Technology giant ABB has won a $155million contract from Statoil to power the first phase of the Johan Sverdrup field development. The company was awarded the deal for land-based power supply to phase 1 of the North Sea field operations. The Johan Sverdrup oil field will be operated by land-based power supply and during its first phase of development, a system will be established for supplying power from shore to production start in 2019.
Woodside Petroleum has been forced to shut down its $15billion Pluto liquefied natural gas (LNG) plant after a submersible drilling rig began to drift near to its flowlines. The Australian operator said the move was taken after the rig was torn from its moorings in a cyclone. The rig had been drilling at Chevron’s Wheatstone LNG project nearby.
Hundreds of thousands of Brazilians have marched peacefully in more than 150 cities around the country to demand President Dilma Rousseff’s impeachment and to criticise government corruption amid a sprawling graft inquiry at state-run oil firm Petrobras. The biggest of the protests, held on the 30th anniversary of Brazil’s return to democracy after a long military regime, took place in Sao Paulo, an opposition stronghold where some 210,000 gathered on a main avenue, according to the polling institute Datafolha, one of the only entities in Brazil that makes scientific crowd estimates. Large rallies were also seen in the capital Brasilia, the southern city of Porto Alegre and in Rio de Janeiro.
Oil extended its collapse to the lowest intraday price since March 2009 on speculation that record U.S. supply may start to strain the country’s storage capacity. Crude tanks in the US may fill up as drilling-rig cuts fail to slow production this year, the International Energy Agency predicted. Speculators have cut bullish bets on oil to the lowest level in more than two years while short wagers rise to a record, US Commodity Futures Trading Commission data show. Futures lost as much as 2.8 percent to $43.57 a barrel in New York on Monday, falling a fifth day. Oil slumped for a fourth week on Friday after government data showed US output and stockpiles expanded to the highest levels in more than three decades, exacerbating a glut that drove prices almost 50% lower last year. The market hasn’t bottomed yet because of the surplus, former Federal Reserve Chairman Alan Greenspan said.
George Osborne is widely expected to offer a fillip for the oil and gas sector in this week’s budget although the impact of so-called “rabbits out of the hat” is expected to be fiscally neutral. In the last budget ahead of the UK general election, Mr Osborne is set to announce a range of support measures, including a new investment allowance to spur North Sea production. Some sources have suggested he could also slash the headline tax rate to less than 50%, partially reversing the effects of the 2011 tax grab when the supplementary charge was ramped up from 20% to 32%. It is thought the chancellor has “wriggle” room in the UK’s tight finances due to low oil prices and low inflation. Mr Osborne is also likely bring in a “Google tax” in the budget on Wednesday, a charge on profits deemed to have been artificially funnelled overseas which could rake in £250million to £300million a year.
US energy explorers shut rigs targeting oil for the 13th straight week, extending the biggest retrenchment in drilling on record and dragging the total count to the lowest level since 2011. Rigs targeting oil in the US dropped by 64 to 922, the lowest since April 2011, Baker Hughes Inc. said on its website Friday. The count is down 43% from the 2014 peak of 1,609. More rigs were idled in the Permian Basin of Texas and New Mexico, the nation’s biggest oil field and one of its oldest, than any other play. The country has lost more than a third of its oil rigs since October as a collapse in crude prices squeezes drillers’ profits and threatens to end the shale boom that turned the US into the world’s largest fuel exporter.
Knowledge transfer and innovation is often seen as the way forward and PSL, as a spin out company of the University of St Andrews, exemplifies this route. We at PSL have developed a unique fibre lighting system offering an innovative technical solution to many sectors where safety of life is paramount. LIGHTPATH is a patented side-emitting flexible fibre that projects a continuous and flexible line of light that carries no electrical power. It combines second-generation, high-performance light emitting diodes (LED) with a life expectancy of 50,000 hours/five hours continuous operation. A unique coupling system for the optics to allow more light into the fibre, which is just 5mm in diameter, is used in combination with a new fibre quick release coupling system.
