Sunday, February 24, 2013

Lokring: No More Hot Work

Saving money is just a bonus for engineers using new carbon-steel connections in their piping systems. Other benefits include a safer work environment and shorter project schedules.

But what really matters to engineers is the fact that Lokring makes their job significantly easier by allowing them to make connections without associated hot-work issues.

In the past, engineers in charge of repairing or installing permanent piping systems were limited to using hot work — work that involves burning and welding that might lead to fire or explosions. In addition to the obvious safety issues, welding is a source of high costs and often lost productivity for the oil and gas companies & contractors that rely on it.

"For offshore facilities and other upstream sites that use it, hot work is a major issue, and they prefer not to do it," said Martin Parker, international sales & operations director, Lokring Europe Ltd., which pioneered the LTCS-333 Process Fitting product in Aberdeen. "First and foremost, the concept gives them a 'cold work' solution."

Lokring's stainless and carbon steel connections aren't new; they have been prevalent in utilities, steam, process services and a number of process applications since the early 1990s. Relying on Lokring's elastic strain preload (ESP) technology, Lokring fittings eradicate the need for welding by sealing pipes during an installation without the use of heat.

The technology works like this: During a piping installation, the axial movement of the Lokring driver over the fitting body swages the body onto the pipe surface, compressing the pipe wall first elastically and then plastically. When the pipe wall resists this swaging action, it generates high unit compressive loads at the contact points. These contact stresses are high enough to plastically yield the pipe surface under the multiple sealing lands, forming a 360-degree circumferential, permanent, metal-to-metal seal between the pipe and fitting body. Finally, the installation process causes the Lokring driver to grow slightly in diameter — an "elastic strain" — so that it exerts an elastic, radial preload on the metallic seals. This secures the fitting for the life of the connection.

Several years ago, Lokring saw the opportunity to better serve the marketplace by developing a product that achieves the same integrity as welding but removes many of the challenges and long-term costs of hot work. In January 2010, the company introduced a new LTCS-333 Process Fitting, based on its tested ESP technology. Using the same design, LTCS-333 Fittings incorporated a new material — low temp 4130 carbon steel — that provided a new scope of capabilities for users.

Prior to use, the new fittings undergo extensive mechanical testing to verify the mechanical and sealing integrity of the connection. This includes burst, tensile, torsion, flexural fatigue, impulse & vibration, corrosion & fire testing. The carbon steel material that is used for LTCS-333 Process Fittings is impact tested thus can be used on low carbon steel applications and also complies to NACE.

"Testing has been comprehensive," Parker said. "It has enabled the fitting to be used on piping systems with an increased corrosion allowance of one-eighth of an inch from what was one-sixteenth of an inch on the standard design."

The result is a superior quality, leak-free fitting that is extremely reliable, easy to install and requires no heat for installation in a far wider scope of applications.

"Safety is the clearly the biggest thing," Parker said. "But to be honest, key engineers know it's also a no-brainer in terms of cost. So they also know automatically that it will reduce their time and produce real savings."

The addition of LTCS-333 Process Fittings also enables engineers to use Lokring Technology in applications that they couldn't before, specifically, in cases where hot work poses a high risk — i.e. open and closed hazardous drains and vents, gas-lift, flare gas, propane, butane, LPG, hydrocarbon, sour water and sour gas, diesel and chemical injection.

Furthermore, with Lokring, fabrications can be made onsite and systems and can be fully field-routed, significantly reducing design, fabrication and off-site costs while still enhancing safety.

"You don't have to necessarily fabricate onshore and ship pipework offshore," Parker said. "So it's superior to a weld because you can avoid post-weld heat treatment (PWHT). You also have no decontamination, no flushing, no purging, no hot-work permits and no enclosures or fire tents, no atmospheric tests and possibly a reduction in scaffolding. You also have a much lower rework rate whilst eliminating heat affected zone (HAZ) issues and also nondestructive testing (NDT) costs."

