BSEE Director, BSEE Presentation to the Deepwater Technical Symposium, November 13, 2020.

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 FIGURE 13
Total injury/illness rates across multiple industries
4
Worker recordable + DART injuries/illnesses per 200,0000 work-hours

3.5
Service Providers (All)
3

2.5
Electric Power Generation, Transmission, Distribution
2

1.5

1 Offshore OCS Oil & Gas, Overall

0.5 Nuclear Electric Power Generation

0
2010 2011 2012 2013 2014 2015 2016 2017 2018
Service Providing, All (Multiple NAICS Codes) Electric Power Gen., Trans., Distrib. (NAICS Code 2211)

OCS Oil & Gas, Overall (BSEE Data)2 Nuclear Electric Power Generation (NAICS Code 221113)2

■ THE OFFSHORE GULF OF MEXICO IS

CHARACTERIZED BY INNOVATION AND
ADVANCED TECHNOLOGIES

America’s offshore energy sector employs technologies that not long ago were
inconceivable. Today, satellites provide real-time imaging and communications support
for offshore oil and gas platforms. On the seafloor, subsea autonomous robots are
monitoring production and equipment health, providing real-time data to engineering
experts on the offshore platforms as well as in onshore facilities that connect experts
from around the world to enable the best operational decisions to be made. Remote
operations and automation have eliminated the need for large offshore crews for
certain activities, which not only cuts down on trips to and from the assets but improves
safety for offshore workers.

Machine learning (ML) and artificial intelligence (AI) are revolutionizing the industry’s
decision-making abilities. Automated sensing and inspection allow companies to

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 capture enormous amounts of data that provide considerably more insight into
operations. With improved knowledge of the activities underway, workers are far less
likely to be injured.

ML enables complex simulations using predictive data to discover hidden patterns.

Paired with AI, ML lets companies test for potential negative impacts of operations
and gauge the environmental risk of a new project before plans are finalized. And as
development progresses, AI incorporates lessons learned to streamline informed
decision-making.

Technology advances are shrinking an already small offshore footprint. The U.S.
offshore industry is producing increasingly more energy without appreciably expanding
the real estate required for operations, which preserves the U.S. Gulf of Mexico’s
performance as a low-emissions basin.

Offshore production is the energy anchor the world needs. Multi-billion-dollar offshore
projects produce massive amounts of oil and natural gas, and advances in technology
are enabling offshore fields to produce more, cleaner barrels for even longer. Seismic
technology and better and smarter subsea tiebacks and other infrastructure open
the door to a new era of productivity and efficiency, all while continuing to improve
environmental performance.

The graphic below shows some of the technology used in the offshore oil and gas
sector to promote safety, environmental protection, emissions reductions, reliability,
and efficiency [FIGURE 14].

STATE OF DEEPWATER GOM

PRODUCTION
Oil Production 2019 Oil Production

Oil Production 50% 25%Oil Production

2019 25%
50% 25% 25%
18 DEEPWATER
FACILITIES
(TOTAL SURFACE AREA = 9 CITY BLOCKS)
18 DEEPWATER
PRODUCE:
FACILITIES
(TOTAL SURFACE AREA = 9 CITY BLOCKS)

13% 13% 74%

75% 10%
PRODUCE:

13% 13% 74%

75%
OF OFFSHORE
PRODUCTION
OF OFFSHORE
10%
OF NATIONAL
PRODUCTION
OF NATIONAL
Facilities

Facilities
PRODUCTION PRODUCTION

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 FIGURE 14
Onshore Support
Drones
Onshore support for offshore projects
include the use of artificial intelligence,
Drones provide workers machine learning and cloud computing.
increased ability for inspection The growth of computing power means
and monitoring of offshore workers onshore can provide realtime
platforms and production. support and expertise to the folks offshore.

Satellites

Allow for monitoring of

platforms to ensure there
are no undetected leaks Workers
occurring.

Rig Standardization

Allows for more efficient facilities

and also increases familiarity for
workers, adding safety benefits.

Floa
ting Containment Systems
prod
uctio
n New containment systems are the result
of unprecedented industry-government
collaboration and offer a full range of oil
spill response capabilities. These
Subsea Systems companies offer solutions to an ever
growing portfolio of extreme scenarios.
Advances in engineering and material
sciences have made subsea systems
more efficient and have lowered risks.

Blowout Preventer
A safety requirement to prevent the
uncontrolled release of oil or natural gas,
Remotely Operated Vehicles blowout preventers are constantly
advancing and are able to accommodate
ROVs, which now can incorporate artificial higher and higher stress environments.
intelligence, provide high-resolution
real-time imaging and can be used for
inspections and repairs.

■ OFFSHORE FACILITIES CREATE

AND SUPPORT FLOURISHING
MARINE ECOSYSTEMS

From the moment an offshore platform is installed, it begins its transformation into a
flourishing marine ecosystem. BSEE states, “A typical eight-leg structure provides a
home for 12,000 to 14,000 fish, according to a study by the Coastal Marine Institute.
A typical four-leg structure provides two to three acres of habitat for hundreds of
marine species.”63

Concerns raised by fishermen, divers, and coastal states about potential damage to
marine life should offshore structures that had developed into marine ecosystems
be removed led to the Rigs to Reefs program, which was formalized by Congress as
the National Fishing Enhancement Act in 1984. This act supports the development of

63. https://www.bsee.gov/what-we-do/environmental-compliance/environmental-programs/rigs-to-reefs

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 Photo 1183424466 © Tunatura | Dreamstime.com
artificial reefs and establishes a permitting program for formally converting offshore
facilities into artificial reefs.

According to BSEE, the Rigs to Reefs program provides the following benefits64:
■ For the environment, repurposing obsolete structures saves fuel emissions that
otherwise would be expended transporting and disposing of the structure. It also
enriches the marine life in the area.
■ For oil and gas companies, repurposing obsolete structures saves them the costs
of removing, transporting, and disposing of them onshore. BSEE regulations
require that, within one year of a lease’s expiration, the obsolete structure
must be removed.
■ For states, the artificial reefs attract marine life that enhance fisheries
and contribute to the economy by attracting recreational and commercial
fishing and diving.

64. https://www.bsee.gov/what-we-do/environmental-compliance/environmental-programs/rigs-to-reefs

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 ■ For divers and recreational and commercial fishers, artificial reefs create a rich
diversity of marine life.
■ For marine species, the artificial reefs provide habitat, shelter, food, and other
necessary elements for biodiversity and a productive ocean.

Isabelle Gerettsen, of the BBC, reported on artificial reefs in January 2021:

Offshore rigs are among the most productive fish habitats in the world,
according to marine biologist Milton Love who has spent 20 years studying fish
populations around oil and gas platforms in California. They provide marine
wildlife with food, shelter from predators and a safe breeding ground.

For some species, the rigs are even better nurseries than natural reefs, says
Love. The towering pylons are the perfect spawning grounds for tiny fish larvae.
“A lot of them are just drifting,” says Love. “They want to settle.” The 500 ft (150m)
high underwater structures provide an opportunity for just that.

One of the big beneficiaries is rockfish, stocks of which have been heavily
depleted due to overfishing along the US West Coast. These fish are found
in abundance around oil platforms. For instance, the platforms have helped
revive the critically endangered bocaccio rockfish. “We’ve found a very high
density of young bocaccio at platforms, around 400,000 at six platforms. We
didn’t see that at natural reefs,” says Love, adding that the number of juvenile
bocaccio found at rigs was enough to boost the adult stock of the Pacific Coast
population by around 3%.65
[Emphasis in original publication.]

