News

21 september 2018

Shell partners with Microsoft to accelerate offshore innovation

Shell Global Solutions has announced a partnership with Microsoft to accelerate industry transformation and offshore innovation in its upstream and downstream businesses.

Under the deal, Shell will use Microsoft Azure’s C3 Internet of Things (IoT) software platform to drive efficiencies in all sectors, from drilling and extraction to employee empowerment and safety.

Using artificial intelligence (AI) and machine learning applications, the oil giant hopes to create substantial economic value across its entire business, and improve operational performance.

Shell executive vice-president for technology and CTO Yuri Sebregts said in a press release: “Digital technologies are core to our strategy to strengthen our position as a leading energy company. Our collaboration with Microsoft gives us a solid digital platform to make our core business more effective and efficient and supports our ambition to provide more and cleaner energy solutions through technology.”

Shell has been a core driver of digital innovation throughout the years, and has worked on projects such as subsea robotics in the 1970s and the development of RAM to process big data offshore in the 1980s.

The oil giant already uses some Microsoft tools to enhance productivity among its employees.

C3 IoT chairman and CEO Thomas M Siebel said: “Shell is demonstrating AI and IoT leadership in selecting C3 IoT and Azure for the Shell AI Platform. This will enable Shell to rapidly realise the vision of digital transformation across all lines of business, including upstream, midstream, retail and finance.”

Microsoft Worldwide Commercial Business executive vice-president Judson Althoff said: “As one of the energy sector’s largest and most prominent players, Shell’s wide-scale adoption of AI, machine learning and IoT technologies sets an example of how digital transformation can help the industry address resource challenges, improve asset performance and promote safety.”

Shell is also a reference customer for Microsoft Azure’s DevTest Labs, which provides developers with self-service access to virtual development environments.

Shell claimed that using DevTest Labs in collaboration with Microsoft Visual Studio Team Services has reduced the time it takes to set up software builds by 80%, according to Computer Weekly.

Shell IT chief technology officer said in a blog post last month: “In the past, our people would wait for days, if not longer, to get help creating VM [virtual machine] environments. They had no direct control over the process.

“Now, with the approach based on DevTest Labs, people can create and change their own setups on the fly. That gives them more versatility, more freedom, and more value to the company.”

21 september 2018

US oil giants join fight against global climate change

Three US oil giants, namely Chevron, ExxonMobil and Occidental Petroleum, have joined a global alliance to fight climate change.

Launched in 2014, the Oil and Gas Climate Initiative (OGCI) aims to provide practical solutions to combat global warming and reduce greenhouse gas emissions.

Each of the three companies will commit $100m to the OGCI Climate Investments fund, which is armed with a total funding of more than $1bn.

The US oil giants’ entry increases the number of OCGI member companies to 13 and raises OGCI’s representation to around 30% of global oil and gas production.

The key focus areas of the coalition include carbon capture and storage, methane reductions, and energy efficiency.

Over the years, ExxonMobil downplayed the risks associated with climate change although reports emerged that the company was in full knowledge of these risks.

As part of the OGCI project, ExxonMobil has now committed to invest in the research and development of long-term solutions to reduce greenhouse gas emissions.

ExxonMobil chairman and CEO Darren Woods said: “It will take the collective efforts of many in the energy industry and society to develop scalable, affordable solutions that will be needed to address the risks of climate change.”

In May, ExxonMobil unveiled plans to reduce methane emissions by 15% and flaring by 25% by 2020.

Occidental Petroleum president and CEO Vicki Hollub said: “Industry innovation and collaboration have a critical role to play in addressing climate change, and Occidental is excited to join OGCI’s efforts to create a lower-emissions world.

“Occidental is advancing carbon dioxide enhanced oil recovery (CO₂ EOR) as a form of carbon capture, utilisation and sequestration (CCUS).”

Other members in the global alliance include BP, CNPC, Eni, Equinor, Pemex, Petrobras, Repsol, Royal Dutch Shell, Saudi Aramco and Total.

20 september 2018

China retaliates against Trump with fresh tariff on US LNG

The Chinese Government has announced a 10% tariff on US LNG, after the US imposed tariffs on $200bn worth of imports from China.

The 10% tariff on $60bn worth of US goods, which will come into effect on 24 September, is lower than the 25% previously threatened. It is nonetheless a blow to LNG producers in the country.

S&P Global Platts’ head of gas and power analytics Ira Joseph told the Wall Street Journal: “It’s a big deal for the US-China gas trade. The tariffs will push Chinese buyers to other sellers in Asia and the Middle East because the US will no longer be considered a low cost option. The US now can’t come in with lowball price deals.”

The latest tariff on US LNG weakens President Trump’s attempts to use shale oil and natural gas to turn the US into a global energy leader. Estimates showed the US was on track to export more than 1,000 billion cubic feet (bcf) of LNG in 2018, which is enough gas to fuel around 5 billion homes for a day.

