oil review africa 3 2013

Nigeria downstream -a work in progress

Algeria comes fullcircle to embraceinvestment

Tackling the peopleproblem

Gas to liquids floatingsolutions

Accurate and reliablepipeline leak detection

Round pipes - anengineer’s pipe dream

Mechanical extrusiontechnology

Oil cyber security - the invisible attackers

AfricaAfricaCovering Oil, Gas and Hydrocarbon Processing Europe m15, Kenya Ksh300, Nigeria N400, South Africa R20, UK £10, USA $16,50

REGULAR FEATURES: ■ News ■ Contracts ■ Events Calendar ■ IT update ■ Company profiles ■ Products & Innovations

Aliko Dangote aims to invest up toUS$8bn in a major new oil refinery.See page 20.

www.oilreviewafrica.com

Volume 8 Issue Three 2013■ Geology - p28 ■ Gas - p30 ■ Exploration - p32 ■ Technology - p41

Oil Review

Africa

- Issue Three 2013w

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.oilreviewafrica.com

Nigerian firmsprosper from

offshore oil boom


offshore oil boom

ORA 3 2013 Cover_cover.qxd 21/05/2013 16:01

PEM Offshore LimitedPlot 231, Trans-Amadi Industrial Layout, Port-Harcourt, NigeriaPhone: +234.(0)84.361.390 Mobile: +234.803.403.6935

PEM Offshore Inc.2425 West Loop South, Suite 200 Houston, 77027 Texas, USAPhone: +1.713.297.8868 Fax: +1.267.224.9070 Mobile: +1.832.339.6843

OUR PARTNERS

UAE Mobile: +971.555.122.725 Email: [email protected] www.pemoffshores.com

OUR PRODUCTS

• Sewage/Waste Water Treatment

• Reverse Osmosis Desalination water making

• Offshore Equipment supply

• Gas Detection devices/Monitors

• Lifesaving Appliances/Marine safety appliances

• Offshore Containers & Baskets

• Marine and Offshore Consultants

• Marine Warranty Surveys, Pre-purchase, On/Off - Hire Inspections,

• Riggings/Loose Lifting Equipment Inspection, NDT Services

• Vessel Managers and Marine Technical Advisers

• Rope Access Inspection / Risk Based Inspections

• Underwater Engineering, Subsea Inspections and Support

OUR SERVICES

PEMPEM OffshoreDelivering Great Services

PEM OFFSHORE SIMULATION & INNOVATION CENTERComplete KONGSBERG World Class Offshore Simulation Training Center, 1st of its Kind in Africa, to be N.I (Nautical Institute) Approved!

• Offshore Anchor Handling

• Dynamic Positioning

• Power Management

• Crane Simulation Systems

S01 ORA 3 2013 Start_Layout 1 21/05/2013 14:49

Oil Review Africa Issue Three 2013 3

Editor’s noteThe growth of Nigeria’s rich deepwater sector has had a big impact onthe nation’s homegrown oil and gas companies, with the country’sentrepreneurs in the services sector as well as new and emerginglocally-owned exploration and production companies starting to gain afoothold in this testing sector.

Meanwhile Algeria is showing renewed signs of progress and nowthere is a political will to reform upstream investment terms and soinvestor confidence is building.

However, there is still a ‘people problem’. As the industry moves toincreasingly deeper waters and tougher environments, high-skill labouris increasingly scarce, with one generation retiring, and the newgeneration as yet inexperienced. The oil companies cannot buy theirtalent - they have to increase their own efforts to develop it.

Accurate and reliable pipeline leak detection. Typical installation using Coriolismeters for pipeline material balance.

ColumnsIndustry news and executives’ calendar 4

AnalysisOil market analysed 12Ahead of the northern hemisphere’s “driving” season, the oil market has been quiet,considerably eased by the resumption of international supplies from South Sudan.

Country FocusNigeria 14Nigerian firms prosper from offshore oil boom.The downstream sector - a work in progress.

Algeria 22Algeria comes full circle to embrace investment but outside dangers lurk.

Human ResourcesTackling the people problem 24Access to human resources is critical for the future success of the oil and gas industry.

GasLiquid floating solutions deal 30SBM Offshore has joined forces with CompactGTL to provide gas to liquids floatingsolutions.

Developments 31A round-up of recent gas activity from around the region.

E&PDevelopments 32The latest exploration and production news from around the region.

InterviewRosetti Marino looks south 38Interview with Alessandro Heltai about the company’s plans to seek new markets insub-Saharan Africa.

TechnologyAccurate and reliable pipeline leak detection 41How the latest leak detection systems based on Coriolis flowmeter technology can helpoperators to meet regulatory requirements and detect leaks effectively with a minimumof false alarms.Information TechnologyPipelines 44Round pipes - an engineer’s pipe dreamCollaborative effort proves successful for Angolan pipe-lining project

Extrusion technology 46One of the most innovative recent advances in downhole activation for the drillingindustry has been the introduction of mechanical extrusion technology by ChurchillDrilling Tools, incorporating the deployment of rigid metal darts.

ICTCyber security - the invisible attackers 49Michela Menting of ABI Research tells Oil Review about some of the cyber threatsthe industry should fear — and why they should fear them.

Nigerian firms prosper from theoffshore oil boom...Afren drilling atOkoro East.

Nigeria downstream -a work in progress

Algeria comes fullcircle to embraceinvestment

Tackling the peopleproblem

Gas to liquids floatingsolutions

Accurate and reliablepipeline leak detection

Round pipes - anengineer’s pipe dream

Mechanical extrusiontechnology

Oil cyber security - the invisible attackers

AfricaAfricaCovering Oil, Gas and Hydrocarbon Processing Europe m15, Kenya Ksh300, Nigeria N400, South Africa R20, UK £10, USA $16,50

REGULAR FEATURES: ■ News ■ Contracts ■ Events Calendar ■ IT update ■ Company profiles ■ Products & Innovations

Aliko Dangote aims to invest up toUS$8bn in a major new oil refinery.See page 20.


Volume 8 Issue Three 2013■ Geology - p28 ■ Gas - p30 ■ Exploration - p32 ■ Technology - p40


offshore oil boom


offshore oil boom

Contents

AfricaAfricaCovering Oil, Gas and Hydrocarbon Processing

Head Office: Middle East Regional Office: Alain Charles Publishing Ltd Alain Charles Middle East FZ-LLCUniversity House, 11-13 Lower Grosvenor Place Office 215, Loft No 2A, PO Box 502207London SW1W 0EX, UK Dubai Media City, UAETelephone: +44 (0) 20 7834 7676 Telephone: +971 4 4489260 Fax: +44 (0) 20 7973 0076 Fax: +971 4 4489261

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Oil Review Africa Issue Three 2013

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E x e c u t i v e s C a l e n d a r 2 0 1 3JUNE

3-5 10th Maghreb, Mediterranean, MidEast Upstream Conference PARIS www.petro21.com

4-6 Nigeria Oil & Gas Technology LAGOS www.cwcnogtech.com

4-6 Lagos Power LAGOS www.lagos-power.com

4-6 NOG Logistics LAGOS www.nog-logistics.com

11-12 Oil Council Africa Assembly PARIS www.frontier-communications.com

11-12 Mozambique Recruitment Summit MAPUTO www.eliteic.net

12-13 EG Gas MALABO www.cwceg.com

13-14 Platts Crude Oil Summit LONDON www.platts.com

18-20 IFSEC South Africa JOHANNESBURG www.ifsecsa.com

18-20 4th Eastern Africa Oil, Gas & Energy Conference 2013 NAIROBI www.petro21.com

18-20 ZIMEC (3rd Annual Zambia Intl Mining & Energy Conference & Exhibition LUSAKA www.zimeczambia.com

18-20 African Energy Forum BARCELONA www.africa-energy-forum.com

19-20 Offshore Africa Summit JOHANNESBURG www.offshoreafricasummit.com

19-20 World National Oil Companies Congress LONDON www.terrapinn.com

JULY

6-7 Angola Recruitment Summit LUANDA www.eliteic.net

30-1 Aug NAICE 2013 LAGOS www.spenigeria.spe.org

AUGUST

18-20 Oil & Gas Summit Africa MAPUTO www.africa.oilgassummit.com

SEPTEMBER

3-6 Offshore Europe ABERDEEN www.offshore-europe.co.uk

24-26 3rd U & D Oil & Gas Summit ABUJA www.environmental-expert.com

OCTOBER

2-4 Power Nigeria LAGOS www.power-nigeria.com

7-10 East Africa Oil & Gas Summit LONDON www.eastafrica-oil-gas.com

8-11 CIOME 2013 N'DJAMENA www.ciome-chad.com

28-30 NOCs & Governments Summit LONDON www.nocs-governments.com

Readers should verify dates and location with sponsoring organisations, as this information is sometimes subject to change.

EXPERTS FROM THE offshore energy industry around the world cametogether for the 2013 OTC in Houston. Attendance at the conferencereached a 30-year high of 104,800, the second highest in show historyand up 17 per cent from last year.Attendance surpassed the 2012 total of 89,400 and the sold-outexhibition was the largest in show history.“We had a terrific conference with deep and broad technical coverage,supported by excellent panels and executive keynote presentations,”said Steve Balint chairman of OTC. “Technology is at the heart of theoffshore industry and it was all here on display at OTC 2013.”This year’s event featured nine panel sessions, 29 executive keynotepresentations at luncheons and breakfasts, and 298 technical papers.Speakers from major IOCs, NOCs, and independent operatorspresented their views on the current challenges and future directionsof the industry.OTC’s Spotlight on New Technology recognised 15 technologies fortheir innovation in allowing the industry to produce offshore resources.Energy ministers and national oil company senior executivesparticipated on a panel where they shared their perspectives on howthe industry and its partnership models should adjust to address futuresupply challenges and what role companies and governments shouldplay to shape the energy future.The Distinguished Achievement Award for companies, organisations,or institutions was awarded to Total’s Pazflor deep offshoredevelopment at the sold-out event on the floor of Reliant Stadium.OTC 2014 takes place 5-8 May 2014 at Reliant Park.

RECENT LARGE AND world-class gas discoveries in Mozambique and Tanzania,with potential for more to come, and commercial oil flows in Kenya, show thepotential of the enormous exploration frontiers of Eastern Africa, both onshoreand offshore. The impact of this resurgence is rebalancing the Africa oil-gasindustry landscape into a wider continental oil and gas/LNG game, withpotentially global consequences.

The 4th Eastern Africa Oil, Gas & Energy Conference 2013 gives newinsight in the opportunities, acreage, key players and corporate andgovernment strategies in this region. The Conference is hosted annually byGlobal Pacific and will be held from June 18th to 20th in the InterContinentalHotel in Nairobi, including the pre-conference 4th Eastern Africa StrategyBriefing by Dr Duncan Clarke. The meeting highlights presentations of CEOs,government officials, ministers and key executives from within leadingcorporate and state oil companies.

During the 4th Eastern Africa Conference key Speakers will reveal theexploration potential, future opportunities and growth in countries like Kenya,Somalia, Ethiopia, DRC, the Seychelles, Tanzania, Madagascar, Burundi,Rwanda, and regional oil giant Uganda.

“The new discoveries will add substantial net wealth to the EasternAfrica’s littoral states where they are located, and induce higher economicgrowth rates and regional development,” Dr Duncan Clarke, Chairman ofGlobal Pacific & Partners, says.

Prior to the conference the 4th Eastern Africa Strategy Briefing togetherwith the celebrated 51st PetroAfricanus Dinner, will be held on June 18th.During the Strategy Briefing Dr Duncan Clarke will provide key insights on thecorporate upstream oil and gas game, governments and state oil firms andlicensing agency strategies.

E Africa resurgence reshapes oil landscapeOTC sees record number of attendees



S02 ORA 3 2013 News_Layout 1 21/05/2013 11:09

6 Oil Review Africa Issue Three 2013

SHELL INTERNATIONAL EXPLORATION andProduction has selected CHC Helicopter, theworld’s leading offshore helicopter servicesprovider, for a five-year, multi-million dollarcontract to support Shell‘s deep-water explorationactivities off the coast of sub-Saharan Africa.The agreement, which comes with five, one-yearoptions, will dedicate two Eurocopter Super PumaL2 aircraft to helicopter transportation services andemergency medical evacuation capabilities insupport of Shell’s Noble Globetrotter II Deepwaterdrillship’s multi-country operations. Delivery ofthose services begins from July 2013. CHC has provided services in 19 different Africancountries for a diverse mix of customers, includingoil and gas operators and the United Nations. Thecompany operates both Agusta Westland 139 andSikorsky 76 aircraft for ongoing rig support acrossmultiple drilling programmes. Chris Krajewski, CHC’s regional director for Africaand Euro-Asia, said his company has unmatched

knowledge and operational experience insupporting such complex multi-country projects.“We support customers in challenging oil and gasterritories around the world, including in recentprojects for EHL, Petrobras and British Gas throughoutEast and West Africa,” said Mr Krajewski. “Thiscontract reflects CHC’s ability and our commitmentto customers, as we help them safely go further anddo more in Africa and around the world.”He said that CHC has particular expertise inunderstanding and working within different nationalflight requirements, as well as quickly and efficientlystarting up operations in support of new contracts.

TWMA, A LEADER in integrated drilling wastemanagement and environmental solutions, hasannounced their first offshore processing project in WestAfrica. The 400-day contract is to supply TWMA’sindustry-leading offshore processing services to supportGlencore Exploration Cameroon Ltd’s (Glencore) WestAfrica drilling campaign.

The scope of work includes the installation of a TWMATCC RotoMill and cuttings collection and distributionsystem (CCDS). This integrated approach provides acomplete containment, treatment and disposal solution forcapturing drill cuttings and associated fluids on-board theAtwood Aurora jack-up drilling rig. A team of experiencedTWMA operators are managing the project on location.

As offshore production in Africa escalates, newoperators penetrating the sector are being forced toconsider implementing reliable methods of reducing theenvironmental impact of improperly disposed drill

cuttings. The solution provided by TWMA treats all non-aqueous base fluid (NABF) drill cuttings by way ofthermal desorption, recovering 99 per cent of base oil forreuse by the operator. The inert rock powder andrecovered water are disposed overboard for sea dispersal,in a process which is proven to have a near zero impacton the environment.

"The size of the rig combined with deck loadingrestrictions and a very tight design cycle made this a veryinteresting and challenging project from the outset,” saidKyle Duncan, TWMA project engineer for the Glencoreinstallation. “In order to meet the project deadlines,TWMA’s engineering team travelled to Houston tocomplete a fast-track FEED phase with the client.”

Upon completion of the preliminary design works,TWMA finalised and delivered the full engineering designpackage within a three-week time frame in order toobtain the client’s approval prior to mobilisation.

JAPAN WILL PROVIDE US$2bn worth of financial support over five years to back Japanese companies’ resourcesdevelopment projects in Africa. Japanese news agencies Kyodo and Jiji reported the country’s Trade Minister Toshimitsu Motegi making theannouncement at the Africa-Japan Ministerial Meeting for Resources Development in Tokyo. The financial support will bechannelled through state-run Japan Oil, Gas and Metals National Corp, the news agencies said.Several Japanese companies have been participating in resources projects in Africa, including Mitsui & Co, which ispartnered with Anadarko in the Area 1 liquefied natural gas project in Mozambique.

Japan invests $2bn in African projects

WARTSILA, A LEADING global supplierof flexible and efficient power plantsolutions and services, has signed anOperations & Maintenance (O&M)agreement with Ndola EnergyCompany Ltd (NECL), a subsidiary ofGreat Lakes Energy NV. Theagreement was signed in April and isfor ten years. It will cover the fulloperations, maintenance andservicing of the NECL power plantlocated in Ndola, Zambia.

The plant will be powered by atotal of six Wärtsilä 32 enginesrunning on heavy fuel oil (HFO), a by-product supplied from the Indenirefinery, which is immediatelyadjacent to the plant.

The plant is scheduled tocommence commercial operationsat the end of July 2013, and theelectricity produced will be sold toZambia Electricity Supply CompanyLtd (ZESCO Ltd). When operational,the plant will have an electricaloutput capacity of 50 MW, whichwill be fed to the grid. It will be thefirst HFO power plant installed inZambia to be exclusively operatedby Wärtsilä.

“Our extensive experience andknow-how in O&M as well as ourcapability to mobilise in such a shortspan, together with the efficiency andreliability of the Wärtsilä equipmentwill be of tremendous value inensuring the success of this importantproject,” said Kaj Nordman, DirectorBusiness Development Power PlantAgreements, Wärtsilä Services,Contract & Project Management.

“The power plant is designed withhigh operating efficiency, lowgenerating costs, and reliability as keycriteria, and these are all areas whereWärtsilä excels.”

The NECL power plant willcontribute significantly towardsZambia achieving a more diversifiedenergy mix and increased stability inits power generation. The countryrelies heavily on hydropower and thisnew power plant will complementZambia’s installed capacity.

David Carroll, BusinessDevelopment Manager, Ndola EnergyCompany Ltd, said: “This is amilestone achievement in developingthe power generation business inZambia. This is the first greenfieldproject from an independent powerproducer to operate in Zambia, withthe funding being 100 per centprivate sector capital.”

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Shell & CHC enter five-year agreement


WEST AFRICA-FOCUSED junior oil firm Lekoil hasraised US$48.6mn from investors as part of its listingon London's Alternative Investment Market. The firm plans to use the funds to become a pan-African oil and gas business. So far, it has a farm-inagreement with Afren that will see it ultimately

acquire a 27-per cent interest in the OPL310 license,offshore Nigeria, and it holds a 69.75-per centinterest in Blocks 2514 A & B, offshore Namibia.Lekoil Namibia intends to acquire 2D seismic dataover Blocks 2514 A &B in 2014 as a first steptowards defining drillable exploration prospects.

Lekoil plans to be pan-African player

S02 ORA 3 2013 News_Layout 1 21/05/2013 11:09

S02 ORA 3 2013 News_Layout 1 21/05/2013 11:09


A WELCOME CEREMONY was heldfor two newbuild vessels SL Gabonand SL Libreville at Port Gentil,Gabon on 17 April.

Among those attending theceremony were the MinisterDelegate of Transport Mr EmmanuelJean Didier Biye, the Governor ofthe Ogooué Maritime Province MrMartin Boguikouma, the Prefect ofthe Bendjè Department Mr JosephMouele, Total Gabon ChiefExecutive Officer Mr Benoît Chaguéand Smit Lamnalco Chief ExecutiveOfficer Mr Daan Koornneef.

SL Gabon and SL Librevillehave been contracted for a fiveyear period by Total Gabon. The vessels will support offshoreoilfield activities and tanker operations at the terminal of CapLopez, Port Gentil.

“The partnership between our twoorganisations has roots reaching back30 years,” said Mr Koornneef.

“Port Gentil’s location demandsrobust and reliable marine supportservices. We are delighted to bringthese two state of the art tugs intoservice for Total Gabon, signifyingour continuing commitment toinvest in the future of Gabon.”

Smit Lamnalco now operatesfive vessels for Total Gabon, has afurther four vessels under contractfor Shell at its Gamba terminal andmanages one vessel for Perenco.

The marine support companypraised the performance of its 179

Port Gentil-based staff, 75 per cent of whom are Gabon nationals.Special mention was made of Master Jean-David Mpaga who has beensailing with the company for over 30 years.

NEXANS, A WORLDWIDE expert in thecable industry, has been awarded aUS$32mn contract by Subsea 7, a globalleader in seabed-to-surface engineering,construction and services to the offshoreenergy industry, to design andmanufacture the direct electrical heating(DEH) system for the subsea pipelinesserving the Lianzi oil field developmentlocated in a unitised offshore zonebetween the Republic of Congo and theRepublic of Angola. The Lianzi field isoperated by Chevron Overseas (Congo) Ltd.

The Lianzi fields tie back to theBenguela Belize Lobito Tomboco (BBLT)platform located in Angola Block 14.With a water depth between 390 and1,070 m, this will be the world’s deepestDEH system.

The contract with Subsea 7 covers the

delivery of a complete DEH system,including DEH riser cable, armoured feedercable, a 43 km long piggyback cable andall associated accessories for connectionto the pipeline that will connect the Lianzidevelopment project subsea facilities withthe BBLT platform. The piggyback cableincorporates Nexans’ field provenIntegrated Protection System (IPS).

DEH is a technology for flow assurance,developed to safeguard the wellstreamthrough the pipeline to the platform.Alternating current (AC) transmitted fromthe DEH cable runs through the steel in thepipe, which heats up due to its ownelectrical resistance. By controlling thecurrent, the pipeline inner wall can at alltimes be maintained above the criticaltemperature for wax and hydrateformation. The DEH system eliminates the

need for chemical injection, pressureevacuation or other flow assurancemethods that might have environmental oroperational challenges. DEH allows thepipeline to be operated in a cost-efficientand environmentally safe manner.