According to a study conducted by Love and others and published in the Proceedings
of the National Academy of Sciences, “Oil and gas platforms off the coast of California
have the highest secondary fish production per unit of area of seafloor of any
marine habitat that has been studied, about an order of magnitude higher than fish
communities from other marine ecosystems.”66

As of year-end 2021, more than 570 offshore facilities had been reefed in the Gulf of
Mexico. Research continues to demonstrate that offshore artificial reefs develop into
among the most flourishing marine ecosystems.

65. Gerretsen, Isabelle, “As offshore oil and gas platforms come to the end of their working lives, the remarkable ecosystems
beneath the waves come into their own,” January 26, 2021.
66. Claisse, Pindell, et. al. “Oil platforms off California are among the most productive marine fish habitats globally.” Proceedings
of the National Academy of Sciences. October 28, 2014.

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 ■ THE U.S. GULF OF MEXICO ADHERES
TO A STRONG SYSTEM OF SAFETY AND
ENVIRONMENTAL PROTECTION

America’s offshore oil and natural gas industry is characterized by the continued
advancement of technology and systems integrity, the application of extensive industry
technical standards, and a robust regulatory regime. The industry continues to develop
and improve on technologies to prevent environmental incidents, examining everything
from the materials used in offshore operations, to the development of software
and control systems to manage operations, to the development, production, and
deployment of modern drillships and production facilities that bring energy to market,
to the design and manufacture of blowout prevention systems, subsea safety valves,
and other innovative safety equipment.

This ongoing development and improvement of industry standards promotes reliability

and safety in offshore operations through the use of proven engineering practices.
The American Petroleum Institute (API) publishes industry technical standards under
a process accredited by the American National Standards Institute. API standards
are regularly reviewed to ensure they remain current and appropriate. Standards are
developed in an open and transparent process that includes subject matter experts
from academia, government, and industry. API standards are the most widely cited oil
industry standards by federal, state, and international regulators.

API has more than 200 exploration and production standards that address offshore
operations, covering everything from subsea safety valves to comprehensive guidelines
for offshore safety programs, and an estimated 100 such documents have been
incorporated into federal regulations. Oil and gas operators on the OCS are subject to
myriad regulatory requirements, including more than two dozen statutory authorities
and more than 80 Code of Federal Regulation parts implemented pursuant to those
statutes. In addition, more than two dozen significant approvals and permits are
required for OCS operations.

Through BSEE and its predecessor agencies, the government has significantly
changed regulatory requirements applicable to offshore oil and natural gas operations.
Companies must implement safety and environmental management systems (SEMS),
and audits must be completed by independent third parties. BSEE regulations include
extensive requirements for well design and integrity and blowout preventer and control
systems. Under the current drilling safety provisions, BSEE requires, among other
things: identification of the mechanical barriers and cementing practices that will be
used; independent, third-party verification that the blowout prevention equipment

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 is designed for the specific equipment on the rig and for the specific well design;
independent, third-party verification that the blowout prevention equipment will
operate in the conditions in which it will be used; a certification signed by a registered
professional engineer that the casing and cementing design is appropriate for the
purpose for which it is intended under the expected conditions; and for wells that use
subsea blowout prevention equipment, the inclusion of two independent barriers,
including one mechanical barrier, for each annular flow path. There also are extensive
requirements for the maintenance, testing, and inspection of blowout prevention
equipment. In addition, the Coast Guard, which has regulatory authority for marine
vessels utilized in offshore oil and natural gas operations, has also taken extensive
regulatory action to advance safety in offshore operations.

Another significant achievement of the U.S. offshore oil and natural gas industry is the
creation of well intervention and containment consortia that were founded in 2010 to
provide containment technology and response capabilities for the unique challenges of
capping a well releasing oil thousands of feet below the water’s surface. These groups,
which include MWCC and HWCG, maintain rapidly deployable systems designed to
stem the uncontrolled flow of hydrocarbons from a subsea well and provide training for
member companies on system installation and operation.

BSEE requires companies to demonstrate they have staff resources and access to
equipment to deploy systems to cap a well and capture uncontrolled hydrocarbons.
Companies prove their compliance with this requirement through a contract with
or membership in MWCC or HWCG. BSEE has also instituted new requirements for
determining the worst-case blowout discharge and the associated demonstration
of capability to effectively respond to such an event. On its part, the industry has
enhanced its ability to respond to a potential offshore environmental incident through
improved oil spill response planning and the increased availability of spill response
tools such as dispersants, in-situ burning capabilities, mechanical recovery, and
shoreline protection.

To ensure these requirements are being met, BSEE implements an active and ongoing
system of oversight and inspection. Data from 2019 provides a snapshot of the strong
oversight in place:

BSEE Inspections: 2019

■ 1,665 total number of OCS facilities inspected

■ 126 BSEE inspectors — Based in Alaska, California, Louisiana, and Texas
■ 12,489 total number of inspections
■ 14 inspection categories, including production operations, well operations,
environmental, pipelines and meters
■ 694,093 miles flown in support of inspections

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 Inspectors conducted performance-based risk inspections on:

■ 57 OCS facilities, leading to

» 2 safety alerts
» 20 recommendations 67

Interior confirmed the strength of its regulatory oversight system over offshore oil
and gas operations in its record of decision for Lease Sale 257. The decision, signed by
Principal Deputy Assistant Secretary for Land and Mineral Management Laura Daniel-
Davis on August 31, 2021, concluded:

Pursuant to my authority to exercise the delegable functions and duties of

the Assistant Secretary for Lands and Mineral Management, I have concluded
that holding GOM region-wide oil and gas Lease Sale 257, as described in
Alternative A of the 2018 GOM Supplemental EIS, meets the purpose of and need
for the proposed action, balances regional and national policy considerations,
and includes appropriate measures to minimize potential environmental and
socioeconomic impacts. I have also concluded that GOM Lease Sale 257, as
described in this ROD and in the forthcoming Final Notice of Sale, is subject to
adequate environmental safeguards and is consistent with the maintenance of
competition and the meeting of national energy needs…

To minimize the environmental impacts that could occur from OCS oil- and gas-
related activities following a lease sale, BOEM imposes mitigation measures that
have proven effective in the past in avoiding or reducing impacts. The mitigation
measures that I am adopting in the form of lease stipulations for this lease sale
are described below in Section 5. While offshore exploration and development
cannot be made risk free, OCS oil- and gas-related activities can be conducted
safely and responsibly with strong regulatory oversight and appropriate
measures to protect human safety and the environment. Since the Deepwater
Horizon explosion, oil spill, and response, BOEM and the Bureau of Safety and
Environmental Enforcement (BSEE) have raised standards for offshore drilling
safety and environmental protection to reduce the risk of oil spills and their
severity, and have improved the Federal Government’s and industry’s ability to
respond in the unlikely occurrence of another large oil spill….

The decision to hold Lease Sale 257 recognizes the role that GOM oil and gas
resources play in addressing the Nation’s demand for domestic energy sources
and fosters economic benefits, including employment, labor income, and tax
revenues, which are highest in Gulf Coast States and also distributed widely
across the United States. Revenues from offshore oil and gas lease sales support

67. Director Scott Angelle, BSEE Director, BSEE Presentation to the Deepwater Technical Symposium, November 13, 2020.

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 Photo 856838518 © curraheeshutter | Dreamstime.com

national conservation programs and coastal resiliency for applicable coastal

states and political subdivisions under the Gulf of Mexico Energy Security
Act of 2006.68

Hydrocarbon developments on the U.S. OCS are held to exceptionally high standards
for operations by some of the most robust regulations, oversight, and enforcement
in the world. The regulatory system provides assurances for safe, environmentally
responsible operations, establishing the U.S. as the gold standard for the development
and production of resources, where stringent requirements for operation are enforced
and where responsible development continues to drive down the carbon footprint
of operations.