"Welding can be an expensive process, and it's not just about the actual weld," Parker said. "There are numerous challenges associated with the process & they all add up to time and cost."

As well as the benefits in Maintenance, Repair & Operations – Lokring is used on Projects & Turnarounds providing more efficiency & reducing schedules. Training is provided to non-skilled personnel, so that coded welders can focus on large-bore or critical path piping. This means multiple trades can be stacked during Lokring installation, contributing to higher productivity and quicker turnaround times.

"Lokring installations have been proven to make significant cost savings over welded pipe, documented at between 25 and 62 percent," Parker said.

Although utilizing piping connection technology that eliminates hot work and saves money may seem like a formality on paper, but winning over engineers isn't as simple as you'd expect.

Since launching the LTCS-333 in January 2010, Lokring has helped many global oil and gas companies, and their contractors and fabricators operating in upstream sectors, replace their welded systems with Lokring's pipeline solutions. Yet while many engineers have eagerly embraced the new technology, other groups are hesitant to move away from traditional ways of doing things, even if it makes their jobs easier.

"Welding is an industry steeped in tradition, accountability and documentation," Parker said. "So sticking with the status quo is perceived as less of a risk to the decision-maker than going down a route of change. In other words, sometimes welding is the "easier" option for those away from the plant.

"We're asking engineers to make a paradigm shift and go away from something that's the norm. While in many ways it's an improvement — it's safer and more productive & equivalent integrity— there's a hesitancy of some engineers to change."

Switching from welding to the Lokring system for piping applications also requires a lot of upfront administration from engineers, who must write specifications and produce required documentation to change. According to Parker, swaying engineers has not simply been a matter of showing them that this technology offers increased benefits over welding, we must show that there is no compromise in quality or integrity. We have also developed similar protocols that provide the same accountability & "insurance policy" that installations are safe & appropriately selected.

"So it offers the same integrity of the weld with a number of performance benefits, from increased productivity to lower overall cost. The technology is significantly easier to use and it addresses almost everything in regard to the challenges that engineers have right now."

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

View the original article here

MOG Confirms 'Excellent Permeability' at Italy Well

Mediterranean Oil & Gas Plc (MOG) announced the safe and successful completion of a production test on the well Civita 1 in the Aglavizza Production Concession, Italy, confirming excellent permeability.

MOG announced Jan. 7 that its wholly owned subsidiary Medoilgas Civita Ltd ("MCL") was awarded the Aglavizza Production Concession and that the Company planned to undertake a production test of Civita 1 in January 2013. The step-rate production test and build up analysis was successfully completed Jan. 30 and has confirmed the production potential of Civita 1.

A three-stage step rate test was conducted with the following results:

Stage 1 Conducted 5 hour production flow test at a 1/4" choke setting: Stabilized flow was achieved after three minutes at a rate of 50,300 scm/day (1,776,345 scf/day) with negligible water production.Flowing well head pressure was drawn down by 3.5 percent of static well head pressure.Stage 2 Conducted 5 hour production flow test at a 3/16" choke setting: Stabilized flow was achieved after five minutes at a rate of 27,700 scm/day (978,226 scf/day) with negligible water production.Flowing well head pressure was drawn down by 1.6 percent of static well head pressure.Stage 3 Conducted 5 hour production flow test at a 1/8" choke setting: Stabilized flow was achieved after thirty minutes at a rate of 12,200 scm/day (430,843 scf/day) with negligible water production.Flowing well head pressure was drawn down by 0.4 percent of static well head pressure.

Initial static reservoir pressure was restored within a few seconds after shutting in the well at the end of the production tests.

The results of the production test confirm excellent permeability and no near-well bore formation damage. MOG estimates that the Aglavizza field can be profitably developed, with first gas due in early 2015.