“This latest project with Subsea 7 is afurther confirmation of Nexans’ position asthe prime supplier for the developmentand implementation of DEH systems,” saysEldar Ystad, Sales Manager DEH systems,Nexans. “Over the past 15-20 years,Nexans has supplied 19 out of the 20pipelines operating with DEH systems.’

The cables for the Lianzi DEH systemwill be manufactured at the Nexans factoryin Halden, Norway, for delivery during thesummer of 2014. As a result, problem freeand reliable transportation of hydrocarbonsis achieved.

EGYPT WILL ADOPT a new licensing policy for itsfuture oil and gas exploration contracts signedwith foreign companies that will allow the northAfrican country to obtain a bigger share of theproduction, its oil minister Osama Kamal said.

"We have developed a new system that willbe implemented in the next licensing round,"Kamal said. "The new system will allow Egypt toincrease its share of the output when productionrises. The more production rises, the more ourshare will rise."

The new policy won't be implemented on theeight oil and gas exploration projects in theMediterranean Sea that Egypt awarded earlier foran overall minimum investment of US$1.2bn, Mr.

Kamal added.The winning companies in the last bidding

round, which include BP, Eni, Edison and IEOC, asubsidiary of Eni group, Canada's Sea DragonEnergy, will drill a minimum of 18 wells and willpay US$73.2mn for the licenses.

Mr. Kamal has previously said thatinvestments in oil and gas exploration areexpected to reach US$8.6bn this year.

Egypt has seen its oil and gas explorationactivities slowing over the past couple of yearsdue to the continuing political and social unrestsince the ousting of former president HosniMubarak.

The Egyptian government has been

negotiating with the International Monetary Fundover a US$4.8bn loan, which analysts andinvestors say is critical for the country. IMFofficials left Cairo earlier this month withoutagreeing on the terms of the loan.

The subsidies are delaying an agreement withthe IMF, which is demanding Egypt makesprogress on phasing them out.

The fund was on the verge of signing a bailoutlate last year, but the Egyptian governmentdecided the measures were too controversial atthe time. In a country already struggling with civilunrest, any cuts to fuel subsidies could enrageEgyptians who rely daily on cheap fuel,economists said.

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Nexans heated cables to protect Lianzi subsea pipeline

Egypt to adopt new oil, gas licensing policy

Smit Lamnalco welcomes new vessels in Gabon


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PEM OFFSHORE LTD has signed a multi-milliondollar contract with Kongsberg Maritime for thesupply of a full suite of offshore anchor handling,dynamic positioning, power management andcrane simulation systems. The new simulators willform the main infrastructure for a world-classoffshore simulation training centre and the first ofits kind in Nigeria and West Africa.

The new training centre will be located inLagos and serve to support the training of localand foreign offshore personnel involved in offshoreoil and gas operations, underpinning a growingmarket demand for highly competent and qualifiedpersonnel for this high risk environment.

With operations in Nigeria, the USA andTrinidad & Tobago, PEM Offshore has a proventrack record as a reliable solutions provider offeringa wide range of services aimed at improving safety,quality and reliability in the marine and oil & gassectors. The establishment of the new offshoresimulation training centre will create new high-value employment opportunities for the region andunderpin the requirements for qualified marinepersonnel in this primary offshore supply hub forWest Africa.

As part of the contract, Kongsberg Maritime willsupply PEM Offshore with world-class simulation

training technology, identical to systems found onboard many vessels in the world fleet and alsoprovide subject matter expertise to ensure that thenew training centre meets or exceeds industrystandards. The simulator delivery includes both DPClass B and Class C simulation trainers, allowing foradvanced dynamic positioning training forcertification in accordance with Nautical Institute(NI), Det Norsk Veritas (DNV) and InternationalMarine Contractors Association (IMCA) standards.

The PEM Offshore Training Center will also becertified to DP Class A for use in sea-timereduction training, where time spent in simulatortraining significantly reduces time required for livetraining at sea, enabling safer and more cost-effective DP training.

PEM Offshore has also invested in acomprehensive range of technical and instructor (train-the-trainer) programmes that will cover all aspects ofthe DP, Kongsberg offshore vessel simulator (KOVS),crane, bridge and power management simulators. Toremain current with evolving regulatory changes andthe latest Kongsberg developments, PEM Offshore hasalso invested in a five- year, Long Term SystemSupport Program (LTSSP).

PEM Offshore Senior Vice President, Philips E.Matthew, commented: “This is a new venture for

PEM that will further our commitment toexcellence in our maritime operations for Nigeriansand other West African nationals. As the hub ofoffshore activity in West Africa, Nigeria is a naturallocation for this facility.

Kongsberg Maritime is the undisputed leader inthe offshore Industry when it comes to advancedtechnology and excellence in delivering trainingservices. With Kongsberg at our side, we take greatpride in announcing West Africa's first dedicatedcommercial offshore training facility andKongsberg’s visible commitment to supporting itscustomers operating in this important petroleum-producing region."

Kongsberg Maritime Simulation Inc. President,Henry Tremblay added: “This is a strategic win forour company in what is one of the most activegeographic areas for oil & gas exploration andproduction. This world-class training centre will beequipped with the latest available offshoresimulation technology and provide PEM Offshorewith the tools it needs to continue growing itsexpertise in maritime operations. We are verypleased to have been selected for this project.”

PEM Offshore's new training centre is acceptingcourse registrations now for training commencingJanuary 20, 2014.

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PEM Offshore selects Kongsberg offshore vessel simulators for Nigeria’sfirst offshore training centre


NIGERIA OIL AND Gas Technology Conference &Exhibition (NOGTech) is Nigeria’s leading oil andgas technology event, now in its fourth year. Heldat the EKO Centre (Victoria Island, Lagos), NOGTechis strategically positioned in the commercial centreto bring together government ministries, industrystakeholders and key oil and gas professionals.

The NOGTech 2013 conference and exhibitionwill showcase the latest technologies available tothe Nigerian oil and gas industry and highlight howthese can be utilised to overcome the challengesthat industry stakeholders face in successful projectdelivery. NOGTech 2013 will have a particular focuson how the adoption of new technology and bestpractice can increase production, drive efficiencyand improve cost reduction.

NOGTech 2013 features two days of technicalpresentations that will directly address thechallenges the Nigerian oil and gas industry facesand provide insights into how, through theadoption of the latest technologies and bestpractices, these can be overcome. Combined withunrivalled networking opportunities for allconference delegates, NOGTech 2013 is a mustattend event.

Key topics Include:6 The important role of technology: Driving

efficiency, cost reduction & production increasethrough technological advances

6 New deepwater technology case studies:Sharing best practice in project delivery:

Reduced costs & increased efficiency6 Subsea & deepwater global technology

advances: Reducing costs, increasing efficiency& productivity

6 Panel discussion: Financing growth &technology implementation

6 New technologies increasing productivity &reducing costs for marginal field operators

6 Keynote address: NNPC update on the NigerianGas Master Plan

6 Technology advances for gas distribution,

utilisation & commercialisation6 Enhancing commercial returns with the latest

metering & monitoring technologies6 The impact of new technology on production

levels, efficiency & OPEX in heavy oil & highwater tut projects

6 Panel discussion: How can Nigeria build R&Dcapacity to encourage in-country technologicaliInnovation?

6 Panel discussion: What role can technology playin meeting Nigerian content targets?

Unique insights and opportunities at NOGTech

NOGTech 2012 wasa great success.


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TTHE PRICES OF most commodities,foodstuffs and industrials, including gold,have been exceptionally weak recently.Crude oil has certainly not been immune

from this trend, with WTI marker grade trading atthe end of April at less than US$90/bbl comparedwith US$97 at the beginning of February: Keycomponents of OPEC’s “basket”, both North andsub-Saharan Africa’s sweeter lighter crudes earn asubstantial premium on this because of theirexceptional acceptability to traditional refiners.However in a loose market even this differential hasbeen seen to be eroded of late.

Nevertheless the US dollar has beenstrengthening nicely at the same time, and this isof course the currency in which most of Africa’s oilis still invoiced. OPEC’s latest averaged-out pricejust shy of US$100 was way ahead of its suggestedand now almost-forgotten “fair” price, and theturnaround in the US gas market has hardly evenbegun to be felt in the much larger internationalliquid trades as yet. Meanwhile US imports havecontinued to fall.

SSA remains region of choicePluses and minuses abound at the end of Apriltherefore, but SSA remains the region of choice forincoming investors seeking anything better thansluggish growth; far more receptive and responsivethan both China and India for example. “The fastestgrowing continent on earth” Africa has recentlybeen described as. Budding energy centres likeLuanda (oil, well established) and now Mtwara (gas,brand new) are starting to feature boomtownconditions right now. Confidence remains high, as aresult, for example, of the quietly successfultransition to a new administration in Kenya, theEast’s most closely watched state.

To put all this into perspective in crude-oilmarket terms we have examined the latest market-condition statements from the acknowledgedinternational experts, interpreting what both OPECand the International Energy Agency have recentlybeen saying - as always - in the light of the factthat they reflect the views of key suppliers andtraditional consumers, of course.

First to Paris at the beginning of the month,when both groups shared a platform at theIFP/Petrostrategies 14th International Oil Summit.OPEC’s Secretary General Abdalla El-Badriexpressed confidence that global economicconditions will improve eventually, pointing outthat automobile ownership is still on track todouble by 2035, with the Organization expecting

total demand for energy in all its traded forms toincrease by 54 per cent by this time, andconsumption of the core product, traded oil, togrow at an acceptable but much slower ratebecause of a whole raft of widely discussed andgenerally agreed reasons.

The bottom line he indicated from Vienna’sviewpoint was that total demand for crude willincrease by an average of 20mn bpd between 2010and 2035, to just over 107mn bpd, leaving plentyof room for enhanced sub-Saharan supplies as longas they continue to demonstrate the reliability theyhave shown so far.

Any weakening in prices, along with theactivities of market speculators, will simply havethe effect of deterring incoming investment, hecautioned, a re-statement of course as this is along-standing OPEC point of view.

And the “basic realities” he summed up hisaddress by outlining are that the foreseeable future

will continue to be dominated by fossil fuels –although the mix will continue to change - and thatcurrent weakened price levels are nothing to beworried about. By contrast it is instability thatthreatens the anticipated recovery in the worldeconomy, he said.

The future is a shared one“The future is a shared one,” he concluded. “Thereis no country, region or continent that can actalone. It is about inter-dependence, not in-dependence”. Both sub-regions of Africa arenaturally key components of this.

Unsurprisingly the Organization’s April monthlyreport reflected this don’t-panic point of view. Itcommented on the downturn in prices [which hascontinued since], adding that an unusually highlevel of demand-depressing seasonal maintenancework has been taking place at refineries around theworld. Meanwhile global economic prospects doseem to be getting better, with China alone – nowa key market for and investor in sub-Saharan oil, ofcourse - indicating a growth rate of eight per cent-plus in 2013. Once again the MOMR report pointsto a 0.8mn bpd increase in global demand this year,

Fossil fuels will continue to dominate.

It is instability that threatensthe anticipated recovery in

the world economy.

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Ahead of the northern hemisphere’s “driving” season the oil market has been quiet,considerably eased by the resumption of international supplies from South Sudan.Developments in China and the USA continue to influence the trend.

Oil market

analysed



a hopeful sign more driven by developments in thePeople’s Republic than anywhere else. OECDmarkets especially European ones are expected toremain flat at best, however.

Ahead of their new 2013 Medium-Term OMReport (due to appear just as we go to press) theIEA presented a refreshingly sanguine monthly OilMarket Report in the middle of April. Noting therecent decline in prices overall this agreed withOPEC on the reasons, such as the continuingweakness of demand in Europe (expected to belower this year than at any time since the 1980s),the effects of “subdued” refinery throughput(6.8mbpd offline in April alone) and the ability ofsuppliers generally to respond promptly to anyupturn. It commented on “signs that the oil marketas a whole may be getting more comfortable.”

However, “Recent easing could be relativelyshort-lived,” it maintained. And at the sametime the monthly summary noted the effects ofoutput disruptions in both Libya (“a majorworry”) and Nigeria (disturbingly reported fromboth north and south).

On the Supply side the IEA says with particularreference to Africa:6 Global output fell in March, with increased non-

OPEC output up nevertheless6 Production has re-started in South Sudan,

ending more than 12 months of outage due to

what it describes as a “tiff”6 Output was reduced in three African OPEC

countries in March, in Algeria as well as in thetwo listed just above.Concerning demand, the Agency forecasts that

global consumption will increase by a mere 0.9 percent this year overall, with strong regionaldifferences again expected. Interestingly it alsopoints out that the growth in demand for gasoline

is now, unusually, outpacing that for diesel/gasoildue to the strength of the new-car markets indeveloping countries compared with thesluggishness of industrial demand in the OECDworld, Europe especially.

And on the key issue, pricing, it agrees withOPEC’s comments on the narrowing of thatWTI/Brent gap.

“Rarely has the market faced such diffuse risks,”the latest monthly report from the IEA concludes.“In a resource-rich but rapidly changing world thismakes market transparency a greater priority thanever.” A call-for-action statement with whichofficials based in Vienna will probably agree. ■

Oil Review Africa Issue Three 2013 13

There has been “subdued” refinery throughput over the past year.

Recent easing could berelatively short-lived.


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AAS NIGERIA’S OFFSHORE sector hasexpanded, so too has the nation’sindigenous oil and gas industry.From exploration and production, right

through to transportation services, the local energysector is rightly enjoying some of the benefits ofthe nation’s huge oil and gas wealth.

After all, it was never the intention of thegovernment to design local content policiesexclusively for onshore operations.

But the daunting prospect of deepwateroperations is an entirely different proposition totraditional onshore work, even in challengingenvironments like the Niger Delta.

Still, it is a transition process that has beenunderway for some time now.

It’s almost 10 years since Shell launched

production from Nigeria’s first deepwater project,Bonga, back in 2005, which overnight lifted thenation’s oil capacity by 10 per cent.

First discovered in 1995, the field sits in waterdepths over 1,000 metres, over an area of 60 sqkm, and can now produce more than 200,000barrels of oil a day (bpd) and 150mn standard cubicfeet of gas a day.

Although the field is owned by big internationaloil companies (IOCs), led by Shell, indigenous firmsplayed a vital role in its development.

Three of the big Bonga modules were designedand built in Nigeria, for instance.

So too were the foundation piles for thefloating production storage and offloading (FPSO)vessel, as well as the risers, and the giant singlepoint mooring buoy, the largest in the world at thetime for deepwater operations, weighing in atabout 870 tonnes.

Local engineering boost In fact, the Bonga project helped create the firstgeneration of Nigerian oil and gas engineerswith deepwater experience, according to localindustry experts.

When work first commenced, the country hadvery few contractors with the technical capacityor scale to support such an enormous offshore

development.Shell’s upstream unit, Shell Nigeria

Exploration and Production Company Limited(SNEPCo), actually began training local engineersfor Bonga as early as 1999.

By the end of 2011, some 90 per cent of theproject’s core offshore staff were Nigerian.

Perhaps even more importantly, Bonga alsostimulated the growth of other support industries,so vital to all offshore projects.

For the Bonga project itself, a modern onshorebase for subsea equipment testing andmaintenance was established at Onne in RiversState in the Niger Delta.

And these shore-based facilities are nowthriving commercial hubs for the growingdeepwater sector.

Many of the small local companies thatstarted out as Bonga took shape are now workingfor international clients on other big fields.

In fact, strong local content has been used forall of Nigeria’s other major deepwater projectssuch as Agbami and Usan.

More investment is on its ways too, with Shellrecently confirming that it plans to go ahead withanother deepwater project, Erha North Phase 2 inOML 133.

The field, which is located over 100 km offthe Nigerian coast, will eventually produce some60,000 boepd.

By air and seaNearly a decade after the launch of Bonga, thereis a growing air of confidence about Nigeria’slocal services companies, and their ability to

service the deepwater needs of the IOCs.Among the better known is Caverton

Helicopters, which works closely with Shell on itsoffshore contracts.

Headquartered in Lagos, it is the first whollyindigenous civil helicopter company to work inthe oil and gas industry.

This year, it became the only certified AgustaWestland Service Centre in sub-Saharan Africa,opening up a new state-of-the-art purpose-builthanger outside Lagos, to service aircraft built bythe Ango-Italian chopper group.

The centre now provides maintenance andrepair services to operators across the region.

And there are ambitious plans for continuedgrowth still.

Caverton this year placed an order for anadditional three AW139 helicopters - ideal forserving deepwater oil and gas installations withtheir long range - to add to its existing fleet ofsix, in order to better serve offshore clients.

Caverton’s executive vice chairman AdeniyiMakanjuola called it “another major milestone”for his company, as it seeks to broaden its clientbase and increase capacity.

As well as up in the air, the same trend isbeing seen on the waves too.

One company looking to modernise its fleet ina similar fashion is Seabulk Offshore OperatorsNigeria Limited, which counts Chevron andExxonMobil among its client base.

The company’s roots date back more than adecade but it was only in 2008 that it was takenover by Nigerian ownership.

Since then, management has actively sought

Three of the big Bonga moduleswere designed and built in Nigeria.

The Bonga project helpedcreate the first generation

of Nigerian oil and gasengineers with deepwater

experience.

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The growth of Nigeria’s rich deepwater sector has had a big impact on the nation’shomegrown oil and gas companies.

Nigerian firms prosper from

offshore oil boom


S04 ORA 3 2013 Nigeria_Layout 1 21/05/2013 14:22

Oil Review Africa Issue Three 2013 15www.oilreviewafrica.com

to modernise the fleet, introducing state-of-the-art dynamic positioning (DP) vessels and high-speed supply boats, a measure of the company’sconfidence and ambition.

The company’s first DP2 PSV, The Al-Kat,acquired in 2012, is currently working offshorefor Chevron.

Deepwater E&P sectorAnd it is not only in the services sector thatNigeria’s entrepreneurs are making an impact.

New and emerging locally-owned explorationand production companies are also starting togain a foothold in the testing deepwater sector.

This is no easy undertaking with most localproducers content to focus on opportunitiesonshore, in areas passed on by the IOCs, orperhaps those places deemed to hazardous forforeign companies.

That should not mask their ambition, however:Atlantic Energy, for instance, which holds assetsin the western Niger Delta, hopes to achieve150,000 barrels of oil equivalent per day (boepd)by 2015.

And, just as the deepwater sector is adauntingly challenging prospect from a technicalperspective, it is a financially costly propositionto aspiring oil companies too.

But it can be made to work.South Atlantic Petroleum Limited (Sapetro) has asmall equity stake in Total’s deep offshore Akpofield in Block OML 130, for example.

This deepwater field has a plateauproduction of around 180,000 barrels per day(bpd) of condensates.

Sapetro is also exploring for hydrocarbonsbeyond Nigeria’s borders, again a measure ofgrowing confidence among these nicheproducers.

Last year, it signed up the Juan De Novapermit offshore Mozambique, a new up andcoming gas province on Africa’s eastern flank, toadd to another overseas project, the redevelopmentof the Seme field in Benin’s Block 1.

Another contender is Dangote Equity Energy

Resources, a part of the large and diversifiedDangote Group, which also includes various oiland gas services ventures.

Upstream, Dangote holds equity in blocks inthe Joint Development Zone (JDZ), a largely virginoffshore territory located between Nigeria andSao Tome and Principe.

It holds a nine per cent interest in JDZ BlockI, where it partners Chevron and ExxonMobil - andwhere an initial discovery has been made - and a10 per cent stake in JDZ Block 3, where itpartners operator Anadakko Petroleum.

It also holds a small stake in one deepwaterexploration block off Nigeria (Block 315), where itpartners Petrobras and Statoil.

Although the company is yet to taste firstproduction from these deepwater areas, it isbacked by substantial resources from the broaderDangote Group; the highly successful cementdivision is heading for a UK stock market listingthis year, for example.

At the World Economic Forum earlier thisyear, Dangote Group president Aliko Dangoteexpressed his confidence in the country’s privatesector to make Nigeria’s economy strong.

With local oil and gas industry players on theascendancy - from upstream producers, toengineers and manufacturers - it’s a trend that isalready happening. ■

New and emerging locally-owned exploration and

production companies arealso starting to gain afoothold in the testing

deepwater sector.