68. https://www.boem.gov/sites/default/files/documents/oil-gas-energy/GOM-LS-257.pdf

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 ■ U.S. OFFSHORE ENERGY PRODUCTION
GENERATES TREMENDOUS VALUE FOR
TAXPAYERS, INCLUDING FUNDING FOR THE
LAND & WATER CONSERVATION FUND,
THE OUTDOOR RECREATION LEGACY
PARTNERSHIP PROGRAM, AND COASTAL
RESILIENCY AND RESTORATION

Energy production from the Gulf of Mexico generates multiple revenue streams for
the government. The first is the bonus bid, paid up front to the U.S. government by
operators that acquire a federal oil and gas lease. The bonus bid is paid without any
knowledge of what resources might be discovered and is retained by the federal
government regardless of whether oil and gas are produced from the lease. The second
revenue stream comes from annual rental payments tendered to hold the lease until it
produces or expires. This revenue is paid to the federal government while companies
work through internal assessments and move through the robust permitting process
overseen by the DOI. The final revenue source is the royalty payment made when energy
resources are produced in federal waters, at which point companies extracting those
resources are required to pay the federal government—this is in recognition of the fact
that resources on public lands and waters are a public resource.69 Royalty rates have
increased over time for federal leases in the Gulf of Mexico. In 2008, the royalty rate was
increased to 18.75 percent for all water depths. In 2017, to encourage continued interest
in the more mature shallow waters, the royalty rate for newly acquired shallow water
leases was decreased from 18.75 percent to 12.5 percent. Since that time, however, 84
percent of the leases acquired at OCS lease sales have been in deepwater regions that
are subject to the higher 18.75 percent royalty rate.70

Critically, the significant payments brought in by offshore oil and gas payments help
fund a wide range of state and federal programs, namely around conservation and park
maintenance. Disbursements from offshore oil and gas in fiscal years 2016 through 2019
were enormous, reaching almost $5 billion in 2019:71

69. This discussion does not include taxes paid to federal, state, and local governments, which accounts for billions of dollars in
additional funding.
70. https://revenuedata.doi.gov/how-it-works/revenues/#oil-gas-rates
71. https://revenuedata.doi.gov/query-data/?dataType=Revenue

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 Recipient 2016 2017 2018 ↓ 2019

U.S. Treasury $1,865,028,729 $1,748,637,164 $2,789,421,771 $3,826,926,987

Land & Water

$883,627,823 $891,828,225 $893,887,297 $877,772,576
Conser ...

Historic
$0 $150,000,000 $150,000,000 $150,000,000
Preservation ...

Other $158,644,486 $122,238,329 $116,875,635 $110,056,157

All recipients $2,907,301,038 $2,912,703,718 $3,950,184,703 $4,964,755,720

GOMESA Disbursements to States/CPSs and the LWCF State Grant

Program, FY2009-FY2022 ($ millions)
Subtotal
Year of State LWCF State Total Revenue
Disbursementa Alabamab Louisianab Mississippib Texasb Revenue Programc Shared

FY2009 7.7 7.9 6.9 2.7 25.2 8.4 33.7

FY2010 0.8 0.9 0.7 0.3 2.7 0.9 3.6

FY2011 0.3 0.3 0.2 0.1 0.9 0.3 1.2

FY2012 0.1 0.1 0.1 <0.1 0.3 0.1 0.4

FY2013 0.1 0.1 0.1 <0.1 0.3 0.1 0.4

FY2014 1.3 1.4 1.2 0.5 4.3 1.4 5.8

FY2015 0.7 0.8 0.7 0.3 2.4 0.8 3.3

FY2016 0.1 0.1 0.1 <0.1 0.3 0.1 0.4

FY2017 0.3 0.3 0.3 0.1 1.0 0.3 1.3

FY2018 26.8 82.8 27.8 50.6 188.0 62.6 250.6

FY2019 30.6 94.7 31.7 57.9 214.9 71.6 286.6

FY2020 50.0 155.7 51.9 95.3 353.0 117.6 470.6

FY2021 35.1 109.9 36.5 67.4 248.9 82.9 331.8

FY2022 34.8 111.8 36.8 68.8 252.3 84.1 (est.) 336.4 (est.)

1,725.8
Total 188.4 567.0 194.9 344.1 1,294.5 431.2 (est.)
(est.)

Sources: Office of Natural Resources Revenue (ONRR), “Natural Resources Revenue Data: Data Query Tool,” at
https://revenuedata.doi.gov/query-data/?dataType=Disbursements; and National Park Service (NPS) budget
justifications for FY2011-FY2023, available at https://www.nps.gov/aboutus/budget.htm.
Notes: CPSs = coastal political subdivisions; LWCF = Land and Water Conservation Fund; GOMESA = Gulf of Mexico Energy
Security Act of 2006 (43 U.S.C. §1331 note). Dollar amounts are nominal (not adjusted for inflation). GOMESA Phase II revenues are
first reflected in FY2018 payments. The figures reflect budget sequestration. Totals may not sum precisely due to rounding.
a. T
 he first payments of GOMESA revenues occurred in 2009. Under GOMESA Section 105(c), revenues are disbursed to the
states and the LWCF state grant program in the fiscal year following their receipt.
b. R evenue disbursements for each state include disbursements to the coastal political subdivisions (CPSs) of each state.
c. A mounts correspond with the year revenues were shown in the NPS budget.

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 These funds go not only to the federal Land and Water Conservation Fund, but also to
state governments along the Gulf Coast, as noted in a recent Congressional Research
Service report on the topic that includes the related chart “GOMESA Disbursements to
States/CPSs and the LWCF State Grant Program, FY2009-FY2022.” 72

These revenues are important today and will continue to be a critically important piece
of the energy and economic story in the United States.

Historically, the offshore oil and gas industry has been an important revenue generator
for federal, state, and local governments. Between 2000 and 2018, more than $120 billion
in high bids, royalties and rents were paid to government entities73. A portion of these
revenues flow into key conservation programs, such as the Land & Water Conservation
Fund (LWCF), which is funded entirely by offshore oil and gas production, and beginning
in 2021, certain provisions established in the recent Great American Outdoors Acts for
national park maintenance.

LWCF provides recreational opportunities, preserves ecosystem benefits for local

communities, and enables public access to outdoor areas in urban regions. One
program – the Outdoor Recreation Legacy Partnership Program, which is funded
through the National Park Service – allocates funds to build new parks and improve
existing ones in economically disadvantaged urban areas throughout the country. More
than $28 million has been distributed to approximately 50 disadvantaged communities
since the creation of the program by Congress in 2014. The Outdoor Recreation Legacy
Partnership Program and programs like it have created safe, healthy outdoor recreation
spaces in Atlanta, Milwaukee and Newark and other cities across the United States.

The National Park Service award of a $750,000 grant to Philadelphia Parks and
Recreation to revitalize Mifflin Square Park is one of many examples of how revenue that
comes directly from offshore oil and gas operations provides healthy outdoor spaces
for inner city residents. Funded through the Outdoor Recreation Legacy Partnership
Program, the rejuvenated Southeast Philadelphia park provides a neighborhood of
more than 13,500 people an exceptional new playground and space for community
gatherings, recreation, and athletics.