Dr. Bill Higgs, Chief Executive of Mediterranean Oil and Gas, commented:

"We are pleased to have successfully completed the production test at Civita 1 and the results confirm the economic potential of this asset. The team is now working towards finalizing the development plan for Algavizza ahead of an investment decision in late 2013."

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

View the original article here

Samsung Engineering Bags $879M EPC Contract in Iraq

Samsung Engineering said Wednesday that it has secured a contract, worth $879 million, from Gazprom Neft to construct gas processing facilities in Badra, Iraq.

The company revealed in a disclosure that the lumpsum turnkey agreement – an engineering, procurement and construction contract – will run from Feb.13, 2013, to Feb.16, 2016.

The gas processing facility, sited at the Badra oil field in south eastern Iraq, will be designed to produce 170,000 barrels of oil per day by 2017.

Russia's Gazprom-led consortium will include South Korea's Kogas, Malaysia's Petronas and Turkey's TAPO.

"This contract is significant to Samsung Engineering, considering Iraq has one of the largest oil reserves. As a leading EPC player in Iraq, Samsung Engineering is currently executing the second phase of the West Qurna project awarded by Lukoil in 2012," the company said in a statement.

Quintella has reported on the upstream and downstream oil and petrochemicals markets from 2004. Email Quintella at quintella.koh@rigzone.com.

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

View the original article here

Chevron Plans to Proceed with Second Phase of Offshore Angola Project

Chevron Plans to Proceed with Second Phase of Offshore Angola Project

Chevron Corp. plans to proceed with a $5.6 billion Mafumeira Sul project off the shore of Angola, a move that will expand the oil-and-gas company's footprint in the West African nation.

The project, located in 200 feet of water, will produce its first oil in 2015 and could reach a daily peak output of 110,000 barrels of crude oil and 10,000 barrels of liquefied petroleum gas, Chevron said. Chevron, the second-largest U.S. oil-and-gas producer by market capitalization after Exxon Mobil Corp., is also nearing the expected completion in the second quarter of a major natural- gas liquefaction plant in Angola.

West Africa has become a significant focus of oil drilling in recent years as companies explore onshore and offshore production in Angola, Ghana and Nigeria and other countries in the region.

The Mafumeira Sul project is in the second stage of development and includes 50 wells, two wellhead platforms, a central processing and compression facility and about 75 miles of underwater pipelines. The initial Mafumeira Norte project, which achieved oil in 2009, currently produces more than 40,000 barrels of oil a day.

Said Chevron Vice Chairman George Kirkland: "This decision demonstrates our commitment to further developing opportunities in Angola where Chevron has a leading position and further adds to our strong queue of major capital projects under development."

Chevron's Angola unit, Cabinda Gulf Oil Co., is the operator and has a 39.2% interest in the project. Partners include Sonangol EP, with a 41% interest; Total SA, with a 10% interest; and ENI SpA, with a 9.8% interest.

Copyright (c) 2012 Dow Jones & Company, Inc.

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

View the original article here

Apache Awards Contract Extension to Flexlife

Subsea services firm Flexlife announced Wednesday that it is hopeful that it will take on more staff next year after being awarded an extension to a contract with Apache North Sea worth approximately $8 million a year.

A team of 30 Flexlife subsea staff based in Aberdeen and Newcastle, UK, are dedicated to the Apache North Sea work at present and this could rise over the next year.

Flexlife – which specializes in subsea integrity and project management – was originally awarded a three-year deal, worth $21 million. The new contract is a one-year extension to project manage work that has a capital expenditure value of more than $208 million. The contract also covers the ongoing integrity management of all the subsea infrastructure and pipeline at the Forties and Beryl fields.

Flexlife CEO Ciaran O'Donnell said in a company statement:

"Building on what has already been a successful three years ensuring subsea integrity and project management for Apache, Flexlife is delighted to have secured an additional one year contract extension. The company has worked closely with Apache to ensure we meet their ambitious objectives for the successful development of their subsea assets."