This year, China is looking to buy less than 100bcf of LNG from the US, a significant reduction from 2017, when it bought 15% of all US LNG, according to US Department of Energy data.

China has taken LNG deliveries from just four vessels in the past three months, compared to 17 in the first five months of 2018. So far this year, the Chinese Government has imported 1.6 million tonnes (mt) of LNG from the US, which equates to 11% of US LNG exports. This is just 5% of China’s overall LNG imports.

A report from Wood Mackenzie found that China’s LNG imports are on the rise, and could increase from 38mt in 2017 to 52mt by the end of this year, representing a 45% growth.

Center for Liquefied Natural Gas executive director Charlie Riedl told Reuters that the tariff on LNG specifically “is a good indicator of how serious things have gotten between the US and China on this trade issue. While we would like to see this resolved quickly, I don’t see that happening right now.”

He added that the longer these trade disputes continue, the more likely financial brokers will be put off US LNG investments.

20 september 2018

Eni Norge develops offshore safety information tool on Goliat platform

Eni Norge has developed a web-based tool to gather, systematise and present critical offshore safety information on the Goliat platform in the Barents Sea.

The system, which is being used for the first time offshore, helps to measure and track more than 10,600 technical components, all in real time.

According to Eni Norge, this solution is the result of years of work in the industry to build better approaches and systems for risk management.

For this solution, Eni Norway has received design and engineering support from Safetec and SINTEF, and software development support from Eigen.

The BSP-Barrier Status Panel (BSP) tool helps to offer offshore safety information about the status of major accident-critical barriers for use in daily priorities.

Eni Norway project manager for the barrier project Live Fornes said: “The barrier panel gives us real-time data from the maintenance management system and control system, thus visualising the risk image on the device at all times.

“This is a phenomenal improvement over previous systems because it has dramatically increased our ability to understand which failures of safety-critical equipment that have the greatest impact on major accidents, which must therefore be prioritised.”

The information can be collected in many views and then customised to different user groups. Preliminary user experience and feedback have found to be positive.

The barrier status panel results in increased risk awareness, helps in daily status meetings and provides decision support during work planning and approval.

Safetec and SINTEF have served as important partners for Eni Norge in the development of the barrier panel.

SINTEF project manager Knut Øien said: “The cooperation on the development of the barrier panel has been an exciting opportunity to apply our knowledge in barrier management and visualisation of risk to develop an advanced risk management tool. The barrier panel presents the status of security systems in a new and innovative way, giving operators a better understanding of the risk picture of a device.”

Safetec project manager Ole Magnus Nyheim said: “It has been very exciting to develop a world-class barrier management tool with Eni Norge. Eni’s barrier panel utilises digital technology in an outstanding way, both to monitor the condition of individual components and platform overall. A first-class risk management base on Goliat.”

19 september 2018

Aker Solutions wins services contract in Campos Basin offshore Brazil

Aker Solutions has received a contract from Petrobras to provide maintenance and modifications services for nine oil and gas platforms in the Campos Basin offshore Brazil.

Valued at more than R$250m ($60.39m), the contract is valid for a period of three years and includes an option for a two-year extension.

The scope of work includes renovating, repairing and upgrading offshore production units for Petrobras’ Campos Basin Operational Unit (UO-BC).

In addition, Aker Solutions will manage the yard where replacement parts and other equipment will be fabricated.

The Campos Basin extends around 100,000km², ranging from the outskirts of Vitoria to Arraial do Cabo, off the northern coast of Rio de Janeiro offshore Brazil.

Petrobras’ discoveries in the Campos Basin include Albacora, Marlim, Roncador, Barracuda, and Caratinga.

Aker Solutions CEO Luis Araujo said: “We are pleased to expand our business in Brazil, a key international market. This is the second big contract we have signed after entering the maintenance and modification market in Brazil, reinforcing the importance of having a complete portfolio and being able to provide an integrated solution from concept to decommissioning.”

The contract services will be delivered from Aker Solutions’ majority-owned CSE Mecânica e Instrumentação services base in Macaé, Rio de Janeiro.

The project will commence in October 2018, with final deliveries slated for 2021.

18 september 2018

Kosmos Energy completes purchase of Deep Gulf Energy for $1.225bn

Kosmos Energy has completed the purchase of Deep Gulf Energy (DGE), a deepwater company operating in the Gulf of Mexico, for $1.225bn.

With this purchase, Kosmos has expanded its deepwater Atlantic Margin portfolio.

The acquisition is immediately accretive and is expected to generate free cash flow, thereby allowing Kosmos to return cash to shareholders through a dividend in the first quarter of next year.