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Oil Review Africa Issue Three 201316 www.oilreviewafrica.com

IIN 2012, NIGERIA held proven reserves of atleast 40bn barrels of oil, reports BP’sStatistical Review of World Energy, nearlythree times greater than its nearest rival

producer, Angola. Owing to lack of investment, oilproduction has plateaued at around three millionbarrels of oil per day levels reached a decade ago,and less than their peak of 2011. To arrest thisdecline the state-owned oil company, together withits partners, plans to invest US$100bn over the nextfive years to explore for crude and gas onshore andin risky deep water fields in order to raise reservesand reach a target of four million barrels output aday. To succeed, further foreign investment will berequired alongside positive encouragement ofindigenous firms to invest in oil exploration. Assetsales by oil majors to Nigerian companies such asOando, Elan and Seven Energy Ltd, and to smallindependents will increase drilling and explorationin existing onshore fields. An exemplar of successis Nigerian energy giant Oando, purchasing in May2012, a 40 per cent share of the Qua Iboe Field inthe Niger River Delta. Chief executive officer, ofOando Exploration and Production Ltd, PadeDurotoye, said that the company’s new asset isestimated to contain 11.3mn bbl of 2P reservewhich immediately increases the company’sreserve base by about 50 per cent.

Oil production has remained virtuallystationary over recent years due, in part, to theuncertainty arising from the long-delayedPetroleum Industry Bill. Exploration licences havebeen delayed since 2007. Energy majors havestalled investment and in some cases sold on-shore assets. Dissatisfaction with the Bill’scontents has led the chairman of Shell Nigeria topredict “Production will be down about 40 percent by 2020. All deepwater, most gas and someoil projects will not take place under thePetroleum Industry Bill”. Added to which thereare the very real perennial losses from disruptionsby strikes, oil smuggling, pipeline vandalism andcorruption. Losses of 250,000 barrels of crude,

equivalent to one tenth of daily oil productionfrom sabotage and theft from pipelines are said tohave cost the government US$7bn or about aquarter of its 2011 budget. Nigeria is expected tolose US$554mn (N83bn) in the months of Apriland May alone, caused by crude oil thefts,according to a statement by Tumini Green, ActingGroup General Manager Public Affairs Division,NNPC (18 April).

Downstream – refineriesThe downstream oil industry consists of four oilrefineries, eight oil companies and 750independents all active in the marketing ofpetroleum products. The government has, throughits 100 per cent state-owned national oilcompany an all encompassing control over theindustry through its shareholding and its settingof wholesale and retail prices. A programme ofderegulation of the downstream sector of the oilindustry began in 2001 but has provedinsubstantial to date. Currently, Nigeria’s fourstate-owned refineries produce just under half amillion barrels of oil a day for Africa’s secondlargest economy! The remaining 80 per cent ofdomestic demand is provided by subsidisedimports, an expensive method when demand forpetroleum products is expanding by 12.8 per centa year. Energy consultant Ifeanyi Izeze said, “Over25 licenses for the building of privately-ownedrefining plants were doled out to people who saythey were interested in investing in the refining.”However, it remains to be seen what transpiresgiven the withholding of investments until thePetroleum Investment Bill is passed and thewarning from Mr Malcolm Brinded, the outgoingExecutive Director of Shell PetroleumDevelopment Company (SPDC), “the companycannot build a refinery in Nigeria because there

are surplus refineries across the world.”Nevertheless, there are ambitious plans afoot

by the private sector to build a series of brandnew refineries to boost output. For example,Nigerian billionaire Alhaji Aliko Dangote,reportedly one of Africa’s richest men, plans toconstruct a new oil refinery costing US$8bn, witha capacity to produce 450,000 bpd by 2016. Inaddition, the Nigerian government has signed aUS$4.5bn deal to build six modular refineries witha combined capacity of 180,000 bpd in a jointventure group, comprising Vulcan Energy Corp.Petroleum Refining and Strategic Reserve Ltd.,and Nigerian National Petroleum Corp. The firsttwo should be completed within a year.Forecasters such as the EIU suggest thatconsumption of petroleum products is likely toincrease from 10,756 ktoe (kilo tonnes of oilequivalent) in 2011 to around 14,565 ktoe in2020, as various government reforms begin tokick in to remove regulatory imposed supplyconstraints.

Gas-Nigeria’s hidden secretNigeria has gas reserves of around 181 tcf of gas,sufficient to supply the whole of the EU foreleven years and seventh largest in the world,according to BP’s Statistical Review of WorldEnergy in 2012. However, geologists employed byNigeria LNG Limited (NLNG) speculate that thereis a more gas to be discovered (potentially up to600 tcf), if companies deliberately explored forgas, as opposed to finding it while in search ofoil. In 2011, gas production was put at just under30,000 ktoe and is forecast to increase to 52,000ktoe by 2020 according to the EconomistIntelligence Unit. Nigeria burns away most of thefuel it produces along with oil because it lacksthe infrastructure to produce it.

Oando has built a 100 km gas distribution network in Lagos State.

Nigeria has gas reserves ofaround 181 tcf of gas,

sufficient to supply thewhole of the EU for elevenyears and seventh largest in

the world.

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aThe current administration of President Goodluck Jonathan has announced ambitious plans toconsiderably expand investment in Nigeria’s oil and gas production and, at the same time,increase the country’s share of the proceeds from oil and gas extraction in order to enhanceeconomic development and employment opportunities. Nicholas Newman reports.

Nigeria - a work

in progress



Currently, Nigeria is the leading gas producerin the Atlantic Basin accounting for eight percent of global sales last year. Gas production isundertaken by a joint venture of the governmentowned Nigerian National Petroleum Corporationand foreign oil majors, Royal Dutch Shell, Totaland ENI Group (NLNG). Exports from NLNG’sLNG plant at Bonny Island near Port Harcourt,reached 22 m tonnes delivered in a fleet of 23chartered LNG tankers to markets in Europe,North America and the Far East. Liquid NaturalGas exports are likely to increase to 30m a tonnea year when additional export terminal capacity iscompleted in 2019.

The market for Nigerian gas exports faces someupheaval in the coming years. Today Europe isNigeria’s biggest market for gas. However, if the EUis successful in developing its unconventionalshale gas resources, long-term demand for Nigeriangas is likely to shrink significantly. Moreover, theAmerican shale gas revolution could impact onNigeria’s markets in India and China as the USplans of exporting gas to far distant markets cometo fruition. “Nigeria must recognise that asignificant resource shift has turned a key traderegion into a possible direct competitor,” saidAugustine Avuru, at April’s Lagos Business SchoolBreakfast Club meeting.

While exports may face relative decline, thedomestic market demand for gas will rise. It isexpected that “domestic gas consumption willincrease from 1bcfpd in 2012 to about 3bcfpd in2020,” said Augustine Avuru, Managing Director,Seplat Petroleum Development Company Limited.Much of this increase, will be driven by

increasing demand from the country’s recentlyderegulated growing power generation sector’sresolve to diminish power shortages. Nigeria’spower output is expected to grow ten fold to 40

GW by 2020 fueled by local gas. Furtherencouragement for increased domestic gasconsumption comes from the demonstrationeffect of an existing private sector project.Nigeria’s first large private sector energycompany, Oando has built a 100 km gasdistribution network in Lagos State to supply over100 industrial customers with 85mn standardcubic feet per day (mmscfd). Nearly 90 per cent ofNigeria’s industrial capability lies within easyreach of Oando’s Lagos focused pipelinenetwork and customers have made significantsavings in energy costs from switching fromportable diesel generators to gas powered ones tosupply power. ■

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NLNG’s LNG plant at Bonny Island.

New and emerging locally-owned exploration and

production companies arealso starting to gain afoothold in the testing

deepwater sector.

THE IMPLEMENTATION OF the Nigerian Oil and Gas Industry ContentDevelopment (NOGICD) Act has ensured that US$380bn has stayedwithin Nigeria instead of going overseas and prevented the loss oftwo million jobs, according to the Nigerian Content Developmentand Monitoring Board (NCDMB). General counsel of the NCDMBboard, Umar Babangida, made the statement on behalf of theboard’s executive secretary, Ernest Nwapa, at the recent ESQ Oiland Gas Summit in Lagos.The statement from Nwapa said that more than 95 per cent of thejobs in the industry were still carried out abroad, with US$214bn ofprocurement and US$9bn research and development carried out inNorth America and US$78bn worth of technical services andengineering work amounting to US$39bn carried out in Europe.However, the NCDMB leader added that the 2010 Content Act hadreduced capital flight by around US$168bn and that US$107bn ofprocurement, fabrication worth US$20bn, US$14bn of technicalservices, US$20bn of engineering, and research and developmentworth US$7bn had been domiciled in Nigeria due to the act.Nwapa’s statement added that a further US$191bn could still beretained and that 300,000 new direct job opportunities are expectedto be created in such areas as engineering, sciences, technicalservices and manufacturing. There has also been a significantincrease in contracts being awarded to Nigerian companies,according to Nwapa, though exact details were not given. Thestatement concluded by saying that 90 per cent local content had

been achieved in the area of engineering and 50 per cent infabrication and the compulsory one per cent deduction of thecontract sum of any project, which is deducted at source and paidinto the NCD Fund, had amounted to US$150mn by January 2013.The statement followed Nwapa’s recent keynote speech at theNigerian Content Seminar 2013, which formed part of theconference programme at this year’s Nigeria Oil & Gas exhibition atthe Abuja International Conference Centre. The seminar was hostedby Total and allowed the opportunities created by the NOGICD Actto be evaluated and any challenges to be discussed.During his speech Nwapa outlined two separate strategicdevelopment models, one that focused purely on revenue and theother, enabled by the NOGICD, that focused on in-country value.The key driver of the revenue-focussed development option isoperators seeking the cheapest and fastest route to the first oil.Taxes and royalties from that oil income is then invested indevelopment, with little attention paid to garnering any addedvalue from operations. Nwapa added that this model promotes theimport of goods and services.By contrast, the in-country value focused model sees operatorsencouraged to consider long term value, the higher the in-countryvalue, the less revenue the government takes and greater attentionis paid to the life cycle support of operations. Nwapa concludedthat this promotes development and the use of local workers, skillsand capacity.

Content Act enables US$380bn to remain in Nigeria



THE NIGERIAN NATIONAL PetroleumCorporation, NNPC, has outlined acomprehensive gas infrastructuredevelopment programme projected to attractan industry-wide investment outlay of overUS$16bn within the next four years.Providing details of the gas infrastructuredevelopment drive in a presentation at therecently concluded OTC in Houston, Dr. DavidIge, Group Executive Director, Gas and Powerof the NNPC, said the aspiration for gasdevelopment is anchored on the three pointstrategic focus of the Gas Master Plan.Under the strategic themes of the GMP, it is envisaged that the plan will deliver gas to power for at leasta threefold increase in generation capacity by 2015, achieve a reasonable level of gas-basedindustrialisation by positioning Nigeria as the undisputed regional hub for gas-based industries such asfertiliser, petrochemicals and methanol by 2014. This item is the corner stone of the President’s GasRevolution Agenda. The GMP is also focused on achieving high value export via LNG and Dr Ige said theongoing work to consolidate the agenda has thrown up investment opportunities in the gas sector to thetune of US$16bn. “Opportunities for investments exist in the areas of financial services, gas transmissionpipelines, pipe milling and fabrication yards, upstream gas development, LNG and LPG plants and gasprocessing facility/gas based manufacturing industries,’’ he said.On the proposed Ogidingbe gas-based Industrial Park, the NNPC GED said that investment opportunitiesare available in the areas of Free Trade Zone infrastructure, port infrastructure and real estatedevelopment. The park is designed to emerge as Africa’s largest Gas City ultimately aims to create thelargest gas industrial park sub-Saharan Africa with fertiliser, methanol and power projects.

NIGERIA’S FOREMOST INDUSTRIALIST, Alhaji AlikoDangote, is investing US$8bn in a crude oil refinery inthe country, with a capacity to produce around 400,000bpd by 2016, marking a real commitment. The NigerDelta Petroleum Resources Ltd (NDPR) had commenceda refinery that had an initial capacity of 1,000 bpd ofcrude in Ahoada East, Rivers State.

Dangote's target of 400,000 bpd dwarfs theproduction of the four federal government-ownedrefineries: they have the capacity for 445,000 bpd butthey have been producing below 50 per cent installationcapacity. It also bolsters the lies inherent in the subsidyregime and gives hope to a nation that is one of theworld's greatest producers of oil, yet imports 80 per centof local needs. Other things being equal, Nigeria andNigerians have much to gain if Dangote goes ahead withhis plan to build the refinery.

Dangote's exploits in business and successes incement, fast-moving consumer products and his net worth

of US$16bn, according to Forbes, are enough to show hisseriousness. Private investors' efficiency and business-likeapproach contrast sharply with the sloppiness, red tapeand corruption that characterise the civil bureaucracy. IfDangote's pioneering effort comes into fruition, it will be abig relief in all ramifications.

It is important that the government should stop payinglip service to the deregulation of the downstream sector.With fuel subsidy running into the trillion-naira mark,importation of the commodity and subsequent subsidypayments on it have become an industry from which somepeople are feeding fat. They are therefore unwilling to letgo of the subsidy regime that has sustained them fordecades. But the government would do well to invoke thenecessary provisions of the law to revoke dormant licencesas it did in 2007 before issuing nine new ones. These otherlicencees should not be allowed to use their licences toprocure oil wells and sell crude to multinationalcorporations and other oblique economic hegemons.

THE PETROLEUM AND Natural GasSenior Staff Association ofNigeria, PENGASSAN, has calledon members of the NationalAssembly to urgently pass thePetroleum Industry Bill, PIB.

President of the association,Mr Babatunde Ogun, made thecall recently in an interview withthe News Agency of Nigeria,NAN, in Lagos, adding that itsurgent passage was for thebenefit of the people.

He said that the quickpassage of the bill was importantbecause of the discovery of newoil fields in other parts of Africa.

According to him, while thecountry was delaying the passageof the bill, other African countrieswere attracting investors.

“We cannot, therefore, affordthe luxury of time, whileunnecessary bickering continuesover such an important bill on asector that is the main stay ofthe economy.

“The Petroleum Industryaccounts for over 90 per cent ofNigeria’s foreign exchange, about40 per cent of the GrossDomestic Product, GDP, and 80per cent of government revenue”.

Ogun further urged theFederal Government to create asection in the bill that wouldmake it compulsory to invest20 per cent of all income fromoil in the oil sector. He addedthat some of the percentageshould be invested in the solidmineral sector.

The PENGASSAN presidentsaid that if the section wascreated, it would save thelegislators from debating thecrude oil price bench mark andhelp them focus on the growth ofthe national economy.

Ogun said that the billrepresented a great opportunityfor Nigerians to ensure a solidfoundation on which the futureof oil and gas operations in thecountry would rest. He also saidthat the bill, if passed, wouldensure that agencies andcompanies in the sector wouldbe bound by the NigeriaExtractive Industry TransparencyInitiative.

PENGASSAN urgesimmediate passageof PIB

GLOBAL OCEON ENGINEERS Nigeria Limited (OCEON) has been named the third fastest growing company within theprivate sector in Nigeria. OCEON, by international standards, has grown its growth rate by 2,304 per cent over three yearsof its operation and with a growth at an average 100 per cent a year on revenues of US$9mn. The top three companies onthe Nigeria50 all have very close growth rates exceeding 2,000 per cent for the period 2009-2011.

According to the organisers at the recent award ceremony in Lagos, “the Nigeria50 broke AllWorld records, with eachcompany growing at an average 100 per cent a year on revenues of US$9mn, and as a group they have created 6,600 jobs,and if they continue growing, will create thousands more in the next few years. The Nigeria50 offers a glimpse into thecountry’s vast potential for entrepreneurs, and the impact entrepreneurs are having in addressing the country’s problemsfrom malnutrition to job creation and employee training.”

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Dangote leads the way to private refineries in Nigeria

Global Oceon named a winner at the inaugural Nigeria50 Award

NNPC unveils $16bn gas infrastructure investment opportunity



S05 ORA 3 2013 Algeria_Layout 1 21/05/2013 14:14


FOR THE FIRST time in years a political will toreform upstream investment terms andimprove investor confidence has beenbuilding. With that in mind, the violent

Islamist siege of Algeria’s In Amenas gas facility atthe start of the year was even more tragic, rising toseriously derail Algeria’s upstream investmentrecovery because of outside factors.

Algeria seemed to have come full circle lastyear, with its political leadership speakingincreasingly openly about the need to reform itsupstream investment environment, making termsmore attractive to international oil companies(IOCs). The situation was reminiscent of the 1980s,when falling production and a gaping need forinvestment and technology prodded Algeria toopen its upstream sector up in the first placethrough a far-reaching liberalisation programme.Consequently the 1990s saw large investments inexploration and development, with IOCs likeAnadarko taking the step to midsize status partlythrough the projects they could realise in thecountry. The growth of IOCs in Algeria, and theirprofits, spurred a political backlash, however, andby the middle of the last decade a strong resourcenationalist sentiment started to crystallise withinthe country’s political elite. Laws were changed andinvestment terms tightened, just as Algeria stoodon the cusp of opening up its large, relatively tight,gas reserves in the frontier South and West Saharadesert, far from existing infrastructure and withrelatively high production costs. Investmentsentiment weaned and many projects started losingspeed and crawling slowly to a near-halt.

The lack of progress on projects was not onlydue to tightened fiscal terms. Excessive amounts ofred tape had long been a feature of the Algerianenergy industry and its civil service and thebacklash against liberalisation was to a high degreecarried out by re-emboldened civil servants withlittle understanding of the industry’s need fortechnology. To many frustrated IOC-executives andproject managers the second half of last decadeseemed like a long “revenge of the bureaucracy”.

If there ever was any bureaucratic confidence-overreach, it, however, disappeared in the deepcorruption scandal of 2010, which decimated thesenior leadership of Sonatrach, led to the immediatedownfall of all but one of the company’s VicePresidents and the dismissal and indictment of itsPresident and CEO, Mohamed Meziane. Fallout fromthe scandal went even further, claiming Oil MinisterChekib Khelil, who had a close working relationshipwith Meziane and had nominated him to his post.

For IOCs this was seen as very bad news. Khelil wasseen as a guarantor of liberal policies in the oil andgas sector and a bulwark for the oil companiesagainst resource nationalistic encroachment.Moreover, what had been a slow bureaucratic pace ofSonatrach and the civil service, often delayingprojects, became a complete paralysis.

For 2010 and most of 2011 there was a virtualdecision-making stand-still in Algeria’s hydrocarbonsector. It took time to get a skilled new leadershipin to fill all the vacant senior positions, but theanti-corruption drive also created a climate wherefunctionaries at the corporate mid-level and in theproject management side feared taking anydecisions at all, particularly those involving money.Given the extent of what has been said to havebeen quite a freewheeling corporate culture when itcame to corruption, at least at mid-to-senior levels,there was probably no way around it. In order toclean Sonatrach and the Algerian hydrocarbonsector up, a tough clean-up had not only to set anew example, but also to take its time.

After project delays having built up for almosttwo years and licensing rounds having seen recordlow interest, things were starting to change. Projectplans stuck with Sonatrach for far too long started tomake definitive advances, mainly thanks to aconscious effort to debottleneck any decision-making processes relating to ongoing projects first.Algerian regime’s general preponderance forbureaucracy meant that Sonatrach was never goingto be reformed into a lean operations example,however there was a clear strategy from new Energy

Minister Youcef Yousfi, to methodically untangledecisions that were stuck, starting in the mosturgent part – ongoing upstream projects.

Chief of the projects seemingly close to beingde-railed at the time was Anadarko’s El Merk, witha planned production capacity of 98,000 bpd ofcrude, 29,000 bpd of condensates, 31,000 bpd ofLPG and around 500 mmcfd of gas, most of whichhowever will be reinjected. As being a good sign for2013, El Merk came onstream following aroundfour years of development during the first quarterand production will be ramped up during thecoming months. Another project which looks like itis now moving forward more decidedly is thePetroceltic-led development of the 2.1 tcf Ain Tsilagas and condensate field. There too, delays werebuilding as Sonatrach failed to act quickly withapproing the project plan and given Petroceltic’srelatively junior size and stature, the delays likelyplayed a significant role in the company’s need tofarm down in more than one round, steps whichalso need Sonatrach’s permission.

There has also been some debottlenecking ofexploration, although it remains far below where itshould be considering the amount of acreage whichhas been offered in licensing rounds over the pastyears and the amount of gas discovered, but not yetdeveloped, in Algeria’s south-central Sahara area.

Need for $80bn investment programmeAlgeria last year said it needs to undertake anUS$80bn investment programme in its hydrocarbonsector over the coming five years and with foreigninvestment having slowed to a trickle in the pastfive years, the political will to reform tax laws andfiscal terms started to crystallise. In the politicalarena the tone started to sound more investment-friendly already in late 2010, however the ArabSpring protests, which to a smaller extent alsospread to Algeria from neighbouring Libya andTunisia, caused a delays in the political sphere too.By the second half of 2012 new terms werehowever in place, mainly targeting investment inthe country’s shale gas (and shale oil) potential.