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

View the original article here

Big Oilfield-Services Companies Are Poised for a Reawakening

HOUSTON - Oilfield services companies had reasons to celebrate throughout the North American drilling boom, then spent much of last year hung over amid stalling U.S. profit margins. Now analysts say a more-muted party could resume as the companies have adapted to new circumstances.

Last year, Schlumberger Ltd., Halliburton Co. and Baker Hughes Inc. were challenged by an oversupplied market for fracking services, a pullback in drilling by producers nervous about commodity prices, and the high cost of some materials.

This year, though, analysts consider these companies are poised for take-off, having grown their businesses offshore and in strong international markets and anticipating that there will be at least some rebound in North America operations. The reason is that domestic exploration and production companies may have pulled back too much at the end of last year, and might have to ramp up drilling to hold on to precious shale acreage in early 2013. Also, rigs are becoming more efficient, allowing more wells to come online that need to be fracked and completed, padding the profits of these large oilfield-services companies.

"The stars are finally aligning both from a macro and fundamental perspective such that you do want to buy the bottoming expectations," said Mike Urban, an analyst with Deutsche Bank. "I think you want to be involved now," Mr. Urban said.

Investors have noticed the potential. So far this year, Schlumberger, the largest global oilfield-services company, is up 13% to $78.47, and runner-up Halliburton is up about 16% to $40.91. Analysts with BMO Capital Markets see room to grow: they have set target prices of $52 for Halliburton and $85 for Schlumberger. Most analysts surveyed by FactSet have buy ratings on these two companies. The view is more mixed on Baker Hughes, the smallest of these three companies. Shares are up more than 9% this year to $44.98, but the company has less international exposure than peers and lagged behind in making the shift from gas to oil drilling in North America last year. BMO analysts give it a target price of $43.

Kyle Wade, a partner with Copia Capital LLC in Chicago, said some investors who had been wary are rushing to buy back into these companies before they become too expensive. "When you look at Schlumberger and Halliburton, that's clearly where people are afraid they're going to miss the cycle," Mr. Wade said. "You've got actual panicked buying" by some funds, he said.

To be sure, the upward path might be long and rocky. All three of the largest oilfield-services companies reported that their profits were down in the fourth quarter from a year earlier. Schlumberger and Baker Hughes said in earnings calls last month that the U.S. onshore market for pressure pumping services, which allow oil and gas producers to fracture tight rock formations by injecting high-pressure jets of water and chemicals, remains oversupplied.

Baker Hughes chief executive Martin Craighead told analysts that the U.S. market has 20% to 25% "too much horsepower," which translates into 125 fracking fleets that are idle or underutilized. Another 300 rigs would have to come back online to get those fleets fully utilized, Mr. Craighead said. Schlumberger, which had previously been insulated from the troubled North American market by its international operations, reported a 3.7% decline in net income.

Sandy Pomeroy, a portfolio manager at Neuberger Berman, said she doesn't think the oilfield-services market will have much in the way of momentum until natural-gas prices reach $4 per million British thermal units. Natural-gas futures recently traded at $3.30 per million BTUs, and haven't risen above $4 since 2011. When the supply glut dries up, Ms. Pomeroy said exploration and production companies will eventually start spending again to levels that would spur oilfield-services companies' revenue and profits, she said, but not soon enough.

"That's on the horizon, but not the investible horizon from my perspective," Ms. Pomeroy said.

However, the companies have predicted some recovery in the first quarter as exploration and production companies start fresh in the new year and ramp up from self-imposed fiscal discipline in the final months of 2012. Halliburton chief executive Dave Lesar said he was calling the bottom for North American margins in the fourth quarter, and Schlumberger said last week that it anticipates 100 to 150 rigs will come online in North America in the first quarter.

Bill Herbert, an analyst with Simmons investment bank, said the North American market is in the process of hitting its bottom.