72. https://crsreports.congress.gov/product/pdf/R/R46195
73. https://revenuedata.doi.gov/
explore/?dataType=Revenue&location=NF&mapLevel=State&offshoreRegions=true&period=Fiscal%20Year&year=2019

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 Jesse Allen Park in Newark, N.J., is another example. It is the second largest city-owned
park and is surrounded by several schools and youth facilities, including a popular Boys
& Girls Club facility. Commenting at the opening of this park, Newark Councilwoman
Gayle Chaneyfield Jenkins said, “As we continue to deal with the burden of crime in
our community, open space and recreation have always been a great equalizer and
protective factor for our children. This is a great day for Newark and an awesome day
for the Central Ward.74” Offshore oil and gas production thus promotes positive
environmental justice benefits by providing the funding to make parks and recreation
more readily available to underprivileged neighborhoods.

On July 29, 2022, Interior announced that it will distribute another $192 million as part
of this program. According to Interior Secretary Deb Haaland, “The Outdoor Recreation
Legacy Partnership program is essential to expand our communities’ connections
to urban green spaces, where children can play, families can connect, and a love and
appreciation for the outdoors can be nurtured. The funding and programmatic changes
we are announcing today will allow for us to support bigger ideas and more communities
in their pursuit of creating more parks and places to get outside for every American.” 75

These parks provide a community oasis, offering outdoor spaces for the enjoyment of
inner-city residents, especially children.

Further, in April 2022, Interior disbursed more than $250 million for coastal conservation
and other programs, commenting, “Today’s action represents the second-largest
disbursement since Interior first began disbursing GOMESA revenues to states and
their [coastal political subdivisions (CPS)] in 2009. Since GOMESA’s passage, the
Interior Department has disbursed over $1.26 billion to the coastal states and their
CPS.” 76 These are critical revenues for vital climate resiliency and adaptation programs.

Revenues shared with Gulf Coast states through GOMESA are used by state and local
governments for a host of vital programs, including wetlands preservation, coastal
restoration, flood prevention and hurricane mitigation.77 GOMESA is used to fund the
response and resiliency of coastal states like Louisiana to impacts from climate change.

74. https://www.tapinto.net/towns/newark/sections/central-ward/articles/newark-receives-federal-grant-to-
complete-jessie
75. https://www.doi.gov/pressreleases/interior-department-announces-192-million-create-public-parks-expand-recreation
76. https://www.doi.gov/pressreleases/interior-department-disburses-over-252-million-gulf-states-supporting-coastal
77. https://www.boem.gov/oil-gas-energy/energy-economics/gulf-mexico-energy-security-act-gomesa

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 ■ COMPANIES IN THE OFFSHORE OIL AND
GAS SUPPLY CHAIN PLAY A KEY ROLE IN
INVESTING IN, SCALING, AND DEPLOYING
LOW CARBON SOLUTIONS

There is no linear process for addressing climate change. Achieving our goals requires
the advancement of principles of innovation, conservation, efficiency, resiliency,
mitigation, and adaptation as part of a systematic, global approach.

This fact is well understood by the offshore energy industry and has been
demonstrated through a track record of innovation and technological advancement
that is solving energy challenges, increasing efficiency, and reducing emissions. Not
only do we help solve energy and climate problems, we scale and deploy real-world
solutions. Whether it is the buildout of new offshore wind projects, developing CO2
storage facilities, finding new ways to produce hydrogen, or optimizing logistics and
operations to reduce our carbon footprint, the offshore energy industry is at the
forefront of empowering energy solutions and emission reductions.

The diverse companies active in offshore energy development are committed to

innovation, best practices, and deployment of advanced technologies that are central
to addressing the climate challenge. The energy transition cannot occur without the oil
and gas industry. The offshore oil and gas sector, in particular, has the unique ability and
opportunity to innovate and to scale technological solutions that lead to a lower carbon
future. Globally and at home, far too many people still do not have functional access to
electricity, and that situation will be compounded as energy demand continues to rise.78
The energy transition must be achieved in a way that increases the access, affordability,
and reliability of energy for everyone.

The offshore sector is continuously finding ways to shrink its already small
environmental footprint by introducing technologies and innovations that can benefit
other sectors as well. Whether it is a traditionally oil-and-gas focused multi-billion
dollar company investing in offshore wind equipment manufacturing and building
renewable energy incubators, or the deployment of electric remotely operated vehicles
(ROVs) that were developed for the oil and gas industry and now being used to monitor
offshore wind facilities, or the incorporation of virtual and augmented reality into
worker training to reduce risk, the offshore oil and gas industry is driving efficiency and
reducing emissions in ways that will strengthen and accelerate the energy transition.

78. https://www.realclearenergy.org/articles/2019/09/11/no_need_for_energy_poverty_110474.html

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 THE SUCCESS OF
A LOW-CARBON
FUTURE DEPENDS
ON THE SUCCESS OF ALL
ENERGY INDUSTRY SECTORS

The offshore oil and gas industry helped build the first U.S. offshore wind farm
offshore Block Island, Rhode Island, and is involved in other wind projects up and
down the Atlantic Coast. Block Island showed that the synergy between offshore
oil and gas and wind expedites renewables development. Removing or restricting
investment opportunities for the offshore oil and gas sector would eliminate a key
source of engineering expertise, not to mention RD&D funding that can find, scale,
and deploy the solutions to many of the technical challenges currently associated with
decarbonization efforts.

In the report, The Role of Oil and Gas Companies in the Energy Transition, Robert
Johnston, Reed Blakemore, and Randolph Bell acknowledge the importance
of oil and gas companies in both supplying traditional fuels and in leading in
decarbonization efforts.

[O]il and gas remain an important part of the energy mix, especially in developing
regions. The International Energy Agency’s Sustainable Development Scenario
(SDS) and the Shell Sky Scenario—both aggressive decarbonization forecasts—
show an ongoing, long-term role for oil and gas, even while demand levels are
reduced from where they stand today. In the United States, India, and China—the
three largest greenhouse gas emitters—natural gas in particular has the potential
to remain an integral component of the low carbon energy transition for decades
to come, depending on the policy mechanisms and technologies in place.79

The authors highlight the proactive approach being taken by oil and gas companies to
contribute the emissions reductions efforts:

79. Johnston, Blakemore, and Bell, The Role of Oil and Gas Companies in the Energy Transition, The Atlantic Council, January
2020, at page 1.

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 Oil and gas companies are responding by looking at where and how they do
business and confronting a rethink of business models in a decarbonizing
world. These companies have a range of tools when it comes to engaging
with decarbonization efforts in ways which allow their participation in the
decarbonizing economy. Where energy demand is growing rapidly, oil and gas
companies can endeavor to support coal-to-gas switching and investing in
infrastructure that enables electrification to meet end user demand and support
lower GHG upstream operations. Companies can also focus on using renewables
and new technologies not just as a hedge against demand risk or to decarbonize
their production, but to leverage their expertise with supply chains and market
development to support low carbon energy deployment in the energy transition
on-the whole.80

Companies across the offshore oil and gas supply chain are making investments and
directly participating in decarbonization efforts such as carbon capture and storage,
geothermal, hydrogen, and deployment of technologies in operations that reduce
emissions. This industry is a key funder of zero- and low-carbon energy development
and deployment. The future success of decarbonization efforts depends upon
continued revenue generation from companies in the oil and gas sector.