Apart from the expected shale potential, muchof the loss of pace in the so promising south-central Sahara gas region, around the Timimounand Reggane basins, comes from the fact that therather tight –and remote- reservoirs were far tooexpensive to develop under Algeria’s harshconventional oil and gas investment terms. A moreshale-related investment term package will mostlikely also help make the Timimoun, Reggane andsurrounding basins profitable.

Excessive amounts of red tape had long been a featureof the Algerian energy industry.

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After increasing resource stagnation, Algeria has showed renewed signs of progress. Mostimportantly, for the first time in years a political will to reform upstream investment terms andimprove investor confidence has been building. Sam Ciscuk reports.

Algeria comes full circle to embrace investment

but outside dangers lurk



The increased political will to meet investors’demands for better terms in the upstream sector isnot necessarily a golden ticket, but this timearound it is more likely to prove durable. Unlike lasttime liberalisation was launched, there wassignificant opposition which remained opposed to itin a scale much stronger than now. Algeria tried ahigher degree of liberalisation than, but could besaid to have settled for a more muted reform thistime, after having gone full circle fromnationalisation to liberalisation and back.

Politics and the operational climate is also notnecessarily going to be a smooth ride in Algeria. Alarge corruption probe in Italy into Eni and Saipemdealings with Algeria could have largereverberations and cause further bloodletting inSonatrach and the Energy Ministry, as could alooming Canadian probe into SNC-Lavalin’sdealings with its Algerian counterparties. Yet,nothing focuses political concentration as well asstrained resources and Algeria’s oil and gas incomeis shrinking amid a continued outpouring of welfarepayments to pacify protests, introduced in the wakeof the Arab Spring. According to magazine TheEconomist, Algeria needs an oil price in the vicinityof USD120/barrel to break even, meaning that thestart of 2013 is looking less than comfortable.

Given all the good signs for foreign investors,including a potentially large discovery by Repsol

recently on the border with Libya, it is howeverironic that the inflow of investments now could staymuted because of outside security factors. The tragicand violent In Amenas gas facility siege at the startof the year severely dented Algeria’s reputation as asafe destination for oil and gas companies (as longas they stayed out of the densely populated, butessentially hydrocarbon-free north). Although theAlgerian army for decades has managed to securethe country’s oil and gas installations, the completebreakdown of security in Libya, Mali and to a highdegree also Tunisia, means that securing the bordersof the vast country will be almost impossible. Withmuch of the oil and gas projects straddling Libya’swestern border, this is bad news for the Algerians.Other remote areas hard to police include theprospective shale areas and the tight gas discoveriesin the south-central Sahara region.

No doubt the Algerians will try to maintaintheir security amid this new tough challenge. Theymanaged to secure their hydrocarbon industryfrom harm well during the violence in the 1990sand with more resources and some proactivitythey are in the best place in North Africa, saveMorocco, to do so, judging from organisation andcapability. From a geographical position it willhowever be tougher this time, particularly if theLibyan security situation deteriorates further.

For investors interested in its potentialthough, this might be the best time to enter andbuild relationships at a time when the Algerianstruly are learning to value upstream investors andtheir partnerships. ■


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El Merk central processing facililty.

For investors interested in itspotential, this might be thebest time to enter and build

relationships.




TTHE ROLE OF human capital, competenceand people issues is ascending on thestrategic agenda of both public andprivate enterprises. We have been

through a period with heavy focus on capitalefficiency, asset values and shareholder returns.Human capital management is becoming criticalfor all oil and gas producing environments. Theimportance in the mature provinces in NorthAmerica, the Middle East, Malaysia, Indonesia, UKand Norway, are equally as important as in thenew oil and gas producing countries in Africasuch as Ghana, Uganda, Tanzania and

Mozambique. Employment in the US oil and gasindustry has increased with close to 40 per centover the past decade as a result of the shale oiland gas revolution.

Shell’s external recruitment demand has tripledover the last 18 month, Sander Nieuwenhuizen,Shell’s vice president for recruiting told theUpstream newspaper recently. The oil companiescannot buy their talent. They have to increase theirown efforts to develop the talent.

Corporate culture“We need to focus on transforming today's oilwealth into a broader framework, investing in ourpeople - particularly our youth - with a focus ontechnical skills, training and creating technicalprofessionals who are qualified and capable ofworking both here and abroad,” to quote HE Nasserbin Khamis al Jashmi, Undersecretary for theMinistry of Oil and Gas in Oman, a country that haslaunched its in-country value programme wheredevelopment of people is a major element.

The King Abdullah Scholarship Programme

supports overseas studies of over 100,000young Saudi Arabian men and women. They willreturn to participate in the modernising of theeconomy. Saudi Aramco, the world’s largest oilproducer, has made training a signatureelement of its corporate culture. Saudi Aramcohas a huge programme of training people andhas also introduced young people into a keyrole in its strategic process.

Qatar, UAE and Kuwait have substantial trainingprogrammes to attract and keep talent in the oiland gas industry.

Access to well trained people is critical forBrazil to reach its very ambitious targets forgrowing its oil production, and they have atraining programme to match. The country isdetermined to use the large oil reserves togenerate local jobs, but face a skill shortage inthe short term. The Brazilian president hassigned agreements with several countries,including the United States, France and Britain,opening the way for foreign universities toprovide slots for Brazilian students. Thescholarship plan is part of the Science withoutBorders programme announced by PresidentDilma Rousseff to support students who pursuedegrees abroad.

The programme is expected to assist 100,000university students by 2014 at a cost of about US$2billion. Petrobras will provide 5,000 scholarshipsover the next six years to Brazilian students, manyof them will go abroad. The company has its owntraining and educational facilities with a highlysuccessful corporate university and heavyinvestments in its own world-class R&D facilities.

EssentialIn India leading institutions are focusing onnurturing talent for the oil and gas industry. Indiahas become an attractive location for internationalengineering firms using India as an engineeringcenter. But India also has to tackle the outflow oftalent, especially to the Middle East.

Young Indians are looking for opportunities thatenable them to expand their capabilities throughchallenging jobs in an international environment.

Training and development programmes areessential in the hydrocarbon industry where theevolution and advancement of knowledge,information and technologies are constant and swift.

Projects have become larger and more costly ascomplexity has grown. Project management is nowa core industry skill. In the past, very large project

management has been within the capability of aThe skills shortage in the oil and gas sector needs to be quickly addressed

Employers in future can nolonger rely solely on new

graduates or labour marketentrants as the primarysource of new skills and

knowledge

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Access to human resources is critical for the future success of the oil and gas industry,says Willy H. Olsen.*

Tackling the

people problem


S06 ORA 3 2013 Human Resources_Layout 1 21/05/2013 11:48

few companies; and the major oil companies inparticular. With more and more companiesexecuting larger and larger projects, often in remoteor complex environments, the need to train projectmanagers is becoming acute.

The path-breaking development of newtechnologies is no longer limited to thetechnology, media and telecom industries. Newinnovations have made their way into virtuallyall sectors of the modern economy, not at leastthe oil and gas industry.

Oilfield services are built on science andtechnology. The industry is using some of the mostadvanced services and products in the world toaddress the most challenging engineering problemson land and in increasingly deeper waters underhuge salt layers. The oil industry moves to tougherand tougher environments, especially in the Arctic,where the environment has to be protected.

As the industry moves to these environments,these challenges will not get easier. The focus onunconventional oil and gas resources has changedthe technical capabilities demanded by oil and gascompanies.

People and competence are crucial for theproductivity of these technologies. High-skill labouris an increasingly scarce input for competitive firmsand organisations. To attract and develop talent forkey positions and leadership, individual incentiveschemes and performance-based remuneration hasbecome increasing popular.

The oil and gas industry is facing a big crewchange. The generation that entered the sector inthe late 1970s and 1980s is retiring.

Schlumberger Business Consulting globalsurvey data show that strong efforts have been

made to recruit in the last decade, but the effect ofthe retiring generation still hitting hard. More than22,000 senior petro-technical professionals are setto leave the industry by 2015. The number ofinexperienced industry professionals will haveincreased significantly and could become a majorheadache in the light of the challenges that theindustry faces.

Untapped resourceThe oil and gas industry has not been on the top ofthe wish list for the young generation in the UK,Europe or the USA. Few have looked to math andscience as their priority. Asia stands out – withmore students with relevant backgrounds emergingand with energy high on the priority list of the newAsian talent, with a higher share of women lookingto the energy sector. The number of females in theindustry is still far too low, but the industry hasrealised that women are an untapped resource.

“Empowering women to advance in thesciences, engineering and technology forms asignificant advantage to solving many of thechallenges faced by both the developing and thedeveloped world," says Mr. Sola Oyinlola, ViceChairman of the Schlumberger Foundation.

The industry and the education sector areupgrading capacity for training. Petronas, the

national oil company in Malaysia, has longbeen a leader in training its people and isexpanding its activities to bring in morepeople from the countries around the worldwhere Petronas is operating. Petrofac hasopened an advanced training center inSingapore where the students will be able towork in a ‘live’ environment similar workingon a platform or process plant.

Robert Gordon University in Scotland islaunching a new programme to address thegrowing skills gap in the prospering Energyindustry, particularly for oil, gas and renewablesexpertise. A new Masters programme will becreated through direct contribution andcollaboration with energy industry experts. Theprogramme has been developed to create technicalexpertise coupled with management skills withinthe oil and gas industries.

Many energy professionals with relevanttechnical industry experience are looking todevelop essential commercial skills including riskmanagement and supply chain vulnerability inorder to enhance their current careers or followinga change in job role.

Quality controlEmployers in future can no longer rely solely onnew graduates or labour market entrants as theprimary source of new skills and knowledge. Theyneed workers who are willing and able to updatetheir skills throughout their lifetime. Lifelonglearning is now more than just a slogan. It hasbecome a necessity for everyone. Information andcommunication technologies (ICTs) are openingup entirely new avenues for pedagogy, for inter-institutional networking around research, and foron-line and virtual learning. Access to theInternet allows for self-paced knowledge andskills acquisition.

Prepared courses, even professional certificationnow can take place on-line, with adequate qualitycontrol and monitoring to facilitate individualisedtutoring and graduated, step-by-step instruction andachievement. Schools, colleges and universities, aswell as individual students (and faculty) can engagein networked academic activities acrossinstitutional, even beyond national boundaries.

All players will have to engage with academiaand education authorities to ensure that thedisciplines needed by the industry are available atthe education facilities around the world. ■

*Senior Advisor INTSOK, Norway, Senior Associate,the CWC School for Energy, UK, Former advisor toStatoil’s CEO.Willy Olsen has held a number of senior positions,including Managing Director of Statoil UK and headof Statoil’s activities in in the former Soviet Union.Olsen is now the Senior Advisor to INTSOK, afoundation owned by the Norwegian governmentand Norwegian oil industry. INTSOK is co-ordinatingefforts of expanding the internationalisation of theNorwegian petroleum cluster.Olsen is also a course leader at CWC School forEnergy. For more information please visit:www.cwcschool.com


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The focus on unconventional oil and gas resources has changed the technical capabilities demanded by oil and gascompanies.

The oil companies cannot buytheir talent. They have to

increase their own efforts todevelop the talent



Training Programs June 2013 July 2013 August 2013

IWCF Rotary Drilling Well Control 10th - 15th 15th - 19th 19th – 23rd

IWCF Well Intervention PressureControl

17th – 21st 22nd – 26th 26th – 30th

IADC WellCAP Program 17th – 21st 15th – 19th 19th – 23rd

Introductory Well Control 24th – 28th 8th- 12th 26th – 30th

Stuck Pipe Prevention 10th- 11th 10th – 11th 15th - 16th

IADC HSE Rig Pass 24th – 27th 22nd - 25th 12th -15th

Roustabout/Roughneck 10th – 16th 15th – 19th 26th – 30th

Confined Space [Entry & Rescue] Thurs - Fri Thurs - Fri Thurs - Fri

Work at Height & Rescue Mon - Tues Mon - Tues Mon - Tues

Helicopter Landing Officer [HLO] Thurs - Fri Thurs - Fri Thurs - Fri

Competent Scaffold Erector Thurs - Fri Thurs - Fri Thurs - Fri

Hydrogen Sulphide Safety [H2S] 13th – 14th 18th – 19th 8th – 9th

Welder’s Safety 12th – 13th 25th – 26th 12th -13th

Onshore/Offshore Focal Point 10th – 12th 16th – 17th 22nd -23rd

Manual Handling 17th 22nd 12th

Safe Use of Lifting Equipment Mon - Tues Mon - Tues Mon - Tues

Safe Use of Cargo Carrying Unit Thurs - Fri Thurs - Fri Thurs - Fri

Accident Investigation Mon - Tues Mon - Tues Mon - Tues

IRATA Level 1 24th - 28th 22nd – 26th 5th – 9th

IRATA Level 2 24th – 28th 22nd – 26th 12th - 16th

IRATA Level 3 24th – 28th 22nd – 26th 19th - 23rd

Training Programs June 2013 July 2013 August 2013

Mobile Crane Operation Mon - Tues Mon - Tues Mon - Tues

Offshore Crane Operation Tues - Wed Tues - Wed Tues - Wed

Competent Rigger API RP 2D Tues - Wed Tues - Wed Tues - Wed

Banksman& Slinger Mon - Tues Mon - Tues Mon - Tues

Lifting & Slinging [Practical] 24th – 25th 10th – 11th 8th – 9th

Management of Lifting &Slinging

17th – 18th 29th – 30th 5th – 6th

Lifting Equipment Inspection 24th - 27th 22nd - 25th 19th – 22nd

Wire Rope Inspection 17th – 19th 22nd- 24th 28th - 30th

CCU Inspection 19th – 21st 15th – 17th 14th – 16th

Wire Rope Socketing 10th – 11th 30th – 31st 20th – 21st

Lift Planning 3rd 26th 12th

Forklift Operation Mon - Tues Mon - Tues Mon - Tues

Mobile Elevated Work Platform Tues - Wed Tues - Wed Tues - Wed

Man Riding Tugger Operation Thurs - Fri Thurs - Fri Thurs - Fri

Nigeria.Nigeria.

FIXEDS07 ORA 3 2013 Geology_Layout 1 22/05/2013 19:15


WESTERNGECO HAS BEGUNacquisition of a major multiclientseismic survey offshoreMozambique using the ObliQsliding-notch broadbandacquisition and imaging technique.The technique optimises therecorded bandwidth of the seismicsignal enabling more detailedimaging of the subsurface andmore reliable extraction of rockproperties. “This seismic survey is optimallylocated to help oil and gascompanies evaluate play potentialoffshore Mozambique,” said Carel Hooykaas, president,WesternGeco. “The ObliQ technique is expected to providevaluable high-resolution broadband imaging in thisgeologically complex area where recent discoveries andregional appraisals indicate significant frontier explorationpotential.” The survey is being acquired in collaboration with theNational Petroleum Institute of Mozambique (INP) and isfully supported by industry prefunding. It consists of morethan 31,000 km long-offset 2D data and covers the majorityof the offshore territory of Mozambique where futurelicensing rounds are expected.

AUSTRALIA-BASED EXPLORER Swala Oil & Gas has awarded acontract to Canada’s Polaris International to carry out a 2D seismicacquisition programme over its Kilosa-Kilombero and Panganilicences areas in Tanzania. Swala, which operates the licences on behalf of Australian jointventure partner Otto Energy, said the US$7.3mn contract willinclude 300 km of 2D seismic in Kilosa-Kilombero and 200 kmin Pangani.

The shoot isexpected to beconducted fromJune to September.Swala chiefexecutive davisMestres Ridge saidin a statement thatthe programmewould enable thecompany to “gain abetter overallunderstanding ofthe basins suchthat specific areasof interest can be

targeted for infill seismic and drilling”.Airborne gravity-magnetic surveys conducted last year hadconfirmed the likely presence of significant sedimentary basins inboth licence areas.The Kilosa, Kilombero and Kidatu basins, each covering about 2000sq km, were identified in Kiloso-Kilombero.Two further basins were identified in the Pangani licence.

CAMAC ENERGY INC has announced that Sander Geophysics Ltd hascompleted shooting airborne gravity and magnetic geophysical surveys onthe company's Kenya onshore Lamu Basin Blocks L1B and L16. The dataacquisition covers essentially the entire 12,129 sq km in Block L1B andthe entire 3,613 sq km in Block L16 and satisfies the gravity andmagnetic survey requirements for each Block under the relevantProduction Sharing Agreements.

The company expects to receive initial results of the shoot in the thirdquarter of 2013. Results will be used to optimise the placement of 2-Dseismic lines by identifying faults, basement structures and intra-sedimentaryvolcanic layers and/or intrusions.

"I am pleased that we completed the acquisition of the airborne gravityand magnetic geophysical surveys in Kenya safely, on time, and underbudget," said Senior Vice President of Exploration and Production SegunOmidele. "Our geophysical team will now work with SGL to interpret the dataand delineate optimal areas for 2-D seismic acquisition."

CAMAC completes data acquisition in Kenya

FUGRO HAS COMPLETED a survey for Anadarkoover exploration acreage in the Orange basinoffshore South Africa.

Anadarko is operating the first explorationperiod over frontier blocks 5/6 and block 7, inpartnership with PetroSA.

Fugro’s survey involved acquisition of multi-beam echo sounder (MBES) data from the MVFugro Gauss, and onboard seep mappinginterpretation. The program is part of a greater

seafloor geochemical exploration surveydesigned by Anadarko and its partner.

The nearly 56,000-sq km MBES surveyprovided bathymetry and backscatter MBESdata for identification of natural hydrocarbonseepage at the seafloor.

Fugro geoscientists onboard the vesselperformed mapping of potential seeps,interpretation of the surficial sedimentarygeology, structural geology and shallow fluid

migration systems, and reported the acquiredMBES data.

Helle Els, commercial manager of FugroSurvey Africa, said: “Seep hunting requires bothMBES bathymetry and MBES backscatter datato be collected and processed in real-timeduring the survey. Our geologists onboardevaluate the data to determine potential seeptargets and weight them for a latergeochemical coring survey.”

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Swala awards Tanzania shoot

South African offshore survey for Fugro

WesternGeco starts multiclient seismicsurvey offshore Mozambique


Dolphin applies record seismic spreadoffshore South Africa DOLPHIN GEOPHYSICAL HAS used a seismic survey spread describedas the world’s largest floating object. The eight streamers were 8 kmlong and separated by 200 m, giving a total area covered under towof 11.2 sq km.The equipment was used offshore South Africa under contract withShell and using the Polar Duchess seismic vessel. The big spread wasused to get 8,000 sq km surveyed during a limited weather windowof four months.“Despite the remote nature of the area and the challenging metoceanconditions, the survey has been executed safely, efficiently and witha low down time,” said Stuart McGeoch, Shell regional venturesexploration manager for sub-Sahara Africa. “We have been impressedwith the quality of acquisition data.”Shell’s process centre in Houston validated the initial returns and isvalidating the data.



LLEASED FLOATING PRODUCTION storageand offloading (FPSO) vessel supplier,SBM Offshore, and modular gas to liquidssolutions provider, CompactGTL Ltd, have

signed a commercial development agreement towork exclusively together on offshore projects.Using GTL technology for floating productionsystems could significantly reduce gas flaring asassociated gas can be turned into synthetic crudeoil then blended in to the produced crude oil.

The agreement between the two companies,who have been working together since 2008,makes the world’s first, fully integrated, offshoremodular GTL solution for the upstream industry agenuine prospect. The companies said in a jointstatement that they will combine their strengths forthe marketing and execution of projects involvingassociated gas challenges for oil fields offshore.

“SBM Offshore and CompactGTL providecomplimentary expertise, and by combining thiswe have been able to develop an exciting newFPSO product which will be a very attractivesolution for associated gas disposal in ultradeepwater fields,” said Mike Wyllie, chieftechnology officer, SBM Offshore.

Nicholas Gay, chief executive of CompactGTLadded, “CompactGTL is delighted that we havebeen able to cement our longstanding relationshipwith SBM Offshore. It is a world class company and,combined with our expertise in delivering theworld’s first commercial scale modular gas toliquids solution for associated gas, will havesignificant impact on the offshore oilfield appraisaland development sector.”

Small-scale GTLUK-based CompactGTL has been developingtailored GTL conversion technology, which is smallenough to fit on the deck of a vessel, throughoutthe company’s six-year existence.