"It is our belief that in the second half of the year, North American margins are in structural recovery mode," Mr. Herbert said. Though the timing of a pickup in the rig count is unclear, Mr. Herbert said prices for services will hit a bottom by the second quarter of this year.

Also, international and deep-water markets are picking up the slack, with high global oil prices and new projects able to go forward because of government go-aheads and availability of new drilling rigs. The companies that have traditionally worked mostly in onshore North America are working to grow their presence in other parts of the world. Halliburton, the largest provider of fracking services in North America, reported that its international revenue jumped 12% from the third quarter to the fourth.

"International on the margin looks a bit better than what people thought regarding outlook," Mr. Herbert said , with exploration and production companies planning double-digit percentage increases in spending outside the U.S. "As long as the macro economy appears relatively constructive, you've got to think about getting in now."

Copyright (c) 2012 Dow Jones & Company, Inc.

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

View the original article here

MOG Confirms 'Excellent Permeability' at Italy Well

Mediterranean Oil & Gas Plc (MOG) announced the safe and successful completion of a production test on the well Civita 1 in the Aglavizza Production Concession, Italy, confirming excellent permeability.

MOG announced Jan. 7 that its wholly owned subsidiary Medoilgas Civita Ltd ("MCL") was awarded the Aglavizza Production Concession and that the Company planned to undertake a production test of Civita 1 in January 2013. The step-rate production test and build up analysis was successfully completed Jan. 30 and has confirmed the production potential of Civita 1.

A three-stage step rate test was conducted with the following results:

Stage 1 Conducted 5 hour production flow test at a 1/4" choke setting: Stabilized flow was achieved after three minutes at a rate of 50,300 scm/day (1,776,345 scf/day) with negligible water production.Flowing well head pressure was drawn down by 3.5 percent of static well head pressure.Stage 2 Conducted 5 hour production flow test at a 3/16" choke setting: Stabilized flow was achieved after five minutes at a rate of 27,700 scm/day (978,226 scf/day) with negligible water production.Flowing well head pressure was drawn down by 1.6 percent of static well head pressure.Stage 3 Conducted 5 hour production flow test at a 1/8" choke setting: Stabilized flow was achieved after thirty minutes at a rate of 12,200 scm/day (430,843 scf/day) with negligible water production.Flowing well head pressure was drawn down by 0.4 percent of static well head pressure.

Initial static reservoir pressure was restored within a few seconds after shutting in the well at the end of the production tests.

The results of the production test confirm excellent permeability and no near-well bore formation damage. MOG estimates that the Aglavizza field can be profitably developed, with first gas due in early 2015.

Dr. Bill Higgs, Chief Executive of Mediterranean Oil and Gas, commented:

"We are pleased to have successfully completed the production test at Civita 1 and the results confirm the economic potential of this asset. The team is now working towards finalizing the development plan for Algavizza ahead of an investment decision in late 2013."

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

View the original article here

Marathon Oil 4Q Net Falls 41% on Lower Exploration, Production Income

Marathon Oil 4Q Net Falls 41% on Lower Exploration, Production Income

Marathon Oil Corp.'s fourth-quarter earnings fell 41%, partly due to write-downs and other charges, and the company fell short of analysts' expectations as high taxes and exploration costs offset increased oil and gas sales.

Marathon Oil spun off its downstream and petroleum assets in 2011, creating Marathon Petroleum Corp., in order to focus its drilling efforts on oil-rich unconventional fields in the U.S. The company's profits from oil and gas operations have risen in recent quarters as its production has exceeded expectations.

In the fourth quarter, the company reported a profit of $322 million, or 45 cents a share, down from $549 million, or 78 cents, a year earlier. Taking out items such as impairment, pension settlement and unrealized gains on crude-oil derivative instruments, earnings from continuing operations fell to 55 cents from 78 cents. Revenue jumped 11% to $4.24 billion. Marathon's fourth-quarter results came in 12 cents under the 67 cents per-share forecast of analysts polled by Thomson Reuters, who had anticipated revenue of $3.93 billion.