As the UK offshore industry anxiously awaits news from the Treasury regarding changes to the North Sea fiscal regime, let’s look at the historical context of a province where frequent change has been the norm. I write as a result of discussions with industry tax expert Phil Greatrex, MD of CWEnergy. Phil has been kind enough over many years to teach high level petroleum taxation at our annual UK Oil and Gas Law teaching week for CEPMLP of Dundee University. The special regime for North Sea taxation was first introduced in 1975, just as the first big offshore fields were coming on-stream.
Great leaps have been made in the imaging of hydrocarbons over recent years and it should therefore remain a top priority for technology developers after being named as one of the SPE’s five ‘Grand Challenges’. Whilst exploration activity is being hindered by the low oil price and downturn, it would be dangerous to take an eye off the longer term. Investment in E&P programmes is still needed as well as in the technologies that can aid the discovery of new reserves and optimise recovery. Seismic data today is produced in massive volumes, with more and higher quality 3D and 4D data being processed each year. Advanced computing capabilities permit construction of more detailed inversion models from the collection of high-quality datasets.
Drilling technology business Paradigm Drilling Services this week finalised the establishment of a new Mexican subsidiary, Paradigm Drilling Services Mexico. The firm finalised the establishment of their new Mexican subsidiary in Veracruz on the Gulf of Mexico, and is currently seeking premises to house a large manufacturing and service facility in the city to support its operations, creating around 150 jobs by the end of the year.
BP has signed the final agreements of the West Nile Delta project with an estimated investment of $12billion. The company plans develop 5 trillion cubic feet of gas resources and 55 million barrels of condensates. Production from the project is expected to reach up to 1.2billion cubic feet per day (bcf/d), equivalent to about 25% of Egypt's current gas production and significantly contribute to increasing the supply of energy in Egypt.
Oil and Gas services firm Weir rose by nearly 5% amid speculation it could be the subject of a break-up bid from a US private equity firm. The stock, which has hit turbulence in recent months due to the fall in oil prices, was 85.5p higher at 1824.5p. Other big risers included Taylor Wimpey after the company this week joined rival firms in reporting a strong start to the important spring selling season.
Oil major BP has postponed construction of its £500million gas sweetening plant for up to five months. The company said the decision was triggered by the low oil price over the past six months. Earlier this year the company announced job losses from its North Sea operations as it looks to streamline its operations.
Offshore training provider Survivex has appointed a business development director as it looks to attract international clients in “difficult times for the sector”. Chris Bews has been promoted to business development manager, leading the sales team and meeting pre-defined revenue targets. Before joining the Aberdeen firm in 2011 he held an account management position for an electrical and engineering consumables supply company.
An energy service firm shrugged off the oil and gas industry downturn yesterday, reporting record annual results. The company posted an 8% rise in underlying pre-tax profits to £139.5million, while revenue was up by 7% at £910.6million. Hunting, which announced last month it would cut an unspecified number of jobs and realign business units to help counter a drop in drilling activity, said falling oil prices did not affect its business last year.
The President of Mexico said his country was keen to learn from the expertise of the North Sea oil and gas industry on a trip to Aberdeen yesterday. A heavy police presence, a civic reception and some of the country’s top politicians greeted Enrique Pena Nieto in what was his only commitment outwith London during his stay in the UK. In the grand surroundings of the Town and County Room in the town house, President Nieto signed memorandums of understanding with the UK Government to forge closer links on energy and climate change. Lord Provost George Adam and Secretary of State for Scotland Alistair Carmichael welcomed the Mexican delegation to the north-east, while UK energy minister Matt Hancock described it as the dawn of “an era of closer collaboration”. President Nieto said his country had “enormous” reserves of oil and gas, but was “not capable of exploiting them”.