Dan Romito, Consulting Partner at Pickering Energy Partners, believes the role of oil and
gas companies is critical to green innovation: “These companies are active sponsors of
the green revolution and are responsible for a substantial proportion of functional green
technology.”81 Romito’s conclusion is based upon research conducted by academics
from Harvard, the University of Texas, and DePaul University who found that that “oil,
gas, and energy-producing firms…are key innovators in the United States’ green patent
landscape.”82

The success of a low-carbon future depends on the success of all energy industry
sectors. Bringing to bear its long history of innovation and ingenuity, the offshore
energy industry is poised to drive the energy transformation and develop and
deploy global decarbonization technologies. According to Romito, “The expertise
housing decarbonization implementation lies within the fossil fuel industry. Without
their participation, the successful execution of the energy transition is more of a
pipe dream.”83

80. Johnston, Blakemore, and Bell, The Role of Oil and Gas Companies in the Energy Transition, The Atlantic Council, January
2020, at page 1.
81. Romito, Accelerating the Energy Transition Requires Bridge Building, Pickering Energy Partners, September 2022 [emphasis
in original].
82. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3718682
83. Romito, Accelerating the Energy Transition Requires Bridge Building, Pickering Energy Partners, September 2022.

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 ■ OFFSHORE ENERGY DEVELOPMENT
INCREASES OUR NATIONAL SECURITY

The U.S. domestic energy policy helps determine the level of activity in the Gulf of
Mexico, but regardless of the amount of exploration and development in U.S. coastal
waters, other countries will continue to offer rights to explore, develop, and produce
offshore oil and gas. Restricting production in the Gulf of Mexico will not end the
production of oil; however, limiting opportunities at home will shift production to
countries like Russia, China, and Iran.

An example of this can be seen right across the waters of the Gulf of Mexico. As a
consequence of limited opportunities in the U.S. offshore region, investment has
shifted to the Mexican sector. Mexico is producing oil and gas adjacent to state and
federal waters belonging to the United States. The map below shows how Mexico has
outpaced the U.S. in Gulf of Mexico oil and gas leasing opportunities, surpassing the
U.S. in total acres under the lease [FIGURE 15].

But it goes well beyond Mexico. The U.S. and world need oil and gas, and the clear
choice should be in producing this energy here at home, in U.S. waters. The Russian
invasion of Ukraine has shined the spotlight on the critical link between energy security
and national security. Every barrel of oil that the American women and men of the Gulf
of Mexico produce is a barrel that our nation and our allies do not have to import from
countries like Russia, Iran, or China. Abandoning the Gulf of Mexico reduces American
energy security, locks away low-emissions development, increases the cost of energy,
and outsources American jobs and investment to pollution havens.

According to Daniel Yergin, Vice Chairman of IHS Markit:

The extraordinary growth in U.S. oil and gas production is a geopolitical and
economic asset for the U.S. that contributes to global energy security. As the
domestic oil-and-gas industry continues to rebound from the spring 2020
price collapse caused by the onset of Covid, the U.S. is again the world’s top oil
producer—almost 20% above the other two largest producers, Saudi Arabia and
Russia—and the world’s top natural-gas producer. The global oil market, which
was drowning in oversupply less than two years ago, has tightened dramatically
as the world emerges from Covid shutdowns. That makes the market vulnerable
to crisis. Russia’s push on Ukraine, a rebounding global economy, major weather
events, or a surprise event could send prices soaring.84

84. Yergin, “America Takes Pole Position on Oil and Gas,” Wall Street Journal, February 14, 2022.

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 FIGURE 15

As a component of national security, domestic energy production should always be

a priority. U.S. Gulf of Mexico oil and gas production reinforces our energy security
and strengthens America. On the other hand, eliminating or reducing opportunities
for leasing will lead to energy scarcity, energy insecurity, and a weakening in our
national security.

This point was highlighted by Martin Dempsey, the Chairman of the Joint Chiefs of
Staff during a Congressional hearing, “An energy independent [U.S.] and net exporter
of energy as a nation has the potential to change the security environment around the
world — notably in Europe and the Middle East.”85 This is eminently apparent today in the
wake of Russia’s unprovoked invasion of Ukraine and the associated consequences of
Russia’s using energy as a geopolitical tool.

85. General Martin Dempsey, Chairman of the Joint Chiefs of Staff, House Subcommittee on Defense Appropriations
Hearing, 2014

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 Photo 1311828504 © imaginima | Dreamstime.com
THE GULF COAST’S
ROLE IN THE EMERGING
U.S. OFFSHORE
WIND INDUSTRY
The role of the offshore energy industry goes well beyond oil and gas, with the industry
leading investment and advancing technologies in zero and low carbon projects
such as offshore wind, carbon capture and storage, and hydrogen, among others.
Companies in the offshore sector have the engineering expertise and experience, along
with the capital resources, to scale and deploy the major projects that will help reach
decarbonization goals.

Offshore wind projects are vital to the economic growth of this country and efforts
to meet climate goals for the 21st century and beyond. According to analysis by the
American Clean Power Association, we have an over $120 billion market off America’s

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 coasts for wind, including in the Gulf of Mexico. As detailed in that report, forecasted
potential lease sales in the Gulf of Mexico may raise as much as $282.8 million in auction
revenue and yield as much as 2,400 MW of power, assuming at least two awarded leases
of sufficiently sized areas in the initial Gulf of Mexico wind lease sale.

While the development of U.S. wind opportunities will provide substantial benefits
to the states adjacent to lease areas, it will also lead to tremendous investment
throughout the nation. In areas like the Gulf Coast, you will find steel fabricators,
offshore service vessels, heavy lift vessel operators, subsea construction companies,
helicopter service providers and more who built their experience in the oil and gas
industry but will be vital in building offshore wind. A generation of Louisianan, Texan, and
other Gulf Coastal marine, oil and gas service companies have already begun applying
their skills and experience to building a new renewable American energy industry in
offshore wind.

The U.S. is also taking steps to become a floating wind leader. Due to its deep water
depths, Pacific Coast projects will require floating wind farms to tap their wind
resources. Floating wind technology is still young, despite the expectation that most
future offshore wind resources could well be located in deepwater. Two-thirds of
America’s offshore wind energy potential, including along the Pacific Coast and in
the Gulf of Maine, are in deepwater areas. While the world’s first floating wind farm,
Equinor’s Hywind Scotland offshore Scotland, began operations in 2017, more are in
the global pipeline and this presents an advantageous opportunity for the American
market. The U.S. federal government is pursuing a “Floating Offshore Wind Shot”
project, to accelerate breakthroughs across engineering, manufacturing, and other
innovation areas.

U.S. oil and gas companies active in the Gulf of Mexico can deliver the engineering
expertise developed through floating projects over the past several decades in support
of the offshore wind floating market, and many are already playing such a role. By being
in the floating wind game sooner rather than later, the American offshore wind sector is
in a strong position to be a global leader.

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 Photo 93521845 © Pichit Boonhuad | Dreamstime.com
THE GULF’S CENTRAL
ROLE IN OFFSHORE
CARBON CAPTURE
AND STORAGE
Progress towards addressing the climate challenge will depend upon increased
innovation, conservation, efficiency, resiliency, mitigation, and adaptation. Carbon
capture and storage (CCS) is an innovative approach to mitigating greenhouse gas
emissions. The wide-spread deployment of CCS will be critical for achieving the
climate change ambitions and goals that have been established by a diverse group
of stakeholders around the world. CCS can serve as an important tool for balancing
environmental, economic, and energy needs. U.S leadership in CCS will help ensure the
availability of abundant, reliable, and affordable domestic energy, while continuously
driving down emissions.

What is CCS?: As its name suggests, CCS involves the capture of CO2 from either large
point sources – including power generation or industrial facilities – or directly from
the atmosphere. The captured CO2 is then compressed and transported to either be
injected into deep geological formations which permanently trap the CO2 or is used
in a range of applications. CCS uses a robust supply chain and combines various

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 technologies to effectively reduce the amount of carbon dioxide that is emitted into
the air, thus mitigating against warming effects and the impacts of greenhouse gases in
the atmosphere. Carbon dioxide is the most common greenhouse gas and it is emitted
through various activities, including industrial processes and the transportation sector,
among others. Industrial processes include emissions from power plants, industrial
furnaces and stoves, steel blast furnaces, cement plants, and others.