The company reported that its exploration-and production segment's income fell 10% to $501 million from the year-before period, as higher costs offset increased production volumes. Since last year, Marathon has seen a more-than-four-fold increase in average net production in the south Texas Eagle Ford formation, from about 15,000 barrels of oil equivalent per day in December 2011 to more than 65,000 BOE/D in December 2012. Output in the oil-rich Bakken formation increased by 45% in the same period. However, higher costs have accompanied the production ramp-up in those areas, the company said.

The fourth quarter also included an $85 million in expenses associated with the Innsbruck well in the Gulf of Mexico, a dry hole, and the company reported another well in Iraq's Kurdistan is being plugged and abandoned.

Raymond James analyst Stacey Hudson said Marathon's production came in ahead of expectations and prices held up well. In a note, Raymond James analysts wrote that the rate at which Marathon's reserves are being replaced through organic growth is "solid." But taxes were also higher than Ms. Hudson anticipated.

"It's taxes eating up the upside," she said. Late last year, Marathon resumed production in Libya, where the company has reported a statutory tax rate of 93%.

Marathon said in December it would bump up this year's capital, investment and exploration budget to $5.2 billion from $5 billion in 2012 and spend most of it in oil-bearing shale formations such as the Bakken in North Dakota, the Anadarko Woodford in Oklahoma and the Eagle Ford in South Texas. The company expects the effort to give it a 6% to 8% production boost this year.

Oil and mining income dropped 70% to $19 million while integrated-gas income climbed 75% to $35 million.

Copyright (c) 2012 Dow Jones & Company, Inc.

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

View the original article here

Brazilian Production Hits 2M Barrels Per Day

RIO DE JANEIRO – Brazilian state-run energy giant Petroleo Brasileiro, or Petrobras, said late Monday that domestic oil output rose for a third consecutive month in December, though it still fell short of its production target for last year.

Petrobras said that domestic crude oil output rose 3.2% to 2.03 million barrels per day from 1.97 million barrels a day in November. Output from overseas operations averaged 145,158 barrels per day in December, up from 119,300 barrels in November.

Petrobras ended the year with average domestic crude oil production of 1.98 million barrels a day, short of its target of 2.02 million barrels a day despite an upward swing in production in the fourth quarter.

Domestic crude oil production was squeezed throughout 2012 by maintenance shutdowns to overhaul aging offshore platforms and falling recovery rates at mature fields.

Petrobras Chief Executive Maria das Gracas Foster said in the company's earnings release, also released late Monday, the company would probably repeat 2012's crude oil output this year. Additional offshore platform shutdowns for maintenance will limit production in the first half of 2013, Ms. Foster said.

The company, however, expects production to increase in the second half of the year. Petrobras expects six new platforms to start production in 2013, helping build momentum "for the significant increase in production forecast for 2014," Ms. Foster said. The first platform, Cidade de Sao Paulo, started pilot production from the Sapinhoa field in January, Petrobras said.

In December, Petrobras said that increased output from the Cidade de Anchieta floating platform helped boost crude oil production. The platform was installed at the Whales Park subsalt field, one of the deep-water areas where oil was found trapped under a thick layer of salt below the ocean floor, in November.

Efforts to raise recovery rates in the mature Campos Basin offshore region also generated a "positive effect" on output, Petrobras said.

Domestic natural gas output, meanwhile, rose 4.5% month-on-month in December to 64.9 million cubic meters per day, Petrobras said.

Total crude oil and natural gas production was 2.68 million barrels of oil equivalent, or BOE, in December, up from 2.575 million BOE in November, Petrobras said. For the full year, Petrobras averaged crude oil and natural gas production of 2.59 million BOE per day.

Copyright (c) 2012 Dow Jones & Company, Inc.

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

View the original article here