“As we see commercial projects on the horizonwe thought it time to cement relations with aformal commercial development agreement,”Wyllie was quoted as saying recently.

Creating synthetic crude from gas feedstock isan expensive and complex process that involvesthe use of specialised catalysts and, due to thecorrosive nature of the process and hightemperatures involved, requires the use ofadvanced construction materials. Such processinghas only been adopted onshore by Sasol and Shell(at Qatar’s Pearl GTL plant) to date but on the largescale required for it to make economic sense. SBMand CompactGTL’s smaller scale, offshore

processing plans could therefore be a game-changer if they are fully realised. In fact, thecompanies have announced they are looking tolaunch a 2,000 bpd liquids plant-carrying testvessel soon.

This may seem modest but the partners’ mainmotivation is to overcome the problem of flaringsmall volumes of gas, a process that is beingdeemed increasingly unacceptable, to reach“stranded” oil deposits. This could provide agenuine alternative to other, often costly methodsof dealing with the gas such as re-injection orpipeline laying.

CompactGTL’s experience in this area ledBrazilian operator, Petrobras, to commission aUS$45mn demonstration plant in Aracaju on theBrazilian coast in December 2010. Followingextensive testing with associated gas at the 20bpd plant, Petrobras has now approvedCompactGTL’s technology for commercial use.Petrobras is also carrying out onshore testing ofa GTL demonstration plant from the rival

partnership formed by US company, Velocys,and Japan’s Modec and Toyo.

“CompactGTL has come up with a very neatsolution that avoids the use of oxygen andrelies on steam in the reaction processes,”Wyllie was quoted as saying. “They havebrought it to a point where we believe it can beintegrated quite easily on to an FPSO. In anEWT [extended well testing] context, thistechnology is perfect. You can hop from field tofield without flaring gas.

“We have done extensive studies in-house forsuch a vessel. Now the next step is to go into aFEED study with a client for a specific application.”

With Petrobras rumoured to be keen on EWTwork on its deepwater pre-salt fields, SBM andCompactGTL have put themselves in a primeposition to assist as their generic vessel designis ideally suited for use in Brazilian pre-saltfields, as well as many other field conditions.The 2,000 bpd modular GTL plant required forsuch a purpose would weigh 4,000 tonnes andtake up a third of the deck space of a convertedSuezmax size tanker.

“We are looking actively at a number of ways ofincreasing the complexity of converted FPSOs,”Wyllie was quoted as saying. “GTL is one way ofextending our capability into more complex units.We’re starting small, using it for associated gasdisposal – we think that’s a good way to get itoffshore and gain experience in operating a floatingfacility with GTL capabilities.” ■

CompactGTL has come upwith a very neat solution thatavoids the use of oxygen and

relies on steam in thereaction processes.

CompactGTL’s solution to the problem of associated gas at remote oilfields, both onshoreand offshore, can now be applied to projects around the globe that are delayed,constrained or prevented by operational matters, logistical issues or gas flaring legislation.Now SBM Offshore has joined forces to provide gas to liquids floating solutions.

Liquid floating

solutions deal

Gas

S08 ORA 3 2013 Gas_Layout 1 21/05/2013 11:54


Gas

31www.oilreviewafrica.com

A DRILLSTEM TEST of the Mzia-2 well in deepwater block1 offshore Tanzania flowed as much as 57mn cfd ofnatural gas. This is the first test of the deeper Cretaceousreservoir and was constrained by the equipmentcapacities. Mzia-2 is 4 km from the Mzia-1 discovery, inaround 1,620 m of water and approximately 45 km offthe coast of southern Tanzania. It is approximately 22 kmnorth of the Jodari-1 discovery well, also in block 1,where a successful drillstem test was completed in Marchon the shallower Tertiary reservoir.

The drillship Deepsea Metro-1 has relocated toblock 4 to drill an exploration well, Ngisi-1,adjacent to the Pweza and Chewa discoveries.

BG Group will use data from the currentexploration and appraisal campaign and a recentlycompleted 3-D seismic survey to help identify newoffshore targets for a third exploration programmebeginning in late 2013.

BG Group as operator has a 60 per cent interest in blocks 1, 3, and 4 offshore Tanzania, withOphir Energy holding 40 per cent.

Deepwater Tanzania well flows gas

SONATRACH IS IN talks to buy a stake inMozambique offshore gas projects operated byItaly's Eni and Anadarko Petroleum of the US,according to the Algerian state energy firm'schief executive.

Sonatrach, seeking to expand its presenceabroad, is also eyeing new gas blocks in the eastAfrican country, Reuters quoted the company'schief Abdelhamid Zerguine as saying.

Zerguine was speaking after signing amemorandum of understanding with the head ofMozambique's Empresa Nacional de

Hidrocarbonets (ENH), Nelson Ocuane.Zerguine said Sonatrach was interested in

buying part of a minority stake held by ENH inthe offshore gas fields.

"We want to have a place, but on theMozambican side," he said, according to thenewswire.

Zerguine did not give details of the size ofstake Sonatrach was seeking to acquire, butsaid a five per cent holding would cost itaround US$1bn.

The memorandum also opened the way forSonatrach to acquire exploration blocks inMozambique.

"We agreed that Sonatrach will getprospecting blocks to explore alone or inpartnership with energy companies operating inMozambique," APS quoted Zerguine as saying.

Sonatrach ‘eyes Mozambique gas stake’

JUMBO HAS SUCCESSFULLY completed the deployment of five subsea structures forPetroSA’s Ikhwezi project, offshore South Africa. The installation of the five structures,weighing between 35 and 185t and measuring up to 14 x 8 x 5 ½ m, was executed byJumbo’s DP2 Heavy Lift Vessel Fairplayer. The project was awarded on an interventionbasis and Jumbo once again proved its flexibility and ‘can do’ mentality. The Ikhwezi project is a subsea development that ties into the FA-platform and is set toplay an instrumental role in sustaining the life of PetroSA’s gas-to-liquids (GTL) refinery inMossel Bay, Republic South Africa. It involves tapping into gas reserves in the FO field,which is located 40km south-east of PetroSA’s F-A production platform off South Africa’ssouth coast. Because the project was awarded on an intervention basis Jumbo had verylimited time to complete the preparations. The structures had to be installed before thebeginning of the winter in South Africa. The weather and sea states off the coast areknown to become very hostile in the winter period. The Fairplayer was mobilised inRotterdam, eg, taking Jumbo’s offshore accommodation unit onboard and preparing itsDeepwater Deployment System (DDS).The Ikhwezi subsea installation project confirms Jumbo added-value concept ofproviding a single solution for loading, transporting and installing subsea structures inwater depths up to 3,000 m.

Jumbo installed five structures for Ikhwezi

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BG GROUP AND Ophir Energy haveextended a contract for drillship DeepseaMetro I under their rig-sharing arrangementas the partners line up back-to-back wellsfor a busy exploration and appraisalcampaign off Tanzania and Kenya. The pair have decided to prolong thecharter of Odfjell Drilling’s ultra-deepwaterunit, due to expire in June, by 18 months toNovember 2014 and, according to Odfjell’sfleet status report, apparently have anoption to extend it further to mid-2016.The Ophir-BG joint venture is currentlyusing the vessel to drill the Ngisi-1exploration well in Block 4 off Tanzaniathat Ophir estimates could boost in-placeresources at the Chewa-Pweza-Ngisi hub to

5.8 tcf, or a mean recoverable figure of 4.1tcf. It would also “provide critical scale forgas aggregation and development” at theblock that is likely to be tied into acombined liquefied natural gas project forblocks 1 to 3 in southern Tanzania, alsoincluding Statoil’s discoveries in Block 2. BG Group has discovered between 13.5 and21 tcf of gas in place in blocks 1, 3 and 4off Tanzania, but partner Ophir believesthere is resource upside of about 75 tcf.Statoil meanwhile has lifted recoverablevolumes in its operated Block 2 tobetween 10 and 13 tcf following its latestTangawizi find earlier this year and itsexploration chief Tim Dodson was recentlyreported as saying a joint LNG project

would be based on at least 20 tcf ofproducible volumes.Ophir said the joint venture is now likely todrill a satellite exploration well close to theJodari discovery in Block 1, followed by anappraisal and drillstem test in Block 4. A further outboard exploration well wouldbe drilled in Block 1 to test basin floorprospectivity by early September, withtargets currently being evaluated, it said.Ophir will then use the drillship to drill aprobe targeting the Mlinzi feature in Block7 off Tanzania in November.The co-venturers have also lined up wellsin Kenya’s largely underexplored offshoreplay but are remaining tight-lipped ondrilling targets.

THE TANZANIA PETROLEUM Development Corporation (TPDC)announced the 4th Tanzania Deep Offshore and North Lake TanganyikaLicensing Round will take place during the Tanzania Oil and GasConference and Exhibition in Dar es Salaam in October 2013.The fourth round will include seven deep-sea sedimentary blocks,each with an average size of 3,000 sq km, and one offshore block inLake Tanganyika, the TPDC announced.The licensing round was scheduled to take place in September 2012,but was delayed one year to give the government time to ratify theNatural Gas Policy, according to Tanzania's The Citizen.The government had planned to auction nine deep offshore blocks inthe Indian Ocean, but decided to reserve two for commercial use."The two deep offshore blocks are reserved for [the] governmentwhere TPDC will be allowed to execute a different explorationapproach using a strategic partner to be competitively sourced," theTPDC said.

US INDEPENDENT ERHC has inked a letter of intent to farm out part of aKenya block to an unidentified multinational company.

The Houston-based company has been looking to farm down its 100 percent interest in Block 11a as it seeks to move forward with exploration afterfinalising a production sharing contract with the authorities last year.

ERHC said it would now start to hammer out definitive terms of a farm-outdeal with the potential suitor, which it described as “an international oil andgas company” with “exploration and production interests spread acrossseveral continents”.

The block operator is currently evaluating bids from service companies tocarry out an airborne full tensor gravity gradiometry survey of the 11,950 sq-km tract in north-west Kenya, near the South Sudan border with Lake Turkanato the east.

ERHC is pursuing the block’s rift margin play that is believed to be similarto recent major onshore discoveries made by the likes of Tullow Oil in EastAfrica respectively."

Kenya farm-out in ERHC sights

TULLOW OIL, THE operator of Block 10BB in Kenya,has commenced drilling at the Etuko (formerlyKamba) prospect. This well will target a new playarea in the Lockichar Basin where a workingpetroleum system has been confirmed by recentdiscoveries at Ngamia and Twiga. The well will focuson the 'eastern flank play' where oil was discoveredin 1992 by Shell at the Loperot-1 well. The primaryobjectives will be the Lower Lokhone and Auwerwersands, both of which have been shown to be highquality reservoirs containing oil in existing wells. Thegross best estimate of prospective resources for the prospect are 231mn barrels of oil based on a third-partyCompetent Person's Report. The well is expected to take approximately 60 days to drill and evaluate.

Testing operations continue on the Ngamia #1 well, also in Block 10BB in Kenya, and drilling operationscontinue on the Sabisa #1 well in the South Omo Block in Ethiopia. A result for Sabisa is expected in lateMay and Ngamia testing completed in early June.

Africa Oil CEO Keith Hill commented, "The Etuko prospect is one of the most attractive prospects in ourportfolio and has the potential to open up a new play fairway on the eastern side of the already provenLockichar Basin. A number of additional prospects and leads will be de-risked on this 'eastern flank' play ifthe Etuko well is successful. With three rigs active and three more on the way, the second half of 2013promises to be a very exciting period in the continuing growth story of the company in East Africa."

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Tanzania’s 4th round of exploration announced

Tullow Oil spuds Kenya well

Drillship primed for fresh East Africa probes


Woodside eyesMozambique oil and gasOIL AND GAS producer Woodside Petroleum hasits eyes on a project off the coast of Africa, thatcould be five times bigger than the North WestShelf project.

Chief executive Peter Coleman haspreviously ruled out investing in emerging eastAfrican oil and gas projects due to high costs,but he has now highlighted the potential ofMozambique for liquefied natural gas exports.

At a recent business breakfast, Coleman saidrecent discoveries in Mozambique had shownan area of gas reserves totalling around 100tcf,or “Five North West Shelfs”.

Coleman predicted energy producers willsoon have to change the way they market andtransport LNG. “That’s not just due to shale gas,that’s due to a whole new number of newsupply sources coming in,” he said. “Whereverand whatever it is, the industry isfundamentally changing.”

The Ngamia rig site in northern Kenya.

S09 ORA 3 2013 E&P_Layout 1 21/05/2013 11:59


AFRICAN OIL AND gas company SacOil has been given the right toexplore for oil in Botswana. The independent upstream oil and gas company, through itsBotswana subsidiary Transfer Holdings, said it has been grantedthree exploration licenses by the Botswana Department of Mines. SacOil has interests in Nigeria, the Democratic Republic of theCongo and Malawi. Botswana's mineral industry provides about 40 per cent of allgovernment revenue but the country's policy makers have beentrying to reduce the economic dependence on the sector.

THE MOZAMBIQUE GOVERNMENT is currently revising its legal and fiscalpackages for exploration and production, but anticipates its new petroleum lawto be ratified by year-end in time for the upcoming licensing round, saidArsenio Mabote, chairman of the Instituto Nacional de Petroleo. Mozambiquewill seek to promote exploration in offshore areas 4, 5 and 6 in its upcominglicensing round. The government is also developing a master plan fordevelopment of the nation's gas resources, including asset developmentoptions, optimal locations, pricing structures and social improvements.

Mozambique has significant offshore natural gas resources in theRovuma Basin, where 12 gas discoveries have been made to date within a50 km radius area.

Thanks to exploration activity, the estimate of Rovuma Basin gas resourceshas been raised from five tcf in 2009 to 170 tcf in 2012.

The additional gas resources are located in two main concession areas 1 and4. However, more resources may exist as both areas are not fully explored andexploration efforts offshore neighboring Tanzania and Kenya will support theconstruction of several liquefied natural gas (LNG) plants in the region.

Mozambique could also hold significant oil resources as well, if estimates byTotal, which holds interest in offshore areas 3 and 6, are correct.

"The government understands the stable legal framework needed, but lawsneed to be finalised before the project can move forward," said John Peffer,president of Anadarko Mozambique.

Despite the cost, Anadarko President and CEO Al Walker sees Mozambiqueand its tremendous gas resources as the right opportunity for Anadarko to meetits goal of becoming a major LNG player.

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SacOil to look for oil in Botswana Ratification of Mozambique petroleum lawseen by year end


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SINOPEC GROUP'S ADDAX Petroleum Cameroon Ltd unit has let a contract to Atwood Oceanics Inc forthe Atwood Aurora jack up to drill offshore Cameroon. Atwood said the contract is for one year beginning

February 2014 at a US$193,000 day rate inclusive of the 15 percent Cameroon withholding tax or US$164,000 exclusive of the15 per cent Cameroon withholding tax, depending on the welllocation.Addax in October 2012 said it would appraise the Padouk-1Xexploratory well in 42 m of water on the Iroko block in the RioDel Rey basin near the marine border with Nigeria.The discovery well went to a total depth of 2,616 m andlogged 38.6 m true vertical depth of net oil and 65.1 m TVD ofnet gas sands in which Addax estimated a provisionalcontingent resource of 20mn bbl of oil and 200 bcf of gasexcluding upside potential to be assessed during appraisal.

BP IS GEARING up to kick-startproduction from its long-delayedPlatina, Chumbo and Cesio (PCC)project in Block 18 off Angola via ahefty subsea development thatcould produce up to 70,000 bpd ofcrude.

There has been a long-runningdebate between BP and Angola’sstate-owned oil company Sonangolabout how best to exploit thesechallenging assets.

Sonangol wants a floatingproduction, storage and offloadingvessel, while the operator is seekingan all-subsea scheme tied back toits Greater Plutonio FPSO.

BP Angola regional presidentMartyn Morris said the PCC project“is more likely to be a tie-backarrangement, rather than requiringanother vessel”.

He said Sonangol would preferan FPSO because the Angolanstrategy is to have at least twoindependent projects in eachoffshore block, so that when oneinstallation cannot produce forwhatever reason, a second remainson stream.

BP’s view is that the costs ofusing an FPSO “do not stack up”and that in recent talks withSonangol, “we have anunderstanding that the tie-backconcept is the best way forward”.

The next step, Morris said, is towork out what the development willlook like, how much it will cost andthe project schedule.

Assuming Sonangol agrees to asubsea soluition, the plan could callfor between 14 and 16 wells, downfrom the original 26. This scaled-down project is understood to bebased on initially developing onlythe Platina and Chumbo discoveries,with the challenging Cesiofind to betied back at a later date.

AFREN AND LEKOIL have agreed to farm-out terms forlicense OPL 310 that lies offshore Nigeria and holds theOgo prospect that is currently being drilled. Under theterms of the agreement, Afren has farmed out a 17.14per cent interest in license to Lekoil, pending NigerianMinisterial Consent. The indigenous Nigerian company Optimum Petroleum Development Ltd is the operator of the blockand will continue to hold a 60 per cent participating interest.

The GSF Monitor (350' ILC) spud the Ogo prospect which is a four-way dip-closed structure in the Turonian to Albiansandstone reservoirs. The well is targeting 78mn barrels of oil equivalent of gross P50 prospective resources, stated Afrenin a press release. Drilling commenced April 23 and is currently at a depth of 914 metres.

Drilling is expected to last 90 days and includes a planned sidetrack which will test a new play of stratigraphicallytrapped sediments that pinch-out onto the basement high targeting 124mn boe of gross P50 prospective resources.

“We are delighted to have successfully concluded a farm-out on OPL 310, offshore Nigeria and welcome Lekoil as apartner in exploring the significant potential of this under-explored region of the West African Transform Margin,” saidOsman Shahenshah, chief executive of Afren.

Lekoil farms into OPL 310

NOBLE ENERGY HAS found oil in the Carla South structureoffshore Equatorial Guinea.

According to partner PA Resources (PAR), well I-7 inblock I encountered oil in good-quality sandstones at thetarget level. It has reached a total MD of 3,660 m, and willbe side tracked to an adjacent target.

Drill cuttings, wireline log data, and downholemeasurements indicate about 12-m measured thicknessand 10-m vertical thickness of net oil pay.

PAR CEO Bo Askvik said the result has “extended theproven Carla trend from block O into block I. Furtheranalysis of the data will be required to assess theimplications of the well and next steps on this trend.”

The partners plan an additional appraisal well and long-term test on the Diega field later this year, he added.

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BP sets coursefor start-up fromPCC project

Noble proves more oil offshore Equatorial Guinea

Addax contracts Atwood jack up for 2014


SOLO OIL IS planning to acquire a stake in aSwitzerland-based company with farm-in dealslined up in West Africa.

Solo has signed a binding memorandum ofunderstanding for a 15 per cent shareholding inPan Minerals & Oil, which has already negotiatedexisting production agreements for onshore

oilfields in the region.Consideration for the acquisition is

US$779,000, comprising a US$306,106 cashpayment and 60mn new ordinary Solo shares.

Pan Minerals has invested almost US$3mn onpursuing farm-ins onshore West Africa, focusing onproven oilfields that have the potential to be

brought onto production at more than 2000 bpdwithin a 12-month period. Solo’s investment isexpected to help complete these agreements.

Solo chief executive Neil Ritson said forcommercial reasons, the details of the provenonshore oilfields needed to remain confidential atthis stage.

Solo in West African buy

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QUICKFLANGE, ONE OF the industry’s leading providers of highperformance pipe connection systems with thousands of topsideapplications worldwide, has launched its new subsea pipeline repairsolution – the Quickflange Subsea. The new solution, which has been designed to bring low impact,robust and cost effective flange-to-pipe connections to subseaoperations, will be available for delivery immediately and will beapplicable for pipeline sizes of up to 12” with larger sizes to follow. The Quickflange Subsea can be utilised in a number of subseascenarios, such as emergency and contingency pipeline spool repair,but also applications in pipe lay, decommissioning, and modification. “For too long, the mechanical connector market has beencharacterised by high subsea intervention costs, long lead times andcomplex and expensive solutions. No longer!” said Quickflange CEO,Rune Haddeland. “With the Quickflange Subsea, operators will beable to enjoy, for the first time, low impact, flexible and costeffective subsea pipeline repairs that are also highly reliable androbust. Quickflange is delighted to be launching this revolutionarynew solution today and look forward to making as big an impactsubsea as we have already done topside.” The Quickflange Subsea can easily be slid onto the pipe with ahydraulic tool then used to activate the flange. This results in amechanically robust flange-to-pipe connection and a less onerous

installation compared to other more cumbersome mechanicalsystems. Key benefits include: Simplicity & Flexibility. The Quickflange Subsea is simple to installand activate. As it is up to 60 per cent shorter than other pipe-endconnectors, it is easier to handle with straightforward diveroperations and no specialist diver training required. The solution canbe used on multiple pipe ranges with the installation being fullyretrievable and reusable, thereby being ideal for emergency repairand contingency repair systems. Significant Cost Savings. Thanks to the simplicity of the concept,the Quickflange Subsea also delivers significant cost savings inregard to subsea repair time, subsea operations, diver and supportvessel costs. This includes reduces lead and delivery times and fasterimplementation with a reduction in required diver time and lessrequired pipe preparation, such as coating removal and deburial. TheQuickflange Subsea also comes with flexible rental options andinstallation tooling to reduce CAPEX. Finally, the Quickflange Subsea comes with maximum reliability androbustness. There are no moving parts, grips or other components,ensuring that less can go wrong. Third party testing has demonstratedthat the solution is equivalent to welded weld-neck flanges in termsof pressure retention and load resistance with the assembled jointbeing stronger than the flange itself.