Capture: Through CCS, CO2 is captured from industrial processes by separating the CO2
from other gas within the stream of emissions. There are four methods for separating
CO2 from other gas during industrial processes, including absorption, adsorption,
membranes, and cryogenic processes. The oil and gas industry has extensive
experience in separating CO2 from hydrocarbons and is uniquely positioned to deploy
capture technologies. The Gulf Coast with its network of industrial centers and facilities
presents a significant opportunity for carbon capture.

Transport: Once captured, it will generally be necessary to transport the CO2 to the
location where the CO2 will either be stored or used. Pipelines are recognized to be
the most cost-effective means for transporting CO2. Prior to shipment by pipeline,
the CO2 is converted into a fluid so that the CO2 can be pumped like other liquids for
ease of transportation. Other methods of transportation include railcars, trucks, ships,
and barges. The Gulf Coast with its robust network of pipelines and energy transport
expertise is well situated for the transport of CO2 for use or storage.

Use: While the prevalent application of CCS may be permanent storage, there are
other valuable commercial uses for CO2. This includes the application of technologies
to convert CO2 into products like fuels, chemicals, and materials. This is accomplished
through chemical reactions or biological conversions such as thermochemical CO2
conversion, electrochemical and photochemical CO2 conversion, carbon mineralization
of CO2, and biological CO2 use. The conversion of CO2 to useful products presents
a tremendous technological opportunity for future maturation and growth. Also, a
common application for CCS today is for enhancing oil recovery (EOR) by injecting
CO2 into oil-bearing reservoirs for increasing oil production. Some of the injected CO2
remains trapped—or stored—within the formation, while some of the CO2 is recovered
with the produced oil and reinjected into the same formation for storage. EO

Storage: CO2 storage involves the injection of CO2 into subsurface geologic formations
either onshore or offshore. Subsurface geologic formations must have sufficient pore
space to hold CO2 (defined as porosity) in commercial quantities, as well as pathways
within the pore space (defined as permeability) so that the CO2 can be injected
throughout the storage reservoir. This is known as porosity and permeability. The
formation must also have a seal of non-porous, impermeable rock to prevent the CO2
from escaping the formation. Finally, the formations must be at the appropriate depths
to ensure effective and efficient storage. The Gulf of Mexico, in waters under both

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 state and federal jurisdiction, presents a significant CO2 storage opportunity because
of its recognized geologic capacity for long-term storage of CO2 (i.e., high porosity, high
permeability, and a good seal to maintain containment).

According to the National Petroleum Council (NPC):

CCUS is an essential element in the portfolio of solutions needed to change

the emissions trajectory of the global energy system. In its Fifth Assessment
Report, the IPCC concluded that the costs for achieving atmospheric CO2 levels
consistent with holding the average global temperature to 2 degrees Celsius—
referred to as a “2-degree Celsius world”—will be more than twice as expensive
without CCUS.

Meeting the Dual Challenge: A Roadmap to At-Scale Deployment of Carbon Capture,

Use, and Storage, December 2019, p. 12, Volume 1, Report Summary

According to the International Energy Agency:

Carbon capture, utilisation and storage (CCUS) technologies offer an important

opportunity to achieve deep carbon dioxide (CO2) emissions reductions in key
industrial processes and in the use of fossil fuels in the power sector. CCUS
can also enable new clean energy pathways, including low-carbon hydrogen
production, while providing a foundation for many carbon dioxide removal (CDR)
technologies.

See https://www.iea.org/reports/the-role-of-co2-storage

The U.S. currently stands as a global leader in CCS, with 10 of the 19 worldwide projects
operating and located in the U.S. in 2019. While most projects to date have included an
EOR component, the U.S. is well-positioned to lead in CO2 storage as well. According to
the National Petroleum Council, the U.S. has become a world leader in CCS by:

■ Executing successful CO2 capture projects

■ Investing in CO2 pipeline infrastructure
■ Establishing a supporting regulatory framework
■ Enacting world-leading policy support
■ Investing in research, development, and demonstration

As it relates specifically to the offshore, the NPC concluded that “One of the largest
opportunities for saline formation storage in the United States can be found in federal
waters, particularly in the Gulf of Mexico.” Meeting the Dual Challenge, p. 27. This is also
true as it pertains to state waters along the Gulf Coast.

The technical and commercial feasibility of large offshore storage projects is being
proven on the global stage. The first large-scale CO2 capture and injection project with

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 dedicated CO2 monitoring and storage was commissioned at the Sleipner offshore
gas facility in Norway in 1996. Today, the facility has stored more than 20 Mt CO2 at 1
km depth under the North Sea. With operations beginning in 2024, Northern Lights is
a new CCS project under construction that will initially store up to 1.5 million tonnes of
CO2 per year with the goal to achieve five million tonnes of CO2 per year by 2027. The
Northern Lights project is part of a larger carbon capture and storage initiative that will
capture CO2 from industrial sources within Norway, ship liquid CO2 from capture sites to
an onshore terminal on the coast, and then transport the CO2 by pipeline to an offshore
storage site below the North Sea in water depths of more than 300 meters and total
depth to injection of 2,500 to 3,000 meters. In the U.S., the Gulf of Mexico is well suited
for the development of projects like Northern Lights.

The U.S. Gulf of Mexico offshore region provides tremendous advantages for an
emerging U.S. CCS sector. The Gulf of Mexico is characterized by vast geologic
prospects for CO2 storage, extensive and established energy infrastructure along the
Gulf Coast and throughout the outer continental shelf, a proximity to industrial centers
for capturing emissions, and an assessable engineering and energy knowledge base and
workforce, along with associated RD&D capabilities.

The Gulf Coast region is distinctly situated to emerge as a global hub for CCS. The
Gulf Coast is home to the full supply chain of energy companies with the engineering
experience, expertise, and vision to deploy CCS projects with the scale and efficiency
necessary for success. As with any capital-intensive industry, the U.S. CCS sector
requires certainty and predictability in the regulatory system, both at the state and
federal level. Improvements must be made in U.S. laws and regulations to foster growth
and enable success in U.S. CCS. Federal policy requires a new level of urgency for
permitting of energy projects like offshore CCS. Otherwise, we will lose out on the
investments and the chance to emerge as a global leader in new energy solutions.

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 Photo 887483630 © nielubieklonu | gettyimages.com
CONCLUSION
The benefits of U.S. offshore energy development are vast. With more than $120 billion
flowing to the federal treasury since 2000 to support the LWCF, urban parks, and
national parks, and with more than 300,000 jobs supported annually, the U.S. Gulf of
Mexico positively contributes to communities while at the same time producing among
the lowest carbon barrels in the world.

Energy affordability is fundamentally and directly tied to the supply and demand of
energy sources. The offshore sector will be a key part of the solution for near- and
long-term affordability of oil, natural gas, and other energy sources for decades to
come. Furthermore, the diverse ecosystem of companies that team up to produce low
carbon barrels of oil from the Gulf of Mexico continues to innovate incredible solutions
for addressing the climate challenge. Emerging segments such as offshore wind
and carbon capture and storage can supercharge our nation’s response to meeting
ambitious climate change emissions targets.