The purchase of Deep Gulf Energy includes Deep Gulf Energy LP, Deep Gulf Energy II, Deep Gulf Energy III, and associated entities.

The pure-play Kosmos has assets at offshore Ghana, Equatorial Guinea, and in the US Gulf of Mexico. It has the Tortue gas project in Mauritania and Senegal, and an exploration programme in proven basins of Equatorial Guinea and US Gulf of Mexico besides emerging basins of Mauritania, Senegal and Suriname, and frontier basins of Cote d’Ivoire and Sao Tome and Principe.

In August, Kosmos signed an agreement to purchase Deep Gulf Energy from First Reserve and other shareholders.

The $1.225bn amount consists of $925m in cash and $300m in Kosmos common shares issued to First Reserve, management, and other DGE shareholders.

Kosmos funded the cash portion of the acquisition through its existing credit facilities.

During the time of the acquisition announcement, Kosmos chairman and CEO Andrew G. Inglis said: “With this acquisition, Kosmos continues to grow into a larger, more balanced exploration and production company, with increasingly diversified production, a pipeline of world-class development projects, and a portfolio of short and longer cycle exploration opportunities.

“Over the last four years, Kosmos has doubled production, and this acquisition creates the platform to double production again in the next four years. With many competitors leaving the Gulf of Mexico to chase onshore shale plays, a huge opportunity has opened in the basin.

“The best deepwater assets can compete with the best of shale, and now is a good time to enter the Gulf of Mexico. This highly complementary transaction is immediately accretive – delivering sustainable production and free cash flow growth, and enabling dividend payments to begin in the first quarter of 2019.”

17 september 2018

UK oil and gas firms will not be affected by Brexit, says government

The UK Government has said that exiting the European Union (EU) without a deal following the March 2019 deadline will not cause any impact on the operational landscape for UK oil and gas firms.

In a note, the government stated: “The established regime for hydrocarbon licensing and environmental issues will continue to operate… UK and EU businesses will not be required to take any action.

“The government will amend the relevant legislation to ensure broad continuity. The legislative changes will have no impact on energy sector businesses, whose residual obligations under the legislation covered will remain unaltered.”

According to the note, as the country will remain a member of the International Energy Agency (IEA), it will have to meet the IEA’s oil stocking obligations for 90 days of net imports of oil, Reuters reported.

Meanwhile, Oil and Gas UK’s latest report stated that the oil and gas platforms in the country could face a shutdown if a deal on Brexit creates difficulties in accessing skilled workers.

Due to delays in accessing labour from EU countries, it could lead to potential problems such as the platforms being shut down.

The UK Government, however, stated UK oil and gas firms could continue appointing workers from the EU until 2020.

According to the report, around 5% of workers in the industry come from other EU countries. The EU workers comprise 7% of the workforce in the offshore platforms.

The report noted that it was “vital that arrangements are in place between the UK and EU to allow the continued frictionless movement of people”.

Oil and Gas UK recommended that in order to reduce the impact of Brexit, the UK Government needs to gain frictionless access to markets and labour and maintain a voice in Europe.

14 september 2018

Total to buy 25% stake in the Orinduik block offshore Guyana

Total Petroleum’s wholly-owned subsidiary Total E&P Activités Pétrolières has triggered its option to acquire a 25% working interest in the Orinduik block offshore Guyana, from Eco Atlantic (Guyana).

Eco Atlantic is a subsidiary of Eco Oil & Gas, which holds licences in highly prospective regions in Namibia and Guyana.

The company has exercised its option before it received the final 3D seismic data from Eco.

Completion of the deal is subject to the receipt of relevant regulatory approvals, including that of the Government of Guyana.

Once the transaction is closed, Total will have a 25% working interest in the Orinduik block offshore Guyana, which will be operated by Tullow Oil with a 60% interest. Eco Guyana will retain a 15% working interest in the block.

Under the terms, Total will pay $12.5m to Eco once all requisite approvals for the transfer are obtained.

Eco will use the proceeds from the option to meet its share of drilling costs on the Orinduik block, as well as to recover the expenses incurred on an expanded 3D seismic survey.

Eco Oil & Gas CEO Gil Holzman said: “The board believes the early exercise of the option by Total is an indication of Total’s confidence in the prospectivity of the Orinduik block based on the data it has received to date from Eco and Tullow Oil, the existing licence partners on the Orinduik block.

“With Tullow as operator and the technical contribution that both Total and Eco now bring to the project, we look forward to working with these two world class players in further progressing the exciting exploration of the Orinduik block.”

Earlier this week, Eco released a technical report on the Orinduik block, which indicated an estimated resource of three billion barrels of oil and gas across a total of ten leads.

The 1,800km² block is located in the shallow water of the prospective Suriname Guyana basin. Drilling is expected to commence in the third quarter of next year.