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Simple, flexible, reliable and cost-effective pipeline repairs for subsea applications


S09 ORA 3 2013 E&P_Layout 1 21/05/2013 11:59


APACHE HAS DISCLOSED a trio of new discoveries in Egypt's Western Desert.Apache vice president for the region, Thomas Maher, said the finds, made inthree different basins, showed the explorer's "diverse potential for new oil andgas developments across its concessions".

Maher added that the Houston-based explorer held a "deep backlog ofdrilling opportunities" offering "stacked-pay potential " in the Western Desert,where drilling costs were relatively cheap.

The NRQ 3151-IX probe in the Alamein basin's North Ras Qattaraconcession flowed at a combined rate of 1,625 barrels of oil and 18.7 mcfd ofnatural gas from two intervals in the Jurassic Lower Safa Formation.

Logging operations confirmed 30 m of pay sands were encountered inmultiple zones, including the Cretaceous Upper Bahariya, the Jurassic Zahra, theUpper Safa and the Lower Safa.

The SIWA L-IX discovery well in the Siwa Concession within the FaghurBasin, tested at a rate of 2,041 bopd from the lowermost portion of a thickPaleozoic Desourky pay sand.

The well encountered 38 m of hydrocarbon pay in the Cretaceous Alam elBuieb (AEB-3), AEB-5, Jurassic Safa and the Desouky zones, according to Apache.

"In addition to extending the productivity fairway of the Faghur basin, thisdiscovery also sets up a number of analogous prospects for drilling in 2013,"the explorer said.

The NTRK-G-IX probe in the Matruh Basin's North Tarek concessionencountered 60 net feet of Upper Safa hydrocarbon pay, later testing at 14.8mcfof natural gas and 1,522 bpd of condensate.

Apache said that in addition to being a wholly-owned discovery, theJurassic Upper Safa find was only three km from a gas gathering system it andthe Egyptian General Petroleum Corporation are competing during thecoming months.

EGYPTY WILL ADOPT a new licensing policy for its future oil and gasexploration contracts signed with foreign companies that will allow the NorthAfrican country to obtain a bigger share of the production, its oil ministerOsama Kamal said.

"We have developed a new system that will be implemented in the nextlicensing round," Kamal said. "The new system will allow Egypt to increase itsshare of the output when production rises. The more production rises, the moreour share will rise," he said.

The new policy won't be implemented on the eight oil and gas explorationprojects in the Mediterranean Sea that Egypt awarded earlier this month for anoverall minimum investment of US$1.2bn, Kamal added.

Egypt to adopt new oil, gas licensing policy

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Apache reveals trio of Western Desert finds


BP ready to get feet wet drilling off Libya SUPERMAJOR BP PLANS to start deep-water drilling off Libya in October2014 using a newbuild vessel being built by Samsung and to be operated byMaersk Drilling. The project is part of a US$2bn offshore and onshoreexploration contract won by BP before the 2011 overthrown of the Gaddafiregime - and represents a big boost to Libya's efforts to mobilise foreigninvestment and to revive its energy sector.The 2007 exploration agreement was based on the expectation of findingenough gas reserves to justify construction of liquifaction facilities for export.BP Exploration Libya has already invited expressions of interest fromcontractors for provision of offshore helicopter services in support of thedrilling programme in the Gulf of Sirt for five wells over three years. A fulltender will be issued later.

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THE UGANDAN GOVERNMENT has reached an agreement with oil companiesoperating in its oil-rich Lake Albertine rift basin over the construction of a 30,000bpd refinery, ending a nearly two-year deadlock that has largely been blamed fordelaying the development of the country's oil fields, according to the Ugandanpresidency.The refinery agreement brings the two parties closer to a final deal on the basin-wideoil development plan, where companies are expected to invest more than US$12bnto develop the country's nascent oil sector.A presidential spokeswoman said that the refinery agreement was reached followinga meeting between President Yoweri Museveni and representatives of companiesoperating in the country - Tullow Oil, Total and CNOOC. "The parties agreed to startwith the refinery size of 30,000 bpd" the spokeswoman said, adding that Museveninoted that oil production in the country was long overdue because alot of time hasbeen wasted in negotiations. With an estimated 3.5bn barrels of untapped oil, Uganda is expected to join Nigeria,Angola and Sudan among sub-Saharan Africa's major crude producers. While thecompanies have been pushing for a pipeline to export crude on the open market,government has been insisting on the construction of a large refinery, with thecapacity to refine as much as 180,000 bpd of crude into fuel products, initially fordomestic consumption and then for regional export.Museveni has said that the two sides were close to agreeing an oil and gas extractionplan that is "optimal" for both government and oil companies. Following the meetingwith oil companies, government also agreed to the construction of an export pipeline.

FLUOR CORPORATION HAS been awarded a front-end engineering and design contract by SouthAfrican Petroleum Refineries (Sapref) for its cleanfuels project in Durban.

"This award builds on our significant clean fuelsexpertise as well as Fluor’s ongoing site supportwork with Sapref in South Africa for nearly 20years," Peter Oosterveer, president of Fluor’s energyand chemicals group, said.

Sapref is a joint venture between Shell SARefining and BP Southern Africa. It is the largestcrude oil refinery in southern Africa, providing 35per cent of South Africa’s refining capacity.

The contract would be the first to be carried outin Africa under Shell’s enterprise frameworkagreement with Fluor. This encompassesengineering and project management servicesthroughout Europe, Africa and the Middle East. Theproject would allow for a substantial upgrade of theSapref refinery, which would improve the quality oftransport fuels by reducing levels of sulphur,benzene and aromatics. This would meet enhancedlegislative requirements.

The agreement allowed for a potentialengineering, procurement and constructionmanagement contract to be signed at a later date.

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IIT IS NOT just the world’s top investment companies that have turnedtheir gaze towards sub-Saharan Africa and the continent’s fast-growingeconomies, but there is increasing interest from all manner of servicecompanies – and this is also true of those working in the energy sector.

Rosetti Marino is a highly respected, integrated engineering group ofcompanies with a focus on the offshore oil and gas industry. Having built anenviable reputation for engineering, procurement and construction (EPC)throughout the Caspian, in North African waters (and onshore), as well asterritories as diverse as the North Atlantic, Brazil and the Gulf, the company isnow appraising new markets in sub-Saharan Africa.

Alessandro Heltai, Rosetti Marino’s regional manager for Africa, describesthe company’s objectives in this way: “Our company is very keen in pursuing allthe interesting prospects there are there, for example in Mozambique and inWest African countries such as Ghana and Côte d’Ivoire.”

What makes Rosetti Marino’s strategy so compelling is that it can offer morethan 40-years experience in the oil and gas industry. In fact, the company tracesits origins back even further – to 1925 to be exact – when the firm’s founder,Marino Rosetti established his company in Ravenna, one of the country’s mostimportant maritime ports and industrial centre, located in north-east Italy.

He was to build his business by supplying the local market with steelcomponents and small storage tanks. He then branched out into ship’s hullmaintenance work and pressure vessel manufacturing.

Offshore platforms became core businessThe opportunity to further develop the business arose in 1970 when the iconicItalian National Oil and Gas company, ENI, began the exploration of the AdriaticSea to determine its gas prospectivity. And so began the long commercialrelationship between ENI and Rosetti Marino that continues to this day. Within20-years, the construction of offshore platforms for the oil and gas industrybecame the Rosetti Marino’s core business.

However, it has also developed the design and construction of tugs, anchor-handling tug supply vessels, and platform supply vessels. These vessels utilisethe most advanced technology, being completely outfitted with state-of-the-artequipment such as the Voith Schneider propeller (also known as a cycloidaldrive) a specialised marine propulsion system that ensures high maneuverability,being able to change the direction of a vessel’s thrust almost instantaneously.

Much of the marine vessel work is undertaken at the San Vitale Yard inRavenna harbour, a facility of over 56 sq km with a 175 m quay capable of‘loading out’ items of up to 10,000tonnes.

“We have a proven capability to work in distant markets,” Heltai explains,pointing to the experience built up by Rosetti Marino with supplying variousoffshore platforms to clients operating in the extremely demanding North Seaenvironment. “To build, and then transport our jackups and topsides from theRavenna yard to the North Sea clearly added some financial costs that perhapsour competitors did not need to meet, but we were successful, and itdemonstrated our ability to penetrate distant markets.”

Heltai believes that sub-Saharan Africa may be a different proposition, aslocal content is becoming an important pre-condition for internationalcompanies wanting to establish operations in Africa.

“At the moment, the yards in sub-Saharan countries are limited in terms ofcapacity,” Heltai says. “That is why we are still competing for a share of theWest African market. But now I see that there is increasing pressure from thegovernments of all those countries in the region to have foreign companiesmake investments within the country, to begin manufacturing that will bolster

the economy and provide employment opportunities.“I think that procurement of materials and the equipment and so on will

continue be done in Western Europe and in the United States, but increasinglygoods used by companies in Africa are required to be locally sourced. Nigeria forgood example of this with the country having published a local content act.

“But this does not discourage us, even if we are not there at the moment.We know Nigeria is still a very promising country, and holds a lot of possibleprospects and projects for us. We need to verify how to organise ourselves tomove forward, almost certainly with local partners.”

Heltai also spoke of the prospects that Mozambique represents, especiallyas its long-term client ENI has such an important stake in the recentlydiscovered offshore gas reserves of the Rovuma basin.

“Mozambique is very promising,” he confirms. “We visited Mozambiquemany times last year and earlier this year, and we are looking at this country’sprospects very closely. It is true that Mozambique represents mainly subsea andLNG activities. These are two areas where Rosetta Marino is not present at themoment, but we have the capability to fabricate subsea modules. We would bedelighted to participate in projects for ENI, and we are looking at the possibilityof building a yard in the country, but this requires a huge investment. Therefore,it is important to confirm the projects first. We have to assess those futureprojects where we can be competitive.”

And that would seem to be Rosetti Marino’s strategy, to carefully assesswhere they can be competitive, leveraging their extensive experience in the oiland gas industry, defining new markets and setting up local offices in order tobetter liaise with their clients.

This is the business model that Rosetti Marino has followed in its mainoperating sphere, the North Africa littoral. “We have a branch and a company inLibya,” Heltai explains, “as well as Egypt and Tunisia. The objective is always towork with local branches or local companies. Our presence adds a lot to futuredevelopments because you have the continuous presence of your people, yourstaff and then also the contact with the clients is much more frequent. This isvery beneficial for the business.”

It was notable that this year’s OMC attracted record numbers of participants,exhibitors and visitors, despite the global economic downturn that has impactedsouthern Europe in particular.

In fact, the chairman of the OMC ’13, Innocenzo Titone reported that the22,500 sq m exhibition area, over six pavilions, this year hosted more than 550

Alessandro Heltai, Rosetti Marino’s regional manager for Africa.

Local content is becoming an important pre-condition for international companieswanting to establish operations in Africa.

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Rosetti Marino always plays a key role at the Offshore Mediterranean Conference (OMC) thatevery other year is held in Ravenna, Italy – the annual conference alternating its locationwith Alexandra, Egypt. This year, Oil Review Africa spoke with Alessandro Heltai about thecompany’s plans to seek new markets in sub-Saharan Africa. Stephen Williams reports.

Rosetti Marino

looks south



exhibitors from 30 countries from around the world, representing a 17 per centgrowth of the event.

Significantly, this year there seemed to be a renewed optimism that thelarge gas reserves identified in the Eastern Mediterranean will begin to beexploited and monetised (although many challenges still remain), and that theMahgreb’s hydrocarbon industry would be bouncing back following the politicalinstability the region has experienced over the last three years.

Many of the super-major exhibitors presented mini-seminars on their stands.The ENI stand was a case in point where Furo Ogolo who is a technical advisorfor gas monetisation to the Italian major, gave a fascinating overview of recentdevelopments.

Rosetti Marino is also at the cutting edge of new gas technologies. In co-operation with Atlantic Hydrogen, Canada, they have been developing a uniquetechnology which removes carbon from natural gas prior to its use (asalternative to CO2 capture and sequestration after combustion).

In this process, carbon is separated prior to combustion in the form of solidcarbon powder, thus avoiding all problems related to CO2 sequestration. Thetechnology produces a ‘low-carbon natural gas’ that can substitute natural gasin motors and turbines as well as in city-gas networks (supplied as ‘greennatural gas’) reducing GHG emissions. The process is also emission free andsolid carbon removed upfront as carbon black is a valuable product for thechemical industry.

The technology is in an early commercialisation phase and is presentlybeing considered as a means of reducing the carbon footprint of stationarypower applications that use natural gas as a feed and for sustainable transportfuels as compressed natural gas.

Among the 25 technical sessions that ran alongside the OMC exhibition –including learned dissertations on drilling, reservoir engineering, subsea operationsand health and safety issues – were a number that focussed on emerging

technologies, such as those that are being applied in the renewable energy space.When asked for his opinion as to the potential of renewable energy for

Rosetti Marino, Heltai said: “We are an EPC contracting company, so when wetalk about renewables, the first idea that comes to my mind is wind. There aredifferent types of activities we can do including the construction for the windfarms, but perhaps the most promising would be to build the jackets andtopsides for the High Voltage Direct Current Stations. These would collect thepower from the wind turbines and transport that electricity via high voltagecable to the onshore. This is the equivalent of building electrical substations,and Rosetti Marino’s engineering expertise and experience would be invaluableto construct wind farms.”

And asked to sum up what he would be taking away from the OMC thisyear, Heltai was upbeat about prospects for the industry. “The EastMediterranean has seen a lot of new discoveries for Lebanon, Israel, Cyprus andmaybe Syria, and exploration is still continuing. While water depths aresignificant, we feel sure we can take part in subsea development.

“I repeat, we are not at the moment present in the subsea industry, but Iknow we can participate with many of the technology providers and worktogether to expand this very demanding market. So we’ll keep an eye on thedevelopment and be one of the players there too.”

On a final note, he commented: We see that Italy is suffering from thisglobal economic crisis and the political instability. However Rosetta Marino hasa lot of work and we see a brilliant future for our continuing growth in thecoming years, and I think that promise includes growing outside the Euro zoneand that has to include Africa.” ■


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Rosetti Marino’s strategy is to carefully assesswhere they can be competitive.




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HONEYWELL HAS BROUGHT to market itsHPS Series High Pressure Premium Switcheswith a two million life cycle rating, IP67environmental sealing, and multiple port andtermination options, which the companyclaims helps to improve equipment uptime,simplify rapid design and assembly, andreduce total production costs.The HPS Series are durable, reliableelectromechanical gauge pressure on/offswitches that are available with either singlepole single throw (SPST) or single pole

double throw (SPDT) circuitry.The switches are suited for use in ruggedtransportation and industrial applicationsthat require the making or breaking of anelectrical connection in response to apressure change of the system media.The HPS Series switches feature a switchingpoint accuracy of up to ±2 per cent,providing efficient operation of equipment.They also operate in temperature ranges fromof -40°C to 120°C which means it can beused in a variety of environments.

TRANSPORTING OIL AND gas from high-pressureand high-temperature reservoirs through pipelinesis a major challenge.

A pipeline laid on or buried in the seabedresponds to high pressure and high temperature byexpanding, resulting in axial displacement (alsoknown as end expansion), lateral buckling,upheaval buckling, or a combination of these. Suchpipeline movements can cause failures and arecritical to the integrity of a pipeline. When apipeline is subject to high pressure and hightemperature, its ends expand longitudinally andexert large forces and bending moments ontoadjacent tied-in structures connected to it. The tied-in structures must be designed to withstand theseexpansions and forces. Dumping rocks along thepipeline or a giant spool installed at the pipelineend have traditionally been costly alternatives.

SliPIPE works to reduce the end forceexpansion exerted at the tie-in by absorbing theend expansion through sliding within itself andsimultaneously reducing or eliminating theeffective axial compressive force in the pipeline.The concept consists of an outer pipe connected

alongside a pressure chamber and an inner pipethat can slide inside them. Seals are placed at thecontacts between the pressure chamber and theinner pipe. The inner pipe slides in or out of theouter pipes in response to an axial stress that caneither be more or less than a certain value. Thisvalue is pre-determined in the design and causesan axial tension in the pipe wall to develop, whichopposes the effective axial compressive forcecomponent arising from the inner fluid pressure.

The axial tensile pipe wall force is producedby letting fluid pressure in. Between the outerpipe/pressure chamber and the inner pipe ofthe SliPIPE concept are two main seals, apartition wall seal, an environmental seal anda scraper seal. The seals are made of materialsthat allow them to function at hightemperatures and pressures.

Several practical issues that will influence theoperation of the SliPIPE have been studied andfeasible ways to overcome these are looked into.

A SliPIPE concept used for absorbing endexpansion may be pre-installed on a PLET which isthen transported and installed offshore on the end

of the pipeline, lowered onto the seabed andconnected to a manifold or riser via a short tie-inspool. A misalignment flange may be included.Alternatively, a direct tie-in (without a PLET andshort tie-in spool) is also feasible with the use of asuitable installation guide.

Key advantages with the SliPIPE concept are:6 avoids the fabrication and complicated

installation associated with giant spools6 minimises costly post-installation subsea

intervention work6 space-efficient and ideal in areas congested

with many subsea facilities.“At this stage SliPIPE is conceptual and will

require refinement, engineering and qualificationbefore it can be realised in an actual project,” saidDNV’s pipeline director Asle Venås. A global DNVteam of experienced engineers has developed theconcept. The team has also taken into accountcomments from the industry and academia.

SliPIPE is a new concept developed to deal withthe end expansion of a rigid pipeline subject tohigh-pressure and/or high-temperature (HPHT)

Honeywell HPSseries switch.

AFTER AN EXTENDED programme of third-party testing, TrelleborgSealing Solutions now has 20 best-in-class materials qualified to allelements of the stringent NORSOK M-710 specification. The breadth ofthe range of approved compounds, from elastomers to PEEK and PTFEbased compounds, means Trelleborg can provide the optimum sealing orbearing solution whatever the oilfield conditions, however demanding.Trelleborg Sealing Solutions’ extensive range of innovating sealmaterials and ongoing material development help it meet industry-recognised standards, such as NORSOK M-710, which requires thatall subcomponents of oilfield equipment be approved to statedspecifications. Individual seal materials are rigorously tested andapproved based on criteria such as Explosive DecompressionResistance (EDR), sour and sweet gas ageing, compression set testsand material property tests.“In today’s oilfield market, quality and safety are paramount. Simplysaying you produce a quality product is insufficient, and claims mustbe reinforced with experience, compliance to industry standards andproven performance," said Eric Bucci, Oil & Gas segment manager,

Trelleborg Sealing Solutions Americas.Trelleborg Sealing Solutions has invested heavily in research toidentify the optimum compound for each application. All materialswere involved in tests undertaken and supervised by MERL –Materials Engineering Research Laboratory – a respectedindependent laboratory in the U.K. The standard covers all criticalnonmetallic (polymer) sealing, seat and backup materials forpermanent use subsea, including well completion, trees, controlsystems, wellheads and valves. It also applies to topside valves incritical gas systems.“Now that Trelleborg Sealing Solutions provides such an extensiverange of elastomer and thermoplastic materials certified to NORSOKM-710, including low-temperature compounds, Trelleborg is uniquelypositioned to solve difficult applications in the oilfield,” saidEuropean Oil & Gas Segment Manager, Bill Allan. “New reservoirdiscoveries in harsh and challenging environments are driving theneed for innovative materials, and Trelleborg is prepared to addressthese challenges."