The Washington Post Editorial Board sums up the reason for continuing investment in
our offshore oil and gas sector86:
We have long supported opening more U.S. waters to offshore drilling. As long as
the economy requires oil, it must come from somewhere, and better the United

86. https://www.washingtonpost.com/opinions/is-ryan-zinke-cynical-or-incompetent/2018/01/24/80055fd0-0146-11e8-
8acf-ad2991367d9d_story.html

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 States than a country with much weaker environmental oversight. It is arrogant
of Americans to benefit from the interconnected global oil market yet insist their
shores remain closed.
—Washington Post Editorial Board, January 18, 2018 [emphasis added].

We need to look no further than the U.S. Gulf of Mexico to achieve our national policy
goals. However, the U.S. offshore competes with other regions throughout the world for
investment in energy producing projects. Historically, the U.S. has been able to compete
effectively under its statutory and regulatory framework. However, that certainty and
predictability has continued to erode due to bureaucratic red tape and a continued
barrage of lawsuits against U.S. projects. We must work together to advance real-world
solutions that unlock affordable, reliable, and environmentally responsible energy while
bringing low and zero carbon technologies and energy to reality. Whether it is offshore
oil and gas, offshore wind, or offshore CCS, the federal government must provide a
pathway for investment through certainty in leasing, permitting, and regulation. Failure
to do so will not prevent the investment, it will only prevent the investment from
occurring in here in the U.S.

Photo 1467340785 © Arseniy45 | gettyimages.com

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 ■ PARTNER PROFILE

EXMAR Offshore
Specializing in the engineering, design,
construction, installation and operation of
semisubmersible production platforms in the
Gulf of Mexico and offshore infrastructure
throughout the world

EXMAR Offshore is the Houston-based engineering

services and project development branch of the Belgian
Exmar NV Group. While other branches provide shipping
and offshore gas infrastructure services, EXMAR Offshore
is a multi-disciplinary maritime and offshore solutions
and King’s Quay projects. Under construction is Beacon
provider, designing and delivering sustainable, efficient
Offshore Energy’s Shenandoah FPS. As FPS hull experts,
and increasing value to its customers worldwide for oil
EXMAR was contracted to perform engineering and
and gas production, LNG liquefaction and regasification,
design for the upgrade and life extension of an existing
storage, and transportation.
FPS for the LLOG operated Salamanca development.

Proven Performance for Gulf of Mexico Assets

Committed to the Gulf of Mexico
EXMAR Offshore was established in 1997. Anticipating
EXMAR Offshore has provided over 25 years of dedicated
a need for reliable, standardized, low-cost deepwater
service to clients in the Gulf of Mexico, offshore US
production solutions, EXMAR Offshore developed its
and Canada , and worldwide. As the offshore industry in
proprietary OPTI® series of production designs starting
the Gulf of Mexico continues to weather extremes and
in 2001. Ever since, the company has secured a global
economic cycles, EXMAR Offshore stands ready with
reputation as a safe, cost-effective provider of proven
technical expertise and design innovations that promise
designs and execution strategies for floating production
optimized asset performance for decades to come.
systems (FPS).

Supporting NOIA Advocacy

Innovative Floating Production Solutions
EXMAR Offshore is fully supportive of NOIA’s role in
In 2006, the company introduced its OPTI®
uniting and advancing the interests of the offshore energy
semisubmersible—a FPS optimized for motion, weight,
industry and for promoting solutions that provide the
design, and execution. The OPTI® was conceived as a
energy vital for lifting society in a safe and environmentally
standard hull product with a repeatable execution plan
sustainable way.
but adjustable to client preferences. Its scalability makes
it ideal for many offshore applications from oil and gas
production to renewable power generation. Rather than
reinventing the wheel with each new project, OPTI®
FPS designs provide a standard, scalable, low-cost
solution, and leverages significant and uninterrupted
execution experience. 3700 W. Sam Houston Parkway South
Suite 300
Installed projects include production platforms for LLOG’s Houston, Texas 77042
Who Dat development, and Murphy Oil’s Delta House www.exmaroffshore.com

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 ■ PARTNER PROFILE

bp
An integrated producer of resilient
hydrocarbons in deepwater Gulf of Mexico
at a lower cost and with fewer emissions

bp is proud of our 150-year history in the United States

and remains committed to providing customers with
the energy they need as we transform the company to
reach net zero emissions by 2050 or sooner. In 2020, bp
Thunder Horse – bp’s largest offshore asset in the GoM
set our net-zero ambition and a new strategy to become
an integrated energy company. In February 2023, bp
announced that we expect to increase the proportion of In support of NOIA
capital expenditure by 2030, by investing $8 billion more As we move forward in the Gulf of Mexico, bp supports
into today’s oil and gas system, and an additional $8 billion NOIA’s role in furthering the interests of the offshore
more into our transition growth engines. energy industry and for promoting solutions that
provide vital oil and gas production through safe and
Investing in the Gulf of Mexico environmentally sustainable processes.
bp is one of the largest oil and gas producers in the
deepwater Gulf of Mexico. We currently operate five
deepwater production platforms in the region: Atlantis,
Mad Dog, Na Kika, Thunder Horse and most recently,
Argos. In April 2023, bp announced the start-up of
production at the Argos platform–a semi-submersible,
floating production platform–which is bp’s fifth
operated platform in the Gulf of Mexico. We’re aiming
to find oil and gas that we can produce at lower cost
and with fewer emissions by developing projects close
to existing infrastructure. We’re changing how we do
things by applying agile ways of working and using digital
technologies that enable our people to safely make faster,
smarter decisions.

bp expects to increase production in the Gulf of Mexico

to around 400,000 boe/d by the mid-2020s, and average
350,000 boe/d through the end of the decade. Through ▲
Argos – the 5th bp-operated
investments in technology and infrastructure, we also
platform in the GoM
expect to cut emissions which will be essential to helping
us achieve our net zero ambition, while generating the
cash flows that will allow us to further invest in the
energy transition. ▶
Inside the control
room at Argos
Emphasis on production safety
bp’s Remote Collaboration Center in Houston uses
leading-edge technology to create a collaborative
real-time environment. The center is devoted entirely
to ensuring the safety of our people and protecting the
environment. Specialists at the facility are in constant
communication with offshore teams to monitor and bp America Inc.
analyze real-time data, focusing on pumps, pits, flow rates 501 Westlake Park Blvd.
and pressures. We believe that technology can play an Houston, TX 77079
increasingly effective role in reducing safety risks. www.bp.com

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 ■ PARTNER PROFILE

MSRC
The largest oil spill removal organization
(OSRO) in the United States consistently
provides reliable, effective oil spill response

