Oil & Gas

Industry Update
Thanks to…
Oil & Gas Industry
Drilling vs. Production
Production Side, NDT Requirements:
• Online Corrosion Monitoring
• Pipeline Inspections (Corrosion &
Erosion)
• Pressure Vessel Inspections
(API/ASME)
• Structural Inspections (Jacket,
Platform, Semi sub, Jack-up, Hull)
• Cargo Tank Inspection FPSO, (IACS
Class Society Requirements)
• Lifting Gear Surveys (Loler)
• Cranes, Flare Booms
• Plus others…
Drilling/MODU Side, NDT Requirements:
• Derrick Inspection (API)
• Drilling Handling Equipment (API)
• Structural Inspections (Drillship Hull,
Semi sub, Jack-up)
• Lifting Gear Surveys (Loler)
• HP & LP Pipeline Inspections (Corrosion
& Erosion)
• Rig Service Pressure Vessel Inspection
(Class Requirements)
• Cranes, Flare Booms
• Plus others…
Brent Crude Oil Price
&
Oil Industry Downturn
HISTORICAL
LY
1860’s to 2014
Brent Crude,
5 Year Trend
 NCS
Drilling Rig
Utilisation
 Worldwide
Drilling Rig
Utilisation
(early 2017)
 Worldwide
Drilling Rig
Utilisation
(2017)

Rig Utilisation Has Stabilised, but not had much Growth…

 Worldwide Drilling Rig Utilisation (2018)

Inventory of Rig Requirements Worldwide:

(includes prospects, market inquiry/expression of interest, pre-tender or tenders)

The RigLogix data base contained 390 noted requirements with a start date of Dec. 25, 2017 or later…

Start dates in the first-half of 2018: 202

68 projects in the pre-tender or tender stage, meaning a rig selection is imminent or fairly close.
Asia-Pacific region accounts for 21 of these (but delays are commonplace in this region.)

Africa and the North Sea also have double digit requirements where tender activity is ongoing.

The remainder of the projects are prospects, commitment wells or expressions of interest, meaning
the start dates for most will slide into the final six months of 2018 or even beyond.
Location
 Rig Hire
Day Rates
(2017)

The Ripple Effect of lower day rates, is lower margins for

NDT Companies and lower wages for employees…
However, there
is light at the end
of the tunnel…
 • One of the main reasons for lack of
production output for 2017 was the crack in
the forties pipeline which shut the North Sea
End of export line for 3 weeks.

2017 • October: Borr Drilling placed orders for 9

new jackups
• Nov/Dec: Netherlands, Hansa Hydrocarbons
success with Ruby Field Discovery
 • OPEC (Organisation of the Petroleum Exporting Countries)
commit to maintaining supply limits in place through 2018,
for a second year, to reduce a price denting glut of oil
currently held in storage inventories worldwide.
• OPEC controlling production rates to drain reserves.

Jan 2018 • Oil hits $68/Barrel, highest price since May 2015
• First New Build Rig of the year leaves Keppel Fels shipyard,
(at its peak in 2013 Keppel Fels produced 21 rigs in a year.)
• Maersk Announces 4 year contract with Tullow Ghana
• Forties Platform Flare relit following shutdown due to Forties
Pipeline leak
• Norway, increased exploration in the Barents Sea test wells
 • North sea Oils Firms plan more exploration in the north
Sea
• BP announce 2 huge finds in North Sea & WOS that
could extend beyond 2050
Feb 2018 • BP announces it expects to double production by 2020
• Hurricane energy announce large find West of Shetland,
FPSO being built in Dubai will be on site Q3 2018, and
production begin Q1 2019.
 • Wintershall to expand production in Germany
• Oil and Gas Authority (OGA) announce production
expectations through to 2050 will be in on excess of 11
Billion Barrels of Oil
Mar 2018 • The Danish Energy Agency has approved the A.P. Møller –
Mærsk’s proposed sale of its subsidiary Danish exploration
and production company Maersk Oil & Gas (Maersk Oil) to
global oil major Total for $7.45bn
• International Energy Agency advised that the downward
trend, may be about to turn.
 • Norway Minister of Petroluem and Energy commit to
increasing hiring more people into the O&G industry,

Mar 2018 • “It’s hard to imagine that all the 50,000 jobs that
disappeared during the industry’s downturn will be
brought back,”
 • COSL Prospector currently on route to Bergen…

Mar 2018
So how does all of this effect the
NDT Companies…??
• Cost Cutting
• Lack of investment into Assets
• Reduced Contracts awarded
• Tightened Budgets
• Reduced PO Values
• Drives down wages….
Most NDT Companies in Aberdeen expect there to be an
NDT Skills Deficit in the near future (12-18 months)
With some companies already struggling to find suitably
qualified technicians for ongoing projects.
The unique problem faced by the offshore industry, is bed space…
Bed space offshore is paramount, and NDT teams are required to
consist of fully qualified, multi disciplined technicians.
 Global
Inspection
Contracts
Turnaround evident:
• Increased Interests,
• Increased inspection contracts
being awarded,
• Increased reactivation of stacked
rigs returning to service.
Hopefully, the trend continues
PCN ISI UT Qualification
in Corrosion & Erosion
The corrosion
problem has
not gone
away.
 Some operators guilty of
turning a blind eye on NDT
certification requirements…
Still no uptake from
Operators due to
continued Industry
downturn and
ongoing cost
cutting.
May 2017, the
Brent Charlie
evacuated due
to a Gas Leak
RBI Inspections/ ISO 31000, API 580, DNV-RP-G101
Should RBI be a
potential area for PCN
Certification in
future..?? Thoughts..??
Question
time
Thank you for your time.