New concept to deal with pipeline expansion

Optimum sealing solutions

Honeywell introduces new HPS high pressure switch

S11 ORA 3 2013 Technology 01_Layout 1 21/05/2013 15:57

41Oil Review Africa Issue Three 2013www.oilreviewafrica.com

PPIPELINE LEAKS ARE a major concern for any pipeline operator. Whether they are caused by pipeline aging, equipment failure or unauthorised extraction,

pipeline leaks can compromise safety and have aserious environmental impact.

Installing a reliable and effective leak detectionsystem will minimise the amount of productreleased, maximise public and employee safety,reduce environmental impact, minimise clean-upcosts, and limit legal liability. An accurate andreliable leak detection system will also assistoperators in meeting local regulatory requirements.

Over the years, various technologies andstrategies have been implemented to detect leaksand these systems generally fall into threecategories. Pipeline inspection gauge (pig) basedsystems, where a pig is passed along the length ofthe pipe, external monitoring where the line isinspected manually and internal fluid statemonitoring. While pig based and manual systemsare scheduled, event based activities; internal fluidstate leak detection systems based onComputational Pipeline Monitoring are continuous.By using the latest high accuracy Coriolisflowmeters, accuracies of less than 0.2 per cent ofthe maximum line flow rate have been reliablydetected in less than ten minutes.

Each of these methods is summarised as follows: 1. Pipe integrity monitoring (eg, pipeline pigging) Pipeline pigs carry a range of surveillance andmonitoring equipment and are used at regularintervals to check the internal condition of a pipe. Ifa leak is suspected, a pig with acoustic equipmenton board is used to locate the leak. This occurs whenthe audio output reaches a maximum. Using radiotransmitters, the exact location of the pig in thepipeline can be confirmed and the leak investigated.

Unlike instrumentation based systems, pigging isnot a continuous method of monitoring and thisintroduces delays in leak detection. There can alsobe problems with pigs getting stuck in pipelines dueto the build-up of debris. Noise generated byobstacles such as welds may also affect the acousticoutput as the pig travels along the pipeline. Tocompensate for this, some pigging systems build up

an acoustic map of an individual pipeline so anychanges can be more easily detected. 2. External monitoring (eg, human inspection,surveillance by unmanned drones or satellites,vapour sensors, acoustic emissions monitoring,and IR sensing) The simplest method of pipeline monitoring is byregular inspection, either by walking the line orsurveillance using vehicles or aircraft. Howeverthese systems are labour intensive and may exposeoperators to difficult or dangerous terrain. Even if theinspections are carried out regularly, pipeline leakscould remain undetected for some time. 3. Internal fluid state monitoringInternal fluid state monitoring is where the hydraulicstate of the fluid in the pipeline is monitored. This isthe most common method and this type of leakdetection is normally software-based. It is calledComputational Pipeline Monitoring.

Computational pipeline monitoring Introduced by the American Petroleum Institute(API) in 1994, Computational Pipeline Monitoring(CPM) uses pressure, flow and temperatureinformation to estimate the hydraulic behaviour ofthe product being transported. Based on theestimation, the results are compared to other fieldreferences to detect the presence of an unusualsituation, which may be related to a leak.

CPM uses two principal methods used for leakdetection. Pressure or acoustic analysis analyses thepressure wave in the fluid that is caused by a leak.This method detects leaks quickly, (a function of thespeed of sound in the fluid), however, the leak mustbe fairly large for the system to pick it up.

The second method is based on the materialbalance of the pipeline (or segments of thepipeline). By comparing the quantity of materialentering the pipeline, with the quantity ofmaterial flowing out, any differences that cannotbe accounted for by changes in temperature,pressure, or linepack (changes in the volume ofmaterial in the pipe), suggest the existence of aleak. Combining these two methods to maximisedetectability and sensitivity in both flowing andstatic pipeline operations, provides the mosteffective leak detection systems.

Material balance systems Material balance systems can be based on eithervolume or (direct) mass. For the purposes of thisarticle, the term ‘material balance systems based onmass’ refers only to systems that utilise direct massmeasurement. 1. Volume-based For material balance systems based on volume,the volume measurements at each end of thepipeline (or segment) must be comparable.Differences in temperature and/or pressurebetween the input and output measurements, willintroduce errors that must be compensated for.

Material balance systems based on inferredmass (mass derived from volume) are essentiallyvolume-based, and have all the limitationsassociated with volume measurement.

In addition to measuring volume, temperatureand pressure measurements are required at bothends of the line. The volume measurement is thenconverted either to ‘standard’ conditions or tomass (the preferred solution). However, if eitherthe temperature or pressure varies significantlyinside the pipeline, the end measurements are nottruly representative and the applied compensationfactors are not accurate. Temperaturecompensation, in particular can be challenging ifthe pipeline is exposed to different environments(e.g., if some segments are below ground, under abody of water, etc.). 2. Mass-based For material balance systems based on mass, notemperature or pressure compensation is requiredbecause mass measurements are not affected bytemperature or pressure.

Accordingly, material balance systems basedon mass require less instrumentation, and sinceonly one measurement device is used, they aretypically more accurate.

Even the most rigorous leak detection system,whether volume-based or mass-based, will requirelinepack compensation. Linepack compensationadjusts measurements for the amount of material inthe pipe. Linepack compensation is implemented bythe software component of CPM systems and is oneof the main reasons that the software is required.

Typical installation using Coriolis meters for pipeline material balance.

In this article, Christopher Connor, Emerson Process Management, explains how thelatest leak detection systems based on Coriolis flowmeter technology, can helpoperators to meet regulatory requirements and detect leaks effectively, with aminimum of false alarms.

Accurate and reliable pipeline

leak detection

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Effective mass balance system requiredAlthough a mass balance system is theoreticallyaccurate, in reality its accuracy depends on theaccuracy of the mass measurement devices and thelinepack calculation.

Meter accuracy directly determines the system’ssensitivity or ability to detect small leaks and theoverall accuracy of the system is a function of theleast accurate meter. Accordingly, all meters mustbe of custody transfer quality, capable of providinghigh-accuracy measurements. All measurementsmust be repeatable through changing processconditions (changing flow rates, density, viscosity,etc.) and finally, all measurements must be reliableand sustainable over time. Experience has shownthat flowmeters based on Coriolis technology areideally suited to meet these requirements.

Emerson’s Micro Motion range is a goodexample of the high accuracy available from Coriolisflowmeters. Various models are available with anaccuracy specification of 0.1 per cent. Forapplications where an even higher accuracy isrequired, an enhanced model is available with anaccuracy specification of 0.05 per cent. The highaccuracy of these meters makes them an idealchoice for direct mass measurement leak detectionapplications. An additional benefit is that metersbased on Coriolis technology will measure density

as well as mass, and this additional data can beused for secondary functions.

For example, the density measurement can beused to monitor changes in process fluidcomposition, eg, to track batches of product as theypass multiple metering stations, or to monitorproduct quality. Coriolis meters measure the densityof the entire flowing stream, independent of fluidcomposition. This makes them more accurate forprocess fluids with complex or variablecomposition, than other technologies that infer thedensity (e.g., using look-up tables).

Built-in meter verification is a recent innovationthat enables a calibration check to be quickly madewithout removing the meter from the line. Ensuringthat a flowmeter is correctly calibrated means thatwhen there is an out-of-tolerance variation betweenmeters being used for leak detection, operators canquickly rule out false alarms or meter damage.

Real life situations The ‘ideal’ application is where a well-understoodrefined product is being monitored. In reality thistends to be the exception rather that the rule andthere are many factors that make accuratemeasurement problematic. Examples includefluids of variable (transient) composition eg,produced crude with gas, water and suspended

solids, fluids with gas/liquid fractions, and fluidswith variable viscosity or density.

There are also situations which make itimpossible to follow installation best practice formeasuring instruments, for example where thereare short meter runs or installations near elbows,etc. In addition there may be difficult operatingsituations (eg, empty-full-empty).

Where operating conditions are less thanideal, the highly accurate, direct mass flowmeasurements produced by Coriolis mass flowmeters makes them the meter of choice. Inaddition, because they do not rely on externalpressure or temperature measurements orconversion to reference conditions, they are notaffected by changing conditions. Because Coriolismeters are delivered from the factory pre-configured, they usually do not need anycalibration in the field. When compared withother technologies, users do not require a highlevel of expertise to design and operate ametered run of pipe.

Coriolis flowmeters offer many other benefits.For example, they have a high turndown ratio,which ensures accurate results over a wide range offlow rates. Their robust design isolates sensitivecomponents from the process and insulates themfrom the ambient environment. In addition, they do


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not require long pipe runs before or after the meter,so they can be installed in more accessiblelocations.

Finally, gas entrainment in mostly-liquidstreams is a situation that can occur frequently inleak detection and is challenging for conventionalmeters. For example, produced crude oil haswhatever gas fraction nature feels appropriate. Thismakes achieving complete gas-oil separation formeasurement challenging. Likewise, a chemicalprocess that is operating slightly off its set pointcan produce a mostly liquid flow with a vapourfraction. This can be a problem when the flow isbeing measured by a meter designed for liquid flowmeasurement.

In both instances, the presence of vapour, andthe transient amount of it, can seriously degrademeter accuracy and consequently leak detectionsensitivity and reliability. It is important therefore toutilise Coriolis technology that can tolerate vapourfractions and deliver acceptable accuracy (aroundone per cent) in the presence of vapour, to avoidcompromising leak detection.

For example, using Emerson’s Coriolisflowmeters, leaks of less than 0.2 per cent of theline flow rate have been reliably detected. While itis possible to achieve this level of success withother meter types, the use of Coriolis technologymakes it far easier to accomplish, particularly indifficult applications.

Summary The most effective leak detection systems utilise acombination of a pressure or acoustic analysissystem and a material balance system. The mostaccurate, reliable and robust material balancesystems incorporate linepack compensation and arebased on mass measurement, rather than volume.

Emerson’s flowmeters measure mass accuratelyand reliably across changing process andenvironmental conditions, with no requirement forexternal temperature, pressure, or density data.Using leak detection systems that include Coriolisflowmeters, pipeline operators can meet regulatoryrequirements and detect leaks effectively with aminimum of false alarms. In addition, Coriolismeters can tolerate vapour fractions and alsosupport a variety of secondary functions such asprocess fluid monitoring or custody transfer.

Coriolis technology in action The following four examples outline applicationswhere Micro Motion Coriolis meters are beingsuccessfully used for leak detection.

Leak detection using flow reconciliation A refiner needed a leak detection system to meetpipeline monitoring requirements. The pipeline is120 km long and 300 mm in diameter, andcarries various crude oils including sweet, sourand heavy crudes.

The refiner chose to use flow reconciliation tomeet regulatory requirements. Three meteringstations were installed; one at each end of thepipeline and one in the centre with PositiveDisplacement (PD) meters being installed at each

station. With the constantly changingenvironmental conditions and fluid properties, thePD meters were not sufficiently accurate to meetregulatory requirements. As a result, the refiner wasunable to demonstrate to the authorities that therewere no leaks currently in the pipeline, or that aneffective leak detection system was in place.

A project to improve the flow reconciliation wasundertaken. This required the installation of twoMicro Motion Coriolis flowmeters from Emerson, oneat each end of the pipeline, with the mass totalsfrom these two meters being compared every hour: 6 If the totals matched within 0.7 per cent, the

pipeline was assumed to be intact. 6 If the totals varied by more than 0.7 per cent, an

alarm was generated. The conversion to Micro Motion meters was

immediately successful enabling the refiner to meetits regulatory requirements. However, when massflow rates from the two meters were compared on acontinuous basis: 6 If pipeline operation was steady, the meters

agreed to within 0.1 per cent. 6 If pipeline operation changed (eg, a tank was

switched or a pump was shut down), thereadings would diverge until flow again reachedsteady state. These results demonstrate the importance of

linepack compensation in leak detection systems. Ifonly the hourly reconciliation is used, it would bepossible for a leak to go undetected for up to anhour, but a comparison of flow rate data cannotdistinguish between pipeline events and leakswithout the assistance of linepack compensation.

Leak detection using a 4-m voting system A refiner sends products from the refinery to a tankfarm located on the opposite bank of a large river.The pipelines run below the riverbed and the localauthorities required a leak detection system tomonitor for leaks into the river. The original systemused a volume-based, materials balance system withboth PD and turbine meters. However, this systemgenerated a large number of false alarms, so a newsystem based on mass measurement was designed.

To increase statistical accuracy and reliability,four Micro Motion Coriolis meters were installed oneach pipeline, two at each end. Mass flow data isreported to a central station. If the four metersagree to within 0.5 per cent, the pipeline isassumed to be intact; if any one of the four metersis outside this limit, an alarm is generated. Becauseof the relatively short length of the pipeline,linepack compensation was not needed. Based onthe success of this system, it has beenimplemented on a further 18 pipelines at this site.

Leak detection with linepackcompensation The state of Alaska has established some of themost stringent pipeline leak detection requirementsin the United States and possibly the world. Thismeans that all leak detection systems areinspected, tested, and monitored by the state.

At one refinery, PD meters were installed atvarious points along a large crude oil pipeline.Although a statistical pipeline monitoring systemwas in place, the leaks were being masked by thenoise of the PD meters. The site was unable to passthe state audit.

When the replacement Micro Motion meterswere installed, mass flow rather than volume flowwas reported to the leak detection software. Theleak detection system now reached the requiredlevels of effectiveness and received state approval.

Leak detection on pipeline transportingmultiple fluids and custody transfer An 800 km pipeline in Canada transports C2+(ethane and higher hydrocarbons), condensate, andcrude oil. Only a mass-based Coriolis system caneasily measure process fluids of such variedcomposition. Other methods either infer density fromlook-up tables or require a separate density device.

The pipeline operator has installed Micro MotionCoriolis meters, and uses them for leak detectionand for custody transfer – with the same meterssupporting both functions. ■


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Coriolis meters used for storage and pipeline leakdetection at an oil terminal.


Figure 1 shows two examples of changes in pipelineoperation and the resultant effects on measurement. Thedata lines represent mass flow rate from Meter 1 at thetank farm (the pipeline entrance) and Meter 2 at thepipeline exit. The meter readings are in close agreementuntil Event 1 (a tank switch at the tank farm). The tankswitch registers only on Meter 1. When the disruption isover, the meter readings again agree until Event 2 occurs (apump shutdown at the pipeline exit). Both meters registerthis change, but at different times. Event 3 (pump restart) isalso registered by both meters but at different times.



TTHE MAJORITY OF pipes create fit up

problems. The only way that pipesapproach being round is when they aremachined internally and externally, a

manufacturing process that is not always possible."Manufacturers try to make pipes as

accurately as they can but they cannot beformed precisely enough," said Dr Tim Clarke,director of Optical Metrology Services (OMS)."There will always be a necessity to take furthersteps to meet the most demanding applicationsfound in the oil and gas industry."

A size discrepancy of just half a millimetrebetween pipes can mean the differencebetween success and ecological disaster. Afatigue-sensitive steel catenary riser is subjectto dynamic stresses as it descends a mile froma vessel (or a spar) to the sea floor, for example.The topside structures are subject to extremeweather conditions (such as hurricanes) whilethe pipe itself can be buffeted by underwatercurrents that are so strong that strakes aretypically fitted to pipes to stop them vibrating.

The shape of a pipe is largely dependent onthe method of manufacture and, for eachmethod there will be variability that is typicalfor that process. Further shape variations willoccur depending on the size of the pipe and thespecific equipment used to manufacture thepipe. One type of manufacture is the UOEprocess. These pipes are called UOE pipes asthey are first formed into a U, then an O andfinally expanded to their final size. Each part ofthe process leaves its signature on the pipe. Theexpander is a tool that is made up of a numberof segments. The pipe is enlarged by theexpander in order to attempt to create auniformly round pipe. While it may besuccessful in taking out some features leftbehind from the Uing and Oing process, itleaves behind its own imprint in the pipe.

When the Eing process does not create acircular pipe, a variety of shapes are possible.Sometimes the pipes are oval or are not circularin the weld region, an effect known as'peaking', but this term arguably does notadequately cover the sheer variety of shapeabnormalities in the region of the weld.

UOE pipes are used in the oil and gasindustry at the point when seamless pipebecome difficult to manufacture to the desirestandards. Unlike UOE pipes, seamless pipes aremanufactured red hot. The manufacturingprocess is complicated. A solid cylinder of red

hot steel is pierced through the centre with arod, then the red hot tube goes through furtherstages where it is rolled into shape against aninternal mandrel. The final pipe is far longerthan the original ingot.

Seamless pipes have a variety of shapeswhich can vary between mills and duringproduction runs. In some cases the pipes aremade in double lengths and cut in half. Theends of these pipes can be more out of shapethan the middle due to the closeness of the endto the piercing.

Extra attention for deep water pipesPipes that will be used in deep water (morethan a kilometre under the sea) must be givenextra attention, particularly steel catenaryrisers (SCR’s), which bend up from the sea bedand lead up to a platform or FPSO. Weatherextremes and sea currents can cause seriousproblems if they are not welded to an exactspecification.

"If the pipes don’t match any closer than0.5mm a bad weld can occur which could leadto a failure of a riser which would be anenvironmental disaster,” said Clarke.

Better fit up of pipes leads to better weldsand this can prevent such problems occurring.OMS also measures pipes more quickly, easilyand accurately than has previously beenpossible, taking a matter of seconds for 2,000measurements of both the internal diameterand wall thickness of the pipe.

OMS's Automatic Pipe Checker uses lasersto measure internal and external dimensions.The device is placed inside the end of the pipe

so that an arm with lasers attached can encirclethe pipe taking accurate measurements to buildup a map of the pipe shape, both on the insideand the outside. The information from the toolis sent to a computer via Bluetooth technology,which displays all the points of the circle, in aline, as though the pipes circumference hasbeen unwrapped.

The software devised by the company isthen able to perform a number of tasks thatsolve the problems posed by out-of-shape pipes.One scheme is to find the pipes that fittogether exactly.

"Sometimes the pipes we get are difficult touse," said Clarke. "We have to find pipes withthe right diameter and then find pipes that arethe right shape. It can be an extraordinarilycomplex thing to do."

In other cases OMS will assist in creating acounterbore plan in order to create pipes thatare good enough to be used without matchingthem together in a specific order. Counterboringis a process of removing material from theinside of the pipe to obtain a smooth circularinside, which is good for welding and easy to fittogether in any order. Either way, OMS is able todeliver pipe joints to the client that are as goodas they would be if the pipes were round.

Using the OMS tools saves time - being ableto measure as many as 400 pipe ends in oneday is at least three times faster than usingregular measurement tools that only measure ata few discrete locations around the pipe.Companies are able to keep their projectschedules on track and as some projects involvemeasuring more than 2,500 pipes, this timesaving is hugely valuable.

Project engineers also have the security ofknowing that the dimensional part of theirproject is being managed by experts who haveacquired skills and experience over many yearson a wide range of projects.

Clarke said, “Offering our clients thecomplete solution to their problems is our aim,we know we can deliver that, in fact we do.” ■

A size discrepancy of justhalf a millimetre between

pipes can mean thedifference between success

and ecological disaster.

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A common assumption made by many people is that pipes are round and have a constantwall thickness. It is also assumed that to all that needs to be done to fit pipes together is tofind and join together pipes of a similar size. These assumptions are incorrect, however, as DrTim Clarke from OMS reports.

Round pipes -

an engineer’s pipe dream




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SWAGELINING LTD HAS detailed the successfuldeployment of its integrated lining system ina water-injection riser offshore Angola. The single leg offset riser (SLOR) concept,installed by J-Lay, was utilised for the firsttime with a polymer lining system designedspecifically for the application. Themanufacturing of the base double joints wascompleted in the UK before they were shippedto Angola for installation.

The SLOR configuration included bespokesections for the upper and lower riserassemblies which also required lining. With a20 year service life, the design of the polymerlining system had to accommodate the J-Layinstallation process and be able to withstandvery high operating pressures. The verticalorientation of the riser, which was in water2,000 metres deep, raised a number ofengineering questions surrounding thetightness of fit, self-support and anchoring forthe liner system.

A co-ordinated collaborative effortThe project was very much a co-ordinated,collaborative effort. Heerema MarineContracting, acting on behalf of BP, wasresponsible for the manufacture andinstallation of the SLOR by J-Lay, using theirsemi-submersible crane vessel, Balder.

The design of the SLOR was by 2H andPipeline Technique Limited (PTL) wasresponsible for the fabrication of the riser. PTLselected Swagelining Limited for the designand delivery of the polymer lining system. Allstakeholders worked openly with each other toidentify every relevant technical issue to thefirst-time use of the technology in the SLOR.

In what may have been the most extensivepolymer lining system design report yetcompleted for a water injection system,Swagelining Limited produced a wide range ofevidence that the liner system was fit forpurpose.