For more than thirty years, the Marine Spill Response

Corporation (MSRC) has consistently delivered reliable
oil spill removal services to our customers across the oil
and gas industry. MSRC’s robust spill response capability
is supported by monthly readiness and preparedness
training activities and is fully funded by our oil and gas
customers through dues paid to the Marine Preservation
Association (MPA). Relying on this operating grant rather
than on revenue from spill activity incentivizes MSRC to
prioritize efficiency and effectiveness when responding Demonstrated Success
to an event. Responsible oil and gas operators know that MSRC has never failed to respond effectively to a spill
they can rely on MSRC’s decades of real-world response incident. Our operating profile positions us to activate
experience and our industry-leading expertise to equipment and personnel efficiently and effectively,
provide credible and reliable response when unexpected delivering the right combination of response tools to
incidents and emergencies occur. a response scenario. We have played a pivotal role in
numerous oil spill events for our customers and the USCG,
Spill Response and our experience includes over 1,000 spill responses
MSRC is response ready for oil spills of all sizes since our founding in 1990.
across the continental U.S., Hawaii, and Puerto Rico.
Notable recent responses include:
Our dedicated spill response equipment portfolio is
- Deepwater Horizon event in 2010, for which MSRC
strategically allocated along coastal areas and includes
was the largest single OSRO to respond, with over
50+ oil spill response vessels, 10+ oil spill response
15,000 employee man days, including over 11,000 man
barges, 60+ shallow water barges, 500,000+ feet of
days offshore;
boom, 650,000+ barrels of storage, and nearly 1.5 million
- USCG activation to respond to a barge explosion in
barrels of skimming capacity. In addition, MSRC
Aransas Pass, TX in 2017;
maintains a robust portfolio of alternative technologies
including 22,500 feet of pyro-boom, two Boeing 737 - USCG activation to respond to a tank farm fire in the
dispersant jets, and 190,000 gallons of dispersant Houston, TX, Ship Channel in 2019;
for surface application. Our highly-trained team of - Subsea pipeline release offshore Huntington Beach,
300+ response personnel maintains this response CA, in 2021.
equipment in excellent condition. MSRC’s dedicated
national capability is augmented by a vetted and trained Supporting NOIA
nationwide contractor network of over 220 sites ready MSRC is an active NOIA member and is fully supportive of
to activate to support response efforts. NOIA’s mission to advance the interests of the Gulf Coast
offshore industries in the safe, sustainable production
Our remote sensing and surveillance portfolio employs
and delivery of offshore energy.
sophisticated sensor packages mounted on a variety
of airborne platforms, including fixed-wing aircraft,
aerostat balloons, and utility drones, to identify
and track thick, recoverable oil on water using HD,
TIR and multispectral imaging systems. To address
communications challenges in remote areas or following
a natural disaster, we maintain a broad communications
capability that can establish wifi and telephone
connectivity through a variety of technologies supported www.msrc.org
by full-time, trained technicians. customer.service@msrc.org

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 ■ PARTNER PROFILE
Quality Companies
A portfolio of top-tier oil and gas product
and service companies Internationally
recognized for offshore and onshore
construction, fabrication and electrical and
instrumentation with a global reach
Quality Companies is a consortium of premier oil
and gas product and service companies strategically
located throughout the Gulf Coast region and beyond.
Five industry-leading entities make up the Quality
Companies family:
Quality Construction & Production. Quality Companies
leads the way in onshore and offshore fabrication,
construction, and maintenance with highly skilled
personnel and quality service offerings for the domestic
and international oil and gas industry. When it comes
to construction, production, and maintenance, Quality
Companies offers the finest along the Gulf Coast, with
specializations in composite wrap, blasting & painting,
scaffolding, production and mechanical services,
and equipment.
Zadok Technologies Inc. Whether offshore or onshore,
Zadok Technologies, Inc. is an international leader in
electrical and instrumentation, testing and inspection,
fabrication, and telecommunication services to the global
energy industry.
76 NOIA | THE U.S. GULF OF MEXICO
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Quality Production Management. We provide premier
operation management services within the continental
United States. Our production operation management
division offers contract operations services, incorporating
all land operations and logistics coordination. Our services
include contract operations, supplemental labor, E&I/
electrical/compliance technicians, deepwater/shelf/state
water/land operations, plant/pipeline operations, and
contract/supplemental transport.
Traco Production Services Inc. As a leader in general
fabrication and production services, Quality Companies
offers an array of new or refurbished production
equipment, separators, safety system panels and more
to the upstream, midstream and downstream sectors.
Committed to oil and gas service, we additionally provide
maintenance to a variety of equipment pieces.
Qualco Inc—Guyana. Qualco Inc. is an international
leader that has a strong local content presence in Guyana.
Our company provides electrical and instrumentation,
fiber optic, NDE testing and inspection, fabrication,
modifications and specialty access services to the
energy sector.
Safety Mindset
At Quality Companies, the health and safety of our
employees, and protection of the environment is a core
value to us. We promote a Target Zero mindset, with
a strong focus on customer satisfaction and quality
performance throughout the company. We promote a
strong Stop Work Authority (SWA) Program designed
to empower all employees and contract workers with
the responsibility and obligation to cease work when
an unsafe condition or behavior is observed. As part of
our concerted effort to improve and maintain safety in
all we do, Quality Companies received recognition from
American Equity Underwriters Inc. (AEU) as a 2022 AEU
Safety Award winner.
Support for NOIA
Quality Companies is proud to be a NOIA member and
supports the industry organization in its efforts to
strengthen the oil and gas industry’s presence in the
Gulf of Mexico.
425 Griffin Road
Youngsville, LA 70592
Tel: 337-857-6000
www.qualitycompanies.com
4/28/23 6:09 PM
 ■ PARTNER PROFILE

Oceaneering
Global technology company delivering
engineered services and products to the
energy, defense, aerospace, manufacturing,
logistics, and entertainment industries
Oceaneering has been committed to the Gulf of Mexico
(GoM) since its founding nearly 60 years ago. We serve our
GoM customers with facilities in Houston, Morgan City
and Port Fourchon, Louisiana, and Panama City, Florida.
Serving GoM renewable energy market
With a decade of experience in renewables, we leverage
our fleet of Jones Act-compliant vessels and work class
ROVs to serve our customers’ complex challenges.
We deliver cost efficient, safe, and low-carbon solutions,
from survey operations to the design and manufacture of
dynamic inter array cables, cable repair support, and route
clearance and preparation.
Innovation
We are powering the energy transition with advancements
including our autonomous Freedom™ AUV for site
investigations, high-speed Isurus™ ROV for operating in
harsh current conditions, our Integrated IMR offering,
cost- and carbon-reducing suction anchors, and Ocean
Perception™ marine mammal monitoring software. Our
recent collaboration with Kontiki Winds will enable us to
support the electrification of offshore assets and island
states using floating wind.

Supporting the NOIA and Sustainability

Oceaneering supports NOIA’s mission of advancing a
dynamic and growing offshore energy industry, providing
solutions that support communities and protect workers,
the public, and our environment.

Oceaneering International, Inc.

5875 N. Sam Houston Parkway West
Suite 400
Houston, Texas 77086
Tel 713 329 4500
www.oceaneering.com

PUBLISHED BY

ENDEAVOR BUSINESS MEDIA, LLC

CEO Chris Ferrell
GROUP PUBLISHER Diana Smith
dsmith@endeavorb2b.com PRESIDENT June Griffin
VP, CUSTOM PUBLISHING Roy Markum CFO Mark Zadell
rmarkum@endeavorb2b.com COO Patrick Rains
PETROLEUM GROUP
WRITER, PARTNER PROFILES Pramod Kulkarni CRO Reggie Lawrence
757 North Eldridge
pramodhk2000@gmail.com CHIEF ADMINISTRATIVE and LEGAL OFFICER Bldg. 2, Suite 8D
ART DIRECTOR Meg Fuschetti Tracy Kane Houston, Texas 77079
PRODUCTION MANAGER Josh Troutman EVP INDUSTRIAL GROUP Mike Christian 713.621.9720

2305CP_NOIA.indd 3 4/28/23 6:09 PM

 Society can reach ambitious emissions reduction targets
through American offshore energy.

The National Ocean Industries Association (NOIA) members are leading the
development and deployment of climate change solutions and GHG emission
reductions. From responsibly developed oil and gas in the Gulf of Mexico to rising
offshore wind to emerging energy segments, such as carbon capture and storage,
NOIA members are transforming the global energy landscape.

Through initiatives like the NOIA Environmental, Social & Governance Network, NOIA
unites the interests of the entire offshore energy ecosystem.

We encourage you to join NOIA today. Together, our voice will successfully promote
the durable energy solutions so vital for lifting society in a safe and environmentally
sustainable way.

National Ocean Industries Association: Become a member and join

the voice of the offshore industry today!

TO LEARN MORE VISIT NOIA.ORG

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