Tullow Oil Plc, Total SA and Cnooc Ltd. are set to invest almost $14 billion developing oil fields in Uganda, according to Jimmy Mugerwa, general manager of Tullow’s operations there. “With the partner companies, we are looking at $8 to $10 billion for the upstream and $3 to $4 billion when we start the pipeline construction,” Mugerwa said in an interview Thursday in Kigali, the capital of neighboring Rwanda.
Pemex Exploracion y Produccion can’t recover hundreds of millions of dollars lost on Mexican condensate smuggled across the Texas border by bandits and sold to Shell Chemical LP, ConocoPhillips Co., BASF Corp. and other buyers that didn’t know the feedstock was stolen, a federal appeals court ruled. A Houston federal judge threw out the claims last year after finding Mexico’s national oil company waited too long to pursue US buyers of its stolen natural gas liquids, after it failed to halt the thefts on its side of the border.
Since the days of Henry Ford and the beginning of mass production, the benefits of ‘standardisation’ have been widely promoted and publicised. The automotive industry spear-headed standardisation and, with it, transformed manufacturing practice forever. The rationale for standardisation is as compelling as it is simple – we know full well that variation is more likely to cause errors, increase complexity and therefore impact everything from safety to operating costs. The oil and gas industry has been slower than many to adopt standardisation to the same extent, although some operators have been better than others at embracing the concept. Generally, the industry is still behind the curve. Nowhere is this more evident than offshore when comparing ‘ways of working’ across different shifts where it is not unusual to see a marked change in how things get done with the arrival of a new crew.
UK production efficiency has dropped from 80% to 60% over the last decade making technologies that can help extend the life of current assets and rejuvenate uptime increasingly important. Gerald Schotman, Chief Technology Officer at Shell put it wisely: “If you simply stick with existing technologies then our industry becomes very labour intensive and unaffordable.” Yes there is a risk involved, but we take an even bigger risk of failure if we do not, as an industry, fund innovations that can address production challenges and support recovery.
Genel Energy said it fell to a loss last year as it waited for money still owed from some of its fields in the Kurdistan Region of Iraq. The company said its expects to receive regular repayments this year. The oil producer made a full-year loss of $312.8million, compared with a profit of $186.5million in 2013.
Woodside Petroleum’s proposed $3.75billion acquisition of Apache’s interest in three projects will not be opposed by the Australian Competition and Consumer Commission (ACCC). The company is looking to acquire interests in the Wheatstone, Balnaves and Kitimat Projects. The first and second project are located in the Northern Carnarvon Basin, offshore Western Australia, while the Kitimat Project is located in British Columbia, Canada.
What a difference a year makes. Twelve months ago the shale revolution in the US was changing everything, from manufacturing competitiveness to traditional import/export flows and even longstanding geopolitical arrangements this side of the pond, shale exploration was pretty much on each EU country’s agenda, with shale gas often seen as the only way out of Russian dependency. Now we are in the middle of another quantum shift which is transforming everything again. Crude prices have plunged, Russia is in recession, experts are declaring shale investments dead in the water (too soon in my view) and government policies favouring renewables are under new scrutiny, as economics suddenly favour dirtier coal and gas. Whether you blame technology, politics, softening demand or a mix of all three, these ructions are testament to the dynamic nature of energy markets and the huge risks that emerge in a period of profound volatility.
The President of Mexico will visit Aberdeen today to sign a memoranda of understanding on collaboration in the energy sector. Enrique Pena Nieto will be joined by Scottish secretary Alistair Carmichael, UK energy minister Matthew Hancock and Scotland’s external affairs secretary Fiona Hyslop on the final day of his state visit to Britain.
Royal Dutch Shell Plc and the United Steelworkers’ union will resume talks Monday on a new labor contract after ending discussions today without a resolution to the largest oil worker strike since 1980. The two sides will meet in Houston, the union said in a statement. The discussions come amid a walkout that’s widened to 12 refineries accounting for almost 20 percent of the capacity in the US Shell is leading the negotiations with the 30,000-strong United Steelworkers on behalf of companies including Exxon Mobil Corp. and Chevron Corp.