Every individual aspect of the performanceof the liner system was analysed for insertionand in-service loads. Design calculations weredeveloped and a substantial pre-qualificationtest programme was also established andsuccessfully completed.

To support the validation exercise,Swagelining Limited produced extensivehistorical records from previous projectsincluding the condition assessment of a 13-year-old 'Swagelined' spoolpiece with aWeldLink connector attached, recovered fromthe seabed. Further data from extensive fully-instrumented hydrotests of Swagelined spoolswith WeldLink Connectors further enhancedconfidence that the system would prove fit forpurpose.

The water injection system, comprisingSwagelined polymer liners and WeldLinkconnectors, was successfully hydrotested to

410 bar without ingress of water behind theliner, proving the technology's efficacy atelevated levels.

Despite a very challenging fabricationschedule, PTL was able to complete the riserdouble joints with time to spare and withinthe budgeted costs. The challenging upper andlower assemblies were successfullySwagelined as a separate scope undertaken atHMC fabrication shops in Holland. The SLORnow has internal corrosion protection from

end to end, ensuring that it remains 100 percent operational for its full 20-year servicelife.

The successful combination of WeldLinkconnectors and Swagelining technology hasshown that taking a collaborative approach todeveloping an integrated lining system, madeup of materials, technology and proprietarycomponents, can be a highly effective strategywhen fitting polymer lining to deep waterpipes and risers.

Collaborative effort proves successful for Angolan pipe-lining project



MMECHANICAL EXTRUSION USINGdart activation is being increasinglyrecognised by operators as a time,cost and labour saving alternative

to traditional ball activation methods. As an example, drilling bypass valves have been

conventionally cycled with balls via a polymerextrusion. However, using mechanical extrusion,Churchill Drilling Tools - an Aberdeen-baseddesigner and manufacturer of patented downholetools - has developed a highly effective andaccurate dart-based valve which can deliver up tofour times faster deployment, saving considerablewait time over polymer methods.

The company’s MX (mechanical extrusion)system allows the use of rigid darts (Smart Darts)for multi-cycle control and exploits their robustnessand HPHT resilience (up to 660°F) to deliver greaterspeed, reliability and performance. The system’sunique feature is that it has two configurableshearing modes, solving reliability and powerdelivery problems. It requires as little as 0.0075”radially for power transmission, makingimplementation extremely compact.

Users can control and power three or more toolsindependently, removing the conventional ID andobstruction conflicts between different tools in astring. This has implications for mono-cycling balland shear systems, which commonly obstruct thebore after use. These can now be turned into multi-cycling, non-obstructive, multi-tool systems. It canalso enhance multi-cycling ball activated toolsbased on polymer extrusion, by improvingperformance and delivering greater multi-toolcompatibility and inter-operability.

The system allows mechanical extrusion to bedelivered in a range of settings to suit the specificcycle application. Offering the user a variety oflatching, sealing and flow path geometries as wellas the adjustable shear mode ratings, this elementof the system provides a tangible change in stringdesign and program implementation. For example,in bypass valve implementation, users can covermultiple flow path contingencies with a single valvein hole and then choose from the range of darts theoptimal setting for the situation encountered.

The system advances the capability of simplehydro-mechanical control and its power and reliabilitybenefits into areas which were previously the domainof more complex electronic systems. Beingmechanical it is not subject to the same HPHT limitsthat affect electronics and electrical components.

Smart Darts unlock the potential of a simple circsub to deliver reliable and versatile bypass on demand.

Whatever the drilling application, whether planned orcontingency, DAV MX users get rapid and reliableswitching to the optimal flow path configuration.

The correct flow path mode is vital for a givenapplication. There is no need for DAV MXconfiguration in advance, as one tool in hole will doit all. Each bypass application has its own dart to‘quick set’ the valve into the right mode. Functionssuch as, LCM spotting, split-flow hole cleaning anddry tripping are truly “plug and play”.

The closing cycle is just as easy with a universalclosing dart rapidly deployed to allow drilling toresume quickly with no loss of hydraulicperformance. Multiple Smart Dart cycles can beperformed in any sequence.

System benefitsWhen curing losses, boosting hole cleaning orperforming other circulation applications,conventional BHA bypass relies on balls landing onseats. Landing seats are sized to withstand apressure up activation cycle and then succumb to ablow thru shear-out sequence to regain circulationto the bit. The emergence of the mechanicallyextruding dart technology as an alternative to thepolymer extrusion has presented tool designerswith an opportunity to push some of theperformance boundaries of conventional valves.

The objective for any tool is to offer maximumperformance and value whilst being as simple,reliable and flexible to use as possible. For drillingbypass valves this can be more specificallyanalysed under the following sections to assess thecurrent conventional limits. * Activation speed and ball displacementalgorithms: With heavy losses, fast activation iscritical to stem the mud being lost to theformation, over-zealous activator displacementwhich fails to take into account depth, angle andmud density parameters creates a risk of blow-thrumisfire. Conservative displacement can increasedelays and may make activation pressure moredifficult to detect from the surface. Polymerextrusion systems can therefore lead tocomparatively slow activation sequences, as timemust be allocated to displacement calculations anddetection of the activation point before curing canbegin. In contrast, darts eliminate the calculationelement and activate at high pump rates, and witha positive opening stroke clearly indicated by apressure drop, losses can be treated more quickly.* Cycling reliability: The properties of theextrusion determine the performance window of thecycle. Using polymer extrusion, the designer has to

create an interference between the ball and theseat that can withstand the landing shock andallow the ball to overcome the inertia of thepiston/mandrel in the valve before it reaches itsextrusion threshold. In single cycle circ subs thisinterference can be over-engineered to guaranteeopening, but for multi-cycling the shear-out pointneeds to be in pump range so that circulation canbe regained by extruding the ball. In order for it tobe possible to close the valve using polymerextrusion it must be possible for it to misfire bydefinition. By creating a dual shear pointcharacteristic, mechanical extrusion addresses bothreliability and the activation speed simultaneously.

The MX Smart Dart for multi-cycle control.

The system allows mechanicalextrusion to be delivered in arange of settings to suit the

specific cycle application.

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One of the most innovative recent advances in downhole activation for the drillingindustry has been the introduction of mechanical extrusion technology, incorporating thedeployment of rigid metal darts, as a means of improving cycling and control of a rangeof processes and devices.

Patented mechanical

extrusion technology



* Multi-modal/application flexibility: Whenselecting a valve it is prudent to perform a weightedrisk assessment to identify the circulatingcontingencies that are most likely for a given well.For example, whilst hole-cleaning might be a majorissue, contingency for heavy losses might beprioritised on the basis of well control. The operatorthen makes a tool selection based on these priorities.

In polymer extrusion systems, tool choice is animportant consideration because of the multipleconfiguration permutations during bypass. Theintroduction of an activation ball sets the polymerextrusion tool in primary bypass mode. However,this may not be the optimal setting, meaning eitherperformance is limited or delayed whilst smallersecondary setting balls are pumped to secondaryseats to create application specific flow-paths. Bycontrast, dart-based mechanical extrusion canoptimise bypass for almost any application in asingle step, thereby simplifying both tool selectionand application implementation.* Genuine BHA isolation: Using polymerextrusion, contamination of the bottom holeassembly (BHA) during pill spotting can occur evenwhen 100 per cent bypass has been configured. Aball on a seat seals in just one direction, once thepumps are switched off u-tubing and buoyancyforces will determine whether the ball stays on itsseat or floats/rolls away to allow curing fluids tomake their way into the BHA. Dart latching throughmechanical extrusion ensures that the isolationobjective is achieved. * Simplicity of operation and design: Complexitydown-hole invariably adds risk and unreliability.Whilst the permutations of polymer extrusionapplications can allow the skilled user to activateand configure for almost any application, the needfor skill and expertise adds risk for the operator.Multi-sized operating balls and complicateddisplacement procedures for activation can increasethe risk of error and non-productive time. Inaddition, the likelihood that full value will bereturned from financial investment in the tool isreduced because users will be naturally cautiousabout trying unfamiliar or complex procedures.

For the mechanical extrusion system, a simpleport and piston assembly housing a low profileceramic ‘socket’ to catch the darts is all that isrequired. The darts themselves determineperformance. Single use and individually sealed, thedart is kept isolated from the down-holeenvironment until the very last minute. Dartrobustness means up to 4 times faster deploymentand landing at speeds up to 2,000 ft/minute, savingin excess of an hour of wait time and giving positiveopening indications to remove any uncertainty.

Proven successSince 2011, the system has had a 100% reliabilityrecord courtesy of the high shear landing mode andthe innate stability of the mechanism in any fluidand high temperatures and pressures. As anexample, a European land operator deployed asingle dart cycle to set hole cleaning and trippingdry modes simultaneously, not only saving time butalso delivering rig floor safety that would previouslybeen unavailable.

In another instance, a North Sea operator plannedfor hole cleaning and jetting but when unexpectedlosses occurred it was simple to switch strategies andchoose a dart that would deliver LCM into theformation and protect the BHA from contamination.

The system has been used successfully inbypass valves for over 200 wells to date, includingin the Gulf of Mexico.

Handling the pressureIn December 2011, Churchill applied mechanicalextrusion to a fourth dart in a new tool for stringintegrity testing. The PTS MX™ system provides asimple yet accurate way to test a drill string up to aspecific pre-set pressure with the capability toregain circulation between each test. This allowsusers to perform multiple tests at various pressuresin a single run. The system can be run in any lengthof pipe, at any angle or temperature and with anytype of circulation fluid.

The subs have fully tapered internals, provideunrestricted circulation and have a full thru-boreprior to the first cycle. The dart is dropped andpumped into place with the load transmitted throughpins in the dart into the sub; the pins determine theshear out pressure. Pressure can be held at therequired test level for as long as necessary, and whentesting is complete a small increase in pressure isused to shear out the dart into the catcher below.The unique benefits of the system are that multipletest cycles can be performed; full circulation isregained between each test, and that the shear outpoint can be accurately modified by altering thedart’s pins before it is dropped.

The system was first successfully deployed inNorway by a major pipe manufacturer in 2011 withshearing accuracy results of 99.6 per cent. As a resultof this success, a full programme of further drillstring development applications has been scheduledusing the system. The system is also being used inthe UK Continental Shelf for leak detection inoperational drill-strings, in pre-emptive integrity testsprior to ultra-critical high-pressure phases.

Choosing the right tool for the jobThe MX™ Smart Dart™ is available under licence foruse by OEMs to overcome most of the issuesencountered with polymer solutions. The advantage isthat it does not require a redesign of their existingball activated systems. The system can easily beintegrated into existing tool designs by simple

replacement of the landing seat. The dartsthemselves are available in a range of sizes witheasily adjustable shearing points. Whereas a typicalball system will require about 13.4 per cent of thebore ID to be used for power delivery the MX requiresless than one per cent and this compactness makes itboth easy to implement and delivers the flexibility formulti-tool compatibility and inter-operability.

Both operators and service companies arestarting to look at using the system to improve BHAdesign by reducing ID restrictions and increasingoperational performance windows. This can be doneby replacing ball seats within a series of conflictingtools with dart seats that catch only the dartsintended for that tool. This simplifies the process forthe user as more options can be kept open and alsofor the tool designer who can offer the user moreflexibility and performance.

The Smart Darts provide an infinitecombination of geometries, latches, seals andchokes that can be rapidly deployed to set the toolinto its optimal configuration.

To summarise, the key system benefits forthe user are:6 Multi-tool (three or more) multi-cycling in any order 6 High speed activation6 High reliability6 HPHT to 660F6 High angle performance

The key benefits for the OEMs are:6 Easy to retrofit into existing tools (both ball

shear and extrusion types)6 Multi-tool series capability6 Multi-modal tool options controlled by the dart deployed6 Compact (Radially <1 per cent compared to

~13.4 per cent for balls)6 Infinitely more configurable for power delivery

and shearing points6 Smart Dart options for variable tool settings and

flow paths6 Total flexibility for OD/ID selection

ConclusionMechanical extrusion via dart deployment hashelped make existing processes faster, more costeffective and simpler to deploy. There is now anopportunity to evaluate whether mechanicalextrusion can become the conventional system fora range of downhole deployments. ■

The PTS MX pressure test dart provides a simple yet accurate way to test a drill string.


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ICT


CCONSIDER THE SHEER size of most oilprojects and the multiple playersinvolved. Then consider them fromthe point of view of a hacker or cyber

terrorist.There is, theoretically, no shortage of potential

attack points where IT could be present in theform of computers, monitors or wireless links.They range from rigs, pipelines, refineries, supplyand transport vessels, geological surveys and HQsor commodity trading operations to any one of alarge number of oilfield service companies andsubcontractors. How well are all these pointsbeing protected?

That is one of the questions ABI Research’sCyber Security and Smart Grids Research Services*asked recently in a review of oil and gas industrycybersecurity spending. It suggested thatrealisation of the financial implications ofpersistent cyber threats will boost cybersecurityspending on critical infrastructure in the oil andgas industry; it will reach US$1.87bn by 2018. Thisincludes spending on IT networks, industrialcontrol systems and data security; countermeasures; and policies and procedures.

Today oil and gas infrastructure is not assecure as it needs to be. ABI refers to “industrialcontrol systems full of unpatched vulnerabilitiesto the internet, where cybercriminals roam withimpunity”. It continues, “These systems are poorlyprotected against cyber threats — at best, they aresecured with IT solutions which are ill-adapted tolegacy control systems such as SCADA.”

In fact cyber attacks have already been carriedout, through high profile intrusions like Shamoon(a computer virus used against Saudi Aramco inSeptember 2012) and Night Dragon (a multi-technique cyber attack used against a number ofenergy companies). There may even be others,albeit they have not been publicised because

energy companies would not be keen to advertisethe fact that their security has been compromised.

Proper investment in security measures However, speaking to Oil Review, ABI Researchsenior cyber security analyst Michela Menting isreassuring — though not unequivocally. Referring tothe attack points mentioned earlier she says, “Intheory, all these points can be monitored andprotected if there is proper investment in securitymeasures. This means a multi-layered approach tosecurity — at the end-point, in the network andaround the data, whether it is at rest or in transit. Itshould not matter what the type of end-point ornetwork is — whether it is an RTU [remote terminalunit], a computer, or a sensor, or whether thecommunication is fixed or wireless. There aresecurity mechanisms available for all of them.”

Of course, as she notes, there can be problems— often focused on something as simple as basiccost. Does it make sense to protect all theseendpoints in view of the risks?

More worrying perhaps is the problem ofknowledge. As she says, “Operators or managementmay simply not be aware that there are risks toparticular terminals or data.”

And it’s not just about the areas where IT ishoused. An E & P operation will use multiplecommunications technologies — from SCADA, GSMand TETRA to satellite, microwave, fibre optic andPSTN, at the very least.

“Certainly the more vectors, the greater therisk,” Menting agrees. And of course it would be

difficult to put into place one system to monitor allof them since a number of service providers wouldbe involved across mobile, fixed and ISPs, all ofthem employing different security mechanisms fortheir networks. “For this reason,” she says, “thefocus from the E&P operator should be onprotecting the data, since the network security willbe largely out of their hands. This can be donethrough encryption.”

Of the various communications technologiesmentioned, SCADA (supervisory control and dataacquisition) seems to be one that ABI regards asamong the most vulnerable. Menting herself hasproduced a white paper going into more detailabout SCADA security. Called PetroSecurity in theDigital Era: Legacy Systems vs. Cyber Threats** itpoints out that SCADA systems use legacytechnology and transmission protocols that are noteasily replaced. They also have a very long lifecycle (often over a decade) and security audits areless likely. Why?

SCADA is a type of industrial control system(ICS). Such systems are computer controlled andusually monitor and control industrial processes.SCADA systems are likely to be large-scaleprocesses that can include multiple sites, and largedistances. And in oil and gas they are, it seems, justabout everywhere.

The white paper explains, “Such systems enableremote operators to make set point changes ondistant process controllers, to open or close valvesand switchers, to monitor alarms, and gathermeasurement information from, for example, an oilor gas field, a pipeline system, or an offshoreplatform.”

It’s hardly surprising that you wouldn't want toturn them off for too often long to check securitybut the white paper also suggests that there is lowsecurity awareness among SCADA operators. In fact,it says, “SCADA system vulnerabilities in particular

Today oil and gasinfrastructure is not as secure

as it needs to be.

Cyber criminals are a threat to oil and gas infrastructure. But how much of a threat? And how prepared is the oil andgas industry for these invisible attackers? In the first of two articles on cyber security Michela Menting of ABI Researchtells Vaughan O’Grady about some of the cyber threats the industry should fear — and why they should fear them.

The invisible

attackers

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represent over half of all ICS vulnerabilities”.So what threats do these and other systems

have to be ready for, at least in theory? Whatmethods would cyber attackers use to disrupt orhack oil and gas company communications?

“Cyber attackers can disrupt the corporatenetwork of an oil and gas company through anynumber of tried and tested cyber attacks — denialof service (DoS) attacks, SQL [Structured QueryLanguage} injections to breach the web-facing sitesand gain access to the network, or socialengineering techniques like phishing to steal loginsand credentials,” Menting explains. “Once insidethe network, the cyber attacker can either remainlow profile and steal data, or infect the system withdisruptive malware that will impair the properfunctioning of the systems.”

Attacks against the industrial control systemsare less common, but have also happened. Similarattack methods are used for the corporate networkattacks, except that the forms of malware infectingthe system may be written specifically for ICS. “Theytravel through the corporate system looking for away into the ICS. Once there, they could potentiallydisrupt the flow of information between RTUs andsensors, or with SCADA systems,” says Menting.

And these assaults are far from simple. AsABI points out, Night Dragon used spear-phishing, social engineering, Windows bugs and

remote administration tools (RATs). What do suchterms mean?

Menting explains: “Spear-phishing is a targetedform of social engineering. It looks to exploithuman weakness in order to get access to aparticular system. It implies that the targetedperson has been the object of study by the attacker.For example, a management figure at an oil andgas company is sent an email from a supposedlytrusted source with attachments that would be ofinterest to that figure — the email could come froma law firm or third party supplier that the companydeals with regularly, including a pdf entitled E&POperations in China, or SEC Filing for OilCompetitor X. Often, the attackers will try andcompromise a less well protected third party to tryand gain access to a better protected target. Socialengineering, especially target ones like spear-phishing, can be difficult to detect. Once the pdf isopened, the malware will usually infiltrate thecorporate system. Many spear-phishing attacks areemployed in espionage operations, so they willremain hidden in the system.”

She continues, “The perpetrator will exploitvulnerabilities in the systems, usually Windows if itis a corporate system, by using remoteadministration tools (RATs). These allow remoteaccess to a PC. Usually used by IT administrators totroubleshoot systems remotely, RATs have known to

be used maliciously in such operations. Theseinclude moving or copying files, changing settings,registry management for example.”

Zero-day exploitsAnd then there are zero-day exploits. These arevulnerabilities in a system or application that havebeen found by malicious cyber agents but not yetby the developer of that system or by securityprofessionals. Therefore, there is no known patchfor that vulnerability. They are even a form oftradeable commodity in their own right. “Exploitpacks [which demonstrate the vulnerability of anetwork] which include zero-day will sell muchhigher in the digital black-market than thosewithout any zero-days,” says Menting.

These may be the highest profile cyber attacksbut they are far from the only ones. Is the energysector prepared? Not really. Can it be? Yes. Find outhow in part two of this feature. ■

*ABI Research is a market intelligence companyspecializing in global technology markets. Formore on ABI’s cyber security research service,go to :http://www.abiresearch.com/research/service/cyber-security/ http://www.abiresearch.com/whitepapers/petrosecurity-in-the-digital-era/

ICT

Company Name ............................................................PageArik Air International Ltd. ................................................................25ARKeX Ltd. ..........................................................................................39Baker Hughes......................................................................................52BVEE International ............................................................................19Crestchic Ltd. ......................................................................................37CWC ......................................................................................................42DMG World Media Dubai Ltd. ........................................................47Doris Engineering..............................................................................15Emerson Process Management ........................................................5Epic Atlantic Ltd. ................................................................................29GEFCO ..................................................................................................33Hempel Czech Republic SRO ..........................................................31JC International..................................................................................27KAREVA Marketing GmbH ..............................................................13Magnetrol International N.V. ..........................................................21MSAR ....................................................................................................45Olivecrest Resource Services Limited ..........................................35PEM Offshore Inc. ................................................................................2Portwest Clothing Ltd. ....................................................................23Reed Exhibitions ................................................................................36Sky Vision Global Networks ............................................................11Smit Lamnalco Netherlands b.v ......................................................7Tilone Subsea Ltd.................................................................................7Tolmann Allied Services Company Ltd.........................................51Trade House TMK ................................................................................9

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